Court Opinion

ID: 1025940
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:58:06.913244+00
Date Added: 2024-06-11T15:26:54.653720
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 07-1491

CENTURY CARE OF THE CRYSTAL COAST,

                Petitioner,

           v.

MICHAEL LEAVITT, Secretary of the United States Department of
Health and Human Services; U.S. DEPARTMENT OF HEALTH & HUMAN
SERVICES,

                Respondents.

On Petition for Review of an Order of the United States Department
of Health and Human Services. (A-06-128)

Argued:   May 13, 2008                       Decided:   June 11, 2008

Before WILKINSON, NIEMEYER, and MOTZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, PLC, Arlington,
Virginia, for Petitioner. Gwendolyn L. Johnson, U.S. DEPARTMENT OF
HEALTH & HUMAN SERVICES, Atlanta, Georgia, for Respondents. ON
BRIEF: Peter D. Keisler, Assistant Attorney General, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C.; Daniel Meron, General
Counsel, Howard H. Lewis, Acting Chief Counsel, Region IV, U.S.
DEPARTMENT OF HEALTH & HUMAN SERVICES, Atlanta, Georgia, for
Respondents.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Century Care of the Crystal Coast (“Century Care”), a skilled

nursing facility that provides care to Medicare and Medicaid

beneficiaries in North Carolina, appeals a final agency decision of

the Secretary of Health and Human Services (“Secretary”).                The

Secretary, through the Centers for Medicare and Medicaid Services

(“CMS”), imposed a civil monetary penalty on Century Care for non-

compliance with certain Medicare and Medicaid regulations requiring

facilities to take reasonable steps to prevent accidents and to

administer resources so as to maintain residents’ physical, mental,

and psychosocial well-being. 42 C.F.R. §§ 483.25(h)(2), 483.75

(2007).    In Century Care’s case, both an administrative law judge

and the Department of Health and Human Services Appeals Board

(“DAB”)    upheld   the   CMS’s   findings   of   non-compliance   and   its

assessment of the civil monetary penalty.              Because the DAB’s

findings are supported by substantial evidence, we affirm.

                                     I.

                                     A.

     Federal regulations require that skilled nursing facilities

participating in the Medicare and Medicaid programs comply with

certain safety requirements. 42 U.S.C. § 1395i-3 (2000); 42 C.F.R.

§ 483.    To determine whether a facility is in compliance with those

requirements, the Secretary contracts with state agencies, which

                                      2
conduct inspections, known as surveys, both on a routine basis and

in    response   to     complaints     about       a    facility.            See    42   U.S.C.

§ 1395aa(a) (2000); 42 C.F.R. §§ 488.10(a)(1), 488.308(a), 488.332

(2007).     The surveys are conducted by multi-disciplinary, formally

trained     teams,      each    of   which    is       comprised       of    at    least    one

registered nurse.         42 C.F.R. § 488.314(a)(1).

       During    these         surveys,      the       state        agency    records       any

deficiencies it discovers, along with their severity.                               42 C.F.R.

§ 488.404(b). The severity categories range from deficiencies that

result in “[n]o actual harm with a potential for minimal harm” to

those    that    pose     “[i]mmediate       jeopardy          to    resident      health    or

safety.”     42 C.F.R. § 488.404(b)(1).                A facility is deemed to be in

substantial compliance with Medicare and Medicaid regulations if

its deficiencies are ones that pose no greater risk than the

potential for minimal harm. See 42 C.F.R. § 488.301.

        Once a deficiency is identified, the CMS selects a remedy

designed to address that deficiency.                   42 C.F.R. § 488.408.              One of

those remedies is a civil monetary penalty, which the CMS may

impose on a “per day” or “per instance” of non-compliance basis.

See    42   U.S.C.    §   1395i-3(h)(2)(B)(ii);                42    C.F.R.    §§    488.430,

488.438(a)(1)(I), 488.438(a)(1)(ii), 488.438(a)(2).

                                             B.

        A team of inspectors from the North Carolina Department of

Health and Human Services (“state survey agency”) conducted a

                                             3
complaint survey of Century Care that concluded on June 18, 2004.

The state survey agency determined that Century Care was not in

substantial compliance with five program requirements, two of which

are at issue here.       The two deficiencies relate generally to the

enforcement of Century Care’s smoking policy, which prohibits

residents from keeping cigarettes, lighters, or matches on their

person or in their rooms, as well as from smoking anywhere except

on Century Care’s back patio.          Specifically, the two deficiencies

involve    two   Century   Care      residents,      Resident    Two      (“R2")   and

Resident Ten (“R10"), both smokers.

