SunBridge Care and Rehabilitation v. Leavitt

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 08-1603

SUNBRIDGE CARE AND REHABILITATION FOR PEMBROKE,

Petitioner,

MICHAEL O. LEAVITT, Secretary of the United States
Department of Health & Human Services; UNITED STATES
DEPARTMENT OF HEALTH & HUMAN SERVICES,

Respondents.

On Petition for Review of an Order of the United States
Department of Health & Human Services. (A-08-7)

Argued: March 26, 2009 Decided: July 22, 2009

Before MOTZ and AGEE, Circuit Judges, and Thomas D. SCHROEDER,
United States District Judge for the Middle District of North
Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, PLC,
Arlington, Virginia, for Petitioner. Erica Cori Matos, UNITED
STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, Atlanta, Georgia,
for Respondents. ON BRIEF: Peter D. Keisler, Assistant Attorney
General, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.;
Thomas R. Barker, Acting General Counsel, Dana J. Petti, Chief
Counsel, Region IV, UNITED STATES DEPARTMENT OF HEALTH & HUMAN
SERVICES, Atlanta, Georgia, for Respondents.
Unpublished opinions are not binding precedent in this circuit.

2
PER CURIAM:

SunBridge Care and Rehabilitation – Pembroke (“SunBridge”),

a skilled nursing facility that provides care to Medicare and

Medicaid beneficiaries in North Carolina, appeals the final

decision by the Secretary of the U.S. Department of Health and

Human Services (“HHS”) to assess civil monetary penalties for

its failure to comply with certain federal health and safety

regulations. An agency of HHS, the Centers for Medicare &

Medicaid Services (“CMS”), made the initial determination of

non-compliance and assessed the civil monetary penalties. These

determinations were upheld by both an Administrative Law Judge

(“ALJ”) and the Departmental Appeals Board (“DAB”). For the

reasons set forth below, we affirm.

SunBridge is a skilled nursing facility located in

Pembroke, North Carolina. Among the responsibilities SunBridge

undertakes is to transport its wheelchair-bound residents to

various medical appointments in a van owned and operated by the

facility. The van is specially equipped, including with safety

belts, to ensure that the residents remain in their wheelchairs

while being transported.

On August 8, 2005, a Sunbridge van was transporting a

resident (“Resident 1”) when the driver made a sudden traffic

3
stop. Although the parties disagree as to what actually

happened, Resident 1 either slipped out of his wheelchair or was

thrown against the safety belt. He suffered minor injuries to

his arm and shoulder. His wife, who was following the van in

her car, claims that she saw “her husband going head first out

of the wheelchair” and found him on the floor of the van with no

safety belt on and with the wheelchair resting on top of him.

(Admin. R. (“A.R.”) 842.)

On March 3, 2006, another Sunbridge van driver noticed that

an 84-year-old resident she was transporting (“Resident 3”) had

slid out of her wheelchair onto the van floor. 1 The driver

stopped the van and attempted to return the resident to her

wheelchair but, when unable to do so, called the Sunbridge nurse

on duty. The on-duty nurse instructed the driver to leave

Resident 3 on the van floor, place a pillow under her head,

cover her with a blanket, and return to the facility – which the

driver did. Resident 3 was transferred to the hospital by

ambulance and, while being examined for a broken leg, died of an

apparent cardiac event.

In May 2006, these accidents became the subject of an

investigation when the North Carolina Department of Health and

1
The administrative record also includes complaints
involving Resident 2, which are not relevant to this appeal.

4
Human Services (“NC HHS”) responded to a complaint about

SunBridge. Through a contract with CMS, NC HHS investigated

these two events as part of a survey of Sunbridge’s compliance

with federal health and safety regulations. 2 42 U.S.C. § 1395aa;

42 C.F.R. § 488.10(a)(1). Under the applicable regulations, NC

HHS must identify any deficiencies, determine their seriousness,

and recommend a remedy to address them. 3 42 C.F.R. §§

488.404(b), 488.408.

