Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Integrated Diagnostic of South Florida, Inc.,
(NPI: 1316045792),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-754
Decision No. CR2508

Date: February 24, 2012

DECISION DISMISSING PETITIONER’S REQUEST FOR HEARING

I dismiss the hearing request of Petitioner, Integrated Diagnostic of South Florida, Inc.
Petitioner has no right to a hearing to challenge the determination by First Coast Service
Options, Inc. (First Coast), a Medicare contractor, to reinstate Petitioner as a Medicare
participant effective December 20, 2010.

Petitioner is an Independent Diagnostic Testing Facility (IDTF) that has been enrolled as
a participating supplier in the Medicare program. Following an on-site inspection
completed on August 6, 2010, the Centers for Medicare and Medicaid Services (CMS)
revoked Petitioner’s Medicare enrollment and billing privileges effective August 6, 2010,
and instituted a one-year bar on reenrollment. Petitioner filed a corrective action plan
(CAP). On February 17, 2011, First Coast approved Petitioner’s CAP and reinstated
Petitioner’s enrollment effective December 20, 2010, the date that First Coast received
the CAP. On April 4, 2011, Petitioner requested reconsideration of the contractor’s
February 17, 2011 decision, challenging the effective date of reinstatement.

On July 14, 2011, First Coast issued a review of the reinstatement date as a result of the
CAP. CMS Ex. 15. The contractor determined that the correct effective date for
reinstatement remained December 20, 2010. CMS Ex. 15. The contractor, however,
incorrectly informed Petitioner that it had the right to an Administrative Law Judge (ALJ)
hearing on this unfavorable CAP effective date review. CMS Ex. 15.

Pursuant to this misinformation, on August 30, 2011, Petitioner filed a hearing request. I
was assigned the case and issued an Acknowledgement and Pre-Hearing Order, in which
l established a briefing schedule. Accordingly, CMS filed a brief and seventeen proposed
exhibits (CMS Exs. 1 — 17). In its submission, CMS moved to dismiss Petitioner’s
hearing request or, alternatively, that I enter summary judgment in CMS’s favor.
Petitioner replied to the motion and filed sixteen proposed exhibits (P. Exs. 1 — 16). I
receive all of the parties’ exhibits into the record.

To be entitled to a hearing before an ALJ, a supplier must be dissatisfied with a
determination authorized under 42 C.F.R. § 498.5(1)(1). See 42 C.F.R. § 498.5(1)(2). A
determination by CMS, or one of its contractors, to revoke a supplier’s participation in
Medicare is an appealable initial determination. 42 C.F.R. § 498.3(b)(6). Similarly, a
supplier who seeks to participate in Medicare may appeal a determination by a contractor
or CMS to certify it as of a particular effective date. 42 C.F.R. § 498.3(b)(15). However,
a CMS contractor’s refusal to reinstate a supplier’s billing privileges based on a CAP is
clearly not an initial determination under 42 C.F.R. Part 498 and is not appealable. 42
C.F.R. § 405.874(e); see DMS Imaging, Inc., DAB No. 2313, at 5-10 (2010).

Petitioner argues that its November 30, 2010, letter of revocation was an initial
determination subject to a reconsideration decision and related appeal rights. P. Br. at 9.
I agree it was an initial determination to which it had a right to a reconsideration review,
but Petitioner did not request one within the sixty-day regulatory time period. 42 C.F.R.
§§ 498.5(1)(1); 498.22(b)(3). Petitioner did, however, timely request a CAP, which is a
separate process than a reconsideration and has no right to an ALJ hearing. CMS Ex. 2;
see also DMS Imaging, Inc., DAB No. 2313, at 7-8 (discussing how a CAP process
addresses corrective measures for a revocation while a reconsideration process challenges
the basis of a revocation).

Petitioner claims that its April 4, 2011 reconsideration request was timely filed following
the February 17, 2011 notice of reinstatement. However, First Coast’s notice of
reinstatement was based on CMS’s discretion to accept Petitioner’s CAP. First Coast’s
February 17, 2011 notice was not an initial determination subject to appeal rights
pursuant to 42 C.F.R Part 498. 42 C.F.R. § 405.874(e); see DMS Imaging, Inc., DAB
No. 2313, at 5-10; Pepper Hill Nursing & Rehab. Ctr., DAB No. 2395, at 9-10 (2011).

Petitioner argues that because First Coast issued a reconsideration decision discussing the
case merits, CMS now cannot escape ALJ review. P. Br. at 7. I disagree. In its July 14,
2011, letter, First Coast incorrectly stated that Petitioner timely requested
reconsideration. CMS Ex. 15, at 2. Although it is regrettable that based on this language
Petitioner believed it had an extended right to reconsideration and a related ALJ review, I
cannot create a right where one does not exist. I have no authority to review the merits of
Petitioner’s case because CMS, or its contractor, gave misleading information,
particularly at that late stage of the CAP process.

Petitioner simply chose not to challenge the basis of its Medicare revocation until it
received an undesired decision on its effective date following submission of a CAP.
Petitioner may not now challenge the basis for the revocation well outside of the
regulatory period provided. Petitioner’s arguments are equitable in nature and are not a
basis for me to grant Petitioner a hearing. Pepper Hill Nursing & Rehab. Ctr., DAB No.
2395, at 10-11; US Ultrasound, DAB No. 2302 (2010); Community Hospital of Long
Beach, DAB No. 1938 (2004).

Accordingly, I dismiss Petitioner’s hearing request pursuant to 42 C.F.R. § 498.70(b)
considering Petitioner did not timely request a reconsideration, and it has no right to
appeal the Medicare contractor’s determination regarding its CAP under 42 C.F.R. Part
498.

/s/
Joseph Grow
Administrative Law Judge


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

Mountain Villa Nursing Center
(CCN: 67-5768),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-726
Decision No. CR2506
Date: February 22, 2012

DECISION

Petitioner, Mountain Villa Nursing Center, was not in substantial compliance with
program participation requirements from February 5 through March 19, 2010. There is a
basis for the imposition of enforcement remedies. The following enforcement remedies
are reasonable: a civil money penalty (CMP) of $5,550 per day from February 5 through
10, 2010, and $600 per day from February 11 through March 19, 2010, a total of
$55,500; and a denial of payment for new admissions (DPNA) for March 18 and 19,
2010. Petitioner was also ineligible to conduct a nurse aide training and competency
evaluation program (NATCEP) for a period of two years.

I. Background

Petitioner is located in El Paso, Texas, and participates in Medicare as a skilled nursing
facility (SNF) and the state Medicaid program as a nursing facility (NF). On February
10, 2010, the Texas Department of Aging and Disability Services (state agency)
completed a survey of Petitioner’s facility and found Petitioner not in substantial
compliance with program participation requirements. Joint Stipulations (Jt. Stip.);
Centers for Medicare and Medicaid Services (CMS) Exhibit (Ex.) 2; Petitioner Exhibit
(P. Ex.) 2. CMS notified Petitioner by letter dated March 3, 2010, that CMS concluded
that Petitioner no longer met the requirements for participation in Medicare and Medicaid
based on the February 10 survey. CMS advised Petitioner that it was imposing the
following enforcement remedies: termination of Petitioner’s provider agreement August
10, 2010, if Petitioner did return to substantial compliance before that date; a per instance
CMP (PICMP) of $8,500 for the alleged noncompliance with 42 C.F.R. §
483.13(c)(1)(ii)-(iii), and (c)(2)-(4); and a DPNA beginning March 18, 2010, unless
Petitioner returned to substantial compliance before that date. CMS also advised
Petitioner that it was ineligible to conduct a NATCEP for two years. CMS Ex. 1, at 1-3.
CMS notified Petitioner by letter dated March 31, 2010, that it was revising the
enforcement remedies as follows: the PICMP was rescinded; and CMS imposed a CMP
of $5,550 per day from February 5 through 10, 2010, and $600 per day beginning
February 11, 2010. CMS Ex. 1, at 4-5. CMS notified Petitioner by letter dated April 28,
2010, that: the state agency determined that Petitioner returned to substantial compliance
as of March 20, 2010; the termination of Petitioner’s provider agreement was rescinded;
the $5,550 per day CMP was in effect from February 5 through 10, 2010; the $600 per
day CMP was in effect from February 11 through March 19, 2010; the total CMP was
$55,500; and the DPNA was in effect from March 18 through 19, 2010. CMS Ex. 1, at 6-
7; Jt. Stip.

