Appeals Court Rules Against St. Pete Nursing Home In Medicare Fight

Jul 12, 2016

A federal appeals court Monday said a bankruptcy judge did not have the authority to block health officials from cutting off Medicare and Medicaid payments to a Florida nursing home that was alleged to have violated patient-care regulations.

A three-judge panel of the 11th U.S. Circuit Court of Appeals sided with the U.S. Department of Health and Human Services and the Florida Agency for Health Care Administration in the dispute with nursing home operator Bayou Shores SNF, LLC.

The case stems from state inspectors in 2014 citing a St. Petersburg nursing home operated by Bayou Shores. Contending that the violations posed a threat to patients' health and safety, federal officials notified Bayou Shores that they were terminating an agreement that included Medicare payments, according to Monday's ruling.

The move also was expected to trigger termination of Medicaid payments.

Bayou Shores subsequently filed for Chapter 11 bankruptcy protection and asked the bankruptcy court to prevent the state and federal agencies from ending the payment agreements.

The bankruptcy judge sided with Bayou Shores and blocked the termination of the payments, leading the government agencies to appeal in U.S. District Court.

A U.S. District judge ruled that the bankruptcy court did not have jurisdiction over the payment agreements, prompting Bayou Shores to take the issue to the 11th U.S. Circuit Court of Appeals.

The three-judge panel issued a 66-page ruling Monday that gave a detailed analysis of federal legislation and upheld the ruling by the U.S. District judge.

"HHS (the Department of Health and Human Services), not the bankruptcy court, has been charged by Congress with administering the Medicare Act and regulating Medicare providers," said Monday's ruling, written by Judge Raymond Clevenger III and joined by judges Frank Hull and Julie Carnes. "Indeed, the bankruptcy court's action here stymied the direct statutory mandate from Congress to HHS to take appropriate action (including potentially terminating a provider agreement) when, as here, a survey determines that a nursing home's condition 'immediately jeopardize(s) the health or safety of its residents.' And though charged with broad jurisdiction to deal with issues related to a debtor's bankruptcy estate, bankruptcy courts generally lack the institutional competence or technical expertise of HHS to oversee the health and welfare of nursing home patients or to interpret and administer a 'massive, complex health and safety program such as Medicare.' "