Following the survey, NC HHS issued a Statement of

Deficiencies in which it determined that SunBridge was not in

substantial compliance with two health and safety regulations,

2
As part of the Medicare and Medicaid programs, SunBridge
must substantially comply with the health and safety
requirements set forth in the Social Security Act and
implementing regulations. 42 U.S.C. § 1395i-3(a)-(d); 42 C.F.R.
§§ 483.1-483.75. To ensure that a facility fulfills those
requirements, HHS conducts surveys on a regular basis, as well
as in response to complaints about a facility. 42 U.S.C. §
1395i-3(g); 42 C.F.R. §§ 488.308, 488.332. Although CMS
administers the Medicare and Medicaid programs, MacKenzie Med.
Supply, Inc. v. Leavitt, 506 F.3d 341, 343 (4th Cir. 2007), HHS
may contract with state entities to conduct a survey. 42 U.S.C.
§ 1395aa; 42 C.F.R. § 488.10(a)(1).
3
The degree of seriousness ranges from deficiencies that
result in “[n]o actual harm with a potential for minimal harm”
to those that pose “[i]mmediate jeopardy to resident health or
safety.” 42 C.F.R. § 488.404(b)(1). A facility is deemed to be
in substantial compliance with the health and safety regulations
if its deficiencies “pose no greater risk to resident health or
safety than the potential for causing minimal harm.” 42 C.F.R.
§ 488.301. Potential remedies include a civil monetary penalty,
which CMS may assess on a “per day” or “per instance” basis. 42
U.S.C. § 1395i-3(h)(2)(B)(ii); 42 C.F.R. §§ 488.430, 488.438(a).

5
one governing accident hazards, 42 C.F.R. § 483.25(h)(1), and

one governing administration, 42 C.F.R. § 483.75. NC HHS found

that Sunbridge’s non-compliance posed “immediate jeopardy to

resident health or safety” from March 6, 2006, to May 11, 2006,

and less than immediate jeopardy from May 12, 2006, to June 19,

2006. Among other remedies, NC HHS recommended, and CMS

ultimately assessed, civil monetary penalties against SunBridge

of $4,000 per day for the period of immediate jeopardy and $50

per day for the period of non-immediate jeopardy, totaling

approximately $270,000.

SunBridge requested a hearing on CMS’s determination. 42

C.F.R. § 498.40. On June 5, 2007, an ALJ heard the matter and

subsequently affirmed the determination. In sum, the ALJ held

that (1) SunBridge failed to comply substantially with 42 C.F.R.

§ 483.25(h)(1) because it misused the van’s safety belts while

transporting residents in wheelchairs; (2) SunBridge failed to

comply substantially with 42 C.F.R. § 483.75 because it did not

adequately investigate the accidents or ensure that staff

members followed the prescribed emergency procedures; (3) the

finding of immediate jeopardy was not clearly erroneous; and (4)

the amount of the civil monetary penalties was reasonable. On

October 9, 2007, SunBridge appealed the ALJ’s decision to the

DAB, which affirmed for essentially the same reasons.

6
SunBridge timely petitioned this court for review. For our

purposes, the DAB’s decision constitutes the final agency

decision. 42 U.S.C. § 1320a-7a(e); 42 C.F.R. § 498.90(c)(1).

We exercise jurisdiction pursuant to 42 U.S.C. §§ 1395i-

3(h)(2)(B)(ii) and 1320a-7a(e).

II.

In the petition for review, SunBridge raises four issues: 4

(1) whether HHS has the authority to regulate motor vehicle

travel; (2) whether HHS applied an improper burden-shifting

framework that required the facility to demonstrate its

compliance with the regulations by a preponderance of the

evidence; (3) whether substantial evidence demonstrates that

SunBridge was not in substantial compliance with the HHS

regulations; and (4) whether the civil monetary penalties were

upheld on grounds other than those identified by CMS. 5

4
Though SunBridge’s briefing incorporated argument in its
lengthy Statement of Facts, we address only those arguments
contained in the argument section itself. Fed. R. App. P.
28(a)(9)(A) (requiring the argument section of the opening brief
to contain the “appellant’s contentions and the reasons for
them”).
5
In the final decision, the DAB also rejected SunBridge’s
argument that the determination of immediate jeopardy was
clearly erroneous. SunBridge waives this claim on appeal
because it failed to raise the claim in its opening brief. Fed.
R. App. P. 28(a)(9)(A). The argument was readily available at
the time of briefing, United States v. Leeson, 453 F.3d 631, 638
(Continued)
7
A.

