Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Missouri Baptist Hospital-Sullivan
(CCN: 26-0015),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-163
Decision No. CR2384
Date: June 17, 2011

DECISION AND ORDER
OF REMAND

I decide that Petitioner, Missouri Baptist Hospital-Sullivan, met the distance criteria for
qualifying as a critical access hospital (CAH), effective the date when the Missouri
Legislature changed its designation of the 1.33 mile section of Missouri Route 47 in
Washington, Missouri, from a State highway to a local street (Franklin Street). I remand
this case to CMS so that it may determine the effective date of this change and also so
that CMS may determine whether Petitioner satisfies other applicable criteria for CAH
certification.

I. Background

This is the second iteration of this case. Petitioner initially applied in 2008 to be certified
as a Medicare-participating CAH. CMS denied that application, and Petitioner requested
a hearing before me. On August 11, 2009 I issued a decision that sustained CMS’s
determination. Missouri Baptist Hosp. — Sullivan, DAB CR1987 (2009). That decision
was not appealed. Rather, Petitioner filed a second application for certification, which
was again denied by CMS, and Petitioner again requested a hearing. It is this second
hearing request, which is before me at this time.
I ordered the parties to file pre-hearing briefs and proposed exhibits. CMS filed a brief
and two proposed exhibits that are identified as CMS Ex. | and CMS Ex. 2. Petitioner
filed a brief and four proposed exhibits that are identified as P. Ex. 1 — P. Ex. 4.

I receive the parties’ exhibits into the record. There exists no reason that I convene an in-
person hearing in this case. Although the parties have not entered into formal stipulations
of fact they have raised no disputed facts in their briefs or in their evidentiary
submissions.

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

A. Issue

The issue in this case is whether Petitioner satisfies the distance test for certification as a
CAH.

B. Findings of Fact and Conclusions of Law
I make the following findings of fact (Findings) and conclusions of law.

1. To qualify as a CAH, a hospital must satisfy the distance standard of
section 1820(c)(2)(B(i)(1) of the Social Security Act.

Section 1820(c)(2)(B)(i)(D of the Social Security Act (Act) states that, as a prerequisite
for qualifying as a CAH, a hospital must be:

Located more than a 35-mile drive (or, in the case of mountainous
terrain or in areas with only secondary roads available, a 15-mile
drive) from a hospital or another [CAH] ....

An implementing regulation restates this language. 42 C.F.R. § 485.610(c).

Neither the Act nor the regulation defines the term “secondary roads.” CMS has
provided guidance as to the meaning of this term in its State Operations Manual (SOM).
The SOM defines a “primary road” to be either:

e A numbered federal highway, including interstates,
intrastates, expressways or any other numbered federal
highway; or

e A numbered State highway with 2 or more lanes each
way....
SOM, Chapter 2, § 2256A.'

In Missouri Baptist Hospital, | discussed the history and intent of this SOM language. I
held there that the Secretary, through CMS, had determined to implement a precise and
objective criterion for defining what is meant by a secondary road. Using the SOM
definition of a “primary road” as a guide, a “secondary” road is a road that is not a
numbered federal highway or a numbered State highway with two or more lanes each
way. Thus, a numbered State highway having only one lane in each direction, or a road
that is not designated as a State highway — even if that road has more than one lane in
each direction — would satisfy the SOM’s definition of a secondary road.

It is very clear that CMS determined to defer to the States in delineating what is and what
is not a secondary road. The SOM rests the distinction between a primary and a
secondary road in a critical aspect on a State’s determination of what is, and what is not,
a State highway.

As I explained in Missouri Baptist Hospital, the determination to rely on State
designation establishes an objective bright line for determining whether a facility meets
the distance criteria for qualifying as a CAH. There is nothing in the Act or in the
implementing regulation that requires CMS to make this distinction. CMS could have,
for example, defined a secondary road based on the actual driving conditions encountered
on that road. It might have taken into consideration factors such as lane width, grade,
curves, elevation, weather conditions, and traffic. However, it elected to rely on a much
more simplified test, that being the way in which a State designates its roads. That is a
determination that is within CMS’s discretion to make, but it is bound by that
determination.

