Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Meadow Park Care Center
(CCN: 03-5127),
Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-09-327
Decision No. CR2294

Date: December 16, 2010

DECISION

Petitioner, Meadow Park Care Center (Petitioner or facility), is a long-term care facility
located in Prescott, Arizona, that participates in the Medicare program. Based ona
survey completed December 30, 2008, the Centers for Medicare and Medicaid Services
(CMS) determined that the facility was not in substantial compliance with Medicare
requirements and that its deficiencies posed immediate jeopardy to resident health and
safety. CMS has imposed against the facility a per instance civil money penalty (CMP)
of $10,000 and denied payment for new admissions for two days (January 27-28, 2009).
Petitioner timely appealed CMS’s determination.

CMS moves for summary judgment, which Petitioner opposes.
For the reasons set forth below, I find that CMS is entitled to summary judgment. The

facility was not in substantial compliance with Medicare program requirements, and the
penalty imposed is reasonable.
I. Background

The Social Security Act (Act) sets forth requirements for nursing facility participation in
the Medicare program and authorizes the Secretary of Health and Human Services to
promulgate regulations implementing those statutory provisions. Act §1819. The
Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the Medicare
program, a nursing facility must maintain substantial compliance with program
requirements. To be in substantial compliance, a facility’s deficiencies may pose no
greater risk to resident health and safety than “the potential for causing minimal harm.”
42 CFR. § 488.301.

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act § 1864(a);
42 C.F.R. § 488.20. The regulations require that each facility be surveyed once every
twelve months and more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.

Here, following a complaint investigation survey completed December 30, 2008, CMS
determined that the facility was not in substantial compliance with program requirements
and that its deficiencies posed immediate jeopardy to resident health and safety.
Specifically, CMS determined that the facility was not in substantial compliance with 42
C.F.R. §§ 483.25, 483.25(h), 483.25(1), and 483.35(d)(3). CMS also determined that the
deficiencies cited under section 483.25(h) (Tag F323 — supervision/accident prevention)
posed immediate jeopardy to resident health and safety. CMS Ex. 4.

CMS subsequently found that the facility returned to substantial compliance on January
29, 2009. CMS Ex. 5.

Based solely on the deficiencies cited under section 483.25(h), CMS imposed a $10,000
per instance CMP. Based on all of the deficiencies cited, CMS denied payment for new
admissions, effective January 27, 2009. CMS Ex. 4 at 2.

Petitioner timely appealed, and the matter was assigned to Administrative Law Judge
(ALJ) Alfonso J. Montano. When Judge Montano left the Civil Remedies Division, the
matter was reassigned to me. On July 27, 2010, I issued a ruling and order delineating
the issues before me and directing the parties to submit additional written arguments and
the written direct testimony of any proposed witness. Ruling and Order (July 27, 2010).

The parties have filed “readiness reports” and pre-hearing briefs. (CMS Br.; P. Br.). In
response to my order, CMS filed a motion for summary judgment (MSJ) and
memorandum in support (MSJ Br.), and Petitioner filed “Written Arguments” (P. Arg.).
Petitioner filed a response to CMS’s MSJ (P. Response). CMS has submitted 29 exhibits
(CMS Exs. 1-29). Petitioner has submitted 20 exhibits (P. Exs. 1-20).!

IL. Issues
I consider whether summary judgment is appropriate.

On the merits, the only issues before me are: 1) whether, at the time of the December
2008 survey, the facility was in substantial compliance with 42 C.F.R. §§ 483.25,
483.25(h), 483.25(1), and 483.35(d)(3); and 2) if the facility was not in substantial
compliance with section 483.25(h), is the penalty imposed — $10,000 per instance —
reasonable.

I have the authority to review all of the deficiency findings, because CMS bases its two-
day denial of payment for new admissions (DPNA) on all of the deficiencies cited. See
Schowalter Villa, DAB No. 1688 (1999). However, since I find that the facility was not
in substantial compliance with 42 C.F.R. § 483.25(h), I need not review the remaining
deficiencies. So long as the facility was not in substantial compliance, CMS has the
authority to impose any of the penalties listed in 42 C.F.R. § 488.406, which include
imposing a DPNA. Act § 1819(h); 42 C.F.R. § 488.402; see Claiborne-Hughes Health
Ctr., No. 09-3239 at 11 (6th Cir. 2010).

Petitioner raises the following additional issues, which I have no authority to review:

e Petitioner challenges the immediate jeopardy finding. An ALJ may review
CMS’s scope and severity findings (which include a finding of immediate
jeopardy) only if a successful challenge would affect the range of the CMP, or
if CMS has made a finding of substandard quality of care that results in the
loss of approval of a facility’s nurse aide training program. 42 C.F.R. §
498.3(b)(14); 42 C.F.R. § 498.3(d)(10); Cedar Lake Nursing Home, DAB No.
2344 at 9 (2010); Evergreen Commons, DAB No. 2175 (2008); Aase Haugen
Homes, DAB No. 2013 (2006). Here, the penalty imposed is a per instance
CMP, for which the regulations provide only one range ($1,000 to $10,000), so
the level of noncompliance does not affect the range of the CMP. 42 C.F.R. §
488.438(a)(2). Nor does CMS’s scope and severity finding affect approval of

' Petitioner did not mark P. Ex. 16 (Affidavit of Heather Easterday) nor P. Ex. 17
(Affidavit of Sheila Perry), which are attached to Petitioner’s “First Amended .. .
Proposed Prehearing Exhibit List & Witness List” and were submitted with a letter dated
August 30, 2010. On October 4, 2010, Petitioner filed a revised P. Ex. 11 with its
“Second Amended Proposed Prehearing Exhibit List and Witness List.” I am marking P.
Ex. 16 and P. Ex. 17 and substituting the revised P. Ex. 11 for the copy of P. Ex. 11 filed
earlier.
the facility’s nurse aide training program. Where, as here, the facility has been
assessed a CMP of $5,000 or more, the state agency may not approve its nurse
aide training program. Act § 1819(f)(2)(B); 42 C.F.R. § 483.151(b)(2)(iv).

e Petitioner also suggests that CMS did not apply correctly the relevant factors
for determining the amount of the CMP. It is well-settled that, in reaching a
decision on the reasonableness of the CMP, I may not consider CMS’s internal
decision-making processes. Instead, I consider de novo whether the record
evidence concerning the relevant regulatory factors supports the finding that
the amount of the CMP is at a level “reasonably related to an effort to produce
corrective action by a provider with the kind of deficiencies found and in light
of the other factors involved.” Barn Hill Care Ctr., DAB No. 1848 at 21
(2002); Cmty. Nursing Home, DAB No. 1807 at 22 et seq. (2002); Emerald
Oaks, DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1683 at
8 (1999).

e Finally, although Petitioner complains about the conduct of the survey, survey
performance does not relieve a facility of its obligation to meet all
requirements for program participation nor invalidate adequately documented
deficiencies. 42 C.F.R. § 488.318(b).

II. Discussion

Summary judgment. Summary judgment is appropriate when a case presents no issue of
material fact, and its resolution turns on questions of law. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247-48 (1986); Livingston Care Ctr. v. United States Dep’t of Health
and Human Servs., 388 F.3d 168, 173 (6th Cir. 2004). See also Illinois Knights Templar
Home, DAB No. 2274 at 3-4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234 at 3-
4 (2009)). The moving party may show the absence of a genuine factual dispute by
presenting evidence so one-sided that it must prevail as a matter of law, or by showing
that the non-moving party has presented no evidence “sufficient to establish the existence
of an element essential to [that party’s] case, and on which [that party] will bear the
burden of proof at trial.” Livingston Care Ctr., 388 F.3d 168, 173 (quoting Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986)). To avoid summary judgment, the non-moving
party must then act affirmatively by tendering evidence of specific facts showing that a
dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11
(1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab.
Ctr., DAB No. 1918 (2004).

To defeat an adequately supported summary judgment motion, the non-
moving party may not rely on the denials in its pleadings or briefs, but must
furnish evidence of a dispute concerning a material fact... .
Illinois Knights Templar, DAB No. 2274 at 4; Livingston Care Ctr., DAB No. 1871 at 5
(2003).

In examining the evidence for purposes of determining the appropriateness of summary
judgment, I must draw all reasonable inferences in the light most favorable to the non-
moving party. Brightview Care Ctr., DAB No. 2132 at 2, 9 (2007); Livingston Care Ctr.,
388 F.3d at 168, 172; Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); but see
Cedar Lake, DAB No. 2344 at 7; Brightview, DAB No. 2132 at 10 (entry of summary
judgment upheld where inferences and views of non-moving party are not reasonable).
However, drawing factual inferences in the light most favorable to the non-moving party
does not require that I accept the non-moving party’s legal conclusions. Cedar Lake,
DAB No. 2344 at 7; Guardian, DAB No. 1943 at 11 (“A dispute over the conclusion to
be drawn from applying relevant legal criteria to undisputed facts does not preclude
summary judgment if the record is sufficiently developed and there is only one
reasonable conclusion that can be drawn from those facts.”).

Program requirements. Under the statute and the “quality of care” regulation, each
resident must receive, and the facility must provide, the necessary care and services to
allow a resident to attain or maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the resident’s comprehensive assessment
and plan of care. Act § 1819(b); 42 C.F.R. § 483.25. To achieve this, the facility must,
among other requirements, “ensure” that each resident’s environment remains as free of
accident hazards as possible. 42 C.F.R. § 483.25(h)(1). It must take “reasonable steps to
ensure that a resident receives supervision and assistance devices designed to meet his
assessed needs and to mitigate foreseeable risks of harm from accidents.” Briarwood
Nursing Ctr., DAB No. 2115 at 5 (2007); Guardian, DAB No. 1943 at 18 (citing 42
C.F.R. § 483.25(h)(2)). The facility must anticipate what accidents might befall a
resident and take steps to prevent them. A facility is permitted the flexibility to choose
the methods it uses to prevent accidents, but the chosen methods must constitute an
“adequate” level of supervision under all the circumstances. Briarwood, DAB No. 2115
at 5; Windsor Health Care Ctr., DAB No. 1902 at 5 (2003); see Burton Health Care Ctr.,
DAB No. 2051 at 9 (2006) (holding that determining whether supervision/assistive
devices are adequate for a particular resident “depends on the resident’s ability to protect
himself from harm’’).