SunBridge argues that HHS lacks the authority to regulate

motor vehicle travel. Although SunBridge correctly notes that

the Social Security Act and 42 C.F.R. § 483.25 do not

specifically mention motor vehicles, this court has recently

held that HHS reasonably interpreted section 483.25(h)(1) to

authorize the issuance of citations to skilled nursing

facilities for violations arising from the use of motor

vehicles. Liberty Nursing & Rehab. Ctr. – Mecklenburg County v.

Leavitt, 294 F. App’x 803, 804 n.2 (4th Cir. 2008) (per curiam)

(holding that this regulation should be “interpreted as broadly

as is necessary to protect residents in all locations under the

n.4 (4th Cir. 2006), yet Sunbridge mentioned it only in the
reply brief. United States ex rel. Vuyyuru v. Jadhav, 555 F.3d
337, 356 n.8 (4th Cir. 2009) (citing Edwards v. City of
Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999)). The
Government’s only mention of this issue consists of a two-page
summary of the DAB’s conclusions. Thus, the Government would be
prejudiced by the consideration of this issue because it lacked
an adequate opportunity to respond. Cavallo v. Star Enter., 100
F.3d 1150, 1152 n.2 (4th Cir. 1996) (holding that consideration
of an issue first argued in the reply brief “would be unfair to
the appellee and would risk an improvident or ill-advised
opinion on the legal issues raised” (internal quotation marks
and citation omitted)). Even if we deem SunBridge to have
properly raised the immediate jeopardy argument, we note that
this argument lacks merit. The determination of “immediate
jeopardy” was not clearly erroneous because the record contains
substantial evidence that SunBridge’s noncompliance with the
health and safety regulations “caused, or . . . [was] likely to
cause, serious injury, harm, impairment, or death to a resident”
under 42 C.F.R. § 488.301.

8
facility’s control, including facility vehicles” and that “[i]t

would be incongruous to hold that residents travel at their own

risk when the facility to which they have entrusted their care

transports them off-site”). We find that reasoning and

conclusion equally applicable here. 6

SunBridge argues that this interpretation deprived it of

notice and due process. We disagree. SunBridge had sufficient

notice because the statute and section 483.25(h)(1) are broad

enough to encompass motor vehicle travel. Due process was

afforded because Sunbridge participated in a hearing before the

ALJ and an appeal before the DAB.

SunBridge contends that HHS applied an improper burden-

shifting framework that required the facility to demonstrate its

compliance with the regulations by a preponderance of the

evidence. SunBridge argues that this framework violates the

Administrative Procedure Act (“APA”), which generally places the

ultimate burden of proof on “the proponent of a rule or order.”

5 U.S.C. § 556(d).

6
We do not accord precedential value to our unpublished
opinions, see Collins v. Pond Creek Mining Co., 468 F.3d 213,
219 (4th Cir. 2006), and certainly not to those of other courts.
In this case, involving an area of the law in which few courts
have published opinions, we cite unreported opinions simply to
demonstrate that other courts share our own views on the legal
questions presented; we do not cite them as precedent.

9
A burden-shifting framework applies to cases involving

alleged noncompliance with HHS regulations, Hillman Rehab. Ctr.

v. Health Care Fin. Admin., DAB No. 1611, 1997 HHSDAB LEXIS 547,

at *12-13 (1997), aff’d sub nom. Hillman Rehab. Ctr. v. U.S.

Dep’t of Health and Human Servs., No. 98-3789 (GEB), 1999 WL

34813783 (D.N.J. May 13, 1999), as well as to the assessment of

civil monetary penalties. Cross Creek Health Care Ctr. v.

