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

The Claremont Rehab & Living Center d/b/a Claremont of Buffalo Grove,
(CCN: 14-5819),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-12-482
Decision No. CR3307
Date: July 23, 2014
DECISION

Petitioner, The Claremont Rehab & Living Center d/b/a Claremont of Buffalo Grove, was
not in substantial compliance with program participation requirements from January 5,
2012 to February 17, 2012, due to violations of 42 C.F.R. §§ 483.13(c), 483.25(h),
483.30(a), 483.70(a), and 483.75(f).' There is a basis for the imposition of enforcement
remedies. The declaration of immediate jeopardy was not clearly erroneous. The
following enforcement remedy is reasonable: a civil money penalty (CMP) of $3,050 per
day for January 5 and 6, 2012 and $300 per day for January 7 through February 17, 2012,
for a total CMP of $18,700.
I. Background
Petitioner is located in Buffalo Grove, Illinois, and participates in Medicare as a skilled

nursing facility (SNF) and the state Medicaid program as a nursing facility (NF). On
January 11, 2012, the Illinois Department of Public Health (state agency) completed a

' References are to the 2011 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise stated.
complaint investigation and partial extended survey at Petitioner’s facility. The state
agency concluded that Petitioner was not in substantial compliance with program
participation requirements due to violations of 42 C.F.R. §§ 483.13(c), 483.25(h), and
483.75(f).” Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 5. The state
agency completed an annual life safety code survey on February 15, 2012, and concluded
that Petitioner was not in substantial compliance due to a violation of 42 C.F.R.

§ 483.70(a) based on eight life safety code violations. CMS Ex. 53. On February 17,
2012, the state agency completed an annual licensure and certification survey and
concluded that Petitioner was not in substantial compliance due to a violation of

42 C.F.R. § 483.30(a). CMS Ex. 21. CMS notified Petitioner by letter dated May 16,
2012, that the state agency determined that Petitioner returned to substantial compliance
effective February 18, 2012, and that CMS was imposing the following enforcement
remedy based on the deficiencies cited in the three surveys: a CMP of $3,050 per day for
January 5 and 6, 2012 and $300 per day for January 7 through February 17, 2012, a total
CMP of $18,700.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
March 19, 2012. Petitioner challenged the findings and conclusions of all three surveys
and the proposed enforcement remedy. The case was assigned to me for hearing and
decision on March 30. 2012, and an Acknowledgement and Prehearing Order was issued
at my direction. On January 29, 2013, a hearing was convened by video teleconference.
A transcript (Tr.) of the proceedings was prepared. CMS offered CMS exhibits (CMS
Exs.) 1 through 56 that were admitted as evidence. Tr. 34. Petitioner offered Petitioner
exhibits (P. Exs.) 1 through 3 that were admitted as evidence. Tr. 37. CMS called
Surveyor Patricia Campbell, RN, as a witness. Petitioner called the following witnesses:
Concepcion Paloma, RN, Petitioner’s Director of Nursing (DON); Merle Punzalan, RN;
and Jackelin Yang, RN. The parties filed post-hearing briefs (CMS Br. and P. Br.,
respectively) and post-hearing reply briefs (CMS Reply and P. Reply, respectively).

IL. Discussion
A. Issues

Whether there is a basis for the imposition of an enforcement
remedy; and,

Whether the remedy imposed is reasonable.

2 Originally cited as a violation of 42 C.F.R. § 483.75(e)(4) (Tag F495), but amended to
a violation of 42 C.F.R. § 483.75(f) by informal dispute resolution. CMS Ex. 5 at 34-38.
B. Applicable Law

The statutory and regulatory requirements for participation of a SNF in Medicare are at
section 1819 of the Social Security Act (Act) and 42 C.F.R. pt. 483. Section 1819(h)(2)
of the Act authorizes the Secretary of Health and Human Services (Secretary) to impose
enforcement remedies against a SNF for failure to comply substantially with the federal
participation requirements established by sections 1819(b), (c), and (d) of the Act. The
Act requires that the Secretary terminate the Medicare participation of any SNF that does
not return to substantial compliance with participation requirements within six months of
being found not to be in substantial compliance. Act § 1819(h)(2)(C). The Act also
requires that the Secretary deny payment of Medicare benefits for any beneficiary
admitted to a SNF, if the SNF fails to return to substantial compliance with program
participation requirements within three months of being found not to be in substantial
compliance — commonly referred to as the mandatory or statutory DPNA. Act
1819(h)(2)(D). The Act grants the Secretary discretionary authority to terminate a
noncompliant SNF’s participation in Medicare, even if there has been less than 180 days
of noncompliance. The Act also grants the Secretary authority to impose other
enforcement remedies, including a discretionary DPNA, CMPs, appointment of
temporary management, and other remedies such as a directed plan of correction. Act
1819(h)(2)(B).

an

an

The Secretary has delegated to CMS and the states the authority to impose remedies
against a long-term care facility that is not complying substantially with federal
participation requirements. “Substantial compliance means a level of compliance with
the requirements of participation such that any identified deficiencies pose no greater risk
to resident health or safety than the potential for causing minimal harm.” 42 C.F.R.

§ 488.301 (emphasis in original). A deficiency is a violation of a participation
requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary’s
regulations at 42 C.F.R. pt. 483, subpt. B. Noncompliance refers to any deficiency that
causes a facility not to be in substantial compliance; that is, a deficiency that poses a risk
for more than minimal harm. 42 C.F.R. § 488.301. State survey agencies survey
facilities that participate in Medicare on behalf of CMS to determine whether the

> Participation of a NF in Medicaid is governed by section 1919 of the Act. Section
1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply
with the participation requirements established by sections 1919(b), (c), and (d) of the
Act.
facilities are complying with federal participation requirements. 42 C.F.R. §§ 488.10-.28,
488.300-.335. The regulations specify the enforcement remedies that CMS may impose
if a facility is not in substantial compliance with Medicare requirements. 42 C.F.R.

§ 488.406.

CMS is authorized to impose a CMP for the number of days of noncompliance — a per-
day CMP - or for each instance of noncompliance — a per-instance CMP (PICMP).

42 C.F.R. § 488.430. 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).
“Immediate jeopardy means a situation in which 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 (emphasis in original).
The lower range of CMPs, $50 per day 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). The only range for a PICMP is $1,000 to $10,000. 42 C.F.R.

§§ 488.408, 488(a)(2).

Petitioner was notified in this case that it was ineligible to conduct a nurse aide training
and competency evaluation program (NATCEP) for two years. CMS Ex. 6 at 4.
Pursuant to sections 1819(b)(5) and 1919(b)(5) of the Act, SNFs and NFs may only use
nurse aides who have completed a training and competency evaluation program.
Pursuant to sections 1819(f)(2) and 1919(f)(2) of the Act, the Secretary was tasked to
develop requirements for approval of NATCEPs and the process for review of those
programs. Sections 1819(e) and 1919(e) of the Act impose upon the states the
requirement to specify what NATCEPs they will approve that meet the requirements that
the Secretary established and a process for reviewing and reapproving those programs
using criteria the Secretary set. The Secretary promulgated regulations at 42 C.F.R. pt.
483, subpt. D. Pursuant to 42 C.F.R. § 483.151(b)(2) and (f), a state may not approve
and must withdraw any prior approval of a NATCEP offered by a SNF or NF that has
been: (1) subject to an extended or partial extended survey under sections
1819(g)(2)(B)(i) or 1919(g)(2)(B)(@) of the Act; (2) assessed a CMP of not less than
$5,000; or (3) subject to termination of its participation agreement, a DPNA, or the
appointment of temporary management. Extended and partial extended surveys are
triggered by a finding of “substandard quality of care” during a standard or abbreviated
standard survey and involve evaluating additional participation requirements.
“Substandard quality of care” is identified by the situation where surveyors identify one
or more deficiencies related to participation requirements established by 42 C.F.R.

§ 483.13 (Resident Behavior and Facility Practices), § 483.15 (Quality of Life), or

§ 483.25 (Quality of Care) that are found to constitute either immediate jeopardy, a

pattern of or widespread actual harm that does not amount to immediate jeopardy, or a
widespread potential for more than minimal harm that does not amount to immediate
jeopardy and there is no actual harm. 42 C.F.R. § 488.301.

The Act and regulations make a hearing before an ALJ available to a long-term care
facility against which CMS has determined to impose an enforcement remedy. Act

§§ 1128A(c)(2), 1866(h); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). A facility has a right to
seek review of a “certification of noncompliance leading to an enforcement remedy.”

42 C.F.R. §§ 488.408(g)(1), 488.330(e), 498.3. However, the choice of remedies, or the
factors CMS considered when choosing remedies, are not subject to review. 42 C.F.R.

