Sunshine Haven Nursing Operations, LLC v. United States HHS - 742 F.3d 1239 (10th Cir. 2014)

Rule:

Under the standard of review applicable to a civil monetary penalty imposed under the Medicare Act, an appellate court is not in the business of rubber-stamping agency action. The applicable code provision, 42 U.S.C.S. § 1320a-7a(e), states that the findings of the Secretary of Health and Human Services with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive. This standard requires meaningful scrutiny of the agency's findings. Ultimately, the court asks whether a reasonable mind might accept a particular evidentiary record as adequate to support a conclusion. The substantial evidence test has been equated to review for arbitrariness or caprice. Agency action is arbitrary and capricious if the agency has entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Facts:

Petitioner Sunshine Haven Nursing Operations LLC (Sunshine) operates a 67-bed nursing home in Lordsburg, New Mexico. It petitions for review of the United States Department of Health and Human Services (HHS) Departmental Appeals Board's (DAB) decision affirming an administrative law judge's (ALJ) decision upholding mandatory and discretionary "remedies" (penalties) imposed on Sunshine by the Centers for Medicare and Medicaid Services (CMS). CMS remedies are commonly characterized as imposed by the Secretary of HHS.

Issue:

Does the appellate court have jurisdiction over the facility's challenges to nonmonetary remedies imposed for lack of substantial compliance with Medicare regulations?

Answer:

No

Conclusion:

The court held that although an appellate court had express jurisdiction to review Medicare civil monetary penalties (CMPs) imposed against a skilled nursing facility, the district court had exclusive jurisdiction over the facility's challenges to nonmonetary remedies imposed for lack of substantial compliance with Medicare regulations, and pendant appellate jurisdiction was not warranted. The court found that the CMPs were properly imposed against the facility since the facility failed to monitor the whereabouts of an abusive resident who was repeatedly found with a prior victim and failed to protect other residents from assaults; CMPs were also warranted based on the facility's failure to respond properly to a resident's ankle injury since the facility failed to promptly assess and investigate the injury.