Health Care Fin. Admin., DAB No. 1665, 1998 HHSDAB LEXIS 65, at

*25-26 (1998). CMS initially bears the burden of making out a

prima facie case that it has a legally sufficient basis for its

action. Hillman, 1997 HHSDAB LEXIS 547, at *12. If CMS makes

out a prima facie case, the burden shifts to the provider to

“com[e] forward with evidence sufficient to establish the

elements of any affirmative argument or defense.” Id. at *13.

The facility “bears the ultimate burden of persuasion[,]”

proving “by a preponderance of the evidence on the record as a

whole that it is in substantial compliance with the relevant

statutory and regulatory provisions.” Id.

Nevertheless, this burden-shifting framework operates only

when the evidence stands in equipoise. Century Care of the

Crystal Coast v. Leavitt, 281 F. App’x 180, 184 n.1 (4th Cir.

2008) (per curiam) (citing Fairfax Nursing Home, Inc. v. U.S.

Dep’t of Health & Human Servs., 300 F.3d 835, 840 n.4 (7th Cir.

2002)). In this case, as discussed below, the evidence is not

10
in equipoise because the record contains substantial evidence of

SunBridge’s noncompliance with the regulations. Consequently,

the burden-shifting framework does not apply to these facts, and

we need not address whether it violates the APA.

SunBridge next challenges the findings of fact underlying

HHS’s conclusion that Sunbridge was not in substantial

compliance with the health and safety regulations. We accept as

conclusive HHS’s findings of fact “if supported by substantial

evidence on the record considered as a whole.” 42 U.S.C. §

1320a-7a(e). Substantial evidence is “such relevant evidence as

a reasonable mind might accept as adequate to support a

conclusion.” Richardson v. Perales, 402 U.S. 389, 401 (1971)

(internal quotations and citation omitted). “It consists of

more than a mere scintilla of evidence but may be somewhat less

than a preponderance.” Laws v. Celebrezze, 368 F.2d 640, 642

(4th Cir. 1966).

SunBridge contends that HHS failed to identify substantial

evidence demonstrating a violation of 42 C.F.R. § 483.25(h)(1),

which requires a facility to “ensure that . . . [t]he resident

environment remains as free of accident hazards as is possible.”

We conclude that there is ample evidence that SunBridge was not

in substantial compliance with this regulation because staff

11
members improperly fastened the safety belts of residents in

wheelchairs.

First, the record shows that the safety belts worked

properly when buckled to the floor behind the wheelchair.

Several technical bulletins, photographs, and figures, including

some submitted by SunBridge itself, indicate that the safety

belts, which were attached to the van sidewall, should be

strapped across the resident’s lap and then buckled onto the

floor behind the wheelchair. In this fashion, the belt secures

both the wheelchair and the resident. A member of the NC HHS

survey team also indicated, in both the Statement of

Deficiencies and her testimony before the ALJ, that she watched

a SunBridge staff member demonstrate how a resident could not

slide out of a wheelchair if the safety belt was buckled behind

the wheelchair. By contrast, the demonstration also showed that

if the safety belt was buckled in front of the wheelchair, a

resident could not be secured across the waist and therefore

could slide out of the wheelchair. Furthermore, SunBridge

produced no evidence that the safety belts worked properly when

buckled in front of the wheelchair.

Second, substantial evidence shows that SunBridge staff

members routinely buckled the safety harnesses in front of the

wheelchair. The NC HHS surveyor indicated that she watched

SunBridge perform a safety demonstration during which a driver

12
buckled the safety belt in front of the wheelchair. The

surveyor also noted that a driver had admitted that safety

harnesses could not be buckled behind the wheelchairs whenever

at least four wheelchairs were in the van, which occurred at

least three times per week. SunBridge also proffered no

documentary evidence that staff members buckled safety belts

behind wheelchairs or were trained specifically on the use of

safety belts for wheelchair-bound residents.

