F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

P L O T T N U R S I

N G H O M E , P etitioner
,

v

.

S Y L V I A M A T H E W S B U R

W E L L , * Secretary of the United States Department of Health and Human Services, Respondent

. N o. 12-70174

HHS No. A-11-66

OPI NI ON

O n Petition for Review of an Order of the D epartment of Health & Human Services

Arg ued and Submitted October 11, 2013—Pasadena, California

F iled March 3, 2015

B e f ore: Andrew J . Kleinfeld and Morg a n Christen, Circuit J udg es, and J ohn W . Sedwick, District J udg e. * *

Opinion by

J udg e Kleinfeld; Partial Concurrence and Partial Dissent by J udg e Christen

* Sy lv ia Math ew s B u rw ell is su bstitu ted f o r h er p red ecesso r, Kath leen Seb e liu s, as Secretary o f t h e U n ited States D ep artm en t o f H ealth an d Hu m an Serv ices. Fed R. A p p . P . 4 3 (c)(2 ).

** T h e Ho n orab le J o h n W

. Sed w i ck

, District J u d g e f o r th e U.S. District Co u rt f o r th e District o f

A lask a, sittin g b y

d esig n atio n

.P L O T T N U R S I N G H O M E V

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SUMMARY * * *

Medicare Act

The panel reverse d i n part the Secretary of H e alth a nd H u m an Services’ imposition of a civil monetary penalty for violations o f the Medicare A ct’s standards of care f or nursing home patients, and remanded.

The panel affirmed the Secretary ’s determination that the Plott Nursing Home in California violated the quality o f care for b e d sores, reversed the Secretary ’s determination that the nursi ng home violated the q uality o f care for urinary tract infection, and held that the nursing home was e ntitled to administr a tive review of all cited deficiencies and a remand with direction s to review or dismiss the violations that were not reviewed by the ag ency

.

The p anel a lso held that reg arding the public website, the
ag ency need not afford review before survey results were posted, but must allow review and c orrec t i o n as required b y the Medicare Act. The panel remanded to the Department o f Health and Human Serv i c e s Appeals B oard to review o r dismiss the unreviewed and appealed d eficiencies al l e ged, and to reconsider the civil money penalty assessed ag ainst the nursing home.

J udg e Christen concurred w ith the majority ’ s holding concerning the two deficiencies that formed the basis for the $500 per d ay penalty (bed sores and ur i n a r y tract infection).

*** T h is su

m m ary co n stitu

tes n o p art o f

th e o p in io n

o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.P L O T T N U R S I N G H O M E V

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J udg e Christen dissented from P a r t C of the majority ’s analy sis concerning the holding a s to the unreviewed deficiencies.

COUNSEL

J oseph L

. B ianculli, Health Care L a w y ers, PL C, Arling ton, Virg inia; Eliz a

beth Plott Ty ler and Terry Schneier, Ty ler & W ilson, L os Ang eles, California, for Petitioner.

H e l en L

. Gilbert and Michael S. Raab, Attorney s, Stua r t F. Delery

, Acting Assistant Att orney General, Department o f J ustice, W ashing ton, D.C.; William B

. Schultz

, A cting General Counsel, Ann Hall, Chief C o u n sel, Reg ion I X, a nd Claire D. Chaz al, Assistant Reg ional Counsel, Department o f Health a nd Human Services, San F rancisco, C alifornia, for Respondent.P L O T T N U R S I N G H O M E V

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OP INION

KL EI N F EL D , Senior Circuit J udg e:

Plo t t Nursing Home (“Plott”) petitions for review of a civil money penalty imposed b y the Secretary of the U nited States D epartment o f Health and Human Services for Plott’s violations o f the Medicare Act’s standards of care f or nursing home patients.

I. The Regulatory Scheme

Skilled nursing facilities that participate i n the federal Medicare a nd Medicaid prog rams must satisfy minimum standards of p atient care in order to receive reimburs e m ent for patient services. 1 The Centers f o r Medicaid and Medicare Services (“CMS”), a division of the United States Departm e n t of Health and Human Services, contracts with state ag encies
to conduct unannounced compliance survey s of participating skilled nursing facilities. 2 T h e survey s must be performed at least every 1 5 months. 3 Most survey ors are Health F acilities Evaluator Nurses (HF ENs). To become qualified as an HF EN in California, a

n individual must be a reg istered nurse and have one y ear of nursing ex p er i en c e , and six months o f nursing supervisory ex perience. 4 A Master’s Deg ree in a health-related field c a

n be substituted for the required nursing

1 4 2 U.S.C. § 1 39 5 i- 3 (a)– (d ); 4 2 C.F.R. § 4 8 3 , § 4 8 3 .2 5

.

2 S ee 4 2 U.S.C. § 1 3 9 5 aa.

3 4 2 U.S.C. § 1 39 5 i- 3 (g )(2 )(A )(iii).

4 Calif o rn ia Dep artm en t o f P u b l ic Health W eb s ite, a va i la b le a t h ttp ://w w w .cd p h .ca.g o v /serv ices/j o b s/P ag es/HFENJ o b s.asp x

.P L O T T N U R S I N G H O M E V

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ex p erience and a B achelor’s of Science deg ree in Nursing can be substituted for the required supervisory ex perience. 5 All successful applicants m u s t s core at least 70% on the HF EN Tr ai ning and Ex perience Ex amination. 6 A mong other subjects, the ex amination tests knowledg e of health facilities and services r eg ulations, standards of patient care, m e d ical terminolog y , techniques of h ealth facility manag eme n t , a nd invest i g ative methods. 7 Survey teams may also include
survey o rs with specializ e d k nowledg e, such as dieticians a nd
p h a r macists. CMS g uidance requires the number o f
survey o rs be assig ned based on the siz e of the facility

, the history of non-compliance, the ex istence of special care u n its

a n d t he need for inex perienced survey ors to accompany

ex p erienced survey ors a s part of their training

. 8 All survey ors assig ned to a facility shou ld have received the r equired training

, and at least one member o f t h e team should be a reg istered nurse. 9

Survey ors record v iolations, o therwise known a s “deficiencies” and rate them as to scop e a n d s everity

. The deficiencies are then r eferred to CMS fo r various enforcement

5 Id

.

6 J o b Descrip tio n f

o r Cali f o rn i a D ep artm en t o f P u

b lic Health (CDP H) Health Facilities Ev alu atio n Nu rse, a va ila b le a t h ttp s://j o b s .ca.g o v / J O B SGEN/6 P B 6 4 .P DF.

7 Id

.

8 CMS Pu b lica tio n 1 0 0 -0 7

, S ta te Op era tio n s Ma n ua l

, Ch a p t e r 7
, § 7 2 0 1

. 1 [ h e r e i n a f

ter S OM ] a va ila b le at h ttp : //w

w w .cm s.g o v / Reg u latio n s

a n d

- G u i d a n c e / G u i d a n c e / M a n u a l s / I n t e r n e t

- O n l y

- M a n u a l s

- I O M s

I t e m s / C M S 1 2 0 1 9 8 4

. h

t m l ?D L Pa g e = 1 & D L S o r

t = 0 & D L S o r

t D i r = a s c e n d i n g

.

9 Id

. at Ch ap ter 7 , § 7 2 0 1 .2

.P L O T T N U R S I N G H O M E V

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actions, including prog ram disqualification, temporary manag e m ent, denial of reimbursement p ay ments, state monitoring

, transfer o f residen t s, closure of the facility

, d i r ected plans of correction and training

, and civil m o n e y penalties. 1 0 B efore imposing a remedy

, CMS must consider the scope and severity of a deficiency

, the relationship of the deficiencies to e a c h o ther, and the f acility ’s prior h istory o f noncompliance. 1 1 I f a facility is cited for deficiencies reflecting a subs t a n d ard q uality of care d

u ring three consecutive survey s, CMS must deny reimbursement
pay ments and monitor the facility

. 1 2

I n this case, the state survey ors cited Plott for deficiencies and CMS imposed a civil money penalty

. CMS may impose “per day ” or “per instance” civil money penalties based on a deficiency ’s scope a

n d severity

. 1 3 The penalties start at $50
per d a y , and are imposed in $50 increment s

. 1 4 F o r deficiencies of lesser severity

, CMS m a y i mpose penalties
rang ing from $50 to $3,000 per day

. 1 5 F or deficiencies with the h ig hest severity rating of “immediate jeopa r d y ” the facility may be fined $ 3,050 to $10,000 per day

. 1 6 I f penalties

10 4 2 C.F.R. § 4 8 8 .4 0 8

.

