State v. Neiswanger Mgmt. Servs., LLC
State v. Neiswanger Mgmt. Servs., LLC
Opinion
Statutory interpretation is a complex task for any court, and requires careful reflection upon the text of the statute, and the intent of the legislative body. These complexities are compounded when we consider a statute's relationship with equitable doctrines. The Maryland General Assembly has enacted a comprehensive scheme to identify and protect the rights of individuals in nursing facilities in Maryland called the Patient's Bill of Rights. Md. Code (1982, 2015 Repl. Vol.), §§ 19-343 et seq . of the Health-General ("HG") Article. In this case, we are asked to decide whether the Attorney General has authority to request injunctive relief against a nursing facility pursuant to two different provisions of the Patient's Bill of Rights. FACTS AND LEGAL PROCEEDINGS
Neiswanger Management Services, LLC ("Neiswanger") operates four Maryland nursing facilities 1 located in Anne Arundel County ("New Annapolis"), Montgomery County ("NMS Silver Spring" and "NMS Springbrook"), and Prince George's County ("NMS Hyattsville"). 2 On December 21, 2016, the State of Maryland, through the Attorney General, filed a two-count Complaint in the Circuit Court for Montgomery County against Neiswanger and other related corporate and individual defendants. The Complaint alleged violations of the Patient's Bill of Rights, and the Maryland False Health Claims Act, HG §§ 2-601 et seq. Count One, the subject of this appeal, related to allegedly unlawful resident discharges from Neiswanger facilities in violation of HG §§ 19-345, 19-345.1, and 19-345.2, as well as multiple provisions of COMAR. 3
The State alleged that Neiswanger engages in a widespread pattern of unlawful involuntary discharges of residents from their nursing facilities. These practices include involuntary discharges to homeless shelters or "sham assisted living facilities" with operators who unlawfully exploit residents' public benefits. Neiswanger discharged residents to shelters or facilities far from residents' hometowns and families. Many evicted residents are ultimately hospitalized, at the State's expense, with serious or life-threatening medical complications caused by the evictions.
To support its claims about the breadth of Neiswanger's alleged misconduct, the State asserted that during a 17-month period, from January 1, 2015 to May 31, 2016, Neiswanger issued involuntary discharge notices to at least 1,061 residents. In 1,038 of these discharge notices, Neiswanger stated that the resident was discharged for failure to pay, or for failure to arrange for payment from Medicare, 4 Medicaid, 5 or another third-party payor.
By contrast, the State observed that during the same 17-month period, all of Maryland's other 225 licensed nursing facilities issued approximately 510 involuntary discharge notices. It claimed that "more than 700 people" who "reside in the five NMS facilities," could be affected by Neiswanger's unlawful discharge practices.
The State provided detailed factual narratives of eight Neiswanger residents' discharges between October 2015 and August 2016. These residents were improperly discharged to family members' homes, homeless shelters, or predatory unlicensed assisted living facilities in violation of the Patient's Bill of Rights. One resident was left outside a family member's home on a hot day. Residents were sent to unfamiliar locations. In many cases, Neiswanger failed to communicate with residents and their family members regarding discharge plans. Three of the named residents had been evicted from Neiswanger facilities on multiple occasions over a period of several years.
The State asserted that Neiswanger unlawfully discharges residents to benefit from the public-insurance payment system for residents of nursing facilities in Maryland. Medicare recipients are entitled to up to 100 days' coverage in a nursing facility after a qualifying hospital stay. For the first 20 days of a resident's stay, Medicare pays the full reimbursement rate, and an 80% reimbursement rate for days 21 to 100. Some residents may be "dual eligibles," who participate in both Medicare and Medicaid. When a resident has exhausted their Medicare coverage, and is eligible for Medicaid, then the reimbursement rate shifts to the Medicaid rate. Medicaid provides coverage for long-term care in nursing facilities for eligible Maryland residents, and has significantly lower reimbursement rates than Medicare.
The Complaint charged that Neiswanger "strives to discharge each resident of its nursing homes at the precise point in time when the resident can be replaced by someone else with a more favorable public health insurance profile." It does this by maximizing the number of Medicare recipient residents and minimizing the number of Medicaid recipient residents. The State alleged that Neiswanger monitors residents' public health insurance statuses to identify candidates for eviction, and times that eviction to coincide with the end of the resident's Medicare coverage. It also claimed that Neiswanger unlawfully discharges Medicaid recipients to make room for more lucrative Medicare recipients in violation of HG § 19-345(b)(1)(ii).