2. Petitioner satisfied the distance test for qualifying as a CAH, when the
Missouri State legislature changed its designation of the 1.33 mile
section of Missouri Route 47 in Washington, Missouri, from a State
highway to a local street (Franklin Street).

I addressed the facts of Petitioner’s location and its proximity to other hospitals or CAHs
in Missouri Baptist Hospital, and my Finding was not appealed by either party. The
nearest hospital to Petitioner is St. John’s Mercy Hospital in Washington, Missouri (St.
John’s). That hospital is situated 31.14 miles away from Petitioner. To drive from

' An earlier policy statement defined the term “secondary road” explicitly by stating that a
secondary road is “any state or local road, paved or unpaved, that does not meet the
definition of ‘primary road’ as herein stated.” State Survey Agency Directors Letter,
Location and Relocation of Critical Access Hospitals (CAHs) and Relocation of
Necessary Provider CAHs, S&C-06-04 (Nov. 14, 2005). This policy statement was
replaced effective September 7, 2007 with the current SOM language.
Petitioner to St. John’s, using the shortest possible route, one must travel over portions of
Interstate Highway 44 (I-44), Missouri Route (Mo. Rt.) 47, and U.S. Highway 50.

The distance traveled on I-44 is 15.15 miles. I-44 has two or more lanes and meets the
SOM’s definition of a primary road. To enter and exit I-44, one must drive on an
entrance ramp of 0.27 miles and an exit ramp of 0.30 miles. These ramps also meet the
SOM’s definition of a primary road, because they are part of the Interstate Highway
System and consist of two lanes each of one-way travel.

The remaining distance is comprised of what was formerly designated in its entirety as
Mo. Rt. 47. That distance exceeds 15 miles. If 15 miles of that stretch of highway is
secondary road, then Petitioner satisfies the distance test fora CAH.

A total of 13.92 miles of Mo. Rt. 47 consists of a road that has a single lane in each
direction. Although it is designated as a State highway, the 13.92 single-lane stretch of
Mo. Rt. 47 does not have two lanes of traffic in each direction. It is, therefore,
undisputed that this 13.92 mile stretch is secondary road, because it fails to meet CMS’s
criteria as a primary road.

What remain to be considered are the .17 miles of dual lane highway and the 1.33 miles
that run through the town of Washington, Missouri. The .17 miles clearly satisfy the
SOM test for primary road because it is part of a State highway having two or more lanes
in each direction. That leaves the 1.33 miles in Washington, Missouri.

At the time of my first decision in this case, those 1.33 miles were designated as being
part of Mo. Rt. 47. That designation was critical to my decision because that section met
the test for a primary road using the SOM criteria. By virtue of that, the total amount of
secondary road between Petitioner and St. John’s was less than 15 miles, and Petitioner
failed to satisfy the distance test for qualifying as a CAH.

However, at some date in 2009, and presumably after I had decided Missouri Baptist
Hospital, the Missouri State legislature adopted a law changing the designation of Mo.
Rt. 47 in Washington from a State highway to a local street. CMS Ex. 2 at 6.
Consequently, and using the criteria of the SOM for determining whether a road is
secondary, the total distance between Petitioner and St. John’s Hospital that satisfy the
test for a secondary road now exceeds 15 miles. Thus, Petitioner now satisfies the
distance test for a CAH under the SOM criteria, even though it failed to satisfy those
criteria previously. The sole determining factor here that changes the outcome is
Missouri legislature’s change of designation of the 1.33 mile stretch in Washington, from
Mo. Rt. 47, a State highway, to a local street.

CMS does not deny that Petitioner now satisfies the distance test for CAH certification
established in the SOM. Rather, it argues that the State legislature’s change of
designation of the 1.33 mile stretch in Washington, Missouri is simply a change of name
that changes none of the conditions of the road. It characterizes the change as being a
sham intended to circumvent Medicare participation criteria to qualify Petitioner for
participation.

