      RECOMMENDED FOR FULL-TEXT PUBLICATION
           Pursuant to Sixth Circuit Rule 206            2    Crestview Parke Care                       No. 02-4084
   ELECTRONIC CITATION: 2004 FED App. 0196P (6th Cir.)        Center v. Thompson et al.
               File Name: 04a0196p.06
                                                                            _________________
UNITED STATES COURT OF APPEALS                                                   COUNSEL
             FOR THE SIXTH CIRCUIT                       ARGUED: Geoffrey E. Webster, Columbus, Ohio, for
               _________________                         Petitioner.    Robert C. Stephens, UNITED STATES
                                                         DEPARTMENT OF HEALTH & HUMAN SERVICES,
CRESTVIEW PARKE CARE           X                         OFFICE OF THE GENERAL COUNSEL, REGION V,
CENTER ,                        -                        Chicago, Illinois, for Respondents. ON BRIEF: Geoffrey E.
                  Petitioner, -                          Webster, Columbus, Ohio, for Petitioner. Robert C.
                                -  No. 02-4084           Stephens, UNITED STATES DEPARTMENT OF HEALTH
                                -                        & HUMAN SERVICES, OFFICE OF THE GENERAL
          v.                     >                       COUNSEL, REGION V, Chicago, Illinois, for Respondents.
                                ,
                                -
TOMMY THOMPSON; UNITED                                     MOORE, J., delivered the opinion of the court, in which
                                -                        MARTIN, J., joined. KENNEDY, J. (pp. 28-31), delivered a
STATES DEPARTMENT OF            -                        separate opinion concurring in part and dissenting in part.
HEALTH AND HUMAN                -
SERVICES,                       -                                           _________________
               Respondents. -
                                -                                               OPINION
                               N                                            _________________
     On Petition for Review from an Order of the
      Department of Health & Human Services.                KAREN NELSON MOORE, Circuit Judge. Petitioner
                     No. A-02-62.                        Crestview Parke Care Center (“Crestview”), a skilled nursing
                                                         facility, appeals an order holding Crestview responsible for a
              Argued: December 5, 2003                   $27,600 civil money penalty (“penalty”). Following several
                                                         inspections of Crestview’s Cincinnati facility in 1999,
          Decided and Filed: June 28, 2004               Respondent Centers for Medicare and Medicaid Services
                                                         (“CMS”) determined that Crestview violated several
 Before: KENNEDY, MARTIN, and MOORE, Circuit             regulations and levied a penalty against Crestview. Crestview
                   Judges.                               requested a hearing to dispute the penalty. The parties filed
                                                         briefs and gathered evidence in advance of a hearing, but the
                                                         ALJ declined to hold an in-person hearing, believing that the
                                                         written record was sufficient to adjudicate the matter. CMS
                                                         filed a motion for summary judgment, which the ALJ granted,
                                                         reasoning that no genuine issues of material fact existed
                                                         regarding any of Crestview’s alleged acts of noncompliance.

                           1
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                              Center v. Thompson et al.                   Center v. Thompson et al.

The ALJ upheld the penalty, finding it to be reasonable.            condition demonstrates that they were unavoidable.”
Because genuine issues of material fact do exist as to some of      42 C.F.R. § 483.25(c)(1). Resident 68 had two pressure sores
the acts of noncompliance, and it was thus improper not to          and did not have pressure-relieving devices. Resident 93 was
hold an in-person evidentiary hearing, we VACATE the order          observed wearing pillowed heel protectors that were
and REMAND for an in-person, evidentiary hearing on the             contaminated with dried serosanginous drainage. Fourth, the
disputed material issues as we outline below.                       ODH alleged that Crestview failed to “[s]tore, prepare,
                                                                    distribute, and serve food under sanitary conditions,”
              I. FACTS AND PROCEDURE                                42 C.F.R. § 483.35(h)(2), noting seventeen different food-
                                                                    related violations, including dirty equipment, dried food
   Crestview, a skilled nursing facility, is periodically           spills, and potentially botulinus food containers. Fifth, the
surveyed by the CMS in order to assure compliance with              ODH found that Crestview failed to provide the annual twelve
Medicare and Medicaid regulations. On August 12, 1999, the          hours of in-service training that were “sufficient to ensure the
Ohio Department of Health (“ODH”), which often examines             continuing competence of nurse aides,” 42 C.F.R.
skilled nursing facilities for CMS, see 42 C.F.R. § 488.20(a),      § 483.75(e)(8)(i), for fourteen of the twenty-nine nurse aides
completed a Life Safety Code survey of Crestview’s                  employed at Crestview.
Cincinnati facility. The ODH surveyors determined that
Crestview violated a federal regulation requiring emergency           On August 30, 1999, the ODH informed Crestview that it
lighting because Crestview’s emergency generator failed to          was noncompliant and recommended to CMS that it impose
start. See 42 C.F.R. § 483.70(b)(1).                                a penalty of $400 per day unless Crestview remedied the
                                                                    problems by October 2, 1999. ODH revisited the facility on
   The following day, the ODH investigators returned and            October 5, 1999. It discovered not only that Crestview had
discovered numerous additional infractions. First, the ODH          failed to remedy the deficiencies discovered during the
found that Crestview had failed to provide “[h]ousekeeping          August inspections, but also that it had committed twelve
and maintenance services necessary to maintain a sanitary,          additional housekeeping violations. CMS imposed the $400
orderly, and comfortable interior.” 42 C.F.R. § 483.15(h)(2).       per-day penalty. See 42 U.S.C. § 1395i-3(h)(2)(B)(ii) (giving
The surveyors pinpointed fifteen different infractions,             the HHS Secretary the authority to impose penalties not to
including a hole in the tile floor of a restroom, missing ceiling   exceed $10,000 per day of noncompliance). A fourth
tiles, and dirty showers. Second, the ODH found that some           inspection on October 21, 1999, demonstrated that Crestview
residents did not receive care and services necessary “to attain    had remedied the problems and achieved substantial
or maintain the highest practicable physical, mental, and           compliance. On November 19, 1999, CMS informed
psychosocial well-being, in accordance with the                     Crestview that it owed $27,600 for sixty-nine days of
comprehensive assessment and plan of care. 42 C.F.R.                noncompliance.
§ 483.25. Specifically, two residents (Residents 44 and 90),
needed elbow or heel protectors to ward off pressure sores,            Crestview appealed its penalty on December 30, 1999, in
but were observed lying on their beds without these                 accordance with HHS regulations.               See 42 C.F.R.
protectors. Third, Crestview failed to ensure that “[a] resident    §§ 498.40(a)(1), 498.5(k). The case was assigned to an ALJ,
who enters the facility without pressure sores does not             but just before the filing of the final exhibit and witness lists
develop pressure sores unless the individual’s clinical             in December 2000, the case was reassigned to a different ALJ,
No. 02-4084                      Crestview Parke Care          5    6     Crestview Parke Care                          No. 02-4084
                              Center v. Thompson et al.                   Center v. Thompson et al.