On May 25, 2010, Petitioner requested a hearing. On May 28, 2010, the case was
docketed as C-10-726; assigned to me for hearing and decision; and an Acknowledgment
and Prehearing Order was issued at my direction. On January 4, 2011, I notified the
parties that the case was scheduled for hearing from February 8 through 11, 2011, in El
Paso, Texas. On January 24, 2011, the parties filed a joint motion by which Petitioner
waived oral hearing and the parties agreed to a decision on the briefs and documentary
evidence. On January 28, 2011, I accepted Petitioner’s waiver of oral hearing and set a
briefing schedule. On March 2, 2011, CMS filed its opening brief (CMS Br.) with
exhibits marked CMS Exs. | through 10. CMS also filed three declarations that CMS
failed to mark as exhibits. I have marked the CMS declarations as follows: the
declaration of state surveyor Jessica Aguilar is marked CMS Ex. 11; the declaration of
the state program manager Rosa Hinojos is marked CMS Ex. 12; and the affidavit of
CMS nurse consultant Susana Cruz, RN, is marked CMS Ex. 13. CMS waived filing a
reply brief. On February 28, 2011, Petitioner filed its opening brief (P. Br.), with P. Exs.
1 through 19. Petitioner filed its reply brief (P. Reply) on March 25, 2011, with P. Exs.
20, 21, and 22. No objections have been made to my consideration of the exhibits
submitted and CMS Exs. | through 13 and P. Exs. | through 22 are admitted.

II. 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
denial of payments for new admissions (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).

' References are to the revision of the Code of Federal Regulations (C.F.R.) in effect at
the time of survey, unless otherwise indicated.

> Participation of a NF in Medicaid is governed by section 1919 of the Act. Section
1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply
with the participation requirements established by sections 1919(b), (c), and (d) of the
Act.
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 C.F.R. §§ 488.10-.28,
488.300-.335. The regulations specify the enforcement remedies that CMS may impose
if a facility is not in substantial compliance with Medicare requirements. 42 C.F.R. §
488.406.

The regulations specify that a CMP that is imposed against a facility on a per day basis
will fall into one of two ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper
range of a CMP, $3,050 per day to $10,000 per day, is reserved for deficiencies that pose
immediate jeopardy to a facility’s residents and, in some circumstances, for repeated
leficiencies. 42 C.F.R. § 488.438(a)(1)(i), (d)(2). “Immediate jeopardy means a
situation in which the provider’s noncompliance with one or more requirements of
participation has caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident.” 42 C.F.R. § 488.301 (emphasis in original). The lower range of CMPs,
$50 per day to $3,000 per day, is reserved for deficiencies that do not pose immediate
jeopardy, but either cause actual harm to residents, or cause no actual harm but have the
potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii). A CMP of
$1,000 to $10,000 for each instance of noncompliance is also authorized. 42 C.F.R. §
488.438(a)(2).

Petitioner was notified in this case that it was ineligible to conduct a NATCEP for two
years. Pursuant to sections 1819(b)(5) and 1919(b)(5) of the Act, SNFs and NFs may
only use nurse aides who have completed a training and competency evaluation program.
Pursuant to sections 1819(f)(2) and 1919(f)(2) of the Act, the Secretary was tasked to
develop requirements for approval of NATCEPs and the process for review of those
programs. Sections 1819(e) and 1919(e) of the Act impose upon the states the
requirement to specify what NATCEPs they will approve that meet the requirements that
the Secretary established and a process for reviewing and reapproving those programs
using criteria the Secretary set. The Secretary promulgated regulations at 42 C.F.R. Part
483, subpart D. Pursuant to 42 C.F.R. § 483.151(b)(2) and (e)(1), a state may not
approve and must withdraw any prior approval of a NATCEP offered by a SNF or NF
that has been: (1) subject to an extended or partial extended survey under sections
1819(g)(2)(B)(i) or 1919(g)(2)(B)(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 Administrative Law Judge (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). The hearing before an ALJ is a de novo proceeding. The Residence at
Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care, DAB No. 2030 (2006);
Beechwood Sanitarium, DAB No. 1906 (2004); Emerald Oaks, DAB No. 1800, at 11
(2001); Anesthesiologists Affiliated, DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir.
991). 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)@). 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 standard of proof, or quantum of evidence required, is a preponderance of the
evidence. CMS has the burden of coming forward with evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v.
Thompson, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross
Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehab. Ctr., DAB No. 1611
(1997), aff'd, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999 WL
34813783 (D.N.J. May 13, 1999).

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

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis. I have carefully considered all the evidence and the arguments of both parties,
though not all may be specifically discussed in this decision. In this decision, I discuss
the credible evidence given the greatest weight in my decision-making.* 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 completed on February 10, 2010, that Petitioner was
not in substantial compliance with program participation requirements from February 5,
2010 to Petitioner’s return to substantial compliance on March 20, 2010. It is alleged in
the Statement of Deficiencies (SOD) for the survey completed on February 10, 2010, that
Petitioner violated the following participation requirements: 42 C.F.R. § 483.12(a)(2)
(Tag F201 at a scope and severity level (SS) D, indicating a risk for more than minimal
harm); 42 C.F.R. § 483.13(b), (b)(1)(i)* (Tag F223, SS L, indicating immediate
jeopardy); 42 C.F.R. § 483.13(c)(1)(ii)-(iii), (2), (3), (4) (Tag F225, SS L); 42 C.F.R. §
483.13(c) (Tag F226, SS L); and 42 C.F.R. § 483.75 (Tag F490, SS L). Petitioner
contests all the deficiencies. Jt. Stip.

> “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.

+ The reference to 42 C.F.R. § 483.13(b)(1)(i) is in error, as there is no such subsection.
The surveyors recite the language of 42 C.F.R. § 483.13(c)(1)(i) under Tag F223, and I
recognize that the surveyors’ reference to 42 C.F.R. § 483.13(b)(1)(i) was a clerical error.
The erroneous citation caused no prejudice to Petitioner, as the language of the correct
subsection is recited in the SOD. All references in this decision to Tag F223 refer to 42
C.F.R. § 483.13(b) and (c)(1)(i). Illinois Knights Templar Home, DAB No. 2369, at 2 n.2
(2011).
I conclude that Petitioner did not violate 42 C.F.R. §§ 483.12(a)(2) (Tag F201) or
483.13(b) and (c)(1) (Tags F223 and F225). However, Petitioner was not in substantial
compliance as alleged by CMS due to the violations of 42 C.F.R. §§ 483.13(c)(2)-(4)
(Tags F225 and F226) and 483.75 (Tag F490); and Petitioner has failed to show that the
determination that those violations posed immediate jeopardy was clearly erroneous. The
violations provide a sufficient basis to impose a CMP of $5,550 per day from February 5
through 10, 2010, and $600 per day from February 11 through March 19, 2010, totaling
$55,500, a DPNA from March 18 through 19, 2010, and cause the loss of eligibility to
conduct a NATCEP.

1. Petitioner did not violate 42 C.F.R. § 483.12(a)(2) (Tag F201).

The Secretary has defined the phrase “transfer and discharge” to be the “movement of a
resident to a bed outside of the certified facility whether that bed is in the same physical
plant or not. Transfer and discharge does not refer to movement of a resident to a bed
within the same certified facility.” 42 C.F.R. § 483.12(a)(1). A facility may not transfer
or discharge a resident except when:

(i) The transfer or discharge is necessary for the resident’s
welfare and the resident’s needs cannot be met in the facility;
(ii) The transfer or discharge is appropriate because the
resident’s health has improved sufficiently so the resident no
longer needs the services provided by the facility;
(iii) The safety of individuals in the facility is endangered;
(iv) The health of individuals in the facility would otherwise
be endangered;

(v) The resident has failed, after reasonable and appropriate
notice, to pay for . . . [the resident’s] stay... .; or

(vi) The facility ceases to operate.