But, it was CMS that determined to rely on States’ designation of their roads as the basis
for distinguishing primary from secondary roads. CMS could have developed criteria
designed to establish the actual driving conditions on State roads but it did not do so,
relying instead on the States’ designations of their roads. Given that, CMS cannot really
cry foul when the State of Missouri decides to change the designation of a particular
stretch of its roads.

CMS never argued that actual driving conditions on Mo. Rt. 47, either on the highway
taken as a whole, or on that stretch in Washington, Missouri, would serve to qualify the
road as primary in character. Throughout, CMS has maintained that the so/e basis for
deciding whether Petitioner met the distance test was application of the SOM criteria to
determine the character of the roads between Petitioner and St. John’s. Thus, the fact that
the actual conditions on the stretch in question in Washington may not have changed,
even though the designation of that stretch has changed, is not relevant to deciding
whether that stretch is now secondary road. It is now secondary based on the SOM’s
criteria for distinguishing primary from secondary roads.

Indeed, had the stretch in question originally been designated a local road, there would
have been no dispute that Petitioner would satisfy the distance test fora CAH. It was
CMS that urged the use of the SOM criteria as the dispositive test for deciding whether
Petitioner satisfied the distance criteria.

3. Iremand this case to CMS for further determination.

Although the parties do not dispute that the Missouri legislature changed the designation
of the 1.33 mile stretch in Washington some time in 2009, neither party has supplied me
with the effective date of that change. That may be relevant for purposes of determining
the effective date of Petitioner’s participation in Medicare. I remand the case to CMS so
that it may determine the effective date of the change of designation and its impact on
Petitioner’s participation status. Furthermore, neither party has advised me whether
Petitioner satisfies what other criteria may apply to a CAH. I remand the case so that
CMS may make that additional determination if it is necessary to do so.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
John J. Kane Regional Center - McKeesport
(CCN: 39-5640),
Petitioner
v.

Centers for Medicare and Medicaid Services.

Docket No. C-10-843

Decision No. CR2383

Date: June 15, 2011

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
impose two per-instance civil money penalties of $3,000 against Petitioner, John J. Kane
Regional Center.

I. Background

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

CMS determined to impose against Petitioner the remedies that I describe in the opening
paragraph of this decision. CMS based its remedy determination on Petitioner’s alleged
failure to comply with two Medicare participation requirements stated at 42 C.F.R.

§§ 483.10(b)(11) and 483.13(c). Petitioner requested a hearing, and the case was
assigned to me for a hearing and a decision.
I held a hearing by videoconference on April 4, 2011. I heard the cross-examination and
redirect testimony of witnesses whose written direct testimony had been submitted
previously as exhibits. I also received into evidence the parties’ exhibits (Ex.) that were
identified as CMS Ex. 1 - CMS Ex. 22 and P. Ex. 1 — P. Ex. 14.

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

1. Petitioner failed to comply substantially with Medicare participation
requirements; and

2. CMS’s remedy determinations are reasonable.
B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law (Findings).

1. Petitioner failed to comply substantially with Medicare participation
requirements.

a. Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.10(b)(11).

The applicable regulation mandates a facility to consult immediately with a resident’s
treating physician about either an accident involving the resident that results in injury and
has the potential for requiring physician intervention or a significant change in the
resident’s physical, mental, or psychosocial status. The purpose of the regulation plainly
is to assure that sick and vulnerable individuals receive care that they are unable to
provide for themselves.