who set a hearing date for September 18, 2001. The parties          which responded to Crestview’s “means to pay” argument,
participated in a prehearing telephone conference on                and also asserted that Crestview waived its “means to pay”
September 10, 2001, during which the ALJ admitted all the           argument because it did not discuss its financial condition in
exhibits that had already been tendered into evidence. The          its original hearing request.
ALJ attempted to delve deeper into the exact nature of
Crestview’s claims, but found that Crestview’s attorneys were         On December 12, five days before receiving CMS’s reply
unable to answer many of her questions regarding the                brief and motion for summary judgment, the ALJ informed
contours of its appeal.                                             the parties that after reviewing the prehearing briefs and
                                                                    accompanying declarations, she had “determined that an in-
   Tragedy followed on September 11th, forcing the                  person hearing is unnecessary and that this matter can be
postponement of both the prehearing conference call and the         decided on the basis of the written submissions, declarations,
hearing itself. The parties resumed their prehearing                and exhibits,” because the written record demonstrated that
teleconference on September 19, 2001. The ALJ learned               “certain material facts . . . are not in dispute.” J.A. at 277
during the phone call that the parties had failed to stipulate to   (ALJ Letter 12/12/01). A week later, Crestview objected to
any factual matters. The ALJ consequently ordered the               the cancellation of the hearing.
parties to draft prehearing briefs that would more clearly
outline the facts and the legal arguments to be made at the            The ALJ granted CMS’s motion for summary judgment on
hearing. The ALJ also asked the parties to append all witness       February 4, 2002, concluding that the facility was not in
affidavits and declarations to these prehearing briefs. The         substantial compliance and that the penalty was reasonable.
ALJ stated clearly that the record at this point was closed.        At the outset, the ALJ rejected Crestview’s argument that the
                                                                    cancellation of the in-person hearing was improper. The ALJ
   The parties then exchanged prehearing briefs. CMS filed          then assessed the evidence on each of the alleged deficiencies,
its prehearing brief on October 19, 2001, asking for a              ruling that the facility was not in substantial compliance. In
summary affirmance of the penalty because there were no             analyzing the reasonableness of the amount of the penalty, the
disputes of material fact. Crestview filed its prehearing brief     ALJ ruled that Crestview had not properly presented the issue
on November 29, 2001. It challenged all of the facts as             of its ability to pay because Crestview had not discussed its
presented by CMS and attached declarations from Julie               financial condition in its request for a hearing. The ALJ also
Hrybiniak, the Regional Administrator for Crestview and             refused to admit the declaration of Bert Cummins because it
Alejandro Bayalan, the Food Service Manager at Crestview.           had not been listed as an exhibit before December 4, 2000.
Crestview also filed a declaration from accountant Bert             Partially taking into account the facility’s history of failing to
Cummins, who had not been previously listed as a witness.           satisfy several regulations, the ALJ concluded that the amount
Cummins’s declaration purported to show that Crestview was          of the penalty was reasonable. Crestview appealed the
unable to pay the penalty. CMS filed its Reply Brief on             decision to the HHS Departmental Appeals Board (“DAB”),
December 17, 2001, and simultaneously filed a Motion for            which affirmed the ALJ’s decision in its entirety on July 24,
Summary Judgment, asserting that “there is no material issue        2002. See 42 C.F.R. §§ 488.408(g)(1), 498.5(k) (establishing
of fact, and an adequate factual and legal basis clearly exists     the appeals process). Crestview petitioned us to review the
for the [penalty] that was imposed.” Joint Appendix (“J.A.”)        DAB’s decision on October 15, 2002. We have jurisdiction
at 279 (Mot. Sum. J.). CMS attached two new declarations,
No. 02-4084                      Crestview Parke Care         7    8    Crestview Parke Care                         No. 02-4084
                              Center v. Thompson et al.                 Center v. Thompson et al.

over the appeal of a final DAB decision pursuant to 42 U.S.C.      demonstrate that a genuine issue exists, as there must be
§ 1320a-7a(e). See also 42 C.F.R. § 498.90(a)(1).                  evidence on which the factfinder, in this case the ALJ, could
                                                                   reasonably find for the nonmoving party. Anderson v. Liberty
                       II. ANALYSIS                                Lobby, Inc., 477 U.S. 242, 251 (1986).
   Crestview presents several different issues on appeal. First,   B. Crestview’s Procedural Challenges
it alleges various procedural errors. Second, it claims that the
ALJ improperly cancelled the in-person hearing for the same           Crestview unavailingly asserts that the ALJ made several
reason that a grant of summary judgment was unjustified:           procedural errors unrelated to the denial of the in-person
there are genuine disputes of material fact for several of the     hearing. First, Crestview asserts that “[the ALJ]’s biased and
alleged deficiencies. Third, it contends that the ALJ erred in     prejudicial” behavior merits reversal. Pet. Br. at 13.
analyzing the reasonableness of the amount of the penalty          Crestview apparently believes that the ALJ blamed Crestview
because the ALJ refused to consider Crestview’s “ability to        for several long delays in the proceedings. This argument is
pay” argument and the ALJ accounted for the facility’s past        without support. The ALJ blamed both parties for the long
history of noncompliance. While Crestview may be incorrect         delay between the closing of the record and the scheduling of
about its first and third arguments, it is correct that the ALJ    the in-person hearing.        J.A. at 23 (ALJ Decision).
improperly cancelled the hearing because there are certain         Additionally, the ALJ was relatively lenient with Crestview;
genuine issues of material fact that warrant a hearing as          Crestview was given a two-day extension for the filing of its
explained below. Consequently, we vacate the ALJ’s order           prehearing brief and a two-week extension for the filing of its
and remand for further proceedings.                                brief in opposition to summary judgment, even though
                                                                   Crestview had clearly missed the twenty-day window for
A. Standard of Review                                              filing a response to CMS’s summary judgment motion.
  We review de novo a grant of summary judgment. Logan               Second, Crestview suggests that it was denied an adequate
v. Denny’s, Inc., 259 F.3d 558, 566 (6th Cir. 2001).               chance to respond to CMS’s summary judgment motion
Summary judgment is appropriate “[i]f the pleadings,               because it was not permitted to submit any evidence in
depositions . . . and admissions on file, together with the        response to issues raised by CMS. Pet. Br. at 7. It is not clear
affidavits . . . show there is no genuine issue as to any          precisely what new issues CMS raised in its summary
material fact and the moving party is entitled to a judgment as    judgment motion to which Crestview wished to respond via
a matter of law.” Fed. R. Civ. P. 56(c). CMS, as the movant,       new affidavits or declarations, excluding the issue of
has the burden of establishing that no genuine issues of           Crestview’s ability to pay, which was initially raised by
material fact exist. Logan, 259 F.3d at 566. The evidence          Crestview itself. CMS did not receive any evidentiary
must be viewed in the light most favorable to the nonmoving        advantage. The ALJ had forbidden both parties from adding
party, but that party “must set forth specific facts showing       new exhibits after December 4, 2000, and the ALJ
that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e);   specifically discounted the new declarations that accompanied
Richards v. Consol. Rail Corp., 330 F.3d 428, 432 (6th Cir.        CMS’s reply brief.
2003). The mere existence of a “scintilla of evidence”
supporting the nonmoving party is not sufficient to
No. 02-4084                      Crestview Parke Care         9    10    Crestview Parke Care                         No. 02-4084
                              Center v. Thompson et al.                  Center v. Thompson et al.

