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

Autumn Hills Nursing and Rehabilitation Center of Niles, LLC,
(CCN: 365672),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-12-449
Decision No. CR3119

Date: February 18, 2014

DECISION

Petitioner, Autumn Hills Nursing and Rehabilitation Center of Niles, LLC (Petitioner or
facility), is a long-term care facility located in Niles, Ohio, that participates in the
Medicare program. Based on a complaint investigation survey completed November 10,
2011, and a follow-up survey completed December 20, 2011, the Centers for Medicare &
Medicaid Services (CMS) determined that, from September 23, 2011 through January 11,
2012, the facility was not in substantial compliance with Medicare program requirements
and that, from September 23 through October 27, 2011, one of its deficiencies posed
immediate jeopardy to resident health and safety. CMS imposed civil money penalties
(CMPs) of $4,400 per day for 35 days of immediate jeopardy and $100 per day for 76
days of substantial noncompliance that was not immediate jeopardy.

Here, Petitioner limits its challenges to the deficiency cited at the immediate jeopardy
level (42 C.F.R. § 483.25), the immediate jeopardy determination itself, and the
accompanying $4,400 per day CMP.
For the reasons set forth below, I find that the facility was not in substantial compliance
with the challenged program requirement; this deficiency posed immediate jeopardy to
resident health and safety; 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 survey completed November 10, 2011, CMS determined that the
facility was not in substantial compliance with three program requirements:

© 42 C.F.R. § 483.15(a) (Tag F241— quality of life — dignity) at scope and severity
level E (pattern of noncompliance that causes no actual harm with the potential for
more than minimal harm);

e 42 C.F.R. § 483.25 (Tag F309 — quality of care) at scope and severity level J
(isolated instance of immediate jeopardy); and

© 42 C.F.R. § 483.25(a)(3) (Tag F312 — quality of care — activities of daily living) at
scope and severity level D (isolated instance of noncompliance that causes no
actual harm with the potential for more than minimal harm).

Based on these findings, CMS imposed CMPs of $4,400 per day, beginning September
23, 2011, and $100 per day beginning October 28, 2011. CMS Exs. 1, 5.

On December 20, 2011, surveyors conducted another complaint investigation. Based on
their findings, CMS determined that the facility was not in substantial compliance with
two program requirements:
© 42 C.F.R. § 483.10(b)(11) (Tag F157 — notification of changes) at scope and
severity level D; and

© 42C.F.R. § 483.30(a) (Tag F353 — nursing services — sufficient staff) at scope and
severity level E.

CMS continued the $100 per day CMP. CMS Exs. 1, 20.

Following a January 19, 2012 revisit, CMS determined that the facility returned to
substantial compliance on January 12, 2012. CMS Ex. 2.

Petitioner timely requested a hearing. Petitioner limits its appeal to one deficiency cited
during the November survey: 42 C.F.R. § 483.25 (Tag F309), which was cited at the
immediate jeopardy level. Petitioner does not challenge the other deficiencies cited
during the November survey and does not appeal any of the December survey findings.
P, Post-hrg. Br. at 2; Transcript (Tr.) of January 30, 2013 Hearing 6-7.' It does not
challenge the $100 per day CMP. CMS’s determinations with respect to the deficiencies
that were not appealed are therefore final and binding and provide a sufficient basis for
imposing a penalty. From September 23, 2011 through January 11, 2012, the facility was
not in substantial compliance with program requirements. The $100 per day CMP that
CMS has imposed for 76 days of substantial noncompliance ($7,600 total) is reasonable.

On January 30, 2013, I convened a video hearing from the offices of the Departmental
Appeals Board in Washington, D.C. Counsel and most of the witnesses convened in
Youngstown, Ohio. Witness Roberta Kaplow testified from Atlanta, Georgia, and
Witness Rebecca Hromyak testified from Greenville, North Carolina. Tr. 14, 202. Ms.
Marian C. Nealon appeared on behalf of CMS. Ms. Barbara L. Miltenberger and Mr.
Scott Martin appeared on behalf of Petitioner. I have admitted into evidence CMS
Exhibits (CMS Exs.) 1-20 and 35-43, and Petitioner’s Exhibits (P. Exs.) 1-5 and 7-30,
Petitioner having withdrawn P. Ex. 6 during the course of the hearing. Tr. 8-11, 14, 181.

The parties have filed pre-hearing briefs (CMS Pre-hrg. Br.; P. Pre-hrg. Br.) and post-
hearing briefs (CMS Post-hrg. Br.; P. Post-hrg. Br.); CMS filed a reply brief (CMS
Reply).

In error, the transcript says that petitioner did not appeal the “September” survey
findings. It should have said “December” survey findings. Tr. 7.
IL. Issues

Based on the uncontested issues, the facility was not in substantial compliance with
Medicare program requirements from September 23, 2011 through January 11, 2012, and
I must affirm a CMP of at least $100 per day.

The remaining issues are:

1. From September 23 through October 27, 2011, was the facility in substantial
compliance with 42 C.F.R. § 483.25 (Tag F309), the quality-of-care regulation,
which mandates that the facility provide necessary care and services to each
resident;

2. If the facility was not then in substantial compliance with 42 C.F.R. § 483.25, did
that deficiency pose immediate jeopardy to resident health and safety; and

3. Is the CMP imposed — $4,400 per day for that period — reasonable?
Tr. 6-7.
II. Discussion

A, The facility was not in substantial compliance with 42
CF.R. § 483.25, because facility staff did not closely
monitor a resident’s deteriorating respiratory condition
nor immediately report to her physician the changes in
her condition.”

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.

Resident 145 (R145). This case revolves around R145. R145 was a 75-year-old woman
suffering from diabetes, chronic obstructive pulmonary disease (COPD),° coronary artery
disease, hypertension, atrial fibrillation, anxiety, and many other disorders. CMS Ex. 15

> My findings of fact/conclusions of law are set forth, in italics and bold, in the
discussion captions of this decision.

> COPD involves chronic inflammation of the lungs’ air sacs. CMS Ex. 38 at 4 (Kaplow
Decl. {| 23).
at 45. She developed gangrene, and, in June 2011, her right leg was amputated above the
knee. In September 2011, her left leg was amputated above the knee. CMS Ex. 15 at 23,
45; CMS Ex. 19 at 171. Following her left-leg amputation, she was readmitted to the
facility on September 10, 2011. CMS Ex. 15 at 23, 35; CMS Ex. 19 at 175. At the time
of her readmission, her physician ordered 2.5mg/3mL Albuterol aerosol every four hours,
as needed (Q4° prn), to treat wheezing/shortness of breath related to her COPD. CMS
Ex. 15 at 56; P. Ex. 20 at 2.

R145’s treatment records show that her condition remained stable for the week following
her readmission. Until the evening of September 18, nursing staff reported no complaints
of shortness of breath or other respiratory difficulties, almost always responding “none”
or “not applicable” to questions about her oxygen/respiratory needs. CMS Ex. 15 at 28-
34. Even her medication order is referred to only a couple of times (“‘prn aerosols”).
CMS Ex. 15 at 29, 31, 34.

Progress notes indicate that, at 8:15 p.m. on September 18, R145 complained of shortness
of breath. She was administered Albuterol aerosol “with good effect” and voiced no
further complaints. CMS Ex. 15 at 28.

At 6:41 the following morning (September 19), R145 again complained of shortness of
breath, and nurses reported audible wheezes throughout her lungs.’ Her oxygen
saturation level was 86%. The nurses administered Albuterol aerosol “with good effect”;
er wheezes diminished; and she expressed no further complaints about shortness of
breath (according to the notes). CMS Ex. 15 at 28.

In a respiratory progress note dated September 19 at 4:29 p.m., the facility’s respiratory
therapist, Christine Hunkus, indicated that she checked on the resident “after hearing
from staff that she was short of breath.” Respiratory Therapist Hunkus found that the
resident’s respirations were labored and noted that she was asking for aerosol treatment.
Her oxygen saturation level was 88% on room air, though the therapist noted that a
“nursing assistant had been working with [R145] and had just turned her.” The therapist
eard wheezing “both audibly and throughout [the resident’s] lung fields.” The resident
ad a moist and productive cough. After the aerosol treatment, her breathing was less
labored, and her oxygen saturation level was up to 94% on room air. Respiratory
Therapist Hunkus indicated that she would ask the physician to order a chest x-ray. CMS
Ex. 15 at 27-28.

* For individuals suffering from COPD, fluid leaks from the vessels that surround the air
sacs of the lungs into the air sacs themselves. Tr. 28. When air passes through the fluid,

it causes sounds, referred to as crackle, rhonchi, or rales. CMS Ex. 38 at 4 (Kaplow Decl.
§ 23); Tr. 30. Wheezing indicates that air is passing through a narrow passageway. This

narrowing causes breathing difficulties. CMS Ex. 38 at 4 (Kaplow Decl. § 23).
A note dated September 20 at 1:41 p.m. indicates that R145 again complained of
shortness of breath and was administered the aerosol at 11:30 a.m. “with effect noted.”
CMS Ex. 15 at 26-27.

R145’s physician, Dr. Bahaa Awadalla, ordered a chest x-ray, which was performed on
September 21, 2011. The x-ray showed that R145 had left lower lobe pneumonia or
atelectasis (collapsed lung). CMS Ex. 15 at 26. Dr. Awadalla prescribed the antibiotic
Avelox. According to progress notes, at 3:30 p.m. that day, the resident again
complained of shortness of breath; her oxygen saturation level was 79%. “Crackles”
were heard in her left lower lobe, and wheezing was heard throughout her left lung fields.
Registered Nurse (RN) Autumn Lopez notified R145’s physician of her status and
administered oxygen via nasal cannula. CMS Ex. 15 at 26. RN Lopez reported that, by
9:00 p.m., the resident said that she felt better. CMS Ex. 15 at 26. Staff administered
Albuterol treatments three times on September 21. CMS Ex. 15 at 57; Tr. 43.