     R2 was admitted to Century Care in January 2004 with diagnoses

of mild dementia, delirium, chronic obstructive pulmonary disease,

acute pneumonia, and periods of altered perception.                        R2 was a

chronic and heavy smoker.             Because of his lung ailments, R2

received oxygen, and without his oxygen (which he often removed to

smoke), he became confused and disoriented. R2 generally smoked on

either Century Care’s patio or front porch by wheeling himself to

the dining room or the lobby, leaving his oxygen bottle in his

wheelchair, and walking outside.

     Despite his “typical” smoking pattern of smoking outdoors, on

February 9, 2004, members of Century Care’s staff approached R2

regarding reports that he had been smoking in his bathroom.                         R2

admitted   to    doing   so,   and    he       promised   not   to   do    it   again.

Nonetheless, a few days later on February 13, Century Care staff

                                           4
reported    smelling     smoke   in    R2's    bathroom,    and   staff   again

confronted R2 about the problem.              This time, however, R2 denied

that he had been smoking in violation of Century Care’s policy, and

he also denied having a lighter in his possession.

     The state survey agency noted that on May 5, 2004, around 2

a.m., R2 –- forgetting that his oxygen was flowing –- lit a lighter

in his room.    His oxygen ignited.           R2 was taken to the emergency

room and treated for burns to the left side of his face and

several fingers.       After this incident, Century Care searched R2's

room and found a lighter, cigarettes, and cigarette butts.

     R10, also a chronic smoker, was admitted to Century Care in

December 1997 with diagnoses of dementia, depression, a history of

alcoholism, Alzheimer’s and senile dementia, syncope and collapse,

vertebral fracture, and thoracic spondylosis.               R10 also suffered

memory     problems,    impaired      decision    making,    reduced      safety

awareness, and multiple risks for falling because of her wandering

behavior.    Due to her propensity to wander, Century Care gave R10

an electronic alarm bracelet that triggered an alarm if she tried

to exit an exterior door.          Further, Century Care noted in R10's

care plan that she must be closely monitored, and that she was not

to smoke without supervision.

     R10's “typical” smoking pattern was to start smoking early in

the morning and to go in and out of Century Care’s alarmed patio

door numerous times a day thereafter to smoke.               Nonetheless, R10

                                        5
was a constant violator of Century Care’s smoking policy: she often

was caught smoking indoors in the dining room, and she was caught

multiple   times     with     matches      or   a   lighter   in    her   possession.

Moreover, although Century Care’s staff “consistently attempted to

distract her from her incessant going in and out to and from the

patio,” Century Care documented that R10 often smoked without her

prescribed supervision.

       The state survey agency noted that on April 26, 2004, R10

walked   out   of    Century    Care’s      building     to   the    smoking    patio,

wandered through a gate that was supposed to be locked, through a

line of trees, past a parking lot, and around to the back of the

building where a physician’s office was located.                    R10 sat down at

a picnic table next to the physician’s office.                 She was discovered

by the physician’s staff and returned to Century Care unharmed.

       As a result of these incidents, the state survey agency

determined that Century Care was not in compliance with 42 C.F.R.

§ 483.25(h)(2), which requires care facilities to provide adequate

supervision and assistance to prevent accidents, and with 42 C.F.R.

§ 483.75, which requires a facility to be administered in a manner

that   enables      it   to   use    its   resources    such   that       the   highest

practicable physical, mental, and psychosocial well-being of each

resident is maintained.             CMS determined that Century Care’s non-

compliance existed at an “immediate jeopardy” level of severity for

the period of April 26, 2004, through June 17, 2004.                      Accordingly,

                                            6
CMS imposed a civil monetary penalty of $3050.00 per day from April

26, 2004, through June 17, 2004, for a total of $158,600.00.

     Century Care appealed the CMS’s decision, and both the ALJ and

the DAB affirmed.   Century Care timely appealed.

                                II.