  Third, Crestview suggests that CMS’s motion for summary          record.” Chem. Waste Mgmt., Inc. v. EPA, 873 F.2d 1477,
judgment was “untimely and unauthorized.” Pet. Br. at 9.           1481-82 (D.C. Cir. 1989); 1 Richard J. Pierce, Administrative
There is no basis for this claim, as there is nothing to prevent   Law § 8.2, at 536-39 (collecting cases) (4th ed. 2002). The
CMS from filing such a motion with its reply brief or at any       Supreme Court has also implied that formal adjudication
other time. Furthermore, CMS’s prehearing brief asked ALJ          procedures are only necessary when a statute uses the magic
Hughes to grant CMS a summary affirmance, putting                  words “on the record.” Cf. United States v. Fla. E. Coast Ry.,
Crestview on notice of what was to come.                           410 U.S. 224, 237-38 (1973) (holding that formal rulemaking
                                                                   procedures prescribed by 5 U.S.C. §§ 556, 557 are required
C. The ALJ’s Summary Disposition of Crestview’s Claim              only when a statute mandates that rules be made “on the
                                                                   record”); Vt. Yankee Nuclear Power Corp. v. Natural Res.
  Evaluating Crestview’s claim that it had a right to an in-       Def. Council, Inc., 435 U.S. 519, 548 (1978) (ruling that
person hearing plunges us deep into the thicket of statutes,       courts cannot require an agency to use more formal
published regulations, and interpretive rules governing            rulemaking procedures than those required by statute); PBGC
administrative hearings conducted by CMS. The first                v. LTV Corp., 496 U.S. 633, 654-55 (1990) (upholding an
question is whether the ALJ could resolve Crestview’s appeal       informal agency adjudication without an oral hearing when
of the penalty without conducting an in-person hearing. The        the statute did not require a hearing to be on the record).
second subsequent question is whether, assuming an in-
person hearing is not always required, the ALJ properly               The statute authorizing the imposition of penalties on
denied Crestview an in-person hearing in this particular case.     skilled nursing facilities, such as Crestview, requires CMS to
We answer the first question in the affirmative, but the second    hold a hearing “on the record.” If skilled nursing facilities
in the negative: HHS’s interpretive rule for summary               fail to meet an “applicable requirement,” the HHS Secretary
proceedings is valid, but the ALJ misapplied it to Crestview’s     “may impose a civil money penalty in an amount not to
appeal.                                                            exceed $10,000 for each day of noncompliance.” 42 U.S.C.
                                                                   § 1395i-3(h)(2)(B)(ii). “The provisions of section 1320a-7a
  1. The Right to an In-Person Hearing                             of this title (other than subsections (a) and (b)) shall apply to
                                                                   a [penalty] . . . in the same manner as such provisions apply
  The starting point is the Administrative Procedure Act           to a penalty or proceeding under section 1320a-7a(a) of this
(“APA”), which establishes a detailed set of procedures for        title.” Id. The referent section provides,
formal agency adjudications. These procedures mirror the
elements of a judicial trial and establish the proper method of      The Secretary shall not make a determination adverse to
conducting an oral evidentiary hearing. See 5 U.S.C.                 any person under subsection (a) or (b) of this section
§§ 554(a), 556(d), 557. Agencies need only employ this set           until the person has been given written notice and an
of formal adjudication procedures if there is an “adjudication       opportunity for the determination to be made on the
required by statute to be determined on the record after             record after a hearing at which the person is entitled to
opportunity for an agency hearing.” 5 U.S.C. § 554(a).               be represented by counsel, to present witnesses, and to
Lower courts have explicitly held that a formal adjudication         cross-examine witnesses against the person.
featuring an oral evidentiary hearing is required by the APA
only when a statute explicitly calls for a hearing “on the
No. 02-4084                     Crestview Parke Care        11    12    Crestview Parke Care                          No. 02-4084
                             Center v. Thompson et al.                  Center v. Thompson et al.

42 U.S.C. § 1320a-7a(c)(2) (emphasis added). The statute          adjudicatory hearing, which includes an in-person component.
clearly includes the “magic words” that invoke the panoply of     Section 498.66 states, “If the affected party waives the right
procedures described by the formal-adjudication provisions        to appear and present evidence, the ALJ need not conduct an
of the APA.                                                       oral hearing,” except during certain circumstances that are
                                                                  inapplicable here. Id. at § 498.66(b). This provision
  In conjunction with the use of the statutory language “on       powerfully implies that if the affected party does not waive
the record,” the regulations regarding CMS hearings strongly      the right to present evidence, the ALJ must conduct an oral
imply that an in-person, oral evidentiary hearing is generally    hearing. Other regulations lead to the same conclusion. They
required. Under the statutory authority to publish rules and      fix a time and place for the hearing and a method for
regulations, see 42 U.S.C. § 1302(a), HHS has promulgated         changing the time and place. Id. at §§ 498.52, 498.53. They
regulations concerning administrative hearings.             The   describe the conduct of the hearing. Id. at §§ 498.60(a) (“The
regulations establish “procedures for reviewing initial           hearing is open to the parties and their representatives . . . .”);
determinations that CMS makes.” 42 C.F.R. § 498.3(a)(1).          498.60(b)(1) (“The ALJ . . . receives in evidence the
“[I]nitial determinations” encompass: (1)“a finding of            testimony of witnesses and any documents that are relevant
noncompliance that results in the imposition of a remedy          and material.”); 498.60(b)(3) (“The ALJ decides the order in
specified in § 488.406 of this chapter,” id. at § 498.3(b)(13),   which the evidence and the arguments of the parties are
and (2) “[t]he level of noncompliance found by CMS in a           presented and the conduct of the hearing.”). The regulations
[skilled nursing facility] or [nursing facility], but only if a   also contain procedures for the receipt of evidence, id. at
successful challenge on this issue would affect . . . the range   § 498.61, and rules governing witness testimony. Id. at
of [penalty] amounts that CMS could collect.” Id. at              § 498.62.
§ 498.3(b)(14)(i); see also id. at § 488.406 (granting CMS
authority to levy penalties). The regulations further state,         HHS has created an internal procedure that provides an
“Under the circumstances specified in § 431.153 (g) and (h)       alternative to in-person, oral hearings. The HHS procedure
of this chapter, [a nursing facility] has a right to a hearing    reads,
before an ALJ, to request Board review of the hearing
decision, and to seek judicial review of the Board's decision.”     An in-person hearing (i.e., a hearing at which witnesses
Id. at § 498.5(k); see also id. at § 488.330(e)(3)(ii) (stating     are called and testify) is not the only vehicle for the
that the “provisions of part 498 . . . apply when the following     [ALJ] to hear and decide the case. If, after giving the
providers,” including skilled nursing facilities, “request a        parties the opportunity to present their views, the judge
hearing on . . . certification of noncompliance leading to an       determines that there are no genuine issues of material
enforcement remedy”).                                               fact, the judge might decide the case based on the
                                                                    undisputed facts and the applicable law. If there are
  Subpart D of part 498 establishes the regulations for CMS         genuine issues of material fact which can be decided on
hearings and strongly suggests that oral hearings are required.     the basis of documentary evidence, the judge might
Only one regulation in this subpart actually uses the term          proceed without an in-person hearing.
“oral hearing,” but the statutory requirement that hearings be
“on the record” implies that the term “hearing,” as used          Dep’t of Health & Human Servs., Dep’t Appeals Bd.,
throughout this subpart of the regulations, refers to a formal    Civil Remedies Div., Procedures, at 1, available at
No. 02-4084                      Crestview Parke Care         13    14     Crestview Parke Care                        No. 02-4084
                              Center v. Thompson et al.                    Center v. Thompson et al.

