Opinion
No. 2-132 / 01-0280
Filed November 15, 2002
Appeal from the Iowa District Court for Polk County, MICHAEL D. HUPPERT, Judge.
Nursing facility appeals from district court ruling that upheld violations of federal regulations and state law. AFFIRMED.
Kendall R. Watkins of Davis, Brown, Koehn, Shors Roberts, P.C., Des Moines, for appellant.
Thomas J. Miller, Attorney General, and Jean M. Davis, Assistant Attorney General, for appellee.
Heard by Vogel, P.J., and Miller and Vaitheswaran, JJ.
Dubuque Nursing and Rehabilitation Center appeals from a federal deficiency and state citation and fine that were issued after one of its residents was injured. We affirm.
I. Background Facts and Proceedings. In November 1998, an employee of Dubuque Nursing and Rehabilitation Center (Dubuque) removed a lap tray from a resident's wheelchair while preparing to transfer the resident to her bed. When the employee left the resident alone, she fell from her chair and fractured her nose and leg. On January 15, 1999, following a complaint investigation, the Iowa Department of Inspection and Appeals (the Department) issued statements of deficiencies asserting violations of both state and federal regulations, imposed a state fine and issued a conditional state license.
When Dubuque contested the Department's actions, the administrative law judge reversed the state citation and federal deficiency regarding facility administration, as well as the issuance of the conditional license. See 42 C.F.R. § 483.24(h)(2); Iowa Code § 135C.12(2) (1999); Iowa Admin. Code r. 481-58.9(1)(a). He affirmed, however, the federal deficiency, state citation and fine relating to adequate supervision. See 42 C.F.R. § 483.25(h)(2); Iowa Admin. Code r. 481-58.19(1)(g), .28(3)(e). The proposed decision was upheld on agency appeal and judicial review. Dubuque appeals.
II. Scope of Review . Our review is for errors at law. See Iowa Code § 17A.19(8) (1999).
iii. State Operations Manual . The heart of this appeal is the impact and effect of the federal State Operations Manual for Provider Certification (SOM), issued by the Department of Health and Human Services, Heath Care Financing Administration (HCFA). The SOM is provided by HCFA as a tool to assist state survey agencies, in this case the Department, in determining whether nursing facilities are in compliance with federal regulations State Operations Manual, Department of Health and Human Services, Healthcare Financing Administration, § 2712 (1995). In Iowa, the Department also utilizes the SOM's survey protocol when determining compliance with state regulations.
HCFA is now known as the Centers for Medicare and Medicaid Services (CMS).
Hereinafter cited as SOM.
The focus of Dubuque's argument is the SOM's Appendix P, the survey protocol for long-term care facilities, and a subpart thereof regarding information gathering on a facility's quality assurance program:
If the facility has been out of compliance with a regulatory requirement between two surveys in which they were in compliance, that past noncompliance will not be cited by the survey team if a quality assurance program is in place and has corrected the noncompliance. An exception to this policy may be made in cases of egregious past noncompliance.
SOM, Appendix P, Part I, § II, Task 5F(C)(2). The administrative law judge found this provision would not serve as a basis for reversing the federal deficiency or state citation, as the Department was not obligated to follow the dictates of the SOM "when investigating and determining violations of state and federal rules." He further found that, even if the Department was required to use the SOM when determining federal deficiencies, the quality assurance provision need not be applied because Dubuque's conduct was egregious. Dubuque contends the agency erred when it determined the SOM was inapplicable to state violations. It also challenges the federal deficiency, state citation and fine as being issued in contravention of the survey protocol provision, and argues they must be reversed. For a number of reasons, we cannot agree.
A. State Citation and Fine . Dubuque contends the agency erred in concluding the Department was not required to follow the SOM's survey protocol when investigating alleged violations of, and determining compliance with, state regulations. However, by its own terms the survey protocol serves as a guideline to assess compliance with federal regulations. See SOM, § 2712. It is clear the Department must use the SOM when initially establishing and certifying a health care facility as a Medicaid facility. Iowa Admin. Code r. 441-81.13(1), (2). However, Dubuque has not pointed us to, and we are not aware of any regulation, statute or other law that requires use of the SOM's survey protocols before determining whether a state law has been violated. Cf. Iowa Admin. Code r. 441-81.31 (defining "standard survey" without reference to the SOM).
Dubuque contends the Department's admitted use of the survey protocol when conducting complaint investigations and determining compliance with state regulations is tantamount to formal adoption of the protocol. However, Dubuque cites no authority in support of such a proposition, see Iowa R.App.P. 6.14(1)( c) (noting failure to cite authority may waive issue on appeal), and in fact such a finding appears to be contrary to prior Iowa law. See Anderson v. Iowa Dept. of Human Services, 368 N.W.2d 104, 108 (Iowa 1985); Fears v. Iowa Dept. of Human Services, 382 N.W.2d 473, 476 (Iowa Ct.App. 1985). The agency did not err when it determined the SOM did not govern state compliance, and the Department's resulting ability to issue citations for violations of state regulations.