11 Id

. § 4 8 8 .4 0 4

.

12 4 2 U.S.C. § 1 3 9 5 i

- 3(h )(2 )(E).

13 Id

. § § 1 3 9 5i- 3 (h )(2 )(A )(ii), (h )(2 )(B )(ii); 4 2 C .F.R. 4 8 8 .4 3 8 (a)(1 )(ii).

14 4 2 C.F.R. § 4 8 8 .4 3 8

.

15 Id

. § 4 8 8 .4 3 8 (a)(1 )(ii).

16 S ee id

. § § 4 8 8 .3 0 1 , 4 88 .4 0 8 (e)(2 )(ii), 4 8 8 .4 3 8 (a)(1 )(i).P L O T T N U R S I N G H O M E V

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are imposed per instance, instead of per day

, the permissible
rang e is $1,000 to $10,000. 1 7

The penalty must be “reasona b l e

. ” 1 8 I n setting the civil
money penalty amount, CMS must take into account several factors, including the scope a nd severity of the deficiency

, the facility ’s history o f n oncompliance, r epeated deficiencies, the facility ’s financial condition, and the fa c ility ’s deg ree o f

cu l p a b i l ity

. 1 9 The statute directs CMS to “provide for the imposition o f incrementally more severe fines for repeated o r uncorrected deficiencies.” 2 0

Nursi n g facilities are entitled to a hearing b efore an administrative law judg e (“AL J ”) to challeng e civil money penalties. 2 1 CMS h a s the initial burden of proving a p rima facie case of noncompliance. Then the burden switches to the facility to prove, by a preponderance of the evi d e n c e, that they were in “substantial c ompliance

. ” 2 2 “Substantial compliance” means a level of noncompliance such that “any

17 Id

. § 4 8 8 .4 3 8 (a)(2 ).

18 Emera ld

Oa ks , D.A .B . No . 1 8 0 0, at 7 (2 00 1 ).

19 4 2 C.F.R. § § 4 8 8 .4 0 4 (b ), 4 88 .4 3 8 (f ).

20 4 2 U.S.C. § 1 3 9 5 i

- 3(h )(2 )(B )(iii).

21 Id

. § 1 3 9 5 i- 3 (h )(2 )(B )(ii) (in co rp oratin g 4 2 U.S.C. 1 3 2 0 a- 7a(c)(2 )).

22 Ba ta via N

u rsin g & Co n va lescen t C t r

. , D .A .B

. No

. 1 90 4
, at 5

– 6 (2 0 0 4).P L O T T N U R S I N G H O M E V

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identified d eficiencies pose n o g reater risk to resident health or safety than the potential for causing minimal harm.” 2 3

A facility m a y appeal the AL J ’s decision to the Department of Health and Human Ser v i ces Appeals B oard (“B oard”), w hich revie w s t h e A L J ’s f inding s for substantial

e v idence o n the record as a whole. The Secretary h a s deleg ated to the B oard her “authority to make final decisions

on review of

. . . decisions o f A d m i nistrative L aw J udg e s involving enforcement a ctions, including

. . . civil money penalties.” 2 4 “Any p erso n adversely affected by a determination of the Secretary ” may appeal the B oard’s decision to a United States Court of Appeals. 2 5

II. Plott’s 2008 Surveys

P lott Nursing Home is a Medicare and Medic a i d participating skilled nursing facility in California. On September 24, 2008, the California Departm e n t o f Public Health con d u c t ed an unannounced survey of Plott. Ten
survey o rs completed the survey

. Eigh t of Plott’s survey ors

were H F ENs, one was a reg istered d ieticia n , and one was a Health F acilities Evaluator Supervisor (HF ES). 2 6

23 4 2 C.F.R. § 4 8 8 .3 0 1

.

24 5 8 Fed . Reg . 5 8 ,1 71

.

25 4 2 U.S.C. 1 3 9 5 i

- 3 (h )(2 )(B )(ii); 4 2 U.S.C. 1 3 2 0 a- 7 a(e).

2 6 A HFES is a su

p erv iso r th at h as th e sam e q u alif icatio n s as an HFEN, b u t also h as w o rk ex p erien ce as an HFEN. Jo b Descrip tio n f o r C alif o rn ia Dep artm en t o f P u

b lic Health (CDP H) H ealth F acilities Ev alu atio n Nu rse

a v a i l a b l e a t h t t p : / / w w w

. c d p h

. c a

. g o v / s e r v i c e s / j o b s / D o c u m e n t s / HFEIISu p 8 H1 A T .p d fP L O T T N U R S I N G H O M E V

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During compliance survey s, state survey ors identify categ ories of deficiencies with a “Tag ” desig nation

. 2 7 The “Tag ” identifies the r eg ulatory p rovision alleg e dly v iolated. 2 8 Each Tag also has an accompany ing alphabetical sco p e a

nd severity code rang ing from A to L

. 2 9

Scope and severity levels A throug h C indicate that the cited deficiency poses n o actual harm and has a potential for minimal harm. L evels D thro u gh F indicate the deficiency
poses no actual harm, but has t h e potential f or more than minimal harm. L evels G throug h I indicate that the deficiency poses actual harm that does not rise to immediate jeopardy

. L evels J throug h L indicate that t h e d eficiency
poses immediate jeopardy to resident health o r s a fety

. I n each of the f

our alphabetical levels, the lowest letter indicates the deficiency is “isolated, ” the middle letter indicates that there is a “pattern ” o f the deficiency

, and the hig hest letter indicates that the problem is “widespread.” F acilities whose deficiencies do not rise bey ond a C in scope and severity a re considered in substantial compliance. No penalty is imposed for facilities who are found to be in substantial compliance. 3 0

I n September 2008, the s u rvey ors cited Plott for 33 different Tag numbered deficiencies above a D in scope and severity

. Fo u r of the 33 were a G, H, or I
, (actual harm, but not immediate jeopardy

) the rest were a D, E or F (no actual

2 7 S ee S OM
, su p ra n o te 8
, at A

p p en d ix P P

– Gu id an ce to Su rv ey ors f or L o n g T erm

Care Facilities.

28 Id

.

29 Id

. at Ch ap ter 7 , § 7 4 0 0.5 .1

.

30 4 2 C.F.R. § 4 8 8 .4 0 2 (d )(2 ).P L O T T N U R S I N G H O M E V

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h a r m , b ut potential for minimal harm.) A follow-up surve y in December 2 008 foun d one additional D level deficiency

. The state ag ency referred all 34 3 1 deficiencies to CMS. B ased

on the 3 3 September deficiencies, CMS fined Plott $500 per day from September 2 4 throug h D ecember 3, 2008, and $100
per day from December 4 throug h December 15, 2008 for the one December deficiency

.