http://www.hhs.gov/dab/civil/procedurescms.html (last               in a trial, it would be bizarre if administrative agencies, which
visited Feb. 3, 2004). This rule constitutes an interpretive        are in many respects modeled after the federal courts and
rule that is “issued by an agency to advise the public of the       which indeed often have more informal proceedings than
agency’s construction of the statutes and rules which it            federal courts, could not follow a similar rule. See Fed. R.
administers.” Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87,         Civ. P. 56; 1 Richard J. Pierce, Administrative Law § 8.3, at
99 (1995) (quotation omitted). “Interpretive rules do not           542 (“Even when an agency is required by statute or by the
require notice and comment[;] . . . they also do not have the       Constitution to provide an oral evidentiary hearing, it need do
force and effect of law and are not accorded that weight in the     so only if there exists a dispute concerning a material fact.”).
adjudicatory process.” Id. We generally give substantial            It may make as good, if not more, policy sense to have a
deference to an agency’s interpretations of its own                 standard for summary judgment in HHS administrative
regulations. St. Francis Health Care Ctr. v. Shalala, 205           proceedings as it does to have one in federal court
F.3d 937, 943 (6th Cir. 2000). However, this deference is           proceedings. See Puerto Rico Aqueduct & Sewer Auth. v.
limited when an interpretation is “plainly erroneous or             EPA, 35 F.3d 600, 605-07 (1st Cir. 1994) (describing the
inconsistent with the [published] regulation.” Id. at 944           structure and validity of administrative summary judgment
(quoting Harris County Hosp. Dist. v. Shalala, 64 F.3d 220,         and stating, “summary judgment often makes especially good
221 (5th Cir. 1995)). The reason for this limited deference is      sense in an administrative forum, for, given the volume of
to prevent agencies from gaming the rulemaking provisions           matters coursing through an agency’s hallways, efficiency is
of the APA, see 5 U.S.C. § 553, by creating interpretive            perhaps more central to an agency than to a court”).
regulations that undercut regulations passed through notice-        Furthermore, the Supreme Court has upheld the use of
and-comment rulemaking.                                             summary procedures in other administrative contexts,
                                                                    although only when a party fails to convince an agency at the
   Our deference to the HHS’s interpretive rule, which is akin      threshold that the agency should waive a rule or regulation
to the summary judgment standard contained in Federal Rule          that would otherwise prevent the party from adjudicating its
of Civil Procedure 56, depends on whether the interpretive          claim. Weinberger v. Hynson, Westcott & Dunning, Inc., 412
rule can be reconciled with the CMS regulations that carry the      U.S. 609, 621 (1973); Fed. Power Comm’n v. Texaco, Inc.,
force of law. On its face, the internal procedure appears           377 U.S. 33, 39-45 (1964). Therefore, HHS’s interpretive
inconsistent with the statutory and regulatory provisions           rule allowing ALJs to grant summary judgment without an in-
because the procedure offers an alternative to an in-person         person hearing is valid.
hearing, yet the plain meaning of “on the record” in the
statute and the implications of the regulations suggest that          2.    The ALJ Erred By Granting Summary Judgment
there is only one vehicle for an ALJ to decide a case: an oral              Without an In-Person Hearing
evidentiary hearing.
                                                                      While HHS’s interpretive rule is valid, we hold that it was
    Nonetheless, it would seem strange if disputes could not be     improperly applied here, and thus summary judgment was not
decided without an oral hearing when there are no genuine           proper. Consequently, we remand this case to the ALJ for an
issues of material fact. Given that federal district courts can     oral hearing. The ALJ erred both procedurally and
decide cases as a matter of law without an oral hearing when        substantively in deciding the case without an oral hearing.
it is clear there are no genuine material disputes to be resolved
No. 02-4084                      Crestview Parke Care        15    16   Crestview Parke Care                         No. 02-4084
                              Center v. Thompson et al.                 Center v. Thompson et al.

    a. Procedural Error                                            basis, as is required. Crestview’s response that the generator
                                                                   had always worked before the “unknown and unexplained,”
   The procedure employed by the ALJ was inconsistent with         J.A. at 263 (Hrybiniak Decl.), failure to start in front of the
the interpretive rule. The ALJ canceled the in-person hearing      inspector does not contradict the basic observation that the
on December 12, 2001, after the record had been closed and         generator’s malfunction deprived Crestview of the ability to
both parties had filed prehearing briefs, but before any motion    provide emergency power.
for summary judgment had been filed. The prehearing briefs,
to which all affidavits and declarations were appended, were         Second, there is no factual dispute regarding all but one of
designed only to give the ALJ a better idea of what to expect      the twenty-seven alleged housekeeping violations. To
during the hearing, to state the facts that each party intended    counter the surveyors’ reports of these violations, Crestview
to prove at the hearing, and to explain how the evidence           presented evidence of cleaning schedules, procedures, and
would help to prove these facts. See J.A. at 143 (Order to         duties in an attempt to demonstrate that the facility is “clean,
Submit Briefing). There was no warning that these briefs           safe, and well maintained.” J.A. at 264 (Hrybiniak Decl.).
would be used to determine whether an in-person hearing            This evidence established only that Crestview failed in the
should occur, and the phrasing of the order requesting the         execution of its procedures, because the surveyors’
briefs did little to reduce the expectancy of a hearing.           observations showed that the facility was noncompliant.
                                                                   Crestview’s contention that the facility may be observed as
    b. Substantive Errors                                          unclean at any time because the facility is constantly being
                                                                   used does not rebut the evidence of noncompliance amassed
   Summary disposition of this case without an oral hearing        during the survey.
was also improper because there were indeed genuine issues
of material fact that may have impacted the determination of          Third, Crestview has not offered evidence challenging most
whether the penalty was reasonable. The penalty was levied         of the alleged food-service deficiencies. The ODH observed
against Crestview because of multiple different infractions.       seventeen different violations of the regulation that skilled
We hasten to note that Crestview has not disputed every            nursing facilities “[s]tore, prepare, distribute, and serve food
alleged deficiency. While Crestview challenges each aspect         under sanitary conditions.” 42 C.F.R. § 483.35(h)(2). While
of the grant of summary judgment, which held that the              Crestview challenged seven of the alleged violations, offering
penalty was reasonable, it is clear that for several of the acts   alternative rationales for the infractions, Crestview presented
of noncompliance there are no disputes or genuine issues of        no evidence challenging the other ten deficiencies aside from
material fact.                                                     general statements of Crestview’s diligence in storing and
                                                                   preparing food in a sanitary fashion, which do little to contest
       (i) Undisupted Deficiencies                                 specific claims of noncompliance.
  First, there was no dispute that Crestview failed to provide       Fourth, Crestview presented no evidence to contest its
adequate emergency power. During the August 12, 1999,              failure to provide at least twelve hours of in-service training
survey, the Crestview staff was unable to start the emergency      each year for its nurse aides. 42 C.F.R. § 483.75(e)(8)(i).
generator on three separate occasions. There was also no           Crestview’s 1998 records indicate that fourteen of twenty-
indication that the generator had been tested on a weekly          nine nurse aides received less than twelve hours of in-service
No. 02-4084                             Crestview Parke Care               17     18       Crestview Parke Care                              No. 02-4084
                                     Center v. Thompson et al.                             Center v. Thompson et al.

