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# Franklin Care Center, DAB CR5700 (2020)

----

## Department of Health and Human Services     DEPARTMENTAL APPEALS BOARD          Civil Remedies Division        

## Franklin Care Center	(CCN: 31-5151),	Petitioner,

## v.

## Centers for Medicare & Medicaid Services.

### Docket No. C-18-939Decision No. CR5700September 1, 2020

### DECISION

The roof of Franklin Care Center (Petitioner or facility), a skilled nursing facility (SNF), developed leaks that permitted water intrusion from at least 2004 through November 2014.  By 2005, Petitioner's owners knew that the second floor of the facility needed to be renovated, and by 2007, the second floor was closed.  The second floor was never renovated or reopened, but persistent roof leaks remained as Petitioner continually patched the roof rather than replace it.  Difficult winters in 2012-2013 and 2013-2014, along with heavy rain in spring 2014, resulted in significant leaking, causing Petitioner to catch leaking water by hanging a tarp from the ceiling, placing large metal pans in the false ceiling with hoses that permitted the water to empty into garbage cans, and placing large garbage cans around the second floor to generally catch leaking water.  Due to water intrusion, the first floor of the facility became a damp environment, resulting in visible black substances staining ceiling tiles and walls, and appearing behind wall paper.  Facility management did not seek to test whether these stains were mold and engaged in some remediation using its maintenance staff rather than outside specialists.  The rooms with most extensive visible staining were not locked to bar residents from entering, and remediation efforts were started without fully sealing off those rooms to ensure mold spores would not spread throughout the facility.

**Page 2**

Due to an anonymous complaint, the New Jersey Department of Health (state agency) sent surveyors to the facility at the end of October and early November 2014.  The surveyors documented wetness in the facility due to the roof leaks (during the survey, the surveyors photographed pools of water on the first floor and water that had dripped on the surveyors from the ceiling) and black stains in numerous facility rooms.

At the surveyors' request, Petitioner hired a mold remediation company, which toured the facility on October 30, 2014, first with facility management and again with the surveyors.  That company took samples, the analysis of which showed significant mold in some rooms of the facility.  The company informed facility management that the facility had signs of mold and the surveyors told the facility administrator that this was an immediate jeopardy situation.  The facility administrator reacted to this news by hiring another remediation company to come the next day and take samples; however, the surveyors were not invited to tour the building with the second company.  The results from the second company's samples showed a significant reduction in mold quantity than from the samples taken the day before.  The facility also hired an expert who would opine, based on the results of the second test that the facility did not have much mold and there was no threat to the health and safety of facility residents.

Based on the results of the survey, the Centers for Medicare & Medicaid Services (CMS) concluded that the facility had placed its residents' health and safety in immediate jeopardy.  CMS engaged an expert who considered both mold test results before opining that the facility had extensive mold contamination and that the contamination was likely to cause serious harm to the aged and infirmed residents who already suffered from asthma or other respiratory ailments.  Specifically, the expert opined that asthmatic allergic reaction was the primary threat to these individuals, and that there is little debate in medical circles that mold contamination is likely to cause an allergic response in those individuals who are sensitive to mold.  The scientific and medical literature in the record of this case is consistent with the expert's conclusions.

As explained in detail below, I find that the facility had long-term water intrusion and the facility acted in an ad hoc manner to deal with that chronic problem which, by 2014, would not be resolved in that way.  This created a wet environment, conducive for mold growth, but the facility did not investigate visible black substances that appeared in various rooms of the facility or have professionals remediate those signs of potential mold.  As also explained below, I give greater weight to results of the mold analysis based on the samples taken on October 30, 2014, rather than the results from the October 31, 2014 samples.  The first company was hired by Petitioner, but received information and toured the facility with representatives from the facility and the surveyors.  Therefore, the first company, unlike the second company, received information from both parties when determining where to take samples for analysis.  Further, these samples best reflect the actual mold contamination of the facility because they were taken first, and

**Page 3**

contemporaneously with the facility learning that the surveyors believed immediate jeopardy existed.

In addition, I explain below why I give greater weight to CMS's expert's opinion in regard to the extent of the mold contamination at the facility and the level of risk for serious harm to the facility residents.  In part, I do this because CMS's expert, unlike Petitioner's expert, reviewed both mold analyses and CMS's expert considered the specific effect that mold contamination could have on aged and infirmed residents who suffered from asthma and other respiratory conditions.  That is the population that is important to the determination of immediate jeopardy, and not the potential effect of mold on the average adult.

Therefore, I conclude that CMS did not clearly err when it determined that Petitioner immediately jeopardized the health and safety of its residents.  However, as also explained below, I reduce the per-day civil money penalty (CMP) from $10,000 to $9,000 per day for the 26 days of immediate jeopardy.  Therefore, including the CMP imposed for substantial non-compliance following the period of immediate jeopardy, Petitioner is liable for a $243,800 total CMP.

### I.  Legal Framework

The Medicare program "provides basic protection against the costs of . . . related post-hospital . . . care" for individuals over the age of 65 who are eligible for Social Security retirement benefits and for individuals under 65 who meet other criteria.  42 U.S.C. § 1395c.  Post-hospital care includes extended care services provided at an SNF.  42 U.S.C. §§ 1395f(a)(2)(B), 1395x(h), (i).

For Medicare program purposes, an SNF is an institution that is primarily engaged in providing skilled nursing care and/or rehabilitation services for its residents, but is not primarily engaged in the care and treatment of mental diseases.  42 U.S.C. §§ 1395x(j), 1395i-3(a)(1).  Because an SNF is a "provider of services" in the Medicare program, each SNF that participates in the program must file a provider agreement with the Secretary of Health and Human Services (Secretary).  42 U.S.C. §§ 1395cc(a), 1395x(u).  Further, a participating SNF must meet a variety of ongoing requirements related to how it provides services, maintains the rights of its residents, and administers its facility.  42 U.S.C. § 1395i-3(a)(3), (b), (c), (d); 42 C.F.R. pt. 483, subpt. B.1

When an SNF fails to meet a statutory or regulatory participation requirement, then the SNF has a "deficiency."  42 C.F.R. § 488.301; *see* 42 U.S.C. § 1395i-3(h)(1).

**Page 4**

"Noncompliance" means "any deficiency that causes a facility to not be in substantial compliance."  42 C.F.R. § 488.301.  To maintain "substantial compliance," an SNF's deficiencies may "pose no greater risk to resident health or safety than the potential for causing minimal harm."  42 C.F.R. § 488.301.

Broadly, noncompliance that subjects an SNF to enforcement remedies is divided into two levels comprised of deficiencies that immediately jeopardize the health or safety of residents and those that do not.  42 U.S.C. § 1395i-3(h)(1).  "Immediate jeopardy" exists when "the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident."  42 C.F.R. § 488.301.

The Secretary contracts with state agencies to conduct surveys to determine whether SNFs are in substantial compliance.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  These surveys can be unannounced surveys that occur at least once every 15 months, or can be in response to a complaint.  42 U.S.C. § 1395i-3(g)(1)(C), (2), (4).  When the results of a survey show that an SNF is not in substantial compliance with the program participation requirements, the Secretary may impose enforcement remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  When CMS selects an enforcement remedy to impose on an SNF, it determines the scope (i.e., the number of residents effected or potentially effected) and severity (i.e., the degree of harm or potential harm) for each deficiency.  *See* 42 C.F.R. § 488.404(a), (b).

One such remedy is a CMP.  42 U.S.C. § 1395i-3(h)(2)(B)(ii).  CMS may impose a per‐day CMP for the number of days an SNF is not in substantial compliance or a per-instance CMP for each instance of the SNF's noncompliance.  42 U.S.C. § 1395i-3(h)(2)(A), (h)(2)(B)(ii)(I); 42 C.F.R. § 488.430(a).  A per-day CMP may range from either $50 to $3,000 per day for less serious noncompliance, or $3,050 to $10,000 per day for more serious noncompliance that poses immediate jeopardy to the health and safety of residents.  42 C.F.R. § 488.438(a)(1).

If CMS imposes a CMP based on a noncompliance determination, then the SNF may request a hearing before an administrative law judge (ALJ) to challenge CMS's determination of noncompliance that led to imposition of an enforcement remedy and/or the level of noncompliance (if a successful challenge to the level would affect the range of CMP amounts imposed on the SNF).  42 U.S.C. §§ 1320a-7a(c)(2), 1395i-3(h)(2)(B)(ii); 42 C.F.R. §§ 488.408(g)(1), 488.330(e), 488.434(a)(2)(viii), 498.3(b)(13), (14); *see also* 5 U.S.C. §§ 554, 556.  Either the SNF or CMS may request Departmental Appeals Board (DAB) review of an ALJ's decision.  42 C.F.R. § 498.80.

In regard to challenging the existence of a deficiency, CMS must make a prima facie case that the SNF failed to substantially comply with federal participation requirements and, if this occurs, the SNF must, in order to prevail, prove substantial compliance by a

**Page 5**

preponderance of the evidence.  *Hillman Rehab. Ctr.*, DAB No. 1611 at 8 (1997); *see**Batavia Nursing & Convalescent Inn*, DAB No. 1911 (2004); *Batavia Nursing & Convalescent Ctr.*, DAB No. 1904 (2004), *aff'd*, *Batavia Nursing & Convalescent Ctr. v. Thompson*, 129 F. App'x 181 (6th Cir. 2005); *Emerald Oaks*, DAB No. 1800 (2001).  If an SNF challenges CMS's determination as to the level of noncompliance, CMS's determination must be upheld unless it is clearly erroneous.  42 C.F.R. § 498.60(c)(2).

### II.  Background and Procedural History

Petitioner is an SNF that operates in Franklin Park, New Jersey.  In September and October of 2014, the state agency received two anonymous complaints regarding roof leaks and potential mold contamination at the facility.  CMS Ex. 20; CMS Ex. 88 at 3-5; CMS Ex. 96 at 2-3.  A September 29, 2014 complaint letter indicated the roof had been neglected for years, resulting in "numerous leaks all over the building."  CMS Ex. 20 at 1.  The October 2014 anonymous complaint stated that the "[c]eiling is falling down and is in disrepair and you can see pipes . . . Garbage cans in the halls collecting the rain that is falling in from the holes in the ceiling."  CMS Ex. 20 at 20.  The complaints also asserted the water damage caused "ceiling tiles to become saturated with water and fall onto the floor all over the building."  CMS Ex. 20 at 1.  The complaints further indicated ceiling tiles were replaced to hide water damage, and mold growing behind the wallpaper was removed without proper technique or equipment.  The complaints also suggested the poor conditions may have contributed to the decline in a deceased resident's health.  CMS Ex. 20 at 1.

Surveyors from the state agency conducted a survey of Petitioner's facility from late October 2014 through November 3, 2014.  CMS Ex. 1.  The state agency found that the facility was not in substantial compliance with Medicare requirements for SNFs and that the conditions immediately jeopardized the health and safety of its residents.  Relevant to this case, the state agency found the following deficiencies, each at the immediate jeopardy level from October 30, 2014 through November 24, 2014:
                            - 42 C.F.R. § 483.25(h) (Tag F323) (accident prevention and adequate supervision) at a scope and severity level of "L"; 2 
                            - 42 C.F.R. § 483.75(d)(1)-(2) (Tag F493) (facility policies/appoint administration) at a scope and severity level of "J"; 3  and
                            - 42 C.F.R. § 483.75(o)(1) (Tag F520) (committee members/meet quarterly/facility policies/meet quarterly/plans) at a scope and severity level of "J."

**Page 6**

CMS Ex. 1 at 13-32, 36-40.  The deficiencies primarily resulted from a chronic problem that Petitioner had with a leaky roof, which the state agency surveyors believed to cause black substances in various rooms that turned out to be mold.

In response to the state agency findings, Petitioner filed several plans of correction.  CMS Exs. 41-50.  The state agency ultimately approved the sixth plan of correction.  Although the state agency originally sought the evacuation of all residents from the facility, the sixth plan of correction did not require an evacuation.  CMS Exs. 49, 50.

On November 19, 2014, CMS issued an initial determination adopting the state agency survey findings and imposing a $10,000 per-day CMP effective October 28, 2014.  CMS Ex. 2.  On March 18, 2015, CMS issued another initial determination following multiple revisit surveys and concluded that the $10,000 per-day CMP would be effective October 30, 2014 and continue through November 24, 2014, and that a $350 per-day CMP would be imposed from November 25, 2014 through December 22, 2014, for a total CMP of $269,800.  CMS Ex. 3.

Petitioner requested a hearing before an ALJ to dispute the March 18, 2015 initial determination.  The Civil Remedies Division docketed the case under C-15-2114.  In the hearing request, Petitioner "dispute[d] CMS's finding of Immediate Jeopardy, the imposition of the CMP, and the amount of the CMP."  Hearing Req. at 2.

This case was assigned to me to hear and decide, and I issued an Acknowledgment and Pre-Hearing Order that established a prehearing submission schedule.  However, before the parties could submit their prehearing exchanges, CMS issued another initial determination on April 10, 2015, which imposed the same CMPs as the March 18, 2015 determination.  CMS Ex. 4.  Petitioner requested a hearing related to the April 10, 2015 initial determination, and the Civil Remedies Division docketed that request under C-15-2515.  The new request was assigned to me, and I consolidated both hearing requests under C-15-2515, but left the original prehearing exchange schedule unchanged.

In accordance with the schedule, CMS and Petitioner filed prehearing exchanges, including prehearing briefs, exhibit and witness lists, and proposed exhibits.  CMS moved for summary judgment, which Petitioner opposed.  CMS submitted CMS Exs. 1 to 117, and Petitioner submitted P. Exs. 1 to 65.  CMS objected to P. Exs. 10-12, 19, 22, 23, 27-29, 39, 43, and 53.

I granted CMS's summary judgment motion and issued a decision favorable to CMS.  *Franklin Care Ctr.*, DAB CR4922 (2017).  In doing so, I admitted CMS Exs. 1-117 and P. Exs. 1-9, 11-26, and 28-65, but explained that I would sustain CMS's objections to P. Exs. 10 and 27.  *Franklin,* DAB CR4922 at 5.  In the decision, I identified the issues to be resolved as follows:

**Page 7**

1) Whether summary judgment is appropriate;

2) Whether Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 483.25(h) (Tag F323, relating to accident prevention and adequate supervision);

3) Whether Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 483.75(d)(1)-(2) (Tag F493, relating to Facility Policies/Appoint Administration);

4) Whether Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 483.75(o)(1) (Tag F520, relating to Committee Members/Meet Quarterly/Facility Policies/Meet Quarterly/Plans);

5) If Petitioner was not substantially compliant with 42 C.F.R. §§ 483.25(h), 483.75(d)(1)-(2), 483.75(o)(1), whether CMS's immediate jeopardy determination was clearly erroneous; and

6) Whether the CMP that CMS imposed is reasonable.

*Franklin,* DAB CR4922 at 5-6.  In my decision, I concluded that Petitioner had not been in substantial compliance with the cited standards, CMS had not clearly erred when it concluded that Petitioner's deficiencies immediately jeopardized its residents, and CMS's per-day CMP amount and duration was reasonable.  *Franklin,* DAB CR4922 at 16-22.

Petitioner requested review of my decision.  The DAB issued a decision in which it upheld Petitioner's failure to be in substantial compliance with 42 C.F.R. §§ 483.25(h), 483.75(d)(1)-(2), 483.75(o)(1).  *Franklin Care Ctr.,* DAB No. 2869 (2018).  In doing so, the DAB reviewed the reports of Petitioner's expert, Robert Laumbach, MD, as well as the facts that Petitioner did not dispute and concluded:

In any case, the relevant and undisputed fact is that at least 18 residents were known to have the kind of preexisting conditions that Dr. Laumbach recognized could be worsened by mold exposure.

It is sufficient to establish noncompliance with 42 C.F.R. § 483.25(h) if conditions are present in the environment that place residents at risk of injuries with a potential for more than minimal harm.  *See* 42 C.F.R. §§ 488.402(b), 488.301.  The undisputed facts, even viewed in the light most favorable to Franklin, definitively establish that mold was present in areas occupied by or accessible to residents who included

**Page 8**

patients vulnerable to possible exacerbations of respiratory conditions which certainly constitutes at least a risk of more than minimal harm.

*Franklin,* DAB No. 2869 at 8-9.

However, the DAB remanded the case on the questions as to whether immediate jeopardy existed and the reasonableness of the CMP amount.  When remanding, the DAB considered it significant that Petitioner requested to cross-examine all of CMS's witnesses and said that "Franklin raised questions about the credibility of the surveyors' assessment and reporting of the scope and impact of the problematic conditions sufficient to justify permitting Franklin to test those witnesses in cross-examination, whether or not the ALJ ultimately concludes that the questions have any merit at all."4  *Franklin,* DAB No. 2869 at 11.

The DAB also said that Petitioner raised a genuine issue of material fact as to the assessment of the likelihood and seriousness of the harm created by the types and extent of mold that was present, particularly through its expert witness, Dr. Laumbach.  *Franklin,* DAB No. 2869 at 11.  Further, the DAB indicated that CMS's expert and Petitioner's expert conflict significantly on the location of the mold and on the interpretation of the mold test results.  *Franklin,* DAB No. 2869 at 12-13.  The DAB pointed out that immediate jeopardy involves the likelihood of serious harm and that

CMS need not prove actual harm to an individual resident in order to find immediate jeopardy, and that on review of the full record, [the ALJ] may consider all cited conditions in the facility (including the remediation measures actually used and effects of the roof leaks beyond mold) in assessing whether CMS clearly erred in determining that a likelihood of serious harm existed.

*Franklin,* DAB No. 2869 at 13-14.  The DAB also viewed the deficiencies CMS found under 42 C.F.R. § 483.75 to be derivative of the deficiencies found at 42 C.F.R. § 483.25(h).  *Franklin,* DAB No. 2869 at 14.  Finally, the DAB believed that the evaluation of the reasonableness of the CMP amounts involved material facts in dispute and that they should be reevaluated.  *Franklin,* DAB No. 2869 at 15.

On remand the case was assigned to Judge Steven T. Kessel because, at that time, I was serving as an ALJ with another component at the Department of Health and Human Services.  Judge Kessel held a prehearing conference and stated that he accepted my

**Page 9**

previous evidentiary rulings and would not entertain motions from the parties to reopen the case to receive additional exhibits.  July 6, 2018 Pre-hearing Order at 2.  Judge Kessel also ordered the parties to file notice with him by July 13, 2018, as to an agreed upon date for a hearing and the names of the witnesses that the parties would like to cross-examine.  The parties timely informed Judge Kessel of their preferred date for a hearing, that Petitioner only wanted to cross-examine CMS's expert witness, and that CMS no longer wished to cross-examine any of Petitioner's witnesses.  July 12, 2018 Letter from CMS Counsel.  Judge Kessel subsequently set a hearing to start at noon Eastern Time on December 13, 2018, to permit Petitioner the opportunity to cross-examine Ernest Chiodo, M.D.  July 23, 2018 Notice of Hearing.

After my return, on November 20, 2018, this case was reassigned to me because I had issued the original decision.  Shortly before the hearing, Petitioner submitted a new exhibit (P. Ex. 66) and CMS renewed its objections to P. Exs. 11, 22, and 43.