Progress notes for the next day or two record no significant problems. They indicate that,
on September 22, R145 continued to receive oxygen via nasal cannula. CMS Ex. 15 at
25. As of 1:50 a.m. September 23, the notes describe her as “pleasant and cooperative
with staff.” She is “alert and oriented to self,” but at times is “confused as to facility and
date.” CMS Ex. 15 at 25. She continued on oxygen per nasal cannula. CMS Ex. 15 at
25. According to the resident’s Medication Administration Record (MAR) she required
few Albuterol treatments — just one on September 22 and one on the morning of
September 23. CMS Ex. 15 at 57; Tr. 45.

By 3:31 p.m. on September 23, 2011, however, the resident’s condition had changed.
According to a note written by Respiratory Therapist Hunkus, the resident’s breath
sounds revealed “high pitched wheezing and rhonchi throughout.” The resident
continued receiving oxygen via nasal cannula, and was given Lasix and aerosol
treatments. Her oxygen saturation level was 93%. For the first time since her admission,
she had swelling in her hands and elbows. The respiratory therapist wrote that the
resident required close monitoring, and she discussed that need with nursing staff. CMS
Ex. 15 at 25.

At 8:15 p.m., R145 “was found,” unresponsive, with no vital signs. Staff initiated CPR
and sent the resident to the emergency room, where she was pronounced dead. CMS Ex.
15 at 24.

Failure to report changes. CMS faults the facility for not immediately reporting the
September 23 changes — a significant deterioration in the resident’s respiratory condition
and swelling in her arms/elbows — to the resident’s physician. According to CMS’s
expert witness, Roberta Kaplow, RN, Ph.D., failing to report deviates from standard
nursing practices, which require that such changes in status be reported to the physician
immediately.° See Spring Meadows Health Care Ctr., DAB No. 1966 at 17 (2005)
(“[M]eeting professional standards of quality may not always be sufficient, but, at the
very least, such standards define the minimum services that must be provided . . . .”).
Failing to do so, according to CMS, risked further deterioration in the resident’s
condition “without her receiving necessary treatment as determined by her physician.”
CMS Ex. 38 at 3-4 (Kaplow Decl. 4§ 21, 24).°

Petitioner, on the other hand, argues that R145’s condition did not change, so staff had no
reason to contact her physician. At the same time, Petitioner claims that staff, in fact,
contacted her physician.

Most obvious, the swelling in R145’s extremity or extremities (referred to as peripheral
edema) unquestionably presented a significant change in her condition that staff should
immediately have reported to her physician. Peripheral edema can be a sign of heart
failure. CMS Ex. 38 at 4 (Kaplow Decl. 23). Dr. Awadalla eventually learned about it,
but this record does not indicate when he learned. In her written declaration, Licensed
Practical Nurse (LPN) Rebecca Hromyak stated that she worked the day-shift on
September 23 (7:00 a.m. to 7:00 p.m.) and noted that R145 had swelling in her right arm,
though not “pitting edema.” Although her declaration suggests that she noticed swelling
at the start of her shift, progress notes do not mention the symptom until 3:31 p.m. that
afternoon (“some swelling noticed in hands and elbows”). LPN Hromyak asserts that she
assumed that the swelling was due to the resident’s positioning, so she elevated the arm.
According to her declaration, the swelling decreased throughout the day, a claim
supported primarily by LPN Hromyak’s own statements, not by any actual medical
evidence. P. Ex. 3 at 1 (Hromyak Decl. § 3).

Petitioner suggests that staff were not required to report the arm swelling because it
affected only one arm and was likely caused by positioning rather than a more serious
underlying condition. But the contemporaneous treatment note refers to swelling in both
“hands” and “elbows” (plural). CMS Ex. 15 at 25. Moreover, as Dr. Kaplow pointed

> Dr. Kaplow is a clinical nurse specialist at Emory University Hospital and an adjunct
member of the faculty at Emory’s Neil Hodgson Woodruff’s School of Nursing. In
addition to her bachelor of science degree in nursing, she has a master’s degree in
delivery of nursing services, a doctorate in research and theory development, and a post-
masters certificate as a clinical nurse specialist. CMS Ex. 35; see CMS Ex. 38 at 1-3
(Kaplow Decl. J 1-18).

® The regulations also mandate that staff immediately consult the resident’s physician
when there is a significant change in the resident’s physical, mental or psychosocial
status or a need to alter treatment. 42 C.F.R. § 483.10(b)(11). However, CMS did not
cite the facility under that regulation.
out, all swelling is positional, since “[t]he fluid will move with gravity.” Tr. 53. In any
event, the swelling represented a significant, and potentially very serious, change, and
staff were bound to report it to the physician, no matter what they thought its cause. This
is particularly true in this case, because swelling can indicate heart failure or infection,
conditions to which R145 was especially vulnerable. Tr. 54.

At the time, LPN Hromyak apparently recognized that she should notify the physician.
According to her declaration, at about 10:00 a.m. that morning, she told her colleague,
LPN Jo Ellen Liboratore, that she (LPN Hromyak) “needed to contact Dr. Awadalla
about R145’s swelling to her right arm and complaints of shortness of breath.” P. Ex. 3
at 1 (Hromyak Decl. § 4). But Petitioner has not established that LPN Hromyak or any
other staff member timely reported the changes. On the one hand, LPN Liboratore wrote
a new physician’s order, and she might have placed the call while covering for LPN
Hromyak, sometime after 10:00 a.m. but before 12:15 p.m. On the other hand, according
to Respiratory Therapist Hunkus, as late as 2:00 p.m., staff were administering Albuterol
pursuant to Dr. Awadalla’s earlier (prn) order, which suggests that the call was made
much later in the day. Tr. 98. Neither Dr. Awadalla nor any staff member remembers a
specific call, nor do any contemporaneous records indicate that a call was made, even
though standard nursing practice requires nurses to document such calls. Tr. 218. Thus,
without regard to her increased breathing difficulties (discussed below), the evidence
does not show that staff promptly reported a new and troubling symptom; this violates the
standard of care and puts the facility out of substantial compliance with the quality-of-
care regulation.

Even assuming that staff contacted the physician sometime that morning (an assumption
not supported by any reliable documentary or testimonial evidence), the evidence also
establishes that, by 3:31 p.m. on September 23, R145’s respiratory condition had
deteriorated significantly. From September 18 to 23, the Albuterol treatments seem to
have been controlling R145’s breathing difficulties. Even when she contracted
pneumonia, she did not require treatment more than three times a day. Treatment records
show that she responded well to them and that the Albuterol aerosol sustained her for at
least four to six hours at a time. CMS Ex. 15 at 57. But, as of 3:31 p.m. on September
23, the aerosol treatments were no longer sustaining R145 for any significant period.
Though treated at 10:00 a.m. and 2:00 p.m. that day, she was wheezing and complaining
about shortness of breath at 3:31 p.m., only an hour and a half after her last treatment.
This represented a significant change. Tr. 74-75 (“So that indicates to me that this patient
has taken a turn for the worse .... Something . . . has happened to her and it needs to be
reported and investigated further.”).

At 3:31 p.m., the respiratory therapist was plainly disturbed by the resident’s condition,
as evidenced by her assessment and note that R145 needed to be monitored closely.
CMS Ex. 25 at 160. Yet, no reliable evidence establishes that either she or any of the
nursing staff reported those concerns to the resident’s physician until much later.
How much later is impossible to determine. The resident’s treatment record is replete
with glaring omissions and misleading entries. The witness testimony is characterized by
faulty memories and inconsistent statements. According to the progress notes, at 4:50
p.m., with the resident’s family voicing concerns about the resident’s deteriorating
condition, LPN Hromyak called R145’s physician, who ordered that the resident’s Lasix
be changed “to qd” (every day) and that her Albuterol be administered qid (four times
daily) instead of every four hours, prn (as needed). CMS Ex. 19 at 22.

I note first that this change in the resident’s order for Albuterol is puzzling. Prior to the
change, she could receive the medication every four hours, as needed. CMS Ex. 15 at 56.
By the afternoon of September 23, the four-hour interval was too long; after just an hour
and a half, she was again short of breath and wheezing. But, instead of allowing more
frequent treatments, her physician decreased their frequency to four times a day, which
means roughly every six hours. See Tr. 62-63. According to Dr. Awadalla’s written
declaration, he ordered that the aerosol treatments be given four times a day rather than
on an as needed basis, because “she was getting those treatments regularly anyway.” P.
Ex. 7 at 6 (Awadalla Decl. § 27). He thought (incorrectly) that he was changing the order
to reflect the practical frequency of the medication’s administration. This suggests that
staff did not accurately describe to him the resident’s current medication order, her
deteriorating condition, or both.

lam not sure that Dr. Awadalla ever fully understood what he had done. However, he
agreed that staff “absolutely” needed to call him and ask for an additional order, if
administering the drug four times a day did not sustain the resident. Tr. 157.

In her written declaration, LPN Hromyak asserts that “at 4:50 p.m.,” she documented that
the resident’s condition had not worsened over the shift; that the resident had edema to
her right arm and both arms were elevated; and that “the family was voicing concern over
the resident’s condition and asked me numerous times if I had spoken with the
physician.” According to the note, she told the family that she had spoken to the
physician and that he had changed his orders. P. Ex. 3 at 2 (Hromyak Decl. § 6). But
LPN Hromyak now admits that she had not then called the physician. Someone else did,
and no one knows when the call was placed nor what was reported. And she could not
remember when she wrote the note, but considered it “most likely” that she did so at the
end of her shift. Tr. 215. She admitted that she altered the facility’s computer system, so
that it would record the earlier time (“You have the ability to change dates and times in
our computer system’’) and insisted that it was perfectly appropriate to alter a record to
indicate that an entry had been made at a time other than when it was made. Tr. 212-214,
216, 218.

