Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Rebecca Bailey Harvey, LCSW
(OI File No. H-12-40978-9),
Petitioner,

v.

The Inspector General.

Docket No. C-12-1254
Decision No. CR2713

Date: March 5, 2013

DECISION

The Inspector General (1.G.) of the Department of Health and Human Services notified
Rebecca Bailey Harvey, LCSW (Petitioner) that she was being excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
minimum period of five years pursuant to 42 U.S.C. § 1320a-7(a)(1). I find that the LG.
has a basis for excluding Petitioner from program participation and that the five-year
exclusion is reasonable as a matter of law.

I. Background

By letter dated July 31, 2012, the I.G. notified Petitioner, a licensed clinical social
worker, that she was being excluded from Medicare, Medicaid, and all federal health care
programs for a minimum period of five years pursuant to section 1320a-7(a)(1). I.G. Ex.
1. The I.G. advised Petitioner that the exclusion was based on her conviction “in the
437" District Court, Bexar County, Texas of a criminal offense related to the delivery of
an item or service under the Medicare program or a state health care program, including
the performance of management or administrative services relating to the delivery of
items or services, under any such program.” LG. Ex. 1, at 1.

Petitioner timely filed her August 21, 2012 request for hearing (RFH) and this case was
assigned to me for hearing and decision. On October 17, 2012, I convened a prehearing
conference by telephone, the substance of which is summarized in my Order and
Schedule for Filing Briefs and Documentary Evidence (Order), dated October 17, 2012.
See 42 C.F.R. § 1005.6. Pursuant to the Order, the IG. filed a brief (I.G. Br.) on
November 15, 2012, with I.G.’s exhibits (I.G. Exs.) 1 through 6. Petitioner filed a
response (P. Br.), which our office received on January 3, 2013. Petitioner did not submit
any proposed exhibits. The LG. filed a reply brief (I.G. Reply) on January 9, 2013.
Absent objection, I admit CMS Exs. | - 6 into the record. Additionally, both parties
indicated that an in-person hearing was unnecessary (I.G. Br. at 4-5; P. Br. at 2);
therefore, I issue this decision on the basis of the written record.

IL. Issue

Whether the I.G. has a basis for excluding Petitioner from participating in Medicare,
Medicaid, and all other federal health care programs pursuant to 42 U.S.C. § 1320a-
T(a)(1).

III. Findings of Fact, Conclusions of Law, and Analysis’

A. Petitioner pled nolo contendere to the offense of theft from the Texas
Medicaid program and received deferred adjudication.

Petitioner is a licensed social worker. The Texas State Health and Human Services
Commission, Medicaid Provider Integrity, Office of Inspector General investigated
Petitioner for billing Texas Medicaid for counseling services that were not provided. I.G.
Ex. 6, at 1. On July 2, 2009, Petitioner was indicted on one count of Theft under Texas
Penal Code 31.03, and on one count of Medicaid Fraud under Texas Penal Code 35A.02.
1G. Exs. 5; 6, at 2. According to the indictment, beginning on or about September 17,
2001 through on or about October 27, 2006, Petitioner knowingly made false statements
or misrepresentations of material facts when she billed for work that was not performed
in order to receive payments under the Medicaid program in excess of $20,000, but less
than $100,000. I.G. Ex. 5. The indictment further charged that Petitioner made false
statements or misrepresentations, without the effective consent of the owner but through
deception, with the intent to deprive the Texas Medicaid Program of an amount in excess
of $20,000, but less than $100,000, pursuant to one scheme or continuing course of
conduct. I.G. Ex. 5.

On December 9, 2011, Petitioner entered into a plea agreement to plead “open” and nolo
contendere to the lesser included offense of Theft: $1,500 - $20,000. I.G. Ex. 2,3. On
March 9, 2012, a Texas District Court Judge sentenced Petitioner according to the

' My findings of fact and conclusions of law are set forth in italics and bold font.
agreement, ordered Petitioner to remit $41,070.25 in restitution; serve 240 hours of
community service; pay court costs of $310; and pay a $500 fine. I.G. Exs. 3, 4, and 6.
In accordance with the plea agreement, the judge ordered Deferred Adjudication for 3
years. LG. Exs. 3, 4.

B. Petitioner was convicted of a criminal offense for the purposes of 42 U.S.C.
§ 1320a-7(a)(1).

Petitioner’s primary defense to exclusion is that she has not been convicted of a crime.
RFH at 1; P. Br. at 1-2. Under 42 U.S.C. § 1320a-7(a)(1), Petitioner must be “convicted
of a criminal offense.” Petitioner argues that she only pled nolo contendere and that she
entered into deferred adjudication. RFH at 1; P. Br. at 1-2. The record confirms these
admissions: signed plea bargain (I.G. Ex. 2) and order of deferred adjudication (I.G. Exs.
3, 4). However, for the purposes of a violation under 42 U.S.C. § 1320a-7(a)(1), the term
“convicted” includes “when a plea of guilty or nolo contendere by the individual . . . has
been accepted by a Federal, State, or local court” and “when the individual . . . has
entered into participation in a first offender, deferred adjudication . .. where judgment of
conviction has been withheld.” 42 U.S.C. § 1320a-7(i); see also 42 C.F.R. § 1001.2.
Therefore, Petitioner was convicted of a criminal offense within the meaning of the
statute.

C. Petitioner’s conviction requires exclusion under 42 U.S.C. § 1320a-7(a)(1)
because her criminal conduct related to the delivery of an item or service
under the Medicaid program.

An individual must be excluded from participation in any federal health care program if
the individual was convicted under federal or state law of a criminal offense related to the
delivery of an item or service under Medicare or a state health care program. 42 U.S.C.

§ 1320a-7(a)(1). In the present case, the record fully supports this conclusion.
Specifically, Count 1 of the indictment against Petitioner charged her with unlawfully
appropriating, through deception, between $20,000 and $100,000 from the State of
Texas, Texas Medicaid Program, or the Texas Health and Human Services Commission.
1.G. Ex. 5, at 1. Petitioner pled to a lesser included offense from this charge (i-e., the
amount of money subject to the theft was decreased to between $1,500 and $20,000).

1.G. Ex. 2. Further, the Closing Summary Memo of the investigation makes it clear that
Petitioner was billing Texas Medicaid for services she was not providing. LG. Ex. 6.
Medicaid is a “State health care program” for exclusion purposes. 42 C.F.R. § 1001.2.
Therefore, Petitioner’s conviction is directly related to the delivery of services under a
state healthcare program. I conclude that the record fully supports Petitioner’s mandatory
exclusion under section 1320a-7(a)(1). I.G. Exs. 2-6.
D. Petitioner must be excluded for the statutory minimum of five years under
42 U.S.C. § 1320a-7(c)(3)(B).

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C.

§ 1320a-7(a)(1), Petitioner must be excluded for a minimum period of five years.

42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2). Petitioner argues that a five-
year exclusion is “very excessive” given that she already fully paid restitution. P. Br. at
2; see also RFH at 1. However, the payment of restitution does not affect the length of
exclusion because doing so is “merely carrying out part of [a] court ordered sentence.”
Sushil Aniruddh Sheth, M.D., DAB No. 2491, at 11 (2012). In any event, the statute does
not give me discretion to reduce the length of exclusion below the minimum period of
five years and I conclude that the five-year exclusion imposed by the L.G. is not
unreasonable as a matter of law.

IV. Conclusion

For the foregoing reasons, I sustain the I.G.’s determination to exclude Petitioner from
participating in Medicare, Medicaid, and all federal health care programs for the statutory
five-year minimum period pursuant to 42 U.S.C. § 1320a-7(a)(1), (c)(3)(B).

/s/
Scott Anderson
Administrative Law Judge


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

(OI File No.: H-11-40211-9),
Petitioner
Vv.
The Inspector General.
Docket No. C-13-228
ALJ Ruling No. 2013-05

Date: March 5, 2013

ORDER OF DISMISSAL

I dismiss Petitioner’s untimely request for hearing. See 42 C.F.R. § 1005.2(e)(1).

I. Background

By

letter dated August 31, 2011, the Office of the Inspector General (I.G.) for the

Department of Health and Human Services notified Petitioner that she was being

eXc.

luded from participation in the Medicare and Medicaid programs, as well as other

Federal health care programs defined in 42 U.S.C. § 1320a-7b(f). The exclusion notice
indicated that the basis for the exclusion was due to her conviction in the Superior Court
of California, County of Los Angeles of a criminal offense related to the delivery of an
item or service under the Medicare or a State health care program, including the

per:

‘ormance of management or administrative services relating to the delivery of items or

services under any such program. The exclusion notice further stated that the exclusion
would become effective 20 days from the date of the letter.

On
wit

December 18, 2012, Petitioner, represented by counsel, filed a request for hearing

the Departmental Appeals Board, Civil Remedies Division. On January 3, 2013, I
issued an Order to Show Cause directing the Petitioner to show cause why her request for
hearing should not be dismissed on the basis that it fails to raise an issue that is within my
jurisdiction to adjudicate. See 42 C.F.R. § 1005.2(e)(4). Further, I directed Petitioner to
show cause why her request for hearing should not be dismissed because it was not
timely filed. See 42 C.F.R. §§ 1005.2(c) and (e)(1). Petitioner filed a timely response (P.
Resp.), which included a Declaration of Alaleh Kamran (Petitioner’s counsel), and
exhibits A and B. I granted the I.G. an opportunity to reply to Petitioner’s response,
which the LG. did on February 11, 2013.

IL. Discussion

The issues before me are whether Petitioner’s request for hearing was timely filed and
whether the request raises an issue that is within my jurisdiction to adjudicate. Because
Petitioner neither argues that she did not receive the I.G.’s exclusion notice letter nor
denies that her appeal was filed more than a year after the filing deadline, I find
Petitioner’s request for hearing was untimely filed. I do not dismiss the request for
hearing based on a failure to raise an issue over which I have jurisdiction because
Petitioner did so in response to the Order to Show Cause and I will treat that as an
amendment of the request for hearing.