On December 13 and 18, 2018, I held a hearing to permit cross-examination of Dr. Chiodo.  At the beginning of the hearing, I excluded P. Ex. 66 as untimely filed.  Hearing Transcript (Tr.) at 11-12; *see also* Tr. at 21-28.  Further, I denied CMS's renewed objections to P. Exs. 11, 22, and 43 as untimely.  Tr. at 8-10.  At the end of the hearing, I informed the parties that they needed to address the reasonableness of the CMP amount because, regardless as to whether I upheld the immediate jeopardy determination, Petitioner was subject to a CMP based on its substantial noncompliance with Medicare requirements.  Tr. at 167; *see also* Tr. at 7.  After granting extensions for each party, they submitted post-hearing briefs (CMS Br. and P. Br.).  CMS did not file a reply brief.

### III.  Issues

The outstanding issues that remain in this case are:

1) Whether CMS's determination that Petitioner immediately jeopardized its residents, based on its substantial noncompliance with the requirements at 42 C.F.R. §§ 483.25(h), 483.75(d)(1)-(2), 483.75(o)(1), from October 30, 2014 through November 24, 2014, was clearly erroneous; and

2) Whether the CMP that CMS imposed is reasonable.5

**Page 10**

### IV.  The Statement of Deficiencies (SOD)

Because the primary issue is to determine whether CMS clearly erred when it concluded that Petitioner immediately jeopardized the health and safety of its residents, and that conclusion was based on the state agency findings in the SOD, I summarize those findings before making my own findings and conclusions.6

In regard to the requirement at 42 C.F.R. § 483.25(h) (i.e., ensuring resident environment remains as free as possible from accident hazards), the SOD provides the following as an overview to its determination that Petitioner was deficient at immediate jeopardy level:

Based on observation, interview and record review from 10/28/14 through 10/30/14 it was determined that the facility failed to protect residents from potential mold contamination.  The facility failed to determine/identify a black mold-like substance that was located throughout the building before beginning remediation.  The surveyors observed facility staff working to remediate areas in the building without relocating and protecting residents while work/remodeling was in progress.  The project, that included removing and replacing sheetrock and wallpaper, was done without supervision from a qualified remediation specialist and without proper sealing and securing of the areas with potential mold.  This deficient practice posed a potential serious health danger to all residents in the building.  The immediate jeopardy was identified on 10/30/14 at 11:30 a.m.

CMS Ex. 1, pt. I at 15-16.

The SOD also provided specific information as to the survey's findings.  CMS surveyors (including James Inman, Patricia Devine, Julie Baker, and Maxine Charles) held an October 28, 2014 entrance conference with Petitioner's administrator and Director of Nursing.  The administrator stated to the surveyors that the second floor of the facility was "closed for renovations due to an issue with financing."  CMS Ex. 1, pt. I at 16.

After the conference, the survey team conducted a tour of the facility common areas.  The surveyors observed signs on the doors of rooms 128 and 132 that read:  "Room closed for maintenance – Please keep door closed."  CMS Ex. 1, pt. I at 16.  Room 138 had a sign

**Page 11**

reading:  "Room closed for maintenance – Please keep door closed, Off limits to all."  CMS Ex. 1, pt. I at 16-17.

A shower room next to the nurse's station was closed and had a sign that read "closed for maintenance."  CMS Ex. 1, pt. I at 17.  The surveyor observed stained ceiling tiles above the double doors near rooms 112 and 113.  The surveyor entered room 138, which was unlocked, and noted freshly installed sheet rock.  Upon entering the shower room next to the nurse's station, the surveyor immediately noted a heavy, musty odor and debris on the floor from sheet rock that had been torn down.  A black substance was observed on the inside of the wall frame.  The room was not sealed off from the rest of the facility except by the closed door.  The surveyors noted stained ceiling tiles in rooms 22 and 29.  CMS Ex. 1, pt. I at 17.

The surveyors also observed a black substance on the walls and debris in room 21.  The surveyors noted the complete lack of personal protective equipment by employees, and the fact the work areas were not enclosed in any manner to prevent contamination from spreading throughout the facility.  When the physical plant surveyor asked the maintenance staff if the facility still had roof leaks, the staff replied, "yes."  CMS Ex. 1, pt. I at 18.

A surveyor conducted a tour of the second floor of the facility with the facility's Corporate Director of Facility Maintenance.  The surveyor observed a blue tarp and 16 garbage cans of various sizes which appeared to be used for collecting water.  The surveyors then observed similar arrangements throughout the second floor, including aluminum pans set up with clear plastic tubing to drain water into larger bucket reservoirs.  Ceiling tiles were missing in a number of places on the second floor.  CMS Ex. 1, pt. I at 18-20.

The surveyor then conducted a tour of the first floor with the Corporate Director of Facility Maintenance.  Room 138, a resident room, had a sign that read "closed for renovation."  The door was closed, but not locked.  The room and its associated bathroom had new wall boards installed.  The heating unit in the room was open, rust was noted at its base, along with a black substance similar to what had been seen in other places in the facility.  "The pipes were exposed and the room was not sealed off from the rest of the facility and could easily be accessed by residents."  CMS Ex. 1, pt. I at 20.

The surveyor observed the beauty salon and noted a stained ceiling tile with a 6" by 10" area of black substance adhered to it.  The Corporate Director of Facility Maintenance did not know what the black substance was.  The surveyor also saw four stained ceiling tiles in room 128.  CMS Ex. 1, pt. I at 20.

The surveyor also viewed Shower Room 1, which had a sign on the door:  "Closed for maintenance."  The surveyor observed that a section of wall between the two showers

**Page 12**

had been removed and that a 4' by 9' 3" section of wall board had a black substance adhered to it.  CMS Ex. 1, pt. I at 20; CMS Ex. 1, pt. II at 21.

The surveyor also noted black substances in rooms 21, 22, 29, 111, and 120.  Room 29 was occupied by a resident and the stained ceiling tile was 2' by 4'.  CMS Ex. 1, pt. I at 21.

The surveyor asked the facility administrator and the Corporate Director of Maintenance whether they knew or had identified what the black substances were in the facility.  The surveyor reported that those individuals replied in the negative.  Both individuals also answered in the negative whether they had tested the black substances and whether they had contacted the local health department.  After obtaining permission, the Corporate Director of Maintenance said he would call a company to test the black substances.  CMS Ex. 1, pt. II at 21-22.

Another surveyor also noted black substances in rooms 111, 120, and 122.  The rooms had damage and were in a state of disrepair.  The surveyor asked the facility administrator about accessibility to these rooms, and the administrator stated that the rooms were not locked and were not designed to be locked.  However, the administrator stated that she would place a Velcro sign at the doors to keep the residents out.  The surveyors learned that a total of seven cognitively impaired residents had the ability to get into the rooms "that had dangerous objects, were contaminated with a black substance and were under construction."  CMS Ex. 1, pt. II at 23-24.

On October 30, 2014, the surveyors observed that Velcro stop signs had now been placed in front of room 138 and Shower Room 1, and an alarm system was added that would sound if anyone entered the room.  However, work areas were not sealed off in any way to prevent contamination.  CMS Ex. 1, pt. II at 24.

On October 30, 2014, at the request of the facility, representatives from AdvantaClean (a mold remediation company) viewed the facility and indicated "it was obvious that mold was visible."  CMS Ex. 1, pt. II at 24.  The representatives found mold in all three rooms they were shown (rooms 21, 138, and Shower Room 1).  CMS Ex. 1, pt. II at 24-25.  The representatives identified likely mold in rooms that were used to store beds, paper goods, soda and snacks for vending machines, pillows, diapers, bibs, curtains, wheelchairs, walkers, shower chairs, electric wheelchairs, and disposable dishes and cups.  CMS Ex. 1, pt. II at 25-26.  The representatives also identified mold in the heating vents and air-conditioning unit of the occupied room 120.  CMS Ex. 1, pt. II at 26.

The surveyors spoke with employees regarding the conditions in the facility.  An employee indicated "at times I can smell it [meaning the mold]," and another employee stated that the employee had "seen mold, water leaks and stains."  Yet another employee indicated there were also ceiling leaks in the dining area and that there were "always guys

**Page 13**

fixing the roof."  CMS Ex. 1, pt. II at 27.  The administrator indicated she was not familiar with mold and had thought it was mildew.  CMS Ex. 1, pt. II at 28.

Subsequent visits by the survey team from November 1, 2014 through November 3, 2014, indicated the facility continued to have active ceiling leaks.  CMS Ex. 1, pt. II at 29-31.  The surveyors noted active dripping water above room 122, and visible black mold next to room 109.  CMS Ex. 1, pt. II at 30.  The surveyors observed wet ceiling tiles in the recreation room while it was being used by 28 residents.  CMS Ex. 1, pt. II at 30-31.

The SOD also indicated Petitioner was deficient at the immediate jeopardy level in regard to the 42 C.F.R. § 483.75(d)(1)-(2) (i.e., facility governing body responsible for establishing and implementing policies regarding the management and operation of the facility) and stated the following as the factual support for that determination:

[T]he facility failed to identify a pervasive, black mold like substance that the survey team identified throughout the facility in order to ascertain if this substance was harmful to residents.  The facility failed to contact the county Health department concerning this issue.  The facility also failed to implement measures to ensure that residents were protected from contamination when the facility attempted to repair walls and other areas that were damaged by water leaks and the black substance, later identified as mold by a consultant hired by the facility during the survey.

CMS Ex. 1, pt. II at 36-37.

The SOD also indicated Petitioner was deficient at the immediate jeopardy level in regard to the 42 C.F.R. § 483.75(o)(1) (i.e., quality assessment and assurance committee, the facility governing body responsible for establishing and implementing policies regarding the management and operation of the facility) and stated the Petitioner's quality assurance committee "failed to identify and implement an action plan to address the presence of potentially dangerous environmental contamination present [in] many areas of the facility, including resident care areas, which therefore placed several residents at risk for serious injury and/or death."  CMS Ex. 1, pt. II at 38.

### V.  Findings of Fact, Conclusions of Law, and Analysis

**1. As of October 28, 2014, the facility had 79 residents.  At least 25 of the residents suffered from compromised respiratory systems, 13 of whom were diagnosed with asthma.  Further, each of these individuals suffered from other significant comorbid conditions.**

**Page 14**

On October 28, 2014, the day the survey started, Petitioner had 79 residents.  CMS Ex. 18 at 1.  Petitioner's medical director testified that some of the residents at the facility "have respiratory issues including asthma, COPD,7 pleural effusion, etc. and are admitted to the facility with such conditions."  P. Ex. 63 ¶ 9.

Petitioner identified the following 18 residents as ones who had a respiratory diagnosis and who were receiving oxygen (CMS Ex. 79 at 1):  R.L.1 (respiratory failure) (CMS Ex. 79 at 1);8 L.M. (COPD and asthma) (CMS Ex. 80 at 33); L.P. (asthma) (CMS Ex. 80 at 37-38); M.P. (pneumonia) (CMS Ex. 80 at 41); D.P. (asthma, aspirational pneumonia, bronchiectasis) (CMS Ex. 80 at 44); D.R. (COPD) (CMS Ex. 80 at 47); B.S. (asthma, COPD) (CMS Ex. 81 at 1); P.V. (respiratory arrest) (CMS Ex. 81 at 4);  J.W. (COPD, pneumonia) (CMS Ex. 81 at 7); R.B. (asthma) (CMS Ex. 81 at 10, 12); S.B. (pneumonia) (CMS Ex. 81 at 11, 16); F.B. (asthma) (CMS Ex. 81 at 20); S.D. (asthma) (CMS Ex. 81 at 25-26); T.F. (COPD) (CMS Ex. 81 at 29); A.H. (pneumonia) (CMS Ex. 81 at 34); E.J. (asthma) (CMS Ex. 81 at 37-38); J.K. (asthma) (CMS Ex. 81 at 43); and R.K. (pneumonia) (CMS Ex. 81 at 45).

Further, the record shows that the following seven additional residents had respiratory related diagnoses:  P.A. (COPD) (CMS Ex. 79 at 4-5); O.B. (pleural effusion) (CMS Ex. 79 at 11); E.G. (asthma) (CMS Ex. 79 at 35); C.H. (asthma) (CMS Ex. 79 at 36); A.S. (pleural effusion) (CMS Ex. 80 at 9-10); H.W. (asthma) (CMS Ex. 80 at 21); and R.B. (asthma) (CMS Ex. 81 at 12).

Of these individuals, the record shows that some had significant respiratory problems.  One of the physicians testified that resident L.P. "was a very compromised patient who was admitted to [Petitioner's facility] with a medically complex background and prior respiratory issues."  P. Ex. 64 ¶ 11.  Further, on November 2 and 6, 2014, residents S.D. and A.S., respectively, were discharged to Robert Wood Johnson facilities due to diagnoses of pneumonia.  CMS Ex. 22 at 15; CMS Ex. 32 at 6.  A.S. had "extreme [shortness of breath]."  CMS Ex. 32 at 5.

With the exception of R.L.1, for whom there is limited information, the record shows that the residents with compromised respiratory systems also had significant comorbidities.  The following are the residents the facility identified as having a respiratory issue:  L.M. (acute renal failure, Stage 3 chronic kidney disease, diabetes, hypertension) (CMS Ex. 80 at 33); L.P. (congestive heart failure, diabetes, hypertension) (CMS Ex. 80 at 37-38);

**Page 15**

M.P. (atrial fibrillation, transient ischemic attack, hypothyroidism, hypertension) (CMS Ex. 80 at 41); D.P. (hypoxemia, arthritis, osteoporosis ) (CMS Ex. 80 at 44); D.R. (diabetes, hypothyroidism, hypokalemia, Parkinson's disease, hypertension) (CMS Ex. 80 at 47); B.S. (congestive heart failure, diabetes, shortness of breath, hypertension, chronic lymphedema) (CMS Ex. 81 at 1); P.V. (coronary artery disease, hypertension) (CMS Ex. 81 at 4); J.W. (congestive heart failure, mesenteric ischemia, shortness of breath, atherosclerosis, diabetes) (CMS Ex. 81 at 7); R.B. (essential hypertension, syncope, hyponatremia) (CMS Ex. 81 at 10, 12); S.B. (prostate cancer, chronic kidney disease, multifocal stroke, congestive heart failure, coronary artery disease) (CMS Ex. 81 at 11, 16); F.B. (end stage renal disease, diabetes, chronic ischemic heart disease, hypertension, anemia, disseminated malignant neoplasm) (CMS Ex. 81 at 20); S.D. (congestive heart failure, atrial fibrillation, hyperlipidemia, hypertension) (CMS Ex. 81 at 25-26); T.F. (coronary artery disease, osteoarthritis, diabetes, hypocholesteremia) (CMS Ex. 81 at 29); A.H. (congestive heart failure, cellulitis) (CMS Ex. 81 at 34); E.J. (G-tube, stroke, congestive heart failure, dysphagia, acute left hemiparesis, thrombocytopenia) (CMS Ex. 81 at 37-38); J.K. (hypertension, cellulitis) (CMS Ex. 81 at 41-42); and R.K. (stroke, coronary artery disease, diabetes, aortic stenosis) (CMS Ex. 81 at 45).

These are the comorbidities for the additional residents that had a respiratory diagnosis based on a review of the record:  P.A. (atrial fibrillation, diabetes, and hyperlipidemia) (CMS Ex. 79 at 4-5); O.B. (congestive heart failure, renal failure) (CMS Ex. 79 at 11); E.G. (stroke, diabetes, seizures, hyperlipidemia) (CMS Ex. 79 at 35); C.H. (chest pain, hypertension, diabetes) (CMS Ex. 79 at 36); A.S. (congestive heart failure, diabetes, hypertension) (CMS Ex. 80 at 9-10); H.W. (peripheral vascular disease, end stage renal disease, anemia, coronary artery disease) (CMS Ex. 80 at 21); and R.B. (hyponatremia, essential hypertension, syncope) (CMS Ex. 81 at 12).

**2. Mold is a fungi that reproduces through producing spores that may become airborne.  Mold needs oxygen, moisture, and an appropriate surface on which to live.**

According to the Environmental Protection Agency (EPA), molds are organisms that may be found both outdoors and indoors and can multiply by producing microscopic spores that float on the air.  Mold is also called fungi and plays an important role in the environment by breaking down and digesting organic materials.  Mold spores cannot be completely eliminated in the indoor environment; however, they will not grow when moisture is absent.  Therefore, mold only becomes an issue indoors when spores land on a wet or damp spot and begin growing.  As a result, the EPA stated that **"Moisture control is the key to mold control."**  CMS Ex. 63 at 1; *see also* CMS Ex. 61, pt. 1 at 8; CMS Ex. 69 at 3; P. Ex. 20 at 1 ("Controlling moisture is the main way to control indoor mold growth."); P. Ex. 21 at 5.

**Page 16**

Mold can grow on almost any organic surface so long as moisture and oxygen are present.  The EPA stated that common moisture problems are caused by leaking roofs and leaking water pipes.  CMS Ex. 63 at 4.  Therefore, mold growth is more likely to be found in indoor locations that are wet, damp, or humid.  CMS Ex. 63 at 7; *see also* CMS Ex. 59 at 2; P. Ex. 21 at 5.  Mold can grow in the dark and on hidden surfaces, like the backside of drywall, wallpaper, and paneling.  CMS Ex. 63 at 7.  The EPA advises:  "If water enters a building through a leaking roof . . . it should be removed immediately and affected areas should be dried out . . . . Special attention should be given to areas that are hidden, but that might have gotten wet."  CMS Ex. 63 at 18; *see also* CMS Ex. 61, pt. 1 at 9.  When investigating for hidden mold, caution is necessary since disturbing the mold can send high levels of dust and mold into the air.  CMS Ex. 63 at 7; *see also* CMS Ex. 61, pt. 1 at 14.

"Molds grow in colonies and growth may take on different shapes and colors.  Some molds may appear circular in growth while others may grow and spread to cover an area.  Molds may appear brown, yellow, green or black in color.  The appearance depends on the species of mold present."  CMS Ex. 69 at 4.

**3. Petitioner was aware that the roof of its facility had long-term persistent leaking from 2004 through to 2014; however, Petitioner was financially unable renovate the facility and instead fixed individual leaks after water entered the facility.  Petitioner's roof leaks resulted in multiple fines from local government officials, and, based on the facility's overall condition, one local government building official believed that the facility's building should have been closed.**

According to one of Petitioner's witnesses, Petitioner's facility "was forty-one years old at the time of the [state agency] survey in October 2014.  Its roof was old and was continuously being repaired due to leaks."  P. Ex. 62 ¶ 4; *see also* P. Ex. 60 ¶ 6 (Petitioner's facility "is one of the older facilities in the area . . . .").

The Fire Prevention Department of Franklin Township (Fire Prevention Department), the locality where the facility is located, enforced the New Jersey State Fire Code in Franklin Township and employed seven full-time inspectors and one part-time inspector for that purpose.  CMS Ex. 110 ¶ 1.9  The Fire Prevention Department inspected Petitioner's facility in 2004, 2005, 2007, 2008, 2013, and 2014, and issued notices to Petitioner that

**Page 17**

water leaks from the roof were creating an electrical hazard because water was leaking onto electrical fixtures.  CMS Ex. 110 ¶¶ 2, 4.

A July 16, 2004 inspection revealed roof leaks, among other issues, and the Fire Prevention Department directed that Petitioner fix the leaks by July 30, 2004.  The inspector returned on July 30, 2004 and August 17, 2004; however, it was not until August 19, 2004, that the inspector was able to verify that Petitioner completed repairs.  Petitioner used its own maintenance staff to make the repairs.  CMS Ex. 105 part I at 1-2, 4; P. Ex. 23 at 1.

