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

Heading: Tags F281 and F425

Text: Perry challenges its citations and penalties under Tags F281 and F425, the only two tags considered by the ALJ and DAB. Tag F281 arises from Perry’s alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i), which requires SNFs to “[m]eet professional standards of quality.” Tag F425 cites Perry for violating 42 C.F.R. § 483.60(a) and (b), which require SNFs to provide effective pharmaceutical services “including procedures that assure the accurate acquiring, receiving, dispensing, and administering of all drugs and biologicals” 11 and to “employ or obtain the services of a licensed pharmacist” to maintain accurate drug receipt and dispensation records. 12 The DAB upheld the ALJ’s determination that Perry was noncompliant with both regulations. 7 Cedar Lake Nursing Home v. U.S. Dep’t of Health & Human Servs., 619 F.3d 453, 456 (5th Cir. 2010) (quoting 5 U.S.C. § 706(2)(A)–(E) (2010)). 8 Tex. Clinical Labs, Inc. v. Sebelius, 612 F.3d 771, 775 (5th Cir. 2010). 9 42 U.S.C. § 1320a-7a(e). 10 Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994) (quoting Udall v. Tallman, 380 U.S. 1, 16–17 (1965)) (internal quotation marks omitted); see also Auer v. Robbins, 519 U.S. 452, 461–62 (1997). 11 42 C.F.R. § 483.60(a). 12 Id. § 483.60(b). 4 Case: 14-60158 Document: 00512965104 Page: 5 Date Filed: 03/11/2015 No. 14-60158
The substance of Perry’s challenge to Tag F281 is that, when the deficiency cited pertains to medication, 42 C.F.R. § 483.20(k)(3)(i)’s “professional standards of quality” requirement must be interpreted in accordance with 42 C.F.R. § 483.25(m), which defines the medication error rates that SNFs must not exceed. Under 42 C.F.R. § 483.25(m), an SNF “must ensure that—(1) [i]t is free of medication error rates of five percent or greater; and (2) [r]esidents are free of any significant medication errors.” Perry contends that, when medication is at issue, these two requirements form the exclusive basis for interpreting 42 C.F.R. § 483.20(k)(3)(i)’s requirement that SNFs “[m]eet professional standards of quality.” In other words, if Perry’s medication dispensation performance was compliant with 42 C.F.R. § 483.25(m)—Perry contends that it was 13—it could not have been noncompliant with 42 C.F.R. § 483.20(k)(3)(i). Because CMS interprets 42 C.F.R. § 483.20(k)(3)(i) as defining a standard of performance independent of 42 C.F.R. § 483.25(m), 14 Perry must show that CMS’s interpretation is plainly erroneous or inconsistent with the regulation. First, Perry relies on DHHS’s commentary when promulgating 42 C.F.R. § 483.25(m), in which the agency noted that the regulation “left a facility free to create and manage its own [drug distribution] system in any way it sees fit as long as it does not make ‘significant’ medication errors and has an overall 13 We doubt that Perry was compliant with 42 C.F.R. § 483.25(m). The DAB found that at least one resident experienced a significant medication error when Perry staff failed to provide a prescribed painkiller. As the regulation requires SNFs to operate “free of any significant medication errors,” id. § 483.25(m)(2) (emphasis added), the DAB’s determination that Perry violated 42 C.F.R. § 483.20(k)(3)(i) even if the standards of 42 C.F.R. § 483.25(m) were applied was not erroneous. 14 CMS explains that its guidance documents clearly differentiate between “errors in the techniques of medication administration,” which should be cited under 42 C.F.R. § 483.20(k)(3), and “actual medication errors,” which should be cited under 42 C.F.R. § 483.25(m). CMS, STATE OPERATIONS MANUAL app. PP, at 155 (2015). 5 Case: 14-60158 Document: 00512965104 Page: 6 Date Filed: 03/11/2015 No. 14-60158 medication error rate of less than five percent.” 15 Perry reads this statement as granting SNFs virtual carte blanche in managing medications, limited only by the two listed criteria in 42 C.F.R. § 483.25(m). This interpretation would, however, render superfluous any regulation affecting SNFs’ drug distribution mechanisms. If we were to agree with Perry, the medication-error regulation would not only preempt 42 C.F.R. § 483.20(k)(3)(i) but also, for example, 42 C.F.R. § 483.60, which establishes specific pharmaceutical procedures for SNFs to follow. 