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NATIONAL ASS'N OF PSYCHIATRIC HEALTH v. SHALALA

September 14, 2000

NATIONAL ASS'N OF PSYCHIATRIC HEALTH SYS., ET AL., PLAINTIFFS,
V.
DONNA E. SHALALA, SECRETARY, DEP'T OF HEALTH AND HUMAN SERVS., DEFENDANT.



The opinion of the court was delivered by: Kessler, District Judge.

MEMORANDUM OPINION

Plaintiffs bring this action against Donna E. Shalala, in her official capacity as the Secretary of the Department of Health and Human Services ("HHS"), to challenge an interim final rule which requires a physician or other licensed independent practitioner to evaluate a patient, face-to-face, within one hour after the patient has been placed in restraints or seclusion. This matter is before the Court on Plaintiffs' Motion for Summary Judgment and Application for Permanent Injunction, and Defendant's Motion for Summary Judgment. Upon consideration of the motions, oppositions, replies, the arguments made at the motions hearing, and the entire record herein, for the reasons discussed below, Plaintiffs' Motion for Summary Judgment is granted in part and denied in part, Plaintiffs' Application for Permanent Injunction is denied, and Defendant's Motion for Summary Judgment is granted in part and denied in part.

I. Background*fn1

Plaintiffs bring this case to challenge the interim final rule promulgated by HHS, which requires a physician or other licensed independent practitioner to evaluate a patient, face-to-face, within one hour after the patient has been placed in restraints or in seclusion. 42 C.F.R. § 482.13 (f)(3)(ii)(C). This rule will hereafter be referred to as the "one-hour rule."

Plaintiffs are private psychiatric hospitals, and organizations that represent private hospitals, private psychiatric hospitals, and psychiatric units within acute care hospitals. Most of the hospitals represented participate in both the Medicare and Medicaid programs. A few participate in Medicaid but not Medicare.

To participate in Medicare, hospitals must meet certain conditions of participation ("COPs"), which are imposed by statute, regulation, or both. The Medicare statute allows the Secretary to impose additional COPs as necessary to protect the health and safety of Medicare beneficiaries. Hospitals which have received accreditation by a national accreditation body, such as the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO"), are generally deemed to be in compliance with Medicare COPs, except that the Secretary may promulgate standards or requirements higher or more stringent than those prescribed for accreditation by such a national accreditation body. 42 U.S.C. § 1395bb(a), (b).

By notice in the Federal Register on December 19, 1997, HCFA announced a far-ranging proposed rule to revise many different COPs for hospitals participating in Medicare and Medicaid. Medicare and Medicaid Programs; Hospital Conditions of Participation; Provider Agreements and Supplier Approval, 62 Fed.Reg. 66,726 (1997) (this notice of proposed rulemaking shall hereafter be referred to as the "NPRM"). Included in this extensive rulemaking was a HCFA proposal to regulate the circumstances under which hospitals may use restraints and seclusion.*fn2 HCFA did not, in the proposed rule, delineate specific requirements for use of restraints and seclusion, but merely offered general guidelines for such use: that they be used "only when absolutely necessary to prevent immediate injury to the patient or others and when no alternative means are sufficient to accomplish this purpose," and that patients should be released from such restraints or seclusion "as soon as they no longer pose an immediate threat of injury to themselves or others." 62 Fed. Reg. at 66,731.

HCFA did note, however, that it had considered adding further detail to these general guidelines, and requested comments on whether additional prescriptive requirements were necessary. Id. In the preamble of the NPRM, HCFA listed a number of prescriptive requirements as examples of the types of standards it had considered adopting, including requiring physicians to conduct face-to-face assessments of restrained or secluded persons, requiring orders of restraint or seclusion to be signed by a physician and be specific and time-limited, requiring that restrained and secluded patients be constantly monitored for comfort, health, and safety, and limiting the time that a patient may be kept in restraints or seclusion. Id.