Section 1128(a) of the Social Security Act requires the exclusion from participation in
Medicare, Medicaid and other Federal health care programs of any individual or entity
convicted of certain classes of criminal offenses. 42 U.S.C. § 1320a-7(a). If the I.G.
determines that a conviction constitutes a proper basis for exclusion, he must send notice
of the decision to exclude to the affected individual or entity. 42 U.S.C. § 1320a-7(c);
42 C.F.R. § 1001.2002(a). The exclusion notice must include information on the appeal
rights of the excluded party. 42 C.F.R. § 1001.2002(a)(6).

The regulations provide that an excluded individual has 60 days from the receipt of the
notice of exclusion to file a request for a hearing. 42 C.F.R. §§ 1001.2007(b), 1005.2(c).
The regulations further provide that “the date of receipt of the notice letter [is] presumed
to be five days after the date of such notice unless there is a reasonable showing to the
contrary.” 42 C.F.R. § 1005.2(c). The regulations do not provide an administrative law
judge with the authority to extend the 60-day filing deadline, but only allow a petitioner
to make a “reasonable showing” to rebut the presumption that he or she received the
exclusion notice more than five days after the date of the notice. Jd. If the request for
hearing is untimely filed, the regulations require an administrative law judge to dismiss
the request for hearing. 42 C.F.R. § 1005.2(e)(1).

In this case, Petitioner does not assert that she did not receive the exclusion notice or that
she did not receive the notice within the five-day delivery period presumed by the
regulations. The exclusion notice indicates that the I.G. sent it to Petitioner’s address on
August 31, 2011, and that a copy was sent to Petitioner’s then counsel, Robert Yousefian,
Esquire. Request for Hearing, Notice Letter at 3, 4. The L.G.’s notice of intent to exclude
and a debarment notice from the Office of Personnel Management were also sent to
Petitioner at the same address stated in the I.G.’s exclusion notice. Request for Hearing,
Supporting Documents at 3, 4. Petitioner does not contend that she received any of the
notices in an untimely manner. In addition, the exclusion notice expressly notified
Petitioner that if she disagreed with the action, then she could request a hearing before an
administrative law judge and that “such request must be made in writing within 60 days
of your receiving the OIG’s letter of exclusion ... .” Request for Hearing, Notice Letter
at 5. Accordingly, Petitioner has made no reasonable showing that she did not receive
the notice within the presumed five days of the date on the exclusion notice. Rather,
Petitioner appears to have only decided to seek review of the I.G.’s exclusion following
the post-conviction dismissal of her criminal plea. P. Resp. at 2. Therefore, based on the
date of the I.G.’s exclusion notice and the regulatory presumption of receipt within five
days of that date, Petitioner’s request for hearing was due on November 4, 2011.
However, Petitioner’s request for hearing was not filed until December 18, 2012, more
than a year after the filing deadline.

Petitioner contends in her response to my Order to Show Cause that her former counsel
failed to request the hearing and, for that reason, Petitioner should now be able to file an
untimely request. P. Resp. at 2-3. Petitioner’s argument is an attempt to show good
cause for a late filing of the request. However, as previously stated, the regulations do
not provide a good cause exception to the requirement that Petitioner file a timely request
for hearing, see 42 C.F.R. §§ 1001.2007(b), 1005.2(b), and an administrative law judge
must follow federal regulations, such as 42 C.F.R. § 1005.2(e)(1), which mandates
dismissal of an untimely request for hearing. See 42 C.F.R. § 1005.4(c)(1). Further, even
if Petitioner could obtain relief by showing good cause for untimely filing, the negligence
of counsel cannot provide such a basis. See Link v. Wabash Railroad Co., 370 U.S. 626,
633-34 (1962) (finding that there is no merit to the argument that dismissal of petitioner’s
claim because of his counsel’s unexcused conduct imposes an unjust penalty on
petitioner). Accordingly, I must dismiss the Petitioner’s hearing request as untimely.

The Order to Show Cause also directed Petitioner to show why Petitioner’s hearing
request should not be dismissed for failure to raise an issue that may be properly
addressed at a hearing. Petitioner’s request for hearing did not state any facts or law
related to the I.G.’s decision to exclude with which Petitioner disagreed. See 42 C.F.R.

§ 1005.2(d). However, in her response to the Order to Show Cause, Petitioner states that
the exclusion under 42 U.S.C. § 1320a-7(a)(1) is erroneous and argues that she should
instead have been subject to a permissive exclusion under 42 U.S.C. § 1320a-7(b)(1)(A).
Although I have no authority to review the I.G.’s discretionary decision related to the
imposition of a permissive exclusion, see 42 C.F.R. § 1005.4(c)(5), I do have jurisdiction
to adjudicate a dispute as to whether the stated basis for an exclusion exists. 42 C.F.R.

§ 1001.2007(a)(1)(i). Accordingly, I find that Petitioner raised an issue that may be
properly addressed at hearing and do not dismiss Petitioner’s request for hearing pursuant
to 42 C.F.R. § 1005.2(e)(4).

III. Conclusion

Petitioner did not timely request a hearing and, therefore, Petitioner’s request for hearing
must be dismissed pursuant to 42 C.F.R. § 1005.2(e)(1).

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Courtyard Healthcare Center
(CCN: 15-5689),

Petitioner,
v.
Centers for Medicare and Medicaid Services.

Docket No. C-11-796

Decision No. CR2712

Date: March 1, 2013

DECISION

Petitioner, Courtyard Healthcare Center, was not in substantial compliance with program
participation requirements from June 7 through 9, 2011, due to a violation of 42 C.F.R.
§ 483.25(h)! that posed immediate jeopardy on June 7, 2011 and a risk for more than
minimal harm without actual harm or immediate jeopardy on June 8 and 9, 2011. A civil
money penalty (CMP) of $3,550 for June 7 and $100 per day for June 8 and 9, 2011, is
reasonable.
I. Background
Petitioner is located in Goshen, Indiana, and participates in Medicare as a skilled nursing
facility (SNF) and the state Medicaid program as a nursing facility (NF). Petitioner was
surveyed by the Indiana State Department of Health (state agency) from June 6 through
9, 2011. The survey concluded that Petitioner was not in substantial compliance with

program participation requirements. Centers for Medicare and Medicaid Services (CMS)
Exhibit (Ex.) 6. CMS notified Petitioner by letter dated July 12, 2011, that it was

' References are to the 2010 revision of the Code of Federal Regulations (C.F.R.), which
was in effect at the time of the survey, unless specifically indicated.
imposing the following enforcement remedies: a CMP of $3,550 for June 7, 2011; a
CMP of $100 per day beginning June 8, 2011, and continuing until Petitioner returned to
substantial compliance; termination effective December 9, 2011, if Petitioner did not
return to substantial compliance prior to that date; and a denial of payment for new
admissions (DPNA) effective September 9, 2011, if Petitioner did not return to
substantial compliance prior to that date. CMS also notified Petitioner that it was
ineligible to conduct a Nurse Aide Training and Competency Evaluation Program
(NATCEP) for a period of two years based on the partial extended survey the state
conducted. CMS Ex. 1. CMS subsequently determined that Petitioner returned to
substantial compliance effective June 10, 2011, and the termination and DPNA remedies
were not effectuated. CMS Exs. 2, 19. Thus, the remedies at issue are the CMP of
$3,550 for June 7 and $100 per day for June 8 and 9, 2011.

Petitioner requested a hearing before an administrative law judge (ALJ) on September 12,
2011. The case was assigned to me for hearing and decision on September 21, 2011, and
an Acknowledgement and Prehearing Order was issued at my direction. On May 1,
2012, a hearing was convened in Indianapolis, Indiana. A transcript (Tr.) of the
proceedings was prepared. CMS offered CMS exhibits (CMS Exs.) 1 through 24 that
were admitted as evidence. Tr. 18-19, 32. Petitioner offered Petitioner exhibits (P. Exs.)
1 through 4 that were admitted as evidence. Tr. 20. CMS called the following witnesses:
Surveyor Ellen Ruppel, RN; and Surveyor Brenda Meredith, RN. Petitioner called the
following witnesses: Paula Hoover; and Brian Cook, Petitioner’s Administrator. The
parties filed post-hearing briefs (CMS Br. and P. Br.) and post-hearing reply briefs (CMS
Reply and P. Reply). Petitioner offered P. Ex. 5 with its post-hearing reply, CMS filed
no objections, and P. Ex. 5 is admitted.

IL. Discussion
A. Issues

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

Whether the remedy imposed is reasonable.
B. Applicable Law
The statutory and regulatory requirements for participation of a SNF in Medicare are
found at section 1819 of the Social Security Act (Act) and at 42 C.F.R. Part 483. Section

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

§ 1819(h)(2)(B).

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

§ 488.301 (emphasis in original). A deficiency is a violation of a participation
requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary’s
regulations at 42 C.F.R. Part 483, subpart B. Noncompliance refers to any deficiency
that causes a facility not to be in substantial compliance. 42 C.F.R. § 488.301. State
survey agencies survey facilities that participate in Medicare on behalf of CMS to
determine whether the facilities are complying with federal participation requirements.
42 CFR. §§ 488.10-.28, 488.300-.335.

The regulations specify the enforcement remedies that CMS may impose if a facility is
not in substantial compliance with Medicare requirements. 42 C.F.R. § 488.406. CMS
may impose a CMP against a facility on a per day basis. The regulations provides for
two ranges of CMPs. 42 C.F.R. §§ 488.408, 488.438. The upper range, $3,050 per day
to $10,000 per day, is reserved for deficiencies that pose immediate jeopardy to a
facility’s residents and, in some circumstances, for repeated deficiencies. 42 C.F.R.

§ 488.438(a)(1)(i), (d)(2). “lmmediate jeopardy means a situation in which the
provider’s noncompliance with one or more requirements of participation has caused, or

> Participation of a NF in Medicaid is governed by section 1919 of the Act. Section
1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply
with their participation requirements established by sections 1919(b), (c), and (d) of the
Act.
is likely to cause, serious injury, harm, impairment, or death to a resident.” 42 C.F.R.