16 Perry points to nothing to indicate that DHHS intended 42 C.F.R. § 483.25(m) to have such an expansive reach. Second, Perry asserts that a “plain reading” of the regulations supports its interpretation. We find no basis for this assertion. There is nothing in 42 C.F.R. pt. 483 to suggest that 42 C.F.R. § 483.25 contains the exclusive definition of “professional standards of quality” as applied to SNFs’ drug distribution. 42 C.F.R. § 483.25(m) makes no reference to 42 C.F.R. § 483.20(k)(3)(i) or to “professional standards of quality.” Third, Perry relies on Caretel Inns of Brighton, a 2012 decision in which an ALJ, in choosing a standard to apply when assessing compliance with 42 C.F.R. § 483.20(k)(3)(i), held that “the regulation at 42 C.F.R. § 483.25(m)(2) establishes the standard of quality, supplanting any lesser standard.” 17 Critically, the ALJ chose 42 C.F.R. § 483.25(m)(2) over a less stringent standard, reasoning that “[t]he application of any lesser standard from another source would constitute a failure to follow the Secretary’s regulations.” 18 Thus, 15 Medicare and Medicaid; Requirements for Long Term Care Facilities, 56 Fed. Reg. 48,826, 48,853 (Sept. 26, 1991) (emphasis added). 16 See, e.g., 42 C.F.R. § 483.60(c) (requiring every resident’s drug regimen to be “reviewed at least once a month by a licensed pharmacist”); id. § 483.60(d) (detailing drug labeling requirements); id. § 483.60(e) (setting drug storage requirements). 17 DAB No. CR2643, 2012 WL 5389866, at  (U.S. Dep’t of Health & Human Servs. Oct. 12, 2012) (emphasis added). 18 Id. 6 Case: 14-60158 Document: 00512965104 Page: 7 Date Filed: 03/11/2015 No. 14-60158 Caretel does not support Perry’s approach; it indicates, at most, that 42 C.F.R. § 483.25(m) establishes a floor for 42 C.F.R. § 483.20(k)(3)(i), not a ceiling. Finally, Perry suggests that a specific regulation, such as 42 C.F.R. § 483.25(m), trumps a general regulation, such as 42 C.F.R. § 483.20(k)(3)(i). This canon of construction, however, applies only when two regulations are inconsistent and cannot be reconciled. 19 CMS’s interpretation does not present such a conflict. In conclusion, Perry has not met its burden of showing that CMS’s interpretation of 42 C.F.R. § 483.20(k)(3)(i) was plainly erroneous or inconsistent with the regulation. Furthermore, Perry does not challenge the DAB’s specific findings that it failed to meet professional standards of quality with respect to the distribution of medication. 20 Accordingly, we affirm the DAB’s determination that Tag F281 was properly imposed.
Perry’s challenge to Tag F425 is similar. It asserts that 42 C.F.R. § 483.60(a) and (b), like 42 C.F.R. § 483.20(k)(3)(i), address “medication errors” and thus are governed by the standard defined in 42 C.F.R. § 483.25(m). We find this contention likewise unconvincing. 42 C.F.R. § 483.60(a) and (b) require an SNF to have pharmaceutical procedures in place and a pharmacist to oversee those procedures. A facility could easily be found in compliance with the requirements of this section but not in compliance with the requirements of 42 C.F.R. § 483.25(m), or vice versa. Furthermore, these two regulations 19See United States v. Mackay, 757 F.3d 195, 199 (5th Cir. 2014). 20The DAB upheld the ALJ’s determination that the medication deficiencies cited by CMS constituted violations of professional standards of quality. This conclusion is supported by substantial evidence. 7 Case: 14-60158 Document: 00512965104 Page: 8 Date Filed: 03/11/2015 No. 14-60158 have different purposes, as 42 C.F.R. § 483.25(m) is plainly result-oriented, 21 whereas 42 C.F.R. § 483.60(a) and (b) focus on process. The issues that CMS found justified Tag F425 were primarily documentation errors, hinging on Perry’s failure to follow procedures, and not incidents of residents receiving incorrect medications. Accordingly, we affirm the DAB’s determination that Tag F425 was properly imposed. 22