Plott req u e sted an AL J h earing to d ispute the results o f both survey s. The AL J consolidated the two p roceeding s a nd noted at the beg inning of the hearing that ma n y o f t h e survey o rs only had two y ears of survey ing ex perience, a

nd that there was a larg e number of “ low level” deficiencies. He said “my initial impression is a lot of these d e f i ciencies a

re very fi n e l y honed. T hey are very pointed deficiencies

. . . us u a l ly I see g ross problems.” After a four-day evidentiary hearing

, the AL J upheld the entire penalty imposed by CMS on the basis of three deficiencies for three different patients,
two during the September 2008 survey and o n e during the December 2008 survey

. During the September survey , Plott’s

care of Resident Six violated the sta n d a r d of care for b ed
sores, 3 2 and Plott’s care of Resident F ive violated the standard

31 P lo tt states in th eir b rief th at th ey w ere cited f o r 9 6 d ef icien cies. T h is is b ecau se so m e o f th e 3 4 T ag co d ed d ef icien cies cited in th e tw o su rv ey s ap p lied to m o re th an on e p atie n t

. P lo t t co u n ts ev ery o ccu rren ce of th e alleg ed d ef

icien cy w h ere th e s u r v ey o rs co u n ted th e co d e o n ce an d th e

sco p e an d sev erity co d e tak es in t o acco u n t in s tan ces w h ere th e d ef

icien cy ap p lied to m o re th an

o n e p atien t

.

3 2 4 2 C .F.R. § 4 83 .2 5 (c) “ P ressu re So res. B ased o n th e co m preh en siv e

assessm en t o f a resid en t , th e f acility m u st en su re th at– (1 ) [a] resid en t

w h o en t ers th e f

acility w ith o u

t p ressu re so res d o es n o t d ev elo p p res s u r e

so res u n less t

h e in d iv id u al’ s clin ical co n d i tio n d em o n strates th at th ey w ere

u n av o id ab le; an d (2 ) [a] resid en t h av in g p ressu re so res receiv es n ecessaryP L O T T N U R S I N G H O M E V

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of care for urinary tract infections (“ UTI s”). 3 3 During the December survey , Plott violated the standard of care for UTI s for another patient.

During informal dispute resolution prior to t h e A L J hearing

, CMS deleted t he deficiency alleg ing that residents h ave a ccess to the outdoor g arbag e containers. CMS f a i l e d
to mak e a prima facie case on five other deficiencies, 3 4 such

as a staff member storing a lunchbox in a residen t ’ s r o o m , slow respo n s e t o c all lig hts, and f oods served at the wrong temperature, when CMS presented no evidence t o s u pport these deficiencies at the h earing

. The AL J did not review the 25 remaining deficiencies from t h e S eptember survey , even thoug h CMS initially imposed the $500 per day civil money penalty based on all 33 deficiencies. The AL J held that it was “n o t n ecessary to address all the other alleg ed deficiencies from the September 2008 survey ” b e cause the bedsore a nd UTI violations “provide a sufficient basis for the enforcement remedies that CMS proposes.”

treatm en t an d serv ices to p ro m o te h ealin g , prev en t in f ectio n an d p rev en t

n ew so res f ro m d ev elo p in g .”

33 Id

. § 4 83 .2 5 ( d ) “ Urin ary In co n tin en ce. B ased o n th e resid en t’ s

co m preh en siv e assessm en t , th e f acility m u st en su re th at– (1 ) [a] resid en t

w h o en ters th e f

acility w i th o u t an in d w ellin g cath eter i s n o t cath eterized

u n less t h e resid en t’ s clin ical co n d itio n d em o n strates th at cath et e rizatio n

w as n ecessary ; an d (2 ) [a] resid en t w h o is in co n tin en t o f b lad der receiv es ap p ro p riate treatm en t an d serv ices to p rev en t u rin ary t ract in f ectio n s an d
to resto re as m

u ch n o rm al b lad d er f

u n ctio n as p o ssib le.”

34 D ef icien cy T ag s 2 4 1
, 2 4 6
, 2 5 2
, 2 82 an d 3 6 4 w ere n o t arg u ed in CMS’ s clo sin g b rief

.P L O T T N U R S I N G H O M E V

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The Department of Health and Human Services Appeals B oard affirmed the $500 per day p e n a l t y based on the bedsores and UTI deficiencies from the Septembe r s u rvey , but reversed the UTI deficiency and eliminated the $100 per day penalty from the December survey

. The B oard f ound that the $500 per day penalty was reasonable because P l ott had a history of noncompli a n c e a n d was cited for the same two deficiencies in 2005 and 2007. 3 5 The B oard further h eld that t h e A L J was n ot required to review the other 25 contested, but unreviewed, deficiencies.

Plott appealed the B o ard’s decisio n. W e a ffirm the Secretary ’ s deter m i n at ion that Plott violated the quality o f

care for bed sores, 3 6 but rever s e t he determination for violating the quality of care for urinary tract infections 3 7 because it is not supported by substantial e v i d ence on the record as a whole. W e also hold that Plo t t i s entitled to administrative review of all deficiencies that CMS cited and remand with d irections to review or dismiss the 25 violations that the AL J and B o ard did not review.

I II. Standard of Review

“ Th e finding s of the Secretary with respect to questio n s of fact, if supported by substantial evidence on the record considered a s a whole, shall be c o nclusive.” 3 8 Substantial

35 S ee 4 2 C.F.R. § 4 88 .4 3 8 (f

).

36 Id

. § 4 8 3 .2 5 (c).

37 Id

. § 4 8 3 .2 5 (d ).

38 4 2 U.S.C. § 1 3 2 0 a- 7 a(e).P L O T T N U R S I N G H O M E V

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evidenc e i s “more than a mere scintilla b ut less than a preponderance; it is such r elevant e v idence as a reasonable mind mig ht accept as adequate t o s u p port a conclusion.” 3 9 An ag ency ’s interpretation of its own r egu lations is entitled
t o “controlling weig h t unless it is plainly erroneous o r inconsistent with the reg ulation.” 4 0

I V. Analysis

A. Bed Sores

B e d sores, also kn o w n as pressure sores, pressure ulcers

or decubitus ulcers, d evelop when skin is ex posed t o prolong ed ex ternal press u r e that restricts blood supply

, especially if the skin remains wet on an incontinent patient o r is subject to shearing for ce f r om being pulled along a bedsheet. They ty

pically form in areas of the body like the tailbone, where skin is thin, b one is close to the surface, and
pressure cannot spread easily

. The reduct i o n in blood flow
starves the skin tissue of ox y g en and n u t r i e n ts, causes the skin to thin even more, and tissue to die. B ed sores ultimately results in open wounds that can require surg ery or, if untreated, can cause death.

B e d sores are common in skilled nursing f acilities, where
many reside n t s are bedridden. According ly

, 4 2 C.F .R. § 483.25(c) requires skilled nursing facilities to

ensure that – (1) A resident who enters the facility w it hout pressure sores does not

39 Hill v. Astru e , 6 9 8 F.3 d 1 15 3 , 1 1 5 9 (9 th Cir. 2 0 1 2 ).

40 Th oma s Jefferso n Un iv. v. S h a la la , 5 1 2 U.S. 5 0 4 , 5 1 2 (1 99 4 ).P L O T T N U R S I N G H O M E V

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R W E L L 14

develop pressure sores unless the individual’s clinical condition demonstrates that they were unavoidable; a

nd (2) A r esident h aving
pressure sore s receives necessary treatment and services to p r omote healing

, prevent infe c tion and prevent new sores f rom developing

. 4 1

The B oard has interpreted § 483.25(c) to mean that a facility
must “ g o bey ond merely what s e e m s reasonable to, instead, alway s f urnish what is necessary to prevent new sores, unless clinically unavoidable, and to treat e x isting ones as n eeded.” 4 2

Resident S ix

, an 81-y ear-old woman, was admitted to Plott o n J une 28, 2007. Her diag n o ses included dementia, incontinence, hy

pertension, depress i o n, anemia, r ecurrent urinary t r act infections, and a history of brain cancer. She

was entirely dependent on staff, bedridden, a n d fed throug h

a tube inserted into her stomach. On May 30, 2008, she was hospitaliz ed for a methicillin-resistant staph infection (MRSA) o n her scalp over her brain surg ery incision. W h en she was readmitted to Plott on J u n e 5
, 2 0 08, her phy sician prescribed the use of w ris t r e s t r aints o n her bed to keep her from picking at and spreading the infection in her scalp. Thus she was literally bound to her bed, on doctor’s orders, because she kept re-injuring her now-diseased scalp.

