Court Opinion

ID: 1011813
Source: CourtListenerOpinion
Date Created: 2013-07-04 20:34:09.640196+00
Date Added: 2024-06-11T12:38:52.796306
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

SEA ISLAND COMPREHENSIVE              
HEALTHCARE CORPORATION, d/b/a
Hermina Traeye Memorial Nursing
Home,
                        Petitioner,
                 v.
U.S. DEPARTMENT OF HEALTH &                       No. 02-2076
HUMAN SERVICES; TOMMY G.
THOMPSON, Secretary of Health and
Human Services; THOMAS A.
SCULLY, Administrator, Centers for
Medicare & Medicaid Services,
                       Respondents.
                                      
               On Petition for Review of an Order
                 of the Benefits Review Board.
                        (HHS-DAB-1810)

                      Argued: September 24, 2003

                      Decided: October 29, 2003

     Before MICHAEL, MOTZ, and SHEDD, Circuit Judges.

Petition for review denied by unpublished per curiam opinion.

                             COUNSEL

ARGUED: William Rakestraw Cowden, PHILLIPS, LYTLE,
HITCHCOCK, BLAINE & HUBER, L.L.P., Buffalo, New York, for
2        SEA ISLAND COMPREHENSIVE v. U.S. DEP’T OF HEALTH
Petitioner. Elizabeth Carlin Benton, Assistant Regional Counsel,
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN
SERVICES, Atlanta, Georgia, for Respondents. ON BRIEF: Robert
D. McCallum, Jr., Assistant Attorney General, Alex M. Azar, II, Gen-
eral Counsel, Bruce R. Granger, Chief Counsel, Region IV, UNITED
STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES,
Atlanta, Georgia, for Respondents.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   Sea Island Comprehensive Health Care Corporation (Sea Island)
petitions for review of the United States Department of Health and
Human Services’ (HHS) decision imposing civil money penalties
(CMPs) for its nursing home’s immediate jeopardy level violation of
the Medicare and Medicaid participation requirements. Because we
find no reason to set aside the CMPs, we deny the petition.

                                  I.

   Sea Island ran the Hermina Traeye Memorial Nursing Home (Her-
mina), a long term care facility on John’s Island, South Carolina, that
was certified to receive Medicare and Medicaid funds. All such facili-
ties are subject to annual state surveys to determine if they comply
with the Medicare and Medicaid participation requirements. 42
U.S.C. § 1395i-3(g). The State of South Carolina conducted an annual
survey of Hermina from April 19 to April 23, 1999. The surveyors
discovered numerous violations of the participation requirements.
Based on the surveyors’ findings, HHS notified Hermina that the
facility was out of compliance with the Medicare and Medicaid par-
ticipation requirements at the immediate jeopardy level. HHS termi-
nated Hermina’s federal funding and imposed CMPs of $10,000 per
          SEA ISLAND COMPREHENSIVE v. U.S. DEP’T OF HEALTH              3
day from April 23, 1999, the date the survey was completed, up to but
not including May 16, 1999, the effective date of the termination. The
facility requested an administrative hearing.

   An administrative law judge found that Hermina placed residents
in immediate jeopardy by violating the infection control regulation,
42 C.F.R. § 483.65. Immediate jeopardy is the most serious violation
category. 42 C.F.R. § 488.408. The ALJ relied on the following evi-
dence: Hermina’s failure to make any attempt to identify the source
of one resident’s infection and its general failure to keep track of the
cause, status, or severity of residents’ infections; the inadequate treat-
ments administered to residents for infections; and the failure of staff
to take adequate precautions to prevent the spread of infection. The
ALJ upheld the termination of Hermina’s participation in Medicare
and Medicaid effective May 16, 1999. The ALJ reduced the CMPs to
$3,050 per day for the twenty-three-day period of monetary penalties.
The HHS Departmental Appeals Board affirmed the ALJ. Sea Island
now petitions to us for review of the decision to impose the CMPs.

                                   II.

   Sea Island attacks the agency’s decision on four fronts. First, it
argues that HHS violated its due process rights by not giving it fair
notice of the requirements for infection control programs. The appli-
cable regulation gives a facility notice that it "must establish an infec-
tion control program" that (1) "[i]nvestigates, controls, and prevents
infections," (2) "[d]ecides what procedures, such as isolation, should
be applied to an individual resident," and (3) "[m]aintains a record of
incidents and corrective actions." 42 C.F.R. § 483.65. Sea Island
argues specifically that it did not receive fair notice because the ALJ
went beyond the regulation and held that its facility had a duty to con-
duct tests to determine the cause of residents’ infections. The ALJ did
not go that far. The ALJ simply held that Sea Island’s Hermina facil-
ity had "a duty to make reasonable efforts" to determine the cause of
residents’ infections. The ALJ found that there was no evidence to
show that Hermina had made such efforts. In sum, the ALJ did not
err in requiring a reasonable effort to comply with the infection con-
trol regulation, and the regulation itself provides adequate notice.