42 CF.R. § 483.12(a)(2).
The State Operations Manual (SOM),° Tag F177, further defines transfer to be the
movement of a resident from a facility to another legally responsible institution. The
SOM characterizes discharge as moving the resident to a non-institutional setting and the
facility ceases to be responsible for the resident’s care. The regulation establishes, and
the SOM discusses, specific documentation and procedures necessary for a transfer or
discharge initiated by a facility rather than a resident. 42 C.F.R. § 483.12(a)(3)-(8);
SOM, Tags F177, F201-F204.

The surveyors allege in the SOD that Petitioner violated 42 C.F.R. § 483.12(a)(2) in the
case of Resident 2. It is alleged in the SOD, and it is not disputed, that on January 5,
2010, Resident 2 received a discharge letter from the facility dated December 30, 2009,
notifying her that she was to be discharged on or before January 31, 2010. The letter
cited as grounds that Petitioner was unable to meet the needs of the resident and the
expectations of the resident’s family. CMS Ex. 10, at 15. The surveyors concluded that
the resident’s discharge was not necessary for her welfare and the facility could not show
that the resident’s needs could not be met. The surveyors found that there had not been
any documented change in the resident’s condition since her admission; the facility did
not document in her clinical record why she was given a 30-day discharge notice; an
Resident 2 expressed to the surveyors that she liked the facility and did not want to leave.
CMS Ex. 2, at 1-3. There is no dispute that, as alleged in the SOD, Resident 2 received
many phone calls on the telephone intended for use by all residents, which required that
staff carry the cordless phone to the resident’s room. Petitioner apparently believed the
use of the phone was excessive and gave the resident the 30-day discharge notice. The
resident appealed to the state as authorized by the regulation and the Ombudsman
suggested that the family install a phone in the resident’s room, but the family refused.
CMS Ex. 2, at 3-4. Surveyor Jessica Aguilar testified in her declaration that she cite
Petitioner for the violation because she concluded that Petitioner did not have a reason
recognized by the regulation to discharge Resident 2. CMS Ex. 11.

I conclude that CMS has failed to make a prima facie showing of a violation of 42 C.F.R.
§ 483.12(a)(2) as CMS has failed to present any evidence that Resident 2 was transferred
or discharged from Petitioner’s facility.

> Although the SOM does not have the force and effect of law, the provisions of the Act
and regulations interpreted clearly do have such force and effect. State of Indiana by the
Indiana Dep’t of Pub. Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991); Northwest
Tissue Ctr. v. Shalala, | F.3d 522 (7th Cir. 1993). Thus, while the Secretary may not
seek to enforce the provisions of the SOM, she may seek to enforce the provisions of the
Act or regulations as interpreted by the SOM.

The Board has been consistent in its view that CMS has the burden of coming forward
with evidence to establish a prima facie case that Petitioner was not in substantial
compliance with federal participation requirements to justify the 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. 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.

When a penalty is proposed and appealed, CMS must make a prima facie case that the
facility has failed to comply substantially with federal participation requirements.

“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). In Hillman Rehabilitation Ctr., 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.

DAB No. 1611, at 11. 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:
10

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.

CMS makes a prima facie showing of noncompliance if the
evidence CMS relies on is sufficient to support a decision in
its favor absent an effective rebuttal. 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.”

DAB No. 2069, at 7-8 (citations omitted).

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 and that the violation posed a risk for
more than minimal harm. The Board’s prior decisions seem to be consistent with this
construction. Whether CMS makes a prima facie showing is determined by review of the
credible evidence CMS presents to establish each element necessary to show that a
facility is not in substantial compliance with a statutory or regulatory requirement of
participation. To establish a prima facie case of noncompliance, the required basis for
imposition of an enforcement remedy, CMS must show that the participation requirement
was violated and that one or more residents suffered or were exposed to a risk for more
than minimal harm. Petitioner disputes the factual basis for the CMS prima facie case.
See Jennifer Matthew Nursing & Rehab. Ctr., DAB No. 2192, at 20 n.12 (2008).

The regulation at issue, 42 C.F.R. § 483.12(a)(2), gave Petitioner notice that it is
prohibited from transferring or discharging a resident except in certain circumstances. In
this case, the surveyors focused upon whether Petitioner had proper grounds under the
regulation for transferring or discharging the resident. The surveyors overlooked,
however, that they had no evidence that Resident 2 was ever transferred or discharged
11

from the facility. The 30-day discharge notice letter advised the resident she was to be
discharged on or before January 31, 2010. CMS Ex. 2, at 2. However, the SOD clearly
states that the resident was interviewed by the surveyors on February 4, 2010, at 11:30
a.m. CMS Ex. 2, at 3. I infer, based on the surveyor notes at CMS Ex. 4, at 23, that the
interview of Resident 2 was at the facility. The nurse’s notes for Resident 2 introduced
as evidence also shows that the resident remained at the facility after January 31, 2010.
CMS Ex. 10, at 13. The SOD also reports that Resident 2’s appeal of the discharge was
pending and a hearing was set for March 1, 2010, and the Ombudsman expressed hope
that the discharge notice would be withdrawn. CMS Ex. 2, at 3.

The SOD fails to allege that Resident 2 was ever discharged, a required element of the
CMS prima facie case. In fact, the SOD shows that during the survey Resident 2
continued to reside at the facility and that she had not been discharged or transferred.
CMS argues to me that it has met its burden to make a prima facie showing but never
addresses the fact that Resident 2 was not transferred or discharged. CMS Br. at 5-7.
Because the SOD does not allege evidence that Resident 2 was not discharged or
transferred, there is no prima facie showing that Petitioner violated 42 C.F.R. §
483.12(a)(2).

Even if one concluded that CMS made a prima facie showing of a deficiency without
showing an actual transfer or discharge of the resident, Petitioner has rebutted the prima
facie showing. Petitioner’s unrebutted evidence shows that Resident 2 continued to be a
resident at Petitioner’s facility as of February 14, 2010. P. Ex. 20. Furthermore,
Petitioner’s assertions that Resident 2 had a telephone installed in her room and that she
continues to reside at Petitioner’s facility are not disputed by CMS. P. Ex. 21; P. Reply
at 2-4.

Accordingly, I conclude that Petitioner did not violate 42 C.F.R. § 483.12(a)(2) as alleged
by the survey completed on February 10, 2010.

2. Petitioner did not violate 42 C.F.R. § 483.13(b) and (c)(1)(i) (Tag
F223).

3. Petitioner did not violate 42 C.F.R. § 483.13(c)(1)(ii)-(iii) (Tag F225).

The surveyors allege a violation of 42 C.F.R. § 483.13(b) and (c)(1)() (Tag F223) on
grounds that Petitioner failed to: (1) investigate and act on allegations of physical,
verbal, and mental abuse of residents by a staff member; and (2) to supervise staff to
prevent abuse. The surveyors cited examples involving four residents. CMS Ex. 2, at 5-
17. However, the surveyors do not specifically allege that they found or concluded that
abuse actually occurred.
12