§ 488.408(g)(2). A facility may only challenge the scope and severity level of
noncompliance determined by CMS if a successful challenge would affect the range of
the CMP that may be imposed or impact the facility’s authority to conduct a NATCEP.
42 C.F.R. § 498.3(b)(14), (d)(10)(i). The CMS determination as to the level of
noncompliance, including the finding of immediate jeopardy, “must be upheld unless it is
clearly erroneous.” 42 C.F.R. § 498.60(c)(2); Woodstock Care Ctr., DAB No. 1726 at 9,
38 (2000), aff’d, 363 F.3d 583 (6th Cir. 2003). The Departmental Appeals Board (the
Board) has long held that the net effect of the regulations is that a long-term care facility
has no right to challenge the scope and severity level assigned to a noncompliance
finding, except in the situation where that finding was the basis for an immediate
jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester
Pavilion, DAB No. 1750 (2000). ALJ review of a CMP is subject to 42 C.F.R.

§ 488.438(e).

The hearing before an ALJ is a de novo proceeding, i.e., “a fresh look by a neutral
decision-maker at the legal and factual basis for the deficiency findings underlying the
remedies.” Life Care Ctr. of Bardstown, DAB No. 2479 at 32 (2012) (citation omitted);
The Residence at Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care, DAB
No. 2030 (2006); Beechwood Sanitarium, DAB No. 1906 (2004); Emerald Oaks, DAB
No. 1800 at 11 (2001); Anesthesiologists Affiliated, DAB No. CR65 (1990), aff'd, 941
F.2d 678 (8th Cir. 1991). The standard of proof is a preponderance of the evidence.
CMS has the burden of coming forward with the evidence and making a prima facie
showing of a basis for the imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, 129 F. App’x 181 (6th Cir. 2005);
Emerald Oaks, DAB No. 1800; Cross Creek Health Care Ctr., DAB No. 1665 (1998);
Hillman Rehab. Ctr., DAB No. 1611 (1997) (remand), DAB No. 1663 (1998) (aft.
remand), aff'd, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999 WL
34813783 (D.N.J. May 13, 1999).

C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis. I have carefully considered all the evidence and the arguments of both parties,
though not all may be specifically discussed in this decision. I discuss in this decision the
credible evidence given the greatest weight in my decision-making.’ I also discuss any
evidence that I find is not credible or worthy of weight. The fact that evidence is not
specifically discussed should not be considered sufficient to rebut the presumption that I
considered all the evidence and assigned such weight or probative value to the credible
evidence that I determined appropriate within my discretion as an ALJ. There is no
requirement for me to discuss the weight given every piece of evidence considered in this
case, nor would it be consistent with notions of judicial economy to do so. Charles H.
Koch, Jr., Admin. L. and Prac. § 5:64 (3d ed. 2013).

Petitioner was cited by the survey completed on January 11, 2012, for noncompliance
with 42 C.F.R. §§ 483.13(c), 483.25(h), and 483.75(f). The alleged noncompliance with
42 C.F.R. § 483.25(h) was cited as an isolated incident of immediate jeopardy. CMS Ex.
5. The life safety survey completed on February 15, 2012, cited Petitioner for
noncompliance with 42 C.F.R. § 483.70(a). CMS Ex. 53. The February 17, 2012, survey
cited Petitioner for noncompliance with 42 C.F.R. § 483.30(a). CMS Ex. 21. Petitioner
requested a hearing as to all deficiency citations and enforcement remedies. However,
prior to hearing, the parties stipulated that Petitioner now challenges only the declaration
of immediate jeopardy related to 42 C.F.R. § 483.25(h) (Tag F323) and the
reasonableness of the CMP proposed by CMS. Joint Stipulation of Issues. The parties
agreed at hearing that Petitioner contests only the declaration of immediate jeopardy
related to Tag F323 and the reasonableness of the CMP. Tr. 16-17. In post-hearing
briefing Petitioner concedes that it was not in substantial compliance with 42 C.F.R.

§ 483.25(h) (Tag F323). P. Br. at 2; P. Reply at 2. Petitioner also affirms that it
challenges only the declaration of immediate jeopardy related to Tag F323 (P. Br. at 2;
P. Reply at 2) and the reasonableness of the CMP, if I conclude that the declaration of
immediate jeopardy was clearly erroneous. P. Br. at 17; P. Reply at 7. Accordingly, I
conclude:

* “Credible evidence” is evidence that is worthy of belief. Black's Law Dictionary 596
(8" ed. 2004). The “weight of evidence” is the persuasiveness of some evidence
compared to other evidence. Id. at 1625.
1. Petitioner violated 42 C.F.R. §§ 483.13(c) (Tag F226), 483.25(h) (Tag
F323), 483.30(a) (Tag F353), 483.70(a) (Tag F454), and 483.75(f) (Tag
F498).

2. Petitioner’s violations of 42 C.F.R. §§ 483.13(c) (Tag F226),
483.25(h) (Tag F323), and 483.75(f) (Tag F498) caused actual harm to
Resident 3.

3. Petitioner’s violations of 42 C.F.R. §§ 483.30(a) (Tag F353) and
483.70(a) (Tag F454) posed a risk for more than minimal harm for
Petitioner’s residents with no actual harm.

4. The violations of 42 C.F.R. §§ 483.13(c) (Tag F226), 483.25(h) (Tag
F323), 483.30(a) (Tag F353), 483.70(a) (Tag F454), and 483.75(f) (Tag
F498) are an adequate basis for the imposition of an enforcement
remedy.

The issues remaining for decision are whether the violation of 42 C.F.R. § 483.25(h) (Tag
F323) posed immediate jeopardy; and whether, if there was immediate jeopardy, a CMP
of $3,050 per day for two days is a reasonable enforcement remedy.

5. The declaration of immediate jeopardy for two days based upon the
violation of 42 C.F.R. § 483.25(h) (Tag F323) was not clearly erroneous.

a. Facts

The parties stipulated to the following facts in their Joint Stipulation of Facts dated
August 24, 2012 (Jt. Stip.):

Resident 3 was a 75-year-old woman readmitted to Petitioner’s facility on
December 5, 2011, following a hospitalization for the fracture of her right upper
leg due to a fall. CMS Ex. 14 at 1, 7, 11, 129; Jt. Stip. ¢ 5.

Resident 3 also suffered from coronary artery disease, diabetes, and renal disease
that required hemodialysis, among other conditions. CMS Ex. 4 at 10-11; CMS
Ex. 14 at 1, 61, 63; Jt. Stip. 45.

Resident 3 wore an immobilizer on her right leg due to the fracture, and her
physician ordered that she not bear weight on her leg. Resident 3’s December 8,
2011 therapy assessment showed that Resident 3 could not bear weight on her
lower extremities, and required the use of a mechanical lift for transfers. CMS Ex.
5 at 10-11; CMS Ex. 14 at 73, 86, 113, 126-29; Jt. Stip. § 6.

¢ On December 10, 2011, at 10 a.m., Employee 16, a certified nurse aide (CNA),
transferred Resident 3 by himself using a Hoyer lift. During the course of the
transfer, Resident 3’s right cheek hit the Hoyer lift resulting in pain, but no bruises
or skin tears. CMS Ex. 5 at 8-9; CMS Ex. 14 at 9, 14; Jt. Stip. § 7.

e Nurses notified Resident 3’s physician about the accident at 1:21 p.m. on
December 10, 2011. The physician ordered Petitioner to hold Resident 3’s second
dose of heparin, an anticoagulant or blood thinner, that evening and told
Petitioner’s staff to ice Resident 3’s cheek if swelling occurred. CMS Ex. 14 at 9,
14; Jt. Stip. J 8.

e Four days later, on December 14, 2011, Employee 15, a CNA, also transferred
Resident 3 by himself using a Hoyer lift. Resident 3 fell out of the Hoyer lift sling
onto the floor, hitting her head and right shoulder. CMS Ex. 5 at 9-13; CMS Ex.
14 at 3-4, 13-14; Jt. Stip. | 9.

e The hospital report on December 14, 2011, shows that Resident 3 sustained a
comminuted right-side scapular fracture and multiple right-sided rib fractures as a
result of the fall from the lift sling. CMS Ex. 5 at 9-10; CMS Ex. 14 at 44; Jt. Stip.
4 10.

Surveyor Patricia Campbell, RN, testified that she cited immediate jeopardy in this case
for the following reasons: on December 14, 2011, Resident 3 experienced serious
injuries due to the fall from the Hoyer lift; Resident 3 was 72 years old; Resident 3
suffered multiple fractured ribs and a fractured scapula; Resident 3 was on heparin and
had an increased risk for bleeding due to trauma. Surveyor Campbell testified that
heparin prevents the formation of blood clots and any kind of trauma can cause internal
bleeding. Resident 3 hit her head when she fell on December 14, and the fact she was
taking heparin made her more susceptible to a subdural hematoma (bleeding in the skull)
which could cause brain damage, coma, or death. Resident 3’s fractured right scapula
and rib fractures also posed a risk for uncontrolled bleeding of organs or tissue. Surveyor
Campbell testified that she also considered that Resident 3 suffered pain due to the injury
resulting from the incorrect Hoyer lift procedure on December 10, 2011. Tr. 48-51, 59-
61. Surveyor Campbell also testified that while Petitioner’s staff trained on correct
procedures, she found no evidence that the facility monitored staff to ensure that Hoyer
lift transfers were properly performed using a two-person assist and that sufficient
assistance was provided in the day-to-day care of Resident 3 and other residents. Tr. 58,
60.