The State alleged that in executing these practices, Neiswanger committed multiple violations of the Patient's Bill of Rights and COMAR, including failure to give required notices, in violation of HG § 19-345.1(c)(2)(i) and COMAR 10.07.09.10(D)(8). The timing of Neiswanger's discharge notices is also allegedly improper. The State claims that Neiswanger issued discharge notices before providing residents with notice of nonpayment, in violation of HG § 19-345(a)(4). Family members often learned of discharges shortly before they occurred, the day of the discharge, or not at all, in violation of COMAR 10.07.09.09(F)(4). Neiswanger allegedly fails to properly document discharges or provide residents and families with a written statement containing statutorily-required information about discharges.
The State also asserted that Neiswanger violates HG § 19-345.2 by failing to engage in discharge planning, develop appropriate post-discharge plans of care, or comply with other statutory procedures required before an involuntary discharge or transfer. Neiswanger allegedly does not arrange for post-discharge medical care for discharged residents, or provide a 3-day supply of current medications upon discharge. Neiswanger also violates its statutory obligation to place involuntarily discharged residents in safe and secure environments, in violation of HG § 19-345.2(c)(2).
The State also alleged that Neiswanger violates HG § 19-344(c)(5)(ii) ("C & A Clause") by failing to "cooperate with and assist" residents and their agents in applying for long-term care coverage from the medical assistance program. Specifically, Neiswanger "ignor[es] resident requests for assistance," "delay[s] the submission of required paperwork to the Department of Health and Mental Hygiene," 6 or "impedes the submission of the long-term care applications of Medicare/Medicaid dual eligibles ...."
Relying on HG §§ 19-344(c)(6)(iii) ("Enforcement Clause") and 19-345.3(c) ("Injunction Clause"), Count One 7 of the State's Complaint sought an injunction to prohibit Neiswanger from: (1) further violations of HG §§ 19-344 - 19-345.2 and COMAR 10.07.09; (2) issuing notices of involuntary discharge for failure to pay except under specifically delineated circumstances; (3) discharging a resident who is a Medicaid participant or is Medicaid-eligible, without documenting the resident's or legal representative's failure to cooperate in applying for benefits or arranging for reimbursement; (4) discharging, for non-payment, any resident who has a pending application for Medicaid benefits, unless Neiswanger had a good faith basis for believing that the resident is ineligible for benefits; (5) discharging any resident to an unlicensed assisted living facility or incorporating such a facility into a post-discharge plan of care; and (6) discharging any resident to a homeless shelter, or incorporating such a discharge into a post-discharge plan of care, or discharging a resident without an identified discharge destination.
After the State filed its Complaint, but before Neiswanger had responded, the Department issued a Notice of Restrictions on Admissions to Neiswanger facilities, prohibiting the facilities from admitting or re-admitting residents. After a hearing, an administrative law judge recommended that the Secretary rescind the ban. On January 26, 2017, Neiswanger entered into a Consent Agreement with the Department, requiring Neiswanger to implement changes to its involuntary discharge practices, comply with the Patient's Bill of Rights, and install an independent monitor to supervise and ensure its compliance with the Consent Agreement. 8 Neiswanger, the Department, and the independent monitor, Dr. Daniel Haimowiz, entered into a Memorandum of Understanding (MOU) dated February 8, 2017, which expired after three months, to implement the terms of the Consent Agreement. The MOU set out specific compliance procedures for Neiswanger and outlined numerous conditions for the independent monitoring.
Neiswanger and the other defendants moved to dismiss the Complaint. After a hearing, the Circuit Court dismissed Count One of the State's Complaint for failure to state a claim upon which relief can be granted. The trial court agreed that the allegations in the State's Complaint, if true, "would certainly be in violation of the Patient's Bill of Rights ...." But the Circuit Court concluded that the Injunction Clause does not authorize "a broad sweeping injunction against these Defendants' company practices." It determined, based on the plain language of the statute, that the Injunction Clause authorizes injunctive relief only for an individual resident. The Circuit Court also found that the State lacked authority to sue for an injunction under the Enforcement Clause, because the statute does not specify injunctive relief as a means of enforcement for violations of § 19-344. 9
The State filed a timely appeal pursuant to Md. Code (1973, 2013 Repl. Vol.), § 12-303(3)(iii) of the Courts and Judicial Proceedings Article, which authorizes an interlocutory appeal from a court's refusal to grant an injunction. Before the Court of Special Appeals issued a scheduling order, the State petitioned this Court for a writ of certiorari. We granted certiorari to answer the following questions:
1. Did the Circuit Court err in holding that, although Health-General § 19-345.3 authorizes a court to grant "injunctive relief" to remedy violations of the discharge-related provisions of the Patient's Bill of Rights, the statute excludes injunctive relief barring "company practices" that violate those provisions?
2. Did the Circuit Court err in holding that the statutory responsibility conferred on the Attorney General by Health-General § 19-344 for the "enforcement" of certain of its provisions related to the Medicaid application process does not authorize the Attorney General to seek, or a court to grant, a judicial injunction enforcing those provisions?
We answer both questions affirmatively.