The surveyors record in the SOD numerous allegations by confidential sources, staff
members, and residents of physical or verbal abuse or mistreatment of four residents by a
certified nursing assistant (CNA) identified as “CNA F” and a Medicare Coordinator
(MC) identified as “MC L.” CMS Ex. 2, at 7-14, 20-23, 30-36. There is no dispute that
CNA F is CNA Pedro Arellanes. P. Ex. 15, at 1. The surveyors do not report that they
observed any incident of abuse. The majority of the allegations reported by the surveyors
in the SOD and surveyor notes are not verifiable through documents made
contemporaneously with the alleged incidents or through the testimony of eyewitnesses
and I consider the allegations to be unreliable hearsay. Petitioner objects generally to the
hearsay nature of the allegations, but failed to pose any objection to the admissibility of
the SOD or the surveyor notes in this case. However, I am required to evaluate the
credibility and weight of any evidence I rely upon for my decision even absent a specific
objection. I do not find that the surveyor notes at CMS Exs. 4, 5, and 6 are entitled to
much if any weight in this case as evidence of actual incidents of abuse. While surveyor
notes are a usual and important part of surveying a facility, I do not find the surveyor
notes sufficiently reliable to corroborate the allegations and establish a regulatory
violation providing a basis for an enforcement remedy in this case. The surveyor notes
lack specificity as to the dates of the occurrence of alleged incidents. The surveyor notes
are only notes rather than complete summaries of statements received by the surveyors
and are mostly indecipherable, absent surveyor testimony explaining them. The
declarations of Surveyor Aguilar and Program Manager Hinojos authenticating their
surveyor notes are conclusory at best and do not clarify or elaborate upon their notes.
CMS failed to even submit a declaration from Surveyor Golden. The declarations of the
surveyors are not helpful for understanding their notes. The surveyor notes merely
summarize the questions that the surveyors asked staff and residents and the surveyors’
perception of the responses received. The notes do not summarize the actual questions
asked and answers received. The surveyor notes do not reveal how the individuals
interviewed obtained the information they shared with the surveyors. The surveyor notes
do not describe the ability of the individuals interviewed to perceive what they alleged.
The surveyor notes do not reflect that the individuals interviewed reviewed the notes and
agreed that the surveyor accurately summarized what was said. I find the surveyors’
notes are simply too unreliable to be considered as weighty evidence to support a
conclusion that abuse actually occurred. I conclude that the allegations reflected in the
surveyor notes and the SOD are insufficient and do not constitute the competent evidence
necessary to meet CMS’s burden to make a prima facie showing under 42 C.F.R. §
483.13(b) and (c)(1)(i) (Tag F223) that abuse occurred. Accordingly, I conclude that no
violation of 42 C.F.R. § 483.13(b) and (c)(1)() (Tag F223) is shown by the evidence
before me.

The surveyors allege a violation of 42 C.F.R. § 483.13(c)(1)(ii)-(iii), (2), (3), and (4) (Tag
F225). Subsection 483.13(c)(1)(ii) provides that a facility may not employ individuals
who have either been found guilty of abusing, neglecting, or mistreating residents, or who
have been listed on a state nurse aide registry for abuse, neglect, mistreatment of
13

residents, or misappropriation of resident property. Subsection 483.13(c)(1)(iii) requires
that a facility report to the state nurse aide registry or licensing authority any knowledge
the facility has of court actions against an employee that indicates unfitness for service as
a nurse aide or other facility staff. The SOD alleges no facts showing a potential
violation of 42 C.F.R. § 483.13(c)(1)(ii) or (iti). Accordingly, I find no violation of those
provisions.

4. Petitioner violated 42 C.F.R. § 483.13(c)(2), (3), and (4) (Tag F225).
5. Petitioner violated 42 C.F.R. § 483.13(c) (Tag F226).

6. Petitioner did not show that the determination that the deficiencies
posed immediate jeopardy was clearly erroneous.

The surveyors allege under Tag F225, that Petitioner failed to ensure that: (1) all
allegations of abuse were reported to the state agency as required by 42 C.F.R. §
483.13(c)(2) and (4); (2) all allegations of abuse were thoroughly investigated as required
by 42 C.F.R. § 483.13(c)(3); and (3) further potential abuse was prevented while the
investigation was in progress as required by 42 C.F.R. § 483.13(c)(3). The surveyors
also cited examples related to the same four residents as cited under Tag F223. CMS Ex.
2, at 17-27.

The surveyors allege a violation of 42 C.F.R. § 483.13(c) (Tag F226) on grounds that
Petitioner failed to develop and implement policies and procedures that prohibit
mistreatment, neglect and abuse of residents. The surveyors cited examples related to the
same four residents as under Tags F223 and F225. CMS Ex. 2, at 27-38.

The surveyors declared immediate jeopardy on February 5, 2010, at 3:30 p.m., and
determined that the immediate jeopardy was abated on February 10, 2010, at 2:40 p.m.,
after Petitioner implemented its action plan. CMS Ex. 2, at 6.

Petitioner denies knowledge prior to the survey of any of the allegations of abuse cited by
the surveyors, except two. The first allegation was made on February 3, 2009, during a
resident council meeting at which a resident reported that he witnessed CNA Arellanes
verbally abuse a resident. The second allegation is documented on a facility complaint
form dated October 30, 2009, in which a Licensed Vocational Nurse (LVN) reported that
Resident 12 reported to her that CNA Arellanes had been cursing and calling the resident
names. P. Br. at 3, 5, 19-20; P. Reply at 4; P. Ex. 12, at 1, 7; P. Ex. 13, at 1, 7-8, 13;
CMS Ex. 2, at 14, 23-24, 36. Petitioner concedes that the two incidents it acknowledges
were reported to Petitioner’s managers prior to the survey. Petitioner asserts that neither
of the alleged incidents involved an allegation of physical abuse. P. Reply at 4. The
evidence related to Petitioner’s handling of the two allegations establishes a prima facie
showing of violations of 42 C.F.R. § 483.13(c) and (c)(2)-(4) that Petitioner has failed to
14

rebut. The evidence also shows that when Petitioner investigated the allegations raised
by the surveyors, Petitioner learned that staff failed to report prior instances of suspected
abuse in violation of Petitioner’s abuse prevention policy and procedures, showing that
Petitioner’s policy and procedures were not implemented. I conclude that it is
unnecessary to discuss every incident and example alleged in the SOD.

a. Facts
(i) The February 3, 2009 Allegation of Verbal Abuse

During a resident council meeting on February 3, 2009, the council president, Resident
13, reported that he witnessed “verbal abuse” of another resident by CNA Pedro
Arellanes. CMS Ex. 10, at 38. A Nurse Notes form, dated February 3, 2009, records that
at a resident council meeting at 10:30 a.m. on February 3, 2009, Resident 13 reported that
on Saturday, January 31, 2009, CNA Arellanes called Resident 8 “momia.” Resident 13
also reported that Resident 8 was showing CNA Arellanes what the resident called a
ticket, which CNA Arellanes told him was a plain hand towel. The document also shows
that CNA Arellanes denied working Saturday, January 31, 2009, but stated that he did
work on Sunday, February 1, 2009. CNA Arellanes stated that he and another CNA call
each other “momia” on a daily basis. CNA Arellanes stated he never called a resident a
“momia.” CNA Arellanes stated that during the last week of January 2009, Resident 8
did show him a hand paper towel, stating that it was a lottery ticket. CNA Arellanes
stated that he told Resident 8 that it was a hand paper towel. The form indicates that the
investigator concluded that the allegation of verbal abuse was unfounded. The form
indicates that staff was advised to refrain from using the nickname “momia” while on the
floor. The investigator noted that residents might mistake the CNAs’ use of “momia” for
something else. P. Ex. 12, at 1.

CNA Luis Juarez corroborated that he was present when the resident had the paper towel
and claimed it was a lottery ticket. He also corroborated that he and CNA Arellanes had
nicknames for each other, including “momia,” which CNA Juarez clarified means

mummy. P. Ex. 9, at 15-16; P. Ex. 12, at 3-5.

In an affidavit dated February 22, 2011, Petitioner’s Director of Nursing (DON), Lillian
Jabines, states that she was aware of the verbal abuse allegation made against CNA
Arellanes during the February 3, 2009 resident council meeting. She states that
Petitioner’s activities director, Fermin Chavez, conducted the investigation. DON
Jabines states that she read the report and concurred with the finding that no verbal abuse
occurred. She states she interviewed the two CNAs involved and counseled them to be
more careful with their language in front of residents. P. Ex. 9, at 13; P. Ex. 12, at 7.

There is no evidence that CNA Arellanes was suspended or that Resident 8 was otherwise
protected from potential abuse during the investigation. There is no evidence that the

15

complaint was reported to the administrator. There is no evidence that the complaint was
reported to the state agency. There is no evidence that the results of the investigation
were reported to the administrator or the state. Petitioner’s Administrator, Dionicio
Rivera, states in his affidavit executed on February 22, 2011, that he reviews all
complaint forms generated in the facility and ensures that a full and proper investigation
is done. P. Ex. 9, at 5-6. However, Administrator Rivera does not mention that he
received the February 3, 2009 allegation of verbal abuse. Petitioner’s Assistant
Administrator (AA), Donovan Rivera, states in his affidavit that when he received notice
from the surveyors that there was immediate jeopardy due to allegations of abuse against
CNA Arellanes, he immediately suspended CNA Arellanes who never returned to work.
AA Rivera does not mention the February 3, 2009 allegation of abuse. P. Ex. 9, at 7-8.