     Century Care challenges the DAB’s findings of non-compliance,

which we review for substantial evidence.   See 42 U.S.C. § 1320a-

7a(e) (2000). Century Care first contends that the finding of non-

compliance with 42 C.F.R. § 483.25(h)(2) (governing accidents) was

not supported by substantial evidence.      Likewise, Century Care

argues that the finding of non-compliance with 42 C.F.R. § 483.75

(governing   facility   administration)   was   not   supported   by

substantial evidence.   We address each of Century Care’s arguments

in turn.1

     1
      Century Care also mounts a broad challenge to the system of
evidentiary burdens applied by the Secretary during the
administrative review process, on the grounds that it violates the
Administrative Procedure Act (“APA”). 5 U.S.C. § 500 et seq.
(2000).    In particular, Century Care argues that rather than
placing the ultimate burden of persuasion upon the facility to
prove compliance, as the Secretary does, see Hillman Rehab. Ctr. v.
Health Care Fin. Admin., DAB No. 1611 (1997), that burden should be
placed upon the Secretary to demonstrate that a facility is in non-
compliance with Medicare and Medicaid program requirements. We
need not reach this argument concerning the burden of persuasion,
however, because Hillman only applies if evidence is in equipoise.
See Harmony Court v. Leavitt, 188 Fed. Appx. 438, 440 (6th Cir.
2006); Fairfax Nursing Home, Inc. v. U.S. Dep’t of Health and Human
Servs., 300 F.3d 835, 840 n.4 (7th Cir. 2002).       As we discuss
below, the Secretary put forth substantial evidence to support the
findings of non-compliance.

                                 7
                                   A.

     Century Care first argues that its care of R2 and R10 was

reasonable, and thus, substantial evidence did not support a

finding of a violation of 42 C.F.R. § 483.25(h)(2), which requires

a facility to “take reasonable steps to ensure that a resident

receives supervision and assistance devices designed to meet his or

her assessed needs and to mitigate foreseeable risks of harm from

accidents.”   See, e.g., Windsor Health Care Ctr. v. CMS, DAB No.

1902 at 5 (2003).     Specifically, Century Care argues that it took

“all reasonable steps” to protect R2 from accidents, and that R10's

elopement, though a “mistake,” did not demonstrate unreasonable

care of its residents.       Therefore, Century Care contends, the

finding of a violation of 42 C.F.R. § 483.25(h)(2) constituted an

improper imposition of “strict liability.”

     Regarding R2, substantial evidence supports the finding that

Century Care did not take reasonable steps to prevent his fire-

related accident.     To begin, as both the ALJ and the DAB noted, R2

came to Century Care with diagnoses of mild dementia and delirium,

had a history of unsafe smoking behaviors, yet was still able to

obtain   prohibited    smoking   materials,   such   as   lighters   and

cigarettes.   Even after R2 admitted to smoking in his room on

February 9, 2004, Century Care did not ask R2 where he had obtained

a lighter or matches, nor did it advise visitors not to give

residents lighters or matches.          Further, Century Care did not

                                   8
perform any search of R2's room after either the smoking incident

on February 9 or the suspected smoking incident on February 13,

even though, as the DAB noted, Century Care housekeeping found

cigarette butts in R2's room between those incidents and his May 5

accident.

      Nonetheless,         Century   Care       argues    that    R2's   accident     was

unforeseeable, and thus no further steps to prevent his accident

could have been taken.         See, e.g., Florence Park Care Ctr. v. CMS,

DAB   No.    1931    (2004)    (holding         that     the    regulation   regarding

accidents        applies    only     to    those       risks     of   harm   that     are

foreseeable).       Specifically, Century Care contends that given its

assessment of R2 as “alert” and aware of “the danger” attendant to

smoking     near    his    oxygen,   and    given      R2's     “adamant”    denial    of

continued violations of the smoking policy on February 13, 2004, it

was not foreseeable that he might make the “foolish choice” to use

a lighter around his oxygen three months later.                       However, as both

the ALJ and the DAB recognized, it was reasonably foreseeable that

a resident like R2 –- who suffered mental impairment, who had a

history     of     unsafe    smoking      behaviors       and    of    smoking   policy

violations, who received oxygen, and who became very confused when

he was not on his oxygen –- might have a fire-related accident.

This is especially true given the addictive nature of smoking, and

residents’ likely desire to avoid being caught violating the

smoking policy.

                                            9
     Ample evidence also supports the finding that Century Care did

not provide adequate supervision of R10's smoking behavior in order

to prevent accidents.   R10 suffered from even more severe mental

impairment than did R2, yet she too was able to obtain lighters and

matches in violation of Century Care’s smoking policy.   And again,

Century Care did not investigate how R10 obtained these items, nor

did it take steps to prevent her from obtaining them.    Moreover,

R10 frequently smoked outside without her care-plan prescribed

supervision, including on April 26, 2004, when she wandered away.

Further, Century Care’s staff did not report R10's elopement, nor

did it take any further steps to better supervise the smoking

habits either of R10 or other residents at risk of harm because of

their wandering behaviors.