DISCUSSION
The State appeals from the grant of a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. A court considering a motion to dismiss must:
assume the truth of, and view in a light most favorable to the non-moving party, all well-pleaded facts and allegations contained in the complaint as well as all inferences that may reasonably be drawn from them, and order dismissal only if the allegations and permissible inferences, if true, would not afford relief to the plaintiff ....
RRC Ne., LLC v. BAA Maryland, Inc.
,
Justiciability-Mootness
We first address justiciability. A case is moot if, "at the time it is before the court, there is no longer an existing controversy between the parties, so that there is no longer any effective remedy that the court can provide."
Frazier v. Castle Ford, Ltd.
,
Neiswanger argues that this case is moot for two reasons. First, NMS Hagerstown has closed, and Neiswanger no longer operates the other facilities. Neiswanger asserted that "the owners of NMS are out of the picture," but admitted that its "management services company" and "personnel" were involved in the transition. Second, Neiswanger maintains that the Consent Agreement and MOU contain the relief the State initially sought in its Complaint. The State disagrees. The State also contends that the best place to resolve the mootness inquiry regarding the transition in management is before the Circuit Court on remand. Further, the State argues that even if the case is moot, this Court can, and should apply either of two exceptions to mootness: (1) voluntary cessation, and (2) important issues of public interest, to decide the questions presented.
A party's voluntary cessation of conduct, or a change in the factual circumstances that formed the basis for seeking judicial relief does not require "dismissal of the judicial proceedings on the grounds of mootness where the matter is a continuing controversy or the circumstances are likely to recur."
Chase v. Chase
,
A "reasonable expectation of recurrence" may exist when the alleged misconduct was a "continuing practice or was otherwise deliberate."
Sheely v. MRI Radiology Network, P.A.
,
We may also address moot issues if we are convinced that the case contains unresolved issues of great public concern that "merit an expression of our views for the guidance of courts and litigants in the future."
Robinson v. Lee
,
The record before the Court does not detail the transfer of management in the Neiswanger facilities. It is similarly lacking in specifics regarding implementation of the Consent Agreement and MOU, other than Neiswanger's assertion of compliance. We observe that the State sought relief beyond the terms of these documents, and that the Consent Agreement only required three months of supervision implemented under the MOU. 10 Given the paucity of the information available to us, we do not conclude that the factual circumstances make this case moot. We agree with the State that the best place to resolve this question is the Circuit Court.
Even if changed circumstances rendered the case moot, we could nonetheless address these questions under the voluntary cessation exception. The State alleged deliberate, unlawful conduct over a prolonged period of time in multiple Neiswanger facilities. Neiswanger entered into the Consent Agreement only
after
the State sued and the Department
suspended all admissions, and it has never admitted any misconduct or illegality. As such, Neiswanger has not demonstrated that its allegedly wrongful behavior "could not reasonably be expected to recur."
Friends of the Earth
,
The Court may address the questions presented under the other mootness exception. The legislative history surrounding the enactment of these statutes, discussed
infra
, demonstrates that the Maryland General Assembly considered the issues presented in this case to be a matter of significant public policy. The Attorney General's power under the Enforcement Clause and the scope of the Injunction Clause necessarily implicate the relationship between the government of Maryland and its citizens. Further, an involuntary discharge may be completed before individual residents can seek effective relief, particularly if residents do not receive adequate notice and opportunity for a hearing before discharge as required by HG § 19-345.1. Determining the nature of the relief available and the extent of the Attorney General's enforcement powers provides important guidance for courts resolving time-sensitive issues, and will avoid duplicative and inconsistent litigation results.
See
Potomac Abatement
,
With justiciability resolved, we turn to the questions presented.
Statutory Interpretation
"The cardinal rule of statutory interpretation is to ascertain and effectuate the real and actual intent of the Legislature."
Lockshin v. Semsker
,
The Injunction Clause
The Circuit Court, relying on
State Comm'n on Human Relations. v. Talbot Cty. Detention Ctr.
,
To the contrary, the State sees the Injunction Clause as containing no restriction on the Attorney General's ability to act on behalf of multiple residents. In its view, when a violation of the Patient's Bill of Rights occurs, at the request of the Attorney General, a circuit court would have discretion to exercise its "full equitable authority." The State avers that the Circuit Court read the Injunction Clause too narrowly, and ignored the principle that enforcement provisions of remedial statutes should be read broadly to "afford complete relief consistent with the statute's remedial purposes."
The Language Of The Injunction Clause
We turn to the language of the Injunction Clause.
A resident, resident's agent, or resident's attorney, or the Attorney General on behalf of the resident, who believes that an involuntary discharge or transfer that violates the requirements of § 19-345, § 19-345.1, or § 19-345.2 of this subtitle is imminent or has taken place may request injunctive relief from a circuit court.
HG § 19-345.3(c).