(ii) The October 30, 2009 Allegation of Abuse

A facility complaint form dated October 30, 2009, states that Resident 12 notified LVN
Gonzalez that he was not feeling good, and, when she asked him what was wrong, he
stated that “[t]hose two guys were cussing and calling me names.” He told her the two
guys were “Luis and Pedro.” The comments section of the form, states that witness
statements from Maria Mott and Veronica Hermosillo (also known as Veronica
Jaramillo) are attached. A note at the bottom of the form indicates that “Luis and Pedro”
were verbally counseled to be more careful with how they “verbally and physically”
interact with residents. The note states that observation shows that staff was following
through and there were no further complaints. CMS Ex. 8, at 1; P. Ex. 13, at 1. Ina
written statement dated March 8, 2010, after the survey, LVN Gonzalez clarified her
prior statement on the complaint form. LVN Gonzalez clarified that CNAs Mott and
Hermosillo did not witness the alleged incidents of rude acts or rough handling, rather,
they witnessed Resident 12 make his complaint. P. Ex. 13, at 2.

DON Jabines states in her affidavit dated February 22, 2011, that she did not receive the
October 30, 2009 complaint as she was on vacation. She states that LVN Rae Michelle
Thweatt and Norma Rivera handled Resident 12’s verbal abuse allegation. P. Ex. 9, at
13. Norma Rivera, Petitioner’s Admissions and Medicare Coordinator, did not mention
the October 30, 2009 allegation in her affidavit dated February 22, 2011. P. Ex. 9, at 21.
LVN Thweatt stated in her affidavit dated February 24, 2011, that on October 30, 2009,
she received a complaint form completed by LVN Elizabeth Gonzalez. LVN Thweatt
states that she interviewed Resident 12 and the two CNAs. There were no witnesses to
the alleged verbal abuse and the two CNAs denied verbally abusing Resident 12. LVN
Thweatt states that she knew Resident 12 sometimes had bad days and got confused and
he also sometimes used “very bad language on the CNAs.” She states she counseled the
two CNAs to be careful how they “talk and kid” with Resident 12 and to be “respectful”
of him. She observed the two CNAs the following week and saw they were treating the
residents appropriately, and there were no further complaints. She concluded that the

16

allegation of verbal abuse was unfounded, based on her own interaction with Resident 12
and his history at the facility. P. Ex. 13, at 5-6; P. Ex. 9, at 19-20.

CNA Juarez denies in his affidavit that he used abusive language with Resident 12. He
also stated that he did not witness CNA Arellanes using abusive language. CNA Juarez
states that Resident 12 has called him a “wetback” or “Mexican.” CNA Juarez states that
if he did something wrong, Resident 12 would say, “[i]t had to be a Mexican” or he
would threaten CNA Juarez with deportation. P. Ex. 13, at 7-8.

There is no evidence that CNA Arellanes was suspended or that Resident 12 was
otherwise protected from potential abuse during the investigation. There is no evidence
that the complaint was reported to the administrator. There is no evidence that the
complaint was reported to the state agency. There is no evidence that the results of the
investigation were reported to the administrator or the state. Administrator Rivera states
in his affidavit executed on February 22, 2011, that he reviews all complaint forms
generated in the facility and ensures that a full and proper investigation is done. P. Ex. 9,
at 5-6. However, Administrator Rivera does not mention that he received the October 30,
2009 allegation of abuse. AA Rivera also fails to mention the October 30, 2009
allegation in his affidavit. P. Ex. 9, at 7-8.

(iii) Petitioner’s Abuse Policy

There is no dispute that Petitioner had a policy that required that its residents be free from
abuse and neglect and that imposed upon all personnel the obligation to report to proper
authorities an incident of abuse, mistreatment, or neglect. The policy is set forth in
several different documents issued by Petitioner that are in evidence. CMS Ex. 9, at 9-
21; P. Ex. 8; P. Ex. 16, at 2. The surveyors do not allege under Tag F226 that Petitioner
did not have the policies and procedures required by 42 C.F.R. § 483.13(c). Rather, the
surveyors allege that Petitioner failed to implement the policies and procedures that
prohibit mistreatment, neglect, and abuse of residents. CMS Ex. 2, at 27.

Petitioner’s policy defines abuse as any “act, failure to act, or incitement to act done
willfully, knowingly, or recklessly through words or physical action which causes or
could cause mental or physical injury or harm or death to a resident.” Verbal abuse is
defined as using oral, written or gestured language which includes terms disparaging or
derogatory to a resident or within the resident’s hearing distance without regard to the
resident’s age, ability to comprehend, or disability. Mental or psychological abuse
involves mistreatment that does not result in physical harm and may include humiliation,
harassment, threats of punishment, deprivation, and intimidation. CMS Ex. 9, at 9-10.

Petitioner’s abuse policy provides that facility residents will be free from abuse.
Personnel are required to report any incident pertaining to abuse or neglect to the proper
authorities and failure to report subjects the employee to criminal prosecution. Any
17

facility owner or employee having cause to believe that a resident’s physical or mental
ealth or welfare has been, or may be, adversely affected by abuse by another person
must report the abuse immediately. Petitioner’s procedure for an employee witnessing
resident abuse is for the employee to immediately report the incident to the charge nurse,
DON, administrator, state agency, or local law enforcement. The facility requests that if
an employee reports to the state agency or law enforcement, the employee inform the
administrator or DON so that they can take necessary and immediate remedial measures.
Petitioner’s policy requires that an oral report by the administrator or designee to the
proper authorities must be performed immediately upon learning of the abuse, followed
by a written report within five days. All reports must contain the name and address of the
facility and of the employee accused. The administrator, the DON, or charge nurse will
conduct the investigation immediately. CMS Ex. 9, at 9-10.

Petitioner’s policy and procedures in evidence are inconsistent regarding the protection of
residents during an investigation. The July 1, 2000 revision of the policy, a “Personnel
Policy — Revision/Clarification,” and a “Patient Abuse Investigation” policy or procedure
specify that an alleged perpetrator will be suspended during the investigation of an abuse
complaint. CMS Ex. 9, at 16, 18. 21. The form that employees signed that sets forth the
policy only provides that an employee may be suspended. CMS Ex. 9, at 10; P. Ex. 8, at
8-41. The August 15, 2000 revision of the policy also indicates that an accused employee
may be suspended, and not that the employee will be suspended. The revised policy
provides that to protect a resident in a case when an employee is not suspended following
an abuse allegation, the employee will be transferred during that shift to another wing or
asked not to handle the affected resident to prevent further contact between the employee
and resident. CMS Ex. 9, at 11-12. Ifthe employee involved was a nurse aide, the
incident was to be reported to the nurse aide registry and could result in suspension of the
employee’s license. CMS Ex. 9, at 9-21.

CNA Maria V. Mott states in her affidavit executed on February 24, 2011, that one time
she worked with CNA Arellanes and she thought he handled a resident too roughly. She
did not report the incident and stated that she did not know if it was abuse, but she did not
like it. P. Ex. 9, at 29-30; P. Ex. 13, at 3-4. Her affidavit is consistent with her February
3, 2010 statement during Petitioner’s investigation of the allegations identified during the
survey. P. Ex. 7, at 24-26; CMS Ex. 8, at 41. CNA Veronica Jaramillo (P. Ex. 15, at 1)
also reported on February 3, 2010, that she had seen CNA Arellanes treat residents badly,
saying bad words and hitting a resident on the head, but she had not reported her
18

observations because she had heard someone had reported in the past and nothing was
done.® P. Ex. 7, at 24-25; CMS Ex. 8, at 41-44.

b. Analysis

Section 1819(c)(1)(A)(ii) of the Act requires that a SNF protect its residents and promote
their “right to be free from physical or mental abuse, corporal punishment, involuntary
seclusion, and any physical or chemical restraints imposed for purposes of discipline or
convenience and not required to treat the resident’s medical symptoms.” The Secretary
has provided by regulation that a “resident has the right to be free from verbal, sexual,
physical, and mental abuse, corporal punishment, and involuntary seclusion.” 42 C.F.R.
§ 483.13(b). The regulations require that a facility develop and implement written
policies and procedures prohibiting mistreatment, neglect, and abuse of residents and the
misappropriation of residents’ property. 42 C.F.R. § 483.13(c). The facility must “[nJot
use verbal, mental, sexual, or physical abuse, corporal punishment or involuntary
seclusion.” 42 C.F.R. § 483.13(c)(1)(i). The facility “must ensure that all alleged
violations involving mistreatment, neglect, or abuse . . . are reported immediately to the
administrator of the facility and to other officials in accordance with State law.” 42
C.F.R. § 483.13(c)(2). The facility “must have evidence that all alleged violations are
thoroughly investigated, and must prevent further potential abuse” during the
investigation. 42 C.F.R. § 483.13(c)(3). The facility must ensure that the results of all
investigations are “reported to the administrator or his designated representative and to
other officials in accordance with State law . . . within 5 working days of the incident.”
42 C.F.R. § 483.13(c)(4). The regulations define “abuse” to be “the willful infliction of
injury, unreasonable confinement, intimidation, or punishment with resulting physical
harm, pain or mental anguish.” 42 C.F.R. § 488.301.

