Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Athens Healthcare, Inc. v. Sebelius

United States District Court, Third Circuit

May 31, 2013

ATHENS HEALTHCARE, INC. d/b/a Ashton Healthcare, Plaintiff,
KATHLEEN SEBELIUS, Secretary of the United States Department of Health and Human Services; MARILYN TAVENNER, Acting Administrator of the Centers for Medicare & Medicaid Services; BEVERLY MACKERETH, Acting Secretary of Pennsylvania Department of Public Welfare, Defendants


MALACHY E. MANNION, District Judge.

Pending before the court are the plaintiff's motion for the issuance of a temporary restraining order, (Doc. No. 2), and the defendant's motion to dismiss plaintiff's motion, (Doc. No. 12). Based upon the court's review of the record, as well as arguments made during a hearing on the matter this same day, the defendant's motion to dismiss will be granted and the plaintiff's motion for a temporary restraining order will be dismissed for lack of subject matter jurisdiction.

By way of relevant background, the plaintiff operates a skilled nursing facility in Athens, Pennsylvania (hereinafter the "Facility"). On May 2, 2013, the plaintiff received notice from the United States Department of Health and Human Services' Centers for Medicare and Medicaid Services (hereinafter "CMS") that it would terminate its Medicare provider agreement with the plaintiff effective May 31, 2013 for failure to substantially comply with care requirements.

Pursuant to 42 U.S.C. §§ 1395i-3, 1396r and 42 C. F. R. §§483.1 et seq., facilities such as the one operated by the plaintiff are required to meet standards of care to receive funding from Medicare and Medicaid programs. The Pennsylvania Department of Health ("DoH") is charged with administering the programs and conducting surveys of facilities to ensure compliance. Failures to comply with the participation requirements, observed during standard surveys or during surveys precipitated by incidents or complaints, results in regulatory "deficiencies." The deficiencies range from "A" to "L, " with "A" through "C" indicating deficiencies that pose no actual harm but potential for nominal harm; "D" through "F" indicating no actual harm but potential for more than minimal harm; "G" though "I" indicating actual harm that is not immediate, and; "J" through "L" indicating immediate jeopardy to resident health or safety. (Doc. No. 1, Att. 6).

The Facility was placed on the Special Focus Facility ("SFF") list in October 2010. SFF facilities are those that have consistently been evaluated as displaying a substandard quality of care. Under procedures outlined in a memorandum of September 17, 2010, facilities on the SFF list are to undergo a standard survey no less frequently than every six months. (Doc. No. 1, Att. 7). This is twice the number of surveys effectuated upon a facility not on the SFF list. The Facility has had four consecutive sub-standard surveys since being placed on the SFF list.

The first survey, after designation as a SFF, was completed on January 14, 2011 and resulted in five deficiencies, two of which were classified as "F" level deficiencies for failing to provide a patient's therapeutic diet and to properly wash bed sheets. (Doc. No. 1, Att. 8). The second survey was completed on July 29, 2011 and resulted in three "D" level deficiencies for failing to promote bowel continence, to monitor patient's dietary needs and to safely store food. (Doc. No. 1, Att 9). Severe flooding in September 2011 required the Facility to temporarily close and transfer patients to other facilities while it underwent repairs. Even this process was problematic for the Facility, as their renovation plans were rejected on three successive submissions to the Division of Nursing Care facilities of the Pennsylvania State Department of Health. The Facility eventually reopened on June 1, 2012. The third survey was completed on June 28, 2012 and resulted in deficiencies including "E" deficiencies for failing to notify proper medical personnel of patient conditions, to maintain patient dignity, to obtain physician orders before administering medication, to properly label and dispose of medication. (Doc. No. 1, Att. 10). In addition, the June 28, 2012 survey included an "F" level deficiency for failure to maintain sanitary conditions and a "G" level deficiency for failing to treat bedsores observed on patients. The fourth survey was completed on December 20, 2012 and resulted in six deficiencies, including an "E" deficiency for failing to regularly review patient's drug regimes. (Doc. No. 1, Att. 12).

On February 8, 2013, an incident survey in response to a complaint resulted in a "G" level deficiency related to patient transfer assessments, which, after appeal, was reduced to a "D" level deficiency. (Doc. No. 1, Att. 14). Another incident survey on March 29, 2013 resulted in an "E" level deficiency for failing to respect patient's accommodation requests. On April 10, 2013, an incident survey resulted in two "G" level deficiencies, one for failing to obey a patient's wishes regarding resuscitation and another for failing to properly monitor and report a different patient's uncontrolled blood sugars. The latter patient was found dead the next morning, with the cause of death related to the uncontrolled blood sugar levels. (Doc. No. 1, Att. 18).

On May 2, 2013, CMS issued a Notice of Termination indicating that the provider agreement would be terminated effective May 31, 2013.

On May 29, 2013, the plaintiff filed the instant civil action requesting a temporary restraining order, preliminary injunction and permanent injunction due to alleged violations of procedural and substantive due process and ultra vires action by CMS. (Doc. Nos. 1, 2 & 3).

The plaintiff contends that the court has jurisdiction over the action pursuant to 42 U.S.C. § 1331 (federal question) or, alternatively, under 28 U.S.C. § 1361 (mandamus). Section 1331 provides, "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, law, or treaties of the United States." 28 U.S.C. § 1331. Section 1361 states, "The district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff." The plaintiff further argues that it has a high likelihood of success on the merits with respect to its claims that CMS did not have statutory authority to terminate the provider agreement, that CMS failed to provide proper public notice, that CMS abused its discretion and that termination cannot occur while an administrative appeal is pending. In addition, the plaintiff argues that it will be irreparably harmed, largely in economic terms, by the termination of the agreement, and that CMS will not be harmed by maintenance of the status quo through the administrative process and that an injunction would further public interest in preventing, inter alia, "transfer trauma" to residents of the Facility.

On May 31, 2013, the defendants filed a motion to dismiss for lack of subject matter jurisdiction, (Doc. No. 12), a brief in support, (Doc. No. 11), and exhibits, (Doc. No. 13). The defendants argue that the court does not have jurisdiction because 42 U.S.C. § 405(g) requires exhaustion of administrative remedies and that neither the "no review at all" nor "collateral claim" exceptions apply. The defendants also argue that mandamus relief is extraordinary and not warranted. Finally they challenge the plaintiff's arguments regarding success on the merits, irreparable harm and the public interest in granting a temporary restraining order.

42 U.S.C. §§ 405(g) and (h), limit judicial review of "claims arising under" the Medicare Act until such time as the parties have exhausted their administrative remedies. Fanning v. U.S. , 346 F.3d 386, 395-96 (3d Cir. 2003). Section 405(h) states:

No findings of fact or decision of the Commissioner or Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Commissioner or Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.

After the administrative appeals process has been exhausted, however, § 405(g) allows the parties to seek judicial review. 42 U.S.C. § 405(g). Sections 405(g) and (h) were applied to the Medicare act by 42 U.S.C. § 1395ii. Nichole Medical Equipment & Supply, Inc. v. Tricenturion, Inc. , 694 F.3d 340, 346 (3d Cir. 2012). The jurisdictional question before the court, therefore, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.