training in that year. Crestview did not offer any evidence                       when evaluating whether summary judgment should be
that these aides actually received the statutorily required                       granted. Nonetheless, the ALJ concluded that Crestview still
training.1                                                                        violated the applicable regulations because the large number
                                                                                  of undisputed observations demonstrated that Crestview was
        (ii) Disputed, but Nonmaterial Deficiencies                               not in substantial compliance with 42 C.F.R. §§ 483.15,
                                                                                  483.35. As a matter of law, we cannot say that the ALJ erred
  Factual disputes attend several of the other alleged acts of                    in reaching this conclusion: the cumulative undisputed
noncompliance, but some of these disputes are not material.                       infractions suffice to show that Crestview stood in violation
The initial two disputes involve the cleanliness of the facility                  of the guiding regulations, even though some of the instances
environment in general, see 42 C.F.R. § 483.15(h)(2), and of                      of unsanitary conditions may not have occurred.
the dietary services in particular, see 42 C.F.R. § 483.35.
Summary judgment as to the violation of these regulations                                   (iii) The Alleged Disputes Regarding Patient Care
was nonetheless proper because these disputes are not
material. First, of the twenty-seven alleged sanitary                               The most serious potential genuine disputes of material fact
housekeeping violations, there is a factual dispute concerning                    concern the care of four patients at Crestview’s facility
the cleanliness of the ice-machine. Second, there is a factual                    (Residents 44, 68, 90, and 93). For Residents 44 and 90,
dispute regarding seven of the seventeen food preparation                         Crestview allegedly failed to “provide the necessary care and
infractions. In its opinion, the ALJ assumed that Crestview                       services to attain or maintain the highest practicable physical,
had not committed these disputed violations, as is proper                         mental, or psychosocial well-being, in accordance with the
                                                                                  comprehensive assessment and plan of care.” 42 C.F.R.
                                                                                  § 483.25. The ODH surveyors observed Residents 44 and 90
    1
       Instead, Crestview argued that, as a new owner who acquired
                                                                                  without elbow and heel protectors at multiple times during the
control on August 1, 1999, it is not respo nsible fo r the previous ope rator’s   days of observation, even though physicians had ordered the
employees and whether those employees received sufficient training.               protectors to be worn at all times because of the high danger
This argum ent fails as a matter o f law, because “[a] facility may no t avoid    of pressure-sore development.2 Crestview responds by
a remedy on the basis that it underwent a change of ownership,” 42 C.F.R.         arguing: 1) the residents did not “need” the protectors
§ 488 .414 (d)(3 )(i); see also 42 C.F.R. § 488 .438 (f) (includ ing facility’s
past culpability as a factor in determining am ount o f penalty); CarePlex
                                                                                  because the protectors would not prevent the development of
of Silver Spring v. Health Care Fin. Admin., Docket No. A-98-94, CR536,           unavoidable sores and because other treatments, such as the
DAB No. 1683, 1999 WL 985363 (H.H.S.) at 7 (Apr. 13, 1999) (“ [A]                 use of pressure-relief mattresses, were employed to prevent
facility’s history remains a relevant consideration after a change of             the development of sores; and 2) the protectors were not
ownership, but do es not foreclo se a new owner from rebutting the
presu mptio n that the facility’s history remains predictive of likely future
compliance.”).        In purchasing the facility, Crestview assumed                    2
respo nsibility for the noncomp liance history of its predecesso r-in-interest,         It is unclear whether the physician’s ord ers referred to by both
and such p revious non com pliance is one fa ctor that CMS may consider           parties and the ALJ constitute the “plan of care.” The exhibits in the Joint
in assessing the amount of a penalty even though Crestview may not have           Appendix to which the parties refer (Resident 44’s file is Crestview
been directly responsible for the failure to abide by the guiding                 Exhibit 1, Resident 90’s file is Crestview E xhibit 2) contain do cuments
regulations. Whatever diligence Crestview may have exhibited in moving            respe ctively entitled “Physician’s Order” (which mentions the phrase
towards compliance serves only to rebut the presumptio n that a facility’s        “plan of care”) and “Care Plan.” See J.A. at 342-44, 347-49 (Resident 44
history tends to predict its future behavior.                                     File); J.A. at 356-59, 367-74 (R esident 90 File).
No. 02-4084                      Crestview Parke Care         19    20    Crestview Parke Care                         No. 02-4084
                              Center v. Thompson et al.                   Center v. Thompson et al.

