Court dismisses lawsuit from imperiled nursing home

An Oklahoma nursing home can't appeal the termination of its Medicare and Medicaid provider services agreement without exhausting its administrative appeals, a federal court ruled this week.

Callaway Nursing Home filed a suit against the U.S. Department of Health & Human Services on July 7, challenging the termination of its provider agreement on due process grounds. Callaway said 55 of its 72 residents were dependent on Medicare or Medicaid, and terminating its provider agreement would force the facility to close. By moving residents, some of which were in hospice, to another facility would cause “transfer trauma,” Callaway's representatives wrote in a complaint.

Callaway's provider agreement was terminated due to deficiencies that could cause “imminent harm” to residents, but the facility stayed open until the suit had been dismissed.

The U.S. District Court for the Eastern District of Oklahoma dismissed Callaway's suit July 20, stating that a possible provider agreement termination doesn't justify waiving the administrative appeal requirement. In the ruling Judge Ronald A. White also said the court lacked subject matter jurisdiction to hear Callaway's claims.

Callaway appealed the court's dismissal on July 21, and filed for an injunction to block the termination of the provider agreement until the appeal is resolved. Callaway's latest appeal will be heard by the U.S. Court of Appeals for the Tenth Circuit.

A Callaway Nursing Home spokeswoman declined to comment on the court's ruling.