A, CMS is entitled to summary judgment, because the undisputed evidence
establishes that the facility lacked smoking assessments for nine of its residents
who were smokers, and these residents’ care plans did not address safe smoking.
Without proper assessments and care plans, the facility could not identify actual
or potential hazards and thus did not comply with 42 C.F.R. § 483.25(h).”

> My findings of fact/conclusions of law are set forth, in italics and bold, in the
discussion captions of this decision.
The regulation explicitly requires that resident safety needs be assessed. 42 C.F.R. §
483.25(h) (“[T]o meet his assessed needs. . . .”); Briarwood, DAB No. 2115; see 42
C.F.R. § 483.20 (“The facility must conduct initially and periodically a comprehensive,
accurate, standardized, reproducible assessment of each resident’s functional capacity.”).
As Surveyor Rena Castro, RN, noted, the facility must assess the resident to identify any
actual or potential accident hazard related to the resident’s physical or mental status and
to determine if the resident requires an assistive device or higher level of supervision to
ensure his/her safety while smoking. Without an assessment, we cannot know if the
facility considered such issues as: Can the resident safely hold a cigarette and dispose of
the ashes? Will the resident remain conscious, alert, and aware while smoking? Can the
resident sense a cigarette burning his/her fingers? Does the resident require a smoking
apron? Does the resident require verbal cues? CMS Ex. 27 at 9-10 (Castro Decl. 4 31,
32).

CMS alleges that nine of the facility’s residents who were smokers (Residents 8, 9, 10,
11, 12, 13, 14, 15, and 16) lacked smoking assessments, and their care plans did not
address safe smoking. Initially, it seemed that Petitioner did not challenge this finding,
since nowhere in its hearing request, readiness report,° or pre-hearing brief did it mention
smoking assessments or care planning. None of its exhibits include timely smoking
assessments or care plan provisions that address smoking safety.*

Responding to CMS’s MSJ, Petitioner claims, for the first time, that it “does dispute
whether Residents 8, 9, 10, 11, 12, 13, 14, 15, and 16 were accurately assessed as capable
of smoking under supervision.” P. Response at 3. Petitioner points out that facility
policy authorized the resident’s attending physician, prior to or at the time of admission,
to determine whether he/she was a responsible smoker and to determine what, if any,
restrictions should be placed on his/her smoking privileges. Those restrictions would be
noted in the resident’s care plan. P. Response at 4; CMS Ex. 13 at 1, 4, 5; P. Ex. 11 at 2;
P. Ex. 20 at 1. According to Petitioner, all nine of the cited residents were “alert,
oriented, and capable of being directed and supervised”; their physicians had designated

* Judge Montano’s order of March 20, 2009, directed the parties to file “readiness
reports.” In those reports, each party was required to identify legal issues and factual
disputes, summarizing its position and describing the proof it planned to introduce for
each proposition.

+ Petitioner submits one “evaluation for smoking safely” and three portions of care plans
that were developed at the time of the survey, apparently in response to surveyor
concerns. P. Ex. 7 at 61; P. Ex. 10 at 9; P. Ex. 20 at 4, 5.
them as responsible and ordered “NO restrictions on their ability to smoke.” P.
Response at 3-5 (emphasis in original).”

Petitioner accurately refers to one provision of its smoking policy, which authorized a
resident’s attending physician and the facility’s DON to determine, prior to or upon
admission, whether a resident was a responsible or “non-responsible” smoker, and to
restrict the individual’s smoking privileges. Restrictions were to be noted on the
resident’s care plan “so that all personnel may be alert to smoking restrictions.” Non-
responsible smokers were not permitted to smoke except under the direct supervision of a
responsible staff member, family member, visitor, or volunteer worker. “Direct
supervision” had to be provided throughout the entire smoking period. CMS Ex. 13 at 1,
4,5. The facility policy also provided that “[s]moking restrictions concerning the
classification of residents as responsible and non-responsible shall be made at least
quarterly by the director of nursing services, the attending physician, and/or the care
planning team.” All reclassifications were to be noted on the care plan. CMS Ex. 13 at
1,5.

As noted above, to defeat CMS’s MSJ, Petitioner must do more than deny the allegations;
it must furnish evidence of specific facts, showing that a dispute exists. While Petitioner
claims that — consistent with facility policy — an attending physician assessed each of
these residents for smoking safety, it has come forward with no evidence to support that
claim. Indeed, based on the evidence presented, the only reasonable conclusion that can
be drawn from undisputed facts is that, prior to the survey, the facility did not assess its
residents for smoking safety and did not include in its resident care plans interventions
designed to assure resident safety while smoking. At the same time, facility staff
imposed unauthorized and unplanned smoking restrictions as a behavior management
tool.

As the following discussion shows, virtually all of the cited residents suffered conditions
or displayed behaviors that, at a minimum, needed to be considered in planning how
he/she could smoke safely.

Resident 15 (R15) offers a stark example of the problems associated with the facility’s
failure to assess and plan for a smoking resident’s safety. The facility’s own documents
establish the following undisputed facts.

R15 was admitted to the facility on June 21, 2001, and readmitted on August 9, 2007. At
the time of the survey, he was 64 years old. Among other impairments, he suffered from

* But Petitioner also claims that, notwithstanding the physicians’ instruction, the facility
restricted the smoking privileges of these purportedly responsible smokers, allowing
them to smoke only during planned smoking times, while under the “direct care
supervision” of facility staff. P. Response at 5.
a seizure disorder, schizoaffective disorder, hypoxemia (low blood oxygen),
hypertension, chronic obstructive pulmonary disease (COPD), atrial flutter, and
alcoholism. CMS Ex. 11 at 5. Subsequent assessments identified memory problems and
said that his cognitive skills for daily decision-making were moderately impaired; he was
easily distracted and had periods of altered perception or awareness of surroundings.
CMS Ex. 11 at 8. He exhibited behavioral symptoms: wandering; verbal abuse; physical
abuse; and socially inappropriate or disruptive behavior. CMS Ex. 11 at 10. He suffered
from delusions and hallucinations. He had an unsteady gait. He experienced shortness of
breath. CMS Ex. 11 at 15. His medications included antipsychotics and antianxiety
drugs. CMS Ex. 11 at 18-19. He required oxygen therapy. CMS Ex. 11 at 19.

R15’s assessment does not even mention smoking. CMS Ex. 11 at 6-22.

A report of a physical examination, dated September 4, 2008, lists schizophrenia,
dementia, mental retardation, coronary artery disease, atrial flutter, COPD, and
congestive heart failure among R15’s conditions. It says that the resident had a gran mal
seizure in 2006, and that his medications included the antidepressant Zoloft, the
antipsychotic Seroquel, and the antianxiety drug Lorazepam. This document does not
establish that R15’s attending physician assessed him for smoking safety at the time of
his admission, as called for in the facility’s policy, and as Petitioner claims. First, the
report shows that the physician examined R15 more than a year after his readmission, and
Petitioner has not provided evidence of any earlier examination. Second, even though the
report mentions that R15 smokes cigarettes, it includes no assessment of his ability to do
so safely. P. Ex. 10 at 1-2.

Nurses’ progress notes cite the resident’s memory problems, impaired decision-making
ability, and incoherent speech. They say that he has lower extremity weakness and uses a
wheelchair. They note auditory and visual hallucinations and angry outbursts. They say
that he is up all night one or two nights per week. P. Ex. 10 at 3. He endangers staff and
other residents by “run[ning]” his wheelchair in the hallways at a high rate of speed. P.
Ex. 10 at 4.

R15’s clinical records establish that staff frequently deprived R15 of cigarettes in
response to his behavioral outbursts — but they did so in the absence of a care plan to
authorize it. For example:

¢ On October 23, 2008, he was on the patio talking to himself, yelling at others, and
throwing furniture. The nurse told him that he would lose his cigarette if the
furniture were not picked up. P. Ex. 10 at 6.

¢ On October 25, he threw a plastic cup at another resident, so he lost his cigarette.
He then became angry and was “verbal|[ly] scolding” the nurse. P. Ex. 10 at 6.
e On October 31, he threw coffee on another resident, went outside yelling, and then
returned inside yelling and striking out at staff. He threw a cup at one of the
nurses. Staff withheld his 3:30 p.m. cigarette because of his increased agitation.

P. Ex. 10 at 5.

e Staff also withheld cigarettes for less serious infractions. On November 6, he
refused to change his underwear, and staff denied him cigarettes. He became
“very angry” at losing his cigarettes, so he blocked the door and backed another
resident into a corner. P. Ex. 10 at 5.

¢ On December 20, 2008, he refused his scheduled shower, so he lost his cigarette
break, which was followed by an angry outburst. P. Ex. 10 at 7.

¢ On December 30, 2008, R15 was on the patio when a nurse aide went out to
smoke. He asked her for a “puff,” and, when she refused, he “kicked, hit and
punched” her. Staff took away his next scheduled cigarette and told him that
losing the cigarette would help him to remember not to hit, kick, or punch anyone.
P. Ex. 10 at 7.