observed on the patients because the residents moved, shifted,      which required a facility to “ensure that . . . [e]ach resident
or displaced the protectors or because the protectors were          receives adequate supervision and assistance devices to
removed by staff to provide treatment. J.A. at 252-54 (Pet.         prevent accidents.”         Id. at 589 (quoting 42 C.F.R.
Prehearing Br.); J.A. at 264-65 (Hrybiniak Decl.). We               § 483.25(h)(2)). We affirmed the DAB’s imposition of a
emphatically reject Crestview’s first argument. Crestview           penalty. Id. at 590. In the administrative decision below, the
cannot defend an alleged failure to adhere to a physician’s         DAB had held “that the regulatory standard does not amount
orders by contending that those orders are incorrect or             to strict liability or require absolute success in an obviously
misguided. If the staff of a facility believes that a resident      difficult task . . . [and] that an element of reasonableness is
does not need protectors or some other treatment ordered by         inherent in the regulation’s requirements.” Woodstock Care
a physician, the proper course of action is to rework the           Ctr. v. Health Care Fin. Admin, Docket No. A-2000-32, CR
patient’s comprehensive plan of care in a venue other than          623, DAB No. 1726, 2000 WL 900609 (H.H.S.), at 19 (May
HHS’s administrative appeals process. Barring such revision,        30, 2000) (quotation omitted). Subsequent DAB decisions
a facility must follow the plan of care.                            have confirmed this holding as it applies to § 483.25(h)(2),
                                                                    the regulation governing accident prevention. Josephine
  Crestview’s second argument is different, because it posits       Sunset Home v. CMS, Docket No. A-03-85, CR 1038, DAB
that the patients themselves interfered with the                    No. 1908, 2004 WL 714959, at 10 (Feb. 9, 2004) (affirming
implementation of a physician’s order. Crestview did not            Woodstock and listing other cases that decline to impose strict
dispute that the protectors were not on the residents, but rather   liability). At least one ALJ has also ruled that strict liability
presented evidence, solely in the form of an administrator’s        does not control § 483.25(m)(2). See Living Ctr. West v.
affidavit, that it did not violate § 483.25 because the residents   CMS, Docket No. C-00-844, CR 988, 2002 WL 31906315
moved or shifted the protectors, the residents were                 (H.H.S.), at 9 (Dec. 18, 2002) (ruling that “[a]bsent . . . a
uncooperative with care, or the staff removed to protectors to      regulation or ruling of strict liability for any ‘missed dose’”
provide other treatment. This evidence suggests not that the        under 42 C.F.R. § 483.25(m)(2), the factual circumstances of
doctor’s orders were inappropraite, but rather that Crestview       the deficiency must be considered).
did not fully execute them because of patient interference or
because of the necessity of other intervening treatments.             The lack of strict liability in § 483.25(h) does not
Consequently, we must assess whether the mere fact that the         automatically mean that a violation of the general language of
surveyors saw two patients without heel protectors, which           § 483.25 is not a strict-liability infraction, but the use of the
were supposed to be worn at all times, by itself is a violation     word “practicable” in § 483.25 suggests that a party can offer
of § 483.25. In other words, is Crestview strictly liable such      reasons for the failure to adhere to a comprehensive plan of
that it cannot offer reasons for the observed deviations from       care. The regulation employs the phrase “highest practicable
the comprehensive plan of care?                                     physical, mental, and psychosocial well-being,” 42 C.F.R.
                                                                    § 483.25 (emphasis added), which suggests that a
  There is, unfortunately, not a clear answer. In our lone case     reasonableness standard inheres in the regulation. Similar to
evaluating § 483.25, Woodstock Care Ctr. v. Thompson, 363           the word “adequate” in § 483.25(h)(2), “practicable”
F.3d 583 (6th Cir. 2003), we noted that the HHS DAB did not         intimates that it is possible for a petitioner to show that there
employ a strict-liability standard when evaluating whether a
provider achieved compliance under a subsection of § 483.25,
No. 02-4084                            Crestview Parke Care              21     22   Crestview Parke Care                         No. 02-4084
                                    Center v. Thompson et al.                        Center v. Thompson et al.

was a justifiable reason for the violation of § 483.25.3                        clinically unavoidable. Crestview also asserted that Resident
Lacking any other guidance from HHS aside from its                              68 rested on a pressure-relieving mattress to help avoid
statements in Woodstock and progeny, we conclude that                           pressure sores and that the pressure sore observed on the left
§ 483.25 is not a strict-liability regulation.                                  elbow was successfully treated within thirty days. J.A. at 254
                                                                                (Pet. Prehearing Br.); J.A. at 265 (Hrybiniak Decl.). As
   Crestview has presented some evidence that Residents 44                      regards Resident 93, Crestview presented evidence that the
and 90 were observed without their ordered skin protectors                      “dirty” protector reapplied to Resident 93’s heel never made
because the residents removed or shifted the protectors or the                  contact with his skin, because his foot was rebandaged, such
staff members removed the protectors to provide other                           that the allegedly “dirty” protector did not contribute to the
treatment. Crestview’s evidence in this vein is not strong,                     development of any pressure sores. J.A. at 255 (Pet.
chiefly because Crestview has failed to point to any patient                    Prehearing Br.); J.A. at 265 (Hrybiniak Decl.). Crestview did
records or preserved staff observations of such behavior, but                   not offer any evidence to dispute the surveyor’s observation
the relative weakness of the evidence in comparison with the                    that a dirty heel protector was earlier applied directly against
observations by the ODH surveyors is not a proper                               Resident 93’s open pressure sore before the nurse rebandaged
consideration on summary judgment. Upon remand, the ALJ                         the sore and placed the dirty protector against the clean
may conclude in fact that Crestview has not proven it acted                     bandage.
reasonably in failing to adhere to these residents’ plans of
care. Nonetheless, taking the evidence in the light most                           Crestview appears not to dispute that Resident 68 was not
favorable to Crestview, a genuine dispute of material fact                      wearing heel protectors, but such a “concession” does not
exists regarding the violation of § 483.25. Summary                             negate the existence of a genuine dispute of material fact.
judgment without an in-person hearing on the issue of the                       The evidence as presented, and taken in the light most
asserted violations involving these two residents was thus                      favorable to Crestview, shows that Crestview took measures
improper.                                                                       to halt the development of avoidable pressure sores and to
                                                                                promote the healing of existing sores. Crestview claims that
  For Residents 68 and 93, Crestview was cited for failing to                   the pressure sores were unavoidable and that it succeeded in
prevent the development of avoidable new pressure sores and                     treating other pressure sores affecting Resident 68. Whether
to provide the necessary treatment to promote healing of                        these sores were unavoidable and whether Crestview
preexisting sores. 42 C.F.R. § 483.25(c)(2). To counter the                     succeeded in preventing and treating the sores are factual
observations of pressure sores on Resident 68, Crestview                        questions that should not have been resolved in a summary
introduced evidence that Resident 68’s pressure sores were                      fashion without a hearing. CMS certainly presented evidence
                                                                                that Crestview violated 42 C.F.R. § 483.25(c)(2), but CMS’s
                                                                                evidentiary effort with regards to Resident 68 only reinforces
    3                                                                           our conclusion that summary judgment (and thus disposition
       It is possible that adhering to a plan of care pursuant to the general
language of § 483.25 may conflict with other regulations incumbent upon         without a hearing) is improper in the face of disputes of
a facility. For example, if a competent patient consistently refuses to wear    material fact.
pro tectors, the facility may not be able to force that patient to do so
because 42 C.F.R. § 483.15 mandates that a “resident has the right to . . .
[m]ake choices about aspects of his or her life in the facility that are
                                                                                  The same cannot be said of Crestview’s evidence regarding
significant to the resident.” 42 C.F.R. § 483.15(b)(3).                         Resident 93. Crestview has failed to dispute the surveyor’s
No. 02-4084                     Crestview Parke Care        23    24    Crestview Parke Care                         No. 02-4084
                             Center v. Thompson et al.                  Center v. Thompson et al.

