Trade around World of Pa v. Shalala, CIVA 00-1159.
| Citation | 145 F.Supp.2d 653 |
| Decision Date | 08 February 2001 |
| Docket Number | No. CIVA 00-1159.,CIVA 00-1159. |
| Parties | TRADE AROUND THE WORLD OF PA d/b/a Highland Hall Care Center, Plaintiff, v. Donna SHALALA, in her official capacity as Secretary, United States Department of Health and Human Services, Nancy-Ann Min Deparle, in her official capacity as Administrator, Health Care Financing Administration, Charlene M. Brown, in her official capacity as Regional Administrator, Health Care Financing Administration, Region II, Claudette V. Campbell, in her official capacity as Associate Regional Administrator, Medicaid and State Operations, Health Care Financing, Feather Houstoun, in her official capacity as Secretary, Commonwealth of Pennsylvania Department of Public Welfare and Bonnie L. Rose, in her official capacity as Director Commonwealth of Pennsylvania Department Of Public Welfare, Division of Provider Services, Defendant. |
| Court | U.S. District Court — Western District of Pennsylvania |
Louis J. Capozzi, Jr., Stephen A. Miller, Capozzi & Associates, Harrisburg, PA, for Trade Around the World of PA dba Highland Hall Care Center, plaintiffs.
Laura Schleich Irwin, United States Attorney's Office, Pittsburgh, PA, James C. Newman, John Aloysius Cogan, Jr., Department of Health & Human Services, Office of the General Counsel, Philadelphia, PA, for Donna Shalala, in her official capacity as Secretary. United States Department of Health and Human Services, Nancy-Ann Min Deparle, in her official capacity as Administrator, Health Care Financing Administration, Charlene M. Brown, in her official capacity as Regional Administrator, Health Care Financing Administration. Region III, Claudette V. Campbell, in her official capacity as Associate Regional Administrator, Medicaid and State Operations, Health Care Financing Administration, Region III, Feather Houstoun, in her official capacity as Secretary, Commonwealth of Pennsylvania Department of Public Welfare, Bonnie L. Rose, in her official capacity as Director, Commonwealth of Pennsylvania Department of Public Welfare, Division of Provider Services, defendants.
Pending before the Court are two Motions to Dismiss, the first (Docket No. 18) brought by Feather Houstoun, Secretary, Commonwealth of Pennsylvania Department of Public Welfare ("DPW"), and Bonnie L. Rose, Director, DPW Division of Provider Services. The second Motion to Dismiss (Docket No. 20) is brought by Donna Shalala, Secretary, United States Department of Health and Human Services ("HHS"), Nancy-Ann Min DeParle, Administrator, Health Care Financing Administration ("HCFA"), Charlene M. Brown, HCFA Regional Administrator, and Claudette V. Campbell, HCFA Associate Regional Administrator. Each of the named Defendants is sued in her official capacity. The Motions to Dismiss are both brought pursuant to Fed.R.Civ.P. 12(b)(1), alleging lack of jurisdiction by this Court, and pursuant to Fed.R.Civ.P. 12(b), alleging that Plaintiff has failed to state a claim for which relief can be granted. For the reasons discussed below, the Motions to Dismiss are granted.
Before proceeding to the facts of this case, a brief summary of the government programs involved is necessary, particularly as to how Medicare and Medicaid regulations concerning compliance with health and safety standards for nursing home patients are enforced and how a Medicare/Medicaid provider may appeal decisions of the agencies.
Title XVIII of the Social Security Act establishing the Medicare Program, 42 U.S.C. § 1395 et seq., and Title XIX of the Social Security Act establishing the Medicaid Program, 42 U.S.C. § 1396 et seq., each provides that the federal Department of Health and Human Services is responsible for overall administration of the programs. Medicaid, a joint federal/state program, is administered by the individual states which, in order to participate in the program, must agree to comply with the requirements and standards of the Medicaid Act. 42 U.S.C. § 1396a. Private individuals and organizations such as the Plaintiff contract with HHS and the respective states to provide medical services, including residential skilled nursing care, to the elderly, disabled and/or low-income individuals covered by Medicare and Medicaid.