None of these facts are in dispute. The only reasonable conclusion that can be drawn
from them is that R15 was not and could not have been a “responsible smoker”; no
physician or anyone else ever assessed him to be a “responsible smoker.” To keep him
and other residents and staff safe required care planning, particularly if staff were going
to withhold cigarettes as a means of controlling his behaviors.‘

At the time of the survey, the facility drafted a care plan. The plan sets as a goal that R15
will be free of injury related to smoking and directs that: 1) he be monitored “at all
times” while smoking; 2) his oxygen tank be turned off and his nasal cannula removed
before he leaves the building to smoke; 3) his doctor be notified of his “needs and
changes when appropriate”; and 4) staff monitor him “to ensure that he puts out the
cigarette [at] the proper time.” P. Ex. 10 at 9. The plan does not authorize staff to
withhold cigarettes in response to the resident’s behavior.

Resident 16 (R16) was admitted to the facility on October 25, 2004, and readmitted on
May 8, 2008. He was 65 years old at the time of the survey, and his diagnoses included
schizophrenia, Alzheimer’s disease, and COPD. CMS Ex. 12 at 5. According to his
assessment, he had memory problems, and his cognitive skills were moderately impaired.
He had periods of altered perception or awareness of surroundings and episodes of

° I see no evidence that cigarette-withholding was a particularly effective method of
control. In fact, the above-cited incidents suggest that the opposite is true — withholding
cigarettes only escalated his behaviors. In any event, an adequate assessment and care
plan should address the potential effectiveness of such a strategy.
10

disorganized speech. CMS Ex. 12 at 8. He wandered and exhibited “socially
inappropriate/disruptive” behaviors. CMS Ex. 12 at 10. He was on seven antipsychotic
medications. CMS Ex. 12 at 19. Nothing in the record suggests that R16’s physician, the
facility’s DON, or anyone else assessed R16 for smoking safety, although, at the time of
the survey, staff drafted a care plan for R16 that is virtually identical to that drafted for
RIS. P. Ex. 20 at 5.’

Resident 8 (R8) was a 73-year-old man, admitted to the facility on May 2, 2006, suffering
from COPD, depressive disorder, alcoholic cirrhosis, and other impairments. CMS Ex. 9
at 1. The admission documents that are a part of this record do not mention his smoking
status. CMS Ex. 9 at 1.

Petitioner submits clinical records for R8 but points to nothing that suggests that his
physician, the DON, or anyone else ever assessed his ability to smoke safely. A history
and physical, dated December 12, 2008 (more than two-and-a-half years after his
admission), mentions that he is “+ smoker,” but does not answer the form’s questions
about the resident’s neurological condition (is he alert and oriented, confused/agitated, or
lethargic/unresponsive?). Although barely legible, and Petitioner offers no interpretation,
a physician’s note seems to say that R8 is still smoking and was advised to quit. P. Ex. 3
at 1. Nursing progress notes mention that he has an unsteady gait and uses a walker. P.
Ex. 3 at 4, 6, 8, 10. He was apparently taking a variety of prescription medications,
including: the antidepressant, Zoloft; the narcotic, Lortab (Vicodin); and a muscle
relaxant, Roboxin. P. Ex. 3 at 2-3.

Resident 9 (R9) was admitted to the facility on December 9, 2006, and readmitted on
August 17, 2008. At the time of the survey, he was 63 years old. According to the
admissions summary, his diagnoses included schizoaffective disorder and depression.
The summary says nothing about smoking. CMS Ex. 9 at 2. Petitioner submits a report
of a history and physical, dated April 5, 2009, which says that R9 is a smoker, but
nothing in the report suggests that the physician assessed his abilities to smoke safely. P.
Ex. 4 at 1. Physician progress notes, dated May 15, 2008, list as R9’s major problems
chronic schizoaffective disorder, chronic bronchitis, Parkinson’s Disease, and tobacco
use disorder. He also suffered from nicotine addiction and alcoholism. The physician

7 At the same time, a staff member also filled out a document titled “Evaluation for
Smoking Safely,” which is signed by the staff member and the resident. Petitioner does
not explain this document. It asks only three questions (Is the resident able to light his
own cigarette? Is the resident able to hold and dispose of ashes properly? Does the
resident know fire and safety standards and understand proper location of smoking
areas?). All of the questions are answered affirmatively. The document then says that
staff have concluded that the resident is incapable of smoking safely, so they have the
right to “begin monitoring and assisting [him] on all smoke breaks.” P. Ex. 20 at 4.

11

describes him as “‘well medicated” and “subdued.” R9’s history included a November
2007 fall with head injury and seizure. He had a long list of medications, including:
Risperdal, an atypical antipsychotic; Vicodin; Depakote, an anti-seizure medication; and
Benadryl, an antihistamine. P. Ex. 4 at 2-3. Nurses’ progress notes say that his thinking
ability (“disordered thinking/delirium”) varies and that his hands shake. P. Ex. 4 at 4, 5,
6, 10, 12.

Progress notes also describe incidents of confusion and aggressive behavior and indicate
that R9 was once prescribed Ativan, an anti-anxiety medication. P. Ex. 4 at 8-9.

But nothing in R9’s records suggests any assessment or care planning to address smoking
safety.

Resident 10 (R10) was admitted to the facility on August 28, 2003, and readmitted
November 15, 2007. At the time of the survey, he was 75 years old, suffering from,
among other diseases, schizophrenia, diabetes, septicemia, and venous thrombosis; his
feet had been amputated. His admission summary does not mention smoking. CMS Ex.
9 at 3. An annual physical, dated December 12, 2008, includes no identifiable mention of
smoking. P. Ex. 5 at 1.

Treatment notes record two falls, one resulting in a head injury, and a separate incident in
which he hit his ear against the cross-bar of his Hoyer lift, suffering a laceration. P. Ex. 5
at 2-3. According to nurses’ progress notes, his decision-making ability was impaired,
and his thinking ability varied. He was confined to a wheelchair, needed a Hoyer lift for
transfers, and was dependent on staff for transfer, locomotion, and activities of daily
living. P. Ex. 5 at 4, 6, 8. According to one comment, he “goes out for smoke breaks
[with] supervision.” P. Ex. 5 at 7.

Nothing in R10’s records shows that he was assessed for smoking safety or that his care
plan addressed the issue.

Resident 11 (R11) was a 77-year-old woman, admitted to the facility on December 7,
2006. Her diagnoses included anxiety, depression, hypertension, and dementia. She had
fractured her ankle. Her admission summary does not mention her smoking status. CMS
Ex. 9 at 4. A December 12, 2008 report of a physical says “+ smoker” but does not
include any assessment of her smoking capabilities. P. Ex. 6 at 1.

Nurses’ progress notes describe R11’s decision-making ability as “impaired.” She used a
wheelchair and experienced weakness in her lower extremities. P. Ex. 6 at 3,5. Other
progress notes describe her as “very confused.” They mention that she “smokes during
day.” In one incident, she rolled her wheelchair over and skinned her knee and hand. On
another occasion, she was found sitting on the dining room floor. P. Ex. 6 at 2.
12

I see no evidence that anyone assessed R11 for smoking safety or that her care plan
addressed the issue.

Resident 12 (R12) was admitted to the facility on December 15, 2008, with a fractured
femur. She also suffered from COPD. She used a wheelchair or walker for locomotion.
Her admission documents mention that she is a smoker and had a physician’s order for
oxygen. CMS Ex. 10 at 1-3, 5, 19; P. Ex. 7 at 3,4, 8. She was described as “extremely
frail” with mild pursed-lip breathing, cyanotic-colored ears, and clubbing of her digits.
She had an enlarged heart. P. Ex. 7 at 2. She was prescribed Lortab (Vicodin), among
other medications, and her use of the drug was considered “high.” CMS Ex. 10 at 7; P.
Ex. 7 at 31.

Mentally, she appears to have been more competent than some of the other residents
discussed here (CMS Ex. 10 at 3, 19, 20), but that does not mean that she was a
responsible smoker. See P. Ex. 12 (in which a staff member describes a shouting match
between R12 and another resident, making the smoking session “very chaotic”). In any
event, Petitioner has produced no evidence that facility staff assessed her for smoking
safety or addressed the issue in her care plan prior to the time of the survey.

During the survey, staff added safe smoking to R12’s care plan. The plan is virtually
identical to that developed for R15 and R16, except that it authorizes the use of cigarettes
as a behavior management device. Instead of instructing staff to ensure that she put her
cigarette out at the proper time (as called for in R15’s and R16’s plans), it says that, if she
becomes anxious or displays “manipulating behavior,” staff is to calm her down before
giving her a cigarette and explain that she must remain calm or she will not be given a
cigarette. P. Ex. 7 at 61.

Resident 13 (R13) was admitted to the facility on March 24, 2005, and readmitted on
March 12, 2008. She was 64 years old at the time of the survey and suffered from
osteoarthritis and joint pain in her ankle and left leg. She had had a cerebral vascular
accident (stroke) and suffered from peripheral vascular disease and hypotension, among
other ailments. CMS Ex. 9 at 5.

In May 2008, R13 was hospitalized with septic shock. P. Ex. 8 at 1- 3.
According to progress notes, she used a wheelchair and required assistance to transfer.
Nurses’ progress notes describe her decision-making ability as “impaired” and indicate

that she has lower extremity weakness. P. Ex. 8 at 5-7, 9, 11, 13.

Her records do not even indicate that she is a smoker, much less contain any smoking
assessments or smoking care plan.

* Shortly after the survey, medical staff recommended that she decrease her use of Lortab.
13

Resident 14 (R14) was admitted to the facility on April 30, 2007, suffering from
dementia. She was a 69-year-old woman at the time of the survey. CMS Ex. 9 at 6.
According to a physician’s report, dated July 24, 2008, dementia was her only diagnosis.
P. Ex. 9 at 1. Nurses’ progress notes characterize her decision-making ability as
“severely impaired” and indicate that her thinking ability varies. She had an unsteady
gait and ambulated with a walker. She had behavioral problems, wandering into other
resident rooms. P. Ex. 9 at 2,4. A comment dated November 10, 2008, describes her as
alert and agitated, confused, with an impaired short-term memory. The note says that she
is becoming combative and aggressive. P. Ex. 9 at 5. Petitioner points to nothing, and I
found nothing in any of the records that refers to her smoking.