Concepcion Paloma, RN, Petitioner’s DON, testified in response to my questions that
Resident 3 suffered serious injuries on December 14, 2011. Tr. 137-38.
Petitioner elicited testimony from Merle Punzalan, RN, one of Petitioner’s nursing
supervisors. Tr. 146-47. On cross-examination she agreed that because Resident 3 was
on heparin, the physician was called and he ordered that Resident 3 be sent to the
hospital. Tr. 153.

Petitioner also called Jackelin Yang, RN, an employee of Petitioner, to testify. Tr. 162-
63. RN Yang testified that because Resident 3 was on an anticoagulant and claimed to
have hit her head, she called the physician for an order to send Resident 3 to the hospital
for further evaluation. Tr. 166, 176-77.

b. Analysis

Petitioner concedes that on December 10 and 14, 2011, there were violations of 42 C.F.R.
§ 483.25(h) (Tag F323), for which Petitioner is responsible. Petitioner’s Prehearing Brief
at 1, 9; P. Br. at 2; P. Reply at 2. The regulation requires:

The facility must ensure that—

(1) The resident environment remains as free from accidents hazards as is
possible; and

(2) Each resident receives adequate supervision and assistance devices to
prevent accidents.

42 C.F.R. § 483.25(h). The surveyors cited this deficiency at a scope and severity of J
(CMS Ex. 5 at 7), which means an isolated incident that posed immediate jeopardy to
resident health and safety. 42 C.F.R. § 488.404; State Operations Manual, pub. 100-07
(SOM), ch. 7, § 7400.5. CMS’s position before me is that there was immediate jeopardy
due to the admitted violation of 42 C.F.R. § 483.25(h). As discussed in more detail in the
following analysis, the issue before me is whether the determination that there was an
isolated incident of immediate jeopardy was clearly erroneous.

The parties stipulated that on December 10, 2011, Resident 3 was hit on the right check
with a part of the Hoyer lift, resulting in a complaint of pain by Resident 3. Resident 3’s
physician ordered that staff hold her second prescribed dose of anticoagulant for that
evening. Jt. Stip. §§ 7, 8. The parties stipulated that on December 14, 2011, Resident 3
fell from the Hoyer lift sling, striking her head and right shoulder on the floor, resulting
in a fracture of her right scapula and fractured ribs. Jt. Stip. § 9, 10. RN Yang testified
that because Resident 3 was on an anticoagulant and claimed to have hit her head, RN
Yang called the physician for an order to send Resident 3 to the hospital for further
evaluation. Tr. 166, 176-77. RN Punzalan agreed that because Resident 3 was on
heparin, the physician was called and he ordered that Resident 3 be sent to the hospital.
Tr. 153. Surveyor Campbell testified that she cited immediate jeopardy because Resident
3 experienced serious injuries due to her fall on December 14, 2011, and because she was

10

on an anticoagulant, she was at increased risk for internal bleeding, including the risk of
bleeding in the skull that could cause coma or death. Tr. 48-51, 59-61. Surveyor
Campbell’s testimony is unrebutted and is consistent with the fact that Petitioner’s nurses
recognized the increased risk for bleeding associated with anticoagulant use and
contacted the physician who ordered holding one dose of heparin on December 10, 2011,
and ordered Resident 3 to the hospital on December 14, 2011.

The evidence supports a conclusion that there was immediate jeopardy* because
Petitioner’s admitted noncompliance with 42 C.F.R. § 483.25(h) “caused, or was likely to
cause, serious injury, harm, impairment, or death to a resident.” 42 C.F.R. §§ 488.301,
489.3. The CMS determination as to the level of noncompliance, including the finding of
immediate jeopardy, “must be upheld unless Petitioner can meet the burden of showing
that the declaration of immediate jeopardy was clearly erroneous.” 42 C.F.R.

§ 498.60(c)(2); Woodstock Care Ctr., DAB No. 1726 at 9, 38. I conclude that Petitioner
has not met its burden in this case.

Before addressing Petitioner’s specific arguments, it is necessary to consider first the
meaning of immediate jeopardy, what the Act and regulations provide, and the principles
adopted by various appellate panels of the Board.

The Act requires that if the state survey agency finds that a facility’s deficiencies
“immediately jeopardize the health or safety” of the facility’s residents, the state is to
recommend that the Secretary take action to remove jeopardy and correct the deficiencies
through the appointment of temporary management, or terminate the facility’s
participation. Act § 1819(h)(1)(A). Congress granted the Secretary authority and
required that, if a facility is found to no longer meet the conditions for participation and
the facility’s deficiencies “immediately jeopardized the health or safety of its residents,”
the Secretary is to remove the jeopardy and correct the deficiencies through the
appointment of temporary management or terminate the facility’s participation. Act
§1819(h)(2)(A)(i) and (4); see also Act § 1919(h)(3)(B)(i) and (5) (enforcement
procedures for NFs are similar to those for SNFs). The phrase “immediately jeopardize”
is not defined in the statutes. However, the context suggests that Congress intended that
the phrase be given its plain meaning and to be applied if there was any potential of
instantaneous or proximate, hazard or risk for harm to the health or safety of a long-term
care facility resident.

> The evidence also supports a conclusion that Resident 3 suffered actual harm on
December 10 and 14, 2011. However, whether or not there was immediate jeopardy is
not dependent upon a determination that there was actual harm.
11

The phrase “immediate jeopardy,” which seems to have derived from the statutory
“immediately jeopardize,” is given a specific and different effect or meaning by the
Secretary through regulation. “/mmediate jeopardy” under the regulations refers to a
situation “in which 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, 489.3 (emphasis in original). Thus, “immediate
jeopardy” under the regulation refers only to serious injury, serious harm, serious
impairment, or death; whereas the statutory “immediately jeopardize” refers to any
imminent risk to a resident no matter how severe. In the context of survey, certification,
and enforcement related to SNFs and NFs under the regulations, a conclusion by the state
agency and CMS that noncompliance with program participation requirements poses
immediate jeopardy to the facility residents triggers specific regulatory provisions that
require enhanced enforcement remedies, including authority for CMS to impose a larger
CMP than may be imposed when there is no declaration of immediate jeopardy.

42 C.F.R. §§ 488.408(e), 488.438(a)(1)(i), (c), and (d). The regulations also require
termination of the facility’s provider agreement on an expedited basis or the removal of
the immediate jeopardy through appointment of temporary management. 42 C.F.R.

§§ 488.410, 488.440(g), 488.456, 489.53(d)(2)(B)(ii).

Pursuant to 42 C.F.R. § 498.3(d)(10), a finding by CMS that deficiencies pose immediate
jeopardy to the health or safety of a facility’s residents is not an initial determination that
triggers a right to request a hearing by an ALJ or that is subject to review. A finding of
noncompliance that results in the imposition of an enforcement remedy, except the
remedy of monitoring by the state, does trigger a right to request a hearing and is subject
to review. 42 C.F.R. §§ 488.408(g); 498.3(b)(8) and (13). Furthermore, the level of
noncompliance, i.e. scope and severity, is subject to review only if a successful challenge
would affect: (1) the amount of CMP that may be imposed, i.e. the higher range of CMP
authorized for immediate jeopardy; or (2) a finding of substandard quality of care that
rendered the facility ineligible to conduct a NATCEP. 42 C.F.R. § 498.3(b)(14) and (16).
Pursuant to 42 C.F.R. § 498.60(c)(2), in reviewing a CMP, the ALJ must uphold the
CMS determination of the level of noncompliance (i.e. scope and severity), unless it is
clearly erroneous.°

© Petitioner argues that burdening Petitioner to show that the declaration of immediate
jeopardy was clearly erroneous without requiring that CMS first establish a prima facie
showing of the existence of immediate jeopardy violates the Administrative Procedure
Act, 5 U.S.C. § 556(d). P. Br. at 15-17. Although I must construe and apply the
regulations consistent with the Constitution, Act, and other statutory requirements, I may
not upset the Secretary’s regulations on grounds that they do not comply with the
Constitution and statutes. Buena Vista Care Ctr., DAB No. 2498, at 20-22 (2013).

(Footnote continued next page.)
12

Petitioner correctly notes that the phrase “clearly erroneous” is not defined by the
Secretary in the regulations. P. Br. at 12; P. Reply at 2. Many appellate panels of the
Board have discussed “immediate jeopardy” and “clearly erroneous.” In Mississippi
Care Center of Greenville, DAB No. 2450, at 15 (2012), the Board commented:

CMS’s determination that a deficiency constitutes immediate
jeopardy must be upheld unless the facility is able to prove
that the determination is clearly erroneous. 42 C.F.R. §
498.60(c)(2); Woodstock Care Center. 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).

(Footnote continued.)

However, I also note that in this case CMS did present some evidence of the basis for the
existence of immediate jeopardy.