Finally, Sunbridge argues that there is not substantial

evidence that the harm to the residents was foreseeable. Me.

Veterans’ Home – Scarborough v. Ctrs. for Medicare Medicaid

Servs., DAB No. 1975, 2005 HHSDAB LEXIS 54, at *11 (2005)

(holding that the regulation regarding accidents applies only to

those risks of harm that are forseeable). To determine whether

a facility has complied with section 483.25(h)(1), a court may

“evaluat[e] whether the facility has addressed foreseeable risks

by identifying and removing hazards, where possible, or, where

the hazard is unavoidable because of other resident needs,

managing the hazard by reducing the risk of accident to the

extent possible.” Id. at *17-18.

Substantial evidence indicates that SunBridge failed to

address the foreseeable risk that the misuse of the safety belts

posed to residents in wheelchairs. SunBridge should have known

to conduct an investigation into the use of the safety belts

13
because the wife of Resident 1 reported to SunBridge, via a

social worker, that she had witnessed “her husband going head

first out of the wheelchair” and had seen “the wheelchair on top

of her husband, who didn’t have a seat belt on.” (A.R. 842.)

SunBridge also should have known to engage in such an

investigation after the accident involving Resident 3, who

Sunbridge admits slid down in her wheelchair. SunBridge’s

claims that the DAB imposed “per se regulatory liability” or

“strict liability” for the accidents are meritless. Substantial

evidence shows that the risk was foreseeable because SunBridge

could have identified it either through a routine demonstration

of the safety belts or through adequate investigations into the

accidents involving Residents 1 and 3.

SunBridge argues that CMS offered no evidence to support a

violation of 42 C.F.R. § 483.75, which requires a facility to

“use its resources effectively and efficiently to attain or

maintain the highest practicable physical, mental, and

psychosocial well-being of each resident.” “[A]n administrative

deficiency is a derivative finding, based on the presence of

other deficiencies.” Century Care, 281 F. App’x at 186; accord

Asbury Ctr. v. U.S. Dep’t of Health & Human Servs., 77 F. App’x

853, 857 (6th Cir. 2003). In this case, as discussed above,

14
there is substantial evidence that SunBridge violated section

483.25(h)(1), governing accidents.

The record also contains substantial evidence that

SunBridge was not in substantial compliance with section 483.75.

In particular, SunBridge failed to adequately investigate the

accidents involving Residents 1 and 3. Sunbridge’s corporate

manual directs supervisors to “immediately investigate the

accident to determine the . . . cause” and to take steps “to

eliminate that cause.” (A.R. 449.) Although SunBridge

investigated the accidents, it merely interviewed a few

witnesses and examined whether the safety belts were in working

order. These investigations were inadequate because they did

not inquire whether staff members used the safety belts properly

for wheelchair-bound residents and did not identify the cause of

the accidents.

There is also substantial evidence that SunBridge failed to

follow prescribed emergency procedures. SunBridge’s corporate

manual requires drivers to be trained “on how to report an

accident and what to do at the scene.” (A.R. 449.) This manual

also prohibits drivers from moving injured persons “if likely to

cause further injury.” (A.R. 449.) Despite the manual’s

training requirements, the record indicates that some employees

were ignorant of such emergency procedures. Furthermore, there

is evidence that the driver and the on-duty nurse disregarded

15
those emergency procedures after the accident involving Resident

3. Contrary to the prohibition against moving injured persons,

the driver attempted to return Resident 3 to her wheelchair.

When this attempt proved unsuccessful, the driver called the on-

duty nurse. The on-duty nurse, without having examined Resident

3 personally to determine the extent of her injuries, instructed

the driver to leave the resident on the floor of the van, place

a pillow under her head, cover her with a blanket, and return to

the facility. Thus, we find there was substantial evidence to

support a violation of 42 C.F.R. § 483.75.

Finally, SunBridge contends that HHS violated the APA and

ignored relevant case law by upholding the assessment of the

civil monetary penalties 7 on theories other than those identified

in the Statement of Deficiencies or presented by CMS. We find

this contention to be without merit.