observation that a dirty heel protector had been applied          D. The Amount of the Penalty
directly against an open pressure sore. That the same dirty
heel protector was later reapplied over clean bandages does         There are two issues germane to the distinct issues of the
not remedy the initial instance of unclean treatment of           reasonableness of the penalty amount: (1) Crestview’s ability
pressure sores. In evaluating Crestview’s noncompliance           to pay and (2) whether the ALJ can consider the facility’s
with § 483.25(c)(2), the ALJ did not consider the                 history of noncompliance in evaluating the reasonableness of
appropriateness of applying the dirty heel protector to the       a penalty levied against a new owner.
resident’s bandaged feet, but rather focused on the initial
application of the protector to an open sore. Because               1. Ability to Pay
Crestview failed to challenge this observation, there is no
genuine dispute of material fact regarding the violation of          Crestview asserts that the imposition of a $400 per-day
§ 483.25(c)(2) with regards to Resident 93.                       penalty was unreasonable because it cannot afford to pay the
                                                                  penalty. Crestview’s argument fails for two reasons. First,
    c. Conclusion                                                 the ALJ justifiably refused to evaluate this claim because
                                                                  Crestview did not raise it in its initial hearing request. In its
   In sum, the ALJ’s error in applying the HHS rule that          hearing request, Crestview never mentioned its financial
governs the cancellation of in-person hearings sprang from its    condition, in derogation of the regulation that hearing
misapplication of the summary judgment standard, and the          requests must identify the specific issues with which the party
dissent falls into the same trap. In evaluating whether           disagrees. 42 C.F.R. § 498.40(b); see Cmty. Nursing Home
summary judgment is proper, we do not weigh the evidence,         v. CMS, Docket No. A-01-86, CR 770, DAB No. 1807, 2002
but rather view the evidence in the light most favorable to       WL 125182 (H.H.S.), at 9 (Jan. 11, 2002) (holding that
Crestview to divine the existence of a genuine dispute of         untimely arguments regarding ability to pay are deemed
material fact. With regards to the care of Patients 44, 68, and   waived). Crestview disingenuously charges that the ALJ
90 the ALJ, and the dissent, evaluate the strength of             spurned Crestview’s financial-condition argument even
Crestview’s evidence relative to CMS’s evidence, but it is        though CMS raised the issue of ability to pay in its motion for
clear such a comparison is improper at this stage of the          summary judgment, but such protestations ignore the reality
proceedings. Crestview offers evidence and several different      that CMS discussed ability to pay only in response to
arguments for why its actions were in compliance with the         Crestview’s novel introduction of the argument in its
applicable regulations, and CMS proffers different evidence:      prehearing brief.
this is a factual dispute at its essence. This factual dispute
makes the cancellation of an in-person hearing improper, but        Second, given that the ALJ properly refused to admit the
it does not prevent the ALJ from ruling against Crestview         Cummins declaration (because it was tendered after the
upon remand. In reexamining this case, the ALJ may                closing of the record), Crestview presented no evidence of an
conclude that a $400-per-day penalty is reasonable. The ALJ       inability to pay. Crestview did not introduce the Cummins
should determine whether the resolution of the disputed           declaration until nearly a year after the parties exchanged
deficiencies in juxtaposition with the deficiencies for which     exhibit and witness lists and the record was considered
Crestview is undeniably responsible justify the enforcement       closed. Crestview’s arguments that CMS gained an unfair
of the penalty.                                                   advantage because CMS submitted additional declarations to
No. 02-4084                      Crestview Parke Care        25    26   Crestview Parke Care                        No. 02-4084
                              Center v. Thompson et al.                 Center v. Thompson et al.

rebut Cummins’s declaration falls flat because ALJ Hughes            that such history is no longer a valid predictive factor of
excluded CMS’s new evidence, as well as Crestview’s.                 the facility’s ability to achieve and maintain compliance
Moreover, even if Cummins’s declaration were a part of the           (for example, following a change of ownership where the
record, summary judgment was still proper.                While      new owner “cleans house”) the burden of proof is on the
Cummins’s declaration suggests that Crestview in fact was            new owner to demonstrate that poor past performance no
suffering from heavy losses, “financial losses, even if they are     longer is a predictive factor.
severe, are not enough by themselves to establish an inability
of a provider to pay a civil money penalty.” Wellington            Medicare and Medicaid Programs; Survey, Certification and
Specialty Care & Rehab. Ctr. v. Health Care Fin. Admin.,           Enforcement of Skilled Nursing Facilities and Nursing
Docket No. C-97-252, CR548, 1998 WL 673818 (H.H.S.), at            Facilities, 59 Fed. Reg. 56,116, 56,174 (Nov. 10, 1994)
18 (Sept. 15, 1998). The proper standard for ability to pay is     (emphasis added) (quoted by CarePlex of Silver Spring v.
whether the penalty amount would put the facility out of           Health Care Fin. Admin., Docket No. A-98-94, CR536, DAB
business. Milpitas Care Ctr. v. CMS, Docket No. A-02-139,          No. 1683, 1999 WL 985363 (H.H.S.), at 7 (Apr. 13, 1999));
CR932, DAB No. 1864, 2003 WL 974618 (H.H.S.), at 12                see also CarePlex, at 7 (“[This language] presupposes that the
(Feb. 5, 2003). Crestview never asserted that paying the           facility’s history remains a relevant consideration after a
$27,000 penalty would put it out of business, and thus its         change of ownership, but does not foreclose a new owner
ability-to-pay argument must fail.                                 from rebutting the presumption that the facility’s history
                                                                   remains predictive of likely future compliance.”). Crestview
  2. The Facility’s History of Noncompliance                       cannot be penalized for noncompliance that is the
                                                                   responsibility of prior owners in the sense that a penalty
  Crestview also contends that the ALJ erred when it               cannot be levied against Crestview for such noncompliance
accounted for the facility’s history of noncompliance in           by others. But, according to the regulations, Crestview can be
evaluating Crestview’s penalty. There was no error, and on         charged a $400 penalty, as opposed to a $350 penalty, based
remand the ALJ can again take into account the facility’s          upon “[t]he facility’s history of noncompliance.” 42 C.F.R.
history of violations when considering the reasonableness of       § 488.438(f)(1). The regulations clearly demonstrate that the
the penalty. The guiding regulations permit exactly such           ALJ did not err when it accounted for the facility’s past
consideration of past noncompliance: “In determining the           deficiencies, regardless of ownership. Naturally, upon
amount of penalty, CMS does . . . take into account . . .          remand, Crestview can rebut the presumption that past
(1) The facility’s history of noncompliance, including             noncompliance accurately predicts future problems. If
repeated deficiencies.” 42 C.F.R. § 488.438(f)(1). In              Crestview can show that it “cleaned house” when it acquired
adopting its regulations, the HHS specifically stated,             this particular facility, the facility’s history of past
                                                                   noncompliance may no longer be a factor, but conducting
  A facility’s prior compliance history should be                  such an analysis is not our task today.
  considered regardless of a change in ownership. A
  facility is purchased “as is.” The new owner acquires the                           III. CONCLUSION
  compliance history, good or bad, as well as the assets.
  While we agree that after consideration of the facility’s          The ALJ erroneously misinterpreted HHS regulations by
  compliance history, [CMS] or the State may conclude              deciding the case without an oral hearing because genuine
No. 02-4084                      Crestview Parke Care        27    28   Crestview Parke Care                        No. 02-4084
                              Center v. Thompson et al.                 Center v. Thompson et al.