§ 488.301 (emphasis in original). The lower range of CMPs, $50 per day to $3,000 per
day, is reserved for deficiencies that do not pose immediate jeopardy, but either cause
actual harm to residents, or cause no actual harm but have the potential for causing more
than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii).

Petitioner was notified in this case that it was ineligible to conduct a NATCEP for two
years. Ineligibility to be approved to conduct a NATCEP is by operation of law and is
not an enforcement remedy that CMS or the state agency imposes. 42 C.F.R.
§§ 483.151(b)(2); 488.406. Pursuant to sections 1819(b)(5) and 1919(b)(5) of the Act,
SNFs and NFs may only use nurse aides who have completed a training and competency
evaluation program. Pursuant to sections 1819(f)(2) and 1919(f)(2) of the Act, the
Secretary was tasked to develop requirements for approval of NATCEPs and the process
for review of those programs. Sections 1819(e) and 1919(e) of the Act impose upon the
states the requirement to specify what NATCEPs they will approve that meet the
requirements that the Secretary established and a process for reviewing and re-approving
those programs using criteria the Secretary set. The Secretary promulgated regulations at
42 C.F.R. Part 483, subpart D. Pursuant to 42 C.F.R. § 483.151(b)(2) and (f), a state may
not approve and must withdraw any prior approval of a NATCEP offered by a skilled
nursing or nursing facility that has been: (1) subject to an extended or partial extended
survey under sections 1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act; (2) assessed a
CMP of not less than $5,000; or (3) subject to termination of its participation agreement,
a DPNA, or the appointment of temporary management. Extended and partial extended
surveys are triggered by a finding of “substandard quality of care” during a standard or
abbreviated standard survey and involve evaluating additional participation requirements.
“Substandard quality of care” is identified by the situation where surveyors identify one
or more deficiencies related to participation requirements established by 42 C.F.R.

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

§ 483.25 (Quality of Care) that are found to constitute either immediate jeopardy, a
pattern of or widespread actual harm that does not amount to immediate jeopardy, or a
widespread potential for more than minimal harm that does not amount to immediate
jeopardy and there is no actual harm. 42 C.F.R. § 488.301.

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

§§ 1128A(c)(2), 1866(h); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). A facility has a right to
appeal a “certification of noncompliance leading to an enforcement remedy.” 42 C.F.R.
§ 488.408(g)(1); 42 C.F.R. §§ 488.330(e), 498.3. However, the choice of remedies, or
the factors CMS considered when choosing remedies, are not subject to review. 42
C.F.R. § 488.408(g)(2). A facility may only challenge the scope and severity level of
noncompliance determined by CMS, if a successful challenge would affect the range of
the CMP that may be imposed or impact the facility’s authority to conduct a NATCEP.
42 C.F.R. § 498.3(b)(14), (d)(10)(i). The CMS determination as to the level of

noncompliance, including the finding of immediate jeopardy, “must be upheld unless it is
clearly erroneous.” 42 C.F.R. § 498.60(c)(2); Woodstock Care Ctr., DAB No. 1726, at 9,
38 (2000), aff'd, 363 F.3d 583 (6th Cir. 2003). The Departmental Appeals Board (the
Board) has long held that the net effect of the regulations is that a provider has no right to
challenge the scope and severity level assigned to a noncompliance finding, except in the
situation where that finding was the basis for an immediate jeopardy determination. See,
e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB No. 1750 (2000).
ALJ review of a CMP is subject to 42 C.F.R. § 488.438(e).

The hearing before an ALJ is a de novo proceeding, i.e., “a fresh look by a neutral
lecision-maker at the legal and factual basis for the deficiency findings underlying the
remedies.” Life Care Ctr. of Bardstown, DAB No. 2479, at 33 (2012) (citation omitted).
The standard of proof, or quantum of evidence required, is a preponderance of the
evidence. CMS has the burden of coming forward with the evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. The Board has stated
that CMS must come forward with “evidence related to disputed findings that is
sufficient (together with any undisputed findings and relevant legal authority) to establish
a prima facie case of noncompliance with a regulatory requirement.” Evergreene
Nursing Care Ctr., DAB No. 2069, at 7 (2007); Batavia Nursing and Convalescent Ctr.,
DAB No. 1904 (2004), aff'd, Batavia Nursing and Convalescent Ctr. v. Thompson, 129
F. App’x 181 (6th Cir. 2005). “Prima facie” means generally that the evidence is
“[s]ufficient to establish a fact or raise a presumption unless disproved or rebutted.”
Black’s Law Dictionary 1228 (8th ed. 2004). The Board described the elements of the
CMS prima facie case in general terms as follows:

HCFA [now known as CMS] must identify the legal criteria
to which it seeks to hold a provider. Moreover, to the extent
that a provider challenges HCFA’s findings, HCFA must
come forward with evidence of the basis for its determination,
including the factual findings on which HCFA is relying and,
if HCFA has determined that a condition of participation was
not met, HCFA’s evaluation that the deficiencies found meet
the regulatory standard for a condition-level deficiency.

Hillman Rehab. Ctr., DAB No. 1611, at 11 (1997), aff'd, Hillman Rehab. Ctr. v. United
States, No. 98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999). Thus, CMS has
the initial burden of coming forward with sufficient evidence to show that its decision to
impose an enforcement remedy is legally sufficient under the statute and regulations. To
make a prima facie case that its decision was legally sufficient, CMS must: (1) identify
the statute, regulation or other legal criteria to which it seeks to hold the provider; (2)
come forward with evidence upon which it relies for its factual conclusions that are
disputed by the Petitioner; and (3) show how the deficiencies it found amount to
noncompliance that warrants an enforcement remedy, i.e., that there was a risk for more
than minimal harm due to the regulatory violation. In Evergreene Nursing Care Ctr., the
Board explained its “well-established framework for allocating the burden of proof” on
the issue of whether a SNF is out of substantial compliance as follows:

CMS has the burden of coming forward with evidence related
to disputed findings that is sufficient (together with any
undisputed findings and relevant legal authority) to establish
a prima facie case of noncompliance with a regulatory
requirement. If CMS makes this prima facie showing, then
the SNF must carry its ultimate burden of persuasion by
showing, by a preponderance of the evidence, on the record
as a whole, that it was in substantial compliance during the
relevant period.

DAB No. 2069, at 7. CMS makes a prima facie showing of noncompliance if the
credible evidence CMS relies on is sufficient to support a decision in its favor absent an
effective rebuttal. The regulation gives Petitioner notice of the criteria or elements it
must meet to comply with the program participation requirement established by the
regulation. 5 U.S.C. §§ 551(4), 552(a)(1). Therefore, in order to make a prima facie
showing of noncompliance, CMS must show that Petitioner violated the regulation by not
complying with one or more of the criteria or elements of the regulation, which is a
deficiency. CMS must also show that the deficiency amounted to “noncompliance,” i.e.,
that Petitioner was not in substantial compliance because the deficiency posed a risk for
more than minimal harm. See Jennifer Matthew Nursing & Rehab. Ctr., DAB No. 2192,
at 20 n.12 (2008).

The Board has long held that Petitioner bears the burden of persuasion to show by a
preponderance of the evidence that it was in substantial compliance with participation
requirements or any affirmative defense. Batavia Nursing & Convalescent Inn, DAB No.
1911 (2004); Batavia Nursing & Convalescent Ctr., DAB No. 1904, aff’d, Batavia
Nursing & Convalescent Ctr. v. Thompson, 129 F. App’x 181; Emerald Oaks, DAB No.
1800 (2001); Cross Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehab. Ctr.,
DAB No. 1611, aff'd, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999
WL 34813783. However, only when CMS makes a prima facie showing of
noncompliance, is the facility burdened to show, by a preponderance of the evidence on
the record as a whole, that it was in substantial compliance or had an affirmative defense.
Evergreene Nursing Care Ctr., DAB No. 2069, at 7. A facility can overcome CMS’s
prima facie case either by rebutting the evidence upon which that case rests, or by
proving facts that affirmatively show substantial compliance. “An effective rebuttal of
CMS’s prima facie case would mean that at the close of the evidence the provider had
shown that the facts on which its case depended (that is, for which it had the burden of
proof) were supported by a preponderance of the evidence.” Jd. at 7-8 (citations
omitted).
C. Findings of Fact, Conclusions of Law, and Analysis

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

CMS alleges based upon the survey that ended June 9, 2011, that Petitioner was not in
substantial compliance with program participation requirements from June 7 through 9,
2011, based upon a violation of 42 C.F.R. § 483.25(h) (Tag F323), and that the violation
posed immediate jeopardy on June 7, 2011.

1. Petitioner was not in substantial compliance with program
participation requirements due to a violation of 42 C.F.R. § 483.25(h)
(Tag F323) from June 7 through 9, 2011.

2. Petitioner has not shown that it returned to substantial compliance
prior to June 9, 2011.

a. Facts

The state agency survey was triggered by complaints. The sister of Resident B
complained that residents might not be able to exit the facility during a fire because
keypads at exit doors did not function properly. She also complained that limits had been
imposed on the visits of Resident B and his sister and girlfriend. CMS Ex. 11; Tr. 37.
The complaint investigation began on June 6, 2011. CMS Ex. 6 at 1. On June 7, 2011, at
about 7:44 a.m., one of Petitioner’s staff found Resident B approximately one block from
the facility near a busy intersection. The surveyors cited Petitioner for violation of 42
C.F.R. § 483.25(h) (Tag F323) for failure to provide supervision to prevent the elopement

> “Credible evidence” is evidence that is worthy of belief. Black's Law Dictionary 596
(18th ed. 2004). The “weight of evidence” is the persuasiveness of some evidence
compared to other evidence. Id. at 1625.
of Resident B. The surveyors determined that the violation was an isolated incident of
noncompliance that posed immediate jeopardy. CMS Ex. 6 at 2.