HHS has delegated implementation of Medicare regulations and compliance with the health and safety standards established for the skilled nursing facilities to the Health Care Financing Administration. HCFA in turn contracts with agencies in each state to conduct on-site surveys to determine if the providers meet those standards. In Pennsylvania, the Department of Public Welfare is responsible for those surveys. To be certified as a "nursing facility," the organization must comply with the requirements of 42 U.S.C. § 1395i-3(b)-(d) for provision of services under Medicare and 42 U.S.C. § 1396r(b)-(d) for Medicaid services, as well as with the extensive regulations promulgated by the Secretary of HHS. Once a Pennsylvania provider has been initially certified, the DPW conducts periodic re-inspections to assure that those standards are maintained. 42 U.S.C. § 1395i-3(g); 42 U.S.C. § 1396(g). The Medicare and Medicaid standards are nearly identical.
In 1987, as part of the Omnibus Budget Reconciliation Act ("OBRA 87"), Congress amended the Social Security Act to require higher standards of safety, physical and mental care, and rights of residents at nursing homes. Federal Nursing Home Reform Act, Pub.L. No. 110-203, codified at 42 U.S.C. § § 1395i-3 and 1396r. These changes led in turn to more stringent standards for nursing home accreditation and participation. Until the OBRA 87 amendments, only two sanctions were available for nursing homes that failed to meet participation requirements. If the severity of the non-compliance (the so-called "deficiency") posed "immediate jeopardy" to the well-being of the residents, the Secretary of Health and Human Services or the State could decertify the facility and terminate its eligibility to receive Medicaid reimbursements. If, on the other hand, the deficiency did not pose an immediate and serious threat to the patients' health and safety, HHS or the State could deny payment for new admissions for up to eleven months. Brogdon v. National Healthcare Corp., 103 F.Supp.2d 1322, 1327 (N.D.Ga.2000). However, the OBRA 87 amendments not only imposed unscheduled "standard surveys" and "extended surveys" that determined if the facility met specific standards, they also provided a number of new sanctions to encourage compliance. These so-called "remedies" included denial of payments, civil monetary penalties for each day of non-compliance, appointment of temporary management, and under Medicaid, closure of the facility and transfer of residents to other facilities. Brogdon, id.,citing 42 U.S.C. § § 1395i-3(h)(2)(B) and 1396r(h)(2)(A), (h)(3).
If a sanctioned provider wishes to challenge any of these remedies, he is required to follow a series of appeal procedures. The Medicare Act incorporates by reference the same procedures for appealing Medicare decisions as apply to other claims brought under the Social Security Act. 42 U.S.C. § 1395ll. Briefly summarized, this process consists of a reconsideration by the organization which made the initial determination, followed by an evidentiary hearing before an administrative law judge, then appeal of that decision to the Appeals Council. Ardary v. Aetna Health Plans, 98 F.3d 496, 498 n. 6 (9th Cir.1996), citing 42 U.S.C. § 405(b). Once the Secretary renders a "final decision," the provider has the right of judicial review, the procedures for which are codified in 42 U.S.C. § § 405(g) and (h) and provide in part:
(g) Judicial review. Any individual, after any final decision of the Secretary [of Health and Human Services] made after a hearing to which he was a party ... may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business.
(h) Finality of Secretary's decision. The findings and decision of the Secretary after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 1331 or 1346 of title 28 [28 U.S.C. § 1331 or 1346], to recover on any claim arising under this subchapter [42 U.S.C. §§ 401 et seq.].
The appeals process applies not only to individuals who, for instance, have been denied Medicare or Medicaid benefits, but also dissatisfied institutions or agencies whose provider agreements have been terminated or not renewed.1 42 U.S.C. § 1395cc(h)(1).
Plaintiff Trade Around the World of PA, a Pennsylvania for-profit corporation, operates two skilled nursing facilities in New Castle and Aliquippa, Pennsylvania. At these facilities, Plaintiff provides longterm care to elderly, infirm and mentally disabled residents, nearly all of whom receive Medicare and/or Medicaid support. Between November 15, 1999, and May 3, 2000, Plaintiff's facility in New Castle, Highland Hall Care Center ("Highland Hall"), underwent nine separate surveys by the Pennsylvania Department of Health ("DOH"), which acts as the Commonwealth's Medicare and Medicaid survey agency on behalf of the DPW. Each survey resulted in citations for various deficiencies by Highland Hall for failing to meet Medicare and Medicaid program participation requirements. The cumulative effect of these deficiencies was a recommendation by the DOH to...
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