     Century Care finally argues, and is of course correct, that a

delicate balance must be struck between enforcement of its smoking

policy and adherence to regulations regarding residents’ personal

privacy.   See 42 C.F.R. § 483.10(e)(1).   Here, however, Century

Care did not take even the most minimal steps to prevent the

dangerous accidents that can result, for example, when fire and

oxygen mix, or when a mentally impaired resident wanders away. The

neglect of resident safety in this case was serious, and neither

respect for residents’ personal privacy nor Century Care’s other

arguments excuse it.

                                10
                                        B.

       Century Care next contends that substantial evidence does not

support a finding of noncompliance under 42 C.F.R. § 483.75, which

provides that “[a] facility must be administered in a manner that

enables it to use its resources effectively and efficiently” to

maintain its residents’ physical, mental, and psychosocial well-

being.    While Century Care acknowledges that an administrative

deficiency is a derivative finding, based on the presence of other

deficiencies, see Asbury Ctr. at Johnson City v. CMS, DAB Dec. 1815

at 11 (2002), Century Care contends that there is no nexus between

any non-compliance on Century Care’s part and the way in which it

administers its facility.

       The finding that Century Care was not in compliance with the

requirements of 42 C.F.R. § 483.75 is also supported by substantial

evidence.      Contrary to Century Care’s argument, R2's and R10's

accidents were part and parcel of systemic problems in the way

Century   Care    administered    its    facility.   Indeed,   as     the   DAB

recognized, the two incidents involving R2 and R10 were not the

sole   bases     for   the   findings   of   non-compliance,   “but    rather

constitute the most vivid demonstrations of the potential for

dangerous consequences from a laxly and inconsistently enforced

smoking policy.”

       As discussed above, residents were able to obtain dangerous

and prohibited smoking materials.            In fact, the DAB pointed out

                                        11
that Century Care staff allowed so-called “safe smokers” to keep

items such as lighters and matches with them during the day,

despite the prohibition in the smoking policy.               Century Care staff

members also testified that residents were, in practice, permitted

to smoke on the front porch, even though the smoking policy

permitted smoking on the back patio only.                 Finally, Century Care

did not adequately supervise problem smokers, such as R10, nor did

it   conduct   adequate    investigations      of    various    smoking      policy

violations,    such   as   R2's   February     9    and    February    13   smoking

incidents.     Century Care’s deficient administration of its smoking

policy, along with its inadequate supervision of residents’ smoking

habits, constituted a systemic problem that not only led to R2's

injuries   and   R10's     elopement,    but   also       endangered   all    other

residents at Century Care.2

      2
      Even if the findings of non-compliance are supported by
substantial evidence (a point Century Care does not concede),
Century Care contests both the existence of “immediate jeopardy”
and the extension of that period from April 26, 2004, through June
17, 2004. First, the existence of “immediate jeopardy” -- which is
defined as a “situation in which the provider’s non-compliance with
one or more requirements of participation has caused, or is likely
to cause, serious injury, harm, impairment, or death to a resident”
-- is supported by substantial evidence. 42 C.F.R. § 488.301. As
the DAB recognized, R2's burns, despite being characterized by
Century Care as “slight sing[ing],” required emergency room
treatment and constituted an actual serious injury. Further, R2's
accident likely could have caused serious injury to other residents
at Century Care. Finally, R10's unsupervised smoking left her at
significant risk of serious injury.     In particular, as the DAB
recognized, it was a “mere fortuity” that R10 was returned safely
to Century Care. Once she wandered out of the unlocked gate, she
was at risk of falling, getting lost, or getting struck by a car.

                                        12
     For the foregoing reasons, the decision of the Department

Appeals Board is

                                                         AFFIRMED.

     Second, we need not reach Century Care’s challenge to the
duration of the “immediate jeopardy” period. Century Care argues
that the “presumption that . . . non-compliance continues until the
facility comes forward and demonstrates correction” violates the
APA, 5 U.S.C. § 500 et seq., and due process of law by allowing the
Secretary “to impose sanctions in the absence of actual non-
compliance.”   See Lake City Extended Care v. Health Care Fin.
Admin., DAB No. 1658 (1998). The crux of Century Care’s argument
rests upon its premise that the incidents involving R2 and R10 were
unrelated, and thus no continuing non-compliance existed between
April 26, 2004, and June 17, 2004. As discussed above, however,
R2's and R10's incidents are both connected to Century Care’s
inadequate enforcement of its smoking policy, and to its inadequate
supervision of its residents’ smoking behaviors. See 42 C.F.R.
§ 483.75. Because non-compliance during the “immediate jeopardy”
period cited by the CMS is supported by substantial evidence, we
need not reach Century Care’s argument that the presumption of
“immediate jeopardy” allows the Secretary to impose sanctions in
the absence of any non-compliance.

                                13