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Nursing Home Cases: Compliance with Medicare & Medicaid Regulations

Lakeridge Villa Health Care Ctr. v. Leavitt, 2006 U.S. App. LEXIS 27338 (6th Cir. 2006). Lakeridge is an Ohio nursing home that participates in Medicare and Medicaid. When it was surveyed, it was found out of compliance with several provider requirements. It was fined a civil monetary penalty of $80,300. The fine was upheld and affirmed on appeal. Among the violations cited were “one violation of 42 C.F.R. § 483.25(h)(2), creating immediate jeopardy, and violations of 42 C.F.R. § 483.13, 483.25, 483.25(c), and 483.25(d)(2), not producing immediate jeopardy.” The most serious violation related to section 483.25(h)(2), which requires facilities to provide adequate supervision and assistance devices to prevent accidents. One of the facility’s arguments in response was that no actual harm resulted. The Court found that actual harm is not required for the nursing home to violate a provider agreement. The Court rejected the nursing home’s argument that the fine was excessive. Similarly, it rejected the argument that a fine cannot be imposed while the facility is implementing a plan of correction.

Note: This case demonstrates that the federal nursing home regulations are not too vague or general to enforce.

Barbourville Nursing Home v. United States HHS, 174 Fed. Appx. 932 (6th Cir. 2006). The Court affirmed a $24,300 civil penalty after a U.S. Departmental Appeals Board found that a nursing home violated regulations creating an immediate jeopardy to resident’s safety. In this case, the nursing home was found to be non-compliant with minimum standards of care based on unsanitary conditions in a manner that created an immediate jeopardy.

“Federal regulations impose significant requirements on skilled nursing facilities, such as BNH, that choose to participate in Medicare and Medicaid. “Each resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, in accordance with the comprehensive assessment and plan of care.” 42 C.F.R. § 483.25. “Substandard quality of care means one or more deficiencies related to participation requirements under . . . [42 C.F.R.] § 483.25, . . . which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm.” 42 C.F.R. § 488.301.”

On appeal the facility challenged the finding that its noncompliance created an immediate jeopardy for residents. The Court cited Appendix Q, Guidelines for Determining Immediate Jeopardy, where CMS notes that only one individual need be at risk and that serious harm, injury, impairment or death does not have to occur before considering immediate jeopardy. At the ALJ hearing, the finding of immediate jeopardy was justified in view of the observation that fecal material was pulled into or left in wounds. The facilities defense that any infection would be treated was rejected after the government introduced evidence that even local infections can cause wounds to be slow to heal and involve more pain, which qualifies as severe harm. The facility also argued that an absence of infectious outbreaks in the past constitutes dispositive evidence that its program was effective. “Whatever the merits of the Facility’s past practices, the fact that behavior was directly observed that violated BNH’s own policies on infection control, as well as generally accepted medical techniques, simply overwhelms any circumstantial evidence of proper behavior in the past that BNH has mustered. Future injury caused by present mistreatment is simply not cured by claims of past virtue.”

Note: Other Department Appeals Board decisions are at:

Healthcare, LLC v. Leavitt, 2006 U.S. Dist. LEXIS 88906 (D. Ky. 2006). CMS found that Hamburg Healthcare, a nursing home, was not in substantial compliance with the Conditions of Participation in the Medicare and Medicaid programs. After numerous surveys and visits where the nursing home was warned each time that its provider agreement might be terminated absent change, CMS terminated the nursing home’s provider agreement. There was no finding of immediate jeopardy. 42 C.F.R. § 489.53 provides that the provider must have 15 days notice of an impending termination absent a finding of immediate jeopardy. No notice was given. The nursing home sued for an injunction, which was granted due to the lack of notice.

Delta Health Group, Inc. v. United States HHS, 459 F. Supp. 2d 1207 (D. Fla. 2006). CMS sought to impose a civil monetary penalty on the successor of a fined nursing home where the successor accepted assignment of the provider agreement rather than going through the certification process for a new provider agreement. This case includes a detailed discussion of the administrative process through which civil monetary penalties are imposed and appealed. It also discussed the process through which provider agreements are assigned.

N. Mont. Care Ctr. v. Leavitt, 2006 U.S. Dist. LEXIS 69898 (D. Mont. 2006). Nursing home appealed after it failed a survey and CMS threatened to terminate its provider agreement. After immediate jeopardy items were corrected, the sanction was downgraded to denial of payment for new admissions and withdrawal of approval for nurse aide training program. The denial of payment resulted in a loss of $43,600. The nursing home appealed. The violations related to F-Tags 272, 279, 323 and 333. The primary argument reviewed here is that the survey materials were illegal because they constantly changed. The argument was rejected, noting that survey protocols are procedural in nature and are not subject to rule making notice requirements.

United States v. Bell, 2006 U.S. Dist. LEXIS 23031 (D. Pa. 2006). The government prosecuted a case under 18 U.S.C. § 1347, alleging violations of 42 C.F.R. § 483.15 and 42 C.F.R. § 483.25. Defendants Marth Bell and Atrium I Nursing and Rehabilitation Center were found guilty. In a post-trial motion, Defendants argued that the standards of care in 483.15 and 483.25 are vague and ambiguous. The court denied Defendant’s motion, finding that the government’s case was not merely a failure to meet the required standards of care, but for health care fraud based on a scheme to falsify records in an attempt to conceal from State and federal agencies the substandard care being provided. The court found that Defendants’ conduct went well beyond a mere failure to provide care and elevated the wrongdoing to criminal fraud.

See McLain v. Mariner Health Care, Inc., 279 Ga. App. 410 (Ga. Ct. App. 2006), infra (discussing Medicare and Medicaid regulations as evidence of the standard of care).

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