The statute accords standing to two categories of parties. The first, a "resident, resident's agent, or resident's attorney" are plaintiffs whose suits would likely redress the unlawful involuntary transfer or discharge of a specific resident. The second, and the one at issue here, is "the Attorney General, on behalf of the resident." We consider whether, by authorizing the Attorney General to take such action, the General Assembly intended for the Attorney General to act on behalf of multiple residents. 11 We are unable to find any Maryland cases that have addressed the meaning of "on behalf of" in this context. To consider whether the General Assembly intended to authorize broad or narrow enforcement of the Injunction Clause, we turn to the statutes constituting the Patient's Bill of Rights and legislative history.
Legislative History Of The Injunction Clause
The Injunction Clause was not enacted in a vacuum. It was part of a broad statutory scheme governing involuntary discharge or transfer practices in Maryland nursing facilities that amended the Patient's Bill of Rights. See H.B. 343, 1995 Leg., 409th Sess. (Md. 1995). HG § 19-343(b) delineates the General Assembly's policy behind the Patient's Bill of Rights:
(b)(1) The General Assembly intends to promote the interests and well-being of each resident of a facility . (2) It is the policy of this State that, in addition to any other rights, each resident of a facility has the following basic rights:
(i) The right to be treated with consideration, respect, and full recognition of human dignity and individuality;
(ii) The right to receive treatment, care, and services that are adequate, appropriate, and in compliance with relevant State and federal laws, rules, and regulations ....
(Emphasis added). This statement of intent reflects the purpose of the General Assembly to sweep broadly in according legislative protection to the vulnerable population of nursing facilities. See 2A Norman J. Singer, Sutherland's Statutory Construction § 45.9 (7th ed. 2014) (policy section of statute stating general objectives helps court's interpretation).
In 1995, the General Assembly, at the "urging of the Attorney General ...."
Oak Crest Village, Inc. v. Murphy
,
In the 1995 Amendments, the General Assembly also made substantial alterations to existing statutes, and enacted HG §§ 19-345.1 through 19-345.3.
14
See
1995 Md. Laws, ch. 547, § 1. As we observed in
Walton
,
The provisions most relevant to the scope of the Injunction Clause are HG §§ 19-345 through 19-345.2, which provide a comprehensive statutory scheme regulating involuntary transfers and discharges from nursing facilities. HG § 19-345(a) permits an involuntary discharge or transfer from a nursing facility only in certain circumstances:
(1) The transfer or discharge is necessary for the resident's welfare and the resident's needs cannot be met in the facility;
(2) The transfer or discharge is appropriate because the resident's health has improved sufficiently so that the resident no longer needs the services provided by the facility;
(3) The health or safety of an individual in a facility is endangered;
(4) The resident has failed, after reasonable and appropriate notice to pay for, or under Medicare or Medicaid or otherwise to have paid for, a stay at the facility; or
(5) The facility ceases to operate.
These provisions are generally consistent with federal law and regulations governing involuntary discharges and transfers.
See, e.g.
, 42 U.S.C. § 1396r(c)(2)(A)(i)-(vi) (2012) ;
HG § 19-345.1(a) established new guidelines for notice and hearing requirements before a proposed involuntary discharge or transfer. 17 HG § 19-345.2 was an essential feature of the 1995 Amendments. Notes from the testimony of the Director of the Attorney General's Medicaid Fraud Control Unit refer to the implementation of specific practices before involuntary discharge as the "heart of this bill." See Related Institutions-Discharge, Transfer and Assets of Residents: Hearing on H.B. 343 before the H. Comm. on Envtl. Matters , 1995 Leg., 409th Sess. (Md. 1995).
HG § 19-345.2 established specific procedures to be followed before a discharge or transfer, including medical assessments, a "post-discharge plan of care for the resident," as well as written documentation from the resident's attending physician indicating that the transfer is consistent with the post-discharge plan of care, and appropriate based on the resident's medical condition.
These statutes demonstrate clear legislative intent to limit involuntary discharges and transfers, and ensure that when they do occur, they are subject to procedural controls ensuring
a resident's health and safety.
See
Walton
,
The 1995 Amendments are remedial because they authorized injunctive relief for residents who are facing, or have been subjected to involuntary discharge or transfer.
See
Langston v. Riffe
,
Relevant Federal Authority
The State asks us to consider Federal authority interpreting remedial federal statutes that permit public enforcement based on statutory violations by private
individuals. In
United States v. Sch. Dist. of Ferndale, Mich.
,
In
Ferndale
, the district court dismissed an EEOA claim for failure to state a claim upon which relief could be granted because the complaint "did not adequately identify those persons 'on whose behalf' the action was being brought by the Attorney General."
In reaching this conclusion, the Sixth Circuit emphasized that Congress had established a "broad role" for the Attorney General in "enforcing the remedial provisions of the EEOA."