CMS’s allegations of noncompliance all relate to the care that Petitioner gave to a
resident who is identified as Resident # 1. On the morning of April 1, 2010, this resident
fell from her wheelchair. CMS Ex. 6 at 1, 13.! She did not complain initially of pain.
However, beginning at about two o’clock on the afternoon of April 1, the resident voiced
complaints of hip and back pain. /d. at 1. Her complaints escalated over the ensuing one
and one-half days. On the evening of April 1, Resident # 1 demanded that Petitioner’s

' It appears that the resident may have fallen two times on that date. Nursing notes for
April 1, 2010 do not precisely describe the fall, or falls, that the resident sustained, but
they make reference to two falls. CMS Ex. 6 at 6.
staff transport her to a hospital. /d. at 2. She continued to complain of pain during the
day of April 2, 2010 and complained that her pain medications were not helping her. Jd.
On the evening of April 2, the resident again insisted that she be transported to a hospital.
Id. The resident then called 911 and requested that she be taken to a hospital because she
had a broken hip. Jd. This request was subsequently cancelled, and I infer that it was
facility staff that cancelled the request after speaking with the resident.

The resident continued to complain of severe hip and back pain. Some time before 8:00
on the evening of April 2, Resident # 1 again called 911. At 8:00 p.m., emergency
medical technicians arrived and transported the resident to a local hospital. She was
admitted that evening and diagnosed to be suffering from a broken hip. Subsequently,
the resident underwent surgery to repair the fracture. CMS Ex. 10 at 1, 4, 5, 7.

Dr. James Campagna, the resident’s treating physician, saw the resident at about 9:00
a.m. on the morning of April 1, 2010, shortly after the resident had sustained her fall. At
that time the resident was not complaining of pain. The physician directed Petitioner’s
staff to monitor the resident for continued pain. CMS Ex. 6 at 13. But, and despite these
instructions and the resident’s escalating and persistent complaints of hip and back pain,
Petitioner’s staff never again consulted with the Dr. Campagna about the resident’s
condition between the morning of April 1 and the resident’s hospitalization on the
evening of April 2.

The evidence conclusively establishes that Petitioner failed to consult with Resident # 1’s
physician in contravention of regulatory requirements. Petitioner’s failure to respond to
Resident # 1’s escalating complaints of pain — including its failure to consult with the
resident’s treating physician about those complaints — is a grossly inappropriate response
to the resident’s condition in contravention of professionally recognized standards of
care. CMS Ex. 12 at 6. The resident’s escalating complaints of pain in conjunction with
her fall on April 1, 2010 constituted a significant change in her condition that
necessitated immediate consultation by Petitioner’s staff. In fact, the resident herself was
demanding physician intervention due to her pain. The fact that the resident was making
these complaints in the aftermath of a fall should have put the staff on notice that there
was at least a possibility of a serious injury underlying the resident’s complaints.

Petitioner’s defense to the evidence that I have addressed is to argue that Resident # 1
was a chronic complainer and a person who engaged in drug seeking behavior. Petitioner
asserts that the resident’s constant complaints and attempts to obtain pain medication
created a fog that obscured the resident’s complaints after her fall on April 1, 2010. For
example, the resident complained of back pain on March 25, 2010. P. Ex. 3 at 3. The
resident had also had previous falls, on July 15, August 11, and apparently, on August 12,
2009. Resident # 1 was assessed after these falls and found to be uninjured. Petitioner
asserts that it should be excused from failing to respond to the resident inasmuch as her
complaints were, essentially, normal behavior for her. Additionally, Petitioner argues

that it had developed an objective approach to measure the resident’s pain in
collaboration with the resident’s treating physician that obviated the necessity for
physician consultation after the April 1 fall.

Petitioner’s arguments notwithstanding, this is not a case about a resident who merely
complained consistently of pain. The event that was the source of the resident’s
complaints beginning April 1 was an obvious departure from the baseline and should
have put Petitioner’s staff on notice that there was a significant change in the resident’s
condition. The resident fell. The resident’s fall was a signal event that should have
alerted any responsible staff of a possibility of an injury that required medical attention.
Second, and shortly after the fall, the resident uttered complaints of pain that were
entirely consistent with an injury that was caused by a fall. The complaints soon
escalated in seriousness and intensity, the resident complained that her pain medications
were ineffective, and the resident demanded to be transferred to a hospital. Most
significantly, the right-sided hip pain that Resident # 1 complained of after her April 1,
2010 fall was a new complaint, one that had not been voiced previously by Resident # 1.
See CMS Ex. 6.” So, even if the resident was a chronic complainer, she was voicing
something new after the April | fall, and it was consistent with an injury that could have
resulted from the fall.