As discussed under Conclusion of Law 2 related to Tag F223, it is not possible given the
quality of the evidence to determine whether any abuse actually occurred in this facility.
However, a conclusion that abuse occurred is not a threshold requirement for a finding
that Petitioner violated the regulations in issue.

I conclude that CMS has made a prima facie showing of violations of 42 C.F.R. §
483.13(c) that Petitioner has not rebutted. The evidence shows that Petitioner’s staff
failed to report the allegations of abuse from February and October 2009 to the state
agency. Petitioner has also failed to produce evidence that it protected its residents
during investigation of the alleged abuse in February and October 2009. The evidence

® CNA Jaramillo’s statement is unsigned. However, it is offered as evidence by both
parties and is therefore not disputed.
19

also shows that Petitioner failed to implement its abuse policy. Petitioner does not deny
that allegations were made in February and October 2009, regarding CNA Arellanes.
Petitioner argues that both of these complaints were fully investigated and resolved in
accordance with applicable law and Petitioner’s internal policies. P. Br. at 3, 19; P.
Reply at 4. The evidence, however, does not support Petitioner’s argument.

It is undisputed that during the resident council meeting on February 3, 2009, a resident
reported that he witnessed CNA Arellanes verbally abuse a resident. CMS Ex. 10, at 38;
P. Ex. 9, at 13; P. Ex. 12, at 1, 7. Whether or not the resident correctly interpreted the
incident as one of verbal abuse is not the issue. In fact, it was Petitioner’s activities
director that characterized the incident as verbal abuse in her notes from the resident
council meeting. CMS Ex. 10, at 38. Thus, at least Petitioner’s activities director
recognized an allegation of potential abuse. The issue is whether Petitioner responded to
the allegation as required by law. DON Lillian Jabines’ affidavit shows that an
investigation was conducted by Petitioner’s activities director with the conclusion that
there was no verbal abuse. P. Ex. 9, at 13; P. Ex. 12, at 7. The fact that Petitioner’s staff
concluded after investigation that there was no verbal abuse did not relieve Petitioner of
the obligation to comply with the requirements of 42 C.F.R. § 483.13(c).

There is no evidence that Petitioner complied with 42 C.F.R. § 483.13(c)(3) as there is no
evidence that CNA Arellanes was suspended or that Resident 8 was otherwise protected
from potential abuse during the investigation. There is no evidence that Petitioner
complied with 42 C.F.R. § 483.13(c)(2) as there is no evidence that the allegation was
immediately reported to the administrator or the state agency. Administrator Rivera
states in his affidavit executed on February 22, 2011, that he reviews all complaint forms
generated in the facility and ensures that a full and proper investigation is done. P. Ex. 9,
at 5-6. However, Administrator Rivera does not mention that he received the February 3,
2009 allegation of verbal abuse. AA Donovan Rivera also does not mention the February
3, 2009 allegation of abuse in his affidavit. P. Ex. 9, at 7-8. There is also no evidence
that Petitioner complied with the requirement to report the results of its investigation to
either the administrator or the state. The regulation clearly imposes upon Petitioner the
burden to document its investigation and compliance with 42 C.F.R. § 483.13(c).
Petitioner has not presented evidence establishing compliance with the regulation. I
conclude Petitioner violated 42 C.F.R. § 483.13(c) based upon the February 2009
incident.
20

The evidence shows that on about October 30, 2009, Resident 12 complained to LVN
Gonzalez that CNA Arellanes and CNA Juarez were cussing and calling him names.”
Whether or not the resident correctly interpreted the incident as one of verbal abuse is not
the issue. The evidence shows that LVN Gonzalez interviewed a couple witnesses and
then verbally counseled CNA Arellanes and CNA Juarez that they need to be more
careful of both their verbal and physical interaction with residents. P. Ex. 13, at 1. DON
Jabines testified in her affidavit that she believed LVN Thweatt and Ms. Rivera handled
Resident 12’s allegation of abuse. P. Ex. 9, at 13. Ms. Rivera did not mention
participating in any investigation related to the October 2009 incident in her affidavit. P.
Ex. 9, at 21. LVN Thweatt testified in her affidavit that she interviewed Resident 12 and
the two CNAs and concluded that Resident 12 had bad days and was sometimes abusive
of CNAs. She stated that she counseled the CNAs to be more careful of how they speak
to the resident. She stated that she observed the two CNAs for the following week and
observed no problem and received no complaint. P. Ex. 13, at 5-6; P. Ex. 9, at 19-20.

As with the February 2009 allegation of abuse, there is no evidence that Petitioner
complied with 42 C.F.R. § 483.13(c)(3) as there is no evidence that CNA Arellanes or
CNA Juarez were suspended or that Resident 12 was otherwise protected from potential
abuse during the investigation. There is no evidence that Petitioner complied with 42
C.F.R. § 483.13(c)(2) as there is no evidence that the allegation was immediately
reported to the administrator or the state agency. Administrator Rivera states in his
affidavit executed on February 22, 2011, that he reviews all complaint forms generated in
the facility and ensures that a full and proper investigation is done. P. Ex. 9, at 5-6.
However, Administrator Rivera does not mention that he received the October 30, 2009
allegation of verbal abuse. AA Rivera, also does not mention the October 30, 2009
allegation of abuse. P. Ex. 9, at 7-8. There is also no evidence that Petitioner complied
with the requirement to report the results of its investigation into the allegation of abuse

7 A hand-written, unsigned statement dated February 8, 2010, purports to be a statement
of Elizabeth A. Gonzalez. CMS Ex. 8, at 45. I do not give this statement any weight as it
is unsworn and without other sufficient indicia of reliability. Petitioner did not offer a
copy of the statement with its evidence or otherwise indicate it did not contest the content
of the statement. I note the statement suggests that Nurse Gonzalez personally observed
CNA Arellanes speak to residents in an “undermining manner.” The statement also
indicates that Resident 12 claimed that CNA Arellanes handled him roughly, which is
potentially an allegation of physical abuse. More thorough investigation and
documentation by the surveyors and their testimony or the testimony of LVN Gonzalez at
hearing may have permitted consideration of this evidence. Nevertheless, CMS satisfies
its burden to make a prima facie showing even without consideration of this evidence.
21

to either the administrator or the state. The regulation clearly imposes upon Petitioner the
burden to document its investigation and compliance with 42 C.F.R. § 483.13(c).
Petitioner has not presented evidence to establish compliance with the regulation. I
conclude Petitioner violated 42 C.F.R. § 483.13(c) based upon the October 2009 incident.

I further conclude that the evidence shows that Petitioner had the abuse policy required
by 42 C.F.R. § 483.13(c). However, Petitioner failed to implement its policy.