On December 15, 2005, at approximately 12:50 a.m., firefighters were dispatched to Petitioner's facility for a report of a structure fire.  Although the fire chief present found no fires, he reported water leaking through the roof of Petitioner's Princeton Unit.  Inspectors from the Fire Prevention Department arrived on the scene and observed water leaking on a smoke detector as well as leaks in several places in the Princeton Unit of the facility.  The leaks were sufficiently troubling that the firefighters draped salvage covers and plastic bags over electrical panels to protect them from the water.  Petitioner's staff was forced to move two residents on respirators to another part of the facility.  When the facility's maintenance director appeared, he checked the remainder of the facility in concert with firefighters, and they found additional leaks.  Based on the inspector's observations, the Fire Prevention Department found four violations based on water leaks and potential damage due to the water leaks.  The Fire Prevention Department documented the leaks with photographs.  The Fire Prevention Department inspected Petitioner's facility on December 19, 2005 and December 21, 2005, but the leaks remained unabated; however, a December 23, 2005 inspection showed that Petitioner repaired the roof leaks.  CMS Ex. 105 part I at 12-14, 16-17, 20-28; CMS Ex. 110 ¶ 5; P. Ex. 23 at 1-2.

In 2005, Petitioner "planned a major renovation of the facility.  The plan was to completely modernize and renovate the existing facility . . . ."  P. Ex. 60 ¶ 6.

On April 15, 2007, the fire alarm system at Petitioner's facility was activated due to water leaking from the roof.  The Fire Prevention Department inspected Petitioner's facility on April 19, 2007, and found three violations, including a leaking roof.  Petitioner fixed the leak by April 20, 2007.  CMS Ex. 105 part II at 6-8, 10; CMS Ex. 110 ¶ 6e; P. Ex. 23 at 3.

Petitioner "closed the 2nd floor of the facility in 2007 in anticipation of [the] expansion/renovation" for which planning had begun in 2005.  P. Ex. 60 ¶ 6.

A January 31, 2008 Fire Prevention Department inspection revealed additional roof leaks.  Petitioner's maintenance director fixed those leaks himself.  The Fire Prevention

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Department confirmed that the roof was repaired by February 22, 2008.  CMS Ex. 105 part II at 15-18; CMS Ex. 110 ¶ 6f; P. Ex. 23 at 4.

Petitioner ultimately never renovated the facility because "after financing had been almost finalized in 2008, the great recession hit and [Petitioner's] financing disappeared."  P. Ex. 60 ¶ 6.  The second floor of the facility remained closed.

Petitioner had another leak in the roof that it fixed on or about April 29, 2009.  CMS Ex. 105 part II at 19; CMS Ex. 110 ¶ 6g.

On February 7, 2011, the state agency conducted a complaint survey of Petitioner's facility and discovered water damage and leaking.  CMS Ex. 102 at 1-8.  James Inman, a state agency physical Plant and Life Safety Code Surveyor, assisted in conducting the survey.  Mr. Inman testified that during the February 7, 2011 survey of the facility, "I observed water cascading down from the ceiling along the window, leaving a 3 foot by 8 foot pool of water on the floor" and a "staff worker using a shop vacuum cleaner (wet and dry vacuum cleaner) to suction up approximately 10 foot by 2 foot pool of water on the floor in the kitchen."  CMS Ex. 92 ¶¶ 18a-18b.  Also during the survey, Mr. Inman could hear water leaking from the ceiling in the Shower Room near Room 108 and observed a garbage can filled half-way with water.  CMS Ex. 92 ¶ 18e.  He further saw water dripping from the ceiling onto the floor in room 109 and a pool of water, and noted that room 110 had two wet ceiling tiles.  CMS Ex. 92 ¶¶ 18f, 18g.  Mr. Inman saw a ceiling tile with a brown stain 14" in diameter in the Main Dining Room and five stained tiles in room 122.  CMS Ex. 92 ¶¶ 18h, 18i.

As a result of the complaint survey, the state agency issued a SOD to Petitioner on February 28, 2011, which indicated a deficiency in the requirement for a Safe/ Functional/Sanitary/Comfortable Environment (42 C.F.R. § 483.70(h)) and concluded that Petitioner placed its residents in immediate jeopardy.  CMS Ex. 102 at 1-8.  On February 28, 2011, CMS issued an initial determination concurring with the SOD.  CMS Ex. 100.  A March 2, 2011 notice specified that CMS was imposing a $5,000 per-day CMP until the immediate jeopardy situation was abated.  CMS Ex. 101 at 2.

Petitioner represented that it would take action to remedy the deficiency, including the repair of the roof leaks by an outside company.  CMS Ex. 102 at 9-29.  In March 2011, Petitioner requested a fire safety permit to make repairs to the roof of its facility.  CMS Ex. 105 pt. II at 20.

In a subsequent revisit on March 11, 2011, Mr. Inman noted wet ceiling tiles in the Beauty Salon, rooms 33, 34, 41, 47, 54, and 58, in the Large Day Room, and at the Nursing Station.  CMS Ex. 92 ¶ 21.  Despite this, in an April 13, 2011 notice, CMS found that Petitioner had achieved substantial compliance based on the March 11, 2011 revisit.  However, CMS imposed a total CMP on Petitioner of $80,000.  CMS Ex. 103.

**Page 19**

In August 2013, Petitioner reported to the state agency that "[a] couple of months ago" rooms 112, 113, and 114 were forced "out of service for repairs" because "the roof above these rooms sustained some leaks in a major rainstorm.  The patients were immediately transferred to other rooms."  Petitioner assured the state agency that it immediately called a roofer and "the roof was fully repaired."  CMS Ex. 67.

In September 2013, Petitioner had first floor flooding and, in May 2014, Petitioner hired a company to repair its roof.  CMS Ex. 110 ¶¶ 6h-6i.; P. Ex. 23 at 5-7; P. Ex. 62 ¶ 4.

Petitioner's administrator, who was new to the facility in April 2014, testified:  "Shortly after I began my tenure at [the facility], there was a significant roof leak . . . which caused significant damage to Shower Room #1.  This room, which was adjacent to the nurses station, was immediately closed for renovations."  P. Ex. 59 ¶¶ 1, 11; P. Ex. 62 ¶ 7.

Kevin Hobbs, Petitioner's Director of Maintenance, testified:

The winter of 2013/2014 and the prior winter of 2012/2013 had been particularly harsh on the roof at [the facility].  There was a considerable amount of snow and ice during those two winters, which wreaked havoc on the roof.

During the spring of 2014, the roof at [Petitioner's facility] had experienced a number of roof leaks.  One of the areas affected by these leaks was Shower Room #1, which suffered a significant amount of water damage.  Due to this damage, the room was closed for maintenance and not used for bathing of the residents.

P. Ex. 62 ¶¶ 6-7.

There were additional roof leaks in May and June 2014.  P. Ex. 59 ¶ 14; P. Ex. 62 ¶¶ 7, 9.  An invoice from a supply company indicates Petitioner received over $8,000 in roofing supplies on June 18, 2014 and July 1, 2014.  CMS Ex. 10 at 2-3; *see also* P. Ex. 62 ¶ 9.

Although Petitioner paid a company to make repairs to the facility roof in 2011, 2012, 2013, and 2014 (P. Ex. 28; P. Ex. 59 ¶ 12; *see also* P. Ex. 60 ¶ 7, P. Ex. 62 ¶ 7), the facility maintenance staff made roof repairs in June and July 2014, and were tasked with repairing Shower Room 1.  P. Ex. 59 ¶¶ 13, 14; P. Ex. 62 ¶ 10.  Approximately five or six months later, when the state agency conducted a complaint survey in October 2014, the repairs to Shower Room 1 were not completed.  P. Ex. 59 ¶ 13.

**Page 20**

Also, in October, it appears that a leaking roof was still a problem.  An October 21, 2014 letter from Franklin Universal Building Corp. to Franklin Care Center indicated Franklin Universal Building Corp. had eliminated some roof leaks, but the roof design and materials made finding the origins of the leaks "a slow and arduous process."  CMS Ex. 10 at 1; *see also* P. Ex. 62 ¶ 8 ("Finding the cause of the leaks on the roof at [the facility] can be a long and arduous process.").

One of Petitioner's owners testified that "I am familiar with the various problems that we have had with the roof at [the facility].  We have **continuously** worked to repair the leaks when they occur."  P. Ex. 60 ¶ 7 (emphasis added).  Mr. Hobbs agreed with this testimony:  "[The facility's] roof was old and was **continuously** being repaired due to leaks."  P. Ex. 62 ¶ 4 (emphasis added).  Mr. Hobbs considered the repairs to the roof as "an ongoing process."  P. Ex. 62 ¶ 10.  However, that "process" could result in leaks remaining unabated at various times because "[w]henever a leak appeared, the maintenance employees would try to determine the source and repair the problem as soon as practical.  If there was rain, ice or snow, this could not be accomplished until the roof became dry again."  P. Ex. 62 ¶ 10.  Even the facility's medical director was "aware of problems that [Petitioner's facility] has had with its roof in recent years."  P. Ex. 63 ¶ 7.

James Inman, who had surveyed the facility in 2011, again surveyed the facility in 2014.  On October 28, 2014, Mr. Inman toured the facility with a management staff person from the facility who indicated that the facility still had roof leaks.  CMS Ex. 92 ¶ 9.  Mr. Inman toured the unoccupied second floor of the facility with the Corporate Director of Facility Maintenance in which Mr. Inman observed an 8' by 10' blue tarp hanging from the drop ceiling to catch water along with 16 garbage cans below the tarp – one can had three inches of water in it.  CMS Ex. 13 at 8; CMS Ex. 92 ¶¶ 10a, 10b.  Mr. Inman also observed that several rooms on the second floor had missing ceiling tiles, ceiling tiles with stains on them, aluminum pans set up on the drop ceiling, tubes leading from the pans to garbage cans, and, in several instances, between 1" and 6 1/8" of water in the garbage cans.  CMS Ex. 92 ¶¶ 10c-10n.

On November 1, 2014, members of the state agency survey team were present at the facility, and it was raining.  Maxine Charles, a state agency Supervising Healthcare Evaluator, who served as the team leader for the survey, heard the sound of dripping water above the doorway to Room 122 and saw/took pictures of a pool of water across from that room as well as on the floor near rooms 109 and 111 and wet ceiling tiles in the main activity room.  Further, water drops landed on surveyors during the survey.  CMS Ex. 88 ¶¶ 1, 2, 55-57, 59, 63-68; CMS Ex. 74 at 2, 8, 9, 12, 14.

I credit the surveyors' testimony about the wet and leaky conditions at the facility.  Their testimony is detailed, consistent with their notes, and documented with photographs that they took.  Further, Petitioner's witnesses who accompanied the surveyors on tours of the facility did not contradict the surveyors' testimony.

**Page 21**

Although the documents in the record primarily point to roof leaks starting in 2004, according to Vincent Lupo, a Construction Official with the Franklin Township Construction Department, Petitioner's leaking roof may have started as early as 1992.  CMS Ex. 111 ¶ 10; *see also* CMS Ex. 68 at 1-3.  In any event, the Construction Department records show multiple violations of local rules resulting in massive penalties exceeding $23 million.  CMS Ex. 116 ¶ 3; *see also* CMS Ex. 111 ¶ 9.  A 2011 violation "was issued after [the Construction Department] discovered that when [Petitioner] abandoned its second story, sanitary facilities were not decommissioned proper[l]y.  Traps dried out, causing the infiltration of sewer gas and the free movement of vermin within the building, and leaks in the water distribution system."  CMS Ex. 111 ¶ 5; CMS Ex. 68 at 19.  Mr. Lupo testified that, despite the significant violations and penalties, "[Petitioner] has failed to cooperate with the Township in rectifying unsafe conditions at the facility for over a decade.  I personally believe that the building should have been shut down years ago."  CMS Ex. 111 ¶ 11.

**4. Petitioner's facility had visible black substances in various rooms in the facility.  Petitioner did not have the black substances tested until surveyors requested Petitioner do so and Petitioner's staff attempted to remove damage caused by the black substance without sealing the rooms off first.**

In late October and early November 2014 state agency surveyors made observations and took pictures of a variety of places in the facility that visibly appeared to have mold.  State agency surveyor James Inman, who had received training from the University of Medicine and Dentistry of New Jersey on Mold Awareness, discovered numerous places at the facility where there was potential visible mold during the October and November 2014 visits to the facility.  CMS Ex. 92 ¶¶ 1, 3-4.  Mr. Inman observed a number of stained tiles on the ceiling of second floor rooms 55 and 56.  CMS Ex. 92 ¶¶ 10f-10g.  Mr. Inman also toured the first floor of the facility and observed two rooms (128 and 132) with stained ceiling tiles.  CMS Ex. 92 ¶¶ 11a, 11f.  He further noted that there was a sign on room 138 that it was closed for renovation; however, the door was not locked or sealed off from the rest of the facility.  There was also "the same black substance seen in various other locations [in the facility]."  CMS Ex. 92 ¶ 11b.  Mr. Inman noted a 6" x 10" area of a black substance adhered to the ceiling tile in the hair salon.  CMS Ex. 92 ¶¶ 11e.

Mr. Inman noted that Shower Room 1 had a sign on the door that it was closed for maintenance.  He observed and photographed "a 4' high by 9'-3" [sic] section of damaged wall board with a black substance adhered to it."  CMS Ex. 13 at 1, 2, 7; CMS Ex. 92 ¶¶ 11g, 11h.  Mr. Inman also took a photograph of "a 2" x 2" section of black substance adhered to the wall board" in room 111.  CMS Ex. 13 at 5; CMS Ex. 92 ¶¶ 11i-11j.  Mr. Inman observed and photographed in the bathroom of room 120 "fresh spackle to the left, and black substance on the back wall to the right, next to the toilet."  CMS Ex. 13 at 3, 4; CMS Ex. 92 ¶¶ 11*l*-11m.  He also observed wall boards with black substances

**Page 22**

on them in rooms 21 and 22 and photographed a 15" x 10" black substance in room 22.  CMS Ex. 13 at 6; CMS Ex. 92 ¶¶ 11n-11p.  Mr. Inman learned from the facility administrator and Corporate Director of Facility Maintenance that they had not tested the black substances found in the facility, but the facility had now agreed to test it.  CMS Ex. 92 ¶¶ 12c, 12f.  The pictures and observations of Mr. Inman are consistent with the photographs provided with the complaint originally sent to the state agency.  CMS Ex. 20; CMS Ex. 88 ¶¶ 12-17.10  Further, other surveyors testified to the water damage and the mold-like stains appearing in the facility.  CMS Ex. 88 ¶¶ 21-31; CMS Ex. 90 ¶¶ 11-12; CMS Ex. 91 ¶¶ 5-11.  Mr. Inman inquired who was renovating the damaged rooms and was told that the facility maintenance personnel were doing it.  CMS Ex. 92 ¶ 12g.

Maxine Charles, the state agency Supervising Healthcare Evaluator, conducted a tour of the facility on October 30, 2014 with AdvantaClean, a mold remediation company.  Ms. Charles testified that the AdvantaClean representative stated there was visible mold in the facility in rooms 21, 120, 122, 138, and Shower Room 1.  AdvantaClean took surface and air quality samples for testing.  CMS Ex. 88 ¶¶ 33-38; *see also* CMS Ex. 90 ¶¶ 19-31; CMS Ex. 91 ¶¶ 15-24.

Ms. Charles was present again at the facility on November 1, 2014, and observed and took pictures of brown and black substances next to room 109.  CMS Ex. 88 ¶¶ 60-62; CMS Ex. 74 at 7.  On that date, she took a number of other photographs showing staining on ceiling tiles and black substances in the facility.  CMS Ex. 88 ¶ 69; CMS Ex. 74 at 1-7, 10-11, 13, 15-23; CMS Ex. 75; *see also* CMS Ex. 90 ¶¶ 42-43; CMS Ex. 91 ¶¶ 38-41.

On November 6, 2014, Mr. Inman returned to the facility and observed and photographed wet stains on ceiling tiles in the Main Dining Room and the corridor next to the Main Dining Room.  CMS Ex. 13 at 9-10; Ex. 92 ¶¶ 15a-15d.  Further, Mr. Inman observed and photographed in the Beauty Salon a 7" x 30" section of the wall board with an approximately 40" diameter circle of black substance as well as an 8" x 6" section of wall board with a black substance on it.  CMS Ex. 13 at 12-14; CMS Ex. 92 ¶¶ 15e-15h.  Finally, in room 30, Mr. Inman noted and photographed a black substance behind the wall paper and a black substance on the wall across from the Electrical Panel Room.  CMS Ex. 13 at 11, 15; CMS Ex. 92 ¶¶ 15i-15*l*.

Again, I credit the testimony of the state surveyors as to the presence of visible stains and black substances in various rooms throughout the facility.  The testimony is consistent with their notes and the pictures they took during the survey.  Further, Petitioner did not cross-examine these witnesses, and Petitioner's witnesses, who often accompanied the surveyors on their tours of the facility, did not contradict these observations in their

**Page 23**

written testimony.  In addition, some of these surveyors accompanied the representatives from AdvantaClean who identified likely mold in the facility.

Dr. Laumbach, Petitioner's expert witness, also toured the facility on October 31, 2014, and, in his reports, made statements that the mold in the facility was quite limited.  I discuss his testimony in more detail later in this decision.  However, related to his visual observations of the mold or mold-like stains, I noted that his minimalistic characterization of the facility is not supported by the pictures of the black stains in the record taken by the surveyors.  Further, unlike the surveyors' written testimony, none of Dr. Laumbach's reports (including the one specifically authored for this litigation) were signed under oath or penalty of perjury.  P. Ex. 1 at 5; P. Ex. 2 at 4; P. Ex. 3 at 14.  Finally, while Dr. Laumbach states that it appeared Petitioner mostly contained possible mold spore spread during in-house repairs to Shower Room 1, Dr. Laumbach also indicated a need for Petitioner to do much more to contain the possibility of mold spreading by properly sealing off Shower Room 1.  P. Ex. 1 at 1-2.

**5. Petitioner did not lock the doors to the rooms with the greatest amount of visible mold contamination.  At least seven cognitively impaired residents could have independently accessed those rooms.  Five cognitively impaired residents also had compromised respiratory systems.**

One of the state agency surveyors, Rita Njoku, interviewed Petitioner's administrator on October 28, 2014, concerning access to the damaged/contaminated rooms in the facility, and the administrator said that the rooms were not locked or designed to be locked.11  CMS Ex. 90 ¶ 14.  Ms. Njoku also asked a nurse at the facility about residents who could access the damaged rooms with black substances on them, and the nurse stated that a total of seven cognitively impaired residents had the ability to propel themselves and access those rooms.  CMS Ex. 90 ¶ 15.

Based on the documents in the record, the following residents suffered from dementia, Alzheimer's disease, psychosis, and/or schizophrenia:  H.A. (senile dementia); K.C. (schizophrenia); T.C. (dementia); N.C. (dementia); D.C. (dementia); C.C. (dementia, psychosis); I.D. (dementia); F.D. (dementia); H.D. (dementia, psychosis); W.D. (schizophrenia); J.F. (dementia), E.F. (dementia, psychosis); C.F. (dementia); C.H. (Fragile X Syndrome); P.H. (dementia); B.H. (dementia); M.J. (schizophrenia); E.L. (dementia); S.L. (dementia); R.L.2 (dementia); R.L.3 (dementia); P.P. (dementia); A.P. (dementia, schizo-affective disorder); H.S.1 (dementia, psychosis); H.S.2 (vascular dementia, psychosis); B.A.S. (dementia); L.S. (dementia); S.T. (dementia); A.T. (dementia); T.Z. (dementia); J.W. (advanced Alzheimer's); S.B. (dementia); F.B.

