Opinion ID: 2785414
Heading Depth: 2
Heading Rank: 4

Heading: Legality of August 2011 Survey

Text: Finally, Perry asserts that all of the tags should be set aside because CMS violated its own regulations in conducting the August 2011 survey. CMS may only reopen “initial or reconsidered determination[s] within 12 months after the date of notice of the initial determination.” 25 According to Perry, the August 2011 survey constituted an illegal reopening of the April 2010 determination that Perry was back in substantial compliance with Medicare regulations after the Lortab-theft incident. In support of this characterization, Perry notes that several MSDH documents concerning the August 2011 survey refer back to the January 2010 investigation. Specifically, the form containing the August 2011 survey results states that the prior complaint investigation had been “re-opened,” and MSDH sent Perry several letters to that effect, as well. To the extent that Perry challenges the August 2011 tags as illegal reopenings of the April 2010 determination of substantial compliance, we are not convinced. None of the five deficiencies identified in August 2011 relate back to the April 2010 findings, and MSDH’s conclusion that Perry had successfully resolved the two tags cited in the January 2010 survey remains untouched. Furthermore, the CMPs at issue were imposed for a period of noncompliance starting on April 30, 2011. The actions that resulted in Tags F281, F425, F520, and F514 either occurred after this date or were ongoing as of it. See Senior Rehab. & Skilled Nursing Ctr. v. Health & Human Servs., 405 F. App’x 24 820, 825 (5th Cir. 2010) (per curiam) (unpublished) (citing Claiborne-Hughes Health Ctr. v. Sebelius, 609 F.3d 839, 847 (6th Cir. 2010)). 25 42 C.F.R. § 498.30. 9 Case: 14-60158 Document: 00512965104 Page: 10 Date Filed: 03/11/2015 No. 14-60158 The only tag cited in August 2011 that even arguably implicates the April 2010 determination is Tag F225, which found a deficiency based on Perry’s failure to report the Lortab theft to the police. First, we note that the CMPs imposed on Perry may be justified without Tag F225. 26 Second, Perry does not dispute that, as of April 30, 2011, it still had not reported the loss of Lortabs to the police. Third, and finally, we agree with CMS that Tag F225 is a new deficiency, not a reopening of an old one. Broadly, Tag F225 is related to Tag F224 from the January 2010 survey, as both penalize actions related to the same loss of Lortabs. That these two tags concern the same period of time and underlying facts is, however, not persuasive because they address different conduct. Penalizing Perry for failing to report the loss of narcotics is not a revision of the previous penalty for losing them. As Tag F225 does not revise, or even revaluate, Tag F224, there is no reopening. We thus conclude that Tag F225, like the other tags cited in August 2011, concerns deficiencies not relevant to the April 2010 substantial-compliance determination. To the extent that Perry challenges the August 2011 survey itself as procedurally deficient under 42 C.F.R. § 498.30, and the tags imposed as tainted by this defect, we likewise find this contention wholly unconvincing. CMS interprets 42 C.F.R. § 498.30 as limiting only the agency’s ability to reopen determinations—that is, determinations that an SNF is in substantial compliance or noncompliance with the Medicare regulations. 27 In CMS’s view, a survey, whether routine or instigated by a specific complaint, is not a determination, and CMS’s decision to survey Perry in August 2011 is not governed by 42 C.F.R. § 498.30. 26 Cf. Senior Rehab., 405 F. App’x at 825 (noting that only those findings material to the outcome of a case must be reviewed). 27 See 42 C.F.R. § 498.30. 10 Case: 14-60158 Document: 00512965104 Page: 11 Date Filed: 03/11/2015 No. 14-60158 We defer to CMS’s interpretation of its own regulations, as it is neither plainly erroneous nor inconsistent with the regulation. 28 The plain language of 42 C.F.R. § 498.30, as well as a structural reading of 42 C.F.R. pt. 498 as a whole, supports CMS’s approach. There is nothing in 42 C.F.R. § 498.30 about surveys. Moreover, 42 C.F.R. § 498.3(a)(1) notes that this set of regulations concerns the “procedures for reviewing initial determinations that CMS makes,” while 42 C.F.R. § 498.3(b) lists the decisions that constitute initial determinations by CMS. Nothing in that list suggests that a survey or complaint investigation is an initial determination, or that 42 C.F.R. § 498.30 governs CMS’s decision to reopen such a survey or investigation. 29 Perry’s complaint relies, essentially, on the fact that the word “reopen” appears in a regulation and the word “re-opened” appears in some of the documents produced by the August 2011 survey. To give credence to this coincidence would be to exalt form over substance. We also note that MSDH and CMS possess broad authority to survey SNFs. According to the Medicare statute and implementing regulations, each SNF must be inspected at least once every fifteen months (a “standard survey”), and any SNFs found to have provided a substandard quality of care must be reinspected (an “extended survey”). 30 Furthermore, MSDH and CMS may specially investigate an SNF if the facility receives complaints; experiences “a change of ownership, management, or director of nursing”; or presents “other indicators of specific concern” (an “abbreviated standard survey”). 31 Any SNF found to have provided a substandard quality of care 28 See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). 29 The list of initial determinations includes, for example, determinations of “[w]hether a prospective provider qualifies as a provider,” id. § 498.3(b)(1), and “[w]hether to deny or revoke a provider or supplier’s Medicare enrollment,” id. § 498.3(b)(17). 30 42 U.S.C. § 1395i-3(g)(2)(A)(iii)(I), (B)(i). 31 42 C.F.R. § 488.301; see also id. § 488.308(e). 11 Case: 14-60158 Document: 00512965104 Page: 12 Date Filed: 03/11/2015 No. 14-60158 during an abbreviated standard survey is also subject to reinspection (a “partial extended survey”). 32 MSDH and CMS’s documentation are consistent in referring to the August 2011 survey as a “partially extended survey” or a “partially extended complaint survey.” At oral argument, counsel for CMS explained that the survey was triggered—and, it turns out, justifiably—by Perry’s history of violations and by serious concerns over its continued noncompliance with Medicare regulations. 33 In light of CMS’s broad authority to survey SNFs participating in the Medicare program, we cannot conclude that the August 2011 survey was an impermissible exercise of this authority.