Petitioner’s errors in addressing the February and October 2009 allegations of abuse
clearly establish that Petitioner failed to implement its policy. The affidavit of CNA Mott
also shows that the policy was not implemented prior to the survey. CNA Mott states in
her affidavit executed on February 24, 2011, that one time she worked with CNA
Arellanes and she thought he handled a resident too roughly. However, she did not report
the incident as she did not know if it was abuse, but she knew that she did not like it. P.
Ex. 9, at 29; P. Ex. 13, at 3. Her affidavit is consistent with her February 3, 2010
statement given during Petitioner’s investigation of the allegations identified during the
survey. P. Ex. 7, at 24-26; CMS Ex. 8, at 41. CNA Jaramillo’s statement also supports
the conclusion that Petitioner failed to implement its policy. CNA Jaramillo reported on
February 3, 2010, that she had seen CNA Arellanes treat residents badly, saying bad
words and hitting a resident on the head, but she had not reported her observations
because she had heard someone had reported in the past and nothing was done. P. Ex. 7,
at 24-25; CMS Ex. 8, at 41-44.

The inability of staff to identify abuse and to understand and fulfill the requirements to
report to the administrator and state officials is credible and weighty evidence that
Petitioner failed to implement its abuse policy.

Petitioner asserts that it complied with 42 C.F.R. § 483.13(c)(2) because it investigated
the reports regarding the February and October 2009 allegations; it was determined that
abuse did not occur; and, therefore, Petitioner was not required to report to the state
agency. Petitioner cites its policy and the Texas statutes in support of its argument. P.
Br. at 19; P. Reply at 13-15. Petitioner is in error. The federal regulation requires that
the facility “must ensure that all alleged violations involving mistreatment, neglect, or
abuse . . . are reported immediately to the administrator of the facility and to other
officials in accordance with State law.” 42 C.F.R. § 483.13(c)(2). All alleged violations
must be reported to the administrator. Thus, even if Petitioner is correct in its
interpretation of the Texas statute, Petitioner has failed to show that the alleged abuse in
February and October 2009 was reported to Administrator Rivera as required by 42
C.F.R. § 483.13(c)(2).

Petitioner also errs in its interpretation of the Texas statutes. The federal regulation
requires that all allegations of abuse be reported to officials in accordance with state law.
42 C.F.R. § 483.13(c)(2). The Texas statute provides:
22

A person, including an owner or employee of an institution,
who has cause to believe that the physical or mental health or
welfare of a resident has been or may be adversely affected
by abuse or neglect caused by another person shall report the
abuse or neglect in accordance with this subchapter.

Tex. Health & Safety Code § 242.122 (1989). The gist of Petitioner’s argument is that
the Texas code section allows Petitioner to first determine whether or not abuse or
neglect occurred before Petitioner’s obligation to report to the state agency is triggered.
The plain language of the Texas code section indicates that one “who has cause to
believe” that a resident “may be adversely affected by abuse or neglect” must report. The
code section does not specify how much “cause” is necessary to trigger the reporting
requirement. But the language “may be adversely affected” suggests a very low
threshold. The remaining language of the Texas statute, including the existence of
criminal sanctions for failure to report, strongly supports my interpretation that a mere
allegation of abuse with any possible adverse effect triggers mandatory and immediate
reporting without any preliminary determination by the owner or operator of a nursing
facility. Tex. Health & Safety Code §§ 242.123-.135. However, even if my
interpretation of the Texas statute is in error, 42 C.F.R. § 483.13(c)(2) controls and
requires that all allegations of abuse be reported to state officials, using the procedures
specified under state law. Britthaven, Inc., d/b/a/ Britthaven of Smithfield, DAB No.
2018 (2006); Cedar View Good Samaritan, DAB No. 1897, at 11 (2003).

Petitioner argues that: it gave staff and residents the opportunity to voice concerns and
report staff behavior without fear of retribution; the abuse hotline number and department
ead telephone numbers were posted; employees could make anonymous reports through
the hotline; in-service trainings on abuse and neglect were done during the six months
preceding the survey; new employees were trained on the requirements of Petitioner’s
abuse policy; and an administrator’s memorandum stating the abuse and neglect policy
was issued to staff and posted on the bulletin board. P. Br. at 21-23; P. Reply at 16-17.
Despite Petitioner’s efforts to educate its staff, the evidence discussed herein shows that
staff failed to recognize potential abuse or allegations of abuse and failed to immediately
report to the administrator and the state agency as required by law. Thus, Petitioner fails
to rebut the evidence showing that it failed to implement its policy.

Petitioner disputes that its noncompliance posed immediate jeopardy. P. Br. 27-29; P.
Reply at 21-23. Petitioner bears the burden of showing that CMS’s finding of immediate
jeopardy is clearly erroneous. Petitioner argues, referring to the SOM, appendix Q, that

the applicable triggers for immediate jeopardy do not exist in this case. Petitioner argues
that no substantiated evidence exists of psychological harm to the residents involved.
Petitioner argues that the applicable triggers for immediate jeopardy also require a lack of
intervention on the facility’s part, which it asserts did not occur here because it
investigated the two complaints and had no cause to believe that a resident’s physical or

23

mental health or welfare had been or might have been adversely affected by abuse.
Petitioner asserts that such adverse affect is the standard for reporting abuse to state
authorities, consistent with the Texas statutes and with Petitioner’s own abuse and
neglect policy. Moreover, Petitioner argues that the scope of any problem at the facility
was not widespread. Petitioner also argues that there was not a systemic failure of
Petitioner’s abuse and neglect policy.

I conclude that Petitioner failed to meet its burden and has not shown that the declaration
of immediate jeopardy was clearly erroneous. It is not subject to dispute that residents of
nursing homes are susceptible to mental or physical harm from all forms of abuse.
Petitioner’s failure to implement its policy prohibiting abuse; the failure of Petitioner and
its staff to report; and Petitioner’s failure to take measures to protect its residents;
exposed Petitioner’s residents to a high risk for abuse and resulting serious harm or death.
Petitioner has not presented evidence that would support a conclusion to the contrary.

Petitioner has not presented evidence or argued that it returned to substantial compliance
prior to March 20, 2010.

7. Petitioner violated 42 C.F.R. § 483.75 (Tag F490).

8. Petitioner did not show that the determination that the deficiency
posed immediate jeopardy was clearly erroneous.

I also conclude based on this record that there is a derivative violation of 42 C.F.R. §
483.75 (Tag F490) as the failure of management to act appropriately in this case is
significant evidence that the facility was not being administered so as to attain or
maintain the highest practicable physical, mental, and psychosocial well-being of each
resident.

The regulation requires that a long-term care facility be administered in a manner that
enables it to use its resources effectively and efficiently to attain or maintain the highest
practicable physical, mental, and psychosocial well-being of each resident. I have
concluded that from at least February 2009 through March 19, 2010, Petitioner failed to
implement its policy and procedures to protect its residents from physical and mental
abuse, corporal punishment, involuntary seclusion, improper chemical or physical
24

restraints, neglect, and misappropriation of their property.® Petitioner’s obligation to
protect its residents is both statutory and regulatory. Petitioner failed to meet its
obligation for an extended period of more than a year. I conclude that Petitioner’s failure
to protect its residents on the facts of this case amounted to a failure of administration and
a violation of 42 C.F.R. § 483.75. Petitioner has failed to show that the determination of
immediate jeopardy was clearly erroneous under the same analysis as related to the
violations of Tags F225 and F226.

9. Petitioner was not in substantial compliance with participation
requirements for the entire period beginning February 5, 2010 through
March 19, 2010.

10. A CMP of $5,550 per day from February 5 through 10, 2010, and
$600 per day from February 11 through March 19, 2010, a total CMP
of $55,500; and a DPNA for March 18 and 19, 2010, are reasonable
enforcement remedies.

11. Petitioner’s ineligibility to conduct a NATCEP is by operation of
law.

Ihave concluded that Petitioner violated 42 C.F.R. §§ 483.13(c) and (c)(2), (3), and (4)
and 483.75. I have further concluded that Petitioner has not shown that the declaration of
immediate jeopardy was clearly erroneous. Ifa facility is not in substantial compliance
with program requirements, CMS has the authority to impose one or more of the
enforcement remedies listed in 42 C.F.R. § 488.406, including a CMP. CMS may impose
a per day CMP for the number of days that the facility is not in compliance or a PICMP
for each instance that a facility is not in substantial compliance, whether or not the
deficiencies pose immediate jeopardy. 42 C.F.R. § 488.430(a). CMS proposes to impose
a per day CMP of $5,550 for the period of immediate jeopardy and $600 per day for the
period after immediate jeopardy was abated. I have found that there are bases for the
imposition of an enforcement remedy, including the CMP and the DPNA. The CMPs
proposed by CMS are well within the ranges for authorized CMPs. 42 C.F.R. §§
488.408, 488.438.