**Page 24**

(asthma); T.F. (Alzheimer's, dementia); and R.K. (dementia).  CMS Ex. 79 at 9, 12-16, 18, 22-23, 26-27, 29, 32, 36-38, 40, 44-46, 49, 52; CMS Ex. 80 at 4, 11, 13-14, 16-17, 20, 25; CMS Ex. 81 at 7, 11, 20, 29, 45.

Of the residents who had compromised respiratory systems, the following six also were cognitively impaired and had rooms that were a relatively short distance from the rooms with significant amounts of mold contamination:  C.H., room 126 (CMS Ex. 79 at 36); J.W., room 131 (CMS Ex. 81 at 7); S.B., room 119 (CMS Ex. 81 at 11); F.B., room 110 (CMS Ex. 81 at 20); T.F., room 5 (CMS Ex. 81 at 29-30); and R.K., room 123 (CMS Ex. 81 at 45).  *See* CMS Ex. 9 at 1 (floor plan of facility's first floor).

**6. Two separate mold remediation companies took samples from the facility for analysis and two separate laboratories analyzed those samples.  The samples taken by AdvantaClean and analyzed by Pro-Lab showed significantly greater amounts of mold spores and more mold-types that are associated with asthma allergies than the mold testing by Above and Beyond Unlimited Cleaning Company and analyzed by Hayes Microbial Consulting.**

As mentioned above, AdvantaClean had taken surface and air samples for mold testing on October 30, 2014.  Pro-Lab provided the analysis of the samples on November 3, 2014.  CMS Ex. 109; P. Ex. 13.  Further, Above and Beyond Unlimited Cleaning Co. took samples for analysis on October 31, 2014.  Hayes Microbial Consulting provided the analysis of the samples on November 1, 2014.  CMS Ex. 51; P. Ex. 14.  Both of these companies (AdvantaClean and Above and Beyond Unlimited Cleaning Co.) took samples in a limited number of rooms in the facility.

**Room 122 (Bathroom)**

Both companies analyzed samples from room 122.  Pro-Lab concluded, based on a spore trap analysis, that the room had "ELEVATED"12 levels of mold spores.  CMS Ex. 109 at 2.  The Hayes analysis of a spore trap concluded that the mold spores were "Significantly Higher than Outside Air"13 and "Slightly Higher than Outside Air."14  Pro-Lab found that

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room 122 (bathroom) had 11,407 mold spores per square meter, of which Memnoniella, Chaetomium, and Stachybotrys constituted 85% of that amount, accounting for 4,500, 3,300, and 1,900 spores per square meter respectively.  CMS Ex. 109 at 2.  Significantly, Pro-Lab compared the 3,300 spores per square meter of Chaetomium within room 122 (bathroom) with the 18 spores per square meter outside the facility and the 1,900 spores per square meter of Stachybotrys with none outdoors.  CMS Ex. 109 at 5.

In contrast, the Hayes analysis showed only a total of 526 mold spores per square meter for room 122, and, while the same three mold types were found in concentrations higher than in the outside air, this analysis stated that Chaetomium represented the highest mold type at 41% of the spores.  CMS Ex. 51 at 3.  The Hayes analysis also indicated that there was a "Ratio Abnormality" for Chaetomium, which means that "[s]ignificant increases (more than 25%) in the [indoor/outdoor] ratio of a particular spore type may indicate the presence of abnormal levels of mold, even if the total number of spores of that type is lower in the indoor environment than it was outdoors."  CMS Ex. 51 at 6.  Because the Hayes analysis indicates the samples were taken from room 122 and not room 122's bathroom, it is possible that the samples were not taken from the same place in room 122.

Both companies (Pro-Lab and Hayes Microbial Consulting) also analyzed mold samples taken by tape/swab in room 122.  Pro-Lab concluded that mold was present and it was "UNUSUAL."15  Pro-Lab identified the following types of mold:  Chaetomium, Memnoniella, Hyphae, and Penicillium/Aspergillus.  CMS Ex. 109 at 3.  Hayes found Chaetomium, Stachybotrys and Penicillium/Aspergillus.  Hayes estimated the spores for each of these to be "Heavy," "Heavy," and "Moderate," respectively.  Chaetomium and Stachybotrys together constituted nearly 97% of the spores.  CMS Ex. 51 at 5.

**Room 138**

Pro-Lab spore trap sample analysis for room 138 showed mold levels that were "NOT ELEVATED."  CMS Ex. 109 at 2, 6.  The Hayes analysis had no spore trap information.

In regard to tape samples, Pro-Lab found an "UNUSUAL" amount of mold and specified that Stachybotrys, Penicillium/Aspergillus, Memnoniella, and Hyphae mold types were present.  CMS Ex. 109 at 4.  The Hayes analysis from the swab sampled indicated that Penicillium/Aspergillus, Chaetomium, and Stachybotrys mold types were present, but estimated their spore quantities to be light (or rare for Stachybotrys).  CMS Ex. 51 at 5.

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**Shower Room 1**

Pro-Lab concluded that the spore trap sample showed "ELEVATED" levels of mold spores with an estimated 3,401 spores per square meter.  Of these spores, Penicillium/Aspergillus made up 56% of the mold spores, with Memnoniella and Stachybotrys sharing most of the remaining spores.  CMS Ex. 109 at 2.  Significantly, Pro-Lab compared the 1,900 spores per square meter of Penicillium/Aspergillus within Shower Room 1 with the 160 spores per square meter outside the facility and the 500 spores per square meter of Stachybotrys with none outdoors.  CMS Ex. 109 at 7.

The Hayes spore trap analysis for the "Bathroom" had different results.  It showed that there were only 595 mold spores per square meter and that most of them were Memnoniella, which was rated at being "Significantly Higher than Outside Air" and also a "Ratio Abnormality."  CMS Ex. 51 at 3.  Hayes also noted that Stachybotrys mold spores were "Slightly Higher than Outside Air."  CMS Ex. 51 at 3.

In regard to the analysis of the tape sample, Pro-Lab indicated that there was an "UNUSUAL" amount of mold and identified the following mold types:  Chaetomium, Hyphae, Memnoniella, Penicillium/Aspergillus, and Stachybotrys.  CMS Ex. 109 at 3.  In regard to what Hayes referred to as the "Common Bathroom," Hayes estimated the swab sample showed spores of Memnoniella was "Very Heavy" and that the Mycelial Estimate was "Many."  CMS Ex. 51 at 5.

**Room 120**

Pro-Lab did not report a spore trap analysis for this room.  Hayes concluded that the analysis of the spore trap showed seven mold spores per square meter.  CMS Ex. 51 at 3.

In regard to the tape analysis, Pro-Lab concluded that there was an "UNUSUAL" amount of mold and identified the types present as Chaetomium and Hyphae.  CMS Ex. 109 at 3.

The Hayes analysis of the swab samples indicated a light spore estimate for Chaetomium and Stachybotrys.  CMS Ex. 51 at 5.

**Room 115**

The only analysis for this room was a tape sample that Pro-Lab stated showed an "Unusual" amount of mold present.  The types of mold identified were Cladosporium and Hyphae.  CMS Ex. 109 at 3.

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**Rear Hallway**

Hayes analyzed a spore trap for this area of the facility and concluded that there was both "Slightly Higher than Outside Air" levels of Memnoniella mold as well as a "Ratio Abnormality."  The analysis indicated 79 spores per square meter.  Memnoniella made up nearly 42% of the spores, but Penicillium/Aspergillus, Cladosporium, and Myxomycetes made up nearly 17 percent each.  CMS Ex. 51 at 3.

**Hallway**

Although the location of this spore trap is unclear, Hayes analyzed it as registering 40 spores per square meter.  CMS Ex. 51 at 4.  Half of the spores were of the Penicillium/Aspergillus type of mold.  CMS Ex. 51 at 4.

**Second Floor**

Again, this location is ambiguous because the second floor is large and is separated by rooms.  However, the Hayes analysis for this spore trap showed 61 mold spores per square meter.  The mold types of Ascospores and Cladosporium each made up 44.3% of the total mold spores.  CMS Ex. 51 at 4.

The Pro-Lab report indicated that the mold types of Chaetomium, Cladosporium, Penicillium/Aspergillus, and Stachybotrys all are type I allergies, which can cause asthmatic related allergic reactions.  CMS Ex. 109 at 8-10.  The Pro-Lab mold analysis reports also provided information about the potential health risks of mold.  In general, the Pro-Lab report stated the following under the title "**Health Related Risks**":

Based on the Institute of Medicine and the National Academy of Sciences, dampness and mold in homes is associated with increases in several adverse health effects including cough, upper respiratory symptoms, wheeze, and exacerbation of asthma.  Mold and fungi contain many known allergens and toxins that can adversely affect your health.  Scientific evidence suggests that the disease of asthma may be more prevalent in damp affected buildings.  Dampness and mold in homes, office buildings and schools represent a public health problem.  The Institute of Medicine concluded, "When microbial contamination is found, it should be eliminated by means that not only limit the possibility of recurrence but also limit exposure of occupants and persons conducting the remediation".

CMS Ex. 109 at 11.

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**7. The analysis of mold samples taken by two separate companies and analyzed by two separate laboratories show disparate results.  Because the record does not explain what may have transpired from October 30, 2014 to October 31, 2014, to cause such significant changes in the results, the analysis of samples taken at the earlier date and after both parties had an opportunity to tour the facility with the representatives of AdvantaClean provides the fairest and best evidence of the true situation involving the mold at the facility at the start of the survey.  For purposes of fact finding in this case related to the quantity and type of mold at the facility, I give greater weight to the results from the samples taken by AdvantaClean on October 30, 2014, than the results from the samples taken on October 31, 2014, by Above and Beyond Unlimited Cleaning Co.**

The surveyors testified that AdvantaClean came to the facility at Petitioner's request on October 30, 2014.  CMS Ex. 88 ¶ 33; CMS Ex. 90 ¶ 19; CMS Ex. 91 ¶ 15a.  The AdvantaClean representatives informed the surveyors that there was visible mold at the facility in rooms 138, 21 and Shower Room 1 and that the representatives had already discussed it with the facility.  CMS Ex. 88 ¶ 34; CMS Ex. 90 ¶¶ 19-20; CMS Ex. 91 ¶¶ 15a-15b.  However, the AdvantaClean representatives stated that those were the only rooms the facility had shown them.  CMS Ex. 88 ¶¶ 34-35; CMS Ex. 90 ¶¶ 20-21; CMS Ex. 91 ¶¶ 15c, 15e.  The survey team, a facility maintenance employee, and the AdvantaClean representatives toured the first and second floors of the facility, where the AdvantaClean personnel found visible mold in rooms 120 and 122.  The AdvantaClean representatives informed the facility administrator of the visible mold they found and stated they were going to do air quality tests and surface testing for mold.  CMS Ex. 88 ¶¶ 35-38; CMS Ex. 90 ¶¶ 22-24; CMS Ex. 91 ¶¶ 16-20.  Further, on October 30, 2014, the survey team informed the facility administrator that the facility was immediately jeopardizing the health and safety of the residents due to mold contamination and that the facility would need to evacuate the residents from the facility.  CMS Ex. 88 ¶¶ 41-42.

Petitioner's witnesses agree that Petitioner hired AdvantaClean and that representatives from that company came to the facility on October 30, 2014.  P. Ex. 59 ¶ 18; P. Ex. 62 ¶ 15.  The AdvantaClean representatives first toured the facility with the administrator and the Corporate Director of Maintenance.  P. Ex. 59 ¶ 18; P. Ex. 62 ¶ 15.  The facility administrator disagrees with the surveyors' testimony that a facility maintenance person accompanied the AdvantaClean personnel on the second tour of the facility.  P. Ex. 59 ¶ 19.  However, the administrator agrees that she learned on October 30, 2014, of the immediate jeopardy situation and the need to evacuate the facility.  P. Ex. 59 ¶ 20.  Because the facility administrator decided, with no explanation, that AdvantaClean had been "coopted" by the surveyors, she hired Above and Beyond Unlimited Cleaning Co. to assess the mold situation and take samples for analysis.  P. Ex. 59 ¶ 26.  Above and Beyond Unlimited Cleaning Co. arrived on October 31, 2014, but there is no evidence

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that the surveyors were permitted to meet with their representatives to ensure that those representatives were permitted to tour the entire facility.  P. Ex. 59 ¶ 26.

There is nothing in the record to explain why the mold analyses had significantly different results, both in estimates of the mold spores in the air in certain rooms and the types of mold in those rooms.  For purposes of fact finding in this case, I assign the mold analysis by Pro-Lab greater weight than the Hayes analysis.  I do this because both parties had the opportunity to show the AdvantaClean representatives places of concern in the facility and the samples were taken earlier in time.

**8. The number and location of mold spores as determined by a mold testing is only one aspect of determining the potential health dangers posed by a structure contaminated with mold.  Only experts can assess all relevant factors and make that determination.**

Although the presence of mold is necessary for a possible adverse health outcome due to mold, mold is ubiquitous and present in all structures.  In their reports, Pro-Lab and Hayes cautioned readers of the need for individuals with expertise to draw conclusions as to the overall health effects of mold in any given structure.

Pro-Lab provided the following information related to interpretation of mold sampling, which is significant because it highlights that the detection of even low-level amounts of mold generated due to water in a structure may require expert evaluation:

The goal of sampling is to learn about the levels of mold growth and amplification in buildings.  There are no EPA or OSHA [Occupational Safety and Health Administration] standards for levels of fungi and mold in indoor environments.  There are also no standard collection methods. However, several generally accepted collection methods are available to inspectors to study mold (and bacteria) in indoor environments.  Comparison with reference samples can be a useful approach.  Reference samples are usually taken outdoors and sometimes samples can be taken from "non-complaint" areas.  **In general, indoor fungal concentrations should be similar to or lower than outdoor levels.  High levels of mold only found inside buildings often suggest indoor amplification of the fungi.  Furthermore, the detection of water-indicating fungi, even at low levels, may require further evaluation.**  There are several types of testing methods that can detect the presence of mold.  They can be used to find mold spores that are suspended in air, in settled dust, or mold growing on surfaces of building

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materials and furnishings.  There are different methods that can identify types of live mold and dead mold in a sampled environment.  Mold spores can be allergenic and toxic even when dead.

CMS Ex. 109 at 12 (emphasis added).

Hayes provided similar guidance as Pro-Lab, and made clear that spore counts alone were insufficient to determine mold contamination:  "The purpose of sampling and counting spores is to help determine whether an abnormal condition exists within the indoor environment and if it does, to help pinpoint the area of contamination.  **Spore counts should not be used as the sole determining factor of mold contamination**."  CMS Ex. 51 at 6.  Consistent with this, Pro-Lab also advised that mold analysis results are only one part of a complete air quality investigation and that issues related to medical conditions should be referred to an occupational or environmental health physician or professional.  Pro-Lab stated:

**Interpretation Guidelines: **A determination is added to the report to help users interpret the mold analysis results.  **A mold report is only one aspect of an indoor air quality investigation.  The most important aspect of mold growth in a living space is the availability of water.  Without a source of water, mold generally will not become a problem in buildings.**  These determinations are in no way meant to imply any health outcomes or financial decisions based solely on this report.  For questions relating to medical conditions you should consult an occupational or environmental health physician or professional.

CMS Ex. 109 at 2 (emphasis added).

Pro-Lab further stated:

Information (data) on mold in buildings can consist of the simple observation of fungal growth on a wall, analytical measurements from hundreds of environmental samples, or the results of a survey of building occupants with and without particular building-related conditions.  **Data interpretation is the process whereby investigators make decisions on (a) the relevance to human exposure of environmental observations and measurements, (b) the strength of associations between exposure and health status, and (c) the probability of current or future risks.**  These

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interpretation steps are followed by decisions on what measures can be taken to interrupt exposure and prevent future problems.

CMS Ex. 109 at 14 (emphasis added).

The University of Connecticut Health Center, Center for Indoor Environments and Health, also makes the point that air sampling alone is not as important as a qualitative assessment.

A qualitative assessment . . . is often more valuable than air sampling to determine whether there is likely exposure to problem mold.  This is because colonies of mold isolated from sampled air do not identify an unhealthy environment.  More important, the failure of mold colonies to develop from sampled air does not indicate a healthy environment.

There is substantial natural variability in the amount of mold in air.  Understandably, the EPA and other government agencies have not set numeric standards for indoor concentrations of mold or mold spores.

P. Ex. 16 at 65.

Mold indoors should reflect the outside species and the movement of outside air into the indoor environment.  Mold identified in air sampled indoors should be at lower concentrations and of similar types to molds identified in air sampled from the outside.  If the concentration inside is higher or the species different from the outside air, mold is suspected to be growing (amplifying) inside.

A specific species (other than, perhaps, species that may reflect a particular outside type dominant in certain climates at certain times) should not dominate the mold in the indoor air.  If other species occur as a significant percentage indoors, and they do not correspond to outdoor relationships, an indoor source of the species is more probable.

* * * * *

Air sampling is limited, and negative results do not document the absence of mold exposure.  For example, mold may be

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growing in carpets or on walls and wallpapers, yet not be airborne at the time of the sampling.  Where there are other indications, such as moisture noted where it should not be, further investigation for hidden sources is indicated.

P. Ex. 16 at 67 (footnotes omitted).

Therefore, a detailed consideration of the parties' expert testimony is extremely important to the outcome in this case.  *Franklin,* DAB No. 2869 at 12.

**9. Petitioner's Expert Witness, Dr. Robert Laumbach, stated in his written reports that the mold in Petitioner's facility did not pose an imminent risk to the residents, but acknowledged that frail elderly persons may be more vulnerable to serious allergy or asthma exacerbations.**

Petitioner engaged an expert to assess the mold situation at its facility.  Dr. Laumbach has significant qualifications, which include:  a Medical Doctor Degree; a Master of Public Health; medical board certifications in Family Practice and Preventative Medicine (Occupational Medicine); and certification as an Industrial Hygienist.  P. Ex. 1 at 1; P. Ex. 4 at 1.  Further, Dr. Laumbach is an Associate Professor (and previously served as an Assistant Professor) in the environmental and occupational medicine department of a medical school and also serves as an Assistant Professor in the family medicine department of a medical school and a school of public health.  P. Ex. 1 at 1; P. Ex. 4 at 1-2.  His professional experience includes being a sanitary inspector, an industrial hygienist, a corporate safety, health and environmental manager, as well as being a medical resident and chief resident at a medical school, and a fellow in Occupational Medicine at that medical school.  P. Ex. 4 at 1-2.

Dr. Laumbach's opinion concerning the potential risk to the health and safety of Petitioner's residents is provided in three reports that he authored.  Dr. Laumbach's November 2, 2014 report indicates that he inspected Petitioner's facility and reviewed the results of air sampling and surface swab samples collected at several sites in the building on October 31, 2014.  He stated that:  "I did not observe any conditions of concern related to moisture and/or mold.  I did not observe any conditions in the facility that would necessitate evacuation of the buildings to protect the health of patients, workers, visitors or other occupants."  P. Ex. 1 at 1.  Dr. Laumbach did, however, discuss the "growth of indoor mold on interior surfaces."  P. Ex. 1 at 1.