In her written declaration, LPN Hromyak also claims that she called Dr. Awadalla at
about 5:00 p.m. and told him that the resident was doing better. P. Ex. 3 at 3 (Hromyak
10

Decl. § 13). There is no record of such a call. Moreover, under cross-examination, LPN
Hromyak admitted that she did not know when she called Dr. Awadalla; that any call she
made “had nothing to do with the breathing treatment” or the resident’s respiratory
condition; and that she did not record any call. Tr. 210, 218-220. She also said
(somewhat inconsistently) that she did not recall but “believed” that she reported the
respiratory therapist’s findings to the physician. She ultimately testified that she updated
the doctor “to let him know that the patient show[ed] improvement.” Tr. 220-222. The
witness’s testimony was inconsistent and completely unreliable. I find it unlikely that she
spoke to the doctor until very late in the day, but, if, in fact, she told him that the
resident’s condition was improving, she seriously misrepresented the situation.’

Under cross-examination, LPN Hromyak said that LPN Jo Ellen Liboratore called the
physician and obtained the order change sometime between 10:15 a.m. and 12:15 p.m.,
while LPN Hromyak was out of the unit. Tr. 210-211; 218. But she also testified that
she did not know when LPN Liboratore took the order, and the medical record includes
no documentation of such a call. Tr. 211, 218.

For her part, LPN Liboratore claims that, at LPN Hromyak’s request, she called R145’s
physician, Dr. Awadalla, who changed R145’s medication — increasing her Lasix (from
20 mg every other day to 20 mg every day) and changing her Albuterol aerosol from
“every four hours as needed” to “every four hours.” P. Ex. 11 at 1 (Liboratore Decl. § 5).
But LPN Liboratore misstates the changes in the Albuterol order; Dr. Awadalla changed
it from “every four hours as needed” to “four times a day.” Moreover, she does not say
when she called Dr. Awadalla. She prepared a written physician order, but, significantly,
eft blank the space for indicating the time the order was given. CMS Ex. 15 at 90.8

At the time of the survey, Dr. Awadalla reported that he “did not recall being called and
updated regarding [R145’s] change in condition.” CMS Ex. 5 at 12; CMS Ex. 37 at 2
(Zuschlag Decl. §§ 3, 4); Tr. 129. In his written declaration, he claimed that he “was
notified” about the resident’s right arm edema and shortness-of-breath complaints, but,
again, did not mention when he was so notified. P. Ex. 7 at 5-6 (Awadalla Decl. 27).
Inasmuch as the timing of the calls is critical, I find these omissions telling.

Dr. Awadalla later testified that he received the call at 4:50 p.m., which is a problem,
inasmuch as LPN Hromyak admitted that she did not place the call at that time. Tr. 138-

7 To determine whether the resident’s condition was improving, staff should have
compared her vital signs over time. Because she did not record vital signs, the LPN
lacked sufficient information on which to base that determination. See Life Care Ctr. of
Bardstown, DAB No. 2479 at 20-21, 26 (2012).

* To make matters even more confusing, LPN Hromyak denies telling LPN Liboratore to
call the physician. Tr. 211.

11

139. Ultimately, the physician admitted that his testimony as to the time was based on
the (erroneous) entry in the progress notes, and that he had no independent recollection of
receiving the call. Tr. 139; see Tr. 212-213. He produced no records of his own
documenting contact from the facility. See Tr. 139.

R145’s medical record establishes that, at most, two calls were made to the physician on
the last day of R145’s life: one at an undisclosed time that resulted in the medication

changes, and a second at 8:30 p.m., after staff found the unresponsive resident, at which
time Dr. Awadalla ordered them to send her to the emergency room. CMS Ex. 15 at 90.

The record includes other evidence of the resident’s deteriorating condition that afternoon
and her family’s increasingly frantic efforts to persuade staff to help her. When she later
called to complain about her grandmother’s treatment, R145’s granddaughter told the
state agency that she, her mother, and her aunt arrived at the facility in the early afternoon
of September 23. She described her grandmother as “in physical distress.” Her hands
and fingers were “very swollen”; her face “was ashen”; she complained that she felt
“really, really bad,” and breathing treatment did not help. CMS Ex. 11 at 2.

LPN Hromyak documented that “[f]amily is voicing concerns over [the resident’s
condition] and this nurse has reassured numerous times that we will keep the doctor
updated and follow his orders.” CMS Ex. 19 at 22. In a statement dated November 30,
2011 (and submitted during the Informal Dispute Resolution (IDR) process), she
admitted that the resident’s anxious family member approached her four times during the
afternoon of September 23, concerned about the arm swelling. In her testimony, she
claimed that R145’s daughter was not concerned about her mother’s shortness of breath,
only about the swollen arm (“She said, ‘What if she goes to the hospital? What if she
needs to go to the hospital? Her arm is swollen. Should she go to the hospital?’”). Tr.
234. But, when pressed, she admitted that the daughter also bothered her about giving
her mother another aerosol treatment: “When is she going to get her next breathing
treatment?”). Tr. 234.

The facility’s Director of Nursing (DON), Brenda Bergman, confirmed that she went to
R145’s room for the explicit purpose of speaking to the resident’s daughter, because the
woman was so anxious.” Tr. 160.

Petitioner justifies its actions by claiming that R145 experienced similar difficulties, at
least with respect to wheezing, during her hospitalization. I do not see how this helps

° Petitioner has suggested that the complaints expressed by R145’s family should be
given no credence, because certain family members were unreasonably anxious and
troublesome. Given the severity of R145’s condition, their anxiety seems to have been
justified. They were describing real symptoms that merited close monitoring and
physician intervention.
12

Petitioner’s case. That the resident was acutely ill while admitted to an acute-care setting
is hardly surprising. If anything, it would seem that a long-term-care resident’s
experiencing symptoms similar to those she experienced in an acute-care setting would
make it all the more important for staff to report those symptoms to her physician, since it
suggests that she might again require acute care.

Nor am I persuaded that the facility should prevail because it allegedly provided care
comparable to that provided by the hospital. Petitioner has not demonstrated that a
complete set of her hospital records have been submitted. I see neither nursing notes nor
medication administration records from R145’s hospitalization. See, e.g., Tr. 187, 189.
So, even if this issue were properly before me (which it is not), I could not assess the
level of monitoring R145 received while hospitalized.

What matters here are R145’s hospital discharge records, which indicate that she had “an
episode of shortness of breath” for which she was treated, and “since then, her respiratory
status has improved.” P. Ex. 20 at 10, 31. Her condition at discharge was characterized
as “stable.” P. Ex. 20 at 14. As the evidence establishes, her respiratory condition
declined about a week later, then stabilized until the afternoon of September 23, when it
deteriorated. Staff’s failure to report that deterioration violated the standard of care and
put the facility out of substantial compliance.

Inadequate monitoring. Notwithstanding the respiratory therapist’s instructions that
nursing staff closely monitor R145, progress notes show virtually no monitoring between
3:31 p.m. and 8:15 p.m., when the resident was found unresponsive, with no vital signs.'°
CMS Ex. 15 at 24.

According to Dr. Kaplow, staff should have checked and recorded the resident’s vital
signs, particularly heart rate, blood pressure, and respiratory rate, at least every 30
minutes to an hour. Her pulse oximetry readings should have been noted hourly. CMS
Ex. 38 at 4 (Kaplow Decl. §j 25). The standard of care also mandates that nursing staff
listen to the resident’s breath sounds, observe how her chest wall is moving, note changes
in her coughing, and observe whether she is using accessory muscles to assist in her
breathing (which indicates respiratory distress). Staff should also have assessed the
resident’s mental status and checked for signs of diaphoresis (excessive sweating),
another sign of respiratory distress. CMS Ex. 38 at 4 (Kaplow Decl. | 26); see also CMS
Ex. 43 (providing the standard of care for monitoring residents with acute illnesses or

'° LPN Hromyak, on the other hand, claims that Respiratory Therapist Hunkus “agreed
that she would closely monitor the resident. . . .”. (emphasis added) P. Ex. 3 at 2
(Hromyak Decl. § 6).
13

infections). To monitor adequately, staff should have assessed and documented R145’s
lung sounds, color of the resident’s skin, lips, and fingernail beds, changes in mental
status or level of consciousness, increased restlessness, shortness of breath or other
difficulty breathing, presence/absence of cough, and the presence/absence of signs and
symptoms related to a specific infection. CMS Ex. 43.

Dr. Awadalla agreed that he expected staff to be monitoring the resident’s vital signs. Tr.
145-146. At a minimum, staff should have assessed the effectiveness of the Albuterol, by
noting the resident’s vital signs before and after the medication was given. Dr. Awadalla
testified that he considered it “important, for sure,” that staff assess to see if the resident
exhibits improvement as a result of the treatment. Heart rate, respiratory rate, and blood
pressure should be checked after every treatment and noted in the progress notes. Tr.
148, 151.

DON Bergman agreed that standard nursing practice requires that assessment results be
written down. Tr. 162. Even LPN Hromyak admitted (albeit grudgingly) that “if you
don’t write it down, it didn’t happen.” Tr. 232.

The record shows that facility staff fell far short of the standard of care. Between 4:50
p.m. and 7:55 p.m., nothing is recorded in the progress notes. CMS Ex. 19 at 22. Based
on the resident’s entire medical record, it seems that a nurse took the resident’s pulse just
once, when she administered ordered medication and noted the resident’s oxygen levels.
According to notes from the emergency room, staff reported that R145 had been down
for an unknown amount of time, and that they found her during a medication pass. CMS
Ex. 15 at 4.

Although staff members subsequently claimed to have performed assessments and
administered treatments during this time, the resident’s treatment record does not support
their claims.

