Nursing homes should think twice before submitting a plan of correction, court ruling suggests

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Nursing homes that dispute a deficiency citation without Immediate Jeopardy and want it stricken from public record should consider withholding a plan of correction (POC), according to a recent federal court ruling.

The case involves the privately owned Columbus Park Nursing and Rehabilitation Center in Chicago, which received a “G” level deficiency rating in July 2009. A Medicare surveyor cited the facility for an “isolated incident of actual harm to a resident” that did not constitute Immediate Jeopardy.

Columbus Park filed a dispute of the rating with an administrative law judge and submitted a plan of correction to the Centers for Medicare & Medicaid Services.

A follow-up site visit confirmed that the situation was fixed, and CMS did not impose any fines or other penalties. However, the agency did not remove the deficiency rating from the Nursing Home Compare website.

The administrative law judge and an appeals board ruled Columbus Park had no right to a hearing on the disputed rating if CMS did not impose penalties for it. The nursing home took the case to federal court, saying CMS violated its Constitutional due process rights and deprived it of its “interests in its reputation” by continuing to publicize the disputed deficiency, which discouraged potential residents.

Judge Gary Feinerman dismissed the case on jurisdictional grounds, stating the Medicare statute requires that the matter be handled exclusively through that program's judicial review process. Columbus Park argued that there was no way to challenge the deficiency rating under this process. Feinerman said if the nursing home had not submitted a POC, penalties would have been imposed. This would have “entitled Columbus Park to challenge the finding through a full evidentiary hearing, culminating in judicial review,” the judge wrote. 

Although he did not rule on the merits, Feinerman wrote that “the court doubts that Columbus Park could succeed on the merits of its due process claims.” This is in part because a business must show the government's actions caused greater harm than “reduced economic returns and diminished prestige” to bring a successful due process claim. A nursing home would have to lose its Medicare and Medicaid eligibility and essentially cease operating before such a claim could be successfully made, Feinerman wrote.