Thus, the fact that the resident may have been a chronic complainer, or that she may have
fallen in the past without sustaining injury, did not justify Petitioner and its staff from
treating her complaints after April 1 as being anything less than serious. What is evident
is that the resident sustained a fall on April 1 that plainly could have caused (and, indeed,
did cause) the resident to sustain a serious injury. The resident’s complaints of pain in
the wake of the accident were entirely consistent with a serious injury. CMS Ex. 12 at 6;
CMS Ex. 13 at 14. The staff was obligated to treat the resident’s complaints in
conjunction with her fall as a significant change and to consult with the resident’s
physician irrespective of the resident’s history.

Petitioner relies on the testimony of Dr. Campagna to support its contention that there
was no significant change in Resident # 1’s condition that necessitated physician
consultation. P. Ex. 13; Tr. at 54-112. In his direct testimony, Dr. Campagna avers that
there was no significant change in Resident # 1’s condition after her fall on April 1
because there was no major decline in the Resident’s status. P. Ex. 13 at 3. That

> There is, however, a psychiatric report dated March 25, 2010, in which the psychiatrist
notes that the resident complained of “chronic pain, lower back and hip.” P. Ex. 3 at 3.
The report does not document the complaint with any specificity. For example, it does
not specify which hip the resident was complaining about. I find this vague and
generalized complaint of pain to be distinguishable from the specific complaints that the
resident voiced beginning on April 1. Nothing in the resident’s treatment record shows
that the resident had previously made complaints of this type or specificity.
testimony ignores what is obvious from the record of this case, that Resident # 1 voiced
escalating complaints of pain and that those complaints were made in close conjunction
with the resident’s fall on April 1. In light of that, I find Dr. Campagna’s testimony not
to be credible.

His testimony is not credible in another important respect. When asked whether it was
acceptable for Resident # 1 to complain of unremitting pain for a period of nearly 36
hours after sustaining a fall, Dr. Campagna asserted that this was indeed acceptable given

the resident’s previous history. Tr. at 108.
that a resident such as Resident # 1 could ef
in the situation where there was an apparent

n effect, Dr. Campagna advocated the theory
ectively be ignored by a facility’s staff even
cause-effect relationship between an accident

and the resident’s subsequent complaints. Petitioner has offered no nursing standard of
care that would support this theory.

Indeed, Dr. Campagna’s testimony is squarely refuted by professionally accepted
standards of nursing care. As he conceded during his cross-examination, the Joint
Commission on Accreditation of Healthcare Organizations (JCAHO) designated pain as a
fifth vital sign that requires monitoring and assessment with the same vigilance as with
all other vital signs. Tr. at 92-93; CMS Ex. 15 at 1-7. Allowing the resident’s complaints
— for a period of about 36 hours — to go unaddressed, as Dr. Campagna advocated, is
wholly contrary to this standard.

Petitioner contends additionally that it had implemented a system for assessing the
resident’s pain. This system, it asserts, enabled the staff to assess the resident objectively
and without regard to the resident’s complaints of pain. According to Petitioner, it was

necessary to utilize this system in light of the fact that Resident # 1 was a chronic
complainer. Petitioner argues that the objective system that it had put into place
Resident # 1 was implemented pursuant to Dr. Campagana’s orders and that this,
effectively, entitled the staff to ignore the resident’s complaints of pain on April 1 and 2,
2010.