For example, in her IDR statement, LPN Hromyak said that she administered an aerosol
breathing treatment at 6:00 p.m. on September 23. CMS Ex. 19 at 164. According to the
progress notes, however, she administered the aerosol at 7:55 p.m. CMS Ex. 19 at 22.
During these proceedings, she said that she administered the treatment at 6:00 p.m., Tr.
223, 225; but elsewhere she said she did so “probably closer to 6:45.” Tr. 232. Even
assuming that she administered the treatment at 6:00 p.m. or 6:45 p.m., she violated the
standard of care by inaccurately recording the time of administration as 7:55 p.m. The
nurse must document late entries by indicating both the documentation time and the
administration time. CMS Ex. 38 at 5 (Kaplow Decl. § 28).

LPN Hromyak also failed to document the treatment in the facility’s MAR, which shows
treatments administered at 10:00 a.m. and 2:00 p.m., but no other time. Even if I
accepted that she administered the treatment (which I do not), I would find that she
14

violated standard of care by failing to document and/or inaccurately documenting that she
had done so. CMS Ex. 15 at 56; CMS Ex. 43 at 1 § 7 (instructing nurses to “[d]ocument
the results of monitoring, observations, nursing interventions, notifications, and the
resident’s response in the nurses’ notes.”).'!

Nor is this the only example of staff’s failing to document a necessary assessment or
ordered treatment:

e At 4:00 p.m. on September 23, LPN Hromyak should have measured R145’ blood
sugar and administered Novolin. CMS Ex. 15 at 69. She claims to have tested the
resident’s blood sugar, although she did not write that down. She could not
remember whether she administered the Novolin, but she did not document that
she had done so. Tr. 240-241.

e LPN Liboratore claims that she would have assessed the resident before calling the
physician. P. Ex. 11 at 1 (Liboratore Decl. ¥ 5). But she has no memory of the
resident nor of performing an assessment; she does not mention when she
performed the assessment. Most significant, she did not document and the facility
has no record that she ever performed an assessment.

e DON Brenda Bergman, claims that she assessed the resident between 4:00 and
4:30 p.m. on September 23. P. Ex. 2 at 2 (Bergman Decl. {{ 6, 8). However, she
documented no findings.

e Notwithstanding a physician order to take vital signs every shift for the first three
days following her admission and weekly thereafter, no record shows that staff did
so. CMS Ex. 15 at 65; see Tr. 229-232.

Petitioner acknowledges that its “documentation was not perfect,” but minimizes the
significance of this inadequacy, arguing that nurses cannot be expected to document
everything that occurs with a patient. P. Post-hrg. Br. at 16-17. The problem here was
not that staff failed to document everything, but that staff documented so little, including
necessary assessments and administration of medications. Inaccurately recording the
time an aerosol treatment is administered, for example, means that staff and the physician
cannot tell how long the medication is effective. CMS Ex. 38 at 5-6 (Kaplow Decl. § 28).

'' LPN Hromyak implied that others also neglected to document that they administered
medications. Tr. 227 (“I’m not the only person who had ever forgot[ten] to initial
something on the MAR.”). Given the sorry state of the facility’s documentation, | find
incredible the opinion of Petitioner’s expert witness, Jeanne Rutledge, RN, that “the
majority of skilled nursing facilities would not document as frequently as found in this
case.” P. Ex. 8 at 6 (Rutledge Decl. § 28).
15

Finally, that staff were unable to say how long R145 had been unresponsive before they
found her shows that did not closely monitor her condition.

The facility’s “monitoring” was inadequate for an individual exhibiting the symptoms
R145 was exhibiting. The facility was thus not providing necessary care and services so
that she could attain her highest physical well-being, and was not in substantial
compliance with 42 C.F.R. § 483.25.

B. CMS’s determination that the facility’s deficiency under 42
C.F.R. § 483.25 posed immediate jeopardy to resident health
and safety is not clearly erroneous.

Immediate jeopardy exists if a facility’s noncompliance has caused or is likely to cause
“serious injury, harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s
determination as to the level of a facility’s noncompliance (which would include an
immediate jeopardy finding) must be upheld unless it is “clearly erroneous.” 42 C.F.R.
§ 498.60(c). The Departmental Appeals Board has observed repeatedly that the “clearly
erroneous” standard imposes on facilities a “heavy burden” to show no immediate
jeopardy, and has sustained determinations of immediate jeopardy where CMS presented
evidence “from which ‘[o]ne could reasonably conclude’ that immediate jeopardy
exists.” Barbourville Nursing Home, DAB No. 1931 at 27-28 (2004) (citing Koester
Pavilion, DAB No. 1750 (2000); Daughters of Miriam Ctr., DAB No. 2067 at 7, 9
(2007)).

I need not find that the facility’s noncompliance actually caused serious harm or injury to
R145, or that it caused her death. So long as the deficiencies are likely to cause serious
injury or harm, they pose immediate jeopardy. As recognized by Respiratory Therapist
Hunkus, R145 was in distress and in need of careful monitoring during the afternoon and
evening of September 23. When her ordered treatments were no longer sufficient to
sustain her, staff should have accurately reported that fact to her physician, so that he
could respond immediately and appropriately. Staff then failed to monitor her closely
and kept inadequate records of her condition and the treatments they provided (if, in fact,
they provided them). In light of the resident’s fragile condition, these inadequacies were
likely to cause the resident serious harm or even death. CMS’s immediate jeopardy
determination is therefore not clearly erroneous.

C. The penalty imposed is reasonable.

To determine whether a CMP is reasonable, I apply 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.
16

§ 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.

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 section 488.438(f) 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 Care Ctr., DAB No. 1848, at
21 (2002); Community Nursing Home, DAB No. 1807, at 22 et seq. (2002); Emerald
Oaks, DAB No. 1800, at 9 (2001); CarePlex of Silver Spring, DAB No. 1638, at 8
(1999).

CMS imposes a penalty of $4,400 per day for 35 days of immediate jeopardy, which is in
the low-to-middle penalty range for deficiencies constituting immediate jeopardy ($3,050
— $10,000 per day). 42 C.F.R. §§ 488.408(e)(iii); 488.438(a)(1)(i).

Considering the relevant factors, the penalty is reasonable. First, the facility has a
significant history of noncompliance. Since at least 2004, the facility has not been found
in substantial compliance during an annual survey. CMS Ex. 3. In 2010 (the year before
the survey in this case), it was cited for G-level (actual harm) deficiencies under quality-
of-care (42 C.F.R. § 483.25 — Tag F309), as well as failing to prevent pressure sores (42
C.F.R. § 483.25(c) — Tag F314), and failing to prevent accidents (42 C.F.R. § 483.25(h) —
Tag F323). Nor were these the facility’s only deficiencies. It was not in substantial
compliance with the Life Safety Code (Tag 0056). In subsequent complaint-investigation
surveys that year, the facility was again not in substantial compliance with 42 C.F.R.

§ 483.25(h) and 42 C.F.R. § 483.13(b) (Tag F223), which addresses resident behavior
and facility practices, including preventing abuse. The latter deficiency caused actual
arm. CMS Ex. 3 at 2.

Petitioner argues that the facility’s history “demonstrates a pattern of addressing surveyor
concerns prior to the surveyors leaving the building, of immediate corrections, and of
expectations that all staff will meet the highest standards for consistent quality care.” P.
Post-hrg. Br. at 23. That substantial deficiencies were found during every survey since
2004, and during three separate surveys in 2010 suggests that the facility has not
consistently provided quality care. Its history alone supports imposing a significant
penalty.

Petitioner does not claim that its financial condition affects its ability to pay the CMP.
17

With respect to the remaining factors, the evidence establishes that R145 was seriously
ill. Yet, as her condition deteriorated, staff did not timely report changes to her
physician. Notwithstanding explicit instructions from the respiratory therapist (and
prodding from the resident’s family), staff did not closely monitor her condition. Nurses
either failed to administer ordered treatments or failed to document that they had done so.
I find the deficiency extremely serious and the staff culpable. The penalty imposed is
therefore reasonable.

IV. Conclusion

Petitioner has conceded that, from September 23, 2011 through January 11, 2012, it was
not in substantial compliance with Medicare program requirements. From September 23
through October 27, 2011, it was not in substantial compliance with 42 C.F.R. § 483.25,
and its noncompliance posed immediate jeopardy to resident health and safety. I affirm
as reasonable the penalty imposed — $4,400 per day — for the period of immediate
jeopardy.

/s/

Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

The Inspector General of the Social Security Administration,
v.
Kayla Lyn Clark.
Docket No. C-13-1201
ALJ Ruling No. 2014-24

Date: February 11, 2014

DISMISSAL

On August 7, 2013, Respondent Kayla Lyn Clark, through her attorney, filed a request
for an administrative law judge (ALJ) hearing to challenge a May 8, 2013 determination
by the Inspector General of the Social Security Administration (SSA IG) to impose a
$10,000 civil money penalty (CMP) against her.

SSA moves to dismiss Respondent Clark’s request for hearing. SSA argues that
Respondent’s hearing request is untimely filed and does not raise an issue that is subject
to ALJ review. For the reasons discussed below, I grant SSA’s motion.