She first developed bed sores on h e r tailbone six months after admission in December 2007. One sore formed after her

41 4 2 C.F.R. § 4 8 3 .2 5 (c) (em ph asis ad d ed ).

42 S ee e.g

. Ko ester Pa vilio n , DA B No

. 1 7 50
, at 3 1
, 3 2 (2 0 0 0 ) (em p h asis ad d ed ).P L O T T N U R S I N G H O M E V

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admission, but before she was r estrained. The sore continually healed and reopened, six times over the course o f nine months. 4 3 An additional sore appeared in September 20 0 8 o n her left buttock. Substantial evidence on the record

a s a whole supports the B oard’s d etermination that Pl o t t ’s care of Resident Six violated 42 C.F .R. § 483.25(c).

The B oard identified specific treatments that Plott did not provide, such a s specializ ed mattresses that help prevent b ed

sores. Pressure rel i e f m a ttresses use h ig h density f oam, air, water, o r g el to reduce and re distribute bed sore-causing
pressure. More advanced mattresses r educe the risk o f b ed

sores by a lternating pressure between d ifferent areas o f the body

. These mattresses are called low air lo ss mattresses. They are powered by an a ir p u m p that provides sequential inflation and deflation or alternates pres s u re between the mattress’ many air cells. Despite Resident Six ’ s r ecurrent bed sores, Plott failed to timely provide two different kinds o f mattresses, a pressure r elief mattress and a low air loss mattress, even thoug h they were identified by Plott’s nurses and phy sicians as needed interventions. 4 4

Plott prepared a long t erm c are plan in J une 2 007 when Resident Six was first admitted. The p lan said that Resident Six would be provided with a pressure relief mattress. Plott’s records show t h a t Resident Six did not r eceive this mattress

43 It w as o pen f

ro m Decem

b er 2 6
, 2 0 0 7 to Feb ru ary 2 9
, 2 0 0 8 ; March 1 3
to March 2 0, 2 0 0 8 ; M a y 2 3 to May 3 0, 20 0 8; J u n e 5 to Ju n e 1 8
, 2 0 08 ; J u n e 2 6 to A u g u st 1 , 2 0 08 ; an d A u g u st 2 7 to Sep tem ber 2 2 , 2 0 0 8

.

44 S ee Tri-Cn ty. Exten d

ed C a re Ctr.
, D.A .B

. 1 93 6
, at 1 6 (2 0 0 4 ) (h o ld in g th at a n u rsin g h o m e v io l ated § 4 8 3 .2 5(c), in p art, b ecau se it f a i l e d to p ro v id e a p ressu r e r e l i e f m attress th at h ad alread y b een i d en tif ied as

n eed ed in th e resid en t’ s care p lan ).P L O T T N U R S I N G H O M E V

. B U

R W E L L 16

until nearly a y ear later on J u n e 9, 2008. An October 4, 2008 entry in her care plan say s “L E [ late entry ] for 6 /9/08 p ressure relief mattress.” B as e d o n this documentation, the B oard reasonably determined that t h e pressure relief mattress was not timely

provided.

There is also substantial evidence to support the B oard’s finding that this resident was later also n o t given the prescribed low air loss mattress unti l o n e and a half months after the prescription. An outside wound specialist assessed Resident Six ’s bed sores on Au g u s t 7 and Aug ust 14, 2008. B oth assessments recommended that Plott “continue low air l oss mattress.” Plott a r g u es that the speciali s t ’s recommendation to “continue use” shows that a low air loss
mattress was alrea dy in use. The B oard rejected that inference for several r easons. F irst, the care plan did not list

a low air loss mattress until September 24, 2008. Second

, a state survey or from the September 2 008 inspec t i o n testified that Resident Six ’s mattress w as Plott’s standard p ressure relief mattress and it was “firm to touch.” Third, Plott’s nurse testified that Resident Six was using a pressure relief mattress at the time of the survey and that a low air loss mattress was
pro vided “around” September 24, 2008. The B oard reasonably concluded t h a t Plott replaced the pressure relief

m a ttress with the low air loss mattress on September 24, 2008, the last day of the survey

. These reas o n s t o g ether suffice as substantial evidence.

Plott arg ues that there is no evidence that the bed sores

were avoidable or that it failed to successfully tre a t t hem. Thoug h Resident Six ’s b e d sores healed and her medical

c onditions made treatment and avoidance of new sor e s

ex c e eding ly difficult, t

h e r e g ulation requires nursing facilities to “ ensure ” that “pressure sores do[ ] not develop ” and that aP L O T T N U R S I N G H O M E V

. B U

R W E L L 17

“resident having pressure sores receives necessary treatment and services to

. . . prevent new sores from develo p i n g.” 4 5 The evidence sufficed under the lenient “su b s tantial evidence” standard, in lig h t o f t h e delay in furnishing the prescribed mattresses, to support the B oard’s determination.

L ikewise, the evidence sufficed for the B oard’s rejection of Plott’s unavoidability defense. “ [ T] he facility must ensure th a t [ ] [a] resident who e n ters the facility without p ressure

sores does not develop pressure sores unless the individual’s

c l i n i c a l c o n d i t i o n demonstrates that they w ere unavoidable.” 4 6 The B oard, interprets “unavoidable” as “incapable o f prevention despite appropriate measures taken in lig ht of the clinical risks.” 4 7 The mattress delay s w ere sufficient evidence for rejection of this defense. 4 8

B. Urinary Tract Infections

Urinary tract infections (“UTI s”) are c aused by bacteria that enter the urethra and then the b ladder. B ecause catheter

use tends to cause urinary tract infections, reg ulations require avoidance of catheteriz ation if u n n e cessary and special care to avoid infections among catheteriz ed residents:

45 4 2 C.F.R. § 4 8 3 .2 5 (c) (em ph asis ad d ed ).

46 Id

. § 4 8 3 .2 5 (c)(1 ) (em

p h asis ad d ed ).

47 Ha rmo n

y Co u rt , D.A .B . No . 1 9 6 8 , at 1 1 (2 0 0 5 ) (em p h asis ad d ed ).

4 8 W o o d la n d Villa g e Nu rsin g C tr. , D.A .B

. No

. 2 1 7 2
, at 1 2 (2 0 0 8 ); Go ld en Livin g C

tr. , D .A .B

. No

. CR2 6 3 4
, at 6 (2 0 1 2 ); Ed g emo n t Hea l th ca re , DA B No . 2 2 0 2 , at 7 (2 0 0 8 ).P L O T T N U R S I N G H O M E V

. B U

R W E L L 18

B a sed on the resident’s comprehen s i ve assessment, the facility

must ensure that–

(1) A resident w ho enters the facility without

an i ndwelling catheter is n ot catheteriz ed unless the resident’s clinical condition d e m o n s t r a t e s t h a t c a t h e t e r i z a t i o n w a s necessary ; and

(2) A re sident w ho is incontinent of bladder

r eceives appropriate treatment and services
to prevent u rinary tract infections and to

r e s tore as much n ormal bladder function a s possible. 4 9

Resident F ive, a 79-y ear-old woman, w as admitted to Plott in 2005. H er diag noses included diabetes, hy pertension,
cong estive heart failure, Parkinson’s Di s e ase, urinary retention and a history of kidney stones. Her susceptibility to urinary tract infections w as hig h for two reasons. F i rst, she had a permanent indwelling catheter. “ Urinary tract infection is o ne of the most common infections occu r r i n g i n nursing homes a nd is often related to an indwelling urinary

c a t h eter.” 5 0 The CMS g uidance manual for state ag en c y survey o rs notes that “by the 30th day of catheteriz ation, bacteriuria is nearly universal” an d that individuals with catheters are 40 times more lik e l y t o have a urinary tract

49 4 2 C.F.R. § 4 8 3 .2 5 (d ) (em p h asis ad ded ).