In Bathroom 1 (which I assume is Shower Room 1), he said there was visible mold on a wallboard three feet by four feet (i.e., 12 square feet) that partitioned the toilet room from the first shower stall.  He indicated that the swab sample confirmed that it was mold, and the air test indicated mold spores were in the air.  P. Ex. 1 at 1.  Although Dr. Laumbach indicated that an exhaust fan would move all contaminated air directly out of the

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building, Dr. Laumbach indicated that indeed there was some "potential for movement of spores" and had the facility "agree[] to have a crew install a double sheeting of polyethylene over the drop ceiling . . . . This barrier will eliminate a pathway by which mold spores could possibly enter other areas of the building from this room."  P. Ex. 1 at 2.  Dr. Laumbach said that only after "securing and isolating this room, a remediation plan supervised by a qualified project manager . . . must be executed in a timely and thorough manner to eliminate this source of mold in the building."  P. Ex. 1 at 2.

In room 138, Dr. Laumbach noted staining on the interior surface of the wallboard of the exterior wall, which he said was likely mold due to the air sampling report that indicated mold spores in the air.  Dr. Laumbach recommended cleaning the room using guidelines from the EPA.  P. Ex 1 at 2.

In rooms 110, 114, 119, 122, and 129, Dr. Laumbach noted staining that he believed was due to "plumbing leaks related to the sink and toilet, or splashing and floor mopping over time."  He noted that the air sample test confirmed mold in the air in room 122.  A swab sample also confirmed mold.  Dr. Laumbach again recommended following EPA guidelines to clean the rooms.  P. Ex 1 at 2.

In rooms 120 and 111 (unoccupied), he noted several square inches of black discoloration and the air test confirmed mold spores in the air.  Dr. Laumbach again recommended following EPA guidelines to clean the rooms.  P. Ex 1 at 2.

Dr. Laumbach observed stains on ceiling tiles in the drop ceiling "in a few different locations" in the facility from "old small water leaks" from a pipe.  Dr. Laumbach recommended replacing the tiles.  P. Ex. 1 at 2-3.

Dr. Laumbach noted that the second floor of the facility was unoccupied and "there were small leaks from the roof that were being caught in containers on November 1, 2014, after a period of heavy rain."  He also noted that there had been larger leaks from the ceiling that had been repaired.  He noted that the air sample test indicated the existence of mold spores consistent with outdoor mold spores and a lack of a source of mold growth.  Dr. Laumbach indicated that "water intrusion to the second floor has the potential to affect the first floor occupied areas and must be remediated by promptly fixing the roof leaks."  P. Ex. 1 at 3.

Dr. Laumbach stated that based on his inspections and the mold testing, he saw no "imminent health risk due to mold" despite indicating that the facility had not yet isolated or remediated the mold.  He also recommended the temporary relocation of residents during remediation of the mold in their rooms.  P. Ex. 1 at 3.

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Dr. Laumbach stated that there was a lack of evidence to conclude that there is a causal relationship between indoor mold specific health effects, but noted that some epidemiological associations

[S]uggest that mold may cause a limited spectru[m] of health effects.  The potential health effects of exposure to mold include possible worsening of allergy and / or allergic asthma among patients with these conditions who may be sensitive to mold, respiratory tract irritation, and rarely, colonizing or infection in severely immunocompromised individuals . . . .

P. Ex. 1 at 4.

Dr. Laumbach issued a second report on November 25, 2014, which essentially added information to the November 2, 2014 report based on an inspection of Petitioner's facility on November 24, 2014.  Dr. Laumbach reported that the roof leak that resulted in water damage and mold growth in Shower Room 1 was remediated, resulting in a new air sample on November 20, 2014, showing one mold type remaining, although it was at a much higher level than outdoors.  Previously, there had been Memnoniella spores, but none as of November 20, 2014.  P. Ex. 2 at 2.  As to the other locations in the facility, Dr. Laumbach considered the remediation a success, noting the air sample did contain a variety of mold spores, but at lower levels.  P. Ex. 2 at 3.

On October 12, 2015, Dr. Laumbach provided a written report related to the deficiencies CMS found at Petitioner's facility.  Dr. Laumbach stated that mold has been associated with health effects including the "worsening of allergies and asthma, and associated upper respiratory symptoms."  Dr. Laumbach indicated that:

[O]nly a minority of susceptible (sensitized) individuals with allergy or asthma may respond to mold, if levels of exposure are sufficient to cause a response in those individuals.

* * * * *

In addition to allergy, similar upper and lower respiratory symptoms (cough and wheeze) have been reported in individuals who were not demonstrably allergic (atopic).

P. Ex. 3 at 2.  Although Dr. Laumbach characterizes it as rare that indoor mold can trigger an asthma attack, he did believe in prompt remediation of mold.  P. Ex. 3 at 3.  Dr. Laumbach noted that there are no standards at which levels of indoor mold becomes harmful.  P. Ex. 3 at 3.  Dr. Laumbach also indicated that he did not believe there was much mold at Petitioner's facility.  P. Ex. 3 at 5.

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Dr. Laumbach's analysis of the risk of mold to the health of an individual appears to be as follows:

The [World Health Organization] WHO (2009) found that there was "sufficient evidence of a causal relationship" between indoor dampness-related agents (including mold) for *none* of the health outcomes considered in their review.  There was sufficient evidence of an *association*, meaning that some epidemiological studies had linked exposure to dampness/mold, for asthma exacerbation, upper respiratory tract symptoms, cough and wheeze.  It should be noted that none of these health outcomes are chronic diseases; they represent the potential for *temporary worsening* of a chronic, pre-existing condition (asthma) or temporary, acute, symptoms following exposure in sensitive individuals (upper respiratory tract symptoms, cough, and wheeze).  Upper respiratory tract symptoms, cough, and wheeze can be associated with temporary worsening of allergies/asthma or irritation. For asthma development or dyspnea (shortness of breath), the WHO found limited or suggestive evidence of an association. (Table 8, pg. 71)

In reaching the conclusion that evidence was sufficient to conclude that any causal relationship existed between the agent (mold) and an outcome, WHO (2009) cautioned,

"The finding of sufficient evidence of a causal relationship between an exposure and a health outcome does not mean that the exposure inevitably leads to that outcome.  Rather, it means that the exposure can cause the outcome, at least in some people under some circumstances."

Therefore, cases of alleged illness must be evaluated on a case-by-case basis, to include an analysis of differential diagnosis and differential etiology, before concluding that mold was the specific cause of any individual's illness.  The differential diagnosis (possible diagnoses) related to respiratory illness or symptoms is very wide, and the differential etiology (possible causes) of many different diagnoses is even wider.

P. Ex. 3 at 4.

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Significantly, Dr. Laumbach acknowledged that "[f]rail elderly may be more vulnerable to serious allergy or asthma exacerbations . . . ."  P. Ex. 3 at 3.

In his reports, Dr. Laumbach cited and discussed the Hayes analysis of the samples taken by Above and Beyond Unlimited Cleaning Co. on October 31, 2014.  Dr. Laumbach does not reference or discuss the Pro-Lab analysis of the samples taken by AdvantaClean on October 30, 2014.

**10. CMS's Expert Witness, Dr. Ernest Chiodo, stated in his report and testified on cross-examination that Petitioner's facility had extensive mold contamination and that it posed a likely risk to health and safety to elderly residents with compromised respiratory systems due to the potential for respiratory distress based on allergic reaction and asthma exacerbation.  Dr. Chiodo opined that no residents should be inhabiting the facility.**

CMS engaged an expert to assess the safety concerns potentially posed by the evidence of mold contamination at Petitioner's facility.  The record indicates that Dr. Chiodo is highly qualified to render such an opinion based on his education, training, experience, and certifications, which include:  a Medical Doctor Degree; a Master of Public Health Degree; a Master of Science in Biomedical Engineering; a Master of Science in Threat Response Management (biological, chemical, and radiological defense); a Master of Science in Occupational and Environmental Health Sciences with a specialization in Industrial Toxicology; medical board certifications in Internal Medicine, Occupational Medicine (the certification for individuals who determine whether or not an individual has an illness or injury or is at risk of disease due to exposure to mold in the environment) and Public Health and General Preventative Medicine (the certification with a focus on epidemiology and biostatistics for assessing risk due to occupational and environmental exposure); certification as an Industrial Hygienist (the certification for individuals who quantify and control occupational and environmental hazards including air toxins such as mold in buildings); and a Michigan residential builder license.  Tr. at 114-118; CMS Ex. 97 at 1-2; CMS Ex. 106 at 1-2, 4; P. Ex. 36-37.  In addition to having served as a clinical professor at a medical school and an adjunct professor of industrial hygiene and toxicology in a university department for occupational and environmental health sciences, Dr. Chiodo served as the Medical Director for the City of Detroit.  CMS Ex. 97 at 1; CMS Ex. 106 at 3, 5.

Dr. Chiodo's overall opinion as to the threat to the health and safety of residents at Petitioner's facility was:

It is my opinion to a reasonable degree of medical and scientific certainty that there was extensive mold contamination of the Franklin Care Center.  Due to the mold

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contamination, **there was a likelihood of serious harm to the patients at Franklin Care Center, including but not limited to respiratory distress and failure.**

The exposure of patients of Franklin Care Center occurred since at least 2004 when roof leaks were documented.  Mold growth is the result of the moisture caused by water intrusion due to plumbing or roof leaks.

The improper remediation of the mold contamination by a contractor other than a qualified mold remediation placed the patients of Franklin Care Center at additional risk of serious disease or death due to mold, mold mycotoxin, and endotoxin exposure.

CMS Ex. 97 at 10 (emphasis added).

Dr. Chiodo rendered his opinion about the risk posed by the mold contamination at Petitioner's facility based on review of a number of documents in the record of this proceeding, which included mold testing analyses and observations, reports, and photographs made by other people.16  Tr. at 90, 92; CMS Ex. 97 at 2-3.  Dr. Chiodo did

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not personally go to Petitioner's facility.  Tr. at 89.  However, Dr. Chiodo did consider both mold analysis reports from Pro-Lab and Hayes.  CMS Ex. 97 at 2-3.  In his written assessment, Dr. Chiodo also provided a list of references considered when rendering that assessment.  CMS Ex. 97 at 12-15.

Dr. Chiodo summarized the pertinent facts from his review to include:  Petitioner's facility has had water intrusion since at least 2004; extensive mold contamination was found on the first and second floors of Petitioner's facility; air sampling and swab sampling of visible mold conducted on October 30-31, 2014, showed mold species including Aspergillus, Penicillium, Chaetomium, Memnoniella, and Stachybotrys; supplies stored on the second floor of Petitioner's facility were used on the first floor of the facility; facility staff performed renovations without properly removing, remediating, or containing the mold, which could release hidden mold spores; Petitioner used the same contractor who made roof repairs to perform mold remediation at the facility, but there was no evidence that the contractor followed all remedial measures and precautions; and multiple residents had asthma, COPD, and pneumonia, as well as one with respiratory arrest, one with respiratory failure, and two with pleural effusion.  CMS Ex. 97 at 3.

On cross-examination during the hearing, Dr. Chiodo defended his use of the word "extensive" when describing the mold contamination at the facility.  Tr. at 91-92.  He testified that the air test results and the visible mold show that the facility was very contaminated.  Tr. at 93.  "[T]his is not just a small little bit of mold in the corner of some shower.  This is a heavily contaminated facility as one would expect with . . . long running water protrusions coming in through the roof."  Tr. at 94.  Dr. Chiodo explained that he used the term "extensive" based on the totality of the circumstances and not a "mathematical description."  Tr. at 142-143.  Dr. Chiodo testified that, based on the long-standing water intrusions into the facility and the air testing, it was his assessment that "there is mold contamination of the structure.  It's not -- I see no indication that it's somehow limited to just certain areas of the building."  Tr. at 146.

Although Dr. Chiodo and Petitioner's expert witness both discussed in their written assessments the details related to the mold test results, Dr. Chiodo testified about the effect of mold contamination related to allergic disease.  As Dr. Chiodo explained, there is debate about the effects of mold mycotoxin, but not about the allergic effects because it can cause people to have respiratory distress.  Tr. at 50-51.  "Mold mycotoxins are chemicals that are made by mold, some mold, not all mold, some species of mold . . . but not always."  Tr. at 53.  Further, "not all molds can make mycotoxins and not all molds that can make mycotoxins make mycotoxins at all times."  Tr. at 54.

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But Dr. Chiodo emphasized that "[t[he main element is really the allergic disease, and there is no debate -- there really is no debate within the orthodox medical and scientific community about mold being able to cause that."  Tr. at 56.  "Mold can cause allergic disease . . . . If you're talking about aggravation of asthma, respiratory distress, I don't think there is debate about that.  It doesn't have to be any type of industrial situation."  Tr. at 57.

Dr. Chiodo agreed that aflatoxin inhalation exposure is linked to cancer, but in the context of agriculture and food processing studies.  Dr. Chiodo testified that he did not know whether Petitioner's facility would be at those levels.  Tr. at 59-60.  He stated:

I can tell you that the Franklin Care Center was in a very poor state.  Now I can tell you what would be different with the Franklin Care Center in the agricultural setting is that you would not have milling of food, milling of product that would cause things to be airborne.  So that is true.  The amount of air mold contamination might be very much the same, but Franklin Care Center could, in fact, be higher; however, there would not be -- you wouldn't have like machinery that is creating a lot of dust in the air in the Franklin Care Center.

Tr. at 60-61.

However, Dr. Chiodo was clear in his testimony as to the primary threat mold posed to Petitioner's residents:  "what I'm saying, that you have to be concerned about mold, mold mycotoxins as a risk.  It is probably the minor concern in this matter.  In fact, that is the minor concern.  Allergic disease is really the main concern . . . ."  Tr. at 66.

I really am not as -- particularly as to the residents of this facility, yes, mold mycotoxins are an issue and it's by far the most minor issue.  There are older people, yes, there is an increased risk of cancer, but I think -- I think that's very much the minor risk.  Your focus is on mold mycotoxins.  There is a risk, but very much the minor, minor risk, but I think the major risk, as I've testified on my direct examination, is allergic disease, and allergic disease has nothing to do with mold mycotoxin.  Allergic disease is things like aggravation of respiratory disease.  Yes, that is the major risk for the residents.  The mold mycotoxins, like, if they're -- I write up a report, I have to include it as a possible concern because, you know, again, Aflatoxin B1 is the most potent naturally occurring cause cancer causing substance.

**Page 40**

Tr. at 152-153.

This testimony was consistent with his written assessment, which highlighted, in his overall opinion as to risk to health and safety quoted earlier, that respiratory distress and arrest were likely serious harm resulting from the mold contamination.  In his written assessment, Dr. Chiodo discussed bioaerosols and his concerns.  CMS Ex. 97 at 4-5.  He stated:

As many as ten patients in the Franklin Care Center have a diagnosis of asthma.  I am not able to determine from the records currently available to me whether or not any of these patients developed their asthma due to mold exposure in the Center.  **However, patient[s] with asthma would be particularly vulnerable to the adverse health effects of airborne mold exposure.  These adverse health effects include serious upper and lower respiratory disease that can result in respiratory distress and death.  The patients with Chronic Obstructive Pulmonary Disease, pneumonia and pleural effusion would also be a[t] particularly increased risk of the adverse consequences of mold exposure.**

CMS Ex. 97 at 5 (emphasis added).

Dr. Chiodo testified in detail at the hearing as to the respiratory threat mold contamination posed to Petitioner's residents:

But in any event, the main point is that these are already people that have some degree of respiratory compromise, and the problem with mold and mold contaminating an environment is that it can cause people to have respiratory disease, it can cause or aggravate asthma.  So now you have a situation where somebody -- an asthma is an obstructive lung disease.  **So you already have somebody that has difficulty getting air in and out of their lung, and now you have allergic reactions, allergic response to the mold causing mucous production in the lungs, restriction of bronchioles.  You make the situation worse and it can be literally the straw that breaks the camel's back that causes somebody to have to go into the hospital or possibly even die.  So that's why in the context of patients that have some degree of respiratory compromise, this is a very serious matter, and respiratory compromise is a common finding**

**Page 41**

**within people in nursing homes, and specifically there are patients in this facility that have had -- their medical records have documented that they do have respiratory compromise**.  Now, I haven't gone the next step to say that the respiratory compromise was caused by the mold.  I don't have to.  This is a risk assessment, not a causation determination.

* * * * *

You know, healthy adults should not be inhabiting that structure.  Now, you have people that are older, infirmed, particularly people with respiratory compromise.  **I think that really presents a very serious imminent risk of serious injury or death.**

* * * * *

**[T]here should be no patients inhabiting this structure**.  So I don't think the communication information is the issue.  It's just that you shouldn't have them in this nursing home.

Tr. at 155-159 (emphasis added).

In his testimony, Dr. Chiodo addressed the question as to whether there was a minimum amount of mold exposure an individual had to have in order to be placed at respiratory risk.  Dr. Chiodo said that "[y]ou can't say, well, this level of mold contamination does present a problem in this level, another level doesn't."  Tr. at 162.  Dr. Chiodo distinguished between chemical exposure, which is concerned with the amount of exposure, and biological exposure, where the limits do not apply because

[I]f somebody is susceptible, even a small amount of mold can cause somebody to have harm.  That's why there is no occupational exposure limit for mold . . . . Mold is a different matter because you can have allergic disease and even a minute quantity can cause serious disease in somebody that is susceptible.  That is why OSHA does not have permissible exposure limits for mold. 

Tr. at 46-47.  As Dr. Chiodo explained in more detail:

That is not the case for what are called biologics. That is, **if you have something that can cause allergic disease,**

**Page 42**

**theoretically even one spore can cause somebody that has an allergic reaction to go into a fatal respiratory arrest, a fatal asthma attack.**  So that's why OSHA does not have permissible exposure limits for mold.  It doesn't say this certain level of mold is okay and above it is a problem.  So the answer is, if it is a mold-contaminated structure -- and you're not – it's not supposed to be inhabited by healthy people, unhealthy people.  **In this particular context, you clearly have a mold-contaminated structure with people that are already risk and respiratory compromised, which heightens the risk,** but it's still a risk for anybody, a healthy young -- a healthy young person that has asthma going to into a fatal asthma attack in that building.

Tr. at 164 (emphasis added).

Although the record shows that some rooms of the facility had visible mold and the air sampling discussed concentrations of mold, Dr. Chiodo was clear in his testimony that a room-by-room analysis was unhelpful due to the nature of the respiratory threat it posed.  "[T]he overall picture here is of extensive mold contamination throughout the structure, and I personally don't think there is a need to go room by [room].  I think that just confuses and clouds the issue."  Tr. at 144-145.

He stated that once there is contamination, a structure should not be inhabited until there is proper remediation.  Tr. at 161.  However, mold remediation needs to be done by specially trained contractors who build barriers to the spread of mold spores, because tearing out mold-contaminated building material,

[Y]ou are creating a circumstance to spread the mold into the air.  So you want to make sure that . . . the air returns and the air vents are closed off in that area; that you make sure that . . . there is no passage of the air -- from the mold spores in the air to spread throughout the rest of the building.

Tr. at 148-149.  In regard to Petitioner's closing the door of a room being remediated and placing a sign for people to stay out, Dr. Chiodo generally did not think that was sufficient to stop the spread of mold spores.  Tr. at 149.