T Some of the often cited: Lakeport Skilled Nursing Ctr., DAB No. 2435, at 6 (2012);
Liberty Health & Rehab. of Indianola, LLC, DAB No. 2434, at 12, 19 (2011); Yakima
Valley School, DAB No. 2422, at 7 (2011); Lutheran Home at Trinity Oaks, DAB No.
2111 (2007); Daughters of Miriam Center, DAB No. 2067 (2007); Britthaven of
Havelock, DAB No. 2078 (2007); Koester Pavilion, DAB No. 1750 (2000); Woodstock
Care Ctr., DAB No. 1726 (2000).
13

The Board’s statement that the CMS immediate jeopardy determination is entitled to
deference is subject to being misunderstood to limit ALJ and Board review of immediate
jeopardy beyond what was intended by the drafters of the regulations. In the notice of
final rulemaking on November 10, 1994, the drafters of 42 C.F.R. § 498.60(c)(2),
discussing the merits of the reviewability of deficiency citations, selection of remedy, and
scope and severity, commented:

We believe that a provider's burden of upsetting survey
findings relating to the level of noncompliance should be
high, however. As we indicated in the proposed rule,
distinctions between different levels of noncompliance,
whether measured in terms of their frequency or seriousness,
do not represent mathematical judgments for which there are
clear or objectively measured boundaries. Identifying failures
in a facility's obligation to provide the kind of high quality
care required by the Act and the implementing regulations
most often reflect judgments that will reflect a range of
noncompliant behavior. Thus, in civil money penalty cases,
whether deficiencies pose immediate jeopardy, or are
widespread and cause actual harm that is not immediate
jeopardy, or are widespread and have a potential for more
than minimal harm that is not immediate jeopardy does not
reflect that a precise point of noncompliance has occurred,
but rather that a range of noncompliance has occurred which
may vary from facility to facility. While we understand the
desire of those who seek the greatest possible consistency in
survey findings, an objective that we share, the answer does
not lie in designing yardsticks of compliance that can be
reduced to rigid and objectively calculated numbers. Survey
team members and their supervisors ought to have some
degree of flexibility, and deference, in applying their
expertise in working with these less than perfectly precise
concepts. For these reasons, we have revised the
regulations to require an administrative law judge or
appellate administrative review authority to uphold State
or HCFA findings on the seriousness of facility
deficiencies in civil money penalty cases unless they are
clearly erroneous.

59 Fed. Reg. 56,116, 56,179 (Nov. 10, 1994) (emphasis added). It is clear from this
regulatory history, that the drafters of 42 C.F.R. § 498.60(c)(2) ensured that the state
agency or CMS determination that there was immediate jeopardy would receive
deferential consideration, by adopting the clearly erroneous standard of review. Thus,
14

caution must be exercised to ensure that the Board’s decision in Miss. Care Ctr. of
Greenville at 15, and other decisions that have mentioned deference relative to immediate
jeopardy not be read to require deference for the determination that there was immediate
jeopardy beyond that imposed by adoption of the clearly erroneous standard. Giving or
requiring that the immediate jeopardy determination be given deference in addition to
applying the “clearly erroneous standard” would be contrary to the intent of the drafters
of the regulation; would significantly limit the review of the determination by an ALJ and
the Board; and would impermissibly deny an affected party the due process right to
review intended by the drafters of the regulation.

In the foregoing quotation from Mississippi Care Center of Greenville, that panel of the
Board states that the clearly erroneous standard means that “the immediate jeopardy
determination is presumed to be correct, and the burden of proving the determination
clearly erroneous is a heavy one.” Mississippi Care Center of Greenville at 15. Similar
formulations have been used in other Board decisions when referring to the “clearly
erroneous standard.” However, the Board’s characterization of the “clearly erroneous
standard” in Mississippi Care Center of Greenville and other cases does not actually
define the standard.

The “clearly erroneous standard” is described in Black’s Law Dictionary as a standard of
appellate review applied in judging the trial court’s treatment of factual issues, under
which a factual determination is upheld unless the appellate court has the firm conviction
that an error was committed. Black’s Law Dictionary 269 (8th ed. 2004). The Supreme
Court has addressed the “clearly erroneous standard” in the context of the Administrative
Procedure Act (APA), 5 U.S.C. §§ 551-59. The Court described the preponderance of
the evidence standard, the most common standard, as requiring that the trier-of-fact
believe that the existence of a fact is more probable than not before finding in favor of the
party that had the burden to persuade the judge of the fact’s existence. In re Winship, 397
USS. 358, 371-72 (1970); Concrete Pipe and Prods.s of Cal., Inc. v. Constr. Laborers,
508 U.S. 602, 622 (1993). The “substantial evidence” is an appellate standard of review
that considers whether a reasonable mind might accept a particular evidentiary record as
adequate to support a conclusion. Consol. Edison, 305 U.S. 197, 229 (1938); Dickinson
v. Zurko, 527 U.S. 150, 162 (1999). Under the “clearly erroneous” standard, a finding is
clearly erroneous even though there may be some evidence to support it if, based on all
the evidence, the reviewing judge or authority has a definite and firm conviction that an
error has been committed. United States v. U. S. Gypsum Co., 333 U.S. 364, 395 (1948);
Dickinson, 527 U.S. at 162; Concrete Pipe, 508 U.S. at 622. The clearly erroneous
standard has been characterized by the Court as being stricter than the substantial

15

evidence test and significantly deferential.* The Court stressed in discussing the clearly
erroneous standard the importance of not simply rubber-stamping agency fact-finding.
The Court also commented that the APA requires meaningful review. Dickinson, 527
US. at 162 (citations omitted); Concrete Pipe, 508 U.S. at 622-23.

Although the definition in Black’s and the Supreme Court decisions treats the “clearly
erroneous standard” as a standard applied on appeal to judge factual conclusions similar
to the substantial evidence test, the drafters of 42 C.F.R. § 498.60 adopted the “clearly
erroneous” standard and made it applicable to both the ALJ level for application in the
trial de novo and to review by the Board. At the ALJ level for cases subject to 42 C.F.R.
§ 498.60(c), the “clearly erroneous” standard must be applied as an evidentiary standard
establishing the quantum of evidence required to support a conclusion that CMS and the
state agency erred in declaring immediate jeopardy. Based on the foregoing authorities,
the quantum of evidence required by the “clearly erroneous” standard to overcome the
declaration of immediate jeopardy is sufficient evidence to cause a definite and firm
conviction that the declaration of immediate jeopardy was in error.

Various panels of the Board have recognized principles applicable to the review of the
immediate jeopardy issue. A finding of immediate jeopardy does not require a finding of
actual harm, only a likelihood of serious harm. Dumas Nursing and Rehab., L.P., DAB
No. 2347, at 19 (2010), citing Life Care Ctr. of Tullahoma, DAB No. 2304, at 58 (2010),
aff'd, Life Care Ctr. of Tullahoma v. Sebelius, No. 10-3465 (6th Cir., Dec. 16, 2011).

The definition of immediate jeopardy at 42 C.F.R. § 488.301 does not define “likelihood”
or establish any temporal parameters for potential harm. Agape Rehab. of Rock Hill,
DAB No. 2411, at 18-19 (2011). The duration of the period of immediate jeopardy is
also subject to the clearly erroneous standard. Brian Ctr. Health and Rehab./Goldsboro,
DAB No. 2336, at 7-8 (2010). There is a difference between “likelihood” as required by
the definition of immediate jeopardy and a mere potential. A synonym for “likely” is
“probable,” which suggests a greater degree of probability that an event will occur than
suggested by such terms as “possible” or “potential.” Daughters of Miriam Ctr., at 10.
“Jeopardy” generally means danger, hazard, or peril. The focus of the immediate
jeopardy determination is how imminent the danger appears and how serious the potential

® The Board’s characterization of the clearly erroneous standard as being highly
deferential to the fact-finding by the state agency surveyor and CMS, and even triggering
a rebuttal presumption, is entirely consistent with the Supreme Court’s characterization of
the standard. However, the Court’s cautions about ensuring meaningful review rather
than rubber-stamping agency decisions show it is important for the ALJ and the Board
not to be tempted to simply defer to the surveyor, the state agency, or CMS on the
immediate jeopardy issue.
16

consequences would be. Woodstock Care Ctr., DAB No. 1726 (2000). The SOM, app.
Q, is guidance issued by CMS that is instructive but is not a controlling substantive rule
like the regulations. Green Oaks Health and Rehab. Ctr.r, DAB No. 2567 at 10 (2014),
citing Agape Rehab. of Rock Hill, DAB No. 2411, at 19 and Foxwood Springs Living
Ctr., DAB No 2294, at 9.

What is the meaning of “serious injury, harm, or impairment” as used in the definition of
“immediate jeopardy” found in 42 C.F.R. § 488.301? How does serious injury, harm, or
impairment compare with “actual harm?” On the first question, the Board recognized in
Yakima Valley School, DAB No. 2422, at 8 (2011), that the regulations do not define or
explain the meaning of the term “serious” as used in the definition of immediate
jeopardy.” The Board suggested that the definitions may be unimportant as the Board has
held that, under the “clearly erroneous” standard, once the state agency or CMS declares
immediate jeopardy, there is a presumption that the actual or threatened harm was serious
and the facility can only rebut the presumption of immediate jeopardy by showing that
the harm or threatened harm meets no reasonable definition of the term “serious.”