Surveyor Ellen Ruppel, RN, testified that she wrote the Statement of Deficiencies (SOD).
Tr. 36; CMS Ex. 6. Surveyor Ruppel testified that Petitioner was cited for the deficiency
because Petitioner did not know exactly how Resident B exited the facility. Tr. 66.
Surveyor Ruppel testified that Petitioner is situated in an urban area near the edge of
town. A street and a highway near the facility carry a lot of traffic. There are no
sidewalks on either side of the road. The highway is located less than one block from the
facility. Tr. 44-46. Surveyor Ruppel testified that she believed that serious injury was
likely to happen because Resident B was cognitively impaired, at risk for falls, at risk for
wandering, and he could have been hit by a car. Tr. 61, 64, 66. Surveyor Brenda
Meredith, RN, was the supervisor for Surveyor Ruppel. Surveyor Ruppel called
Surveyor Meredith to the facility when she suspected there was immediate jeopardy. Tr.
122-25. Surveyor Meredith testified that she concluded that Petitioner was not in
compliance because Resident B got away; Petitioner’s staff did not know the resident was
out; and Petitioner’s interventions to prevent elopement were not effective. Tr. 127. The
surveyors concluded that after removing the immediate jeopardy, Petitioner continued not
to be in substantial compliance because there continued to be a risk for more than
minimal harm. CMS Ex. 6 at 2-3, 6. The surveyors determined based upon a revisit
survey conducted on July 14, 2011, that Petitioner returned to substantial compliance
effective June 10, 2011. CMS Ex. 2 at 1.

Petitioner’s clinical records show that Resident B was an 83-year-old former state
policeman. He was admitted to Petitioner’s facility on May 3, 2011. Upon arrival he
was found to be alert and oriented, cooperative with assessment, and protective of his
personal privacy. P. Ex. 1; CMS Ex. 14 at 1, 4. Resident B had diagnoses including
Alzheimer’s disease, muscle weakness, atherosclerosis, congestive heart failure, diabetes,
gout, neuropathy, and anxiety. P. Ex. 1 at 1; CMS Ex. 14 at 10. Prior to his admission,
Resident B had been living alone at his personal residence and driving his own vehicle.
Resident B arrived at the facility with his daughters, who held his power of attorney
(POA). Resident B stated that he was “overwhelmed,” in that he had learned only that
day that he would be moving from his personal residence to the facility. P. Ex. 1 at 1;
CMS Ex. 14 at 4, 31-38. Surveyor Ruppel interviewed Resident B on June 6, 2011, prior
to his elopement, and found him to be well-dressed and well-groomed. She testified that
ie could have been mistaken for a visitor. However, she also testified that she doubted

e had the capacity to recall a four-digit code for the door alarm. Tr. 46-47, 67-68.

Petitioner does not dispute that Resident B was assessed as at risk for elopement at
admission on May 3, 2011 and again on May 25, 2011. CMS Ex. 9 at 30-31; CMS Ex.
14 at 1. On May 3, 2011, a wander alert bracelet that would trigger an alarm was placed
on the resident’s ankle to alert staff if he attempted to exit the facility.’ P. Ex. 1 at 1;
CMS Ex. 9 at 34; P. Ex. 2 at 1. On May 6, 2011, Petitioner initiated a care plan to
address Resident B’s elopement risk. The goal for Resident B was that he would have no
successful elopement attempts. Petitioner planned interventions to meet the goal: one-
to-one (1:1) supervision when necessary; encouraging activity attendance; obtaining
information from family regarding interventions that worked in the past; placing the
wander alert bracelet and checking its functioning every shift; and, checking Resident B’s
whereabouts every 15 minutes as needed. CMS Ex. 9 at 33; CMS Ex. 14 at 12.

Although the care plan required that the function of the alarm bracelet be checked every
shift, Petitioner’s treatment flow sheet requires checking the function once per day in the
evening or night but checking the placement every shift. CMS Ex. 14 at 52; P. Ex. 3 at 1,
3. The physician’s order for the wander alert bracelet specified, consistent with the
treatment flow sheets, but inconsistent with the care plan, that function be checked every
night and placement every shift. P. Ex. 2.

Nurse’s progress notes document that Resident B verbalized a desire to leave and that he
attempted to leave on multiple occasions between his admission on May 3, 2011 and his
final elopement from Petitioner on June 7, 2011. The progress notes show the following
events:

e May 6: Resident B verbalized frustration at being at the facility and later
attempted to leave the facility with his girlfriend.” There is no indication in
the notes whether the wander alert system sounded. P. Ex. 1 at 2; CMS Ex.
14 at 6.

e May 8: Resident B’s sisters took him out of the facility against the
direction of the nurse, without permission of the POA, and without signing
him out. When Resident B returned to the facility he did not have on his
wander alert bracelet and the resident reported that his sisters had cut it off.
A new bracelet was affixed. P. Ex. | at 3; CMS Ex. 14 at 6-7. The missing
bracelet was not found in the facility. Tr. 201. There is no indication in
Petitioner’s records in evidence that the wander alert system sounded when
the resident departed the building.

* Alarm systems of this type are generally designed to alert staff when a resident
attempts to exit or comes too close to a door. Generally, such systems involve a bracelet
fixed on the resident’s arm, ankle, wheelchair, or walker; a door lock mechanism; and an
alarm or alarm sensor or trigger mounted near exit doors. The systems are commonly
referred to by their trade names such as WanderGuard® or Code Alert®.

> The nurse’s progress note incorrectly identifies the girlfriend as Resident B’s spouse.
10

May 10: Resident B refused to leave his room while waiting for his family
to “get him ‘the hell out of here.”” Resident B also was observed
attempting to make a phone call with his television remote. P. Ex. | at 3;
CMS Ex. 14 at 7.

May 25: Resident B packed his belongings and stated he is “leaving
today.” Resident B planned on leaving with his girlfriend. Staff began
checking the resident every 15 minutes. P. Ex. 1 at 3; CMS Ex. 14 at 7.

May 27: Resident B noted to be confused and constantly voiced to staff his
intention to leave. Resident B made calls asking to be picked-up. Resident
B continued on 15-minute checks for elopement risk. His daughter took
him to a physician’s appointment in the afternoon. P. Ex. 1 at 4; CMS Ex.
14 at 8-9.

May 28: Resident B packed all his personal belongings, stripped his bed
and unplugged his television. He stated that he was waiting for a ride back
to his house. Resident B did not attempt to leave the facility. P. Ex. 1 at 4;
CMS Ex. 14 at 9.

May 29: Resident B was observed resting in his recliner, but his television
was still unplugged and his belongings packed. P. Ex. 1 at 4; CMS Ex. 14
at 9.

June 1: Resident B was noted to have his bags packed. P. Ex. | at 5.

June 3: Resident B was placed on 15-minute checks in the morning when
he was overheard on the phone stating he was going to walk uptown to
meet someone. Later in the morning, Resident B packed his belongings
and called friends and family for transportation. Resident B’s sister called
the facility to ask when to pick him up as he had called to tell her he was
being released. The sister was told to disregard the request for
transportation. Resident B became more anxious and staff attempted to
calm him and redirect his behaviors. Resident B threatened to kick a door
open. He then exited the facility when someone came in. There is no
indication in Petitioner’s records that the wander alert alarm sounded when
the resident exited. Staff attempted to redirect him, but he was adamant, so
staff shadowed him outside. Several different staff members attempted to
redirect him back inside the building without success. He stated he was
going to “walk home” in order to “take care of business.” Resident B
returned to the facility when notified his daughter would meet with him in

11

his room. Resident B was given Xanax, a prescription, psychoactive drug
typically prescribed for anxiety. He was assisted with unpacking his
belongings. However, after his daughter left, Resident B again started to
pack his belongings and requested transportation to his residence. Staff
continued 15-minute checks. P. Ex. 1 at 5; CMS Ex. 14 at 10.
Administrator Cook testified that because there is no mention in the nurse’s
notes that an alarm sounded, it is a good assumption it did not. Tr. 222.

June 4: Resident B talked about leaving the facility all day. Staff
continued 15-minute checks. Resident B called family members to pick
him up. Resident B was unable to be redirected and carried his magazine
rack to a side door and sat on it by the doorway. Resident B asked visitors
why nobody would let him outside. Resident B argued with his girlfriend.
Resident B wanted his wander alert bracelet cut off. He wanted to go
home. Resident B agreed to stay until Monday and then see about going

home. P. Ex. 1 at 6; CMS Ex. 14 at 1

0.

e June 5: Resident B continued on 15-minute checks. Resident B did not

voice any desire to leave the facility.

P. Ex. | at 6; CMS Ex. 14 at 10.

e June 6: Resident B requested scissors to cut off his wander alert bracelet.

Resident B stated his daughters were

coming to pick him up and he needed

it removed. Xanax was offered because Resident B became increasingly
frustrated with not being able to obtain scissors. Resident B called family

members and friends, but stopped tal

ing to them when staff approached.

Resident B declined to participate in activities or eat in the main dining
room, but did interact with his roommate and peers. Staff continued to

conduct 15-minute checks. P. Ex. | at 6.

Petitioner does not dispute that Resident B eloped
and 7:45 a.m. on June 7, 2011. Petitioner does not

rom its facility between about 7:30
dispute that the resident was found

about 100 yards from the facility. Tr. 152; Petitioner’s Proposed Findings of Fact (PPFF)

437. There is no dispute that when the resident le
heard an alarm from the wander alert system.

t the facility on June 7, 2011, no staff

Nurse’s progress notes dated June 7, 2011, show that Resident B remained on 15-minute
checks. P. Ex. 1 at 7; CMS Ex. 14 at 11. Although the 15-minute checks were to be on

the hour, quarter, and half-hour, Petitioner’s record
June 7, was actually done at 7:24 a.m., six minutes

s show that the 7:30 a.m. check on
early. CMS Ex. 14 at 3. At 7:24 a.m.,

Resident B was observed to be seated in his recliner in his room. He did not display any

anxiety or agitation. Subsequently, Paula Hoover,

a Social Service Designee for

Petitioner, was on the way to the facility and observed Resident B walking along a street

several hundred yards away from the facility. Ms.

