Autumn Health Care of Zanesville, Inc. v. United States Department of Health & Human Services

959 F. Supp. 2d 1044, 2013 WL 4013969, 2013 U.S. Dist. LEXIS 110787
CourtDistrict Court, S.D. Ohio
DecidedAugust 6, 2013
DocketCase No. 2:13-cv-720
StatusPublished
Cited by2 cases

This text of 959 F. Supp. 2d 1044 (Autumn Health Care of Zanesville, Inc. v. United States Department of Health & Human Services) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Autumn Health Care of Zanesville, Inc. v. United States Department of Health & Human Services, 959 F. Supp. 2d 1044, 2013 WL 4013969, 2013 U.S. Dist. LEXIS 110787 (S.D. Ohio 2013).

Opinion

OPINION AND ORDER

EDMUND A. SARGUS, JR., District Judge.

This matter is before the Court on Plaintiffs Motion for a Temporary Restraining Order. (ECF No. 3.) For the reasons set forth below, the Court DENIES Plaintiffs motion and DISMISSES [1046]*1046this action for lack of subject matter jurisdiction.

I.

The following facts are undisputed, unless otherwise indicated. Plaintiff, Autumn Health Care of Zanesville, Inc. d/b/a Autumn Health Care of Zanesville operates a skilled nursing facility in Zanesville, Ohio (the “Facility”). The Facility is a Medicare certified facility under Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., and is a Medicaid certified facility under Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. The portion of Medicare involved here, Part A, is a federally administered program that provides payment for inpatient hospital, nursing home and home health services to aged or disabled individuals who are eligible for social security benefits. 42 U.S.C. §§ 426, 1395c. Medicaid is a State-administered program providing payment for a range of medical care to individuals with qualifying income and resources. 42 U.S.C. § 1396d(a). Both programs are administered by the Centers for Medicare and Medicaid Services (“CMS”), a component of the United States Department of Health and Human Services (“HHS”).

Payment from the federal government under Medicare and/or Ohio under Medicaid is made directly to a nursing home for services furnished to eligible beneficiaries of both programs. To qualify to receive payments under either program, a nursing home must be periodically “certified” through onsite “surveys,” as meeting the health and safety requirements specified in the statute and HHS regulations. 42 U.S.C. §§ 1395i-3(a)(3), (b-d) (Medicare); 42 U.S.C. §§ 1395r(a)(3), (b-d) (Medicaid); 42 C.F.R. § 483.1 et seq. (setting forth identical certification requirements under both programs).

A facility that is certified enters into a provider agreement with the federal government and/or the state. 42 U.S.C. § 1395cc(a) (Medicare); 42 U.S.C. § 1396a(a)(27) (Medicaid). If it is determined, through later surveys, that a previously certified facility no longer meets the participation requirements, a variety of sanctions may be imposed including termination of the provider agreement under either program. 42 U.S.C. §§ 1395i — 3(g, h), and 1395ec(b)(2) (Medicare); 42 U.S.C. §§ 1396a(a)(33)(B) and 1396r(g, h) (Medicaid).

Plaintiff alleges in its complaint that currently, approximately eleven percent (11%) of the Facility’s residents are Medicare beneficiaries, and approximately twenty-four percent (24%) of the Facility’s revenue is derived from Medicare beneficiaries; approximately sixty-six percent (66%) of the Facility’s residents are Medicaid beneficiaries, and approximately fifty-three percent (53%) of its revenue is derived from Medicaid beneficiaries. (ECF No. 1, ¶¶ 46, 47. Also, Plaintiff alleges that if its Medicare and Medicaid provider agreements are terminated, the Facility would have to discharge or transfer approximately seventy-seven percent (77%) of its residents, and it would cease receiving approximately seventy-seven percent (77%) of its revenue. Id., ¶49. Defendants do not concede the accuracy of these percentage approximations, but agree that the percentage of Medicare/Medicaid funded residents at the Facility is substantial. Plaintiff further contends that the Facility’s president and his wife personally guaranteed a debt of over seven million dollars to the Facility’s landlord and that, “[i]f the Facility closes, [Plaintiff] will be unable to make lease payments, the landlord will be unable to make loan repayments to the landlord, and [Plaintiffl’s president and his wife will have to fulfill their guarantee, if even possible.” (ECF No. 3 at 11.)

[1047]*1047In June 2013, HHS notified Plaintiff that it was terminating the Facility’s Medicare provider agreement effective August 2, 2013, due to its failure to bring the Facility into compliance with the Medicare requirements. The Secretary maintains that the termination is the culmination of administrative actions reaching back to December 2008, when the facility was designated a Special Focus Facility (“SFF”) due to its poor compliance history. When a facility is placed in the SFF program, it receives two standard surveys per year instead of one. CMS presents documentation that indicates that its practice is to terminate a facility that does not “graduate” from the SFF program after four standard surveys or within 24 months (18 months after April 5, 2013). (ECF No. 13-2 at 5; ECF No. 13-3 at 3.)

CMS first moved to terminate the provider agreements with the Facility in May 2012, after eight (8) standard surveys had been conducted and the nursing home had not graduated from the SFF program. Through negotiations, the parties entered into a Systems Improvement Agreement, which effectively gave the Facility another year to graduate. (ECF No. 10-1.) In consideration of continued Medicare/Medicaid reimbursement during the time Plaintiff attempted to secure compliance, the Facility waived its right to appeal to any federal or state court on any termination imposed as a result of surveys conducted during the extra year. In relevant part, the Agreement provides:

the Facility acknowledges that any extension of the June 27, 2012 termination of the Facility’s Medicare and Medicaid Provider Agreements by CMS constitutes full and fair consideration for the Facility’s waiver of appeal rights (under 42 C.F.R.. Part 498 and before any federal or state court) regarding (1) the imposition of remedies for the April 27, 2012 survey or for any other survey conducted during the term of this Agreement, including the remedy of termination. ...

Id., at 2. The Agreement further provides:

The Facility agrees to waive its right to appeal any remedies, including termination, imposed as a result of the April 27, 2012 survey and any other survey, including a re-visit, conducted during the term of this Agreement.

Id. at 6.

On June 21, 2013, Plaintiff requested a hearing on the termination imposed by HHS. (ECF No.

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Cite This Page — Counsel Stack

Bluebook (online)
959 F. Supp. 2d 1044, 2013 WL 4013969, 2013 U.S. Dist. LEXIS 110787, Counsel Stack Legal Research, https://law.counselstack.com/opinion/autumn-health-care-of-zanesville-inc-v-united-states-department-of-ohsd-2013.