Discussion

In a letter dated May 8, 2013, the IG advised Respondent Clark that he proposed
imposing against her a CMP of $10,000. The parties agree that: 1) Respondent Clark
received the notice letter on May 13, 2013; 2) the notice letter informed her of her right to
appeal within 60 days of the date she received the notice; and 3) by regulation, she should
have filed her hearing request no later than July 12, 2013. IG Br. at 6; Resp. Br. at 3; See
20 C.F.R. § 498.202(c)(2).
In her August 7, 2013 hearing request, Respondent wrote that she did not timely file
because her attorney, “by inadvertence and oversight” failed to determine correctly the
appeal deadline.

lam required to dismiss an untimely hearing request unless the respondent shows good
cause for the untimely filing. 20 C.F.R. § 498.202(f)(1). The regulations do not define
good cause, but leave that determination to my discretion. See, e.g., Taos Living Center,
DAB No. 2203 at 12 (2009) (holding that the ALJ “has discretion to extend the period...
to file if. . . the ALJ finds ‘good cause’ for the late filing”). In other types of cases,
however, the SSA has defined good cause as circumstances beyond a party’s ability to
control.’ Although I am not bound to apply this definition, I find it reasonable to apply it
here. The regulation has been subject to notice-and-comment rulemaking. It has been
applied in a wide variety of cases. See, e.g., Raj Ahluwalia, M.D., ALJ Ruling No. 2013-
11 at 2-3 (2013) (and cases cited therein). Reliance on such a long-accepted standard
could hardly be considered an abuse of discretion.

On June 17, 2013, Respondent Clark delivered the notice letter to her attorney, who is
employed by Kansas Legal Services. Counsel missed the filing deadline, and the IG
issued a Notice of Default, which Respondent received on August 2, 2013. Counsel then
filed Respondent’s hearing request, citing staffing problems related to budget reductions
as the reason he failed to file timely. That the State of Kansas has declined to fund
adequately its legal services organizations is unfortunate. However, virtually every legal
services organization in the country could make the same claim, as could many private
law offices. Inadvertence and oversight are not circumstances beyond the party’s ability
to control, and do not constitute good cause. See, e.g., NBM Healthcare Inc., DAB No.
2477 (2012) (finding that counsel’s claims that they “did not have time” to focus on ALJ
notice do not constitute good cause); Dr. Elaine Schottstaedt, M.D., DAB No. 2337
(2010) (finding that carelessness is never good cause for extending the time to file a
hearing request).

I therefore find that Respondent has not demonstrated good cause for extending the
deadline for filing her hearing request. Accordingly, this case is dismissed.

' The regulations list factors for the ALJ to consider: 1) the circumstances that kept the
affected party from making the request on time; 2) whether any SSA action misled her; 3)
whether the affected party understood the requirements for filing; and 4) whether the
affected party had any physical, mental, educational, or linguistic limitation that
prevented her from filing a timely request or from understanding or knowing about the
need to file a timely request for review. 20 C.F.R. § 404.911.
Regulations governing these procedures afford no further appeal rights for the dismissal
of a hearing request. See 20 C.F.R. § 498.221 (providing hearing rights only for an initial
decision); see also Guidelines -- Appellate Review of Decisions of Administrative Law
Judges in Social Security Administration Cases to Which Procedures in 20 C.F.R. Part
498 Apply at http://www.hhs.gov/dab/divisions/appellate/guidelines/ssa.html.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Fidel Ruiz Magana
d/b/a Carniceria La Constancia,

Respondent.

Docket No. C-14-326
FDA Docket No. FDA-2013-H-1547

Decision No. CR3116
Date: February 11, 2014
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Fidel Ruiz Magana d/b/a Carniceria La
Constancia, alleging facts and legal authority sufficient to justify the imposition of
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’s staff unlawfully
sold cigarettes to minors, thereby violating the Federal Food, Drug, and Cosmetic
Act (Act) and its implementing regulations, found at 21 C.F.R. Part 1140. CTP
seeks a civil money penalty of $250.
On December 18, 2013, 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 Carniceria La Constancia, an establishment that sells
tobacco products and is located at 1109 East Main Street #103, Mesa
Arizona 85203. Complaint § 3.

e On February 14, 2013, an FDA-commissioned inspector observed that “a
person younger than 18 years of age was able to purchase a package of
Marlboro 100’s cigarettes . . . at approximately 11:34 AM.” Complaint
q 10.

e¢ On March 7, 2013, CTP issued a Warning Letter to Carniceria La
Constancia explaining that the inspector’s February 14, 2013 observation
constituted a violation of a regulation found at 21 C.F.R. § 1140.14(a). 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 § 10.

e¢ On June 3, 2013, Fidel Ruiz, Respondent’s owner, responded in writing to
the Warning Letter on Respondent’s behalf. “Mr. Ruiz stated that all
cashiers have instructions for verifying the identification of a customer who
is purchasing cigarettes. . . . [and] that all cashiers were notified of the
incident and were warned that disciplinary action would be taken against a
cashier for any future violations.” Complaint § 11.
¢ On June 20, 2013, FDA-commissioned inspectors documented a violation
of 21 C.F.R. § 1140.14(a) during another inspection of Respondent’s
establishment. The inspectors noted that “a person younger than 18 years
of age was able to purchase a package of Camel Crush cigarettes . . . at
approximately 1:27 PM.” 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 any person younger than
18 years of age.

Here, Respondent violated 21 C.F.R. § 1140.14(a) on February 14, 2013, and June
20, 2013, when its staff sold cigarettes to minors. Respondent’s actions 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 $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

Center for Tobacco Products,
Complainant
v.

Yara Market Inc.
d/b/a Downtown Market,

Respondent.

Docket No. C-14-297
FDA Docket No. FDA-2013-H-1503

Decision No. CR3115

Date: February 11, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Yara Market Inc. d/b/a Downtown Market, that
alleges facts and legal authority sufficient to justify the imposition of a civil
money penalty of $250. Respondent did not 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 assess a civil money
penalty of $250.

CTP began this case by serving the 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 self-service displays of regulated tobacco products, thereby violating the
Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its

implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. Part 1140
(2012). CTP seeks a civil money penalty of $250.

On December 12, 2013, 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 proposed 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 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. Pursuant to 21 C.F.R. § 17.11(a), 1am required to
“assume the facts alleged in the [C]omplaint to be true” and, if those facts
establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Downtown Market, an establishment that sells tobacco
products and is located at 228 East Main Street, Anoka, Minnesota 55303.
Complaint § 2.

e On January 8, 2013, an FDA-commissioned inspector observed a violation
of 21 C.F.R. § 1140.16(c) at Respondent’s establishment because “the
establishment . . . ha[d] self-service displays that include[d] smokeless
tobacco and cigarette tobacco in customer accessible part [sic] of the
establishment, [and] [wa]s open to persons of all ages.” Complaint § 9.

e On January 24, 2013, CTP issued a Warning Letter to Respondent
regarding the inspector’s observations from January 8, 2013. The letter
explained that the observations constituted a violation of a regulation found
at 21 C.F.R. § 1140.16(c), and that the named violation was not necessarily
intended to be an exhaustive list of all violations at the establishment. The
Warning Letter went on to state that if Respondent failed to correct the
violation, regulatory action by the FDA or a civil money penalty action
could occur and that Respondent is responsible for complying with the law.
Complaint § 9.

e FDA received no response to the Warning Letter from Respondent, though
United Parcel Service records demonstrate that an individual named “Yara”
received the Warning Letter on January 25, 2013. Complaint 4 10.

e On June 17, 2013, an FDA-commissioned inspector documented an
additional violation of 21 C.F.R. § 1140.16(c) at Respondent’s
establishment where “the establishment . . . ha[d] self-service displays that
include[d] smokeless tobacco and cigarette tobacco in customer accessible
parts of the establishment, [and] [wa]s open to persons of all ages.”
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 distributed or offered for sale in any state 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. Part 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). The regulations prohibit the use of self-service
displays of cigarettes or smokeless tobacco, 21 C.F.R. § 1140.16(c)(1), except
where no person younger than 18 years of age is present in or allowed to enter the
establishment at any time, 21 C.F.R. § 1140.16(c)(2)(ii).

Taking the above alleged facts as true, Respondent had two violations of
regulations contained in 21 C.F.R. Part 1140 within a six-month period.
Specifically, Respondent violated 21 C.F.R. § 1140.16(c) on January 8, 2013, and
June 17, 2013, by utilizing self-service displays of tobacco products. Therefore,
Respondent’s actions constitute violations of law that merit a civil money penalty.

The regulations require me to impose a civil money penalty in an amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $250 for a second violation within a six-month
period, 21 C.F.R. § 17.2, and CTP has requested a fine of that amount. Therefore,
I find that a civil money penalty of $250 is warranted and so order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Yazeed Barakat
d/b/a Smoker’s Corner,

Respondent.

Docket No. C-14-293
FDA Docket No. FDA-2013-H-1495

Decision No. CR3114
Date: February 11, 2014
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Yazeed Barakat d/b/a Smoker’s Corner, alleging
facts and legal authority sufficient to justify the imposition of 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’s staff unlawfully
sold cigarettes to minors on two occasions and, prior to one of those transactions,
Respondent’s staff failed to verify that a cigarette purchaser was of sufficient age,
thereby violating the Federal Food, Drug, and Cosmetic Act (Act) and its
implementing regulations, found at 21 C.F.R. Part 1140. CTP seeks a civil money
penalty of $250.

On December 16, 2013, 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:

Respondent owns Smoker’s Corner, an establishment that sells tobacco
products and is located at 1801 Green Mountain Drive #5, Little Rock,
Arkansas 72212. Complaint § 3.

On March 11, 2013, an FDA-commissioned inspector observed that “a
person younger than 18 years of age was able to purchase a package of
Marlboro cigarettes ... at approximately 4:25 PM CT[ ] and... the
minor’s identification was not verified before the sale... .”. Complaint
q 10.

On March 28, 2013, CTP issued a Warning Letter to Smoker’s Corner
explaining that the inspector’s March 11, 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 April 10, 2013, Yazeed Barakat, Respondent’s owner, responded by
electronic mail to the Warning Letter on Respondent’s behalf. “Mr.