The entire record developed in response to all the COP proposals contained in the NPRM includes 200 pages of studies and articles, as well as over 1,000 pages of public comments. As to the one-hour rule, the studies and articles document the link between improper use of restraints and injury or death. Injuries include the psychological (aggression, withdrawal, morbidity, loss of self-esteem, etc.) as well as the physical (burns, pressure sores, limb injury, circulatory obstruction, nerve compression, etc.). The record revealed that restraints are a common intervention, estimating that they are applied hundreds of thousands times a day in the United States, but that restraint-related deaths and injuries (estimated at over 100 per year) often go unreported. The comments received in response to the NPRM stressed the need for frequent monitoring and rapid assessment of persons in restraints or seclusion, and stressed that restraints and seclusion should only be used in emergencies. HCFA received approximately 60,000 public comments in response to all the COP proposals, and a number of them discussed the face-to-face assessment requirement that HCFA had considered when it published the NPRM. A.R. at 295, 519-20, 569, 602, 1217, 1278.

On July 2, 1999, HCFA promulgated the patient-rights COP as an Interim Final Rule.*fn3 Medicare and Medicaid Programs; Hospital Conditions of Participation: Patients' Rights, 64 FedReg. 36,070 (1999). In the Interim Final Rule, HCFA stressed that restraints and seclusion should be used only in emergencies, and stressed the need for rapid assessment and continuous monitoring of patients in restraints or seclusion. The Interim Final Rule listed more specific requirements, which tracked many of the guidelines established by the JCAHO, including the requirement of face-to-face evaluation prior to the renewal of an order for restraints or seclusion. 42 C.F.R. § 482.13 (f)(3)(ii)(D). To ensure more involvement by physicians or licensed independent practitioners, HCFA added the additional requirement (which went beyond the JCAHO guidelines) of a face-to-face assessment of the patient by a physician or licensed independent practitioner within one hour of the application of restraints or use of seclusion. 42 C.F.R. § 482.13 (f)(3)(ii)(C). It is this final requirement that is at issue in this case.

II. Standard of Review

Initially, it must be remembered that the Court is bound by a highly deferential standard of review for agency action. Under the Administrative Procedure Act ("APA"), an agency's action may be set aside only if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706 (2)(A). In making this finding, the Court "must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). The Court may not substitute its judgment for that of the agency. Id. If the "agency's reasons and policy choices . . . conform to `certain minimal standards of rationality' . . . the rule is reasonable and must be upheld," Small Refiner Lead Phase-Down Task Force v. U.S.E.P.A., 705 F.2d 506, 521 (D.C.Cir. 1983) (citation omitted), even though the Court itself might have made different choices. This standard presumes the validity of agency action. Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C.Cir. 1976) (en banc), cert. denied, 426 U.S. 941, 96 S.Ct. 2663, 49 L.Ed.2d 394 (1976).

Courts also give a high degree of deference to agency actions based on an evaluation of complex scientific data within the agency's technical expertise. See Baltimore Gas & Elec. Co. v. NRDC, 462 U.S. 87, 103, 103 S.Ct. 2246, 76 L.Ed.2d 437 (1983); NRDC v. EPA, 824 F.2d 1211, 1216 (D.C.Cir. 1987) (citing NRDC v. EPA, 812 F.2d 721, 725 (D.C.Cir. 1987)) ("[I]t is not for the judicial branch to undertake comparative evaluations of conflicting scientific evidence."). Where the agency decision turns on issues requiring the exercise of technical or scientific judgment, it is essential for judges to "look at the decision not as the chemist, biologist, or statistician that we are qualified neither by training nor experience to be, but as a reviewing court exercising our narrowly defined duty of holding agencies to certain minimal standards of rationality." Ethyl Corp., 541 F.2d at 36.

III. Analysis

The four issues before the Court are whether this Court has subject matter jurisdiction over this action, whether Defendant violated the notice-and-comment requirement of the Administrative Procedure Act ("APA"), 5 U.S.C. § 553 (b), whether Defendant's promulgation of the Interim Final Rule was arbitrary and capricious, and whether Defendant violated the Regulatory Flexibility Act ("RFA"), 5 U.S.C. § 601 et seq.

A. Does the Court Have Subject Matter Jurisdiction?

Our Court of Appeals has long held that "[a] federal court's subject-matter jurisdiction, constitutionally limited by article III, extends only so far as Congress provides by statute." Commodity Futures Trading Comm'n v. Nahas, 738 F.2d 487, 492 (D.C.Cir. 1984). Therefore, "the court must scrupulously preserve the precise ...


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