Yakima Valley Sch., DAB No. 2422, at 8, citing Daughters of Miriam Ctr. DAB No. 2067
at 9. In Daughters of Miriam Ctr, the Board discussed that the ALJ attempted to define
“serious,” finding meanings such as dangerous, grave, grievous, or life-threatening. The
Board notes that the ALJ stated that serious harm is outside the ordinary, requiring
extraordinary care, or having lasting consequences. The Board further noted that the ALJ
stated that a serious injury may require hospitalization, or result in long-term impairment,
or cause severe pain as opposed to harm, injury, or impairment that is temporary, easily
reversible with ordinary care, does not cause a period of incapacitation, heals without
special medical intervention, or does not cause severe pain. The Board did not endorse or
adopt the ALJ’s definitional exercise but concluded that it was simply unnecessary in the
context of that case. The Board reasoned, as already noted, that the facility bore the
burden to rebut the presumption by showing that the actual or threatened harm met no
reasonable definition of serious. Daughters of Miriam Ctr., DAB No. 2067 at 9.

° Appendix Q of the SOM also fails to provide surveyors a working definition of the
term “serious” that they can use to determine whether harm, injury, or impairment is
serious when deciding whether or not to declare immediate jeopardy. The Act does not
define the phrase immediately jeopardize as previously discussed in this decision and
does not introduce the concept of serious harm, injury, or impairment as the basis for
finding immediate jeopardy. Thus, one is not in error concluding that absent a definition
of the term “serious” in the Act, the regulations, the SOM, or decisions of the Board, it is
essentially up to individual surveyors and whatever unpublished guidance they receive
from their superiors or CMS officials, to exercise their individual discretion and
judgment to decide that there was immediate jeopardy, which subjects a facility to the
maximum imposable CMPs.

17

My review of the evidence in this case causes no definite or firm conviction that the
declaration of immediate jeopardy was in error. The evidence shows that there was an
imminent risk for and a high probability of serious injury, harm, impairment, or death of
Resident 3. Resident 3 suffered fractures, which I consider to be serious injuries,
particularly given her age and her complaints of pain. Furthermore, because Resident 3
was on heparin, there was a high risk or probability that she would suffer internal
bleeding, which is serious and could lead to death if not promptly and appropriately
treated. The degree of the risk associated with anticoagulant use and possible internal
bleeding and the immediacy of the risk are established not only by the surveyor’s
testimony, but also by the testimony of Petitioner’s nurses that they recognized the risk as
well as by the speed with which Petitioner’s nurses and the physician effected Resident
3’s transfer to the hospital. Petitioner has not presented evidence that tends to show that
there was no risk for serious injury, harm, impairment, or death, or that such risk was not
probable or imminent.

Petitioner argues that the declaration of immediate jeopardy in this case is inconsistent
with the policy guidance of CMS in the SOM. P. Br. at 3-7; P. Reply at 3-4. The SOM is
CMS’s guidance to surveyors. The SOM does not have the force and effect of law.
Green Oaks Health and Rehab. Ctr., DAB No. 2567 at 10. The SOM reflects the CMS
interpretation and understanding of how the Act and regulations should be applied, and
reference to the SOM for that purpose may be helpful. However, my review of whether
there is a basis for imposition of an enforcement remedy is de novo. I do not review
whether or not the state agency or CMS acted in accordance or consistent with
interpretive rules of CMS found in the SOM. Rather, I am bound to follow the provisions
of the Act and regulations related to immediate jeopardy as discussed earlier in this
analysis.

Petitioner argues that the determination of immediate jeopardy requires a finding that
residents other than Resident 3 faced the likelihood of serious injury, harm, impairment,
or death. P. Br. at 7-9, 13. Petitioner asserts that there is not substantial evidence in this
case that there was a likelihood of harm, serious injury, or death for other residents.

P. Br. at 15. Petitioner incorrectly quotes 42 C.F.R. § 488.301 as stating “. . . likely to
cause serious injury, harm, impairment or death to other residents in the facility
[emphasis added].” P. Br. at 7. In fact, the definition of “immediate jeopardy” set forth
in 42 C.F.R. § 488.301 provides that immediate jeopardy “is a situation in which . . .
noncompliance . . . has caused, or is likely to cause, serious injury, harm, impairment, or
death to a resident.” Resident 3 was “a resident” and the conclusion that there was
immediate jeopardy for her alone is sufficient. Petitioner cites no other authority to
support the argument that there must be a showing that other residents were also at risk.

Petitioner argues that immediate jeopardy is not supported by substantial evidence in this
case. P. Br. at 13, 15. The standard of proof and quantum of evidence required to
18

establish a fact in this proceeding is generally a preponderance of the evidence. The
substantial evidence test is not one applied at the ALJ level. Magnolia Estates Skilled
Care, DAB No. 2228 at 12 (2009). As already discussed in detail, immediate jeopardy
involves the application of a different evidentiary standard before me. The applicable
standard is that required by 42 C.F.R. § 498.60(c)(2), which specifies that the CMS
determination of the level of noncompliance, immediate jeopardy in this case, must be
upheld unless it is clearly erroneous. The regulation does not specify that Petitioner bears
the burden of coming forward with the evidence and the burden of persuasion on that
issue, but that has consistently been the approach followed by the Board in the cases
discussed above.

Petitioner argues that it is unlikely that its staff would disregard the facility policy for a
two-person assist with Hoyer lifts. P. Br. at 8, 14; P. Reply at 5. It is not clear to me
whether Petitioner’s argument refers to the future or to the accidents involving Resident
3. Petitioner conceded a violation of 42 C.F.R. § 483.25(h) (Tag F323) on the facts
stipulated, including the fact that its staff did violate the alleged policy. Jt. Stip. § 7, 9.
Whether or not staff will in the future comply with Petitioner’s policy requiring a two-
person assist with the Hoyer lift, does not impact my determination that there was
immediate jeopardy for Resident 3 in the past. The issue is whether Petitioner’s
noncompliance posed immediate jeopardy. Petitioner argues that there is overwhelming
evidence that Petitioner trained its staff in safety and fall prevention related to transfers.
Petitioner also argues that the surveyor reviewed Petitioner’s accident and incident
reports and found no accidents similar to those involving Resident 3. P. Br. at 14; P.
Reply at 5-6. Petitioner conceded that it violated 42 C.F.R. § 483.25(h), and Petitioner’s
arguments do not tend to show that the declaration of immediate jeopardy was clearly
erroneous. The surveyor clearly recognized the isolated nature of the deficiency and
related jeopardy, given that the deficiency was cited at scope and severity of “J” in the
Statement of Deficiencies. CMS Ex. 5 at 7. Petitioner’s training of staff and its policy
may have been considered by the surveyor in determining that Petitioner abated
immediate jeopardy and returned to substantial compliance. The surveyor was clearly
convinced that the last day of immediate jeopardy was January 7, 2011, and I do not
review whether or not the determination that immediate jeopardy was abated was correct.

Petitioner argues that the manufacturer’s instructions for use of the Hoyer lift indicate
that one person can do a transfer. P. Br. at 9; CMS Ex. 19. Petitioner reasons that it
would be unlikely that the manufacturer would suggest a one-person transfer with the lift
if there was a risk for serious injury, impairment, harm, or death associated with a one-
person transfer. P. Br. at 8. The manufacturer actually recommends the use of two
people to effect a transfer. The manufacturer clearly states that a one-person transfer is
possible with the equipment. However, the manufacturer also states that the decision to
do a one-person transfer should be based on the evaluation of a health care professional
in each case. CMS Ex. 19 at 8. Petitioner also argues that there is no evidence that
Resident 3 actually required two people to perform her transfers with a Hoyer lift for
19

safety or other reasons. P. Br. at 10. Petitioner’s argument overlooks that Petitioner
conceded that it was not in substantial compliance with 42 C.F.R. § 483.25(h), based on
the stipulated facts related to the December 10 and 14, 2011 accidents involving Resident
3. Therefore, Petitioner’s factual arguments related to whether or not two people were
required to transfer Resident 3, either based on manufacturer recommendations or some
medical evaluation of Resident 3, are without merit.

Petitioner argues that CMS provides no support for the determination that Petitioner’s
noncompliance posed immediate jeopardy “[a]part from merely stating that petitioner’s
noncompliance was at the severity level of immediate jeopardy.” P. Br. at 12.
Petitioner’s assertion is inaccurate. CMS offered the Statement of Deficiencies, the
testimony of the surveyor that declared immediate jeopardy, and various records obtained
from Petitioner during the survey that record the accidents on December 10 and 14, 2011,
and the nature and seriousness of Resident 3’s injuries. Petitioner also stipulated to the
facts. Jt. Stip. CMS does not bear the burden of coming forward with the evidence and
making a prima facie showing; however, the CMS evidence is clearly sufficient to show
that it was more likely than not that Resident 3 suffered and was likely to suffer, serious
injury, harm, impairment or death as a result of Petitioner’s noncompliance.

I conclude that Petitioner has failed to meet its burden to show that the declaration of
immediate jeopardy was clearly erroneous.

6. Petitioner does not dispute that a CMP of $300 per day from
January 7 through February 17, 2012 is a reasonable enforcement
remedy.