Baraket stated that he discussed the importance of the establishment’s
policies and the legal restrictions on the sale of tobacco products with his
employees, and that he would place a sign that instructs tobacco purchasers
to have their identification ready.” Complaint § 11.

e¢ On June 19, 2013, during another 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 cigarettes . . . at approximately 2:23 PM.” 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 any 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 March 11, 2013, and June
19, 2013, when its staff sold cigarettes to minors. Respondent also violated 21
C.F.R. § 1140.14(b)(1) on March 11, 2013, when its staff did not verify, by
checking a cigarette purchaser’s photographic identification, that a cigarette
purchaser was 18 years of age or older. 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
$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

Center for Tobacco Products,
Complainant
v.

The Kroesser Group LLC
d/b/a DIY Tobacco,

Respondent.

Docket No. C-14-299
FDA Docket No. FDA-2013-H-1514

Decision No. CR3113

Date: February 11, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against The Kroesser Group LLC d/b/a DIY Tobacco (Respondent),
which alleges facts and legal authority sufficient to justify imposing a $250 civil
money penalty.

CTP initiated this case by serving the 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
impermissibly sold regulated tobacco products to a person younger than 18 years
of age and failed to verify that cigarette purchasers were of sufficient age, thereby
violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq.,
and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R.
Part 1140 (2012). CTP seeks a civil money penalty of $250.
On December 13, 2013, 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 must
take one of the following three actions: 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 issue an initial decision ordering Respondent to pay the full amount of
the proposed penalty. 21 C.F.R. § 17.11.

Pursuant to 21 C.F.R. § 17.11(a), 1am required to “assume the facts alleged in the
complaint to be true, and, if such facts establish liability under [the Act],” issue an
initial decision and impose a civil money penalty. Accordingly, I must determine
whether the allegations in the Complaint establish violations of the Act.

Specifically, CTP alleges that:

e Respondent owns DIY Tobacco, an establishment that sells tobacco
products and is located at 2600 Northwest Randall Way, Suite 111,
Silverdale, Washington 98383. Complaint § 3.

e On January 18, 2013, an FDA-commissioned inspector observed that “‘a
person younger than 18 years of age was able to purchase a package of
Camel Crush Regular Fresh cigarettes . . . at approximately 10:23 AM
PT[.]” The inspector also observed that “the minor’s identification was not
verified before the sale .. . on January 18, 2013 ....” Complaint § 10.

e On January 31, 2013, CTP issued a Warning Letter to Respondent
regarding the inspector’s observations from January 18, 2013. The letter
explained that the observations constituted violations of regulations found
at 21 C.F.R. § 1140.14(a) and (b)(1), and that the named violations were
not necessarily intended to be an exhaustive list of all violations at the
establishment. The Warning Letter went on to state that if Respondent
failed to correct the violations, regulatory action by the FDA or a civil
money penalty action could occur and that Respondent is responsible for
complying with the law. Complaint ¥ 10.
Catherine Kroesser, Respondent’s CEO, responded to the Warning Letter in

a February 12, 2013

letter. “Ms. Kroesser stated that as a result of the

Warning Letter, the establishment updated its tobacco sales policy to

require employees to
retrained its employe

verify the identification of all tobacco purchasers, and
es on this policy using the ‘WE CARD’ program and

other resources.” Ms. Kroesser further stated “that the establishment would

employ a secret shop}

per program to monitor employees’ compliance with

its tobacco p

e On June 11,
of 21 C.F.R.

olicy.” Complaint § 11.

2013, FDA-commissioned inspectors documented a violation
§ 1140.14(a) when “a person younger than 18 years of age was

able to purchase a package of Camel Crush Regular Fresh cigarettes . . . at

approximate

These facts establis!

ly 11:29 AM.” Complaint § 1.

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 distributed or offered for sale in any state 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 S

ecretary issued the regulations at 21 C.F.R. Part 1140 under

section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387£(d)(1); 75 Fed.

Reg. 13,229 (Mar.

0, 2010). The regulations prohibit the sale of cigarettes to any

person younger than 18 years of age. 21 C.F.R. § 1140.14(a). The regulations
also require retailers to verify, by means of photo identification containing a

purchaser’s date of
age. 21C.F.R.§ 1

birth, that no cigarette purchasers are younger than 18 years of
40.14(b)(1).

Taking the above alleged facts as true, Respondent committed two violations of 21

C.F.R. Part 1140 w:

Respondent unlawft

ithin a five-month period. Specifically, on January 18, 2013,
‘ully sold a regulated tobacco product to a minor and failed to

verify the age of a person purchasing tobacco products by means of photographic

identification conta:

ining the bearer’s date of birth. 21 C.F.R. § 1140.14(a) and

(b)(1). On June 11, 2013, Respondent unlawfully sold a regulated tobacco product
toa minor. Therefore, Respondent’s actions and omissions constitute violations of
law that merit a civil money penalty. Accordingly, I find that a civil money
penalty in the amount of $250 is permissible and order it imposed. 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

John A. Stoltzfus Ph.D., LP,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1325
Decision No. CR3112

Date: February 10, 2014

DECISION

Wisconsin Physicians Service (WPS), an administrative contractor acting on behalf of the
Centers for Medicare & Medicaid Services (CMS), denied Petitioner’s application for
enrollment in the Medicare program because WPS determined that he did not qualify as a
clinical psychologist under 42 C.F.R. § 410.71(d). Petitioner appealed. For the reasons
stated below, I reverse CMS’s determination to deny Petitioner’s enrollment application.

I. Case Background and Procedural History

Petitioner, John A. Stoltzfus, Ph.D., LP, earned a Doctor of Philosophy in Counseling and
Guidance from the University of Wisconsin — Madison in December 1980. CMS Exhibit
(Ex.) 3, at 12, 16. Petitioner worked under the supervision of a clinical psychologist for
two years and, in March 1983, became a licensed psychologist in the State of Minnesota.
CMS Exs. 3, at 3-4; 6, at 1. Petitioner’s areas of competency listed with the Minnesota
Board of Psychology include individual, marriage, child, and group psychotherapy, as
well as teaching and supervising students of psychology. CMS Ex. 3, at 5. For the past
30 years, Petitioner has “been practicing and delivering clinical services as an
independent psychologist.” CMS Ex. 6, at 1.
On December 28, 2012, Petitioner completed and signed a Form CMS-855I (Medicare
Enrollment Application) seeking enrollment in the Medicare program as a clinical
psychologist. CMS Ex. 1. In an April 29, 2013 letter, WPS informed Petitioner that it
received his enrollment application and requested that Petitioner provide additional
information; the letter stated that Petitioner’s “diploma does not specifically state your
degree is in psychology; please submit a copy of your transcripts.” CMS Ex. 2, at 1.
After Petitioner responded to WPS’s request, on June 14, 2013, WPS issued an initial
determination denying Petitioner’s application because enrollment in the Medicare
program as a clinical psychologist requires a doctoral degree in psychology and
Petitioner’s “doctoral degree was earned in the field of counseling and guidance, which
does not meet this requirement.” CMS Ex. 5, at 1. Petitioner timely requested
reconsideration of WPS’s determination, in which Petitioner provided additional
information concerning his degree. CMS Ex. 6. WPS issued a reconsidered
determination upholding the denial of enrollment for the same reason stated in the initial
determination. CMS Ex. 7.

Petitioner timely filed a request for hearing (RFH) with the Departmental Appeals Board,
Civil Remedies Division. Following the issuance of my September 25, 2013
Acknowledgment and Pre-hearing Order (Pre-hearing Order), CMS filed a motion for
summary judgment and supporting brief (CMS Br.), a list of proposed exhibits, and seven
proposed exhibits (CMS Exs. 1-7). Petitioner did not file a brief; however, after I issued
an Order to Show Cause, Petitioner submitted a response (P. Response) stating that he did
not believe he needed to submit any additional documents.

II. Decision on the Record

Petitioner did not object to any of CMS’s proposed exhibits. Petitioner submitted
documents with his RFH; however, copies of all except one appear in CMS’s proposed
exhibits. The one exception is an updated version of CMS Ex. 3, at 3, showing that
Petitioner’s psychology license in Minnesota is current through February 28, 2015. RFH
Supporting Documents at 5. CMS did not object to this document. Therefore, I admit
CMS Exs. 1-7 and RFH Supporting Documents at 5 into the record.

My Pre-hearing Order advised the parties that they must submit written direct testimony
for each proposed witness and that an in-person hearing would only be necessary if the
opposing party requested an opportunity to cross-examine a witness. Order §f 8, 9, 11;
Vandalia Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823, at 8
(2002) (holding that the use of written direct testimony for witnesses is permissible so
long as the opposing party has the opportunity to cross-examine those witnesses).'
Neither party offered written direct testimony for any witnesses. Accordingly, an in-

' Administrative decisions and rulings cited in this decision are accessible on the internet
at: http://www.hhs.gov/dab/decisions/index.html.
person hearing is not necessary and I issue this decision based on the written record. See
Order § 12.

III. Issue

The issue in this case is whether Petitioner satisfied the requirements in 42 C.F.R.
§ 410.71(d) to enroll in the Medicare program as a clinical psychologist.

IV. Findings of Fact, Conclusions of Law, and Analysis”

In order to participate in the Medicare program as a supplier,’ individuals and entities
must meet certain criteria to enroll and receive billing privileges. 42 C.F.R. §§ 424.505,
424.510. Psychologists may enroll in the Medicare program as either “clinical
psychologists” or “psychologists billing independently.” See Douglas L. Clore, LMLP,
ALJ Ruling 2012-1, at 2-3 (HHS CRD July 17, 2012). A psychologist who seeks to
enroll in order to provide “qualified psychologist services” under the Medicare program
must meet the requirements for a “clinical psychologist,” as that term is defined by the
Secretary of Health and Human Services (Secretary). 42 U.S.C. § 1395x(ii); see also
42 U.S.C. § 1395u(b)(18)(C)(v). The Secretary’s regulations define a “clinical
psychologist” as an individual who:

(1) Holds a doctoral degree in psychology; and

(2) Is licensed or certified, on the basis of the doctoral degree in
psychology, by the state in which he or she practices, at the independent
practice level of psychology to furnish diagnostic, assessment, preventative,
and therapeutic services directly to individuals.

