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Bryn Mawr Care v. Sebelius

United States District Court, N.D. Illinois, Eastern Division

September 26, 2012

BRYN MAWR CARE, Plaintiff,
Kathleen SEBELIUS, in her Official Capacity as Secretary of the United States Department of Health and Human Services, and Arthur F. Kohrman, M.D., in his Official Capacity as Director of the Illinois Department of Public Health, Defendants.

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Sarah R. Barrish, Sir Management, Lincolnwood, IL, for Plaintiff.

AUSA, Katherine Ellen Beaumont, United States Attorney's Office, Michael D. Arnold, Hellin Jang, Illinois Attorney General's Office, Chicago, IL, for Defendants.



For the reasons stated, the Court grants Defendant Kathleen Sebelius' Motion for Summary Judgment and grants Defendant Arthur F. Kohrman, M.D.'s Motion for Summary Judgment.


Plaintiff Bryn Mawr Care (" Plaintiff" ) operates a nursing home in Chicago. On April 2, 2010, the Illinois Department of Public Health (the " IDPH" ) surveyed the facility and gave Plaintiff written notice that it did not comply with certain federal regulations. Plaintiff denies that it was ever out of compliance with the federal regulations. On April 8, 2010, the IDPH provided Plaintiff a notice stating that due to the noncompliance of the April 2 survey, it had proposed certain remedies. In the same notice, the IDPH also stated that Plaintiff had an opportunity to correct the deficiencies prior to the imposition of any such remedies. On April 18, 2010 Plaintiff requested that the Michigan Peer Review Organization (the " MPRO" ) perform an informal dispute resolution of the matter. The MPRO granted Plaintiff's request and Plaintiff participated in the informal dispute resolution process. On May 8, 2010, the MPRO made its final determination regarding Plaintiff's request and declined to modify the IDPH's April 2 deficiencies survey.

On May 18, 2010, the IDPH conducted a revisit survey and found that Plaintiff had cured all of the April 2 deficiencies and had returned to substantial compliance. On May 26, 2010, the IDPH informed Plaintiff it would not impose any remedies on Plaintiff for the April 2 deficiencies.

The initial April 2 survey results, however, were available on the Centers for Medicare and Medicaid Services (" CMS" ) website and subsequently were disseminated to other commercial websites. As a result, on July 1, 2010, Plaintiff requested a hearing before CMS to challenge the findings of the survey. An Administrative Law Judge (" ALJ" ) dismissed the case, concluding Plaintiff did not have a right to a federal hearing to challenge the survey findings.

In July 2010, after reviewing the April 2 survey, CMS mistakenly calculated Plaintiff's star rating (a rating system CMS uses to rate facilities for the purposes of providing the public a comparison of nursing homes and to encourage compliance amongst facilities), to be two out of five stars when it should have been four out of five stars. CMS published this rating on its website. CMS failed to correct the rating until February 16, 2012.

On August 11, 2010, Plaintiff submitted a request to the IDPH to challenge the April 2 findings. An ALJ again dismissed Plaintiff's request, finding that Plaintiff did not have the right to a hearing because CMS did not impose any remedies on Plaintiff or impose any other adverse action.

Plaintiff filed a two-count Complaint in this Court for a declaratory judgment and injunctive relief. Count One alleges that Defendant Kathleen Sebelius, in her official capacity as the U.S. Secretary of Health and Human Services, violated Plaintiff's procedural due process rights under the Fifth Amendment. Count Two alleges that Defendant Arthur F. Kohrman, M.D. violated Plaintiff's procedural

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due process rights under the Fourteenth Amendment. (Dr. Kohrman is currently the Acting Director of the IDPH and has been substituted in place of the original named Defendant, Damon T. Arnold, M.D., pursuant to Federal Rule of Civil Procedure 25(d).) Both Defendant Sebelius and Defendant Kohrman moved for summary judgment.


Summary judgment is appropriate if the moving party " shows that there is no genuine dispute as to any material fact and [it] is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A dispute is " genuine" if the evidence would permit a reasonable jury to find for the non-moving party. A dispute is material if it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the moving party satisfies its burden, the non-movant must present facts to show a genuine dispute exists to avoid summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court construes all facts and draws all reasonable inferences in favor of the non-moving party. Ricci v. DeStefano, 557 U.S. 557, 129 S.Ct. 2658, 2677, 174 L.Ed.2d 490 (2009).

If a party asserts that a fact cannot be, or is genuinely disputed, it must support that assertion with citations to materials in the record. FED. R. CIV. P. 56(c)(1). Such cited materials must be served and filed. Local Rule 56.1. A court need only consider cited materials, but it is within the court's discretion to consider the entire record. FED. R. CIV. P. 56(c)(3). If a party fails to support an assertion, the court may consider the fact undisputed, and grant summary judgment if the record supports it, or issue any other appropriate order. FED. R. CIV. P. 56(e).


Defendant Sebelius (" Sebelius" ) claims summary judgment is appropriate because Plaintiff's claim is meritless because reputational harm does not require due process protection. Sebelius alternatively argues that summary judgment should be granted because Plaintiff received adequate due process through an informal dispute resolution. Finally, Sebelius contends because Plaintiff is a Medicaid-only facility, it was not entitled to a hearing at the federal level to challenge the findings of noncompliance.

Plaintiff responds that the harm suffered to its reputation is distinguishable from the precedent cited by Sebelius because, in this case, the allegations published and disseminated were never admitted and were never subject to a judicial challenge. In fact, Plaintiff denies it was ever out of substantial compliance on April 2. However, because Plaintiff fails to support its alleged compliance on ...

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