## Facts

- Cedar Lake Nursing Home operated as a skilled nursing facility participating in Medicare.
- A resident with known fall-risk factors fell and was injured at the facility.
- Federal surveyors determined Cedar Lake failed to keep the environment as free of accident hazards as possible and failed to provide adequate supervision and assistance devices to prevent accidents, as required by 42 C.F.R. § 483.25(h).
- CMS imposed a $5,000 per-instance civil monetary penalty (CMP) for the deficiency.
- An ALJ upheld CMS’s noncompliance finding and the CMP, and HHS’s Departmental Appeals Board (DAB) affirmed.
- Cedar Lake petitioned for judicial review in the Fifth Circuit under 42 U.S.C. § 1320a-7a(e).

## Issues

1. Whether substantial evidence supported the DAB’s determination that Cedar Lake was not in substantial compliance with 42 C.F.R. § 483.25(h).
2. Whether the $5,000 per-instance CMP was arbitrary, capricious, or otherwise contrary to law.

## Decision

- The Fifth Circuit denied the petition for review and affirmed the DAB’s decision.
- The court held substantial evidence supported the agency’s finding that Cedar Lake failed to provide adequate supervision and accident-prevention measures in light of the resident’s assessed risks.
- The court upheld the $5,000 per-instance CMP as within the permissible regulatory range and supported by the agency’s reasoning tied to the seriousness of the deficiency.

## Legal Principles

- Under 42 U.S.C. § 1320a-7a(e), agency factual findings in CMP cases are conclusive if supported by substantial evidence; reviewing courts do not reweigh competing evidence.
- 42 C.F.R. § 483.25(h) requires a facility to maintain an environment as free of accident hazards as possible and to provide adequate, individualized supervision and assistance devices to prevent foreseeable accidents.
- CMS need not show intent to establish noncompliance; it is sufficient to show a foreseeable risk of harm that was not addressed by adequate interventions.
- A per-instance CMP will generally be upheld when it is within the authorized range and the agency reasonably applies regulatory factors such as seriousness, culpability, compliance history, and financial condition where relevant.

## Conclusion

The Fifth Circuit upheld HHS’s determination that Cedar Lake violated the Medicare accident-prevention regulation based on substantial evidence of inadequate supervision for a known fall-risk resident and affirmed the $5,000 per-instance civil monetary penalty as a lawful exercise of agency discretion.


Cedar Lake Nursing Home v. U.S. Dep’t of Health & Human Servs., 619 F.3d 453 (5th Cir. 2010)