42 C.F.R. § 410.71 (d).

1. Petitioner holds a doctoral degree in counseling psychology.
Petitioner asserts that he holds a Ph.D. from the University of Wisconsin — Madison.
CMS Ex. 3, at 16. CMS does not dispute this. See CMS Br. at 5. However, CMS asserts

that Petitioner does not have a doctoral degree in psychology. The primary basis for this
position is that Petitioner’s degree is in “counseling and guidance” and not “psychology,”

> My numbered findings of fact and conclusions of law are set forth in italics and bold
font.

> A “supplier” is “a physician or other practitioner, a facility, or other entity (other than a
provider of services) that furnishes items or services.” 42 U.S.C. § 1395x(d).
and that CMS must strictly apply the regulatory requirement that the doctoral degree be
in “psychology.” CMS Br. at 4-6. CMS argues that it may not consider whether a non-
psychology degree is the functional equivalent of a psychology degree and Petitioner’s
state-issued psychologist license cannot substitute for the doctoral degree requirement.
CMS Br. at 4-6. CMS further asserts that Petitioner’s doctoral degree cannot be
considered a qualifying one in psychology because it was not until after Petitioner
obtained his degree that the University of Wisconsin — Madison Counseling and
Guidance Department became American Psychological Association (APA) accredited
and changed the degree name to “counseling psychology.” CMS Br. at 5. Finally, CMS
argues that Petitioner seeks an exception to the regulatory requirements to enroll as a
clinical psychologist and that an administrative law judge cannot grant exceptions. CMS
Br. at 7-8.

Although I agree with CMS that neither I nor CMS can engage in a functional
equivalency analysis of an applicant’s degree or license, Petitioner does not seek such an
analysis. An example of a functional equivalence argument appeared in a case in which
the petitioner attempted to use two different licenses in combination to show that she met
the psychology licensing requirement, when neither one of which fulfilled the
requirement on its own. See Revathi Bingi, Ed.D, DAB CR1573, at 7-8 (2007).
However, Petitioner is not arguing that his doctoral degree is the functional equivalent to
a doctoral degree in psychology; rather, Petitioner is arguing that his degree is, using
modern terminology, a counseling psychology degree. CMS Ex. 3, at 1. In fact,
Petitioner characterized his doctoral degree in his enrollment application as a counseling
psychology degree. CMS Ex. 1, at 7.

I disagree with CMS that Petitioner’s doctoral degree, earned primarily in the late 1970s,
is not a counseling psychology degree. CMS is to evaluate each applicant’s doctoral
degree on a “case-by-case basis.” 63 Fed. Reg. 20,110, 20,116 (Apr. 23, 1998). This is
because, as the Secretary acknowledged when promulgating the final rule concerning
clinical psychologists, psychology degrees vary widely.

We realize that there are many psychologists who, although
their doctoral degree is labeled other than “clinical
psychology,” graduated from psychology programs that
provided them with the appropriate knowledge, training, and
experience in clinical psychology. We are very concerned
that we not indirectly deny beneficiaries access to the care of
qualified psychologist services solely because the degree that
a practitioner has earned is labeled something other than
“clinical psychology.”” Based on our carriers’ experience in
interpreting the [clinical psychologist] definition on a case-
by-case basis, we do not agree with those commenters who
believe that removal of the existing requirement for a doctoral
degree from a program in “clinical psychology” presents a
danger to the Medicare population. . . . While we have made
allowances for the types of psychology programs that can
qualify a practitioner under Medicare’s [clinical psychology]
benefit, we require that the individual’s doctoral degree at
least be from a program that is designated as a psychology
program. The [clinical psychologist] benefit was created as a
discrete benefit for psychologists, and not nonphysician
practitioners who may receive some Clinical training as part
of their doctoral degree programs. We believe that Congress
would have to create a separate benefit to recognize
practitioners whose degrees are in a field other than

psychology.
63 Fed. Reg. at 20,116 (emphases added).

In the present matter, WPS requested that Petitioner provide the transcript of his doctoral
studies (CMS Ex. 5, at 1) and, as indicated in the reconsidered determination, the hearing
officer reviewed all of the documents in the file. CMS Ex. 7, at 1. However, despite
reviewing Petitioner’s transcript, the hearing officer denied Petitioner’s enrollment
application because Petitioner’s degree was in the field of counseling and guidance.
CMS Ex. 7, at 1. Although, as quoted above, the Secretary indicated that the doctoral
degree be from a program designated as a psychology program, the hearing officer failed
to make the required case-by-case analysis to determine if, as a factual issue, Petitioner’s
doctoral program was a counseling psychology program.

The Secretary made it clear in the quote above that the foremost issue was to ensure that
nonphysician practitioners who may only receive some clinical training as part of their
doctoral programs would not be enrolled as clinical psychologists. 63 Fed. Reg. at
20,116. There is no reason to assume that the Secretary meant to exclude doctoral
degrees that, for historical reasons, originally did not include the word “psychology” in
them, but later were updated to include that term. Therefore, the hearing officer should
ave considered the substance of Petitioner’s transcript and Petitioner’s statements
concerning the program he attended.*

Petitioner states that he attended the Counseling and Guidance doctoral program at the
University of Wisconsin — Madison because the program expressly offered a psychology

* It is clear from WPS’s e-mails related to the initial determination that WPS and CMS
personnel simply looked at the name of the degree program, Counseling and Guidance, to
conclude that it was not a psychology program. There is no indication of a substantive
review of the course transcript to determine whether the program was in fact a
psychology program. CMS Ex. 4.

track that would qualify Petitioner to obtain a psychology license. CMS Ex. 6, at 1.
Petitioner asserts that the majority of participants in the program attended in order to be
psychologists and that, as his transcript shows, most of the classes he took were
psychological courses. CMS Ex. 3, at 1. As part of this degree coursework, Petitioner
took classes offered by the psychology and psychiatric departments. CMS Exs. 3, at 12-
15; 6, at 1. Petitioner’s dissertation “was a psychological study of the concept of
adolescent differentiation from family” based on a model developed by the psychiatric
department, and a professor from the psychiatric department was on Petitioner’s
dissertation committee. CMS Exs. 3, at 1; 6, at 1. Finally, Petitioner points out that the
Minnesota Board of Psychology concluded that Petitioner’s doctoral degree was a
psychology degree when it licensed him. CMS Ex. 3, at 1. Although CMS might dismiss
these statements as an attempt by Petitioner to argue that his degree is functionally
equivalent to a psychology degree, it is important to consider Petitioner’s statements in
the historical context of the development of counseling psychology doctoral programs.
When one does this, Petitioner’s statements do not show equivalency; instead, they show
that his doctoral program was in fact a counseling psychology program.

In James Harrison Straub, Ed.D., DAB CR2677 (2012), the petitioner made the same
argument as Petitioner in this case. The decision in that case summarizes testimony on
the background to counseling psychology programs in the United States:

Drs. Norm Gysbers and Joe Johnson are professors at the
University of Missouri, College of Education, Department of
Educational, School, and Counseling Psychology. The
witnesses testified that in the 1970s, counseling programs that
trained psychologists were often located in a university’s
“College of Education.” P. Ex. 1, at 1. “Persons who trained
in the counseling psychology track decades ago were in
programs with titles different today.” P. Ex. 1, at 1. This is
because “[c]ounseling psychology programs were typically in
departments such as Counseling and Guidance and
Counseling and Personnel Services which often housed a
variety of tracks. Thus degrees often reflected the department
and not the track.” P. Ex. 1, at 1. The witnesses concluded
that in evaluating who has clinical psychological training,
“simply looking at the department that offered the degree is
not sufficient. Most state licensing boards evaluate applicants
for licensing to make sure they have at least the minimal
training to provide clinical work.” P. Ex. 1. I assign
significant weight to Drs. Gysbers’ and Johnson’s
uncontroverted testimony. CMS did not object to it or
attempt to discredit it. Both individuals are professors at a
university program that is similar to the one from which
Petitioner graduated. The testimony is also consistent with
Dr. Lauver’s statement. Therefore, based on this testimony,
Dr. Lauver’s statement, Petitioner’s transcript, and the
evidence of record as a whole, I find that Petitioner graduated
from what today would be called a counseling psychology
program.

Straub, DAB CR2677, at 6. As indicated in the decision, the testimony from the
professors was consistent with the statement of the former Chair of the Department of
Counseling and Guidance at the University of Arizona (referred to as Dr. Lauver in the
quoted text above), that the Counseling and Guidance doctoral degree earned by the
petitioner was a degree in “clinically applied counseling psychology.” Jd.

In the present case, CMS cited to the webpage on the University of Wisconsin —
Madison’s website that provides a history of the Counseling Psychology Department at
that school. CMS Br. at 5. A review of that page shows that Petitioner’s doctoral
program developed in a similar manner as the ones described by the witnesses and the
former Chair of the Counseling and Guidance Department at the University of Arizona in
Straub. See History, University of Wisconsin — Madison, School of Education,
Department of Counseling Psychology, at
ttp://counselingpsych.education.wisc.edu/cp/about/history (last visited on January 31,
2014).

Petitioner also points out that the State of Minnesota evaluated his doctoral degree and
found that it was a psychology degree. CMS Ex. 3, at 1. Petitioner was licensed in 1983
as a “Licensed Consulting Psychologist.” CMS Ex. 3, at 7. A review of the statute
applicable to Petitioner when he applied for the license indicates that such a license
required Petitioner to show that he had “received a doctoral degree with a major in
psychology, which may include educational and child psychology, from an education
institution meeting the standards which may be prescribed by regulation of the board [of
psychology].” Minn. Stat. § 148.91, subd 4 (3) (1982). The fact that Petitioner was
licensed by the Minnesota Board of Psychology, therefore, is additional evidence that
Petitioner’s doctoral degree is in fact a psychology degree.