Thus, Petitioner has not come forward with evidence establishing a factual dispute as to
whether the facility assessed these residents for smoking safety or developed care plans
based on such an assessment. Without smoking assessments, the facility could not
identify any actual or potential accident hazards posed by the residents’ physical or
mental limitations and could not determine what, if any, assistive devices or supervision
the residents would require to ensure their smoking safety and the safety of others, as
required by 42 C.F.R. § 483.25(h). See CMS Ex. 27 at 9 (Castro Decl. § 31). The facility
was therefore not in substantial compliance with 42 C.F.R. § 483.25(h), and CMS is
entitled to summary judgment.

B. CMS is entitled to summary judgment that the facility was not in substantial
compliance with 42 C.F.R. § 483.25(h), because the undisputed evidence
establishes that facility staff did not safely handle and store oxygen cylinders.

The facility policy for oxygen safety required staff to store oxygen cylinders “in racks
with chains, sturdy portable carts and/or approved stands.” They could not be left free-
standing but had to be “securely fastened at all times.” The policy also prohibited
“{s]moking, open flames and spark producing devices” in oxygen storage areas or areas
where oxygen was in use. CMS Ex. 13 at 2.

CMS has come forward with evidence establishing that facility staff did not follow —
indeed, could not follow — the facility’s policy for safe storage of oxygen cylinders.

On December 30, 2008, at 3:35 p.m., Surveyor Jean Lapour, RN, observed residents
smoking on the patio of the “behavioral unit.” She saw a nurse aide remove the oxygen
cylinder from R15’s wheelchair and lean it against the wall, approximately four feet away
from the resident. The nurse aide left the cylinder “completely unsecured.” Another
resident, R16, was in the area, near the unsecured cylinder. CMS Ex. 28 at 4 (Lapour
Decl. § 12). Surveyor Lapour did not see any storage racks or stand on the patio or
anywhere near the door inside the behavioral unit, so she concluded that staff were
unable to comply with the facility’s oxygen safety policy and the standard of care for
oxygen safety. CMS Ex. 28 at 5 (Lapour Decl. { 14).

14

Surveyor Lapour asked the nurse aide about her oxygen cylinder storage practices. The
aide said that she always removed the oxygen cylinder and put it against the wall
unsecured. She said that she had never been trained in oxygen safety and smoking,
although she knew that leaving the oxygen unsecured could cause it to “explode or blow
up and be dangerous.” CMS Ex. 28 at 6 (Lapour Decl. § 16); CMS Ex. 16 at 3.

At a different location and time, Surveyor Rena Castro, RN, observed a scheduled,
supervised smoking session on the facility’s open patio at 7:48 p.m. on December 29,
2008. She saw the nurse aide who was supervising the session remove an oxygen
cylinder from a resident’s wheel chair. Holding the cylinder by the regulator,’ the aide
carried it down the hall to the nursing station and placed it on the floor, unsecured. CMS
Ex. 27 at 4 (Castro Decl. §§ 12, 13). Surveyor Castro saw no storage racks or stand on
the smoking patio or near the nursing station, which meant that the staff was unable to
comply with the oxygen safety policy and the standard of care for safe cylinder storage.
CMS Ex. 27 at 5 (Castro Decl. § 17).

According to Surveyor Castro (and as reflected in the facility’s policy) leaving an oxygen
cylinder on the floor, unsecured, creates a hazardous situation. If the cylinder falls or is
hit, “it can take off like a rocket,” injuring anyone who is hit by the projectile. Further,
oxygen is combustible. Ifa cylinder explodes, the highly compressed oxygen gas could
feed a fire if any sparks or flames are in the area. CMS Ex. 27 at 5 (Castro Decl. ¥ 15).
Surveyot Lapour concurred:

If the cylinder hits the ground, particularly a hard surface
such as a patio, it can release oxygen and create sparks that
could start a fire and/or cause an explosion. There is no real
“safe distance” from an unsecured cylinder, so even though
the oxygen cylinder was leaned up against the wall some 4 or
5 feet away from the closest resident, that did not mitigate the
potential for harm if the cylinder was knocked over and
combusted from the sparks and pressurized oxygen in the
cylinder.

CMS Ex. 28 at 5 (Lapour Decl. § 15).

Petitioner has not come forward with evidence establishing a dispute over any of these
facts. In its response to CMS’s MSJ, Petitioner asserts that “‘the closest oxygen tank to

’ The regulator was attached to the top of the cylinder with a wrench to ensure that it was
securely closed. The regulator is used to control the rate at which oxygen leaves the
cylinder. It also reflects the amount of pressure that the contents are under. CMS Ex. 27
at 4-5 (Castro Decl. § 14).
15

any cigarette was Resident #15’s oxygen tank, which was approximately five feet away
from the [rJesident’s cigarette.” P. Response at 6. I need not accept this assertion of fact,
because it is unsupported. Nevertheless, the statement is generally consistent with
Surveyor Lapour’s sworn statement that the cylinder was placed about four feet away
from R15. CMS Ex. 28 at 4 (Lapour Decl. § 12). In light of R15’s behaviors — “running”
his wheelchair, throwing furniture and other objects, striking out — five feet seems a
dangerously short distance between his lit cigarette and an unsecured oxygen cylinder.

Petitioner also disputes CMS’s assertion that, contrary to its policy and the standard of
care, the facility improperly allowed smoking in an oxygen storage area, claiming “[t]he
smoking patio is not an ‘oxygen storage area[.]” P. Response at 7. But Petitioner has not
challenged Surveyor Lapour’s statement that a nurse aide regularly stored R15’s oxygen
cylinder on the smoking patio while R15 and others were smoking. The only reasonable
conclusion to draw from this undisputed fact is that staff turned the patio into an oxygen
storage area during the smoking sessions.

Finally, in her affidavit, the facility’s administrator, Sheila Perry, says that facility staff
followed the facility’s policy for oxygen safety and kept oxygen containers “‘a safe
distance from any open flame or spark.” P. Ex. 17. These are not statements of fact; they
are conclusions (unsupported by any facts).

Thus, Petitioner presents no evidence suggesting a dispute over the dispositive surveyor
observations: staff left oxygen cylinders completely unsecured; the facility had no racks
or stands available for cylinder storage during smoking sessions; at least one staff
member stored oxygen on a smokers’ patio during smoking sessions; at least one staff
member, who handled oxygen cylinders, was not aware of the policy for oxygen storage
and had not been trained in oxygen safety/smoking.'° Nor does Petitioner challenge any
of the surveyor statements regarding the importance of securing the oxygen cylinders.
See Cedar Lake, DAB No. 2344 at 8-9 (citing Woodland Vill. Nursing Ctr., DAB No.
2053 at 9 (2006)); Lakeridge Villa Health Care Ctr., DAB No. 1988 at 22 (2005)
(holding that a facility’s failure to follow its own policies can constitute a deficiency
under 42 C.F.R. § 483.25).

The facility’s failure to secure the cylinders and to keep them away from smoking
residents put residents and staff at considerable risk and, by itself, shows that the facility
was not in substantial compliance with 42 C.F.R. § 483.25(h).

© Another nurse aide told Surveyor Castro that she had never been in-serviced on the
facility’s smoking policies or proper supervision techniques. CMS Ex. 27 at 6-7 (Castro
Decl. § 21). Petitioner has not come forward with documents, affidavits, or any other
evidence of staff training to dispute this assertion.
16

Other incidents. CMS alleges other incidents of purported noncompliance. Surveyor
Castro observed R12 enter the smoking patio with her oxygen running. According to
Surveyor Castro, the nurse aide present was then about to light R12’s cigarette when the
surveyor intervened. CMS Ex. 27 at 6 (Castro Decl. J 19). Petitioner denies that the aide
was going to light the cigarette but admits that R12 entered the smoking patio with her
oxygen in use while other residents were smoking. Petitioner argues that R12 was
returning from an outside appointment, her actions were “beyond [staff's] control,” and
staff quickly told her to turn off her oxygen, which she did. P. Response at 8; P. Ex. 12
(Montoya Decl.); P. Ex. 16 at 1 (Easterday Decl.); P. Ex. 17 (Perry Decl.).

CMS also charges that a staff member responsible for supervising smokers left the
smoking patio to return residents to the facility. CMS Ex. 27 at 8 (Castro Decl. 4 26).
Petitioner admits that the staff member walked some residents back into the facility,
while others were still smoking, but argues that the distance was only “a few” feet, took a
very short time, and the smoking residents were visible through glass doors. P. Response
at 9-10; P. Ex. 17 at 1 (Perry Decl.)."

CMS also claims that a staff member responsible for their supervision was not adequately
observing the smokers, because she sat looking at her cell phone, punching in keys. CMS
MSJ at 14; CMS Ex. 27 at 8 (Castro Decl. 4] 25). Petitioner concedes that the staff
member “was punching keys on her phone” but argues (without citation to any evidence)
that she “was within a few feet” of the smoking residents and that “her eyes and ears
were supervising [them] at all times.” P. Response at 10.

Because I find that CMS’s determination of substantial noncompliance and the penalty
imposed are more than justified by: 1) the absence of smoking assessments and care
plans, and 2) the facility’s failure to secure safely the oxygen cylinders, I need not
consider whether CMS is entitled to summary judgment based on these additional cited
incidents.

C. The penalty imposed is reasonable.

I next consider whether the 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) 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. The absence of culpability is not a mitigating factor. The factors 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.

