The Windsor Place v. United States Dep't of Health

• Decision Date: 17 June 2011
• Docket Number: No. 09–60072.,09–60072.
• Citation: 649 F.3d 293
• Parties: The WINDSOR PLACE, Petitioner,v.UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

649 F.3d 293

The WINDSOR PLACE, Petitioner,

v.UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondent.

No. 09–60072.

United States Court of Appeals, Fifth Circuit.

June 17, 2011.

Julie Bowman Mitchell, Philip Joseph Chapman, Mitchell Day Health Law Firm, P.L.L.C., Ridgeland, MS, for Petitioner.Michelle A. Gilliam, Asst. Regional Counsel, U.S. Dept. of Health & Human Services, Atlanta, GA, Henry Goldberg, U.S. Dept. of Health & Human Services, Office of the Gen. Counsel, Baltimore, MD, Kathleen Sebelius, Sec., U.S. Dept. of Health & Human Services, Washington, DC, for Respondent.

Petition for Review from the U.S. Department of Health and Human Services Departmental Appeals Board.Before WIENER, PRADO, and OWEN, Circuit Judges.PER CURIAM:

The Windsor Place Nursing & Rehab Center (“Windsor”) petitions this Court for review of the final decision of the Departmental Appeals Board (“DAB”) of the U.S. Department of Health and Human Services (“HHS”) finding that Windsor was in substantial noncompliance with regulations covering skilled nursing facilities, and affirming civil monetary penalties (“CMPs”) and denial of payment for new admissions (“DPNA”). Finding that the DAB's decisions are supported by substantial evidence and are not arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law, we dismiss Windsor's petition for review.

I. FACTUAL AND PROCEDURAL BACKGROUND

Windsor is a skilled nursing facility in Columbus, Mississippi that participates in the federal Medicare and Medicaid programs. On behalf of the Centers for Medicare & Medicaid Services (“CMS”), the Mississippi State Department of Health conducted surveys of Windsor to determine whether Windsor was in substantial compliance with applicable laws and regulations. Based on a survey conducted on September 24, 2004, CMS determined that Windsor was not in substantial compliance with four regulations, three of which are relevant to this appeal: (1) 42 C.F.R. § 483.20(b)(2)(ii), requiring the facility to complete a “comprehensive assessment” of a resident after it “determines, or should have determined, that there has been a significant change in the resident's physical or mental condition”; (2) 42 C.F.R. § 483.25(c), requiring that “a resident who enters the facility without pressure sores does not develop pressure sores unless the individual's clinical condition demonstrates that they were unavoidable”; and (3) 42 C.F.R. § 483.25(a)(3), requiring the facility to ensure that “a resident who is unable to carry out activities of daily living receives the necessary services to maintain good nutrition, grooming, and personal and oral hygiene.” Based on the four violations, CMS imposed CMPs of $350 per day effective September 24, 2004, until Windsor achieved substantial compliance, and a proposed DPNA unless Windsor reached substantial compliance before October 27, 2004.

Based on an October 22 visit, CMS determined that Windsor's noncompliance with the fourth violation from September 24 (not on appeal) continued at an increased scope and severity. It did not address the three other violations at issue from September 24. Based on an October 28 visit, CMS concluded that while Windsor had remedied its previous violations as of October 27, it was not in compliance with three additional regulations, including one contested in this petition: self-administration of drugs by a resident without a previous determination by Windsor that this practice was safe, in violation of 42 C.F.R. § 483.10(n). Based on these violations, CMS assessed CMPs of $150 per day, effective October 28 through December 21, 2004, when CMS determined that Windsor had remedied the violations.

Windsor appealed all of the violations to an HHS Administrative Law Judge (“ALJ”). The ALJ upheld all of CMS's determinations of noncompliance with two exceptions. The ALJ reversed the fourth violation from the September 24 survey and by extension that violation's continuance in the October 22 survey, and reversed one violation from the October 28 survey—neither of these violations are at issue in this appeal. On November 26, 2008, the DAB affirmed the ALJ's decision except with respect to one of the two remaining October 28 violations. It reversed and remanded that violation, which is not at issue on appeal. Windsor filed its petition for review on February 2, 2009. It then moved to stay proceedings in this case, and we dismissed the petition without prejudice to the right of either party to reinstate the petition. On August 17, 2010, we granted Windsor's motion to reinstate the petition.

II. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction over the final decision of HHS regarding Medicare-program compliance pursuant to 42 U.S.C. § 1320a–7a(e). Our review of the DAB's final decision is governed by the Administrative Procedure Act (“APA”), “which permits the setting aside of agency actions, findings, and conclusions that are ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law’ or ‘unsupported by substantial evidence.’ ” 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)). Additionally, “findings of the Secretary [of HHS] with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive.” 42 U.S.C. § 1320a–7a(e). While CMS has the burden of production to establish a prima facie case of noncompliance with a regulation, once CMS has met this burden, the provider has the ultimate burden of persuasion that it was in substantial compliance with the regulation at issue. See Hillman Rehab. Ctr. v. Health Care Fin. Admin., DAB 1611 (1997), aff'd sub nom. Hillman Rehab. Ctr. v. U.S. Dep't of Health & Human Servs., No. 98–CV–3789, 1999 WL 34813783 (D.N.J. May 13, 1999).

III. DISCUSSION

Windsor contests the findings of noncompliance and the CMPs assessed for the three remaining citations stemming from the September 24, 2004 survey and the one remaining citation stemming from the October 28, 2004 survey. It also challenges the imposition of the DPNA on October 27, 2004, arguing that it was in substantial compliance prior to that date.

A. 42 C.F.R. § 483.20(b)(2)(ii)

42 C.F.R. § 483.20(b)(2)(ii) requires that a facility conduct a significant-change assessment

[w]ithin 14 calendar days after the facility determines, or should have determined, that there has been a significant change in the resident's physical or mental condition. (For purposes of this section, a “significant change” means a major decline or improvement in the resident's status that will not normally resolve itself without further intervention by staff or by implementing standard disease-related clinical interventions, that has an impact on more than one area of the resident's health status, and requires interdisciplinary review or revision of the care plan, or both.)

Id. CMS found Windsor in noncompliance with § 483.20(b)(2)(ii) based on findings in the September 24, 2004 survey that Windsor had failed to conduct a significant-change assessment for Resident 14 after she developed two Stage II pressure ulcers on February 17, 2004, and two more Stage II pressure ulcers on March 1, 2004. By March 8, one of those ulcers worsened to a Stage III ulcer that was one-by-one centimeters and 0.8 centimeters deep, and by March 15, another worsened to a Stage IV ulcer that was five-by-six centimeters and six centimeters deep with tunneling. Windsor did not undertake a significant-change assessment until April 29, 2004.

Windsor argues, as it did in the agency proceedings, that CMS failed to make a prima facie case of noncompliance because it failed to produce evidence that the pressure sores had “an impact on more than one area of the resident's health status” as required for a “significant change” in health status. It contends that the evidence produced shows that the ulcers affected only skin integrity, and that the DAB's determination that nutritional needs and pain were also implicated was merely speculative. We disagree.

As a first matter, the record shows, and the ALJ and DAB found, that Windsor's staff consulted a dietician on more than one occasion to address the patient's dietary needs with regard to the pressure sores. One of the progress notes also discusses how different vitamin and dietary supplements were meeting her protein and fluid needs but not her caloric needs. While these dietary consultations may have related to remedying the skin-integrity problems rather than addressing separate dietary concerns, this evidence is sufficient to support a finding that the pressure sores implicated the patient's dietary needs.

Windsor nonetheless contends that the sores could not have affected the patient's nutritional status absent evidence of substantial weight gain or loss. Windsor is correct that the preamble to the rulemaking for this section notes ten areas of decline that may be characterized as “significant changes,” including “unplanned weight loss problem.” See 62 Fed.Reg. 67,174, 67,196–97 (Dec. 23, 1997). The DAB correctly notes, however, that the preamble list is not intended to be exclusive. Additionally, while § 483.20(b)(2)(ii) requires that the significant change affects more than one area of the patient's health status, it does not require that all of the areas that are affected themselves indicate a significant change.

Additionally, the DAB and ALJ's findings concerning pain are also supported by substantial evidence. Given the description of the patient's ulcers, which included tunneling of six centimeters deep, it is hard to believe that the patient was not also in severe pain. The ALJ and DAB's decision not to credit nurses notes observing no distress during the relevant time period...