CMS also argues that Petitioner’s doctoral degree is not qualifying for Medicare
enrollment purposes because, at the time Petitioner received his doctoral degree, the
University of Wisconsin — Madison’s Department of Counseling and Guidance was not
accredited by the APA. However, CMS’s position is directly contradicted by the final
rule promulgating 42 C.F.R. § 410.71(d). In response to public comments, the Secretary
decided to remove the requirement in the proposed rule that the doctoral degree be from
an accredited program, see 58 Fed. Reg. 68,829, 68,839 (December 29, 1993), and stated:

We have thoroughly examined the academic accreditation or
approval requirements imposed by the various States for
licensure or certification of psychologists. The wide degree
of variation in the specifics of State requirements makes
creation of a uniform Federal standard infeasible. We have
concluded that reliance on State licensure or certification
requirements provides adequate assurance that an individual’s
doctoral degree was obtained from a program that met
appropriate academic standards.

63 Fed. Reg. at 20,117. The Secretary decided not to rely on the APA or other
accrediting bodies to determine whether a psychology program met “appropriate
academic standards.” Therefore, CMS’s argument concerning accreditation is irrelevant.

Based on a review of the entire record and as explained above, I find that Petitioner’s
doctoral degree is a counseling psychology degree.

2. Petitioner is licensed to independently practice psychology in the State
of Minnesota, based on his doctoral degree, and is authorized to
furnish diagnostic, assessment, preventative, and therapeutic services
directly to individuals.

Petitioner asserts that he is a licensed psychologist in Minnesota and has been licensed
there based on his Ph.D. since 1983. CMS Ex. 3, at 1, 4. Petitioner provided
documentation that his Minnesota psychology license is valid through February 28, 2015.
RFH Supporting Documents at 5. Petitioner’s address is in Minnesota. CMS Exs. 1, at
12-15, 19; 6, at 1; P. Response at 1. CMS has not disputed that Petitioner is a licensed
psychologist in the State of Minnesota.

Minnesota law limits the “independent practice of psychology” to persons who are
licensed by the state. Minn. Stat. § 148.907, subd 1 (2013). The term “Independent
practice” means “the practice of psychology without supervision.” Minn. Stat. § 148.89
subd 3. The term “Practice of psychology” means:

the observation, description, evaluation, interpretation, or
modification of human behavior by the application of
psychological principles, methods, or procedures for any
reason, including to prevent, eliminate, or manage
symptomatic, maladaptive, or undesired behavior and to
enhance interpersonal relationships, work, life and
developmental adjustment, personal and organizational
effectiveness, behavioral health, and mental health. The
practice of psychology includes, but is not limited to, the
following services, regardless of whether the provider
receives payment for the services:

(1) psychological research and teaching of psychology;

(2) assessment, including psychological testing and other
means of evaluating personal characteristics such as
intelligence, personality, abilities, interests, aptitudes, and
neuropsychological functioning;

(3) a psychological report, whether written or oral, including
testimony of a provider as an expert witness, concerning the
characteristics of an individual or entity;

(4) psychotherapy, including but not limited to, categories
such as behavioral, cognitive, emotive, systems,
psychophysiological, or  insight-oriented _ therapies;
counseling; hypnosis; and diagnosis and treatment of:

(i) mental and emotional disorder or disability;

(ii) alcohol and substance dependence or abuse;

(iti) disorders of habit or conduct;

(iv) the psychological aspects of physical illness or condition,
accident, injury, or disability, including the psychological
impact of medications;

(v) life adjustment issues, including work-related and
bereavement issues; and

(vi) child, family, or relationship issues;

(5) psychoeducational services and treatment; and

(6) consultation and supervision.

Minn. Stat. § 148.89, subd 5.

Therefore, I find that Petitioner is licensed, based on his doctoral degree, to
independently practice psychology in Minnesota, the state in which he practices, and that
Petitioner is authorized to provide full diagnostic and therapeutic services based on that
license.

3. Petitioner satisfies the requirements in 42 C.F.R. § 410.71(d) to enroll
in the Medicare program as a clinical psychologist.

Based on the foregoing, I conclude that Petitioner’s Ph.D. degree is a counseling
psychology degree that is sufficient to meet the doctoral degree requirement in 42 C.F.R.
§ 410.71(d). See Straub, DAB CR2677, at 6; Revathi Bingi, Ed.D., DAB CR1573, at 5, 6
(finding that the petitioner “held an Ed.D., a doctoral degree in educational psychology
(counseling), which she received in 1994” and noting that “CMS accepts that Petitioner
met the first requirement [i.e., doctoral degree in psychology] during the relevant period
and held an acceptable doctoral degree in psychology.”).
10

Further, I conclude that Petitioner is licensed to practice psychology based on his doctoral
degree in psychology in the state in which he practices. Because “the specific scope of
practice as provided in state law is controlling as to who is qualified to be a clinical
psychologist under section 410.71(d)(2),” see Paul L. Daniels, Psy.D., DAB CR2640, at
6 (2012), I conclude that, based on his doctoral degree, Petitioner is licensed to
independently practice psychology in Minnesota and furnish diagnostic, assessment,
preventative, and therapeutic services directly to individuals.

III. Conclusion

CMS’s determination denying Petitioner’s enrollment in the Medicare program as a
clinical psychologist is hereby reversed. CMS will enroll Petitioner as a clinical
psychologist and assign an appropriate effective date for Medicare billing privileges.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.
S & B Fuel Inc. d/b/a Phillips 66,
Respondent.

Docket No. C-14-292
FDA Docket No. FDA-2013-H-1492

Decision No. CR3110

Date: February 10, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated the above-captioned matter when it
filed an Administrative Complaint for Civil Money Penalties (Complaint) with the
Departmental Appeals Board, Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. CTP seeks to impose civil
money penalties under the Federal Food, Drug, and Cosmetic Act (Act) and the Act’s
implementing regulations.

The Complaint alleges the following facts. Respondent owns an establishment that sells
tobacco products and is located at 4347 South Broadway, St. Louis, Missouri 63111.
Complaint § 3. CTP conducted two inspections of the establishment. Complaint § 9.
During a December 28, 2012, inspection of Respondent’s establishment, an FDA-
commissioned inspector observed Respondent’s staff “[s]elling individual cigarettes” to a
person younger than 18 years of age. Complaint 10.

On January 24, 2013, CTP issued a warning letter to Respondent specifying the violation
that the inspector observed. The letter warned Respondent that if it failed to correct the
violation, civil money penalties could be imposed on it and that it was Respondent’s
responsibility to ensure compliance with the law. Complaint § 10.

Although United Parcel Service records indicate that an individual named “Algalaqani”
received the warning letter on January 25, 2013, the FDA did not receive a response to
the warning letter. Complaint § 11.

During a subsequent inspection, FDA-commissioned inspectors documented the
following at Respondent’s establishment:

[A] person younger than 18 years of age was able to purchase a single
Newport cigarette on May 20, 2013, at approximately 7:45 PM; and

. .. the minor’s identification was not verified before the sale, as detailed
above, on May 20, 2013, at approximately 7:45 PM.

Complaint § 1.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served Respondent with the
Complaint on December 10, 2013, via United Parcel Service. CTP charged Respondent
with violating 21 C.F.R. § 1140.14(a) (sale of tobacco products to a minor), 21 C.F.R.

§ 1140.14(b)(1) (failure to verify the age of a person purchasing tobacco products by
means of photographic identification containing the bearer’s date of birth) and 21 C.F.R.

§ 1140.14(d) (sale or distribution of individual cigarettes). Complaint §§ 1, 10. CTP
asked the CRD to impose a $2000 civil money penalty based on four alleged violations of
the regulations in a 24-month period. Complaint § 13.

The Complaint provided detailed instructions related to filing an answer and requesting
an extension of time to file an answer. Complaint J 14-18, 20-22. The Complaint stated
that failure to file an answer could result in the imposition of a civil money penalty
against Respondent. Complaint § 19. Further, after CTP filed the Complaint, CRD sent
Respondent an Initial Order informing Respondent of the requirement to file an answer to
avoid a default judgment. CRD sent a form answer along with the Initial Order that
Respondent could fill out and file with CRD. Respondent neither filed an answer nor
requested an extension of time within the 30-day time period prescribed in 21 C.F.R.

§ 17.9.

3

If a respondent does not file an answer within 30 days of a properly served complaint, the
regulations provide that:

[T]he presiding officer shall assume the facts alleged in the complaint to be
true, and, if such facts establish liability under the relevant statute, the
presiding officer shall issue an initial decision within 30 days of the time
the answer was due, imposing:

(1) The maximum amount of penalties provided for by law for the

violations alleged; or

(2) The amount asked for in the complaint, whichever amount is smaller.

21 C.F.R. § 17.11(a). Further, a failure to file a timely answer means that “the
respondent waives any right to a hearing and to contest the amount of the penalties and
assessments” imposed in the initial decision. 21 C.F.R. § 17.11(b).

Accepting the facts alleged in the Complaint as true, I find that those facts establish
Respondent’s liability under the Act. See 21 U.S.C. §§ 333(f)(9), 387c(a)(7)(B), 387£(d);
21 C.F.R. §§ 1140.1(b), 1140.14. Lalso find that CTP’s request to impose a $2000 civil
money penalty is permissible. See 21 C.F.R. § 17.2.

Therefore, Respondent is directed to pay a civil money penalty in the amount of $2000.
This initial decision becomes final and binding upon both parties 30 days after the date of
its issuance. 21 C.F.R. § 17.11(b).

It is so ordered.

/s/
Joseph Grow
Administrative Law Judge