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From Health Law Daily, April 15, 2013

Nursing home encounters road block to agency review after filing plan of correction

By Jenny M. Burke, JD MS

Columbus Park Nursing and Rehabilitation Center (Columbus Park) was unable to proceed with a claim for violation of its due process rights against CMS, because the district court lacked jurisdiction over the case (Columbus Park Nursing and Rehabilitation Center v Sebelius, April 12, 2013, Feinerman, G). Columbus Park claimed that the court had jurisdiction to pursue the case via an exception to a provision in the Medicare Act, allowing providers to challenge a CMS determination when a party otherwise would be unable to obtain review anywhere by any means. Because there was an opportunity for administrative review through CMS, the exception did not apply and the court lacked jurisdiction.

Deficiency finding. Columbus Park is a skilled nursing facility located in Chicago. Acting on behalf of CMS, the Illinois Department of Public Health (IDPH) conducted a survey of Columbus Park on July 20, 2009. Finding that Columbus Park was not in “substantial compliance” with Medicare and Medicaid requirements, IDPH cited Columbus Park for a “G” level deficiency, meaning that it had uncovered an isolated incident of actual harm to a resident that did not create immediate jeopardy. IDPH informed Columbus Park that it was proposing, but not yet actually implementing, remedies for the deficiency, consisting of requiring a directed in-service training for staff, and a $200 daily fine until the deficiency was remedied.

Columbus Park denied IDPH’s finding and attributed it to a deficient investigation, but then it did submit a plan of correction and requested a hearing to challenge the deficiency finding. Afterwards, CMS resurveyed Columbus Park, and found that it was in substantial compliance. At that time, CMS decided not to implement its proposed remedies. It also did not remove the deficiency finding from the nursing facility’s record. Further, CMS refused to grant Columbus Park’s hearing request to remove the finding from the record. As a result, the deficiency finding became part of the public record and remains there.

Challenge. Columbus Park challenged this finding in court, claiming that that the Secretary’s refusal to allow Columbus Park a hearing to challenge the deficiency finding, combined with the continuing negative effects of that finding, amounts to a deprivation without due process of its interests in its reputation, in future income from potential patients who might be deterred by the publicized deficiency finding, and in being afforded a chance to correct future deficiencies rather than having enforcement remedies imposed immediately. Columbus Park claimed that these deprivations were: the decreased demand for its services due to the internet publication of the deficiency finding and a corresponding low one-star facility rating; the loss of the opportunity to make corrections before enforcement remedies would be imposed in response to future deficiency findings; and the enhancement of future remedies in light of the deficiency at issue. CMS then filed a motion to dismiss, claiming that the court lacked jurisdiction.

Jurisdiction. Columbus Park and CMS agreed that the issue in this case falls under the Medicare Act. They disagreed on whether Columbus Park’s situation qualified for an exception for situations where review could not be channeled normally through the agency, and there would be no review at all. Columbus Park claimed that it qualified for the exception because it wanted to challenge the deficiency finding, but HHS refused to hear the challenge claiming that no enforcement remedy was imposed. Columbus Park pointed out that if the court lacked jurisdiction over the case, Columbus Park would have no way to challenge an allegedly unconstitutional deprivation. CMS disagreed.

According to CMS, Columbus Park did have a route by which it could have obtained review of the deficiency finding, even after CMS declined to impose any remedies against it. It could have refused to submit a plan of correction, causing the proposed remedies to be imposed, which would have then entitled Columbus Park to challenge the finding through a full evidentiary hearing, culminating in judicial review. The court agreed.

Columbus Park further argued that the court also had jurisdiction because the nursing facility had already presented its arguments before both the Administrative Law Judge and the Departmental Appeals Board. These challenges were also unsuccessful, as the ALJ and the Board correctly determined that they were without jurisdiction to hear Columbus Park’s challenge to the deficiency finding in the absence of any formal enforcement remedy. The attempt to obtain judicial review is not the same as obtaining a final decision, as no hearing was actually held. Therefore, Columbus Park could not claim that the court had jurisdiction via this route as well. Accordingly, their claims were dismissed.

The case number is 10 C 4317.

Attorneys: Mark J. Silberman (Duane Morris LLP) for Columbus Park Nursing and Rehabilitation Center. Katherine Ellen Beaumont, United States Attorney’s Office, for Kathleen Sebelius, Secretary, United States Department of Health and Human Services.

Companies: Columbus Park Nursing and Rehabilitation Center; United States Department of Health and Human Services

MainStory: TopStory CoPNews IllinoisNews

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