PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 09-3006
_____________
JEWISH HOME OF EASTERN PA,
Petitioner
v.
CENTERS FOR MEDICARE AND MEDICAID
SERVICES;
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
Respondents
____________
On Petition for Review from an Order by the Secretary
of the Department of Health and Human Services
(No. 09-42)
Submitted January 27, 2011
Before: FUENTES, CHAGARES, and ROTH, Circuit
Judges.
(Filed: February 2, 2011)
Christopher S. Lucas, Esquire
2917 Glenwood Road
Camphill, PA 17011
Counsel for Petitioner
Alan C. Horowitz, Esquire
United States Department of Health & Human Services
Office of the General Counsel
150 Independence Mall West
The Public Ledger Building, Suite 418
Philadelphia, PA 19106
Counsel for Respondent
____________
OPINION
____________
CHAGARES, Circuit Judge.
Jewish Home of Eastern Pennsylvania (―JHEP‖)
petitions for review of a final decision of the Secretary of the
Department of Health and Human Services affirming the
imposition of civil monetary penalties for failure to be in
substantial compliance with the Medicare and Medicaid
Services participation requirements set forth in 42 C.F.R.
§ 483.25(h)(2). For the reasons that follow, we will deny the
petition for review.
I.
JHEP provides nursing care to Medicare beneficiaries
and, as a result, is required to comply with the mandatory
health and safety requirements for participation in the
2
Medicare program. In order to participate in the Medicare
program, JHEP must submit to random surveys conducted by
state departments of health to ensure that it meets all of the
program requirements. See 42 C.F.R. § 488.305. On
December 9, 2005, the Pennsylvania Department of Health,
acting on behalf of the Center for Medicare and Medicaid
Services (―CMS‖), conducted a survey of JHEP. The survey
concluded that JHEP had eight regulatory deficiencies,
including violations of 42 C.F.R. § 483.25(h)(2), which
requires a facility to ensure that each resident receives
adequate supervision and assistance with devices to prevent
accidents. Based on those deficiencies, the CMS imposed a
$350 per day fine from December 9, 2005 through January
26, 2006, totaling $17,150. On October 16, 2006, the CMS
performed another survey of JHEP and found twelve
deficiencies for which it imposed a $400 per day fine
effective from October 16, 2006 through November 16, 2006,
totaling $12,800.1
1
Pursuant to 42 U.S.C. § 1395i-3(h)(2)(B)(ii), the
CMS may impose a civil money penalty in an amount not to
exceed $10,000 per day of noncompliance. There are two
categories of monetary penalties: (1) ―Penalties in the range
of $3,050–$10,000 per day are imposed for deficiencies
constituting immediate jeopardy,‖ 42 C.F.R.
§ 488.438(a)(1)(i); and (2) ―Penalties in the range of $50–
$3,000 per day are imposed for deficiencies that do not
constitute immediate jeopardy, but either caused actual harm,
or caused no actual harm, but have the potential for more than
minimal harm,‖ 42 C.F.R. § 488.438(a)(1)(ii). The penalties
imposed in this case fell into the latter category.
3
On August 9, 2006 and October 20, 2006, JHEP
appealed both civil monetary penalties to an Administrative
Law Judge (―ALJ‖), arguing that the allegations of
noncompliance were based on the inadmissible disclosure of
―privileged‖ quality assurance records and that the monetary
penalties violated its right to equal protection because they
were the product of selective enforcement based on race and
religion. The ALJ denied JHEP’s motion to suppress the
quality assurance records, which consisted of event report
forms and witness interview statements that accompanied
those reports (collectively, ―Event Reports‖). Prior to the
administrative trial, JHEP stipulated that it failed to provide
the necessary supervision or assistive devices to three of its
residents and presented no testimony as to these residents.
After a two-day trial in June 2008, the ALJ upheld the fines
against JHEP and also found that JHEP was noncompliant in
its care of two additional residents. The ALJ found that JHEP
was not in substantial compliance with the participation
requirements during the relevant time periods and declined to
consider the equal protection claim because he lacked subject
matter jurisdiction to hear substantive constitutional claims.
JHEP timely filed an appeal to the Departmental
Appeals Board which, on June 18, 2009, affirmed both of the
civil monetary penalties. Thereafter, on July 10, 2009, JHEP
filed the current petition for review.2
II.
2
We have jurisdiction over this petition pursuant to
42 U.S.C. § 1320a-7a(e).
4
On review by this Court, the Secretary’s factual
findings ―if supported by substantial evidence on the record
considered as a whole, shall be conclusive.‖ 42 U.S.C. §
1320a-7a(e). ―[S]ubstantial evidence is more than a mere
scintilla. It means such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.‖
Monsour Med. Ctr. v. Heckler, 806 F.2d 1185, 1190 (3d Cir.
1986) (quotation marks omitted). We may overturn the
Secretary’s action only if it is ―arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.‖ 5
U.S.C. § 706(2); Thomas Jefferson Univ. v. Shalala, 512 U.S.
504, 512 (1994).
III.
Notably, JHEP does not contest the finding that it was
not in substantial compliance with the Medicare program
during the relevant survey periods. Instead, JHEP argues that
CMS’s findings and penalties are invalid because they (1) are
based on quality assurance documents that should not have
been disclosed, and (2) are a result of racial and religious
discrimination. We conclude that both of JHEP’s grounds for
review are unfounded.
A.