Hoover called the facility at 7:44 a.m.,
12

according to her cell phone log, to notify staff of the resident’s location and to get
assistance. Ms. Hoover stayed with the resident until additional staff arrived to assist her.
The nurse’s note states that the resident was alert and oriented as appropriate for him.
His only complaint was that he was tired. He was wearing a short-sleeve shirt, jeans, a
jacket and a hat. The temperature was in the mid 70s and humid. The nurse’s note states
that the resident’s wander alert bracelet was intact on his left ankle but the note does not
show that the operation of the bracelet was tested. Resident B was persuaded by a staff
member to go to a café for coffee. P. Ex. 1 at 6-7; CMS Ex. 9 at 55-56; CMS. Ex. 14 at
11; PPFF §§ 37-39; Tr. 150-52. Following his elopement, Resident B was sent to a
psychiatric hospital and then to a facility with a secured Alzheimer’s unit. P. Ex. 1 at 6;
CMS. Ex. 7 at 1; CMS Ex. 9 at 56; CMS Ex. 14 at 11; Tr. 206; PPFF 39.

Surveyor Ruppel testified that she and a staff member tested the wander alert systems on
all facility doors equipped with the system and found that all worked on June 6, 2011, the
day before Resident B eloped. Tr. 43-44, 78. Surveyor Ruppel testified that she
interviewed staff on June 7, 2011, to determine whether they heard an alarm sound when
Resident B eloped. No staff member that she interviewed reported hearing an alarm
sound at the relevant time. CMS Ex. 12 at 5, 16; Tr. 61, 73, 87-88, 97-98. She also
checked the code alert system with a member of Petitioner’s maintenance staff and
determined that the alarm system was working properly at about 11:30 a.m. on June 7,
2011, following the resident’s elopement. CMS Ex. 12 at 8; Tr. 63. Surveyor Ruppel
testified that she did not investigate whether one of Resident B’s sisters gave the code to
him because she did not think he was sufficiently cognitively aware, based on her
interview, to remember a code. Tr. 67-68.

Brian Cook, Petitioner’s Administrator, testified credibly regarding the operation of
Petitioner’s wander alert system. Mr. Cook testified that Petitioner does not generally
have residents who require a locked or secure unit. However, on June 7, 2011, when
Resident B eloped, all 15 facility exit doors could be locked, 12 were regularly locked
and were used as emergency exists only, and the three not locked had a wander alert
system. When the three doors with the wander alert systems were unlocked from 6:00
a.m. to 8:00 p.m., anyone without a wander alert bracelet could enter or exit just by
opening the door. However, when a wander alert bracelet was within about four feet of
the door, a magnetic lock was triggered that secured the door. A code had to be entered
to unlock the door and, if the bracelet was still in range, the alarm would sound. A code
then had to be entered to silence the alarm. Petitioner used two four-digit codes
primarily: a four-digit visitor code for visitors to unlock the door after hours, 8:00 p.m.
to 6:00 a.m., when all doors were locked; and a four-digit bypass code that staff entered
to disable or silence the alarm and unlock the door. The visitor code would unlock the
door but not disable or shut-off the alarm, so that if a resident with a wander alert bracelet
followed a visitor through a door the alarm would sound. Tr. 159-67. The company that
serviced Petitioner’s wander alert system determined that there was a problem with the
system on the Birch Wing (Unit B on CMS Ex. 24), the B wing door, on the day of the

13

elopement because the visitor code and the staff bypass codes had both been programmed
to the number 0611. Tr. 176. Mr. Cook testified that even though the bypass code and
visitor code were the same, a resident with a wander alert bracelet that approached a
closed door would cause the activation of the magnetic lock. Tr. 162. The staff bypass
code was changed the first Monday of every month using a mmyy format so on June 6,
2011, the first Monday of that month, the staff bypass code was changed by someone to
0611. The visitor code was not changed regularly and it had been 0611 for some period
of time. Mr. Cook opined that staff would not have noticed that the visitor code and staff
bypass code were the same because the doors functioned no differently, except that the
alarm would not sound if the door was open and a resident with a bracelet approached too
closely or crossed the threshold. Tr. 167-69; 208-10. I infer, therefore, that staff was not
doing a daily check of the function of the door alarm system, at least not whether a
bracelet passing through an open door would trigger the wander alert alarm.

Mr. Cook testified that after Resident B eloped, it was surmised that the resident’s most
likely escape route was a door. Therefore, every door, exit, lock, magnetic look, and
door alarm was checked to ensure all functioned properly. It was discovered that the exit
on the Birch Wing, the B wing door, did not work correctly. The B wing door was being
used at the time as the main facility entrance and exit during renovation in the area of the
regular main entrance. There is no dispute that Resident B’s room, Room 132, was the
fifth room away from the B wing door. CMS Ex. 24; P. Ex. 4; Tr. 49, 76, 180.
According to Mr. Cook, when a wander alert bracelet was near the door, the magnetic
lock locked. However, when the door was open and the bracelet passed the threshold, the
alarm did not sound. The company that serviced the facility system was called and
discovered that the staff bypass code and visitor code were the same. Tr. 175-76, 195-96.
Mr. Cook did not know whether a contractor or staff member changed the staff bypass
code so that it was the same as the visitor code. Tr. 198-200, 208. Mr. Cook testified
that the problem was corrected between 10:00 a.m. and Noon on June 7, 2011, before the
surveyors announced they had discovered immediate jeopardy. Tr. 177-78. Mr. Coo!
testified that it was concluded that the code was entered into the wander alert system key
pad on the B wing door and that Resident B exited through that door. He opined that
there was no other way out. It was further deduced that the resident entered the code,
which prevented the magnetic lock from engaging, as vendors and construction workers
probably would not know the code; no staff reported seeing the resident exit; and there
were no visitors in at the time that anyone recalled. Tr. 182-83. Mr. Cook suggested that
Resident B obtained the code from his sisters who did not like that he was in the facility,
and he knew that was mentioned during informal dispute resolution. Mr. Cook could not
recall if it was mentioned to the surveyors during the survey, but thought not as that
theory developed later. Tr. 191-93. He opined that there was nothing the facility could
have done to prevent Resident B from obtaining the code and it was not foreseeable that
the visitor code and staff bypass codes would be set to the same number. Tr. 197. Ido
not find weighty Administrator Cook’s opinion that nothing could have been done. For
example, if staff had properly tested the function of the door on June 6 or June 7, 2011,

14

by unlocking the door with the code 0611 and then passing a wander alert bracelet over
the threshold, it should have been obvious that the alarm did not function. Petitioner also
had the option of changing the visitor code after it was learned that the sisters were
willing to violate policy and remove the resident without signing him out. Thus, while
Administrator Cook was no doubt honest in his belief that nothing more could be done,
he clearly had not considered all the approaches Petitioner could have reasonably
implemented to protect the resident. On cross-examination he testified that the visitor
code is generally provided to family when a resident is admitted to the facility, but he is
not certain how Resident B’s family obtained the code in this case. Tr. 212-15.

CMS alleged for the first time in its prehearing brief the possibility that Resident B could
have eloped through the window in his first-floor room. Petitioner objected at hearing to
my consideration of this theory on grounds that it was not cited in the SOD and
constitutes a violation of Petitioner’s due process right to notice. Petitioner accurately
notes that had the surveyors advised Petitioner of a concern about the window during the
survey or in the SOD, Petitioner would have had the opportunity to develop evidence
related to the windows at the time of the elopement and survey. CMS does not deny that
no facts related to the window in the resident’s room were cited in the SOD but CMS
argues that its prehearing brief provided adequate notice. Tr. 23-25. I allowed the parties
to develop the evidentiary record on this issue prior to ruling upon Petitioner’s objection.
Tr. 29. I conclude that, while Petitioner is correct that CMS failed to provide adequate
notice of additional grounds for the citation of deficiency, Petitioner suffers no prejudice
as CMS failed to prove the additional grounds.° Surveyor Ruppel testified that she
interviewed Resident B in his room, Room 132, on June 6, 2011. She testified that the
window of his ground floor room was not blocked and could be opened all the way. She
made a note to this effect in her surveyor notes (CMS Ex. 12 at 17). She opined that that
was an accident hazard as he could elope through his window. She testified that she
spoke with a maintenance man about the window. She testified that Petitioner could have
removed the accident hazard by simply blocking the window so it only opened a short

° The attempt by CMS to prove a different factual basis for a citation of deficiency than
that cited in the SOD is markedly different than CMS articulating a new legal theory for
liability in its prehearing brief or at hearing. The latter may be permissible. Cf. Illinois
Knights Templar Home, DAB No. 2369, at 2 n.2 (2011); Azalea Court, DAB No. 2352
(2010); Cedar View Good Samaritan, DAB No. 1897 (2003); Oak Lawn Pavilion, Inc.,
DAB No. 1638, at 8-12 (1997), aff'd, Oak Lawn Pavilion. Inc. v. HHS, 2000 WL
1847597 (N.D. Ill. Dec. 14, 2000). The former is not. Life Care Ctr. of Bardstown, DAB
No. 2479, at 7 (SOD notifies a facility “of the nature, scope, and severity of the
deficiencies found and the factual basis for the survey agency’s conclusion that
regulatory standards had been violated”) (citing Western Care Mgmt. Corp., d/b/a Rehab
Specialties Inn, DAB No. 1921 (2004) and Pacific Regency Arvin, DAB No. 1823
(2002)); cf: Hillman Rehab. Ctr., DAB No. 1611, at 8.

15

distance. Tr. 47-49, 63. On cross-examination Surveyor Ruppel testified that she
concluded that the window could be opened fully because she pushed it open. She then
clarified that she did not push the window all the way open but she stated that she did not
see anything that would prevent the window from opening fully. She testified that there
was no screen. She agreed that she failed to place in her surveyor notes that she spoke
with the maintenance man about the window. Tr. 75-76. In response to my questioning,
she stated that she only opened the window 10 to 12 inches and saw nothing to prevent it
from opening further. She testified that Resident B could not have passed through an
opening of only 10 to 12 inches. Tr. 106-08. Mr. Cook testified that he discussed the
window in Resident B’s room with maintenance personnel when CMS first made the
allegation about the window in its prehearing brief. He was told by his maintenance man
that all windows had been secured prior to the survey and he was told by his superior that
the direction to secure windows had been given four years before. He checked the
window and found it was secure. He testified there was no evidence that the screen on
the window had been removed and reinstalled. Tr. 186-88. In response to my questions,
e explained that the windows were secured by a screw placed in the window track so
that the window could not be opened more than about six inches. He opined that
Resident B could not exit through the six inch gap of the opened window. Tr. 203-04.