50 S OM
, s u pra n o te 8
, A

p p e n d ix P P Gu id an ce to Su rv ey o rs f o r L o n g T erm Care Facilities at T ag F- 3 15

.P L O T T N U R S I N G H O M E V

. B U

R W E L L 19

infection. 5 1 She also had a history o f “ stag horn calculus.” S t ag horn calculi are branched kidney stones in the urina r y tract that increase a patient’s risk of developing a urinary tract infection. Resident F ive h ad two stag horn c alculi rem oved dur i n g emerg e ncy surg ery on J anuary 16, 2007 after she

ex p erienced septic shock as a result of a kidney infection.

The survey ors found that Resident F ive had four
sy mptomatic urinary tract infections from December 2007 to Aug ust 2008. They cited Plott for not identify ing a nd implementing “new approaches” to prevent the r e current infections. The AL J and B oard affirmed this finding

.

This finding was n ot supported by substantial evidence on the record. T here was n o evidence that Plott did not provide “appropriate treatment and services” to avoid the infections. Plott prepared a long -term care plan in J anuary 2007 to address the risk. T he plan’s treatm ents included (1) monitoring for sig ns and sy mptoms of infection a

nd reporting any noted infections; (2) ens u r i n g daily catheter

care and chang es as necessary ; (3) p r o v i ding g ood perineal
care; (4) e ncourag ing fluid intak e a nd hy dration (urination flushes bacteria); (5) performing laboratory testing a s ordered; and (6) administering a nt i b i o tics. W hen Resident F ive ex perienced u rinary tract infections, P l o t t prepared short-term care plans. T h ese plans, from J anuary 2007, F ebruary 2008, March 2 0 08, J une 2008, and Aug ust 2 0 0 8, show that nurses (1) administered antibiotics to treat urinary
tract infections as ordered by phy sicians; (2) encourag ed fluid intake; (3) moni tored Resident 5 for adverse sy mptoms; (4) reported sy

mptoms to doctors; (5) and provi ded g ood
per ineal care. Similarly

, the nurses’ notes show that they

51 Id

.P L O T T N U R S I N G H O M E V

. B U

R W E L L 20

encourag ed fluids, kept Resident F ive clean and d ry , and g ave g ood perineal care.

Two phy sicia n s a nd a nurse testified that the care provided was appropriate. T h e A L J asked one phy sician, Plott’s medical director, what “other interventions” he could look for as he reviewed the care plans. He testifi e d that routine interventions include g ood hy g iene

, e ncourag ing fluids, not allowing b ladder distension, g etting residents out of bed to prevent backflow of u rine to the kidney s, a nd preventing o ther infections. The other phy sician, a g eriatric phy s i ci a n , testified that fluid intake should be max imiz ed. The nurse testifi ed that nurses should provide g ood perineal

care a nd encourag e fluid intake. The CMS g uidance manual for state ag ency survey ors sug g e sts the same treatment s for catheteriz ed patients that Plott provided. 5 2

W e affirmed the B oard’s d etermination that Plott v iolated the bed sore reg ulation, 42 C.F .R. § 4 83.25(d), because Plott did not provide special mattresses, eve n t h o u g h they were previously identified as required. I n c ontra st, the Secretary ha s not identified any treatment that Plott should have provided to prevent Reside n t Fi ve’s urinary tract infections. S t ate survey o r nurses sug g ested silver coated catheter s , consultations wit h s p e cialists in nephrolog y or urolog y , a nd cranberry tablets. B ut the Secretary does no t arg ue that Plott’s failure to provide cranberry tablets or a s i lver coated catheter v i o lated the reg ulation. One of the testify ing phy sicians stated that some patients r eceive c ranberry tablets, but the o t h er testified that he did not prescribe cranberry tablets, because “new evidence does not support th a t a s a

52 S OM
, su pra n ote 8
, Ap p en d ix P P Gu id an ce to Su rv ey o rs f o r L o n g T erm Care Facilities at T ag F- 3 15

.P L O T T N U R S I N G H O M E V

. B U

R W E L L 21

p reventive measure.” Nobody testified about silver c oate d catheters or submitted any medical evidence to support their
use, and nobody testified that speculative consultations were

me d i c a lly appropriate. There is not substantial evidence on the record as a whole to support the B oard’s interpretation.

The Secretary arg ues that, due to Plott’s lac k o f independently considering a d d itional interventions bey ond those recommended by h er phy sician, Resident F ive

ex p erienced r e c u r rent urinary tract infections. B ut the evidence shows t h a t h er catheter and history of stag horn calculus put h er at a

n unavoidably hig h risk o f developing them. The reg ulation r equires Plott to p rovide “appropriate
treatment and services to p revent urinary tract infections,” 5 3 not to g uarantee that they will not occur.

The B o ard held that Plott’s failure to implement new interventions violated the r e g ulation

. Bu t, there was no evidence that Plott should h ave or could have done any thing

new that would h a v e been “appropriate.” T h o u gh periodic reviews and revisions of care plans are r e q uired, a nd the
survey o r faulted Plott for not revising this resident’s care p lan
to include cranberry tablets etc., n o evidence supported her
sug g ested revision or other revisi o n s t hat mig ht have been “appropriate.” Th e B oard did not review her conclusion despite Plott’s putting it at issue.

W h at we are left with, in support of the B oard’s penalty

, is the bed sores determination on one resident, supported b y substantial evidence, the u rinary tract infections on another,
not su p ported by substantial e vidence, and Plott’s history

, discussed below.

53 4 2 C.F.R. § 4 8 3 .2 5 (d ).P L O T T N U R S I N G H O M E V

. B U

R W E L L 22

C. Unreviewed Deficiencies

The ag ency dismissed one deficiency prior t o t h e AL J hearing and abandoned a nother 5 deficiencies from the September survey during the h e a ring

. Plott appealed t h e other 28 ( 27 rem a i n i n g f rom September and 1 from December), but the AL J reviewed only 3 (2 from September and 1 from December), holding that it was “unnecessary

” to review th e o ther 25 undismissed and unsettled survey or’s disputed a lleg ations. The AL J reviewed the $500 per d a y penalty for September 24 throug h December 3
, 2008 from the September survey and upheld it bas ed o n 2 of the 33 deficiencies alleg ed. He also u pheld the additional $100 per day penal t y f

r o m December 4 throug h December 15, 2008 based on one defici e n c y f rom the December survey

. The B oard only reviewed the thr ee deficiencies that the AL J upheld, and reversed the December d eficiency with the $100
per day penalty

. One reason the AL J and the B oard g ave for the superfluity of reviewing the other dis p u ted alleg ations

w a s t h at Plott had been c ited before for urinary tract infections and bedsores.

The B oard’s r easoning f o r n o t reviewing any other deficiencies is basically that the $500 per day penalty could have bee n i mposed for the remaining two September deficiencies, so the u nreviewed survey or’s alleg ations were “immaterial.” W e cannot ag ree. U nreviewed alleg ations o f de fi ciency do indeed affect penalties, as the B oard decision demonstrates in this c ase. And the B oard’s position that, so long as the penalty is within the max imum permitt ed, more deficiencies are immaterial, does n ot make sense. Penalties
may be h ig her or lower within an a u thoriz ed rang e , depending on the ex tent of deficiencies. The B oard’s position is analog ous to claiming that we need not review a crimi n alP L O T T N U R S I N G H O M E V

. B U

R W E L L 23

conviction for five bank robberies, if the statutory max imum
sentence on one of them ex ceeded the sentence imposed. Even thoug h the ag e ncy mig ht be authoriz ed to i mpose the

same $500 a day penalty reg ardless of whether there were 33 deficiencies, or 2 or 1, that does not imply that it reasonably would have. Plott makes a constitutional arg ument we need
not r each, because the statute r e q uires that the claimed deficiencies b e reviewed o r dismissed when they affect penalties imposed.