" According to Administrator Perry, the distance was twenty feet.
17

In reaching a decision on the reasonableness of the CMP, I consider whether the evidence
supports a finding that the amount of the CMP is at a level reasonably related to an effort
to produce corrective action by a provider with the kind of deficiencies found, and in
light of the above factors. I am neither bound to defer to CMS’s factual assertions, nor
free to make a wholly independent choice of remedies without regard for CMS’s
discretion. Barn Hill, DAB No. 1848 at 21 ; Cmty. Nursing Home, DAB No. 1807 at 22
et seq.; Emerald Oaks, DAB No. 1800 at 9; CarePlex of Silver Spring, DAB No. 1683 at
8.

CMS has imposed a $10,000 per instance CMP, which is currently the maximum per
instance penalty ($1,000-$10,000). 42 C.F.R. §§ 488.408(d)(iv), 488.438(a)(2). On the
other hand, the penalty is modest considering what CMS might have imposed. See Plum
City Care Ctr., DAB No. 2272 at 18-19 (2009) (Even a $10,000 per instance CMP can be
“a modest penalty when compared to what CMS might have imposed.”).

CMS does not contend that the facility’s history justifies a higher CMP. Petitioner has
not argued that its financial condition affects its ability to pay the penalty. With respect
to the other factors, I find that the scope and severity of the deficiencies more than justify
a $10,000 penalty. Staff's mishandling of oxygen cylinders created a very dangerous
situation, putting at risk virtually every resident, staff member and visitor. Because it did
not assess its residents for smoking safety, the facility could not even begin to identify the
level of supervision or any assistive devices necessary to keep them safe. This failure
evidences serious disregard for resident safety, for which the facility is culpable.

IV. Conclusion

The undisputed facts establish that the facility was not in substantial compliance with
Medicare requirements governing the prevention of accidents, 42 C.F.R. § 483.25(h).
Given the scope and severity of the deficiencies and the facility’s culpability, the $10,000
CMP is reasonable. Because the facility was not in substantial compliance with Medicare
requirements, CMS had the authority to impose the DPNA.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Pepper Hill Nursing & Rehabilitation Center, LLC,
(Supplier No: 6142820001),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-795
Decision No. CR2293

Date: December 14, 2010

DECISION

For the reasons set forth below, I grant the Centers for Medicare and Medicaid Services’
(CMS) motion for summary judgment. The undisputed evidence establishes that
Petitioner, Pepper Hill Nursing & Rehabilitation Center, LLC (Pepper Hill), was not in
compliance with Medicare program requirements of 42 C.F.R. § 424.57(c)(26) and (d) by
October 2, 2009, as required. As such, CMS had the authority to revoke Petitioner’s
Medicare supplier number.

I. Applicable Law and Regulations

Section 1834(a)(16)(B) of the Social Security Act (Act), 42 U.S.C. § 1395m(a)(16)(B),
states that the Secretary of Health and Human Services (Secretary) “shall not provide for
the issuance (or renewal) of a provider number for a supplier of durable medical
equipment for purposes of payment . . . for durable medical equipment furnished by the
supplier unless the supplier provides the Secretary on a continuing basis . . . with a surety
bond in a form specified by the Secretary and in an amount that is not less than $50,000.”
CMS’s regulations implement these “supplier standards,” set forth at 42 C.F.R.

§ 424.57(c), which suppliers of durable medical equipment, prosthetics, orthotics, and
supplies (DMEPOS) must meet to maintain Medicare billing privileges. Specifically,
section 424.57(c)(26) (Supplier Standard 26) provides:

(c) Application certification standards. The supplier must meet and must
certify in its application for billing privileges that it meets and will continue
to meet the following standards. The supplier:

oR RK

(26) Must meet the surety bond requirements specified in paragraph (d) of
this section.

The surety bond requirements at 42 C.F.R. § 424.57(d) state, as relevant here, that
“beginning October 2, 2009, each Medicare-enrolled DMEPOS supplier must meet the
requirements of paragraph (d),” which include “a bond that is continuous” that “meet[s]
the minimum requirements of liability coverage ($50,000)” and provides that “[t]he
surety is liable for unpaid claims, CMPs [civil money penalties], or assessments that
occur during the term of the bond.” 42 C.F.R. § 424.57(d)(1)(ii), (4), (5).

Under the regulations, failure to submit a surety bond as required is grounds for
revocation of a supplier’s billing privileges. See 42 C.F.R. § 424.57(d)(4)(ii)(B); see also
42 C.F.R. § 424.57(d)(11) (“CMS revokes the DMEPOS supplier’s billing privileges if
an enrolled supplier fails to obtain, file timely, or maintain a surety bond as specified in
this subpart and CMS instructions.”). The regulations also provide more generally that
CMS “will revoke a supplier’s billing privileges if it is found not to meet” the supplier
standards or other requirements in 42 C.F.R. § 424.57(c). 42 C.F.R. § 424.57(e).

A supplier that has had its billing privileges revoked is “barred from participating in the
Medicare program from the effective date of the revocation until the end of the re-
enrollment bar. The re-enrollment bar is a minimum of 1 year, but not greater than 3
years depending on the severity of the basis for revocation.” 42 C.F.R. § 424.535(c).
CMS may require a DMEPOS supplier to show compliance with the surety bond
requirement at any time. 42 C.F.R. § 424.57(d)(12).

I. Background

By letter dated November 10, 2009, the National Supplier Clearinghouse (NSC), a
Medicare contractor, notified Petitioner, a Medicare DMEPOS supplier, that it was not in
compliance with 42 C.F.R. § 424.57(c)(26) and revoked Petitioner’s Medicare supplier
number. CMS Ex. 1; P. Ex. 3 at 1. The notice stated that the revocation was effective 30
days after the date of postmark and that Petitioner was barred from re-enrolling in the
Medicare program for one year from the effective date of the revocation. CMS Ex. 1; see
42 C.F.R. § 405.874(b)(2) (setting forth that revocation effective 30 days after CMS, or
the CMS contractor, mails the notice of its determination). The letter informed Petitioner
that it could submit a corrective action plan (CAP) within 30 days, or it could appeal the
decision by requesting reconsideration within 60 days, or both. CMS Ex. 1, at 2.

By letter dated November 13, 2009, Petitioner submitted a CAP to NSC and enclosed a
“continuation certificate,” effective December 20, 2008 through December 20, 2009.
CMS Ex. 2. The certificate references a surety bond and lists the “Department of Health
and Environmental Control” as obligee.! CMS Ex. 2, at 2. The NSC denied Petitioner’s
CAP on November 30, 2009, noting that a “surety bond was not attached to [Petitioner’s]
CAP.” CMS Ex. 3. The notice further advised Petitioner of its right to request
reconsideration before a Medicare hearing officer and stated that the request was due by
January 30, 2010. CMS Ex. 3.

By letter dated January 25, 2010, Petitioner filed a request for reconsideration. CMS Ex.
4, at 1. With its request, Petitioner included a surety bond that listed CMS as obligee and
was executed on January 1, 2010. CMS Ex. 4, at 2-3. The January 1, 2010 surety bond
indicated that it was valid for claims “related to overpayments or other events that
occurred on or after March 3, 2009.” P. Ex. 3 at 3.

The Medicare hearing officer issued an unfavorable reconsideration decision on April 26,
2010. CMS Ex. 5. The hearing officer explained that, although Petitioner attempted to
satisfy the surety bond requirement with the newly submitted surety bond, her scope of
review was limited to whether the contractor’s reason for imposing the initial revocation
was valid at the time the revocation was issued. /d. at 2. Further, “[i]f a provider or
supplier provides evidence that demonstrates or proves that they met or maintained
compliance after the date of denial or revocation, the contractor shall exclude this
information from the scope of the review.” Jd. (quoting Medicare Program Integrity
Manual, ch. 10, § 19.A). Although the hearing officer noted that Petitioner’s authorized
representative did not sign the newly submitted bond, she concluded that, at the time of
the revocation, Petitioner was not compliant with supplier standard 26. Thus, she
determined the NSC appropriately revoked Petitioner’s supplier number. CMS Ex. 5,

at 2.

On June 24, 2010 Petitioner timely filed a hearing request (HR) pursuant to 42 C.F.R.

§ 498.40, in which it asserted, among other things, that although it did not have a
compliant surety bond at the time of its enrollment revocation, it subsequently obtained a
surety bond on January, 1, 2010 and a rider on May 5, 2010, both which the surety agreed

' The referenced obligee is presumably the “South Carolina Department of Health and
Environmental Control.” See http://www.scdhec.gov/administration/aboutDHEC. htm.
In any event, the named oblige is clearly not CMS as 42 C.F.R. § 424.57(d)(10) required.
to be retroactively effective prior to the October 2, 2009 deadline. HR. This case was
originally assigned to Board Member Leslie A. Sussan, pursuant to 42 C.F.R. § 498.44,
which permits a Member of the Departmental Appeals Board (Board) to hear appeals
under Part 498. The case was subsequently transferred to me for decision, and the parties
were notified by letter dated November 18, 2010.

Pursuant to the July 1, 2010 Acknowledgement & Pre-Hearing Order, CMS filed a
motion for summary judgment and supporting memorandum (CMS Br.) on July 27, 2010.
In its motion, CMS averred that the rider Petitioner executed May 5, 2010, referenced in
its hearing request, should be excluded as new evidence under 42 C.F.R. § 498.56(e) and
that, in any case, it is not relevant, because the rider became effective well past the
October 2, 2009 deadline. CMS Br. at 4n.2. CMS accompanied its submission with
CMS Exhibits 1-6, which I admit into evidence without objection. On August 27, 2010,
Petitioner filed its response (P. Br.) and included Exhibits 1-4.

