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Fal-Meridian, Inc. v. U.S. Dep't of Health and Human Services

May 6, 2010


Petition for Review of an Order of the Departmental Appeals Board of the U.S. Department of Health and Human Services. No. 2265.

The opinion of the court was delivered by: Posner, Circuit Judge.


Before CUDAHY, POSNER, and EVANS, Circuit Judges.

The Meridian nursing home asks us to set aside a final decision by the Department of Health and Human Services that imposed a civil penalty of $7,100 on the nursing home for having violated a regulation under the Medicare and Medicaid provisions of the Social Security Act. 42 U.S.C. §§ 1302, 1395hh. The regulation requires a skilled nursing facility to "ensure that-(1) the resident environment remains as free of accident hazards as is possible; and (2) each resident receives adequate supervision and assistance devices to prevent accidents." 42 C.F.R. § 483.25(h). The size of the penalty was based on the Department's further determination that Meridian's violation of the regulation was "likely to cause... serious injury, harm, impairment, or death to a resident." 42 C.F.R. §§ 488.301, 488.438(a)(1)(i).

It may seem odd that the nursing home would be seeking judicial review of such a tiny penalty, when its lawyer told us that the Department's determinations would not jeopardize the nursing home's license to serve Medicare and Medicaid patients. But the episode (which we're about to narrate) giving rise to those determinations has also incited a tort suit for wrongful death against the nursing home, and the home does not want the finding used to bolster a claim of negligence. Regula-tory violations are not negligence per se but they are evidence of negligence. Beta Steel v. Rust, 830 N.E.2d 62, 73-74 (Ind. App. 2005); Zimmerman v. Moore, 441 N.E.2d 690, 696-97 (Ind. App. 1982). Meridian may also fear that the imposition of a civil penalty for an accidental death may make it harder to attract new residents.

A resident of the nursing home identified only as "B" (the Medicare administration tries to maintain patient anonymity in enforcement actions) was a 60-year-old woman covered by Medicare despite her relative youth. (The likeliest explanation for her coverage is that she had been receiving social security disability benefits for at least two years, which would entitle her to Medicare benefits. 42 U.S.C. § 426(b). In effect, a finding of total disability accelerates one's entitlement to federal oldage benefits, including Medicare.) B suffered from schizophrenia (perhaps other mental illness or impairments as well) and dysphagia, which means difficulty in swallowing. Her dysphagia was so serious that she could not safely consume any food or liquid (including water)-her attempt to do so might result in her inhaling it ("pulmonary aspiration"-the breathing of foreign matter into the trachea or lungs) and as a result strangling. And so a feeding tube, called a "PEG" (percutaneous endoscopic gastrostomy), had been inserted into her stomach through the wall of her abdomen.

Readmitted to the nursing home on February 22, 2008, after the implant of the feeding tube and with a "strict NPO" (nil per os-"nothing by mouth") order by the hospital to the nursing home, B was placed in a room with another resident. That resident was required to take all her regular meals, plus snacks, in her bed in the room she shared with B. This placement of B turned out to be a serious error. For she had an irresistible, and possibly insane, compulsion to consume food and drink in the usual way. The conjunction of schizophrenia and dysphagia is not uncommon, and is extremely dangerous. See, e.g., J. Regan, R. Sowman, and I. Walsh, "Prevalence of Dysphagia in Acute & Community Mental Health Settings," 21 Dysphagia 95 (2006); T.K.S. Tan, "Dysphagia and Chronic Schizophrenia: A Case Report," 34 Singapore Med. J. 356 (1993). Had B been compos mentis, she could have eaten and drunk to her heart's content despite the danger; for a competent person has a right to refuse treatment. Cruzan v. Director, Missouri Dep't of Health, 497 U.S. 261, 278-79 (1990). But her mental illness made her incompetent to make decisions about her health.

Between the date of B's readmission and her death two and a half weeks later, the nursing home's staff repeatedly witnessed her trying to eat and drink, including her roommate's food and drink, and sometimes succeeding. In fact on 18 occasions before B's death, she was observed by the staff to be eating or drinking (mainly the latter); and doubtless there were occasions, maybe many occasions, on which her infractions went unobserved or unrecorded. Yet apparently, as Meridian emphasizes, she had no untoward effects from her episodes of eating and drinking.

At some point in B's stay the staff revised her care plan to require staff to check on her every 15 minutes. Some of the occasions on which she was seen eating or drinking occurred after the revision. On March 10 her roommate told the staff that she was giving food to her. B was found dead on the bathroom floor the next night. The cause of her death has not been determined. A first death certificate said she had died of "aspiration pneumonia," which is a form of pneumonia for which dysphagia is a risk factor. But the doctor who signed the death certificate later changed his mind and certified that her death had been due to a combination of schizophrenia and chronic obstructive lung disease. She also suffered from bronchitis and congestive heart failure, and had been virtually sleepless since being readmitted to the nursing home. Her death could not have been a surprise.