**11. Based on the record as a whole, I give greater weight to Dr. Chiodo's assessment as to the risk posed to health and safety of the residents at the facility and give less weight to Dr. Laumbach's views.  Dr. Laumbach's reports and opinion are flawed because they fail to discuss or mention the Pro-Lab analysis of the October 30, 2014 samples taken by AdvantaClean.**

**Page 43**

**In contrast, Dr. Chiodo expressly stated that he reviewed both mold analysis reports.  Dr. Chiodo's report and testimony also took into account that the facility housed many infirmed elderly residents with compromised respiratory systems and gave a risk assessment directed at the population residing in the facility.  However, Dr. Laumbach said little of the medically vulnerable population of the facility and focused on his observations of the mold contamination and indicated that the negative effects of mold contamination are unclear.  Further, the record shows that Dr. Laumbach gave a contradictory opinion as to the health risk of mold in 2013 as well in a paper he co-authored based on a study he conducted.**

Both Dr. Chiodo and Dr. Laumbach commented on each other's opinions.

Dr. Chiodo reviewed Dr. Laumbach's November 2, 2014 report and indicated that Dr. Laumbach's opinions are inconsistent with generally accepted medicine and science concerning mold contamination and that Dr. Laumbach's citation to the 2009 WHO report is meant to minimize potential health effects of mold in the frail and elderly population at Petitioner's facility.  Dr. Chiodo also states that Dr. Laumbach's view is inconsistent with another report he authored in a different matter.  CMS Ex. 97 at 10.

Dr. Chiodo is correct that in another report in an unrelated matter, authored in 2013, or the year before his first two reports regarding Petitioner's facility, Dr. Laumbach clearly stated that mold can and did result in respiratory ailments and even caused the individual he assessed to undergo surgeries as a result of the mold exposure.

In summary, it is likely that [assessed person's] respiratory symptoms, including sore throats, shortness of breath, cough, nasal congestion, tonsil infections, and tonsil liths, were the result of allergic and irritant reactions to years of chronic indoor mold exposure.  Accordingly, her symptoms almost entirely resolved once she was able to move into a new home.  She continues to have some symptoms of nasal blockage, decreased sense of smell, and problems with her memory and fatigue.

In conclusion, [assessed person] suffered from persistent and repeated respiratory symptoms and medical conditions, including sore throats, shortness of breath, cough, nasal congestion, tonsil infections, and tonsil liths, leading to tonsil and sinus surgeries, while living at [a certain address] from 2007 to 2011.  These symptoms and medical conditions, and resultant surgeries and other medical treatments and their complications, were caused by exposure to mold and damp

**Page 44**

conditions in the residence.  I hold these opinions to a reasonable degree of medical certainty.

CMS Ex. 99 at 6.  Dr. Laumbach also drew similar conclusions about mold exposure for two other individuals.  CMS Ex. 99 at 12, 17.

Dr. Laumbach's conclusions in those individual cases are consistent with the results of a study that he and others conducted.  Dr. Laumbach was one of the authors of Symptomatic Improvement after Cessation of Mold Exposure:  Clinical Experience in Environmental and Occupational Health.  CMS Ex. 71.  It states in that article that

Allergy is the most generally accepted pathophysiological explanation for mold-related symptoms.  10% of Americans are reported to have allergic reactions to fungal antigens of which about half, or 5%, are thought to have clinical illness related to mold exposure (ACOEM, 2003)[.]  Several case reports cite an increase in respiratory symptoms and increased asthma in adults and children in damp buildings with visible mold . . . . To date, studies have not clearly demonstrated a causal relationship between mold exposure and non-allergic health effects (Ammann, 2000).

CMS Ex. 71 at 1.

In preparation for writing that paper, Dr. Laumbach and his colleagues conducted a clinical review to determine whether interventions, such as moving away from a location with mold or remediating the mold contamination resulted in improvement in medical symptoms and patients' overall assessment of their own health.  CMS Ex. 71 at 2.  In the study, 80% of the individuals exposed to moldy conditions reported upper respiratory complaints and 82.5% reported lower respiratory complaints, which amounted to 97.5% of all participants in the study reporting either upper or lower respiratory complaints.  CMS Ex. 71 at 3.  Dr. Laumbach and his colleagues found "a significant improvement in broad categories of symptoms and self reported global health assessment for those subjects who moved away from or remediated mold conditions.  This effect occurred in the respiratory or allergy-mediated symptoms as well as in the non-specific symptoms."  CMS Ex. 71 at 5-6.  Dr. Laumbach and his colleagues stated that this was consistent with other studies because "[s]everal studies demonstrate a relationship between mold and asthma and allergy in adults and children with improvement after cessation or decreased exposure to mold."  CMS Ex. 71 at 7.

Not to be outdone, Dr. Laumbach strongly disagreed with Dr. Chiodo's opinion.  Dr. Laumbach disagreed that there was extensive mold contamination at the facility and stated that Dr. Chiodo exaggerated the risk of harm from mold.  Dr. Laumbach asserted

**Page 45**

that he considers Dr. Chiodo's primary source for the effects of mold as obsolete and superseded by the EPA Guidelines for Mold Remediation in Schools and Commercial Buildings from 2008.  Further, Dr. Laumbach referenced the 2009 WHO report (Dr. Laumbach's view of the import of this document was quoted earlier in this decision) and a National Academy of Sciences review in 2004.  P. Ex. 3 at 7-8.  Dr. Laumbach stated that Dr. Chiodo provided ominous sounding information, but allergic reactions to mold are just references to common conditions such as allergic rhinitis, allergic asthma, allergic sinusitis and allergic dermatitis, as well as a rare condition called hypersensitivity pneumonitis.  P. Ex. 3 at 8.

One significant aspect to Dr. Laumbach's disagreement with Dr. Chiodo was that he accused Dr. Chiodo of mischaracterizing the facility as having extensive mold contamination on the first and second floors.  P. Ex. 3 at 7.  However, in making this accusation, Dr. Laumbach showed no knowledge of the Pro-Lab analysis, which detailed much higher levels of mold spores in various rooms of the facility.  This failure to review, consider, and discuss the prime evidence of contamination in this case makes Dr. Laumbach's attack on Dr. Chiodo unsubstantiated.17  I find that it also calls into question much of the reliability of Dr. Laumbach's opinion.

Dr. Laumbach also responded to Dr. Chiodo's reference to Dr. Laumbach's conclusion in 2013 that several people were subject to multiple ailments due to mold exposure:

Dr. Chiodo takes the conclusions supporting association between indoor mold and respiratory illness in my reports for patients in an earlier case (NJDOH/CMS exhibit 99) out of context.  These were cases of actual illness and conclusions were based on exhaustive review of the individual's exposure histories and medical records, followed by differential diagnosis in which other causes of illness were ruled out.  In those cases, patient complaints about non-respiratory symptoms and illnesses unrelated to mold were not supported by evidence.  Consistent with my opinions here, I concluded that the individual patients did have exacerbation of respiratory illness from exposure to mold in their home.  In contrast, Dr. Chiodo does not provide any differential diagnosis or evaluation of alternative etiologies.  In fact, his statements of about "cases of pneumonia" and Lasix-resistant

**Page 46**

congestive heart failure are without any substantiation: no thorough review of medical records, differential diagnosis, or differential etiology and causation analysis are provided. There is no evidence supporting general causation theories for the cases of alleged mold-related illness that Dr. Chiodo discussed, and no evidence supporting specific causation of illness in these individuals.  Respiratory conditions such as pneumonia and exacerbation of COPD and asthma, and pneumonia are highly prevalent causes of illness among nursing home patients.  Incidence of asthma among US adults is about 8%.  Therefore, in a population of about 100 patients, one would expect to find approximately 8 residents who have asthma.

P. Ex. 3 at 12.

Dr. Chiodo and Dr. Laumbach disagree in their reports as to the likelihood and severity of the health risks of mold exposure.  As discussed below, the medical and scientific sources in the record show that there are limits to our knowledge as to how mold affects each individual.  However, Dr. Chiodo applied his formidable knowledge and experience in this field to the elderly population of the facility, which included asthmatics and others with significant respiratory ailments, to conclude that the population actually living permanently at Petitioner's facility was placed in likely risk of serious harm.

Dr. Laumbach criticized Dr. Chiodo's reliance on a publication entitled *Bioaerosols:  Assessment and Control*, published by the American Conference of Government Industrial Hygienists (ACGIH) to support his opinion.  CMS Ex. 97 at 4.  Dr. Chiodo stated that ACGIH "is a highly respected organization that provides guidance to the United States Government in the formulation of occupational and environmental exposure limits."  CMS Ex. 97 at 4.  Dr. Chiodo also stated that *Bioaerosols: Assessment and Control* "is a reliable authority" and "remains the current pronouncement of the ACGIH on the topic."  CMS Ex. 97 at 4; *see also* Tr. at 59.  Neither Petitioner nor Dr. Laumbach cited to any authority to contradict Dr. Chiodo's statement.  Further, this publication is a reference used by the EPA.  CMS Ex. 61, pt. II at 21.

According to *Bioaerosols: Assessment and Control*, "Bioaerosols are those airborne particles that are living or originate from living organisms."  CMS Ex. 55 pt. I at 6.  Further,

Antigens are substances that can induce a detectable hypersensitivity or immune response.  Inhalation of airborne antigens-many of which are of biological origin-can cause a spectrum of immune illnesses broadly referred to as

**Page 47**

hypersensitivity diseases.  An immune response consists of specific antigen recognition and the recruitment of an arsenal of sensitized cells and antibodies.  An allergen (Gr. altered action) is a biological or chemical substance that causes a specific immune response called an allergic reaction. Thus an allergy is the immune-mediated state of hypersensitivity (i.e., an exaggerated or inappropriate immune response) that results from exposure to an allergen.

CMS Ex. 55, pt. VI at 1.  Dr. Chiodo quoted the following for the proposition that mold may result in an allergic response that involves the respiratory system:

The spectrum of diseases associated with airborne antigen exposure may involve the upper or lower airways and includes allergic asthma, allergic rhinitis, allergic sinusitis, atopic dermatitis (skin inflammation with itching), allergic mycosis (fungosis, most commonly allergic aspergillosis), and HP.  The first three of these are allergic diseases that depend on the antigen-stimulated production of specific IgE antibodies.

CMS Ex. 55, pt. VI at 4; *see* CMS Ex. 97 at 4.

The EPA appears to agree with ACGIH, stating that molds produce allergens, which can result in allergic reactions in people, either immediately or delayed.  "Repeated or single exposure to mold, mold spores, or mold fragments may cause non-sensitive individuals to become sensitive to mold, and repeated exposure has the potential to increase sensitivity . . . . **Molds can cause asthma attacks in people with asthma who are allergic to mold**."  CMS Ex. 63 at 1 (emphasis added); *see also* CMS Ex. 61, pt. II at 17.  Further, breathing in mold may cause hypersensitivity pneumonitis or result in opportunistic infections in persons whose immune systems are weakened or suppressed.  CMS Ex. 63 at 1.

Although Dr. Laumbach is correct that the WHO reports that epidemiological evidence is not sufficient to support any specific health effect caused by indoor dampness and mold, it also makes clear that indoor dampness or mold is associated with a number of health effects:

There is sufficient epidemiological evidence of associations between dampness or mould and asthma development, asthma exacerbation, current asthma, respiratory infections (except otitis media), upper respiratory tract symptoms, cough, wheeze and dyspnoea. There is sufficient clinical

**Page 48**

evidence of associations between mould and other dampness-associated microbiological agents and hypersensitivity pneumonitis, allergic alveolitis and mould infections in susceptible individuals, and humidifier fever and inhalation fevers.

CMS Ex. 58 at 4-5.

Further, the Institute of Medicine of the National Academies (Institute of Medicine) stated that "Allergic responses to fungi have been well documented."  CMS Ex. 56, pt. I at 38.  In particular, the Institute of Medicine also found an association between damp indoor environments or mold with cough, wheezing, and exacerbation of asthma symptoms in asthmatics.  P. Ex. 20 at 2.

*Conclusions* Despite the variations in methods used to collect information, studies report a remarkably consistent association between cough and damp indoor conditions. Statistically significant associations between cough and visible signs of dampness or mold have been described by a number of investigators, with ORs of 1.3 to over 5.0. The committee concludes
                            - There is sufficient evidence of an association between exposure to a damp indoor environment and cough.
                            - There is sufficient evidence of an association between the presence of "mold" (otherwise unspecified) in a damp indoor environment and cough.

CMS Ex. 56, pt. I at 23.

*Conclusions* Studies demonstrate a consistent association between wheeze and various indications of indoor dampness, although the association of wheeze with exposure to indoor allergens (notably, house dust mite) in damp environments somewhat complicates the evaluation.  Studies addressing infants and children and those addressing adolescents and adults yield similar relative risk estimates.  The committee concludes on the basis of its review that
                            - There is sufficient evidence of an association between exposure to a damp indoor environment and wheeze.
                            - There is sufficient evidence of an association between the presence of "mold" (otherwise unspecified) in a damp indoor environment and wheeze.

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CMS Ex. 56, pt. I at 30.

Wheezing might be particularly troublesome for a person with a compromised respiratory system because "[w]heeze is a musical or whistling sound, typically accompanied by labored breathing, produced when a person exhales; it may be accompanied by a feeling of tightening in the chest.  It is a subjective finding that may be a sign or symptom of asthma but can also occur in persons who are not considered to be asthmatic."  CMS Ex. 56, pt. I at 23.

As with wheezing, the Institute of Medicine also found sufficient evidence of an association between exposure to dampness and mold with asthma symptoms in asthmatics.  The Institute of Medicine described asthma as follows:

Asthma is understood to be a chronic disease of the airways characterized by an inflammatory response involving many cell types.  Both genetic and environmental factors appear to play important roles in the initiation and continuation of the inflammation . . . . The symptoms are often episodic and usually include wheezing, breathlessness, chest tightness, and coughing.

* * * * *

Asthma may be allergic or nonallergic.  Allergic asthma is IgE-medicated.

CMS Ex. 56, pt. I at 37.  The Institute of Medicine described the correlation of dampness or mold to generating asthma symptoms in diagnosed asthmatics:

Numerous studies of adults and children uniformly report odds ratios over 1 for the association between exposure to dampness or the presence of mold or other agents in damp indoor environments and self-reports of symptoms in people with physician-diagnosed asthma.  Most of the observed associations are statistically significant.

From the reviewed body of evidence, the committee concludes that
                            - There is sufficient evidence of an association between exposure to a damp indoor environment and asthma symptoms in sensitized asthmatic people.
                            - There is sufficient evidence of an association between the presence of "mold" (otherwise unspecified) in a damp indoor

**Page 50**
                            - environment and asthma symptoms in sensitized asthmatic people.

CMS Ex. 56, pt. II at 4-5.

Dr. Laumbach points to the WHO and the Institute of Medicine as sources to show that there is an insufficient causal relationship between adverse respiratory effects and mold.  However, those entities actually recognize a close relationship between adverse respiratory effects and dampness/mold, which supports Dr. Chiodo's opinion that elderly, infirmed, asthmatics at Petitioner's facility were likely placed in risk of a serious respiratory situation due to the facility's long-term damp and moldy conditions.  In fact, Dr. Laumbach admits that a certain minority of individuals will be sensitive to mold and respond with exacerbation of mold-sensitive asthma.  P. Ex. 3 at 3.  He quotes the WHO (without citation) as stating that "[t]he finding of sufficient evidence of a causal relationship between an exposure and a health outcome does not mean that the exposure inevitably leads to that outcome.  Rather, it means that the exposure can cause the outcome, at least in some people under some circumstances."  P. Ex. 3 at 4.  However, this merely establishes that, while not every person with asthma will respond to mold, some will assuredly have their condition exacerbated or an asthma attack will result.  Dr. Laumbach says this himself:  "exposure to airborne fungal spores is an established cause of acute respiratory conditions such as worsening of . . . allergic asthma."  P. Ex. 3 at 12.  But in the context of this case, Dr. Laumbach shrugs this off, saying that for "individuals who are sensitive to mold spores, both young and old, temporary exacerbations of these conditions are usually easily managed.  Triggers of allergy or asthma exacerbation in nursing homes should be controlled and avoided to the extent practical . . . ."  P. Ex. 3 at 12.  Dr. Laumbach's view fails to take into account the degree to which each nursing home (including Petitioner's) has extremely frail and infirmed residents, and fails to acknowledge that Petitioner in fact had not "controlled" the environment for its residents due to a decade of roof leaks.  It is for those people that Dr. Chiodo opined the mold will likely result in a severe health effect.

Further, although the Institute of Medicine has acknowledged a "lack of knowledge regarding the role of microorganisms in the development and exacerbation of diseases found in occupants of damp indoor environments," it is significant that the Institute of Medicine indicates it is essential for homes and buildings to be free from moisture intrusion as much as possible and that mold needs to be eliminated in a manner that will not result in contamination of other areas of the structure or exposure to other occupants.  P. Ex. 21 at 7, 11, 13.  This is a clear indication that, while science may not be able to provide an exact causal relationship between mold exposure and all persons, damp indoor environments and mold exposure is a sufficient and reliable risk to certain persons that dampness and mold exposure are to be avoided.  As stated by the Institute of Medicine:

**Page 51**

Homes and other buildings should be designed, operated, and maintained to prevent water intrusion and excessive moisture accumulation **when possible**.  When water intrusion or moisture accumulation is discovered, the source should be identified and eliminated **as soon as practicable** to reduce the possibility of problematic microbial growth and building material degradation.  The most effective way to manage microbial contaminants, such as mold, that are the result of damp indoor environments is to eliminate or limit the conditions that foster its establishment and growth.  That also restricts the dampness-related degradation of building materials and furnishings.

* * * * *

When microbial contamination is found, **it should be eliminated by means that not only limit the possibility of recurrence but also limit exposure of occupants and persons conducting the remediation.**  Disturbance of contaminated material during remediation activities can release microbial particles and result in contamination of clean areas and exposure of occupants and remediation workers.  Containment during clean-up (through the erection of barriers, application of negative air pressure, and other means) has been shown to prevent the spread of microbial particles to noncontaminated parts of a contaminated building.  The amount of containment and worker personal protection and the determination of whether occupant evacuation is appropriate depend on the magnitude of contamination.

P. Ex. 21 at 13-14 (emphasis added).

Other authorities also support Dr. Chiodo's opinion that mold exposure is a significant threat to certain people.  The Centers for Disease Control and Prevention cited the Institute of Medicine when explaining that mold exposure does not affect everyone, but it can have severe reactions in some who are sensitive to it.

**Mold exposure does not always present a health problem indoors.  However some people are sensitive to molds.**  These people may experience symptoms such as nasal stuffiness, eye irritation, wheezing, or skin irritation when exposed to molds.  **Some people may have more severe**

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**reactions to molds . . . . Severe reactions may include fever and shortness of breath**.  Immunocompromised persons and persons with chronic lung diseases like COPD are at increased risk for opportunistic infections and may develop fungal infections in their lungs.

In 2004 the Institute of Medicine (IOM) found there was **sufficient evidence to link indoor exposure to mold with upper respiratory tract symptoms, cough, and wheeze in otherwise healthy people; with asthma symptoms in people with asthma;** and with hypersensitivity pneumonitis in individuals susceptible to that immune-mediated condition.

CMS Ex. 60 at 4 (emphasis added).

The Federal Emergency Management Administration also concluded there was enough evidence to publically state that "[t]ypical symptoms reported from mold exposure include:  respiratory problems" including asthma attacks.  CMS Ex. 64 at 9.

Even Petitioner's authorities agree.  The University of Connecticut Health Center, Center for Indoor Environments and Health made it clear that the allergic reaction to mold is both genetic and environmental and can, over time, sensitize individuals to it so that the reaction gets more severe.

It is well established that fungi can cause allergic reactions in humans.