We agree with the State that, for our purposes, § 1706 of the EEOA is similar, although not identical, to the Injunction Clause.
19
Both statutes authorize an individual
cause of action, as well as public enforcement by the Attorney General.
Compare
Statutorily-Authorized Injunctive Relief And Judicial Equitable Discretion
To determine whether the Injunction Clause permits the broad relief the State sought, we consider the effect of a statutory injunctive remedy on a court's equitable discretion. Both parties rely on
State Comm'n on Human Relations v. Talbot Cty. Detention Ctr.
,
The State argues that because the Injunction Clause does not contain a limitation on available relief, Talbot County requires a court to read that provision broadly. It reasons that once it has satisfied the statutory standard, the circuit court's equitable jurisdiction permits complete relief. Neiswanger contends that Talbot County restricts courts from exercising equitable discretion in statutorily-authorized injunctions, and the Injunction Clause limits the scope of the relief to redressing wrongs for an individual resident.
"An injunction is 'a writ framed according to the circumstances of the case commanding an act which the court regards as essential to justice, or restraining an act which it esteems contrary to equity and good conscience.' "
El Bey v. Moorish Sci. Temple of America
,
In
Talbot County
, the Maryland Commission on Human Rights alleged that the Talbot County Detention Center impeded the Commission's investigation into two verified complaints of employment discrimination.
Talbot County
was the first opportunity this Court had to address a court's discretionary authority in considering injunctions authorized by statute.
We determined that § 4 granted the circuit court "unmistakable" authority and statutory jurisdiction to "issue injunctive relief at any time after a complaint has been filed with the Commission."
In
Talbot County
, when we characterized traditional equitable factors
20
as "largely inapplicable" we spoke only to the factors relating to
a preliminary or interlocutory injunction-
recognizing that the injunction authorized by § 4 "
share[d] more of the characteristics of a permanent injunction
."
21
Talbot County
teaches us that a statutory injunctive remedy is not necessarily a limitation on the scope of available relief. The Legislature authorized the Commission to seek an injunction when it was necessary to carry out its purpose of investigating and enforcing the State's laws prohibiting employment discrimination.
The Scope Of Available Relief Under The Injunction Clause
Talbot County
and
Ferndale
are our guideposts in resolving whether
the Attorney General may seek injunctive relief on behalf of multiple residents, and the scope of available relief.
Talbot County
demonstrates that legislative injunctive remedies establish standards for a circuit court reviewing a request for injunctive relief.
Applying
Talbot County
, we consider that the Injunction Clause establishes a standard for a circuit court to apply in deciding whether to issue injunctive relief-the Attorney General must have reason to believe that an involuntary discharge or transfer in violation of the Patient's Bill of Rights has taken place or is imminent.
See
HG § 19-345.3(c). This standard does not operate as a
limitation
, on available remedies, as Neiswanger suggests. Rather, it how the legislature has circumscribed the traditional showing a party must make before a court may issue an injunction.
See
Talbot Cty.
,
The Legislature authorized the Attorney General to seek injunctive relief to carry out its goals of preventing unlawful involuntary discharges or transfers that threaten residents' health and safety. The statutes identified in the Injunction
Clause, HG §§ 19-345, 19-345.1, and 19-345.2, establish comprehensive policies and practices nursing facilities must follow when attempting to involuntarily discharge or transfer residents. Neiswanger's proposed narrow reading of the Injunction Clause is inconsistent with legislative goals and would impede enforcement of the Patient's Bill of Rights.
See
Neal v. Fisher
,
Neiswanger argues that if we interpret the Injunctive Clause to permit the Attorney General to seek injunctive relief protecting multiple unnamed residents, we would override the General Assembly's delegation of authority to the Secretary of Health and the Department to regulate and enforce nursing facilities' operating conditions. Neiswanger points to the Secretary's authority to restrict new admissions to a facility for a 30-day period if "the Secretary determines that a life-threatening, health or fire safety deficiency exists in a related institution ...." HG § 19-328(a)(1). We are not persuaded-because a restriction on new admissions does not prohibit a facility from illegally discharging residents. Thus, there is no conflict between the Attorney General's authority to act on behalf of residents, and the Secretary's authority to restrict admissions.
In addition to authorizing the Attorney General to seek injunctive relief, the General Assembly also authorized the Secretary to impose civil penalties on facilities for violations of HG §§ 19-345 - 19-345.2. See HG § 19-345.3(a). There is no apparent discord between these provisions. A civil penalty against a facility affords little, if any, relief for residents who have been subjected to, or are awaiting an unlawful involuntary discharge. The General Assembly clearly intended for these provisions to operate in tandem. We are unconvinced that the Attorney General's authority to seek injunctive relief to require a facility to comply with its statutory obligations usurps the Secretary's authority under state 22 or federal regulations. 23
Neiswanger suggests that the nature of the injunction sought by the Attorney General is "simply unworkable" in light of the possibility that the Secretary might amend regulations affecting nursing facilities. We are not persuaded. By that logic, courts should
never
issue injunctive relief to enforce provisions of laws because legislatures
might
change those laws, or administrative agencies
might
issue new regulations. Courts can, and do, compel performance of a variety of obligations, including compliance with law.