This is not a wrongful-death case, so uncertainty about the cause of B's death cannot get the nursing home off the hook. The dispositive questions are, first, whether its handling of her physical and mental infirmities was consistent with its duty to keep the home as free as possible from hazards that might cause an accident to a resident (that is subsection (1) of the regulation; subsection (2), though cited by HHS in finding a violation, adds nothing to (1) in this case), and, second, if so, whether the breach of that duty was "likely to cause... serious injury, harm, impairment, or death to a resident."

What does "as free of accident hazards as is possible" mean? Taken literally, it would require a nursing home to take precautions regardless of cost, as long as they were at least minimally efficacious. It would have been physically possible, as distinct from economically responsible, for Meridian to have reduced to zero the probability of B's eating or drinking, by locking her in the equivalent of a dry cell (even if Meridian would have had to construct one) and not allowing her to leave it without a staff escort. But no one suggests that "possible" is to be taken literally. If it were, and cost were regarded as no obstacle to requiring hazard precautions, this would be unlikely to help the Bs of this world; nursing homes would turn away applicants who can be protected against all hazards only at a cost that would far exceed the willingness of the Medicare administration, groaning under its huge deficit, to reimburse the nursing home. (The regulation is not limited to Medicare patients, but most residents of nursing homes are elderly and thus covered by Medicare.) Although once a person is admitted to a nursing home licensed by Medicare there are restrictions on the home's transferring or discharging the person, 42 U.S.C. § 1395i-3(c)(2)(A), there is (with immaterial exceptions) no requirement that it admit the person in the first place. See 42 U.S.C. § 1395i-3(c)(5); 42 C.F.R. § 483.12(d).

Neither the opinion issued by the Departmental Appeals Board nor the briefs of either party articulates the standard of care imposed by the "as is possible" regulation. We can assume that it's a high standard. The Social Security Act provides that "a skilled nursing facility must provide services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident, in accordance with a written plan of care." 42 U.S.C. § 1395i-3(b)(2); see also id., § 1396r(b)(2) (emphasis added). The "as is possible" language of the regulation is more or less consistent with "highest practicable" (we hedge with "more or less" because eliminating a particular hazard in a particular way might conflict with maintaining an attractive quality of life-"psychosocial well-being"-as perhaps in our "dry cell" example); in any event Meridian does not challenge the regulation's validity.

The Supreme Court has distinguished "feasibility analysis" from "cost-benefit analysis" in other regulatory settings, e.g., American Textile Manufacturers Institute, Inc. v. Donovan, 452 U.S. 490, 508-09 (1981), and the "as is possible" regulation is suggestive of the former. Cf. 29 U.S.C. § 655(b)(5) (OSHA) (feasibility); 33 U.S.C. § 1316(a)(1) (Clean Water Act) (achievability); 42 U.S.C. § 7412(d)(2) (Clean Air Act) (same). In "feasibility," or its equivalent "achievability," analysis, the regulatory agency is required to consider costs of compliance; but only if they are in some sense prohibitive do they provide a defense. See American Textile Manufacturers Institute, Inc. v. Donovan, supra, 452 U.S. at 536. In an OSHA case we said that the test was "whether the restrictions would materially reduce a significant workplace risk to human health without imperiling the existence of, or threatening massive dislocation to, the health care industry." American Dental Ass'n v. Martin, 984 F.2d 823, 825 (7th Cir. 1993) (emphasis added).

Yet there is a feature of the "as is possible" regulation that makes us doubt that it creates a feasibility standard as demanding as the one described in American Dental Ass'n v. Martin. Medicare pays for the health care of most nursing-home residents. Nursing homes receive a flat per diem reimbursement from Medicare for each day of care that they provide, adjusted for the location of the nursing home and for the resources required to provide adequate care for the different types of resident. See 42 U.S.C. § 1395yy; 42 C.F.R. § 413.335; Medicare Payment Advisory Comm'n, "Medicare Payment Basics: Skilled Nursing Facility Services Payment System" (Oct. 2009), w w w.m ents/M edPA C_Paym ent_ Basics_09_SNF.pdf (visited Apr. 20, 2010); David A. Bohm, "Striving for Quality Care in America's Nursing Homes: Tracing the History of Nursing Homes and Noting the Effect of Recent Federal Government Initiatives to Ensure Quality Care in the Nursing Home Setting," 4 DePaul J. Health Care L. 317, 357-60 (2001). The per diem limits the precautions that the Medicare administration can realistically require a nursing home to take, for a home will stop admitting residents who require precautions that cost more than the reimbursement that the home can expect to receive. And if we assume that the Medicare administration sets a reasonable per diem rate, then in practice the "as is possible" standard will approximate the balancing of magnitude and likelihood of harm against the burden of precautions that is familiar in negligence cases and summarized in the concept of due or reasonable care. E.g., Mesman v. Crane Pro Services, 512 F.3d 352, 354 (7th Cir. 2008); McCarty v. Pheasant Run, Inc., 826 F.2d 1554, 1556 (7th Cir. 1987); United States v. ...

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