for

The objective system that Petitioner contends it implemented in providing care to
Resident # 1 is known as the “FLACC” scale.> The FLACC scale is a system that was
leveloped for assessing pain in preverbal children. Tr. at 71-72, 151. Petitioner has
provided no evidence explaining how this scale would have worked effectively in
assessing the pain that Resident # 1 may have experienced given that the resident is not a
child and is perfectly capable of expressing herself (to the extent that she was capable of
calling 911 and asking for assistance). Furthermore, Petitioner has not shown that its
staff utilized it on April 1 and 2, 2010 to assess the resident’s pain. Petitioner has
provided no documentation showing that an assessment using the FLACC scale was done

* Tcan find no definition of the acronym in Petitioner’s briefs. I take notice that
“FLACC” stands for “face, legs, cry, consolability, activity.” Tr. at 123.
at any time on these dates.* So, even if I were to assume that the FLACC scale might
have been an effective mechanism for assessing Resident # 1’s pain, there is nothing in
the record of this case to show that Petitioner’s staff utilized it to assess the resident’s
pain at a time when the resident plainly needed such an assessment.

b. Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.13(c).

The applicable regulation requires a facility to develop and implement written policies
and procedures that prohibit mistreatment, neglect, and abuse of residents. CMS alleges
that Petitioner neglected to provide necessary care to Resident # 1. It alleges that
Petitioner failed to follow both applicable nursing standards of care and its own policy in
providing care to Resident # 1.

The evidence is conclusive that Petitioner failed to follow applicable nursing standards of
care and its internal policies in addressing Resident # 1’s complaints of pain. The staff
failed to assess the resident’s pain. They failed to precisely document the resident’s pain
and essentially ignored her escalating complaints. They failed to complete

locumentation that was required by Petitioner’s policy. And, the staff failed to notify the
resident’s physician about her complaints, also in contravention of facility policy.

Nursing standards of care require that a resident’s complaints of pain be assessed by a
skilled nursing facility’s professional staff. CMS Ex. 12 at 6. Those standards are
incorporated by Petitioner into its own policies for assessing and addressing pain. CMS
Ex. 7, at 15-16, 18-24. Assessing complaints of pain means that a staff must, first and
foremost, listen to what a resident is saying and, then, attempt to do all that is appropriate
to alleviate the resident’s complaints. CMS Ex. 12 at 7. There are certain discrete
elements that should be documented when pain is assessed. These include: measuring
the intensity of pain using a standardized scale; documenting the frequency, pattern, and
description of pain; documenting duration of pain; assessing precipitating factors, such as
movement or touch; documenting the resident’s response to pain medication; evaluating
other approaches to ameliorating pain when medication is ineffective; documenting
nonverbal responses to pain; and describing a history of the resident’s pain and related
factors. Id. at 8.

Petitioner’s staff failed to comply with these requirements and the applicable standard of
nursing care, as well as Petitioner’s policy governing assessment and management of
pain. There is very little documentation of the resident’s complaints in the resident’s
record, and the record contains none of the assessments mandated by the applicable

* In fact, I find nothing in the record to show that use of the FLACC scale was actually
ordered for Resident # 1.
standard of care. Indeed, between 10:30 p.m. on April 1 to 12:30 p.m. on April 2,
Petitioner’s staff failed to make any documentation of the resident’s complaints. CMS
Ex. 6 at 2; CMS Ex. 12 at 8.

As I have discussed, there is also no evidence that Petitioner utilized the alternative
system that it contends it put into place for measuring Resident # 1’s pain — the FLACC
scale — to document the resident’s pain on April 1 and April 2. Nor is there evidence that
this system would have effectively supplanted the requirements of the professionally
recognized standard for assessing pain in a resident, even if it had been used.

Petitioner utilized a pain assessment form to document residents’ pain. CMS Ex. 6 at 34.
The elements of the form essentially track the requirements of the applicable standard of
care for assessing pain. For example, the form requires that the staff document the
intensity of a resident’s pain on a scale of from 1-10. The form requires that the duration
of pain, its quality, the type of pain, and the effects of pain be documented. It requires
the staff to document observed behavior in a resident who is experiencing pain. It also
requires the staff to make note of a resident’s activity and emotional status. Jd.
Petitioner’s staff failed to utilize this form to assess Resident # 1’s complaints of pain on
April 1 and 2, 2010. Nursing notes fail to demonstrate any assessments that addressed
the elements of this form. See Tr. at 120, 128-30, 132-34.