® There is evidence that in December 2009, January 2010, and during the survey in
February 2010, Petitioner conducted investigations of alleged abuse that were not cited
by the surveyors as deficient. CMS Ex. 7; CMS Ex. 8, at 25-36; P. Ex. 7 at 31-41.
However, Petitioner does not argue that those investigations show that Petitioner returned
to substantial compliance prior to March 2010.
25

When 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 noncompliance, including repeated deficiencies; (2) the facility’s financial condition;
(3) the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404(b), the same
factors CMS and/or the state were to consider when setting the CMP amount; and (4) the
facility’s degree of culpability, including but not limited to the facility’s neglect,
indifference, or disregard for resident care, comfort, and safety and the absence of
culpability is not a mitigating factor. The factors that CMS and the state were required to
consider when setting the CMP amount and that I am required to consider when assessing
the reasonableness of the amount are set forth in 42 C.F.R. § 488.404(b): (1) whether the
deficiencies caused no actual harm but had the potential for minimal harm, no actual
harm with the potential for more than minimal harm, but not immediate jeopardy, actual
harm that is not immediate jeopardy, or immediate jeopardy to resident health and safety;
and (2) whether the deficiencies are isolated, constitute a pattern, or are widespread. My
review of the reasonableness of the CMP is de novo and based upon the evidence in the
record before me. I am not bound to defer to the CMS determination of the reasonable
amount of the CMP to impose but my authority is limited by regulation as already
explained. 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 10 (2001); CarePlex of Silver Spring, DAB No. 1683, at 14-16
(1999); Capitol Hill Cmty. Rehab. and Specialty Care Ctr., DAB No. 1629 (1997).

CMS initially imposed a PICMP of $8,500 for an instance of noncompliance on February
10, 2010. CMS subsequently revised its remedies and the PICMP was rescinded and a
per day CMP was imposed. CMS Ex. 1, at 1-5. Petitioner argues that CMS exceeded its
authority in revising the CMP from a per instance to a per day. P. Reply at 23-25.
Petitioner argues that 42 C.F.R. §§ 488.430 and 488.444 do not permit CMS to revise a
PICMP to a per day CMP. Petitioner’s interpretation of the regulations is faulty, as no
language in either regulation prevents CMS from exercising its discretion to select the
appropriate type CMP. CMS may reopen and revise any initial or reconsidered
determination within 12 months after the date of the notice of the initial determination
(42 C.F.R. § 498.30), except when the CMS determination is the subject of an ALJ or
Board decision (42 C.F.R. §§ 498.74 and 498.90). Petitioner also cites a provision of the
SOM in support of it argument. However, the SOM provision cited by Petitioner is
within the statement of CMS policies to guide the survey and the enforcement process.
The SOM does not limit Secretarial or CMS authority, but must be construed consistent
with the Act and regulations. Furthermore, the SOM provision referred to by Petitioner
26

(currently SOM, Chap. 7, § 7516.3 (eff. Sep. 10, 2010)) does not refer to the reopening
and revision of an initial determination by CMS. Rather, the provision of the SOM
provides guidance to CMS and the state surveyors for determining whether to change the
amount of the CMP when, during the course of the survey cycle, there is an increase or
decrease in the number or severity of the cited instances of noncompliance.

Petitioner argues that the amount of the CMP imposed is unreasonable. Petitioner
asserts, citing CarePlex of Silver Spring, DAB No. 1683, at 8, that I should focus on
whether the amount of the CMP imposed is reasonably related to an effort to produce
corrective action. P. Br. at 29-30; P. Reply at 25-26. Petitioner’s reliance upon the
decision in CarePlex is at odds with its argument. In CarePlex, an appellate panel of the
Board found it error for the ALJ to evaluate the evidence related to the reasonableness of
the CMP in terms of whether the CMP was remedial or punitive. The Board in CarePlex
concluded that an ALJ’s de novo review is limited to whether the evidence presented
supports factual findings as to the regulatory factors.

Petitioner argues that CMS has not established that Petitioner is highly culpable or that
Petitioner has a history of repeat deficiencies. Petitioner argues that a per day CMP of
$5,550 for six days beginning on February 5, 2010 and continuing through February 10,
2010 is too high, because CNA Arellanes was suspended on February 5, 2010, and
afterwards had no access to residents. I conclude, based on my de novo review related to
the regulatory factors, that the CMP proposed by CMS is reasonable, even though I have
concluded that there was no noncompliance proved under Tags F201 and F223. I find
that Petitioner’s noncompliance is serious, and Petitioner has not shown that the
declaration of immediate jeopardy from February 5 through 10, 2010, was clearly
erroneous. I also conclude that Petitioner was very culpable as Petitioner neglected to
ensure that its abuse policy was effectively implemented to protect its residents against
abuse. Petitioner is obligated by both the Act and the regulations under which it agreed
to operate to protect its residents from abuse. The regulations establish a specific scheme
for the reporting and investigation of alleged abuse that Petitioner is further obligated to
implement through its own policies and procedures. Elderly residents, who are often
demented or of limited capacity to understand and cope, are particularly susceptible to
mental or physical abuse. Many states, including Texas, impose criminal sanctions
against those who fail to report suspected elder abuse in recognition of the vulnerability
of that population. Petitioner conceded that allegations of abuse were received by facility
management in February and October 2009, but the evidence shows that Petitioner failed
to report to the state or take action to protect its vulnerable residents. Although CNA
Arellanes was suspended on February 5, 2010, it was not clear until February 10, 2010,
that he would not return to the facility or that Petitioner had accomplished all necessary
steps to abate the immediate jeopardy. Petitioner was not found in substantial
compliance until March 20, 2010, when the state agency determined that the corrective
action was implemented and that Petitioner could maintain substantial compliance.
Petitioner has not shown that it returned to substantial compliance before March 20,

27

2010, or that immediate jeopardy was abated prior to February 10, 2010. Petitioner is
correct that the evidence does not show a history of noncompliance prior to the survey at
issue before me.

Petitioner argues that the total CMP of $55,500 represents a considerable financial
burden and that Petitioner cannot pay the CMP without compromising resident health and
safety. P. Br. at 30; P. Reply at 27-28. Petitioner submitted five pages of tax records as
evidence that it is unable to pay the CMP. P. Ex. 19. The five pages of tax records
reflect the taxpayer name as “Maharlika Resources, Inc.” The 2005 form reflects a
taxpayer address different from the address for Petitioner listed on the SOD. P. Ex. 19, at
1; CMS Ex. 2. However, the tax forms for 2006, 2007, 2008, and 2009 all list a taxpayer
address that is the same as that for Petitioner. P. Ex. 19, at 2-5; CMS Ex. 2. CMS did not
object to my consideration of the tax forms so | infer that they are what Petitioner
represents they are, that is the tax filings for Petitioner for 2005 through 2009. I do not
accept, however, Petitioner’s representation that I may infer based on these forms that
Petitioner is unable to pay the total CMP. The forms show that Petitioner’s accountant is
skilled at reducing Petitioner’s corporate income tax liability to zero. The forms reveal
nothing useful related to Petitioner’s assets or liabilities from which I may make a
reasonable determination regarding Petitioner’s ability to pay. Petitioner has not met its
burden and proved its inability to pay the CMP without compromising resident health and
safety.

Petitioner was notified in this case of the circumstances under which approval of
NATCEP would be withdrawn and that its NATCEP was being withdrawn based on a
finding of substandard quality of care. P. Ex. 22, at 2-3. I have also concluded that a
CMP of more than $5,000 is reasonable. Thus, Petitioner is ineligible to conduct a
NATCEP for two years as a matter of law.

II. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance
with program participation requirements from February 5 through March 19, 2010. A
CMP of $5,550 per day from February 5 through 10, 2010, and $600 per day from
February 11 through March 19, 2010, a total CMP of $55,500; and a DPNA for March 18
and 19, 2010, are reasonable enforcement remedies. Petitioner was ineligible to conduct
a NATCEP for two years.

/s/
Keith W. Sickendick
Administrative Law Judge