He testified that maintenance had checked that all windows were secured on about June
20, 2011, as part of Petitioner’s own plan to ensure that the facility was secure. Tr. 205-
06. I find Mr. Cook’s testimony that the window was blocked from opening more than
six inches at the time Resident B eloped is more credible than the testimony of Surveyor
Ruppel that the window was not blocked but could open freely. Surveyor Ruppel did not
actually attempt to open the window fully; her testimony was that she was looking for a
block to prevent the window from opening rather than a screw in the track which could
ave the same effect as a block; and she did not bother to list the window as a hazard in
the SOD, which I consider to be an indication that she did not view it as a hazard at the
time that merited citation.

There is no evidence that the wander alert ankle bracelet that Resident B was wearing
when he eloped actually worked.

The evidence does not show the path or route by which Resident B exited the facility.
b. Analysis

The general quality of care regulation, 42 C.F.R. § 483.25, requires that a facility ensure
that each resident receives necessary care and services to attain or maintain the resident’s
highest practicable physical, mental, and psychosocial well-being, in accordance with the
resident’s comprehensive assessment and plan of care. The quality of care regulations
impose specific obligations upon a facility related to accident hazards and accidents.
16

The facility must ensure that —

(1) The resident environment remains as free of accident
hazards as is possible; and

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

42 C.F.R. § 483.25(h). CMS instructs its surveyors that the intent of 42 C.F.R.

§ 483.25(h)(1) and (2) is “to ensure the facility provides an environment that is free from
accident hazards over which the facility has control and provides supervision and
assistive devices to each resident to prevent avoidable accidents.” The facility is
expected to: identify, evaluate, and analyze hazards and risks; implement interventions to
reduce hazards and risks; and monitor the effectiveness of interventions and modify them
when necessary. State Operations Manual (SOM), CMS Pub. 100-07, app. PP, Guidance
to Surveyors Long Term Care Facilities, F323 (Rev. 27; eff. Aug. 17, 2007).

The Board has provided interpretative guidance for adjudicating alleged violations of 42
CFR. § 483.25(h)(1):

The standard in section 483.25(h)(1) itself - that a facility
“ensure that the environment is as free of accident hazards as
possible” in order to meet the quality of care goal in section
483.25 -- places a continuum of affirmative duties on a
facility. A facility must determine whether any condition
exists in the environment that could endanger a resident's
safety. If so, the facility must remove that condition if
possible, and, when not possible, it must take action to protect
residents from the danger posed by that condition. [Footnote
omitted.] Ifa facility has identified and planned for a hazard
and then failed to follow its own plan, that may be sufficient
to show a lack of compliance with [the] regulatory
requirement. In other cases, an ALJ may need to consider the
actions the facility took to identify, remove, or protect
residents from the hazard. Where a facility alleges (or shows)
that it did not know that a hazard existed, the facility cannot
prevail if it could have reasonably foreseen that an
endangering condition existed either generally or for a
particular resident or residents.

Maine Veterans’ Home — Scarborough, DAB No. 1975, at 6-7 (2005).

The Board has also explained the requirements of 42 C.F.R. § 483.25(h)(2) in numerous
decisions. Golden Living Ctr. — Riverchase, DAB No. 2314, at 7-8 (2010); Eastwood
17

Convalescent Ctr., DAB No. 2088 (2007); Century Care of Crystal Coast, DAB No.
2076 (2007), aff’d, Century Care of Crystal Coast v. Leavitt, 281 F. App’x 180 (4th Cir.
2008); Liberty Commons Nursing and Rehab. - Alamance, DAB No. 2070 (2007);
Golden Age Skilled Nursing & Rehab. Ctr., DAB No. 2026 (2006); Estes Nursing
Facility Civic Ctr., DAB No. 2000 (2005); Northeastern Ohio Alzheimer’s Research Ctr.,
DAB No. 1935 (2004); Woodstock Care Ctr., DAB No. 1726. The regulation does not
make a facility strictly liable for accidents that occur, but it does require that a facility
take all reasonable steps to ensure that a resident receives supervision and assistance
devices that meet his or her assessed needs and mitigates foreseeable risks of harm from
accidents. Woodstock Care Ctr. v. Thompson, 363 F.3d at 589 (noting a SNF must take
“all reasonable precautions against residents’ accidents”). A facility is permitted the
flexibility to choose the methods of supervision it uses to prevent accidents, but the
chosen methods must be adequate under the circumstances. Whether supervision is
“adequate” depends in part upon the resident’s ability to protect him or herself from
harm. Jd. Based on the regulation and the cases in this area, CMS meets its burden to
show a prima facie case if the evidence demonstrates that the facility failed to provide
adequate supervision and assistance devices to prevent accidents, given what was
reasonably foreseeable. Alden Town Manor Rehab. & HCC, DAB No. 2054, at 5-12
(2006). An “‘[a]ccident’ refers to any unexpected or unintentional incident, which may
result in injury or illness to a resident. This does not include adverse outcomes that are a
direct consequence of treatment or care that is provided in accordance with current
standards of practice (e.g., drug side effects or reaction).” SOM, app. PP, Tag F323.

I conclude that CMS has made a prima facie showing of noncompliance under Tag F323
due to a violation of 42 C.F.R. § 483.25(h). The CMS evidence shows that:

1. Resident B was assessed upon admission on May 3, 2011, as at risk to elope
and it was foreseeable that he would attempt to elope. CMS Ex. 9 at 30-31; CMS
Ex. 14 at 12.

2. On May 3, 2011, Petitioner applied a wander alert bracelet to the resident’s
ankle. CMS Ex. 14 at 5. The wander alert system was a form of supervision that
locked a closed door when a resident with a bracelet approached a properly
operating door too closely and alerted staff by sounding an alarm when a resident
with a bracelet passed through an open door.

3. On May 6, 2011, Resident B’s interdisciplinary team (IDT) adopted a care plan
to address Resident B’s elopement risk, which required one-to-one supervision
when necessary; encouraging activity attendance; obtaining information from
family regarding interventions that worked in the past; placing the wander alert
bracelet and checking its functioning every shift; and, checking Resident B’s
whereabouts every 15 minutes as needed. CMS Ex. 14 at 12. Petitioner’s
treatment flow sheet required that the function of the wander alert bracelet be
18

checked, but only once per day in the evening or night, contrary to what was
required by the care plan. The flow sheets did require that placement be checked
every shift, but it also appears that placement was only checked once per day.
CMS Ex. 14 at 52. The treatment flow sheets show that the care plan was violated
because the function and placement of the wander alert bracelet was only checked
on the evening shift and not every shift as required by the care plan.

4. On May 6, 2011, Resident B attempted to leave the facility with his girlfriend.
The evidence does not show whether the wander alert system worked. CMS Ex.
14 at 6. The evidence does not show a review of the care plan by the IDT to
determine the effectiveness of current interventions or the need for new
interventions given that it was foreseeable that the girlfriend on future visits might
provoke exit seeking behavior.

5. On May 8, 2011, Resident B left the facility with his sisters without permission
and without following procedures. CMS Ex. 14 at 6-7. There is no indication that
the wander alert system functioned when Resident B exited. Although the
evidence shows that the resident returned without his wander alert bracelet, it is
not clear whether the bracelet was removed before or after his elopement.
Administrator Cook conceded the bracelet was not found in the facility, an
indication that it was transported outside the facility in some manner. Tr. 201.
The evidence does not show that the IDT met to review the effectiveness of
current interventions or the need for new interventions, particularly in light of the
new evidence that the sisters facilitated the elopement; likely destroyed the wander
alert bracelet; that their future visits might provoke exit seeking behavior; and that
a wander alert bracelet was removed from the facility without triggering an alarm.

6. On May 8, 10, 25, 27, and 28, Resident B expressed a desire to leave the
facility and, in some instances, engaged in overt acts consistent with his intent to
leave. Staff did implement the intervention of 15-minute checks. CMS Ex. 14 at
7-9. However, there is no evidence that staff implemented other care plan
provisions that required distracting the resident with activities, except on May 10
when he refused activities (CMS Ex. 14 at 7); or consulting the family for other
interventions that might distract or reduce his desire to elope. There is no
evidence that the IDT assessed the effectiveness of current interventions or the
need for new interventions.

7. On June 3, 2011, Resident B exited the facility but staff was watching and
supervised his exit and return to the facility. The evidence does not show that his
wander alert bracelet triggered the door alarm as he followed a visitor through the
exit. CMS Ex. 14 at 10. There is no evidence that the IDT assessed the
effectiveness of current interventions or the need for new interventions. Resident
B was given Xanax to reduce his anxiety. The use of psychotropic medications to

19

control anxiety or behavior is not mentioned on either the elopement or the anxiety
care plans. CMS Ex. 14 at 12, 23.

8. On June 4, 2011, Resident B’s vocalizations and exit seeking behavior
continued. There is no evidence of action by the IDT. CMS Ex. 14 at 10.

9. On June 7, 2011, Resident B eloped without knowledge of Petitioner’s staff
and was found a block away from the facility. There is no evidence that any alarm
sounded. Resident B was transferred to a different facility and never returned to
Petitioner. CMS Ex. 14 at 11.