JHEP maintains that the incident reports in question
were generated by its Quality Assurance Committee, and as
such, are subject to disclosure and use restrictions under the
Federal Nursing Home Reform Amendments (―FNHRA‖), 42
U.S.C. § 1396r(b)(1)(B). Section 1396r(b)(1)(B) mandates
that the nursing facility have a quality assessment and
assurance team that ―meets at least quarterly to identify issues
5
with respect to which quality assessment and assurance
activities are necessary‖ and ―develops and implements
appropriate plans of action to correct identified quality
deficiencies.‖ In order to promote an effective quality review
process, the FNHRA provides that
A State or the Secretary may not require
disclosure of the records of such committee
except insofar as such disclosure is related to
the compliance of such committee with the
requirements of this subparagraph.
Id. The language of 42 U.S.C. § 1396r(b)(1)(B), as a result,
limits the scope of protection from discovery to the records
generated by the Quality Assurance Committee. See, e.g.,
State ex rel. Boone Ret. Ctr. v. Hamilton, 946 S.W.2d 740,
743 (Mo. 1997) (finding that 42 U.S.C. § 1396r(b)(1)(B)
―protects the committee’s own records — its minutes or
internal working papers or statements of conclusions — from
discovery. No honest reading of the statute, however, can
extend the statute’s privilege to records and materials
generated or created outside the committee and submitted to
the committee for its review.‖).
After reviewing the record presented, we hold that the
documents in question were contemporaneous, routinely-
generated incident reports that were part of the residents’
medical records and were not minutes, internal papers, or
conclusions generated by the Quality Assurance Committee.
The ALJ found that the Event Reports were given to JHEP’s
Quality Assurance Committee at the time of the surveys and
were not produced by or at the behest of the Quality
Assurance Committee. JHEP has presented no evidence to
6
suggest otherwise. Notably, Dr. Barry Fogel’s affidavit, upon
which JHEP places much emphasis, simply does not state that
the Event Reports were created by or at the direction of the
Quality Assurance Committee. Appendix (―App.‖) 203.
Moreover, the Departmental Appeals Board pointed
out that federal regulations require nursing home facilities to
investigate and report incidents ―involving mistreatment,
neglect, or abuse, including injuries of unknown source, and
misappropriation of resident property.‖ 42 C.F.R. §
483.13(c)(2). As the Departmental Appeals Board reasoned,
―[i]t would be strange indeed if the very documentation which
a facility is required to generate for that purpose were also
shielded from those very regulators whenever it has been
reviewed by a [Quality Assurance] Committee . . . .‖ App.
13. For these reasons, we hold that the disputed evidence was
not subject to the FNHRA disclosure restrictions.
Accordingly, we conclude that the ALJ’s findings are
―supported by substantial evidence on the record considered
as a whole.‖ 42 U.S.C. § 1320a-7a(e).
B.
JHEP also alleges that the issuance of civil monetary
fines violated its right to equal protection because the fines
were the result of selective enforcement based on race and
religion.3 We conclude that this argument is meritless and, as
such, we will provide only a brief discussion.
3
While JHEP is a non-denominational facility, JHEP
argues that it may maintain an equal protection claim because
of its association with a protected group — persons of Jewish
ancestry.
7
Selective discriminatory enforcement of a facially
valid law is unconstitutional under the Equal Protection
Clause of the Fourteenth Amendment. See Yick Wo v.
Hopkins, 118 U.S. 356, 373 (1886); Holder v. City of
Allentown, 987 F.2d 188, 197 (3d Cir. 1993). To establish a
selective enforcement claim, JHEP must show (1) that it was
treated differently from another, similarly situated facility,
and (2) ―that this selective treatment was based on an
unjustifiable standard, such as race, or religion, or some other
arbitrary factor, . . . or to prevent the exercise of a
fundamental right.‖ Dique v. N.J. State Police, 603 F.3d 181,
184 n.5 (3d Cir. 2010) (quotation marks omitted). Hence, to
maintain an equal protection claim of this sort, JHEP must
provide evidence of discriminatory purpose, not mere unequal
treatment or adverse effect. Snowden v. Hughes, 321 U.S. 1,
8 (1944). JHEP must show that the ―decisionmaker . . .
selected or reaffirmed a particular course of action at least in
part because of, not merely in spite of, its adverse effects.‖
Wayte v. United States, 470 U.S. 598, 610 (1985) (quotation
marks omitted).
JHEP relies upon three documents to prove its
selective enforcement claim. First, JHEP submits side-by-
side comparisons of citations issued to JHEP and other local
facilities. Second, JHEP provides a statistical report which
concluded that the number of citations issued to JHEP was
high in comparison to other facilities surveyed from the
Scranton Field Office and that the disparity was likely the
result of bias and not likely the result of differences in the
quality of care, error, or chance. Third, JHEP presents the
affidavit of an employee who claims that a CMS surveyor
made a discriminatory statement in October 2004, over a year
before the surveys in question. Specifically, in surveying
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whether JHEP provided activities on Saturdays for residents
of all denominations, the surveyor was told that there was a
Kiddush — a ceremony involving a blessing and food that all
individuals were invited to regardless of their religious
affiliations. According to the employee, the surveyor
responded that she was Christian and would feel
uncomfortable attending such an activity.
We hold that JHEP has failed to establish a claim for
selective enforcement under the Equal Protection Clause.
JHEP has not demonstrated that CMS issued fines with an
discriminatory purpose. We find JHEP’s reliance on the
surveyor’s alleged statement to be misplaced, as it was clearly
taken out of context, was not contemporaneous to the surveys
in question, and was not relevant or facially discriminatory.
Additionally, JHEP has failed to show that it was treated
differently from other similarly situated facilities. Therefore,
we conclude that JHEP’s equal protection claim has no merit.
IV.
After considering all of JHEP’s arguments, we will
deny JHEP’s petition for review.
9