Opinion ID: 2708737
Heading Depth: 2
Heading Rank: 1

Heading: Regulatory Right to a Hearing

Text: On appeal, Byrn Mawr has abandoned the argument that the regulations entitle it to a hearing before a federal ALJ, and No. 12-3678 9 instead focuses on its argument that it is entitled to a hearing before a state ALJ. The applicable regulations provide, in pertinent part, that: [If] a nursing facility … is dissatisfied with a State’s finding of noncompliance [deficiency] that has resulted in one of the following adverse actions: (i) Denial or termination of its provider agreement[; or] (ii) Imposition of a civil money penalty or other alternative remedy. … the State must give the facility a full evidentiary hearing … . 42 C.F.R. §§ 431.151; 431.153. Bryn Mawr latches onto the phrase “other alternative remedy” and argues that the plain meaning of those words includes the recording of the deficiencies in its compliance history and the public shaming of Bryn Mawr by the publication of the deficiencies on the CMS website and the Rating System. Bryn Mawr insists that public shaming is a kind of “remedy” that would be “other” and “alternative.” See, e.g., Dan M. Kahan & Eric A. Posner, Shaming White-Collar Criminals: A Proposal for Reform of the Federal Sentencing Guidelines, 42 J.L. & Econ. 365, 366–67 (1999). However, because this particular hearing requirement comes from the “Secretary’s own regulations, [her] interpretation of it is, under our jurisprudence, controlling unless plainly erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U.S. 452, 461 (1997) (quotations omitted). The Secretary explains that the term “other alternative remedy” carries special meaning from the context of the regulatory regime. Specifically, the Secretary interprets that term to mean the remedies listed in, or made possible by, 42 C.F.R. § 488.406. 10 No. 12-3678 That section lists multiple remedies which may be used. Id. at § 488.406(a). As part of the state enforcement plan, state regulators are required to establish protocols at least for the subsection (a) remedies of “(1) Temporary management[;] (2) Denial of payment for new admissions[;] (3) Civil money penalties[;] (4) Transfer of residents[;] (5) Closure of the facility and transfer of residents[; and] (6) State monitoring.” Id. at § 488.406(b). States may also establish any of the other remedies from subsection (a) or “alternative or additional State remedies approved by CMS.” Id. at § 488.406(a)(9) (emphasis added). But to create its own alternatives, the state has to “[s]pecify those remedies in the State plan; and … [d]emonstrate to CMS’s satisfaction that those remedies are as effective as the remedies listed in paragraph (a) of this section, for deterring noncompliance and correcting deficiencies.” Id. at § 488.406(c)(1)–(2). Accordingly, the Secretary asserts that, because maintaining a compliance history and publishing deficiencies through the Rating System are not part of the remedial framework of § 488.406, those actions are not “other alternative remedies.” While the regulation could have explicitly cross-referenced § 488.406 (as its Medicare cousin does, see 42 C.F.R. § 498.3(b)(13)), we do not think the Secretary’s interpretation is plainly erroneous or inconsistent with the regulation. Thus, as none of the remedies listed in, or made possible by, § 488.406 has been imposed on Bryn Mawr, it is not entitled to a state hearing under § 431.151. No. 12-3678 11