The CMS evidence shows that it was foreseeable that Resident B would attempt to elope
because he was assessed as an elopement risk by Petitioner and then exhibited behavior
consistent with an intent and desire to elope. The evidence shows that the resident
required care and services in the form of supervision or assistive devices to prevent him
from eloping and to protect him from accidental injury secondary to elopement. The
resident’s elopement care plan is evidence that the resident’s IDT recognized the risks.
The clinical records offered by CMS show that prior to June 7, Resident B had exited the
facility and the evidence does not affirmatively show that the Petitioner and the resident’s
IDT determined that the wander alert system operated effectively to alert staff so that
staff could prevent his elopement. The CMS evidence shows that the wander alert
system was not effective supervision on June 7, 2011, as staff was not alerted by an alarm
that the resident had departed the facility. Petitioner learned that the codes on the “B
door exit” were incorrectly set so that a single code, a code that had been previously
released to family members, contractors, and likely others, would disable the wander alert
alarm. Administrator Cook’s testimony shows that Petitioner accepted that a highly
unlikely sequence of events occurred, i.e., Resident B’s sisters told him the code on some
unknown date; Resident B was able to recall the code despite his dementia and the
passage of some unknown amount of time; and the day before his elopement the code
that disabled the wander alert alarm was accidentally changed to the same code that the
resident’s sisters gave to the resident. Because Petitioner accepted its rather unlikely
scenario it does not appear from the evidence that Petitioner fully investigated other
potential scenarios. For example, the evidence does not show that Petitioner, as part of
its investigation, tested the wander alert bracelet that the resident was wearing to see if it
worked or if it had been damaged by the resident or his visitors since last checked the
prior evening. Petitioner failed to test the operation of the bracelet the resident was
wearing at the time he eloped despite the knowledge that the sisters had previously
destroyed a wander alert bracelet and Petitioner had been looking for means to remove
the bracelet. I conclude that the CMS evidence shows that the wander alert system was
not an effective form of supervision to prevent Resident B from eloping. Petitioner failed
to assess the effectiveness of the intervention; failed to determine that it was ineffective;
and failed to consider alternatives.

20

The evidence shows that the intervention to check Resident B every 15 minutes was
effective as an intervention to prevent elopement. The evidence shows that the
intervention permitted staff to supervise the resident’s exit on June 3, 2011. However,
the intervention was not correctly implemented on the morning of June 7, 2011 when the
resident eloped, because the check at 7:24 a.m. was early.

In summary, the CMS evidence shows that Petitioner failed to follow Resident B’s
elopement care plan; failed to evaluate the effectiveness of care planned interventions to
reduce the risk for accidental injury secondary to elopement; and failed to implement
revised or new interventions when existing interventions were shown to be ineffective.
The CMS evidence also shows that Petitioner was located near busy roadways that posed
a risk for more than minimal harm to Resident B, who had little ability to protect himself
ue to his dementia. Accordingly, CMS has presented sufficient evidence, which absent
effective rebuttal, establishes Petitioner’s noncompliance, i.e. a prima facie case.

Therefore, the burden is upon Petitioner to rebut the CMS prima facie case or to establish
an affirmative defense to excuse its noncompliance, by a preponderance of the evidence.
Petitioner offers no affirmative defense, but makes several arguments that CMS failed to
make a prima facie showing. Petitioner fails to meet its burden.

Petitioner argues that it was not foreseeable that Resident B could leave the facility by
following a staff member through an exit without the staff member taking some action to
stop the resident. Petitioner argues that it was not foreseeable that a visitor would fail to
notify staff if a resident followed the visitor through an exit. Petitioner also argues that it
was not foreseeable that Resident B would be able to obtain and use a bypass code to exit
the facility. P. Br. at 13; P. Reply at 4-5. However, Petitioner concedes that it was
possible that Resident B’s sisters gave him the door code (P. Reply at 5) and that
Resident B could use a code to unlock an exit door even while wearing a wander alert
bracelet (P. Reply at 2). Petitioner did not prove by a preponderance of the evidence that
Resident B followed a staff member or visitor out the door on June 7 or that he used a
code to disable the alarm. The scenarios hypothecated by Petitioner are not factual bases
sufficient to rebut the CMS prima facie showing, rather, they are pure speculation. Even
if accepted, Petitioner’s speculations about how the resident may have escaped the
facility do not show that Petitioner’s interventions were adequate supervision to minimize
the risk for accidental injury secondary to an attempted or actual elopement in light of the
foreseeable risks for elopement or attempted elopement and secondary injury. Resident
B attempted to leave with his girlfriend and he left with his sisters, therefore it was
foreseeable that he might attempt to leave with them again. He also successfully
followed another visitor out a door, albeit while under observation of staff. Therefore,
contrary to Petitioner’s argument, it was foreseeable that the resident could follow
someone out the door, whether visitor or staff. Petitioner has never denied the assertion
of Surveyor Ruppel that Resident B could be mistaken for a visitor based on his
appearance, and Petitioner has not introduced evidence that all staff knew or could

21

recognize Resident B. Because the evidence does not show that the wander alert bracelet
triggered the alarm on prior occasions, Petitioner cannot rely upon an inference that the
wander alert bracelet that the resident was wearing was reliable and worked consistently
to trigger door locks or door alarms. Petitioner argues that correcting the problem with
the visitor code and the bypass code for the door system eliminated the possibility that
another resident could exit the facility without triggering a door alarm. P. Br. at 14.
While Petitioner’s assertion may be correct, Petitioner did not do a thorough evaluation
of how Resident B managed to elope. Petitioner focused on only one possible
contributing factor, the incorrect door code. Petitioner did not address: staff’s failure to
implement other interventions specified in the care plan; staff’s failure to conduct 15-
minute checks as care planned; the IDT’s failure to assess the effectiveness of care
planned interventions and to modify existing interventions or to implement new
interventions; and Petitioner never checked the ankle bracelet the resident wore when he
eloped to determine whether it was defective or damaged. Thus, unlike the surveyors, I
would not have found that Petitioner returned to substantial compliance simply because
Petitioner fixed the door code. Nevertheless, I will not disturb the surveyors’ conclusion
that Petitioner returned to substantial compliance effective June 10, 2011.

3. Petitioner was ineligible to be approved to conduct a NATCEP
because a partial extended survey was conducted on June 9, 2011.

CMS notified Petitioner by its July 12, 2011 letter that Petitioner was ineligible for two
years to be approved to conduct a NATCEP because Petitioner had been subject to a
partial extended survey. Petitioner argues that it should not be ineligible to conduct a
NATCEP because no partial extended survey was conducted. P. Br. at 4; P. Reply at 3;
Tr. 7-8, 26.

Pursuant to 42 C.F.R. § 483.151(b)(2) and (f), a state may not approve and must
withdraw any prior approval of a NATCEP offered by a skilled nursing facility that has
been: (1) subject to an extended or partial extended survey under sections
1819(g)(2)(B)(i) or 1919(g)(2)(B)(@) of the Act; (2) assessed a CMP of not less than
$5,000; or (3) subject to termination of its participation agreement, a DPNA, or the
appointment of temporary management. The second and third conditions do not exist in
this case. Thus, the issue is whether or not an extended or partial extended survey was
conducted.

Extended and partial extended surveys are triggered by a finding of “substandard quality
of care” during a standard or abbreviated standard survey and involve evaluating
additional participation requirements. “Substandard quality of care” is identified by the
situation where surveyors identify one or more deficiencies related to participation
requirements established by 42 C.F.R. § 483.13 (Resident Behavior and Facility
Practices), § 483.15 (Quality of Life), or § 483.25 (Quality of Care) that are found to
constitute either immediate jeopardy, a pattern of or widespread actual harm that does not
22

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

§ 488.301. Petitioner’s violation of 42 C.F.R. § 483.25(h) posed immediate jeopardy for
one day and amounted to substandard quality of care, which should have triggered an
extended or partial extended survey.

Ineligibility to conduct a NATCEP is triggered under 42 C.F.R. § 483.151(b)(2) if there
is a finding of substandard quality of care and the state agency conducts an extended or
partial extended survey. A finding of substandard quality of care alone does not cause
ineligibility. The Act provides that each SNF found by a standard survey to have
provided substandard quality of care “shall be subject to an extended survey.” Act §
1819(g)(2)(B)(i). The Act requires that the extended survey be conducted within two
weeks of the completion of the standard survey. Act § 1819(g)(2)(B)(1i). The Act
requires that for the extended survey the survey team reviews “policies and procedures”
that resulted in the substandard quality of care; the survey team must determine whether
the facility has complied with all conditions of participation specified in the Act; the
extended survey must include an expanded sample of residents; and the extended survey
must consider staffing and in-service training and consultant contracts, if necessary. Act
§ 1819(g)(2)(B)(iii). Pursuant to 42 C.F.R. § 488.301, an extended survey is a survey
that evaluates additional participation requirements subsequent to a finding of
substandard quality of care during a standard survey. A partial extended survey is a
survey that evaluates additional participation requirements subsequent to a finding of
substandard quality of care during an abbreviated standard survey, which includes a
complaint survey such as that conducted in this case.

The SOD in this case includes a line that states “[e]xtended date: 6/9/11” and
“Supplemental sample 2.” CMS Ex. 6 at 1. Surveyor Ruppel and Surveyor Meredith
both asserted that an extended survey was conducted. Tr. 36, 141-42. However,
Surveyor Ruppel did not describe what was done on the extended survey and Surveyor
Meredith admitted she was not present when the extended survey was allegedly done, but
she stated that there should have been a record of what was done for the extended survey.
Administrator Cook testified to the activity of Surveyor Ruppel on June 9 and the activity
he observed did not include review of facility policies and procedures and an expanded
sample of residents. Tr. 178-79. The SOD does not include alleged findings and
conclusions related to an extended survey. CMS Ex. 6. Surveyor notes indicate that an
extended or partial extended survey was conducted on June 9, 2011. CMS Ex. 12 at 1.
The surveyor notes reflect additional interviews, policy review, and review of in-service
training on June 9, 2011. CMS Ex. 12 at 13, 18. The CMS evidence also includes
Petitioner’s policies regarding wandering and elopement and records of in-service
training performed on June 8, 2011. CMS Exs. 15, 18. I conclude that the evidence is
consistent with Surveyor Ruppel having conducted a partial extended survey on June 9,
2011. Therefore, Petitioner was ineligible to be approved to conduct a NATCEP by
operation of law. Even if I concluded, as Petitioner advocates, that there was no partial
23

extended survey, Petitioner has cited no authority for me to remedy an erroneous
declaration by CMS that Petitioner was ineligible to be approved to conduct a NATCEP.

4. Petitioner has not shown that the determination that immediate
jeopardy was present on June 7, 2011, was clearly erroneous.