Petitioner also had a pain management policy that required nurses to notify a resident’s
physician if medication was ineffective in controlling pain. CMS Ex. 7 at 21; CMS Ex.
12 at 3. On April 2, 2010, Resident # 1 complained that her pain medication was not
elping her. CMS Ex. 6 at 2. Petitioner’s staff failed to notify Dr. Campagna of this
complaint and thereby violated Petitioner’s pain management policy.

Petitioner argues that its liability for failing to comply with the requirements governing
implementation of policies addressing pain assessment and management depends on
whether it contravened requirements governing consultation with Resident # 1’s treating
physician. Petitioner reasons that it cannot be held liable for violating the regulation
governing neglect, if it, in fact, complied with the regulation governing physician
consultation.

This reasoning is incorrect. A facility may fail to implement policies preventing neglect
of residents even in a situation where the issue of physician consultation is not
implicated. Here, Petitioner’s liability stands independently from its liability for
violating the consultation requirement. It would have been obligated to implement its
policies governing pain assessment and management even if effective implementation of
those policies established no reason to consult with Resident # 1’s physician. Moreover,
and as I have found, Petitioner did violate regulatory requirements governing physician
consultation.
Petitioner then argues that there is no evidence that the resident ever complained of
“severe pain” until 7:39 p.m. on April 2, 2010. P. Brief at 13. That is debatable — the
resident’s complaints of pain clearly escalated throughout April 1 and 2, 2010 — but even
if it is true, it provides Petitioner with no excuse for failing to implement its pain
assessment and management policy and contravening professionally recognized standards
of care for managing the resident’s pain. The policy should have been implemented, and
the resident’s pain should have been thoroughly assessed even if the resident had only
voiced complaints of mild pain.

Finally, Petitioner argues that CMS would have had it contravene the Resident # 1’s
physician orders in assessing and managing the resident’s pain. I can discern no basis for
this argument. There is nothing in the record of this case to suggest that Dr. Campagna
ever ordered Petitioner to disregard professionally recognized standards of nursing care
or Petitioner’s own policies in assessing and managing Resident # 1’s complaints of pain.
As I have discussed, there is not even evidence that Petitioner systematically
implemented the FLACC scale — certainly not with respect to the events of April 1 and 2,
2010 — to address the resident’s complaints of pain.

2. CMS’s remedy determinations are reasonable.

At issue here are two per-instance civil money penalties, each in the amount of $3,000. I
find these penalties to be reasonable.

Per-instance civil money penalties are authorized by 42 C.F.R. § 488.438(a)(2). The
regulation allows for a penalty ranging from $1,000 to $10,000 for each instance of
noncompliance. The penalties that CMS determined to impose fall substantially beneath
the midpoint of that range.

Regulatory factors for deciding what is reasonable are set forth at 42 C.F.R.

§§ 488.438(f)(1)-(4) and 488.404 (incorporated by reference into 42 C.F.R.

§ 488.438(f)(3)). These factors include: the seriousness of a facility’s noncompliance;
its compliance history; its culpability; and its financial condition.

Here, CMS relies on the seriousness of Petitioner’s noncompliance to justify the penalty
amounts. I agree with CMS. The noncompliance in this case was serious. The two civil
money penalties that CMS determined to impose are actually quite modest when
considered in the context of Petitioner’s noncompliance.

The evidence establishes that Petitioner’s staff were indifferent to the resident’s injuries
and complaints of pain following the fall that she sustained on April 1, 2010. The
resident suffered for two days with a fractured hip before being provided medical
attention that ultimately necessitated surgery. During this period, her complaints of pain
were disregarded or even ignored by Petitioner’s staff. The staff failed to: assess the
resident’s complaints; listen to her assertions that her medication had become ineffective;
and communicate any of the resident’s problems to her treating physician. The resident’s
problems would have continued to go unattended had the resident not on her own volition
intervened and called 911. The staff’s inattention to the resident comprised blatant
violations of regulatory requirements, applicable nursing standards of care, and
Petitioner’s own policies.