The r ig ht to b e heard before the A L J and the B oard arises from the statutory lang u ag e that “the Secreta ry shall not

m a k e a d etermination adverse to any person u nder

. . . this section until the p e r son has been g iven written notice and an opportunity for the determination to be made on the r ecord.” 5 4 Our jurisdiction arises from the provision that “an y person adversely affected by

a determination of the Secretary under this section may obtain a review of such determination in the United States Court o f A ppeals.” 5 5 I n Shalal a v

. I llinois Council on Long Term Care
, 5 6 the Supreme Court construed this statutory scheme as entitling providers to administrative and judicial review of determinations of p e n a l ties, thoug h not, as in that case, of the reg

ulations g enerally in the absence o f
any determination or penalty impos e d in a particular c ase. “[ T] he r e l evant determination that entitles a dissatisfied home
to review is a n y d e termination that a provider has f ailed to

54 4 2 U.S.C. § 1 3 2 0 a- 7a(c)(2 ). T h e M e d i c a r e A ct, 4 2 U.S.C. § 1 39 5i(h )(2 )(B )(ii), in co rp o rates an d ap p lies t h e rev iew p ro v isio n s o f th e So cial Secu rity

A ct to civ il m o n ey

p en alties u

n d er sectio n

1 3 2 0 a- 7a(a).

55 Id

. § 1 3 2 0 a- 7 a(e).

56 5 29 U.S. 1 (2 0 0 0 ).P L O T T N U R S I N G H O M E V

. B U

R W E L L 24

comply substantially wi t h the statute, ag reements o r reg ulations, whether termination or some oth e r remedy is imposed.” 5 7

The B o ard dec i s ion say s that “noncompliance finding s that a re not material to the outcome of the appeal,” need not be addressed by the A L J

. The B oard’s theory appear s to be that since the AL J had statutory authority to impose a $500 a day penalty for one, two, th r e e , or 33 deficiencies, $500 would be w ithin the reasonable rang e reg ardless, so the unreviewed d eficiencies were immaterial to the result. Plott
arg ues, not that immaterial determinations must nevertheless be reviewed, but rather that the unreviewed d eterminations were, in fact, material.

Plott and their a micus, Califo r n ia Association of Health F acilities, h ave two materiality arg uments: (1) that the ag ency posts the unreviewed d eficiencies on a p u b l i c website, a nd (2) that the u nreviewed deficiencies ar e used to enhance penalties in future proceeding s. W e reject the first arg ument, but are persuaded by

the second.

The website arg u ment c a n not b e correct, b ecause the
statute requires p o s t i n g of survey ors’ deficiency alleg ations before they could p ossibly b e reviewed. 5 8 The statute

r equires the Secretary to establish a website linking to state survey s such as the one done in this c ase. 5 9 The w e bsite must post staffing d ata, links to state inspection reports, responses

57 Id

. at 2 1 (in tern al q u o tatio n m ark s o m itted ).

58 4 2 U.S.C. § 1 3 9 5

- 3 (b )(5 )(E).

59 Id

. § 1 3 9 5 i- 3 (i)(1 )(A )(ii).P L O T T N U R S I N G H O M E V

. B U

R W E L L 25

to the reports, complaints, penalties, and other information to assist consumers. 6 0 The website g ives nursing ho mes stars, like hotels on a travel site, from one s tar to f ive stars, based partly on unreviewed de f i ciencies in survey reports. The inspection score is calculated, in part, by using poi n t s assig ned to deficiencies. 6 1

Review is allowed, but it comes l a t er. The statute requires the Secretary to p rovi d e a r eview process for
accuracy , c larity

, timeliness, and comprehensiveness o f the website’s content. 6 2 I f a nursing h ome disag rees with a rating that it receives, it c a

n contact the “F ive -Star h otline.” 6 3 H o w e v e r , this review process only a pplies to the data provided by t h e nursing homes themselves such as selfreporte d q uality and staffing data. The only way to dispute
survey data is to appeal throug h the administrative process. 6 4 Plott arg u es that it is entitled to review of all deficiencies not dismissed, a

nd the Secretary arg ues that the posting

, unlike a

60 Id

. § 1 3 9 5 i- 3 (i)(1 )(A )(ii).

61 Cen t ers f

o r Med icare an d Med i caid Serv i ces, Desig n fo r N u r s i n g Ho me Co mp a re Five-S t

a r Q u a lity Ra tin g System: Tech n ica l Users’ Gu id e (J u ly 2 0 1 2 ) at 4
, a va ila b le a t h ttp s://w w w .cm s.g o v /Med icare/P ro v id erE n r o l l m e n t

- a n d

- C e r t i f

i c a t i o n / C e r t i fi c a t i o n a n d C o m p l i a n c / d o w n l o a d s /

u sersg u id e.p d f

.

62 4 2 U.S.C. § 1 3 95 i- 3 (i)(2 )(A ).

63 Cen ters f

o r Med icare an d Med icaid Serv ices, Qu estio n s an d An s wers, Imp ro vin g th e Nu rsin g Ho m e Co m p are W eb s ite: Th e Five-S ta r Nu rsin g Ho me Qu a li t

y R a tin g S

ystem (Decem

ber 1 8
, 2 0 0 8 ) at 1 3
, a va ila ble a t h t t p : / / w w w

. c m s

. g o v/ M e d i c a r e / P r o v i d e r -E n r o l l m e n t -a n d -C e r t i fi c a t i o n / Certif icatio n an d Co m

p lian c/d o w

n lo ad s /Qsan dA s Fin al.p df

.

64 Id

.P L O T T N U R S I N G H O M E V

. B U

R W E L L 26

monetary penalty

, i s n o t a “remedy ,” so it is not subject to review.

Thoug h the matter is not entirel y w i t h out doubt, we

c o nclude that the Secretary has the better of this arg ume n t

. The Court in I

llinois Cou n cil held that thoug h unreviewed deficiencies are posted on the w ebsite, 6 5 tha t n ursing h omes cannot challeng e ag ency act i o n until “termination or some other remedy is imposed.” 6 6 Readers o f the website deciding
not to put their relatives in low-rated nursing homes is a not

a “remedy

” under the statute. 6 7 T he penalty is i m p o s e d, at least directly

, by consumers, not the ag ency

. T he statute

r e q u ires the Secretary to post survey information a nd
statements o f d eficiencies “within 14 calendar day s” of when
t he information is made a vailable to the nursing homes

. 6 8 Cong r ess cannot have contemplated a n appellate process that could be concluded within 14 calendar day s, so it must have determined that timeliness o f website p o s ting s outweig h ed the importance of r eview prior to posting

. That interpretation is consistent with the statutory c omman d t h a t the Secretary

use survey information provided by the states to update the

65 Illin o is Co un cil , 5 2 9 U.S. at 2 2

.

66 Id

. at 2 1 (in tern al q u o tatio n m ark s o m itted ).

67 S ee e.g

. , 4 2 U.S.C. § 1 3 9 5 cc(h ) (term in atio n of particip atio n ag reem en ts); 42 U .S.C. § 1 3 9 5i- 3 (b )(3 )(B )(ii) (civ il m o n ey p en alties f

or f alse statem en ts in resid en t assessm en ts); 4 2 U.S.C. § 1 3 95 cc(h )(C)(i)(II) (d en ial o f pay

m e nt an d ap p o in tm en t o f tem p o rary m an ag em en t); 4 2 U.S.C. § 1 3 9 5 cc(h )(C)(i)(III ) (lo ss of ap p ro v al o f sk illed n u rsin g f acility ’ s n u rse aid e train in g p ro g ram ).

68 4 2 U.S.C. § 1 3 9 5 i

- 3(b )(5 )(A ).P L O T T N U R S I N G H O M E V

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website “as ex peditiously as p racticabl e. ” 6 9 This statutory lang uag e compels the reading that Plott was not entitled to review of the deficien c i es alleg ed in the survey prior to posting on the website.