7. A CMP of $3,050 per day for the two-day period of immediate
jeopardy is reasonable.

I have concluded that from January 5, 2012 to February 17, 2012, Petitioner was not in
substantial compliance with program participation requirements due to violations of

42 CFR. §§ 483.13(c), 483.25(h), 483.30(a), 483.70(a), and 483.75(f). I have also
concluded that Petitioner has not met its burden to show that the declaration of immediate
jeopardy related to the violation of 42 C.F.R. § 483.25(h) was clearly erroneous. Ifa
facility is not in substantial compliance with program requirements, CMS has the
authority to impose one or more of the enforcement remedies listed in 42 C.F.R.

§ 488.406, including a CMP. CMS may impose a per-day CMP for the number of days
that the facility is not in compliance or a per instance CMP for each instance that a
facility is not in substantial compliance, whether or not the deficiencies pose immediate
jeopardy. 42 C.F.R. § 488.430(a). The upper range of a per-day CMP, $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 per-day CMPs, $50 per day to $3,000 per
20

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). I conclude that there is a basis for the
imposition of a per-day CMP in the upper range of CMPs reserved for immediate
jeopardy for two days during which immediate jeopardy existed based on the violation of
42 C.F.R. § 483.25(h). Lalso conclude that there is a basis for the imposition of a per-day
CMP at the lower range for the deficiencies that posed a risk for more than minimal harm
but not immediate jeopardy.

If I conclude, as I have in this case, that there is a basis for the imposition of an
enforcement remedy and the remedy proposed is a CMP, my authority to review the
reasonableness of the CMP is limited by 42 C.F.R. § 488.438(e). The limitations are:

(1) I may not set the CMP at zero or reduce it to zero; (2) I may not review the exercise
of discretion by CMS in selecting to impose a CMP; and (3) I may only consider the
factors specified by 42 C.F.R. § 488.438(f) when determining the reasonableness of the
CMP amount. In determining whether the amount of a CMP is reasonable, the following
factors specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history
of non-compliance, including repeated deficiencies; (2) the facility’s financial condition;
(3) the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404(b), the same
factors CMS and/or the state were to consider when setting the CMP amount; and (4) the
facility’s degree of culpability, including but not limited to, the facility’s neglect,
indifference, or disregard for resident care, comfort, and safety, and the absence of
culpability is not a mitigating factor. The factors that CMS and the state were required to
consider when setting the CMP amount and that I am required to consider when assessing
the reasonableness of the amount are set forth in 42 C.F.R. § 488.404(b): (1) whether the
deficiencies caused no actual harm but had the potential for minimal harm; no actual
harm with the potential for more than minimal harm, but not immediate jeopardy; actual
harm that is not immediate jeopardy; or immediate jeopardy to resident health and safety;
and (2) whether the deficiencies are isolated, constitute a pattern, or are widespread. My
review of the reasonableness of the CMP is de novo and based upon the evidence in the
record before me. I am not bound to defer to the CMS determination of the reasonable
amount of the CMP to impose but my authority is limited by regulation as already
explained. The Board has explained that my task is to determine whether the amount of
any CMP proposed is within reasonable bounds considering the purpose of the Act and
regulations. Emerald Oaks, DAB No. 1800, at 10; CarePlex of Silver Spring, DAB No.
1683, at 14-16 (1999); Capitol Hill Cmty. Rehab. and Specialty Care Ctr., DAB No.
1629 (1997).

A CMP in the upper range is authorized for a period of immediate jeopardy. The upper
range is $3,050 to $10,000. CMS proposes a CMP of $3,050, which is the lowest
permissible daily CMP for immediate jeopardy. Accordingly, I conclude that the CMP of
$3,050 per day for two days of immediate jeopardy on January 5 and 6, 2012, is
reasonable.
21

CMS proposes a CMP of $300 per day based on all the deficiencies for the period
January 7 through February 17, 2012, after immediate jeopardy was abated. Petitioner
does not dispute the reasonableness of the $300 per-day CMP. P. Br. at 17, P. Reply at 7.
My review of the required factors leads me to conclude that the $300 per-day CMP is
reasonable. Petitioner does not argue that it cannot afford to pay the total CMP of
$18,700, and Petitioner offered no testimony or documents related to its financial
condition. Petitioner has a history of noncompliance from 2008, 2009, and 2010,
including a prior violation of 42 C.F.R. § 483.25(h) that caused actual harm. CMS Ex. 56
at 1-2. Resident 3’s injuries were serious. The life safety code violations were also
serious. I also conclude that Petitioner was culpable in the injuries of Resident 3,
particularly with respect to the December 14, 2011 injuries, given that a Hoyer lift had
also caused her injury just four days prior on December 10, 2011. The most serious
deficiencies were isolated, but the $300 per-day CMP is at the low--end of the authorized
range. I conclude that a CMP of $300 per day from January 7 through February 17, 2012
is a reasonable enforcement remedy.

III. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance
with program participation requirements from January 5, 2012 to February 17, 2012. I
further conclude that a CMP of $3,050 per day for January 5 and 6, 2012 and $300 per
day for the period January 7 through February 17, 2012, a total CMP of $18,700, is
reasonable.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Citiport Fuel, Inc.
d/b/a Mobil,

Respondent.
Docket No. C-14-1193
FDA Docket No. FDA-2014-H-0698
Decision No. CR3306
Date: July 22, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint)
against Respondent, Citiport Fuel, Inc. d/b/a Mobil, alleging facts and legal authority

sufficient to justify imposing a civil money penalty of $500. Respondent did

not timely

answer the Complaint, nor did Respondent request an extension of time within which to

file an answer. Therefore, | enter a default judgment against Respondent and
Respondent pay a civil money penalty in the amount of $500.

order that

CTP began this case by serving a Complaint on Respondent and filing a copy of the
Complaint with the Food and Drug Administration’s (FDA) Division of Dockets

Management. The Complaint alleges that Respondent’s staff unlawfully sold
to minors and failed to verify that cigarette purchasers were of sufficient age,

cigarettes
thereby

violating the Federal Food, Drug, and Cosmetic Act (Act) and its implementing

regulations, found at 21 C.F.R. pt. 1140. CTP seeks a civil money penalty o

$500.
On June 3, 2014, CTP served the Complaint on Respondent by United Parcel Service,
pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and accompanying cover letter,
CTP explained that within 30 days Respondent should pay the penalty, file an answer, or
request an extension of time within which to file an answer. CTP warned Respondent
that if it failed to take one of these actions within 30 days an Administrative Law Judge
could, pursuant to 21 C.F.R. § 17.11, issue an initial decision by default ordering
Respondent to pay the full amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor has it
requested an extension. Therefore, pursuant to 21 C.F.R. § 17.11(a), am required to
issue an initial decision by default if the Complaint is sufficient to justify a penalty.
Accordingly, I must determine whether the allegations in the Complaint establish
violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true. 21
C.F.R. § 17.11(a). Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Mobil, an establishment that sells tobacco products and is
located at 11846 Conner Street, Detroit, Michigan 48205. Complaint 3.

e During an inspection of the establishment conducted on February 18, 2013, an
FDA-commissioned inspector observed that “a person younger than 18 years of
age was able to purchase a package of Newport Box 100s cigarettes . . . at
approximately 12:33 PM ET[.]” The inspector also observed that “the minor’s
identification was not verified before the sale....” Complaint § 10.

¢ On March 7, 2013, CTP issued a Warning Letter to Mobil explaining that the
inspector’s February 18, 2013 observations constituted violations of regulations
found at 21 C.F.R. § 1140.14(a) and (b)(1). In addition to describing the
violations, the letter advised Respondent that the FDA may initiate a civil money
penalty action or take other regulatory action against Respondent if it failed to
correct the violations. The letter also stated that it was Respondent’s
responsibility to comply with the law. Complaint § 10.

¢ On March 22, 2013, in response to the Warning Letter, CTP received an undated
letter from Respondent’s management. The letter explained that
“a minor was able to purchase a pack of cigarettes from one of our
employee[s][,]’ ” and that Respondent “took disciplinary action against that
employee[ ] ‘for his violation of our company rules and... laws.’ ” The letter
also stated that Respondent “would educate employees and inform both employees
and customers about the legal age requirement for the sale of tobacco products.”
Complaint § 11.

e On February 21, 2014, during a subsequent inspection of Respondent’s
establishment, FDA-commissioned inspectors documented that “‘a person younger
than 18 years of age was able to purchase a package of Newport Box 100s
cigarettes . . . at approximately 12:28 PM[.]” The inspectors also noted that “the
minor’s identification was not verified before the sale... .” Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded
if sold or distributed in violation of regulations issued under section 906(d) of the Act.

21 U.S.C. § 387c(a)(7)(B); 21 C.F.R § 1140.1(b). Under

21 C.F.R. § 1140.14(a), no retailer may sell cigarettes to a person younger than 18 years
of age. Under 21 C.F.R. § 1140.14(b)(1), a retailer must verify, by means of photo
identification containing the bearer’s date of birth, that no cigarette purchasers are
younger than 18 years of age.