III. Issue

The issue in this case is whether CMS is entitled to summary judgment on the ground that
the undisputed facts demonstrate that the revocation of Petitioner’s Medicare billing
privileges was legally authorized.

IV. Applicable Standard
The Board stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . .. The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of
law... . To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations

omitted). The role of an Administrative Law Judge (ALJ) in deciding a summary
judgment motion differs from the ALJ’s role in resolving a case after a hearing. The ALJ
should not assess credibility or evaluate the weight of conflicting evidence. Holy Cross
Vill. at Notre Dame, Inc, DAB No. 2291, at 5 (2009).
V. Findings of Fact, Conclusions of Law, and Discussion
I make a single finding and conclusion set out below:

The undisputed evidence establishes that CMS was authorized to revoke
Petitioner’s billing privileges based on undisputed evidence that Petitioner did
not obtain a surety bond, as 42 C.F.R. § 424.57(c)(26) and (d) required.

Petitioner contends:

Pepper Hill’s surety bond, while executed on January 1, 2010, had an
effective date of March 3, 2009. This bond is in all respects valid and
covers a period greater than that required by law. Therefore, a mere
submission of the bond is inconsequential and, most importantly, does not
in any way affect CMS’s ability to recover any overpayments, assessments,
or CMPs incurred by Pepper Hill since October 2, 2009. A late submission,
without more, should not warrant revocation of billing privileges.

P. Br. at 7-8 (emphasis in original). In its argument, Petitioner readily concedes that it
not only submitted the surety bond late, but that it executed the surety bond after the
regulatory deadline.

As noted above, the statute states that the Secretary shall not issue or renew a DMEPOS
supplier number, “unless the supplier provides the Secretary on a continuing basis . . .
with a surety bond... .” 42 U.S.C. § 1395m(a)(16)(B).

The regulations implement this requirement for continuous compliance. The introductory
language of 42 C.F.R. § 424.57(c) states, in pertinent part, “[t]he supplier must meet and
must certify in its application for billing privileges that it meets and will continue to
meet” the supplier standards listed within. Those standards include section 424.57(c)(26)
(supplier standard 26), which states that “beginning October 2, 2009, each Medicare
enrolled DMEPOS supplier . . . [mJust meet the surety bond requirements specified in
paragraph (d) of this section.” 42 C.F.R. § 424.57(c) and (d). These requirements
include that the “surety bond must name the DMEPOS supplier as Principal, CMS as
Obligee, and the surety . . . as surety.” 42 C.F.R. § 424.57(d)(10). It follows that a
supplier must continually meet the surety bond requirements specified in paragraph (d).

Consistent with this, the preamble to the final rule on appeals of CMS determinations
states “we believe all providers and suppliers must meet and maintain all Federal and
State requirements for their provider or supplier type to enroll or maintain their
enrollment in the Medicare Program.” 73 Fed. Reg. 36,448, 36,452 (June 27, 2008).

Petitioner concedes that it was not in compliance with the surety bond requirement at the
time CMS revoked its supplier number. See P. Br. at 5, 8. However, Petitioner argues
that it subsequently submitted a surety bond that, although executed on January 1, 2010,
was “effective” March 3, 2009, well before the October 2, 2009, regulatory requirement.
P. Br. at 6.

The issue before me, however, is not whether Petitioner can belatedly achieve
compliance with the surety bond requirements, but whether CMS correctly found that, at
the time of the revocation action, Petitioner was not in compliance. If CMS correctly
found that Petitioner was not in compliance with the regulatory requirements, CMS had
authority to revoke Petitioner’s supplier number.

As noted, CMS objects to the admission of the surety bond rider executed May 5, 2010,
because it was new evidence that 42 C.F.R. § 498.56(e) precluded. CMS Br. at 4 n.2; see
HR; P. Ex. 3 at 6. CMS also argues “that it is irrelevant to these proceedings since the
date of the alleged rider is May 5, 2010, which is well beyond the October 2, 2009
deadline.” CMS Br. at 4n.2. Although Petitioner argues that it is not new evidence, I
agree with CMS that the May 5, 2010 rider constitutes new evidence and is therefore not
admissible absent a showing of good cause, which Petitioner’s account of events does not
establish. I conclude, however, that, regardless of whether the rider is admissible, it is
immaterial.

First, like the “continuation certificate,” the rider lists the incorrect obligee. P. Ex. 3, at
3; see CMS Ex. 2, at 2. On its face, the rider does not name CMS as the obligee, as
required. 42 C.F.R. § 424.57(d)(10). However, even if the submitted rider named CMS
as obligee and was admitted, it would remain immaterial, because it was executed after-
the-fact.

Petitioner’s surety bond executed January 1, 2010 (for claims beginning March 3, 2009),
which I admitted into evidence, likewise provides no relief for Petitioner. See P. Ex. 3, at
3-4. As noted, the issue before me is whether CMS correctly found that, at the time of
the revocation, Petitioner was not in compliance and therefore had authority to revoke.
Petitioner admits it did not have a compliant surety bond at the time of the revocation.
Although Petitioner appears to have belatedly obtained a surety bond correctly naming
CMS as the obligee and the surety was willing to be retroactively liable, I find no
authority by which that action may cause Petitioner to be retroactively compliant.

That a surety was willing to undertake to cover Petitioner’s potential overpayments after
the fact does not mean that CMS was protected at the relevant time from Petitioner’s
fraud or billing errors. Furthermore, it is unlikely that a surety would undertake such
retroactive coverage for a supplier had fraud or abuse been discovered during the past
period when no coverage for Petitioner’s legal business was in place. Therefore, a
belated retroactive surety bond does not satisfy the statutory and regulatory purpose of
providing continuous protection to the Medicare program from the risk of loss due to a
supplier’s fraud or abuse.”

Petitioner asserts that “[a] surety bond can be retroactive and have an effective date prior
to the date of execution” as long as “an intent to be so liable is indicated.” P. Br. at 6-7
(citing S.L. Reed and Western Casualty & Surety Co. v. Maryland Casualty Co., 244 F.2d
857, 862 (5th Cir. 1957)). Petitioner relies exclusively on S.L. Reed for its assertion. In
that case, the court allowed for a retrospective surety bond in relation to construction and
contract law as interpreted under section 274 of the Mississippi Code of 1942. Id. A
retroactive surety bond, as permitted in S.L. Reed, is not applicable in this context of
administrative regulatory compliance where federal regulations directly required
Petitioner to submit a compliant surety bond, including a continuity requirement, by date
certain.

Petitioner further argues that “CMS’s own appeals process implies that retroactive surety
bonds are acceptable,” namely, providing suppliers with an opportunity to correct a
deficiency through a CAP. P. Br. at 7. CMS’s decision whether or not to reinstate a
supplier based on a CAP is not an initial determination and not reviewable by an ALJ. 42
C.F.R. § 405.874(e). In addition, I am specifically prohibited from considering new
evidence in this type of enrollment appeal without good cause, which I do not find here.
See 42 C.F.R. § 498.56(e). Therefore I disagree with the argument that, because CMS
may have the specific authority to retroactively allow a correction to a surety bond defect
during the CAP process, this implies I have the same ability at the ALJ level of review.

Petitioner further asserts that it did not receive actual notice of the surety bond
requirements and therefore summary judgment is not appropriate. P. Br. at 4. For
purposes of summary judgment, I will accept as true Petitioner’s factual assertion that it
did not receive actual notice of the surety bond requirement. Nonetheless, as the
Supreme Court has stated, participants in the Medicare program have a “duty to

> The preamble sets forth the surety bond requirement’s purposes, which are to:

(1) Limit the Medicare program risk to fraudulent DME suppliers; (2)
enhance the Medicare enrollment process to help ensure that only
legitimate DME [durable medical equipment] suppliers are enrolled or are
allowed to remain enrolled in the Medicare program; (3) ensure that the
Medicare program recoups erroneous payments that result from fraudulent
or abusive billing practices by allowing CMS or our designated contractor
to seek payments from a surety up to the penal sum; and (4) help ensure
that Medicare beneficiaries receive products and services that are
considered reasonable and necessary from legitimate DME suppliers.

74 Fed. Reg. 166, 180 (Jan.2, 2009).
familiarize [themselves] with the legal requirements for cost reimbursement.” Heckler v.
Cmty. Health Servs. of Crawford County, Inc., 467 U.S. 51, 64 (1984). Petitioner’s
failure to realize that it was subject to the surety bond requirement provides no ground for
relief. As a Medicare supplier, Petitioner was charged with knowing the requirements for
maintaining enrollment. See Waterfront Terrace, Inc., DAB No. 2320, at 7 (2010); see
also Manor of Wayne Skilled Nursing & Rehab., DAB No. 2249, at 10-11 (2009),
Regency on the Lake, DAB No. 2205, at 5-6 (2008) (noting facilities participating in
Medicare have constructive notice of regulations).

I must apply the regulations as they are stated. The applicable regulations clearly
required Petitioner to have in place a compliant surety bond by October 2, 2009.
Petitioner points to no source of authority for me to waive the compliance requirement or
grant an exemption on equitable grounds. Moreover, I have no authority to declare the
statute or the regulation invalid or ultra vires. 1866/CPayday.com, L.L.C., DAB No.
2289, at 14 (2009) (“An ALJ is bound by applicable laws and regulations and may not
invalidate either a law or regulation on any ground.”). Even if I did have such authority,
no basis exists where, as here, the regulation does what the statute grants the Secretary
the authority to do; that is, to require DMEPOS suppliers to demonstrate that they have
obtained a surety bond “in a form specified by the Secretary” and maintain such coverage
“on a continuing basis.” 42 U.S.C. § 1395m(a)(16)(B).