See, e.g.
,
Virginian Ry. Co. v. Sys. Fed'n No. 40
,
We hold that under HG § 19-345.3(c), the Attorney General may bring suit on behalf of multiple unnamed residents who have been subjected to, or await, imminent, unlawful involuntary discharges, provided that at least one individual's statutory rights have been violated. Further, a court may issue complete injunctive relief for violations of HG §§ 19-345, 19-345.1, and 19-345.2.
We turn to the second question presented: whether the Attorney General's authority to prosecute violations of HG § 19-344(c)(4)-(5) permits injunctive relief to enforce the requirement in the C & A Clause, that a facility "cooperate with and assist" a resident or applicant's agent in seeking assistance from the medical assistance program.
Enforcement Of The C & A Clause
In its ruling on the State's request for injunctive relief for alleged violations of the C & A Clause, the Circuit Court explained that although the Enforcement Clause grants the Attorney General the responsibility to enforce and prosecute violations of HG § 19-344(c)(4)-(5), "the use of the word enforcement does not include injunctive relief." The Circuit Court reasoned that the General Assembly never intended to permit injunctive relief because it did not specifically authorize injunctive relief either in the original 1995 enactment, or in subsequent amendments.
Neiswanger encourages us to adopt the Circuit Court's reasoning that the failure to explicitly identify injunctive relief renders it unavailable. It argues that because the General Assembly specifically authorized injunctive relief in the Injunction Clause, and did not include the C & A Clause in the statutory violations triggering an injunction, "the General Assembly's intent is clear that injunctive relief is not authorized for violations of [ HG §] 19-344." Neiswanger also contends that the Attorney General's authority under the Enforcement Clause is restricted to seeking civil financial penalties against a resident's agent, and the C & A Clause is enforceable through other provisions of the Patient's Bill of Rights.
The State responds that an express grant of injunctive relief in one statute does not preempt injunctive relief to enforce other statutory provisions. Rather, injunctive relief is impliedly authorized by the term "enforcement," and the Attorney General's authority. The State reasons that because there is no other provision to ensure a facility's compliance with the C & A Clause, the Circuit Court's ruling has rendered the statute unenforceable.
The Enforcement Clause states that "[t]he Attorney General is responsible for the enforcement and prosecution of violations of the provisions of paragraphs (4) and (5) of this subsection." HG § 19-344(c)(6)(iii). The C & A Clause states that "[t]he facility shall cooperate with and assist the agent in seeking assistance from the medical assistance program on behalf of the applicant or resident."
Neiswanger is correct that paragraphs (4) and (5) are primarily devoted to the responsibilities of agents in applying for the medical assistance program.
See
The General Assembly enacted the Enforcement Clause in the 1995 Amendments, discussed
supra
. The Amendments modified existing provisions of HG § 19-344(c)(4)-(5), added new ones, and expanded the statute to apply to residents of nursing facilities, as well as applicants. 1995 Md. Laws, ch. 547, § 1. The C & A Clause was enacted in 1988,
see
1988 Md. Laws, ch. 452, § 2, and was already in HG § 19-344 at the time of the Amendments. We presume the Legislature was aware of its own laws.
See
Bd. of Educ. of Garrett Cty. v. Lendo
,
But what does "enforcement" mean in the Enforcement Clause? The State and Neiswanger disagree about whether it encompasses the authority to seek injunctive relief against a facility to ensure compliance with the C & A Clause. HG § 19-344(c) provides civil penalties for agents who "willfully or with gross negligence" violate the requirements of paragraphs (4) or (5). HG § 19-344(c)(6)(i)-(ii). But it does not list civil penalties for a facility's violations of the C & A Clause, or specify how the Attorney General may ensure a facility's compliance.
"Enforcement" is defined as "[t]he action or process of enforcing," as well as "[t]he forcible exaction of a payment, an action, etc.; the enforcing or compelling of (a law, demand, obligation); ... a means of enforcing a sanction." 5
The Oxford English Dictionary
245 (2d ed. 1989). Courts consistently use the terms "enforce" and "enforcement" in the context of injunctive relief to require a party to comply with an obligation. For example, in
Talbot County
,
Md. Ins. Comm'r v. Central Acceptance Corp.
,
Central Acceptance argued that because the Commissioner had express grants of authority to issue cease-and-desist orders in other sections of the Insurance Article, the lack of the same in the Premium Financing Title, meant that the Legislature did not intend for the Commissioner to have such authority.