SunBridge claims that it lacked timely notice of the

alleged deficiencies, as mandated by the APA. The APA “requires

procedural fairness in the administrative process.” Rapp v.

U.S. Dep’t of Treasury, 52 F.3d 1510, 1519 (10th Cir. 1995).

Section 554(b)(3) provides that “[p]ersons entitled to notice of

7
SunBridge does not challenge the amount of the civil
monetary penalties in this appeal.

16
an agency hearing shall be timely informed of . . . the matters

of fact and law asserted.” 5 U.S.C. § 554(b)(3); see Clearwater

Finishing Co. v. NLRB, 670 F.2d 464, 468 (4th Cir. 1982). An

agency contravenes this notice provision if it sustains a

violation different from any that is clearly listed on the

charging document. See, e.g., Bendix Corp. v. FTC, 450 F.2d

534, 542 (6th Cir. 1971) (“an administrative agency must give a

clear statement of the theory on which a case will be tried”).

Notice is sufficient as long as the party “is reasonably

apprised of the issues in controversy[] and is not misled.” St.

Anthony Hosp. v. U.S. Dep’t of Health and Human Servs., 309 F.3d

680, 708 (10th Cir. 2002) (internal quotation marks and

citations omitted); accord Harman Mining Co. v. Layne, No. 97-

1385, 1998 U.S. App. LEXIS 21109, at *23 (4th Cir. Aug. 27,

1998). To establish a violation of this provision, a party must

demonstrate that it did not fully and fairly litigate the issue

at the hearing and suffered prejudice from the allegedly

insufficient notice. St. Anthony Hosp., 309 F.3d at 708; Yellow

Freight Sys., Inc. v. Martin, 954 F.2d 353, 358 (6th Cir. 1992).

SunBridge claims that the ALJ overstepped his authority by

introducing his own novel theory for the deficiencies in his

decision, depriving it of the timely notice required by section

17
554(b)(3). 8 SunBridge asserts that CMS based the deficiency

finding on a failure to provide supplemental lap belts yet the

ALJ upheld the civil monetary penalties based on the alleged

misuse of the existing safety belts in the van. As proof that

CMS relied on the absence of supplemental lap belts for the

deficiency finding, SunBridge claims that CMS accepted a

compliance plan requiring the installation and use of

supplemental lap belts.

We disagree with Sunbridge’s characterization and find that

the Statement of Deficiencies satisfies the notice provision of

the APA. The Statement of Deficiencies clearly indicates that

SunBridge “failed to provide safe transportation for 2 of 2

residents” and would remain out of compliance with section

483.25(h)(1) until it implemented a method that would “safely

secure residents for transportation.” (J.A. 6.) Furthermore,

8
In the Statement of Facts, SunBridge also claims that
counsel for CMS introduced a novel theory for the administration
deficiency at the hearing by alleging a deficiency based on the
inadequacy of Sunbridge’s emergency procedures. SunBridge
complains that this deficiency was not raised in either the
Statement of Deficiencies or the prehearing pleadings and only
arose in CMS’s opening statement at the hearing. Although
SunBridge neglected to raise this particular claim in the
argument section of the opening brief, we consider it because it
relates to the notice issue. Nevertheless, we reject this
argument because the Statement of Deficiencies manifestly
provides adequate notice inasmuch as it states that SunBridge’s
staff members were not properly trained “on procedures to follow
at the time of an emergency.” (J.A. 25.)

18
the Statement of Deficiencies describes two specific incidents

that involved wheelchair-bound residents who were not securely

buckled into the SunBridge van and notes that staff members were

uncertain of the proper method for buckling wheelchairs into the

van. Contrary to SunBridge’s claim, the Statement of

Deficiencies never identifies the absence of supplemental lap

belts as the basis of the deficiency. Thus, the Statement of

Deficiencies provided SunBridge with adequate notice that

improper use of the safety belts was the basis of the accident

hazard deficiency.

III.

For the foregoing reasons, the decision of the DAB is

affirmed.

AFFIRMED