W e ag ree with Plott’s other arg ument, that t h e unreviewed d e ficiency alleg ations do affect the p e n a lty

. I n Illinois Council

, the Secretary assured the Court t h a t the
ag ency did n ot increase sanctions in later cases on account o f unreviewed deficiency

finding s in earlier instances:

And, the Council’s amici assert , compliance actually harms t h e h o me b y subjecting it to increased sanctions later o n by virtue of t he unreviewed deficiency finding s, and because the ag ency makes deficiency finding s public

on the I n ternet, §488.325. T h e short conclusive answer to these contentions is that the Secretary

denies any

such practice. 7 0

The assurance that the Secretary g ave the Supreme Court, is not the Secretary ’s practice now.

The B oard’s 2011 decis i o n in this case held that deficiencies in 2 0 0 5 and 2007 survey s not only may , but must, increase the penalty imposed in a later survey

. The Bo ard held that it was “prejudicial error” for the AL J not t o g ive weig ht to e v i d e n ce of this h istory “merely because the earlier d efi c iencies were apparently quickly corrected, a nd required n o enforcement penalties.” The B oard ho lds that

69 Id

. § 1 3 9 5 i- 3 (b )(5 )(E).

70 Illin o is Co un cil , 5 2 9 U.S. at 2 1

– 2 2

.P L O T T N U R S I N G H O M E V

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R W E L L 28

weig ht m ust be g iven to p rior n oncompliance even if “ no remedy was imposed at t h e time.” 7 1 The B oard c ites the statutory lang uag e requiring “incrementally m o r e severe fines for repeated . . . deficiencies.” 7 2

That is correct as far as it g oes. The implication, thoug h, vitiates the soundne s s of the B oard’s position that unpenaliz ed deficiencies are unreviewable. The B oard’s
arg ument that the 25 unreviewed deficiency alleg a t i o n s a re immaterial to the penalty cannot b e reconciled with the B oard’s a r gu ment that the penalties have to be increased if there is a history of pri o r deficiencies, even if they were not subject to review. A fair reading of the sta t u t e r e quires review o f a lleg ed deficiencies because they may affect future penalties.

The B o ard addresses this with a footnote sug g esting that earlier unreviewed deficiencies may be contested when they

are used to determine the reasonablenes s o f a p enalty in a later proceeding

. W e cannot see why Cong r e s s would have
meant that a deficiency unreviewable in 2005, b e c a u se no penalty was imposed then, would become reviewable in 2011 because it established a prior histor y

. L ong delay ed proceeding s a

re g enerally disfavor e d because they are less reliable o n a c c ount of the difficulties of obtaining evidence. I n the nurs i n g home contex t, the a rg ument that a 2005 deficie n c y alleg ation is not reviewable in 2005, but is in a proceeding six y ears later, v erg es on the ridiculous. Residents of nurs i n g h omes, often the most important witnesses, tend to be o ld an d s i c k

. B y the time review is

71 Id

.

72 4 2 U.S.C. § 1 3 9 5 i

- 3(h )(2 )(B ).P L O T T N U R S I N G H O M E V

. B U

R W E L L 29

allowed under the B oard’s interpretation, many will be dead. And many of the staff are likely to have moved on to other jobs and be difficult or impossible to locate.

W e are compelled, by the B o a r d ’ s use of unreviewed deficiencies to increase current penalties, to concl u d e that
survey alleg ation s o f deficiencies must b e reviewed o r dismissed. Of course a nursing home c ould waive review, but it did not waive review here. I f it does not, the nursing home is entitled to r eview in the proceeding stemming from them, and n eed not await a subsequent proceeding when they a re used to enhance penalties.

Our sister circuits, to they ex tent they have spoken on this question, are split

. T h e Eig hth Circuit addressed the reviewability issue in Grace H e a l t hcare v

. United States Department of

Health and Human Services

. 7 3 I n that case, a s in this one, the AL J did not a d d ress most of the deficiencies alleg ed by the survey or on the g round that t he one reviewed “is, in and of itself, sufficient” to j u stify the penalty imposed. 7 4 Grace Healthcare holds tha t all the adverse finding s appealed should be either upheld or r eversed 7 5 because

, t h e nursing home had arg ued and the g overnment did not dispute that, the unreviewed finding s “ r e main accessible to the public and can be u sed to support damag e claims ag a inst the provider in private litig ation.” 7 6

73 6 03 F.3 d 4 12 (8 th

Cir. 2 0 1 0 ).

74 Id

. at 4 1 7

.

75 Id

.

76 Id

. at 4 2 3

.P L O T T N U R S I N G H O M E V

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The Six th Circuit, in Claiborne-Hughes Health Center v

. Sebelius

, 7 7 u p h e ld a B oard determination where only one o f

seven alleg e d def

i c iencies was reviewed. I n Claiborne

, unlike this case, the minimum statutory penalty was imposed, so it could not have b een reduced even if all six unreviewed deficiency alleg ations had been o verturned. 7 8 The court h eld that in the interest of judicial economy , the ag enc y could “choose to address only t hose deficiencies that have a material impact on the outcome of the dispute.” 7 9

Cl a iborne is disting uishable because the penalty in our

case could have been lower than it was , but we would disag ree with it r eg ardless. The B oard holds that “repeated deficiencies ” m u s t necessarily b e g iven weig ht a nd result in

more se v ere f

ines, and reversed the AL J in this case for not g iving weig ht to prior unreviewed deficiencies. That means that unreviewed deficiencies do, in f ac t , have a material impact. One mig ht arg ue that their impact is only on a future d ispute, not the present o ne, but that implies the impractical result that review may take p lace only later, w h e n it is less reliable, not earlier, when it can be more reliable. Also, since
survey s are mandatory a t least e v e r y fifteen months, 8 0 the
ag ency ’s supervisory r elationship w i t h the nursing home is

one c ontinuing rela tionship, not an o ccasional d iscrete c ase. F or mater i a lity purposes, the h istory of prior deficiencies is alway s part of that nursing h ome’s continuing c ase, under the

77 6 09 F.3 d 8 39 (6 th

Cir. 2 0 1 0 ).

78 Id

. at 8 4 2

.

79 Id

. at 8 4 7

.

80 4 2 U.S.C. § 1 3 9 5 i

- 3(g )(2 )(A )(iii).P L O T T N U R S I N G H O M E V

. B U

R W E L L 31

statutory requirement for incrementally more severe penalties as interpreted by

the ag ency

.

V. Conclusion

W e hold that substantial evidence on the record as a whole sufficed to support the bed sore deficiency in reg ard to Resident 6, but there was n ot substantial evidence on the record ta k e n as a whole to support the UTI deficiency in
reg ards to Resident 5. W e further hold that if a p r o vider appeals a deficiency claimed in a survey , the deficiency must either be dismissed or reviewed. Reg arding the publ ic website, we hold that the ag ency need not afford r eview b efore survey results are posted, but must allow r eview a n d correction as required by

the statute. 8 1

W e r e mand to the B o a

r d to (1) r eview or dismiss t h e unreviewed and a

ppealed deficiencies a l l eg ed, a nd (2) reconsider the penalty in lig ht of o u r r e v e rsal of the Resident 5 determination.

REVERSED in part and REMANDED.

CHRI STEN, Circuit J udg e, concurring in part a nd dissenting in part:

I c o ncur in the court’s h olding with respect to the t w o deficiencies that formed the basis of the $500 per day penalty sustained by the Department of Hea l t h and H uman Services

81 4 2 U.S.C. § 1 3 9 5 i

- 3(i)(B )(2 ).P L O T T N U R S I N G H O M E V

. B U

R W E L L 32

Appeals B oard. B ut b e ca u s e the court’s holding as to the

u n reviewed deficiencies a ccords with n either our statuto r y jurisdiction nor with well-established p rinc i p les of judicial review, I respectfully dissent from Part C of the court’s analy sis.