The CMS determination of immediate jeopardy must be upheld, unless Petitioner shows
the declaration of immediate jeopardy clearly erroneous. 42 C.F.R. § 498.60(c)(2).
Immediate jeopardy is “‘a situation in which the provider’s noncompliance with one or
more requirements of participation has caused, or is likely to cause, serious injury, harm,
impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s determination of
immediate jeopardy is presumed to be correct, and Petitioner has a heavy burden to
demonstrate clear error in that determination. Yakima Valley Sch., DAB No. 2422, at 8-9
(2011); Cal Turner Extended Care Pavilion, DAB No. 2384, at 14 (2011); Maysville
Nursing and Rehab. Facility, DAB No. 2317, at 11 (2010); Brian Ctr. Health and
Rehab./Goldsboro, DAB No. 2336, at 9 (2010) (citing Barbourville Nursing Home, DAB
No. 1962, at 11 (2005), aff'd, Barbourville Nursing Home v. U.S. Dep’t of Health &
Human Servs., 174 F. App’x 932 (6th Cir. 2006); Liberty Commons Nursing and Rehab.
Ctr.— Johnston, DAB No. 2031, at 18-19 (2006), aff'd, Liberty Commons Nursing &
Rehab. Ctr.—Johnston, 241 F. App’x 76, at 3-4 (4th Cir. 2007). Once CMS presents
evidence supporting a finding of noncompliance, CMS does not need to offer evidence to
support its determination that the noncompliance constitutes immediate jeopardy, rather,
the burden is on the facility to show that that determination is clearly erroneous. Cal
Turner Extended Care Pavilion, DAB No. 2384, at 14-15; Liberty Commons Nursing &
Rehab. Ctr. — Johnston, 241 F. App’x 76, at 3-4. Petitioner argues that the declaration of
immediate jeopardy was clearly erroneous. P. Br. at 14. However, Petitioner presented
no weighty evidence that Resident B was not likely to sufferer serious harm, injury,
impairment, or death wandering in the neighborhood of the facility with its busy streets.

5. There is a basis for the imposition of an enforcement remedy from
June 7 through 9, 2011.

6. A CMP of $3,550 for June 7 and $100 per day for June 8 and 9,
2011, is reasonable.

Ihave concluded that Petitioner violated 42 C.F.R. § 483.25(h) and that the violation
posed immediate jeopardy on June 7, 2011 and a risk for more than minimal harm to one
or more facility residents on June 8 and 9, 2011. Accordingly, I conclude that there is a
basis for the imposition of a CMP.

Ifa facility is not in substantial compliance with program requirements, CMS has the
authority to impose one or more of the enforcement remedies listed in 42 C.F.R.
24

§ 488.406, including a CMP. CMS may impose a per-day CMP for the number of days
that the facility is not in compliance. 42 C.F.R. § 488.430(a). The regulations provide
for two ranges of CMPs. 42 C.F.R. §§ 488.408, 488.438. The upper range, $3,050 per
day to $10,000 per day, is reserved for deficiencies that pose immediate jeopardy to a
facility’s residents. 42 C.F.R. § 488.438(a)(1)(i), (d)(2). The lower range of CMPs, $50
per day to $3,000 per day, is reserved for deficiencies that do not pose immediate
jeopardy, but either cause actual harm to residents, or cause no actual harm but have the
potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii). In this
case, CMS proposes a $3,550 per-day CMP, for one day of immediate jeopardy on June
7, 2011, which is at the low end of the authorized range. CMS proposes a $100 per day
CMP, which is also at the low end of the authorized range, for June 8 and 9, 2011.

If I conclude, as I have in this case, that there is a basis for the imposition of an
enforcement remedy and the remedy proposed is a CMP, my authority to review the
reasonableness of the CMP is limited by 42 C.F.R. § 488.438(e). The limitations are: (1)
I may not set the CMP at zero or reduce it to zero; (2) I may not review the exercise of
discretion by CMS in selecting to impose a CMP; and (3) I may only consider the factors
specified by 42 C.F.R. § 488.438(f) when determining the reasonableness of the CMP
amount. In determining whether the amount of a CMP is reasonable, the following
factors specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history
of non-compliance, including repeated deficiencies; (2) the facility’s financial condition;
(3) the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404(b), the same
factors CMS and/or the state were to consider when setting the CMP amount; and (4) the
facility’s degree of culpability, including but not limited to the facility’s neglect,
indifference, or disregard for resident care, comfort, and safety. The absence of
culpability is not a mitigating factor. The factors that CMS and the state were required to
consider when setting the CMP amount, and that I am required to consider when
assessing the reasonableness of the amount, are set forth in 42 C.F.R. § 488.404(b): (1)
whether the deficiencies caused no actual harm but had the potential for minimal harm,
no actual harm with the potential for more than minimal harm, but not immediate
jeopardy, actual harm that is not immediate jeopardy, or immediate jeopardy to resident
health or safety; and (2) whether the deficiencies are isolated, constitute a pattern, or are
widespread. My review of the reasonableness of the CMP is de novo and based upon the
evidence in the record before me. I am not bound to defer to the CMS determination of
the reasonable amount of the CMP to impose but my authority is limited by regulation as
already explained. I am to determine whether the amount of any CMP proposed is within
reasonable bounds considering the purpose of the Act and regulations. Emerald Oaks,
DAB No. 1800, at 9-13; CarePlex of Silver Spring, DAB No. 1683, at 14-18 (1999);
Capitol Hill Comm. Rehab. and Specialty Care Ctr., DAB No. 1629 (1997).

Petitioner challenges the deficiency and the declaration of immediate jeopardy but does
not otherwise specifically challenge the reasonableness of the amount of the proposed
CMP. Request for Hearing; Prehearing Brief; P. Br.; P. Reply. CMS introduced
25

evidence that Petitioner was previously cited for a violation of 42 C.F.R. § 483.25(h) in
May 2008 and that the violation posed a risk for more than minimal harm. CMS Ex. 3 at
1. CMS introduced a “Statement of Cash Flows” for Petitioner for the period ending
December 31, 2010. CMS Ex. 4. Petitioner does not argue that it is unable to pay the
total CMP of $3,750. Administrator Cook testified regarding the negative financial
impact of a survey that finds a deficiency that posed immediate jeopardy. Tr. 189-91. I
have considered the testimony to the extent it reflects upon the present and future
financial condition of the facility, but conclude that the evidence does not show
Petitioner’s financial condition will be impaired by the payment of a total CMP of
$3,750. I consider the deficiency serious, consistent with the conclusion that there was
immediate jeopardy, but I concur with the surveyors that the scope and severity was “J”
(CMS Ex. 6 at 2), i.e., it was an isolated deficiency. I also find that Petitioner was
culpable; particularly to the extent that Petitioner did not ensure that the resident’s care
plan was followed, reviewed, and revised.

I conclude that a CMP of $3,550 for June 7 and $100 per day for June 8 and 9, 2011, a
total CMP of $3,750, is reasonable.

III. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance
with program participation requirements from June 7 through 9, 2011, due to a violation
of 42 C.F.R. § 483.25(h) that posed immediate jeopardy on June 7, 2011 and a risk for
more than minimal harm without actual harm or immediate jeopardy on June 8 and 9,
2011. I further conclude that a CMP of $3,550 for June 7 and $100 per day for June 8
and 9, 2011, is reasonable.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Amin BaBakr,
d/b/a Happy Mart

Respondent.

Docket No. C-13-241
FDA Docket No. FDA-2013-H-0015

Decision No. CR2709

Date: February 19, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (“CTP”) filed an Administrative Complaint
(“Complaint”) against Respondent, Amin BaBakr d/b/a Happy Mart, 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 Respondent to pay a civil money
penalty in the amount of $250.

CTP began this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (“FDA”) Division of
Dockets Management. The Complaint alleges that Respondent impermissibly sold
tobacco products to a minor, 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 January 7, 2013, CTP served the Complaint on Respondent by United Parcel

Servi

ce (“UPS”), 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

whic!
these

to file an answer. CTP warned Respondent that, if it failed to take one of
actions within 30 days, the 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 did not file an answer within the

time

provided by regulation.

lam required to issue a default judgment if the Complaint is sufficient to justify a

penal

ty, and the Respondent fails to answer timely or request an extension. 21

C.F.R. § 17.11(a). For that reason, I decide whether a default judgment is
appropriate here, and I conclude that it is merited based on the allegations of the
Complaint and Respondent’s failure to answer them.

For p'

urposes of this decision, I assume that the following facts alleged in the

Complaint are true. Specifically:

Respondent owns Happy Mart, a business that sells tobacco products and is
located at 1200 North Division Street, Forrest City, Arkansas 72335.

On December 4, 2011, an FDA-commissioned inspector made observations
at Respondent’s place of business that included a violation for selling
cigarettes or smokeless tobacco to a person younger than 18 years of age.

On January 26, 2012, CTP issued a Warning Letter to Respondent
regarding the inspector’s observations from December 4, 2011. The letter
explained that the observations constituted violations of regulations at 21
C.F.R. § 1140.14(a) and that these regulations prohibit the sale of cigarettes
or smokeless tobacco to any person younger than 18 years of age. The
Warning Letter advised Respondent that failure to correct the violation
could result in the imposition of a civil money penalty or other regulatory
action by FDA.

The Warning Letter was delivered to Respondent by UPS. It was received
on January 27, 2012, by “Ahmad.” Respondent did not reply to the
Warning Letter.

On May 29, 2012, at approximately 11:19 A.M., an FDA-commissioned
inspector once again made observations at Respondent’s place of business.
The inspector observed a person younger than the age of 18 buy a package
of “Marlboro Gold Pack 100’s” cigarettes.

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). Those
regulations prohibit, in part, the sale of cigarettes or smokeless tobacco to any
person younger than 18 years of age. 21 C.F.R. § 1140.14(a).

Here, Respondent sold tobacco products to individuals younger than 18 years of
age on two occasions, specifically, December 4, 2011, and May 29, 2012.
Respondent’s actions constitute violations of law for which a civil money penalty
is merited. Therefore, 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