* * * * *

Antigens (or more properly, antigenic epitopes) are segments of macromolecules, typically proteins or glycoproteins.  In fungi, these macromolecules can be structural components of the cell, enzymes, or metabolic byproducts (Simon-Nobbe et al. 2000).  Individuals' immune responses to these antigenic molecules are determined by their genetic makeup and environmental factors.  Important among these factors are the frequency of exposure to the antigens and the intensity of the exposures.

* * * * *

Hypersensitivity reactions result from immunologic responses to antigens.  Multiple components of fungi, e.g., proteins, can

**Page 53**

serve as antigens.  The hypersensitivity responses can be of different types, as initially delineated by Gell and Coombs. The most common hypersensitivity responses to fungi are the type I or immediate allergic responses, but type III and type IV or delayed hypersensitivity responses also can contribute. Development of sensitization to antigens generally requires repeat exposures, often to high ambient concentrations of the sensitizing material.  Once sensitization to an antigen has developed, it requires a much lower concentration upon re‐exposure to elicit the reactive phase that we recognize as the clinical manifestation of disease.  In general, the higher the exposure and the degree to which one has been sensitized, the more severe the allergic or immune-mediated response.

* * * * *

In the lower airway, allergic inflammation can trigger bronchospasm, chest tightness, and shortness of breath, leading to either new onset of **asthma** or asthma exacerbations in sensitized individuals.

P. Ex. 16 at 34-36; *see also* P. Ex. 22 at 1 ("Are molds a hazard?  Yes, they are!  Mold can adversely affect humans.  It's clear from information, as summarized by the Institutes of Medicine in a 2003 report that . . . 1 in 10 are allergic to some form of mold/fungus . . . . Molds can create or aggravate allergies, asthma or other respiratory ailments to lessen quality of our lives.").

Petitioner's exhibits also support Dr. Chiodo's opinion that elderly residents with asthma or other respiratory conditions are likely at risk for serious harm because those individuals are already at risk for hospitalization due to their respiratory status.

According to the Inspector General for the Department of Health and Human Services, three of the 15 most common reasons that nursing home residents are admitted to hospitals are respiratory in nature:  Pneumonia; Respiratory failure, insufficiency or arrest; and COPD.  P. Ex. 30 at 14.  Further, asthma and COPD affect a significant portion of the elderly population.

Neither [asthma and COPD] disorder is typically considered as a major affliction of the elderly but, in point of fact, a significant proportion of the geriatric population (i.e., persons 65 yr or older) are at risk.  For example, asthma may involve 7–10% of this population and the prevalence of COPD is thought to range from 13–35% in older smokers (6–9).  Thus,

**Page 54**

these illnesses occur frequently enough to cause a fair amount of morbidity.

P. Ex. 31 at 1.  Because of the "progressive and complex nature" of COPD, it is a common disease encountered in the nursing home resident and "[a]ccording to one study, one in every six admissions to nursing homes was for patients with a history of emphysema or COPD."  CMS Ex. 33 at 1.  The high percentage of COPD in nursing home residents is particularly pertinent to the present case because "[a]bout 25% of persons with COPD have concurrent asthma."  CMS Ex. 33 at 2.

Relevant to Dr. Chiodo's opinion in this case, the New Jersey Department of Health and the American Industrial Hygiene Association both agree that individuals with the highest risk for health effects from mold exposure include the elderly and those with a pre-existing condition concerning allergies, lung conditions, asthma or emphysema.  CMS Ex. 59 at 3-4; CMS Ex. 69 at 5.  The common health effects include asthma attacks.  CMS Ex. 69 at 5.  Further, the New Jersey Department of Health laid out the basic factors in assessing increased health risk related to mold, which are:
                            - Evaluating individuals for sensitivity to mold (children, elderly and those with previously compromised health, are potentially more sensitive)
                            - The extent of mold growth.
                            - The conditions of mold growth

CMS Ex. 69 at 6.  Although Drs. Chiodo and Laumbach both discussed the second and third factors above (and disagreed about them), only Dr. Chiodo truly took into account the age and compromised respiratory conditions of a portion of the total residents living at the facility.

On the whole, Dr. Chiodo has a more balanced and nuanced opinion concerning the mold at the facility and its likely health effect on the elderly population with asthma and other respiratory ailments.  Therefore, I afford his opinion more weight than that of Dr. Laumbach and accept his assessment of risk of serious harm to Petitioner's residents.

**12. Petitioner stored cleaning chemicals that could cause severe harm to individuals in an unlocked closet that was accessible by mobile but cognitively limited residents.**

As summarized above, the SOD's findings in relation to the deficiency at 42 C.F.R. § 483.25(h) (i.e., the requirement that the facility should be free of accident hazards) relate primarily to mold exposure.  However, the SOD also asserts a failure "to store hazardous cleaning chemicals in a locked and secure manner at all times."  CMS Ex. 1, pt. I at 14.  CMS did not invoke this as a basis for summary judgment; however, the DAB

**Page 55**

indicated that the "issue of what risk of harm was presented by the closet should be resolved on remand based on the record as a whole."  *Franklin,* DAB No. 2869 at 9 n.6.

The SOD stated that 13 cognitively impaired residents were placed at risk for serious harm, injury, or death based on a surveyor's observation, on October 28, 2014, that an unmarked door, which was unlocked, was a janitor's closet with harmful chemicals in it.  The SOD asserted that the facility administrator stated that the janitor's closet door needed to be unlocked because a fire extinguisher was stored in the closet and staff needed ready access to it.  The SOD stated that the closet had a spray bottle labeled glass cleaner with no Material Safety Data Sheet (MSDS) labelling to identify the product and cautionary warnings.  There was also a one gallon container of PARA BC-100, with a label that said it could cause damage to the lining of the eyes, nose, and throat.  The SOD also indicated there was a gallon container of PARA BC-200 with same warning as the PARA BC-100.  The SOD further stated that there was a one gallon container of "Neutral Disinfectant" with a label indicating the chemical was a severe skin and eye irritant.  The SOD indicated that a facility maintenance man said the door knob to the closet was broken.  The SOD also reported that surveyors queried staff and learned that the facility had 13 residents with dementia who could independently move around the unit.  The SOD said that the surveyors informed the facility administrator that the janitor closet containing accessible hazardous chemicals resulted in immediate jeopardy.  The facility removed the chemical bottles from the closet and repaired the lock on the door.  CMS Ex. 1, pt. I at 14-15.

State agency surveyor Patricia Devine took notes and pictures related to this part of the SOD, which appears to be the only evidence in the record related to this deficiency.  According to her notes, she checked an unmarked door in the facility that turned out to be unlocked.  She noted that the Corporate Maintenance Manager said this room was a janitor's closet.  She noted four bottles, which were window glass cleaner, PARA BC-100, PARA BC-200, and "Neutral Disinfectant" and took a picture of the closet and the bottles.  The notes show that Ms. Devine asked the facility administrator if she knew why the door was unlocked, and the administrator said that a fire extinguisher was in the closet and staff needed access to it.  A picture of the closet shows a fire extinguisher is in the closet.  Ms. Devine stated that a maintenance man from the facility stated that the door knob was broken.  Although the key would turn in the knob, the door would not latch in the frame.  Ms. Devine also asked a facility nurse how many residents can independently travel and have dementia, and the nurse stated a total of 13.  As found above, the record shows that there were many residents with dementia.  Ms. Devine noted that a housekeeper said that the door to the closet was always unlocked.  The notes ended by indicating that three men were working on the door knob.  CMS Ex. 15 at 1-2; CMS Ex. 16 at 5-6.

Petitioner addressed this issue with the janitor's closet in its brief, asserting that the janitor's closet "was located directly across from the nurses' station.  There was no risk

**Page 56**

of a resident gaining access to the closet, because it was under the direct supervision of the nursing staff at all times."  P. Br. at 13.

CMS relegated its entire argument concerning the janitor's closet to a footnote in which it stated that the facility did not dispute the facts in the SOD but merely argued that serious harm was unlikely because the janitor's closet was across from the nurse's station and thus under observation.  CMS Br. 18 n.11.

I find that there is sufficient prima facie evidence in the record to support the SOD regarding the presence of potentially harmful cleaning chemicals that were stored in an unlocked closet that was accessible by a number of mobile residents with dementia.  Petitioner did not cite to any evidence in the record to support its assertions or otherwise show that the SOD's factual statements were false.  Therefore, Petitioner failed to rebut this portion of the SOD.

**13. CMS's determination that Petitioner's noncompliance with 42 C.F.R. §§ 483.25(h) and 483.75(d)(1)-(2) and (o)(1) immediately jeopardized the health and safety of its residents is not clearly erroneous.**

CMS determined that the level of noncompliance for Petitioner's deficiencies at 42 C.F.R. §§ 483.25(h) and 483.75(d)(1)-(2), (o)(1) were at the immediate jeopardy level.  Immediate jeopardy exists if an SNF's noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.  42 C.F.R. § 488.301.  However, an ALJ must uphold CMS's determination that immediate jeopardy exists unless that determination is clearly erroneous.  42 C.F.R. § 498.60(c)(2).  The DAB has summarized the SNF's burden when challenging the level of noncompliance as follows:

In reviewing an immediate jeopardy determination, the ALJ (and the Board) must defer to CMS's determination absent a showing of clear error.  42 C.F.R. § 498.60(c)(2).  This regulatory standard means, as the Board has explained, that a facility bears a heavy burden in challenging the assessment of immediate jeopardy, which, of necessity, includes an element of judgment.  *Meadowwood Nursing Ctr*., DAB No. 2541, at 14 (2013); *Britthaven of Havelock*, DAB No. 2078, at 29 (2007), and cases cited therein.  The Board has also long held that immediate jeopardy need not be based on the occurrence of actual harm but, rather, requires only the "likelihood" that serious harm may result from the noncompliance.  *Crawford Healthcare and Rehab*., DAB No. 2738, at 17 (2016); *Woodstock [Care Ctr.]*, DAB No. 1726, at 39 [(2000)].

**Page 57**

*Neighbors Rehab. Ctr*., *LLC*, DAB No. 2859 at 18 (2018).  Further the DAB has provided elucidation on the clearly erroneous standard:

The "clearly erroneous" standard means that CMS's immediate jeopardy determination is presumed to be correct, and the burden of proving the determination clearly erroneous is a heavy one.  *See, e.g*., *Maysville Nursing & Rehabilitation Facility*, DAB No. 2317, at 11 (2010); *Liberty Commons Nursing and Rehab Center - Johnston*, DAB No. 2031, at 18 (2006), *aff'd Liberty Commons Nursing and Rehab Ctr. - Johnston v. Leavitt*, 241 F. App'x 76 (4th Cir. 2007).  When CMS issued the nursing facility survey, certification, and enforcement regulations, it acknowledged that "distinctions between different levels of noncompliance . . . do not represent mathematical judgments for which there are clear or objectively measured boundaries."  59 Fed. Reg. 56, 116, 56, 179 (Nov. 10, 1994).  "This inherent imprecision is precisely why CMS's immediate jeopardy determination, a matter of professional judgment and expertise, is entitled to deference."  *Daughters of Miriam Center*, DAB No. 2067, at 15 (2007).

*Mississippi Care Ctr. of Greenville*, DAB No. 2450 at 15 (2012).  Significantly, the DAB has concluded that a facility's deficiencies may pose immediate jeopardy even though they do not create a "crisis situation."  *Mississippi Care Ctr.*, DAB No. 2450 at 16.  Further, a facility's deficiencies may pose immediate jeopardy even though the potential harm is not likely to occur in the near future.  *Agape Rehab. of Rock Hill*, DAB No. 2411 at 19 (2011); *Barbourville Nursing Home*, DAB No. 1962 at 16-18 (2005) (finding that a facility's failing to track information in accordance with its policies posed immediate jeopardy, even though no harm had resulted, and potential harm would not happen "in hours or days, but over weeks or months.").

In the present case, the DAB made it clear that there must be fact finding to support CMS's determination before CMS's determination of immediate jeopardy can be upheld.

In reviewing an immediate jeopardy determination, the reviewing body must consider the facts upon which CMS relied in making the determination, as well as any evidence presented at the hearing.  Because the definition of "immediate jeopardy" requires that there be some causal connection between the facility's noncompliance and the existence of serious injury or a threat of injury, the nature and circumstances of the facility's noncompliance are of obvious importance to the evaluation.

**Page 58**

*Franklin,* DAB No. 2869 at 14 (*quoting Spring Meadows Health Care Ctr*., DAB No. 1966 at 36 (2005) (citations omitted)).  The DAB also said in reference to this case that "on review of the full record, [the ALJ] may consider all cited conditions in the facility (including the remediation measures actually used and effects of the roof leaks beyond mold) in assessing whether CMS clearly erred in determining that a likelihood of serious harm existed."  *Franklin,* DAB No. 2869 at 13-14.

Petitioner argues that the immediate jeopardy determination is clearly erroneous because

a full investigation revealed that there was a small amount of mold in isolated areas that posed *no* risk of imminent harm to patients . . . . Similarly, the leaks were in an area of the building completely sealed off from the patients, resulting in no risk of harm.  Thus, to the extent there was mold in isolated areas in the facility, there is no basis for CMS's position that patients were adversely affected or were at risk of being adversely affected.

P. Br. at 1-2.

Petitioner hinges most of its attack on the immediately jeopardy determination on Dr. Laumbach's observations and opinions, which in turn are heavily based on the Hayes analysis of samples taken on October 31, 2014.  Petitioner argues:

Dr. Laumbach reviewed the tests [sic] results of the mold testing companies.  In so doing, Dr. Laumbach concluded that there was no threat to patient safety.  ([P.] Ex. 3 at 14.)  Dr. Laumbach issued a well-reasoned opinion that the mold was isolated and, therefore, presented no risk of harm.  This conclusion took into account the nature of the patient population at [the facility].

P. Br. at 4.

As an initial matter, Petitioner is incorrect that leaking was restricted to areas of the facility that were "sealed off" from residents.  The surveyors heard the sound of dripping water above the doorway to Room 122 and saw/took pictures of a pool of water across from that room as well as on the floor near rooms 109 and 111 and wet ceiling tiles in the main activity room.  Further, water dripped onto surveyors during the survey.  These areas were not "sealed off."  CMS Ex. 88 ¶¶ 1, 2, 55-57, 59, 63-68; CMS Ex. 74 at 2, 8, 9, 12, 14.

**Page 59**

In addition, Petitioner provides no citation to places in Dr. Laumbach's reports to show that he considered Pro-Lab's analysis of the samples taken by AdvantaClean on October 30, 2014.  Dr. Laumbach's reliance entirely on the Hayes analysis of the October 31, 2014 samples compromises his overall opinion because the Pro-Lab analysis showed significantly more mold spores in certain rooms of the facility.

Further, although Dr. Laumbach made a general statement in a report concerning the potential effects of mold on the elderly (P. Ex. 3 at 3), Petitioner makes too much of this in its argument because Dr. Laumbach's assessment did not discuss this subject in detail.

Petitioner also asserts that Dr. Laumbach, as the only Certified Industrial Hygienist to tour the facility while the survey was being conducted, was the only person in a position to assess the mold contamination at the facility.  Petitioner discounts the observations of the state agency surveyors because they were unable to make expert conclusions about the black staining throughout the facility.  Petitioner states that "only 100 square feet of identified areas [ ] were affected in the 80,000 square floor building, which has approximately 200,000 square feet of wall surface."  P. Br. at 7.  Considering that the entire second floor of the facility was indisputably uninhabitable for years due to persistent and significant water intrusion, Petitioner's comparison of the square footage of mold to the entire facility square footage is unreasonable.  Further, Petitioner fails to mention that the rooms with the highest concentrations of mold were located in habited areas of the facility near resident rooms and accessible by residents.  The observations of the surveyors concerning mold presence and contamination were corroborated by both mold analysis reports, and it is perfectly acceptable for CMS to engage an expert who reviews significant documentation related to the mold at the facility to render an opinion about it.  As surveyor James Inman testified, he received training related to mold and such training is sufficient for the surveyors to spot potential issues.  The AdvantaClean personnel applied their own expertise to take samples of the black substances in the facility and opine the substances were likely mold.  Multiple surveyors testified to their observations concerning the extensive black substances at the facility, and their notes and photographs support that testimony.  In contrast, Dr. Laumbach only provided a brief description of what he observed at the facility. Dr. Laumbach's unsworn statements about the presence of visible mold are insufficient to counterbalance all of the evidence in the record showing black substances in many locations in the facility.

Petitioner also asserts that Dr. Laumbach sufficiently rebutted Dr. Chiodo's opinion regarding the risk of allergic reaction for residents with asthma because Dr. Laumbach stated that there is no evidence that any of the residents were allergic to mold.  Petitioner concludes the argument:  "In fact, given the very small chance that a resident had the requisite mold allergy *and* was exposed to mold, this risk simply does not meet the immediate jeopardy standard.  That is, it was not 'probable' that a resident would suffer an injury due to an allergic reaction to mold."  P. Br. at 10.  However, this argument misses the point that the facility must act in a manner that safeguards its residents from

**Page 60**

immediate jeopardy situations.  Simply remaining ignorant as to whether any of the asthmatic residents were sensitized to mold does not mean that CMS erred in believing that Petitioner's chronically wet and moldy facility posed a likelihood of significant harm to the residents with asthma.  It is Petitioner who could not rule out the possibility that any one of the asthmatic residents might be sensitized to mold.  Further, as discussed above, living in a damp environment is associated with people having a cough and wheezing.  With more than ten percent of the resident population susceptible to mold allergy induced asthma attacks and nearly a third of the resident population diagnosed with respiratory ailments susceptible to worsening due to cough and wheezing, the failure to replace the facility's roof and immediately remediate any visible mold placed these residents at likely risk for serious harm.  As reviewed in detail above, these residents were ill with other ailments, and reactions that might be inconvenient for otherwise healthy adults could, as Dr. Chiodo opined, be the straw the breaks the camel's back.

Further, as asserted in the SOD, Petitioner did not take appropriate action to lock doors either to rooms with visible mold or the janitor's closet with the cleaning supplies that warned of severe injury.  As detailed above, the facility had a sizable population of residents with cognitive impairments who would not necessarily be deterred from accessing rooms that simply had a sign indicating that the rooms were not be entered.  Room 122 and Shower Room 1 showed high mold spore counts or mold types that are known to cause allergic reactions related to asthma.  The six cognitively impaired residents with asthma were placed at high risk given the possibility that they could have been exposed to significant mold spore amounts.  Further, all cognitively impaired residents were placed at likely risk of severe harm from the cleaning supplies in the janitor closet.  Petitioner's argument that nursing staff would be able to stop residents from entering the janitor's closet is unsupported by evidence in the record.  There is no record support that staff were always present to redirect residents from entering that closet, or any other room, such as the rooms with significant mold contamination.

Accordingly, I cannot conclude that CMS clearly erred in determining that Petitioner's noncompliance with 42 C.F.R. §§ 483.25(h) and 483.75(d)(1)-(2), (o)(1) posed immediate jeopardy to resident health and safety.

**14. The CMP that CMS imposed is not reasonable because the number of residents subject to immediate jeopardy is more limited than CMS originally found.  However, the other factors support a significant per-diem CMP, and I conclude that a $9,000 per-day CMP is reasonable.**

CMS imposed the maximum CMP of $10,000 per day, for a 26-day immediate jeopardy period of October 30, 2014 through November 24, 2014.  CMS imposed a $350 per-day CMP for a 28-day period of substantial noncompliance from November 25 through December 22, 2014.  CMS Ex. 2 at 1-2; CMS Ex. 3 at 1-2; CMS Ex. 4 at 1-2.