The skilled nursing f

acility provisio n s o f the Medicare Act provide: “[ T] he Secr e t ar y may impose a civil money p enalty in an a mount not to ex ceed $10,000 for ea c h d a y o f noncompliance. The provisions of section 1320a- 7 a of this title (other than subsections ( a) and (b)) shall apply to a civil
money p enalty

. . . .” 4 2 U.S.C. § 1395i-3(h)(2)(B )(ii)(I ). Section 1320a-7a(e) g ives this court orig inal jurisdiction over appeals from the Secretary ’s d ecision to impose a civil money penalty

. 1

I n its d ecision in this case, the B oard concluded, consistent with its prior decisions, that neither it nor the AL J

was r equired to address noncompliance finding s not material
to the penalty imposed. The court concludes that unreviewed deficiencies were in f

act material to th e Bo a r d ’s decision to uphold the $500 per day penalty

. I n reaching this conclusion,

1 T h e Med i care A ct g iv es f ed eral district co u rts o rig in al j u risd ictio n ov er ap p eals f ro m m o st d eterm in atio n s b y th e Secretary o f Health an d Hu m an S e r v i ces. S

ee 4 2 U.S.C. § 1 3 9 5 cc(h )(1 )(A ) (ref eren cin g 4 2 U.S. C

. § 4 0 5 (g )). On ly civ i l m o n ey p en alty assessm en ts are d irectly ap p ealab le
to a circu it co u rt. S

ee 4 2 U.S.C. § 13 9 5 i- 3(h )(2 )(B )(ii)(I) (ref eren cin g 4 2 U.S.C. § 1 32 0 a- 7 a); S h a la la v. Ill. Co u n cil o n Lo n g Term Ca re, In c. , 5 2 9 U.S. 1
, 8 (2 0 0 0 ); S

u n sh in e Ha ven Nu rsin g Op era tio n s, LLC v. U .S

. Dep ’t o f Hea lth & Hu ma n S

ervs., C trs. fo r M ed ica re & Med ica id S

ervs. , 7 4 2 F.3 d 1 23 9
, 1 2 49 (1 0 th Cir. 2 0 14 ) ( “[ O ] u t o f all th e rem ed i es th e Secretary m ay im

p o se, Co n g ress h as s p ecif ied th at ch allen g es t o [ civ i l

m o n ey pen alties], n ot ch allen g es to o th er n o n co m p lian ce rem ed ies, m ay g o d irectly

to a circu it co u rt u n d er 4 2 U.S.C. § 1 3 2 0 a- 7 a(e).”).P L O T T N U R S I N G H O M E V

. B U

R W E L L 33

the c ourt relies on the fact that the Board used unreviewed deficiencies from 2005 and 2007 survey s to support the penalty imposed. 2 B u t Plott d o e s n o t contest the B oard’s reliance on the 2005 or 2007 deficiencies. I nstead, Plott challeng es the ag ency ’s r efusal to review or dismiss a ll of the d eficiencies identified in the September 2008 survey

. T h e B oard clearly d id not rely on the 2008 unrevi e wed deficiencies in u p h o l ding the $500 per day penalty

, and our jurisdiction is limited to r eviewing the B oard’s decision with respect to that penalty

.

The court overlooks our lack o f jurisdiction and directs the ag ency to review o r dismiss all of the 20 0 8 u n r e viewed deficiencies. The court p oints out that the ag ency might use these deficiencies to d e termine the reasonableness of a penalty in a later proceeding

. I a gr e e that the ag e ncy ’s practice of u sing unreviewed deficiencies from prior survey s to support a later penalty is troubling

. I f Plott had asked our panel to review this practice b y c o ntestin g t h e B oard’s reliance on the unreviewed deficiencies from 2005 and 2007, I mig ht have concluded that the a ge n c y ’s p ractice is impermissible. B ut Plott waived this challeng e by failing to raise it in its briefing

. S

ee S mith v. Marsh

, 194 F .3d 1045, 1052 (9th Cir. 1999).

2 T h e Med icare A ct an d ap p licab le reg u latio n s req u ire th e Secretary to im p o s e m o re sev ere f

i n es f or rep eated d ef

i cien cies. S

ee 4 2 U

. S

. C

. § 1 39 5 i- 3 (h )(2 )(B )(iii) (“ T h e Secretary sh all s p ecif y criteria, as t o

. . . th e

am o u n ts o f an y f in es

. . . . S u ch criteria

. . . sh all p ro v i d e fo r th e im p o s itio n o f in crem en tally m o re sev ere f in es f o r rep eated o r u n co rrected d ef icien cies.”); 4 2 C.F.R. § 4 8 8 .4 3 8 ( f ) (“ In determ in in g th e am o u n t of
p e n alty

, CMS d o es o r th e State m u st tak e in t o acco u n t th e f o llo w in g f acto rs: (1 ) T h e f

a c i lity ’ s h isto ry o f n o n co m p lian ce, in clu d in g rep eated d ef icien cies. . . .”).P L O T T N U R S I N G H O M E V

. B U

R W E L L 34

The c ourt arg ues it is preferable to forc e t h e ag ency to review a ll of the 2008 deficiencies now, in c ase they are used
to support a penalty later, because review w i l l be easier a nd

more reliable n ow. B ut this cou r t ’s subject matter jurisdiction is defined b y Cong ress, and here, Cong ress has specified t h a t we may directly review only the B oard’s
p enalty determination. See 42 U.S.C. § 1320a-7a(e)

. T h i s court is not at liberty to ex pand its jurisdiction so that we may effect what, in our view, is sound policy

. See Keene Corp. v

. United S tates , 508 U.S. 200, 207 (1993) (“Cong re s s h a s the constitutional authority to define the jurisdiction of the lower federal courts, and, once the lines are drawn, l imits upon federal jurisdiction

. . . must be neither di s re ga r ded nor evaded.” (citation and internal quotation marks omitted)).

The court raises the spectre that, absent i t s holding

, the only means Plott w ould h a v e to c h a lleng e the unreviewed 2008 deficiencies would be to wait un t i l they are used to support a penalty

. B u t at o ral arg ume n t , counsel for the
ag ency sug g ested that if Plott has a due process c laim stemming from the unreviewed deficien c i es, Plott could bring

an action in district court. See Shalala v. Ill. Council on Long Term Care, Inc.
, 529 U.S. 1
, 19–20 (2000); see also 5 U .S.C. § 704. I do not opine on whether such a challeng e would be successful, b ut the part i e s do not dispute that Plott has a forum, and if Plott d isag reed with the district court’s decision, it could then properly

appeal to our court.

The wisdom of jurisdictional and waiver rules is that they prevent courts from overreaching

. B ecause: (1) Plott did not raise the issue of the B oard’s reliance on the 2 0 0 5 a nd 2007 unreviewed d eficiencies; (2) the issue of whether the ag ency mig ht rely on the unreviewed 2008 deficiencies to support a future penalty is n ot r i p e ; a n d (3) our jurisdiction underP L O T T N U R S I N G H O M E V

. B U

R W E L L 35

42 U.S.C. § 1320a-7a(e) is limited to reviewing the $500 per day penalty assessment, I would leave the question of the proprie ty of the ag ency ’s use o f unreviewed deficiencies for

a nother day

. The court instead requires that the a ge n c y chang e its procedures w holesale. As a r esult, it may become

more difficult for the age n c y to ensure the safety of our nation’s many skilled nursing facilities. Either the ag ency will h a v e t o devote much more time and energ y to adjudicating deficiencies on which n o penalty is based, or the
ag ency will have to dismiss a ll such d eficiencies. This result

ma y b e a g ood thing in the long run, or it may be a b ad thing —it is hard to tell because the ag ency ha s n ot had an adequate opportunity to defend its procedures in this appeal.

I respectfully

dissent from Part C of the court’s analy sis.