Fine points.

AHCA files for summary judgment in monetary penalties case

THE FIGHT GOES ON. IN JULY, THE AMERICAN Health Care Association filed a motion for summary judgment in its lawsuit against HCFA's new policy regarding the use of civil monetary penalties (CMPs) against nursing homes. In turn, the U.S. Department of Health and Human Services filed a motion to dismiss the lawsuit on jurisdictional grounds, claiming that challenges to Medicare matters must first wend their way through its own administrative appeals process.

AHCA filed suit against HHS and HCFA on May 18 in federal district court in the District of Columbia, claiming that HCFA's final rule expanding the agency's ability to fine providers, was invalid. "AHCA's position is that HCFA's CMP rule exceeds the agency's [statutory] authority by establishing per instance CMPs and by significantly increasing the penalties that can be applied," says Carol Loepere, partner with Reed, Smith, Shaw & McClay in Washington, D.C., and counsel of record for the AHCA lawsuit. "The rule is clearly punitive, whereas the statute and congressional intent under OBRA nursing home reform was to use remedial strategies to encourage compliance rather than punishment."

The lawsuit asks the court to issue a declaratory judgment that the regulation violates federal law and an injunction against its implementation.

Loepere says she had anticipated the government's move to dismiss the suit. "We knew the government could raise the jurisdictional issue, but the D.C. court has in the past agreed to hear challenges to Medicare rules on their face," she says. The U.S. Supreme Court also recently agreed to rule on the issue in a case involving a provider challenge to the survey system, she adds.

Further complicating the litigation, the National Citizens' Coalition for Nursing Home Reform (NCCNHR) recently filed a motion to intervene as a party to the case. If its motion is granted, the coalition could appeal the outcome of the lawsuit.

AHCA intends to oppose the motion. "The coalition's goal is to expand the case to address the shortfalls of the survey and enforcement system, which AHCA views as beyond the scope of the narrow issues presented in the case, Loepere says.

Toby Edelman, NCCNHR attorney, denies that the coalition is attempting to expand the lawsuit. "We are sticking with the issues. We want the CMP rule to stand and be used by the states. We believe we can show that there is good cause for an exception to the advanced notice and rulemaking process because of the harm to nursing home residents." Edelman suggests that providers object to the per instance rule primarily because it appears to eliminate their opportunity to correct deficiencies and avoid sanctions.

Loepere predicts that the court won't rule on the government's lion to dismiss until after it has reviewed AHCA's motion for summary judgment. In a best-case scenario, the association hopes to win a declaratory judgment that the rule is invalid and an injunction halting HHS's Secretary from imposing the rule.