Plott v. Burwell, 9th Cir. 12-70174
Mar 03, 2015OUTCOME: Reversed in part and remanded.
Summary: A Medicare & Medicaid certified health facility appealed a federal administrative decision upholding a civil penalty based only on several deficiencies alleged and tried, leaving other allege ... d and litigated deficiencies undecided. The U.S. Court of Appeals for the Ninth Circuit held the administrative agency could not refuse to address all appealed allegations. Full Discussion: In the case of Plott Nursing Home v. Sylvia Matthews Burwell, Secretary of the Department of Health & Human Services, the court reversed in part and remanded a decision by the Department of Health and Human Services (HHS) Departmental Appeals Board (Board). The court’s decision mandates Administration Law Judge (ALJ) and Board review of each survey deficiency. On September 24, 2008, a team of ten surveyors from the California Department of Public Health conducted a survey of the health facility. The surveyors cited 33 separate deficiencies. (A “deficiency” is a violation of a specific federal regulation at 42 C.F.R. Part 483.) A revisit survey was conducted in December 2008, at which time an additional deficiency was cited. Based on the 34 deficiencies, the Centers for Medicare & Medicaid Services (“CMS”) imposed a $500 per day civil money penalty (CMP) from September 24, 2008 through December 3, 2008, and a $100 per day civil money penalty from December 4 through December 15, 2008. The health facility timely filed an appeal with a ALJ of the Board, challenging the results of both surveys. Following a four-day evidentiary hearing, the ALJ upheld the entire CMP based on only three deficiencies. CMS deleted one deficiency and failed to establish a prima facie case for five others, leaving 27 appealed deficiencies from the September survey. The ALJ did not review 25 of the remaining 27 deficiencies, holding that three of the deficiencies “provide a sufficient basis for the enforcement remedies that CMS proposes.” On appeal, the Board affirmed the ALJ’s decision with regard to just two of the three deficiencies, upholding the $500 per day CMP on that basis. In keeping with Board precedent, it held that the ALJ was not required to review the other 25 deficiencies, even though they were challenged and effectively remained on the facility's record. On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the Board’s decision regarding two deficiencies on the merits and reversed one on the merits. More importantly, the Court held the facility “is entitled to administrative review of all deficiencies that CMS cited." The court then remanded the case with directions to review or dismiss the remaining 25 violations that the ALJ and Board did not review. The court stated the “unreviewed deficiency allegations do affect the penalty” and the facility. The court found the government's argument to the contrary “verges on the ridiculous.” Under this decision, all issued deficiencies a facility appeals must be reviewed or dismissed.