42 C.F.R. § 424.535 plainly authorizes CMS to revoke a supplier’s Medicare enrollment,
whenever the supplier fails to maintain compliance with enrollment requirements.
Section 424.535 provides that a supplier’s billing privileges are revoked when the
supplier “is determined not to be in compliance with the enrollment requirements
described in this section, or in the enrollment application applicable for its provider or
supplier type, and has not submitted a plan of corrective action as outlined in part 488 of
this chapter.”

It is an enrollment requirement that “[t]he supplier must meet and must certify in its
application for billing privileges that it meets and will continue to meet” the supplier
standards in 42 C.F.R. § 424.57(c), which includes the surety bond requirement of section
424.57(c)(26). CMS may revoke the supplier’s Medicare billing privileges if the supplier
fails to meet any of these standards. 42 C.F.R. § 424.57(e); 1866/CPayday.com, DAB
No. 2289, at 13 (“[FJailure to comply with even one supplier standard is a sufficient basis
for revoking a supplier’s billing privileges.”).

Section 424.57(d)(11) further makes abundantly clear the consequences of a failure to
maintain a compliant surety bond:

CMS revokes the DMEPOS supplier’s billing privileges if an enrolled
supplier fails to obtain, file timely, or maintain a surety bond as specified in
this subpart and CMS instructions. Notwithstanding paragraph (e) of this
section, the revocation is effective the date the bond lapsed and any
payments for items furnished on or after that date must be repaid to CMS
by the DMEPOS supplier.

See 42 C.F.R. § 424.57(d)(11); see also 42 C.F.R. § 424.57(c)(26). In addition, a
supplier that has its billing privileges revoked is barred from participating in the
Medicare program from the effective date of the revocation until the end of the re-
enrollment bar, and the re-enrollment bar is a minimum of one year. 42 C.F.R.

§ 424.535(c).

The regulatory language is plain. A supplier must comply with a// standards, or CMS
will revoke its billing privileges. I am bound by applicable laws and have no authority to
invalidate or change an existing regulation or grant Petitioner an exemption from
compliance with regulatory requirements. 1866/CPayday.com, L.L.C., DAB No. 2289,
at 14. I must sustain CMS’s determination where the facts establish noncompliance with
one or more of the regulatory standards.

I conclude that CMS acted within its regulatory authority to revoke Petitioner’s Medicare
supplier number, because Petitioner was not compliant with the surety bond requirements
of 42 C.F.R. § 424.57(c)(26) and (d) by October 2, 2009. I therefore uphold the
revocation of Petitioner’s Medicare billing privileges and supplier number and the one-
year bar on re-enrollment.

VI. Conclusion

For the reasons explained above, I grant summary judgment in favor of CMS. The
undisputed evidence establishes that Petitioner was not in compliance with Medicare
program requirements of 42 C.F.R. § 424.57(c)(26) and (d) by October 2, 2009, as
required. As such, CMS had the authority to revoke Petitioner’s Medicare supplier
number under 42 C.F.R. § 424.57(d)(11).

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Resurrection Nursing and Rehabilitation Center
(CCN: 14-5324),

Petitioner,

Vv.

Centers for Medicare and Medicaid Services.
Docket Nos. C-09-502 and C-09-680
Decision No. CR2292

Date: December 8, 2010

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
impose civil money penalties of $300 per day against Petitioner, Resurrection Nursing
and Rehabilitation Center, for each day of a period that began on March 31, 2009 and that
ended on April 21, 2009.

I. Background

Petitioner is a skilled nursing facility in Park Ridge, Illinois. It participates in the
Medicare program. Its participation in Medicare is governed by sections 1819 and 1866
of the Social Security Act (Act) and by regulations at 42 C.F.R. Parts 483 and 488. Its
hearing rights in this case are governed by regulations at 42 C.F.R. Part 498.

Petitioner was surveyed on several occasions in 2009 to determine whether it was
complying with Medicare participation requirements. Surveys were completed on
January 28, 2009, January 30, 2009 (Life Safety Code), and April 3, 2009 (April Survey).
Findings of noncompliance were made at each of these surveys. CMS concurred with
these findings and determined to impose remedies against Petitioner consisting of civil
money penalties of $300 per day for each day of a period that began on January 28, 2009
and that continued through April 21, 2009.

Petitioner requested a hearing to challenge CMS’s determination, by letter dated June 5,
2009. The case was docketed as C-09-502 and assigned to another administrative law
judge. Petitioner filed a second request for hearing dated August 25, 2009, and that was
docketed as C-09-680. The two cases were consolidated under C-09-502 by order dated
September 9, 2009. CMS filed a motion for partial summary judgment. Petitioner
responded by conceding that it had not complied substantially with Medicare
participation requirements during a period that began on January 28, 2009 and that
continued through March 30, 2009. It conceded also that penalties of $300 for each day
of this period were reasonable. On April 1, 2010, the administrative law judge to whom
the case was then assigned issued an order granting partial summary judgment to CMS
and sustaining civil money penalties of $300 per day for each day of the January 28 —
March 30, 2009 period.

What remained to be heard and decided after the entry of partial summary judgment were
the issues of Petitioner’s compliance beginning with March 31, 2009 and continuing
through April 21, 2009, and the reasonableness of the $300 per day civil money penalties
that CMS had determined to impose to address the additional alleged noncompliance.
The noncompliance finding that remained at issue was made at the April 3 Survey.
Noncompliance findings that were made at previous surveys were no longer at issue by
virtue of the uncontested issuance of partial summary judgment.

In August 2010, the consolidated case was reassigned to me. On September 13, 2010, I
conducted a hearing by telephone solely to address the remaining issues of
noncompliance and remedy. I received into evidence exhibits from CMS consisting of
CMS Ex. 18 through CMS Ex. 35. I received into evidence exhibits from Petitioner
consisting of P. Ex. 1 — P. Ex. 32. I heard the cross-examination, redirect, and re-cross
examination testimony of a single witness, Ms. Cleose Shawley.

II. Issues, Findings of Fact, and Conclusions of Law
A. Issues
The issues in this case are whether:

1. Petitioner failed to comply substantially with the requirements of 42
C.F.R. § 483.25(h)(2).

2. Civil money penalties of $300 per day are reasonable in amount and
duration.
B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law (Findings).

1. Petitioner failed to comply substantially with the requirements of 42
C.F.R. § 483.25(h)(2).

The regulation at issue requires a skilled nursing facility to ensure that each of its
residents receives adequate supervision and assistance devices to prevent accidents. The
regulation has been the subject of much litigation. It does not make a facility per se liable
for accidents sustained by its residents. But, it does impose on a facility the duty to take
all reasonable measures to protect its residents against known or foreseeable accident
hazards. In practice, that means that a facility must: assess each of its residents to
determine what, if any, risks that resident may encounter; plan the resident’s care to
account for the risks that are identified; and implement each and every element of the
plan of care.

CMS’s allegations of noncompliance in this case center on the care that Petitioner gave to
a resident who is identified as Resident # 1. The resident was 81 years old on February
13, 2009, when he was transferred to Petitioner’s facility from a hospital. CMS Ex. 24 at
1; CMS Ex. 27, at 1. On January 26, 2009, the resident had slipped and fallen on his
driveway while trying to get out of his car and had fractured his left hip. CMS Ex. 26 at
4-5. The hip was surgically repaired on January 27, 2009. Jd. at 4. The resident was
then transferred into a rehabilitation unit at the hospital, where he stayed until his transfer
to Petitioner’s facility.

The rehabilitation unit sent documents to Petitioner’s facility along with the resident.
These documents contained both assessments of the resident’s condition and
recommendations about the care that he should receive. They included a Patient
Information and Transfer form that was completed on February 13, 2009. CMS Ex. 26.
Resident # 1 was assessed as alert but forgetful. /d. at 2. The rehabilitation center
recommended that the resident be given a commode chair and a rolling walker. Jd. at 3;
P. Ex. 20.

The resident received an occupational therapy evaluation by Petitioner’s staff on
February 13, 2009, the date of his admission to the facility. CMS Ex. 27 at 15; P. Ex. 11.
The occupational therapist assessed the resident’s mental functioning as being within
normal limits. /d. The resident was found to require moderate assistance in daily
activities, including using the bathroom. Jd.

On February 14, 2009, the resident received a physical therapy evaluation at Petitioner’s
facility. The resident told the physical therapist that he felt very weak. CMS Ex. 27 at
13; P. Ex. 23. The physical therapist assessed the resident as having impaired: joint
mobility; motor function; balance; ability to transfer; and gait and ability to walk. She
also noted that the resident was experiencing pain. Id.

Petitioner developed a care plan to address the resident’s safety issues. CMS Ex. 27 at 3;
P. Ex. 22, at 2. The care plan identified the resident as being at risk for injuries from

alls. Id. However, the plan made no mention of providing the resident with a walker or
with a commode chair, or with other devices designed to protect him against falling. The
care plan contained an apparently pre-printed line, which enabled Petitioner’s staff to list
any assistance devices that were being supplied to the resident. The staff left this line

blank. Nor did the care plan attempt to reconcile and resolve the conflicting assessments
of the resident’s memory.

On the afternoon of February 14, 2009, Resident # 1 sustained a fall while alone in his
room. CMS Ex. 27 at 9. The resident explained to the nursing assistant who discovered
im that he had wanted to go to the toilet but had slipped and fallen while attempting to
walk unaided. Jd. The resident was transferred from Petitioner’s facility back to the
ospital later on February 14, after it was determined that he had fractured his right hip.
Id. at 11.

I find that these facts plainly establish a failure by Petitioner to take all reasonable
measures to protect Resident # 1. Petitioner’s staff failed to assess the resident to
determine whether or not he needed the assistance devices that had been recommended
by the hospital’s rehabilitation center and failed to make a definitive determination about
whether the resident might have memory problems that required special assistance.