B. Federal Deficiency . Dubuque points to a number of facts that indicate a strict application of the quality assurance provision would have precluded the complaint investigator, when assessing compliance with federal regulations, from citing the November 1998 incident. The difficulty with this argument is that it presupposes the Department was required to use the SOM when investigating alleged federal violations. However, since the agency concluded the Department was not obligated to follow the survey protocol when determining federal rule violations, Dubuque must first establish the error of that ruling. It has not done so.
As an initial matter, we question whether the issue is properly before us on review. Beyond a minimal argument as to whether the quality assurance provision is applicable in complaint investigations as well as annual or initial surveys, Dubuque has failed to provide any specific argument or authority challenging the agency's determination that the manual was not binding as to alleged federal violations. See Aluminum Co. of America v. Musal, 622 N.W.2d 476, 479 (Iowa 2001) ("It is a well-established rule of appellate procedure that `[t]he scope of appellate review is defined by the issues raised by the parties' briefs.' . . . Issues not raised in the appellate briefs cannot be considered by the reviewing court."). Instead, Dubuque seems to assume the Department was required to use the SOM, relying on assertions the Department and the district court conceded to the SOM's applicability. This is an overly broad interpretation of the record, particularly in regard to the district court.
While Dubuque does make a limited effort to address the issue in its reply brief, the arguments and authority provided do not go directly to the question of whether the SOM must be followed when investigating an alleged violation of a federal regulation. Moreover, issues raised for the first time in a reply brief are not preserved for appeal. Goodenow v. City Council of Maquoketa, Iowa, 574 N.W.2d 18, 27 (Iowa 1998).
Rather than conceding the applicability of the SOM or the quality assurance provision, the district court simply failed to address the issue. While the court did affirm the agency decision in its entirety, the sole ground for upholding the federal deficiency was that the agency's finding of egregious conduct by Dubuque was supported by substantial evidence. It is clear from the district court's statement of issues that it considered the applicability of the SOM only in the context of state law violations. Instead of filing a motion pursuant to Iowa Rule of Civil Procedure 1.904(2), and requesting the district court address the SOM's applicability to federal violations, Dubuque immediately appealed. Because the issue was not passed upon by the district court, it is not preserved for our review. See West Branch State Bank v. Gates, 477 N.W.2d 848, 852 (Iowa 1991) (finding issue was not preserved where not ruled on by district court, and where no motion to enlarge was made).
In fact, the record indicates Dubuque never clearly articulated an argument, in either the agency appeal or upon judicial review, as to how, or under what authority, the SOM was binding in regard to federal violations.
Even if Dubuque's argument could survive its error preservation infirmities, it would fail on the merits. Dubuque has never provided, and we have failed to ascertain, any federal regulation that mandates application of the quality assurance provision in this situation. The Code of Federal Regulations does require a state survey agency, when determining compliance with participation requirements, to use "survey methods, procedures, and forms that are prescribed by [HCFA]." 42 C.F.R. § 488.26(d). But cf. 42 C.F.R. § 488.332(a)(1) (placing the burden for establishing procedures for complaint investigations upon the state agency). However, by its own terms, the survey protocol was established "to provide . . . guidance in conducting the surveys. . . . " (emphasis added). SOM, § 2712. Reviewing relevant sections of the Code of Federal Regulations as well as the SOM, we are not persuaded the design purpose of Appendix P, particularly as it relates to complaint investigations, was the establishment of binding survey directives.
Rather, the survey protocol seems to provide interpretive administrative tool to assist states in their investigation of alleged federal violations. We find it significant that complaint investigations can be accomplished through an abbreviated standard survey, where the "timing, scope, duration and conduct of a complaint investigation are at the discretion of the state survey agency. . . ." Id at Appendix P, Part I, § VII(A). In an abbreviated survey the quality assurance provision currently under dispute is followed only if the state survey agency determines a quality assessment and assurance review is a "pertinent" survey task. Id.
Cf. SOM, Appendix P., Part I, § II, Task 5F(C)(2) (noting goal in gathering information about a quality assurance program is ascertaining whether the facility adequately identifies and deals with quality deficiencies).
Perhaps the most persuasive indication that protocol procedures do not strictly dictate deficiency findings is the SOM's requirement that deficiencies be based on violations of statutes or regulations, and grounded in observations of a facility's "performance, practices or conditions." Id at § 2712. See also id. at Appendix P, Part I, § II, Task 6(D). This sentiment is echoed in the federal regulations, which provide a state survey agency's failure to follow survey procedures "will not invalidate otherwise legitimate determinations that a facility's deficiencies exist." 42 C.F.R. § 488.305(b). See also 42 C.F.R. § 488.318(b) (Inadequate survey performance does not (1) relieve a SNF or NF of its obligation to meet all requirements for program participation; or (2) invalidate adequately documented deficiencies.). Dubuque does not appear to contest, and the record in this case makes it clear that, as a purely factual matter, the resident received inadequate supervision. See 42 C.F.R. § 483.25(h)(2).
For all the foregoing reasons, we conclude both the agency and the district court were correct in upholding the federal deficiency, state citation, and fine.