Other cases support implied statutory authority to issue injunctive relief.
See So.
Ry. Co. v. Brotherhood of Locomotive Firemen & Enginemen
,
The statutory language and the above precedent persuades us that we would undermine the General Assembly's intent if we were to conclude that the Attorney General lacks the ability to enforce the C & A Clause. The General Assembly intended to prevent involuntary discharges for nonpayment.
See
Walton
,
In
Walton
,
& A Clause, it suggests a broad construction of the Attorney General's authority under the Enforcement Clause.
See
Given the Attorney General's exclusive power to enforce agents' obligations,
see
Neiswanger's argument, that the Legislature foreclosed injunctive relief as a means of enforcing the C & A Clause,
25
by explicitly providing for such relief elsewhere, is substantially similar to the one we rejected in
Central Acceptance
, 424 Md. at 31-32,
Kirkwood v. Provident Sav. Bank of Baltimore
,
Neiswanger proposes that its interpretation does not leave the C & A Clause unenforceable because HG § 19-344(q) permits residents and agents to file administrative complaints about violations of HG § 19-344. Upon receipt of a complaint, the Secretary of Aging must investigate the complaint and report any findings to the complainant, and the complainant must receive an opportunity for a hearing before the Department.
We hold that HG § 19-344(c)(6)(iii) permits the Attorney General to seek injunctive relief to require a facility to comply with its statutory obligation under HG § 19-344(c)(5)(ii) to "cooperate with and assist" an agent in seeking assistance from the medical assistance program on behalf of a resident or applicant.
CONCLUSION
Neiswanger has not met its burden of demonstrating to this Court that the case is moot. We hold that HG § 19-345.3(c) permits the Attorney General to seek injunctive relief on behalf of multiple unnamed residents who have been, or await, imminent unlawful involuntary discharges, provided the statutory standard has been met. HG § 19-345.3(c) permits a court to issue complete injunctive relief for violations of HG §§ 19-345, 19-345.1, and 19-345.2. We also hold that the Attorney General may seek injunctive relief under HG § 19-344(c)(6)(iii) to enforce a facility's obligation to "cooperate with and assist" a resident or applicant's agent in seeking assistance from the medical assistance program on behalf of a resident or applicant. JUDGMENT OF THE CIRCUIT COURT OF MONTGOMERY COUNTY REVERSED; CASE REMANDED TO THAT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS IN THIS COURT TO BE PAID BY THE APPELLEE.
Md. Code (1982, 2015 Repl. Vol.), § 19-343(a) of the Health-General Article defines a "facility" as "a related institution that, under the rules and regulations of the Department [of Health], is a comprehensive care facility or an extended care facility." See COMAR 10.07.09.02.B(6) (defining comprehensive care facility); COMAR 10.07.09.02.B(13) (defining extended care facility). We use the term "nursing facility" for convenience.
Neiswanger formerly operated a facility in Washington County ("NMS Hagerstown"), which closed in 2017.
The State alleged violations of: COMAR 10.09.10.03(Q) ; 10.07.09.04(A)(7) ; 10.07.09.09(C) and (F)(4) ; 10.07.09.10(A)(4), (C) and (D)(8) ; 10.07.09.11(A)(1)(a)-(c), (B), and (C)(2).
Medicare is "a health insurance program which provides for payment for medical care to persons over 65 years of age."
Fort Washington Care Ctr. Ltd. P'ship v. Dep't of Health & Mental Hygiene
,
The Maryland Medical Assistant Program or "Medicaid" is a "a State program partially funded by the federal government, which reimburses nursing homes for their patient related costs of medical care rendered to indigent or medically indigent persons."
Liberty Nursing Ctr., Inc. v. Dep't of Health & Mental Hygiene
,
The Department of Health and Mental Hygiene was renamed in July 2017 to the Department of Health ("Department"). See HG § 1-101(c) ; 2017 Md. Laws ch. 214, § 1. For convenience, we refer to it as the Department, rather than DHMH.
Count Two of the Complaint alleged that Neiswanger submitted false claims to Maryland's Medicaid program in violation of the Maryland False Health Claims Act. See HG §§ 2-601 et seq. Specifically, the State alleged that Neiswanger falsely sought reimbursement for discharge planning and related services that it does not provide, and falsely certified compliance with discharge-related provisions of the Patients' Bill of Rights.
On the same day, the State sought a temporary restraining order from the Circuit Court for Montgomery County to block Neiswanger for discharging residents for nonpayment. The Circuit Court denied the State's application in an order dated March 15, 2017.
The Circuit Court also dismissed Count Two, the Maryland False Health Claims Act, for failure to state a claim upon which relief can be granted against some of the defendants. Count Two survived against Neiswanger, NMS Silver Spring, NMS Springbrook, and NMS Hagerstown.