Here, Respondent violated 21 C.F.R. § 1140.14(a) on February 18, 2013, and February
21, 2014, when its staff sold cigarettes to minors. Respondent also violated 21 C.F.R. §
1140.14(b)(1) on those dates, when its staff did not verify, by checking the minors’
photographic identification, that these tobacco purchasers were 18 years of age or older.
Therefore, Respondent’s actions and omissions on two separate occasions at the same
retail outlet constitute violations of law that warrant a civil money penalty. Accordingly,
I find that a civil money penalty of $500 is permissible under 21 C.F.R. § 17.2.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Coral Home Care, Inc.,
(PTAN: 10-7698),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-691
Decision No. CR3305

Date: July 22, 2014

DECISION

I grant summary judgment in favor of the Centers for Medicare & Medicaid
Services (CMS) affirming the determination of a Medicare contractor to revoke
the Medicare enrollment of Petitioner, Coral Home Care, Inc.

I. Background

Petitioner filed a request for hearing in order to challenge a reconsideration
determination that affirmed revocation of Petitioner’s Medicare enrollment. The
case was assigned to me for a hearing and a decision. CMS moved for summary
judgment. Petitioner’s then-counsel submitted a notice withdrawing Petitioner’s
request for hearing. I dismissed the hearing request. Petitioner subsequently
moved to have its hearing request reinstated and I granted that motion. Then,
Petitioner replied to CMS’s motion for summary judgment and cross-moved for
summary judgment.

CMS filed six exhibits, identified as CMS Ex. 1 — CMS Ex. 6, with its motion for
summary judgment. Petitioner filed seven exhibits, identified as
P. Ex. 1 — P. Ex. 7, with its opposition and cross-motion for summary judgment. I
receive into the record CMS Ex. 1 — CMS Ex. 6. As for Petitioner’s exhibits there
are grounds for excluding some of them inasmuch as P. Ex. 5 — P. Ex. 7 were
clearly generated or obtained by Petitioner after the date of the reconsideration
determination, January 9, 2014, and Petitioner has not shown good cause for my
receiving these exhibits at this time.’ 42 C.F.R. § 498.56(e). They also are
irrelevant inasmuch as they are offered as evidence to support Petitioner’s
contention that CMS unfairly refused to accept a corrective action plan from
Petitioner. As I discuss below, CMS’s refusal to accept the corrective action plan
is, as a matter of law, not reviewable. Therefore, I receive into evidence P. Ex. 1 —
P. Ex. 4, and P. Ex. 7, at 15-16. I exclude P. Exs. 5, 6, and pages 1-14 and 17-24
of P. Ex. 7.

II. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether there is a basis for CMS to revoke Petitioner’s Medicare
enrollment.

B. Findings of Fact and Conclusions of Law

The facts of this case are uncontroverted. Petitioner, a home health agency, had
listed its business address with a Medicare contractor as 1149 SW 27" Avenue,
Suite 303, Miami, Florida 33135. CMS Ex. 1. On August 27, 2013, an inspector
visited this address on behalf of CMS and discovered that Petitioner was no longer
at this location. CMS Ex. 3. CMS subsequently determined that Petitioner had
moved in or about April 2012 to an address in Hialeah, Florida. CMS Ex. 3; CMS
Ex. 4. In September 2013 a Medicare contractor confirmed that Petitioner had
changed its business address to the Hialeah location. CMS Ex. 3.

These facts when read with applicable regulatory requirements establish a clear
and irrefutable basis for CMS to revoke Petitioner’s Medicare enrollment.
Petitioner failed to report to the Medicare contractor or to CMS its change of
business address within 90 days of relocating. This is a violation of the reporting

' Pages 15 and 16 of P. Ex. 7 are an “Employer Account Change Form.” I note
that CMS’s revocation determination dated January 9, 2014, provides a “Summary
of Submitted Documentation” and one of the documents listed is “Employer
Account Change Form.” Because it appears that pages 15 and 16 of P. Ex. 7 may
have been supplied by Petitioner at the time it requested reconsideration, I will
receive them into evidence, but not the remainder of P. Ex. 7.
requirements that apply to Petitioner at 42 C.F.R. § 424.516(e)(2). Failure to
comply with these reporting requirements is grounds for CMS to revoke a provider
or a supplier’s participation in Medicare. 42 C.F.R. § 424.535(a)(9).

Petitioner does not deny any of the material facts nor does it argue that there was
no legal basis to revoke its Medicare enrollment. Rather, it is Petitioner’s
contention that CMS unfairly rejected a plan of correction that Petitioner
submitted after it had been notified about the revocation determination. Petitioner
submitted that plan on October 23, 2013. CMS Ex. 2; P. Ex. 2. A Medicare
contractor, acting on behalf of CMS, subsequently rejected the plan.

According to Petitioner, that rejection was arbitrary and unfair and I should
overturn it. Petitioner argues that it had a right, pursuant to 42 C.F.R.

§ 424.535(a)(1) to “correct” its noncompliance. It asserts that it made the
necessary correction by submitting a plan of correction that identified its new
business address and that CMS was obligated to accept this plan in lieu of
revoking Petitioner’s Medicare enrollment.

I find Petitioner’s argument to be unavailing for two reasons. First, the regulation
relied on by Petitioner does not impose on CMS a duty to accept any plan of
correction. An entity such as Petitioner may have a right to offer a plan of
correction but CMS is under no obligation to accept that offer.

Second, and more important, there is nothing in the regulations that makes a
refusal by CMS to accept a plan of correction reviewable. Initial determinations
that may be challenged and reviewed on appeal are listed at 42 C.F.R. § 498.3(b).
An action by CMS is not appealable unless it comprises one of the listed initial
determinations. Refusal by CMS to accept a plan of correction is not one of the
listed initial determinations and, therefore, it may not be challenged on appeal.
Conchita Jackson, M.D., DAB No. 2495 at 6 (2013); DMS Imaging, Inc., DAB
No. 2313 at 6 (2010).

Nor is CMS’s refusal to reinstate a dis-enrolled provider such as Petitioner, after it
has submitted a corrective action plan, reviewable. 42 C.F.R. § 405.874(e) makes
it explicit that a contractor’s refusal to reinstate on behalf of CMS is non-
reviewable.
Consequently, there is no basis for me to consider Petitioner’s argument that I
should direct CMS to accept its plan of correction and reinstate Petitioner.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-0660)

Complainant
v.

Guadalupana Grocery Deli LP
d/b/a Guadalupana Grocery and Deli,

Respondent.
Docket No. C-14-1159
Decision No. CR3304

Date: July 22, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an
administrative complaint on Respondent, Guadalupana Grocery Deli LP d/b/a
Guadalupana Grocery and Deli, at 1205 River Avenue, Lakewood, New Jersey
08701, and by filing a copy of the complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management. The complaint alleges
that Guadalupana Grocery and Deli impermissibly sold cigarettes to minors and
failed to verify, by means of photo identification containing a date of birth, that
cigarette purchasers were 18 years of age or older, thereby violating the Federal
Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140. CTP seeks to impose a $500 civil
money penalty against Respondent Guadalupana Grocery and Deli.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on May 27, 2014, CTP served the
complaint on Respondent Guadalupana Grocery and Deli by United Parcel
Service. In the complaint and accompanying cover letter, CTP explained that,
within 30 days, Respondent should pay the penalty, file an answer, or request an
extension of time in which to file an answer. CTP warned Respondent that, if it
failed to take one of these actions within 30 days, the Administrative Law Judge
could, pursuant to 21 C.F.R. § 17.11, issue an initial decision ordering it to pay the
full amount of the proposed penalty.

Respondent Guadalupana Grocery and Deli has neither filed an answer within the
time prescribed, nor requested an extension of time within which to file an answer.
Pursuant to 21 C.F.R. § 17.11, Lassume that the facts alleged in the complaint (but
not its conclusory statements) are true. Specifically:

e At approximately 11:13 a.m. on April 21, 2013, at Respondent’s business
establishment, 1205 River Avenue, Lakewood, New Jersey 08701, an
FDA-commissioned inspector observed Respondent’s staff selling a
package of Newport Box cigarettes to a person younger than 18 years of
age. The inspector also observed that staff failed to verify, by means of
photographic identification containing a date of birth, that the purchaser
was 18 years of age or older;

e Ina warning letter dated May 9, 2013, CTP informed Respondent of the
inspector’s April 21, 2013 observations, and that such actions violate
federal law, 21 C.F.R. § 1140.14(a) and (b)(1). The letter further warned
that Respondent’s failure to correct its violations could result in a civil
money penalty or other regulatory action;

e At approximately 1:33 p.m. on September 8, 2013, at Respondent’s
business establishment, 1205 River Avenue, Lakewood, New Jersey 08701,
FDA-commissioned inspectors documented Respondent’s staff selling a
package of Marlboro 100’s cigarettes to a person younger than 18 years of
age. The inspectors also documented that staff failed to verify, by means of
photographic identification containing a date of birth, that the purchaser
was 18 years of age or older.

These facts establish Respondent Guadalupana Grocery and Deli’s liability under
the Act. The Act prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k).
A tobacco product is misbranded if sold or distributed in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C.