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As mentioned above, Petitioner disputes the $10,000 per-day penalty, but has not raised in its filings any arguments related to the $350 per-day penalty.  Further, Petitioner did not expressly dispute the duration of the $10,000 per-day penalty.  Therefore, the only issue in dispute is the reasonableness of the $10,000 per-day penalty amount.

I examine whether a CMP is reasonable by applying the factors listed in 42 C.F.R. § 488.438(f):  1) the facility's history of noncompliance; 2) the facility's financial condition; 3) the factors specified in 42 C.F.R. § 488.404; and 4) the facility's degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort, or safety.  *See* 42 U.S.C. §§ 1320a-7a(d)(2), 1395i-3(h)(2)(B)(ii)(I).  The absence of culpability is not a mitigating factor.  42 C.F.R. § 488.438(f).  The factors listed in 42 C.F.R. § 488.404 include:  1) the scope and severity of the deficiency; 2) the relationship of the deficiency to other deficiencies resulting in noncompliance; and 3) the facility's prior history of noncompliance in general and specifically with reference to the cited deficiencies.  *See* 42 U.S.C. §§ 1320a-7a(d)(1), (3), 1395i-3(h)(2)(B)(ii)(I).

The regulations specify that a CMP that is imposed against a facility on a per-day basis will fall into one of two ranges of penalties.  42 C.F.R. §§ 488.408, 488.438.  The upper range of CMPs, $3,050 per day to $10,000 per day, is reserved for deficiencies that pose immediate jeopardy to a facility's residents and, in some circumstances, for repeated deficiencies.  42 C.F.R. § 488.438(a)(1)(i), (d)(2).  The lower range of CMPs, $50 to $3,000 per day, is reserved for deficiencies that do not pose immediate jeopardy, but either cause actual harm to residents, or cause no actual harm but have the potential for causing more than minimal harm.  42 C.F.R. § 488.438(a)(1)(ii).  In assessing the reasonableness of a CMP amount, an ALJ looks at the per-day amount, rather than the total accrued CMP.  *See**Kenton Healthcare, LLC*, DAB No. 2186 at 28 (2008).  The regulations leave the decision regarding the choice of remedy to CMS, and the amount of the remedy to CMS and the ALJ, requiring only that the regulatory factors at 42 C.F.R. §§ 488.438(f) and 488.404 be considered when determining the amount of a CMP within a particular range.  42 C.F.R. §§ 488.408, 488.408(g)(2); 498.3(d)(11); *see also* 42 C.F.R. § 488.438(e)(2) and (3); *Alexandria Place*, DAB No. 2245 at 27 (2009); *Kenton Healthcare, LLC*, DAB No. 2186 at 28-29.  Unless a facility contends that a particular regulatory factor does not support the CMP amount that CMS imposed, the ALJ must sustain it.  *Coquina Ctr.*, DAB No. 1860 at 32 (2002).

I consider the factors below.  In some cases, I combine similar factors.

**Facility's History of Non-Compliance: **Petitioner argues that Petitioner did not have a history of non-compliance and enjoyed a five-star rating until the 2014 survey.  P. Br. at 14; P. Prehearing Br. at 21.  One of the facility owners testified to this, and Petitioner submitted a copy of the five-star rating based on information reported through August 31,

**Page 62**

2015.  P. Ex. 39; P Ex. 60 ¶ 37.  The facility administrator attributed the facility's two star rating to the survey related to this case.  P. Ex. 59 ¶ 80.

Petitioner incorrectly states that it does not have a history of substantial noncompliance.  As mentioned earlier, the state agency conducted a survey of the facility that ended on February 7, 2011.  The state agency concluded from the survey that Petitioner was in substantial non-compliance at the immediate jeopardy level (scope and severity level "L") for failing to have a safe, functional, sanitary, comfortable environment for residents, staff, and the public (42 C.F.R. § 483.70(h)).  The 2011 SOD found that "the facility failed to provide remediation and ongoing preventative maintenance of the facility's leaking roof and decommissioned toilets on the unoccupied second floor of the building resulting in the potential for fire and/or safety hazards for all residents."  CMS Ex. 14 at 1.  As in the present case, the survey found water intrusion in several rooms in the facility.  CMS Ex. 14.  As CMS argued:  "The facts concerning water leaking into the facility that formed the basis for CMS's finding of immediate jeopardy at the widespread level in 2011 are strikingly similar to [the state agency's] 2014 survey findings."  CMS Br. at 24.  CMS produced the survey notes from the surveyor as well as testimony about the wet conditions related to the roof leaking.  CMS Ex. 92 ¶¶ 16-22; CMS Ex. 104.

On February 28, 2011, CMS issued an initial determination agreeing with the state agency and finding that immediate jeopardy existed at the facility as of February 23, 2011.  CMS indicated that it would deny payment for all new admissions starting March 2, 2011, and terminate Petitioner's provider agreement by March 18, 2011, unless Petitioner could return to compliance.  CMS Ex. 100.  CMS also decided to impose a CMP.  CMS Ex. 101.  In the end, CMS issued another initial determination that Petitioner immediately jeopardized the health and safety of its residents at the scope and severity level of "L" (widespread), starting February 23, 2011, with a return to compliance on March 11, 2011.  CMS Ex. 103 at 1.  Although CMS did not terminate Petitioner's provider agreement, CMS imposed a denial of payment for new admissions from March 2, 2011 through March 10, 2011, and a $5,000 per-day CMP from February 23, 2011 through March 10, 2011, for a total of $80,000.  CMS Ex. 103 at 2.  There is no evidence that Petitioner appealed this determination; therefore, it is binding.  42 C.F.R. § 498.20(b).18

While this history does not directly implicate the deficiencies in the present case, the problematic roof leaks and wide-spread water intrusion may well be related to the ultimate development of mold at the facility.

**Page 63**

**Scope and Severity of Deficiencies and Relationship Between Deficiencies:  **Petitioner asserts that the deficiencies in this case were not serious and relies on the reports of Dr. Laumbach.  Petitioner states that Dr. Laumbach indicated that there was no threat of imminent harm and that mold was not widespread in the facility.  Petitioner asserts that mold "was found in a few select areas in the facility, most of which were closed off to patients."  P. Prehearing Br. at 21.  Because the situation was not sufficiently serious, Petitioner posits that:

the surveyors ultimately decided not to vacate the residents from the Facility.  Given this determination, [Petitioner] could not have truly held an immediate jeopardy level citation at the time; the surveyors would not have decided to leave the residents at risk of serious harm.  If the conditions were truly as bad as CMS is now suggesting, the patients would have had to have been removed.

P. Br. at 14-15; *see* P. Prehearing Br. at 21.

Petitioner's argument, as quoted above, concerning the immediate jeopardy situation, is fallacious reasoning.  While an immediate jeopardy situation is required for an immediate termination of an SNF with a transfer of residents, CMS's decision not to impose such a remedy does not mean that there is no immediate jeopardy. * See* 42 U.S.C. § 1395i-3(h)(4); 42 C.F.R. §§ 488.402-488.410.  To order a transfer of residents, CMS must make one more finding beyond immediate jeopardy – an "emergency" must exist.  42 C.F.R. § 488.426(a).  While there is no doubt that the finding of an emergency would convey greater urgency related to the immediate jeopardy situation, all immediate jeopardy situations are not "emergencies."

CMS correctly asserts in this proceeding that the deficiencies are serious in this case considering Petitioner's failure to address its leaking roof for a decade.  CMS Br. at 24.  However, the immediate jeopardy situation was not as wide-spread as CMS believes.

The SOD indicated that three deficiencies involved immediate jeopardy.  The deficiency at 42 C.F.R. § 483.25(h) (Tag F323) (accident prevention and adequate supervision) was at a scope and severity level of "L," which means there was wide-spread immediate jeopardy to resident health and safety.  The other deficiencies at 42 C.F.R. § 483.75(d)(1)-(2) (Tag F493) (facility policies/appoint administration) and 42 C.F.R. § 483.75(o)(1) (Tag F520) (committee members/meet quarterly/facility policies/meet quarterly/plans), while still immediate jeopardy, were at a scope and severity level of "J," which means isolated immediate jeopardy.  CMS Ex. 1 at 13-32, 36-40.

As the DAB noted, these deficiencies all related to the damp and moldy conditions at the facility, calling them essentially derivative.  *Franklin,* DAB No. 2869 at 14.  However,

**Page 64**

each deficiency had a separate focus:  one relating to the condition of the facility, another to the actions of facility management, and the final related to the actions of the quality assurance committee.  Essentially, the facility as a whole failed to function properly to protect resident health and safety.

Overall, the deficiencies in this case are very serious.  However, Petitioner's argument could call into question the scope of the deficiency at 42 C.F.R. § 483.25(h).  As indicated above, the SOD concluded that deficiency was an "L" or a widespread situation.  "Widespread" means "the problems causing the deficiency are pervasive (affect many locations) throughout the facility and/or represent a systemic failure that affected, or has the potential to affect, a large portion or all the residents or employees."  State Operations Manual ch. 7, § 7410.2.1.  However, a "pattern" is only "when more than a very limited number of residents or employees are affected, and/or the situation has occurred in more than a limited number of locations but the locations are not dispersed throughout the facility."  State Operations Manual ch. 7, § 7410.2.1.

Neither definition fully encompasses the situation at the facility.  In any event, I cannot expressly review the scope of the immediate jeopardy in this case.  However, as discussed in detail earlier, only a limited number of residents had asthma and fewer still would likely be subject to serious harm due to a mold induced asthmatic attack.  On the other hand, the facility was moldy and damp, which ultimately affected the entire facility and placed all respiratory compromised residents at risk for serious harm.  Overall, the population affected by the immediate jeopardy was more limited than all of the residents.

**Culpability: **Petitioner states that Dr. Laumbach indicated that there was no threat of imminent harm and that mold was not widespread in the facility.  Based on this, Petitioner views its conduct as not particularly egregious.  *See* P. Br. at 14-15; *see* P. Prehearing Br. at 21.

CMS asserts that "the facility's longstanding neglect, indifference, and disregard for the care, comfort and safety of its residents demonstrates its culpability.  Though surveyors specifically discussed the black substance with facility leadership during the 2011 exit conference, no mold testing occurred, and the facility engaged in unsafe renovations that promoted the spread of mold."  CMS Br. at 24-25.  CMS points to the notices from local authorities concerning roof leaks dating back to 2004 and $23 million in fines as evidencing further culpability.  CMS Br. at 25.

I must consider the facility's degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort, or safety.  In the present case, the DAB thought that "whether the roof was actively repaired or neglected for years may be relevant to the ALJ's evaluation of the reasonableness of the amount of the CMP . . . ."  *Franklin,* DAB No. 2869 at 15.

**Page 65**

Petitioner is quite culpable for the situation at the facility, which is completely inappropriate for a health care facility caring for aged and infirmed individuals.  As found above, Petitioner's owners and management have known of the roof leaks and the long-term water intrusion into the facility.  It is true, as detailed above, the facility sought to patch the roof, both using contractors and its own staff; however, over the course of a decade, Petitioner knew that such patching was ineffective.  Certainly by 2014, Petitioner knew the roof would leak.  It was just a question of when.

Therefore, at some point, Petitioner's owners decided to "live with" the fact that the roof would leak.  However, only the residents were truly living with that choice.  And that meant infirmed elderly person were living in damp and moldy conditions.  Further, Petitioner's owners and managers cast a blind eye to obvious black substances in the facility and did not act to properly have the black substances tested and remediated.  As explained above, Petitioner's roof leaked in the spring of 2014, and sustained significant water intrusion at the time; however, by the end of October limited remediation and reconstruction from the damage had taken place.  This malaise is most strikingly shown by the fact that Petitioner preferred to abandon its second floor for years rather than re-roof the facility.  It is also shown by the fact that the state agency conducted a survey in 2013 and a surveyor pointed out that black stains were present, but Petitioner did not seek to test for mold or properly remediate.  *See* CMS Ex. 117.

**Financial Condition of the Facility: **Petitioner asserts that it has already suffered financially because its census shows it only has 58 residents for its 180 beds.  P. Prehearing Br. at 21.  However, at the beginning of the survey, as the facility administrator testified, Petitioner only had 79 residents and two of them were discharged to hospitals during the survey.  P. Ex. 59 ¶ 76; CMS Ex. 18 at 1; CMS Ex. 107, pt. III at 1; CMS Ex. 108, pt. III at 1.  The facility administrator indicated that the survey resulted in several long-term residents, who were at hospitals during the survey, not returning to the facility when their hospital stays were completed.  P. Ex. 59 ¶ 77.  The facility administrator stated the loss of residents down to 57 resulted in an estimated loss of $120,000 in revenue each month.  P. Ex. 59 ¶ 79.  One of the facility's owners also indicated similar financial harm.  P. Ex. 60 ¶ 35.

Petitioner has not argued or cited to any evidence in the record that shows it does not have the ability to pay the CMP that CMS imposed.  The correct inquiry with regard to financial condition is "whether [the] facility has adequate assets to pay the CMP without having to go out of business or compromise resident health and safety."  *Gilman Care Ctr*., DAB No. 2357 at 7 (2010), quoting *Sanctuary at Whispering Meadows,* DAB No. 1925 (2005).  The facility has the burden to prove its inability to pay the CMP.  *Oaks of Mid City Nursing and Rehabilitation Ctr*., DAB No. 2375 at 26 (2011).  Although the facility indicated that it was financially harmed due to the survey and its findings, this is insufficient to meet its burden to show financial inability to pay the CMP.

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**CMP Amount:**  In the present case, Petitioner characterizes the imposition of the maximum daily sanction as "utterly unreasonable."  P. Br. at 14; P. Prehearing Br. at 21.  Based on the above analysis, Petitioner must be subject to a significant per-day CMP.  However, as explained above, the facts in the record show a more limited class of residents susceptible to immediate jeopardy from the mold and damp conditions than the SOD appears to envision.  I concluded that the scope of the immediate jeopardy for the primary deficiency in this case implicates fewer residents than all of the residents in the facility.  The situation in this case is extremely troubling, but it is not the worst-case situation worthy of the highest per-day penalty amount.  As a result, I conclude that a reduction in the per-day CMP amount to $9,000 is appropriate.

### VI.  Conclusion

                            - CMS's determination that immediate jeopardy existed at the facility for 26 days is not clearly erroneous.
                            - CMS's determination to impose the highest per-day CMP is not reasonable, but a CMP of $9,000 per-day is reasonable for each day of immediate jeopardy.
                            - Petitioner is liable for a total CMP of $243,800.  This amount includes $9,800 in CMPs for the 28 days of non-immediate jeopardy level deficiencies from November 25, 2014 through December 22, 2014.

Scott AndersonAdministrative Law Judge

                                              1. All citations to the Code of Federal Regulations are to the version in effect at the time of the survey unless otherwise indicated. 
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                                                  2. A scope and severity level of "L," indicates widespread immediate jeopardy to resident health or safety.  See State Operations Manual ch. 7, § 7400E. 
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                                                  3. A scope and severity level of "J," indicates isolated immediate jeopardy to resident health or safety.  See State Operations Manual ch. 7, § 7400E. 
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                                                  4. On remand, Petitioner withdrew its request to cross-examine the surveyors and only cross-examined CMS's expert witness. 
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                                                  5. I consider this issue limited to the CMP amount that CMS imposed from October 30, 2014 through November 24, 2014.  Petitioner, in its request for hearing, appealed "CMS' decision to impose a CMP"; however, Petitioner offered no argument in these proceedings with regard to the remaining 28 days of non-immediate jeopardy deficiencies, from November 25, 2014 through December 22, 2014.  See P. Br. at 14-15 (addressing only the $10,000 per-day CMP amount and not the $350 per-day CMP amount). 
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                                                  6. The SOD also asserted that immediate jeopardy existed due to an unlocked janitor's closet that contained cleaning supplies.  I summarize the SOD's findings later in this decision along with the evidence concerning that situation. 
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                                                  7. "Chronic Obstructive Pulmonary Disease, is defined as a disease characterized by airflow limitation (obstruction) that is not fully reversible."  P. Ex. 33 at 2. 
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                                                  8. There are three residents with the initials R.L. referenced in the record.  I designate them R.L.1, R.L.2, and R.L.3 for purposes of this decision. 
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                                                  9. John Hauss, the Franklin Township Director of Fire Prevention since 2003, testified in this proceeding to the repeated findings of his inspectors concerning leaks at Petitioner's facility starting in 2004.  CMS Ex. 110.  Petitioner declined to cross-examine Mr. Hauss.  I find him to be a credible witness because his testimony is consistent with the documents in the record and Petitioner did not contradict his testimony. 
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                                                  10. Petitioner has not disputed the authenticity of the photographs provided with the complaint that was sent to the state agency.  See Franklin, DAB No. 2869 at 5. 
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                                                  11. I credit the surveyor's testimony because Petitioner did not cross-examine the surveyor and the facility administrator did not contradict this testimony in her written direct testimony. 
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                                                  12. Pro-Lab indicated that "ELEVATED means that the amount and/or diversity of spores, as compared to the control sample(s), and other samples in our database, are higher than expected.  This can indicate that fungi have grown because of a water leak or water intrusion.  Fungi that are considered to be indicators of water damage include, but are not limited to:  Chaetomium . . . Memnoniella . . . Stachybotrys, Scopulariopsis . . . ."  CMS Ex. 109 at 2; P. Ex. 13 at 2. 
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                                                  13. This means that it is likely the contamination source.  CMS Ex. 51 at 6; P. Ex. 14 at 6. 
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                                                  14. This means that it may be a contamination source.  CMS Ex. 51 at 6; P. Ex. 14 at 6. 
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                                                  15. "UNUSUAL" means "An abundance of [mold] spores are present, and/or growth structures including hyphae and/or fruiting bodies are present and associated with one or more of the types of mold/fungi identified in the analyzed sample."  CMS Ex. 109 at 3. 
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                                                  16. Dr. Chiodo testified (Tr. at 131-132) as to his review of the documents when rendering his opinion as follows:  		The basis is, of course, the review of all the records.  The records include industrial hygiene test results that show mold contamination of the facility, photographs that show damage to various parts of the facility rooms and the like, the photographs speak for themselves, what appears to be structural damage to the -- to various areas in the building that is decayed walls, what appears to be mold growth on -- visible mold growth.  And, yes, the fire department's records that indicate that there had been long-standing -- that they are consistent with long-standing water intrusions into the building sufficient to have caused concern of the fire department concerning a functionality of the fire detector.  So I mean, this is -- just the -- the entire fact basis is that there has been -- my understanding, and I believe the records reflect this, that there has been long-standing water intrusions into the building.  And this core central problem that leads to risk is water intrusion because water intrusions lead to mold growth.  Water intrusions lead to issues concerning negative bacteria endotoxin, to dust mite overgrowth, so the totality of the circumstances reflected in the records that I have enumerated in my report. 
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                                                  17. Although Dr. Chiodo mentioned contamination on the second floor of the facility, there is little evidence concerning the second floor.  Certainly, the second floor was uninhabitable due to persistent roof leaks and had been unoccupied for seven years at the time of the survey.  Therefore, the second floor's level of contamination is not as relevant as the mold found on the occupied first floor. 
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                                                  18. Although Petitioner submitted a June 8, 2011 letter from the state agency in which the state agency indicated it recommended a reduction in the scope and severity of the deficiency from "L" to "F," that letter makes it clear CMS had to approve this change.  P. Ex. 29 at 1.  However, the record does not appear to include any confirmation that CMS agreed to the reduction in the scope and severity.  See 42 C.F.R. § 488.431(a)(4). 
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