By its own terms, the MOU expired in May 2017.
Statutory standing requires determining if the statute at issue "contemplates litigants like [the State] availing [itself] of its remedies."
Suessman v. Lamone
,
HG § 19-346(a)(2) defines "abuse of funds" as the use of a resident's assets or income:
[a]gainst the express wish of the resident, if the expenditure was not necessary for the direct and immediate benefit and welfare of the resident; or [f]or the use or benefit of a person other than the resident if the expenditure is not also for the direct and immediate benefit of the resident or consistent with an express wish and past behavior of the resident.
See also
HG § 19-346(n) contemplates that a local department of social services or the Secretary of Aging may also receive complaints, and refer them to a State's Attorney for additional investigation or prosecution.
The Legislature also expanded the definition of neglect to include "intentional failure to provide necessary assistance and resources for the physical needs of the vulnerable adult, including food, clothing, toileting, essential medical treatment, shelter, or supervision." Md. Code (2002, 2012 Repl. Vol.), § 3-604 of the Criminal Law Article ; see also 1995 Md. Laws, ch. 547, § 1. This statute, formerly Article 27, Crimes and Punishments § 35D, has since been modified and renumbered.
Letter from Daniel R. Anderson, Director of the Medicaid Fraud Control Unit, Office of the Attorney General, to Senator Thomas L. Bromwell, Chair of the Maryland Senate Finance Committee, Regarding House Bill 343: Related Institutions-Discharge, Transfer, and Assets of Residents, at 2 (Mar. 22, 1995).
The 1995 Amendments prohibited Medicaid-certified facilities from requiring Medicaid-eligible residents to pay as a private resident for any length of time, and retained an existing prohibition on involuntarily discharging or transferring residents because they receive Medicaid. HG § 19-345(b)(1)(i)-(ii). A facility that discharges or transfers a Medicaid-eligible resident or Medicaid recipient is presumed to be acting in violation of the law, but that presumption may be overcome if the resident was discharged for a failure to pay, and was not eligible for Medicaid.
Before the 1995 Amendments, HG § 19-345 required the facility to provide 30 days' written notice to the resident, and next of kin or guardian for the resident specifying the reason for the transfer or discharge, as well as afford the resident an opportunity for a hearing thereon.
The General Assembly's decision to give the
Attorney General
standing under the Injunction Clause is of some consequence. As we explained in
State ex rel. Attorney Gen. v. Burning Tree Club, Inc.
,
The party seeking an interlocutory injunction must show: (1) a likelihood of success upon the merits; (2) that the injury suffered by granting the injunction is less than the injury that would result from refusing to grant it; (3) the plaintiff will suffer irreparable injury unless the injunction is granted; and (4) granting the injunction is in the public interest.
See
Md. Comm'n on Human Relations v. Downey Commc'ns, Inc.
,
The State initially sought, and was denied, a temporary injunction. The Injunction Clause does not specify whether the injunctive relief may be temporary or permanent. But the State asked the Circuit Court to enter a judgment that Neiswanger had violated the Patient's Bill of Rights, and injunctive relief. This appears to be more consistent with a permanent injunction, because it would dispose entirely of Count One.
See
Colandrea v. Wilde Lake Cmty. Ass'n
,
Neiswanger lists "enforcement actions" available under HG § 19-360(d)(1)(i)-(iv) that may occur "when there has been a violation of the Patient's Bill of Rights ...." But HG § 19-360(d) permits these enforcement actions when "the Secretary determines that a serious or life-threatening patient care deficiency exists and the hospital, residential treatment center, or health care facility fails to correct the deficiency through implementation of immediate corrective action ...." Further, the Secretary
must
consider a specific list of factors before determining which actions to take.
See
Neiswanger cites a number of federal regulations that authorize the Centers for Medicare and Medicaid Services and the State to take action against long-term care facilities for deficiencies. In addition to terminating a provider agreement, remedies include: temporary management, denials of payment to a facility for Medicaid, or to a State for Medicare, denials of payment for all new admissions, civil monetary penalties, state monitoring, transfer of residents, closing a facility and transferring all the residents, directed in-service training, or alternative state remedies.
See
Md. Code (1996-97, 2017 Repl. Vol.), §§ 23-301 et seq. of the Insurance Article.
Neiswanger also reasons that because the Injunction Clause does not include such relief for violations of HG § 19-344, the General Assembly did not intend to permit injunctive relief for those violations.
We observe that the provisions cross-referenced in the Injunction Clause specifically address the guidelines for
discharge
. HG § 19-344 addresses
admissions requirements
and residents' rights. Although we review provisions in the context of the statutory scheme,
Lockshin v. Semsker
,
Reference
- Full Case Name
- STATE of Maryland v. NEISWANGER MANAGEMENT SERVICES, LLC, Et Al.
- Cited By
- 12 cases
- Status
- Published