   Second, Sea Island argues that the imposition of sanctions based on
the surveyors’ assessment of the likelihood of future harm results in
4        SEA ISLAND COMPREHENSIVE v. U.S. DEP’T OF HEALTH
arbitrary enforcement in violation of the Administrative Procedure
Act and the Due Process Clause. See 42 C.F.R. § 488.301, 488.408.
Sea Island has waived this claim because it failed to raise it before the
agency. Armco, Inc. v. Martin, 277 F.3d 468, 476 (4th Cir. 2002); see
also Thetford Prop. IV Ltd. P’ship v. United States Dep’t of Hous. &
Urban Dev., 907 F.2d 445, 447-49 (4th Cir. 1990) (discussing the
importance of exhausting administrative remedies even when the
claim has a constitutional focus).

   Third, Sea Island argues that the ALJ applied an incorrect defini-
tion of immediate jeopardy. The ALJ applied the regulatory definition
of immediate jeopardy, that is, "a situation in which the provider’s
noncompliance with one or more requirements has caused, or is likely
to cause, serious injury, harm, impairment, or death to a resident." 42
C.F.R. § 488.301. Citing Morton v. Ruiz, 415 U.S. 199, 235 (1974),
Sea Island contends that HHS is bound by its own internal policy set
out in its State Operations Manual § 3010, which (according to Sea
Island) narrows the regulatory definition of immediate jeopardy. The
manual requires a "crisis situation" before a facility may be termi-
nated from participation in the Medicare and Medicaid programs.
Even if the manual narrows the definition, the manual does not apply
here. The manual applies only to termination; it does not apply to the
imposition of CMPs. Accordingly, the ALJ did not err in using the
regulatory definition of immediate jeopardy when he considered the
CMPs.

   Finally, Sea Island argues that HHS has adopted a proof scheme in
CMP cases that improperly shifts the burden of proof to the targeted
facility. HHS maintains that "once a certification of noncompliance
is made [by the agency], remedies [such as CMPs] are authorized
unless and until the certification of noncompliance is superceded by
a finding that correction has been completed and compliance and eli-
gibility [has been] restored." Respondent’s Br. at 47. Under the
Administrative Procedure Act the proponent of an order bears the bur-
den of proof. 5 U.S.C. § 556(d); Director, Office of Worker’s Comp.
Programs, DOL v. Greenwich Collieries, 512 U.S. 267 (1994). Here,
HHS argues that once it established noncompliance (immediate jeop-
ardy) at the time the survey concluded on April 23, 1999, the burden
of proof shifted to Hermina because it was the proponent of an order
finding that the violations had been corrected. In turn, Sea Island
         SEA ISLAND COMPREHENSIVE v. U.S. DEP’T OF HEALTH            5
argues that HHS had the burden to prove that Hermina was out of
compliance for the entire period (April 23 up to May 16, 1999) sanc-
tions were imposed. We need not resolve this argument because there
is substantial evidence to support the finding that Hermina was out of
compliance the entire time CMPs were assessed. See Fairfax Nursing
Home, Inc. v. United States Dep’t of Health and Human Services, 300
F.3d 835, 840 n.4 (7th Cir. 2002) (declining to decide whether burden
of proof shifted to facility after HHS made initial showing of immedi-
ate jeopardy because substantial evidence supported the conclusion
that a state of immediate jeopardy prevailed the entire time CMPs
were imposed). There was substantial evidence here to support the
finding that Hermina was out of compliance at the immediate jeop-
ardy level on April 23, 1999, the day the survey ended. The violations
relating to infection control were so serious and extensive that it was
clear that it was going to take Hermina some time to correct them.
Indeed, the ALJ noted that Hermina’s "plan of correction acknowl-
edged that, in many instances, corrections were ‘ongoing’ as of" May
10, 1999. All of this evidence allows the fair inference that Hermina
had not attained compliance by May 15, 1999, the last day CMPs
were imposed.

   For the foregoing reasons, we deny Sea Island’s petition for
review.

                                  PETITION FOR REVIEW DENIED