§ 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). The Secretary issued the regulations at 21
C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387(a); see 21

U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,229 (Mar. 10, 2010). Under 21 C.F.R.

§ 1140.14(a), no retailer may sell cigarettes to any person younger than 18 years of
age.
Under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of photographic
identification containing a purchaser’s date of birth, that no cigarette purchasers
are younger than 18 years of age.

A $500 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $500 against
Respondent Guadalupana Grocery Deli LP d/b/a Guadalupana Grocery and Deli.
Pursuant to 21 C.F.R. § 17.11 (b), this order becomes final and binding upon both
parties after 30 days of the date of its issuance.

/s/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Gadd’s Super Market, Inc.
d/b/a Gadd’s IGA Foodliner,

Respondent.

Docket No. C-14-1190
FDA Docket No. FDA-2014-H-0696

Decision No. CR3303
Date: July 21, 2014
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Gadd’s Super Market, Inc. d/b/a Gadd’s IGA
Foodliner, alleging facts and legal authority sufficient to justify imposing a civil
money penalty of $250. Respondent did not timely answer the Complaint, nor did
Respondent request an extension of time within which to file an answer.
Therefore, I enter a default judgment against Respondent and order that
Respondent pay a civil money penalty in the amount of $250.

CTP began this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent impermissibly
utilized a self-service display of smokeless tobacco, thereby violating the Federal
Food, Drug, and Cosmetic Act (Act) and its implementing regulations, found at 21
C.F.R. pt. 1140. CTP seeks a civil money penalty of $250.
On June 3, 2014, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days Respondent should
pay the penalty, file an answer, or request an extension of time within which to file
an answer. CTP warned Respondent that if it failed to take one of these actions
within 30 days an Administrative Law Judge could, pursuant to 21 C.F.R.

§ 17.11, issue an initial decision by default ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it requested an extension. Therefore, pursuant to 21 C.F.R. § 17.11(a), lam
required to issue an initial decision by default if the Complaint is sufficient to
justify a penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true.
21 C.F.R. § 17.11(a). Specifically, CTP alleges the following facts in its
Complaint:

e Respondent owns Gadd’s IGA Foodliner, an establishment that sells
tobacco products and is located at RR 2 Box 8A, Alderson, West Virginia
24910. Complaint § 2.

e During an inspection of the establishment conducted on April 25, 2013, an
FDA-commissioned inspector observed that “the establishment, which was
open to the public during business hours, had a customer-accessible
shelving unit containing smokeless tobacco on the sales floor.” Complaint

49.

e On May 16, 2013, CTP issued a Warning Letter to Gadd’s IGA Foodliner
explaining that the inspector’s April 25, 2013 observation constituted a
violation of a regulation found at 21 C.F.R. § 1140.16(c). In addition to
describing the violation, the letter advised Respondent that the FDA may
initiate a civil money penalty action or take other regulatory action against
Respondent if it failed to correct the violation. The letter also stated that it
was Respondent’s responsibility to comply with the law. Complaint § 9.

e The FDA did not receive a response to the Warning Letter, but delivery
records show that an individual named “Shafer” received it on May 17,
2013. Complaint § 10.

¢ On October 29, 2013, and October 31, 2013, during a subsequent two-part
inspection of Respondent’s establishment, FDA-commissioned inspectors
documented that “the establishment, which [was] open to the general public
during business hours, ha[d] a customer-accessible shelving unit containing
smokeless tobacco on the sales floor.” Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section
906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R § 1140.1(b). The
Secretary issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the
Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,229 (Mar. 10,
2010). Under 21 C.F.R. § 1140.16(c), a retailer may sell cigarettes and smokeless
tobacco only in a direct, face-to-face exchange between the retailer and the
consumer. A self-service display is a method of sale expressly prohibited by the
regulations unless the self-service display is located in a facility in which the
retailer ensures that no person younger than 18 years of age is present, or
permitted to enter, at any time. 21 C.F.R. § 1140.16(c)(2)(ii).

Here, Respondent utilized a self-service display of smokeless tobacco in its
business establishment on April 25, 2013, October 29, 2013, and October 31,
2013. On those dates, Respondent’s establishment was not exempt from the
requirement that retailers sell smokeless tobacco only in direct, face-to-face
exchanges between the retailer and the consumer because Respondent permitted
minors to enter its establishment during business hours. Therefore, Respondent’s
actions on multiple occasions at the same retail outlet constitute violations of law
that warrant a civil money penalty. Accordingly, I find that a civil money penalty
of $250 is permissible under 21 C.F.R. § 17.2.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Marcus Singel, D.P.M.,
(Supplier No.: 085936400001)

Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-14-1113
Decision No. CR3302

Date: July 21 , 2014

DECISION

I sustain the determination of a Medicare contractor, as adopted by the Centers for
Medicare & Medicaid Services (CMS), to revoke the enrollment of Petitioner, Marcus
Singel, D.P.M., as a supplier to the Medicare program of durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS). The uncontroverted facts establish that
Petitioner did not comply with participation requirements governing DMEPOS and CMS
is authorized to terminate Petitioner’s participation on that basis.

I. Background

Petitioner requested a hearing to challenge an adverse reconsideration determination that
affirmed CMS’s determination to revoke, and the case was assigned to me for a hearing
and a decision. CMS then moved for summary judgment, filing a brief and six proposed
exhibits that are identified as CMS Ex. 1 —- CMS Ex. 6. Petitioner filed a response to
CMS’s motion that included several attachments. Petitioner did not specifically identify
these attachments as exhibits but I infer that he wants me to consider them as evidence
supporting his arguments. The attachments consist of a photograph of Petitioner’s office
with a sign showing the office’s days and hours of operations, a document showing proof
of payment of Petitioner’s Medicare enrollment fee, and several invoices for product
sales made on various dates.

I receive CMS’s exhibits into the record. I also receive Petitioner’s attachments, which I
am consolidating into a single exhibit, P. Ex. 1. It is unclear whether Petitioner offered
these attachments at reconsideration of his case and his failure to do so could be a basis
for excluding them. However, CMS has raised no objection to my receiving the
attachments.

CMS characterizes its motion as a motion for summary judgment. It is unnecessary for
me to determine whether the criteria for summary judgment are met here because neither
party has demanded to present testimony at an in-person hearing. Therefore, I decide the
case based on the parties’ written submissions.

IL. Issues, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether Petitioner failed to comply with DMEPOS participation
requirements, thereby justifying CMS’s determination to terminate Petitioner’s Medicare
participation.

B. Findings of Fact and Conclusions of Law

Petitioner’s participation as a supplier in Medicare is governed by regulations at 42
C.F.R. pt. 424. A supplier must comply with Medicare participation requirements.
Failure by a supplier to comply will result in revocation of its participation. 42 C.F.R. §§
424.57(c)(24), (d). Moreover, CMS may revoke a supplier’s participation if it determines
that the supplier is no longer “operational.” 42 C.F.R. § 424.535(a)(5). The term
“operational” is defined to mean that a supplier:

has a qualified physical practice location, is open to the public
for the purposes of providing health care related services, is
prepared to submit valid Medicare claims, and is properly
staffed, equipped, and stocked . . . to furnish . . . items or
services.

42 C.F.R. § 424.502.

The regulatory requirements — in addition to the requirement that it be operational — that a
DMEPOS supplier must comply with include the requirement that it be accessible to the
public and staffed during posted hours of operation and that it maintain a permanent and
visible sign in plain view that posts its hours of operation. Additionally, the supplier
must permit agents of a Medicare contractor or of CMS to conduct on-site inspections in
order to verify compliance with participation requirements. 42 C.F.R. §§ 424.57(c)(7)(i),

(8).

The material facts are uncontroverted. On January 3 and 7, 2014, during normal working
ours (1:59 p.m. and 11:40 a.m.), an inspector visited Petitioner’s office. On both
occasions the inspector found the office to be locked and no one responded to her
nocking. There was no sign posted showing hours of operations. CMS Ex. 1.

These facts are ample support for CMS’s determination. Petitioner was not open to the
public on the dates and times in question, he did not have a sign posting his hours of
operation, and he was not “operational” in that he was not open to the public for purposes
of providing health care related services. Furthermore, he effectively denied the
contractor’s inspector access to his premises on the dates in question.

Petitioner has provided nothing that would support a conclusion that he was complying
with regulatory requirements. He asserts that on January 3, 2014 his office was “closed
for the holidays” and that it reopened on January 7, 2014. That is not a defense because,
as a requirement for Medicare participation, his business had to be open and operational
on the dates in question. Moreover, Petitioner’s assertion that his business reopened on
January 7, 2014 is belied by the inspector’s inability to gain access to the premises on
that date.

Petitioner also asserts that he posted a sign showing his hours of operation immediately
upon receiving a notice from the Medicare contractor advising him that his participation
as a supplier had been terminated. That action was belated, however. Petitioner does not
assert that he had the requisite sign in January 2014.

Finally, Petitioner asserts that he has paid his Medicare provider re-enrollment fee.
However, CMS is not asserting at this time that failure to pay that fee was a basis for
terminating Petitioner’s Medicare participation as a supplier.

/s/
Steve T. Kessel
Administrative Law Judge