Petitioner’s staff was put on notice when the resident arrived at the facility on February
13, 2009, that this resident might need some special assistance to protect him against
falling. The rehabilitation center at which the resident had resided for approximately two
weeks prior to his transfer to Petitioner’s facility had assessed the resident as needing a
rolling walker and a commode chair to facilitate his toileting. These devices were
explicitly recommended as part of the transfer documentation. The recommendations put
the burden on Petitioner’s staff to either supply Resident # 1 with the recommended
devices, or to explain why, in their judgment, it was not appropriate to supply him with
them. At the least, the staff had the obligation to make an informed judgment as to
whether the recommendations made by the rehabilitation center were necessary
interventions for the resident. However, the staff failed to make such an assessment.
There is nothing in the record of this case showing that the staff even considered whether
the resident might benefit from a walker or a commode chair.

The staff was also faced with conflicting advice as to whether Resident # 1 suffered from
memory impairment. The rehabilitation center, after having treated the resident for about
two weeks, found him to be alert but forgetful, suggesting that he might suffer from some
cognitive deficit. In contrast, Petitioner’s occupational therapist assessed the resident’s
mental functioning to be within normal limits. It was important for the staff to resolve
this issue, because, if the resident did suffer from memory problems, it might affect his
ability to remember advice given to him by the staff. However, nothing in the record
shows that the staff addressed the conflicting assessments and came to a conclusion as to
whether or not the resident in fact suffered from memory deficit.

Petitioner argues that it was not reasonably foreseeable that Resident # 1 would attempt
to get out of bed on his own on the 14th of February. Additionally, it asserts that it had
taken reasonable measures to address the resident’s risk of falling. I find these arguments
not to be persuasive.

Petitioner concedes that Resident # | presented a high risk for falling. But, according to
Petitioner, it addressed that risk in the resident’s care plan by keeping a call light button
within reach of the resident while he was in bed. Petitioner’s Final Brief at 6; CMS Ex.
27 at 3. This intervention, according to Petitioner, constituted “reasonable and
appropriate supervision” to address the resident’s risk of falling. Petitioner’s Final Brief
at 6. Petitioner predicates this argument on its contention that the resident was not
cognitively impaired and that it had no reason to assume that he was cognitively impaired
and would not have known how to use the call light. As support, Petitioner relies on the
testimony of the resident’s treating physician, one of its nurses, and the nursing assistant
who cared for Resident #1. P. Ex. 26 at J 8; P. Ex. 25 at J§ 11-14; P. Ex. 30 at 4 9-12.

I find Petitioner’s arguments and the supporting testimony to constitute a post-hoc
rationalization for its staffs failure to address the possibility that the resident suffered
from memory deficit. As I have discussed, the staff was faced with conflicting opinions
as to whether Resident # 1 had memory deficit. Obviously, the staff assumed that the
resident had no memory deficit or, possibly, they simply did not consider the issue of
memory in planning the resident’s care. But, in fact, they had at least some evidence
suggesting that the resident did have a memory deficit. That was the conclusion of the
staff at the rehabilitation center, where the resident was a patient for approximately two
weeks just prior to coming to Petitioner’s facility.

Petitioner now contends that its staff’s interactions with Resident # 1 during the day that
he was in the facility provide unequivocal proof that the resident suffered no cognitive
impairment. I find this assertion to be unpersuasive for two reasons. First, there is no
evidence that Petitioner’s staff systematically addressed the issue of the resident’s
cognition. Nothing in the record shows that the staff tested the resident’s memory to
determine whether it was safe to rely on a call light in lieu of other assistance devices.
There is nothing in the record showing how the occupational therapist concluded that the
resident’s cognition was within normal limits. It is unclear how long she spent with the
resident or what type of interview she conducted.
Furthermore, the testimony of Petitioner’s witnesses that Resident # 1 suffered from no
cognitive deficits is not dispositive of this question. Dr. Joseph Sadowski avers that he
examined the resident on February 14, 2009, and that he found him to be “alert, awake
and oriented x3.” P. Ex. 26 at 95. He asserts that the resident understood his
instructions and did not display any signs of confusion, agitation, or forgetfulness. Jd.
But, Dr. Sadowski does not aver explicitly that he tested the resident’s short term
memory or made objective findings as to whether the resident suffered from a memory
loss.

Kristine Ignacio is a registered nurse who provided care for Resident # 1. She avers that
the resident was able to recall: the current season; location of his own room; staff
names/faces; and that he was in a skilled nursing facility. P. Ex. 25 at § 13. However,
she does not aver that the resident was ever tested to determine whether he could
remember to use the call light in his room when he needed assistance.

Ms. Angelina Toscano, the nursing assistant who cared for Resident # 1, avers in her
declaration that the resident was able to understand instructions and was able to express
is needs and communicate in a very clear and concise manner. P. Ex. 30 at § 12.
However, there is nothing in Ms. Toscano’s background or training to suggest that she is
competent to assess a resident’s cognitive functioning. Moreover, when Ms. Toscano
was interviewed by a surveyor during the April Survey, she told the surveyor that she
ound Resident # 1 to be forgetful. CMS Ex. 29 at 16.

Petitioner’s staff chose to rely on a device — a call light — that would only be a reliable
protection against the resident falling if the resident suffered from no memory deficit.
They chose to rely on that device in lieu of any other assistance device that would protect
the resident against falling if he attempted to leave his bed. Given that choice, it was
incumbent on the staff to rule out any possibility that the resident might not remember
ow or whether to use the call light if he needed assistance. In view of the resident’s
istory of forgetfulness at the rehabilitation center, that meant that the staff needed to test
the resident carefully and systematically to assure that he could understand how to use the
call light. It meant also that the staff should have resolved any doubts that might exist
about the resident’s memory, even if that meant consulting with the staff at the
rehabilitation center. They failed to take these measures. I conclude that relying on the
call light, to the exclusion of other safety measures, was not a reasonable decision by the
staff, given their failure to assure that the resident’s memory and cognitive functioning
were unimpaired.

Petitioner has offered no cogent explanation for its staffs failure to provide the resident
with other recommended assistance devices including a commode chair and a rolling
walker. Both of these devices had been recommended by the rehabilitation center and
these devices were obviously thought of by that entity as protection against the resident
falling. Yet, Petitioner failed to address either of them in its planning for Resident # 1’s

care. There is simply nothing in the record suggesting that the staff considered whether
or not the resident needed these devices.

Petitioner argues that the discharge form did not call for a bedside commode but merely
had the words “commode chair’ circled. Petitioner’s Final Brief at 8. From this, an
based on the evaluation of Resident 1 by Petitioner’s occupational therapist, Petitioner
asserts that there was really no recommendation that the resident receive a commode. I
disagree. The rehabilitation center clearly intended its recommendation that the resident
receive acommode. That is the only possible inference that one can draw from the fact
that the term is circled on the Patient Discharge Form that the rehabilitation center
supplied to Petitioner. CMS Ex. 26 at 3; P. Ex. 20. Arguably, there is ambiguity in that
the form does not explicitly specify that the commode be at the resident’s bedside,
although logically, that is where one might expect that a commode be situated. But, that
possible ambiguity does not mean that the rehabilitation center made no recommendation,
only that the recommendation needed to be clarified. If nothing else, Petitioner’s staff
could have spoken with the rehabilitation center to determine exactly what was being
recommended. There is no evidence that they did so.

Petitioner now offers the testimony of Ms. Elizabeth Leak, the occupational therapist who
wrote the recommendation that a commode chair be given to the resident. She avers that
she wanted the commode chair to be used in the resident’s bathroom to assist the resident
to position himself on the toilet. She avers also that she did not believe that the resident
needed a bedside commode. P. Ex. 32 at J 7.

I have no reason to doubt the veracity of this testimony. However, none of this was
known to Petitioner’s staff at the time that Resident # 1 went to the facility. It is
arguable, with hindsight, that Petitioner’s staff might have concluded reasonably that no
commode was necessary for the resident’s bedside had they consulted with Ms. Leak
when the resident first arrived. But, the staff conducted no consultation and had no way
of knowing precisely what Ms. Leak was recommending other than that she
recommended that the resident receive a commode chair.

Furthermore, Petitioner failed to carry out Ms. Leak’s recommendation even as
subsequently clarified by her. Had staff consulted with her, they would have known that
she at least recommended that a commode chair be placed in the resident’s bathroom to
guard against his falling there. They did not consult, and they did not carry out this
recommendation.

Petitioner has offered no explanation for its failure to supply Resident # 1 with a rolling
walker. That device was recommended by the rehabilitation center, and it was consistent
with the fall risk assessed both by that center and Petitioner’s own staff. Yet, Petitioner
never supplied one to the resident, nor has it offered any evidence showing that its staff
made a reasoned determination that a walker was not needed.
2. CMS’s remedy determination is reasonable.

The remedy that is at issue here is a $300 per day civil money penalty that CMS imposed
for each day of a period that began on March 31, 2009 and that ended on April 21, 2009.
Petitioner has not argued that it corrected its noncompliance earlier than April 21, nor has
it offered any argument that the penalty amount is unreasonable. The failure of Petitioner
to raise the issues of duration and penalty amount is reason enough for me to sustain
CMS’s remedy determination.

Moreover, the evidence of record establishes CMS’s penalty determination to be
reasonable. The penalty amount — $300 per day — is quite low, comprising only ten
percent of the maximum allowable penalty for noncompliance that is not at the
immediate jeopardy level. 42 C.F.R. § 488.438(a)(1)(ii). The seriousness of Petitioner’s
noncompliance, moreover, provides ample reason to sustain the penalty amount. The
evidence proves that Petitioner failed to take all reasonable measures necessary to protect
Resident # 1 against accidental falls. That failure put the resident at risk for injury.

/s/
Steven T. Kessel
Administrative Law Judge