factual disputes exist for several of the alleged deficiencies.     _____________________________________________
As a result, summary judgment was not appropriate.
Therefore, we VACATE the order and REMAND for further               CONCURRING IN PART, DISSENTING IN PART
proceedings at the administrative level. Upon remand, an            _____________________________________________
ALJ should conduct an oral, evidentiary hearing to determine
whether the previously discussed disputed violations                  KENNEDY, Circuit Judge, concurring in part, and
occurred. Then the ALJ should reassess whether the penalty         dissenting in part. I agree with the majority that the ALJ can
was reasonable. The facility’s history of noncompliance may        grant a summary judgment without an in-person hearing and
be taken into account, but a facility’s history of violations is   I agree that Crestview’s argument about its ability to pay is
neither dispositive nor irrebutable, as it is merely one factor    without merit. However, I respectfully dissent from the
that is to be considered.                                          majority’s finding that there are unresolved factual disputes
                                                                   in this case.
                                                                      The majority found that the ALJ committed a procedural
                                                                   error by cancelling the in-person hearing on December 12,
                                                                   2001 before any motion for summary judgment had been
                                                                   filed. In my opinion, the record before us does not support
                                                                   that legal conclusion. CMS stated in the conclusion to its
                                                                   Pre-Hearing Brief filed on October 19, 2001 that “should
                                                                   Crestview not raise a credible dispute to any material fact in
                                                                   its Response to CMS’ Pre-hearing Brief, then this tribunal
                                                                   should grant CMS a summary affirmance of its
                                                                   determinations in this matter.” CMS Pre-hearing Br. at 32.
                                                                   In my opinion, the ALJ was fully within her discretion when,
                                                                   upon receiving the parties’ pre-hearing briefs, she converted
                                                                   CMS’ Pre-hearing brief into a motion for summary judgment.
                                                                   Furthermore, CMS’ Reply Brief actually included a motion
                                                                   for summary judgment. It is true that the Reply Brief was not
                                                                   filed until December 17, 2001. However, the reply brief was
                                                                   already scheduled to be filed prior to the December 12, 2001
                                                                   letter and, more importantly, the ALJ afforded Crestview an
                                                                   opportunity to respond, in writing, to the motion.
                                                                     I also disagree with the majority’s conclusions with respect
                                                                   to Residents 44, 68, and 90. Crestview argued, and the
                                                                   majority agrees, that genuine issues of material fact remain as
                                                                   to whether it provided necessary care and services to
                                                                   Residents #’s 44 and 90. However, the ALJ found, and
No. 02-4084                      Crestview Parke Care        29    30   Crestview Parke Care                        No. 02-4084
                              Center v. Thompson et al.                 Center v. Thompson et al.

Crestview does not dispute, that Resident #44's care plan          avoidable pressure sores, and failed to ensure that a resident
called for heel protectors at all times (with ankle rings) and     having pressure sores received the treatment and services
bilateral elbow protectors at all times, and that Resident #90's   necessary to promote healing, prevent infection, and prevent
care plan called for heel protectors, elbow protectors, and        new sores from developing. More specifically, Resident #68
cone splint from 7 am to 7 pm. The survey also charged that        was diagnosed with multiple sclerosis, dysphagia, iron
on each of the three days of the August survey, at several         deficient anemia, and dermatitis. As of July 23, 1999, her
different times of the day, Patient #44 was observed without       pressure sores had healed. Her physician ordered pillowed
protectors and Resident #90, who had a history of skin             pressure relieving devices on both feet and both elbows at all
breakdowns, was observed sleeping without such protectors          times. Resident #68 was unable to position herself. On two
and seated in chairs on two occasions without elbow                different days, the surveyor observed Resident #68 without a
protectors. The regulations require that the facility provide      relieving device on her left elbow. On August 11, 1999, the
care “in accordance with the comprehensive assessment and          surveyor observed that Resident #68 had pressure sores on her
plan of care.” 42 C.F.R. § 483.25. Crestview, in contesting        left hip, left buttock area, and left elbow. I agree with the
these two charges before the ALJ, indicated its position was       ALJ that:
that the protective pads were removed by the staff to check
and access the skin. No specific witnesses were mentioned to         The facility is obliged to go beyond what seems
substantiate that claim. Nor do the disclosures of Crestview’s       reasonable to, instead, always furnish what is necessary
administrative and nursing personnel contain any reference to        to prevent new sores unless clinically unavoidable, and
this claim. Hrybiniak, in her disclosure, does mention that          to treat existing ones as needed. Koester, DAB No.
residents do remove protectors. She also states that whether         1750, at 32. Allowing Resident #68, a high-risk
protectors are needed is a nursing judgment and that they are        individual to lie, unprotected, on vulnerable points, in
not needed when patients are in bed on a pressure relieving          contravention of physician orders, does not establish that
mattress. Crestview’s brief in response to the motion for            the facility took “all necessary precautions.”
summary judgment argues only that the protective pads were
not needed because the patients were on pressure-relieving         Crestview Parke Care Ctr., DAB CR867, at 28.
mattresses. The ALJ found that the claim that the protectors
were removed for examination or bathing was unsupported              In summary, these Residents had specific needs that were
and refuted by the circumstances of the observations, and that     addressed in their physicians’ orders. Crestview did not
it was a violation of the regulations to fail to carry out the     comply with those orders. I would end the inquiry at this
doctors’ directions. The ALJ also noted that these patients’       point. The majority, on the other hand, has decided to allow
records include no notations that these patients removed other     Crestview to essentially challenge the “wisdom” and/or
protecting pads. The ALJ concluded that there was no               “practicality” of those specific orders in the administrative
material issue of fact with respect to whether the physicians’     hearing, and, in the case of Resident # 68, to argue whether a
orders had not been complied with.                                 violation of the physician’s orders was the actual cause of the
                                                                   pressure sore. This decision, in my view, would cause
  Crestview also argued, and the majority agrees, that             shambles in the administrative oversight of the nursing
genuine issues of material fact remain as to whether               facilities because it frees these facilities from having to
Crestview failed to ensure that one of its residents not develop   comply with the physician’s orders. Instead of simply
No. 02-4084                    Crestview Parke Care       31
                            Center v. Thompson et al.

checking to see whether the facilities complied with the
physicians’ orders, the ALJs will be required to conduct
hearings to weigh the advantages and the disadvantages of the
alternative courses of care provided by the facilities. In my
opinion, disagreement with the necessity of strict compliance
with physicians’ orders ought to be made in the discussions
between the physicians and the facility administrators at the
time of the physicians’ orders. Congress has authorized the
ALJs to simply review the facilities’ compliance with the
physicians’ orders; it did not authorize them to review the
wisdom or the practicality of those orders.