Petitioner has not provided evidence or argument to show that the penalties are
unreasonable. It argues that CMS has the “burden of proof” to establish that the penalty
amounts are reasonable. It is unnecessary for me to address this argument because the
overwhelming evidence clearly supports the penalties that CMS determined to impose. I
have considered all of Petitioner’s arguments to defend its actions and those of its staff
and for the reasons I discuss above, at Finding 1, I find them to be without merit.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Belle Meade, A Rehabilitation Guest Care Facility
(CCN: 04-5170),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-11
Decision No. CR2382

Date: June 10, 2011

DECISION

I grant the motion of the Centers for Medicare and Medicaid Services (CMS) for
summary judgment against Petitioner, Belle Meade, A Rehabilitation Guest Care Facility.
I sustain two per-instance civil money penalties against Petitioner, each in the amount of
$4,500, as well as CMS’s determination that Petitioner lose authority to conduct nurse
aide training.

I. Background

Petitioner is a skilled nursing facility that does business in the State of Arkansas. It
participates in the Medicare program. Petitioner’s participation in Medicare is governed
by sections 1819 and 1866 of the Social Security Act (Act), as well as by implementing
regulations at 42 C.F.R. Parts 483 and 488. Petitioner’s hearing rights are governed by
regulations at 42 C.F.R. Part 498.

On July 24, 2010, Petitioner was surveyed for compliance with Medicare participation
requirements, and the surveyors found that Petitioner was not complying substantially
with several requirements. CMS concurred with the surveyors’ findings and determined
to impose the civil money penalties that I discuss in the opening paragraph of this
decision, based on Petitioner’s alleged noncompliance with two of these requirements.
The requirements, which I discuss in more detail below, are at 42 C.F.R. §§ 483.13(c)(2)-
(4) and 483.13(c). Petitioner requested a hearing to challenge CMS’s determination, and
the case was assigned to me for a hearing and a decision.

Both parties filed pre-hearing exchanges that included their proposed exhibits (Ex.).
CMS designated its proposed exhibits as CMS Ex. 1 —- CMS Ex. 10. Petitioner
designated its proposed exhibits as P. Ex. 1 — P. Ex. 25. CMS then moved for summary
judgment, and Petitioner opposed the motion. I receive the parties’ exhibits into the
record of this case.

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

1. Petitioner failed to comply substantially with the requirements of 42
C.F.R. §§ 483.13(c)(2)-(4) and 483.13(c); and

2. CMS’s remedy determinations are supported by the undisputed facts
and the law.

B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law (Findings).

1. Petitioner failed to comply substantially with the requirements of 42
CF.R. §§ 483.13(c)(2)-(4) and 483.13(c).

In moving for summary judgment, CMS contends that it should prevail as a matter of law
based on undisputed material facts. In discussing the facts of this case, I rely only on
facts that are undisputed.

a. The undisputed material facts establish that Petitioner failed
to comply substantially with the requirements of 42 C.F.R.
§ 483.13(c)(2)-(4).

In relevant part, the applicable regulation requires that a skilled nursing facility: ensure
that all allegations of resident mistreatment, neglect, or abuse be reported immediately to
the facility’s administration; and protect its residents from possible further abuse while
pending allegations of abuse are investigated and resolved. CMS alleges that Petitioner
failed to comply with the regulation’s requirements in providing care to a single resident
who is identified as Resident # 19. It contends that Petitioner’s staff failed to report
immediately to Petitioner’s administrator the resident’s allegations that she had been
abused and mistreated by a member, or members, of the staff and failed to protect
residents against possible additional abuse or mistreatment while the allegations remained
unresolved.

The undisputed material facts support the allegations. The facts establish that Resident #
19 voiced complaints that she had been abused physically and/or mistreated by
Petitioner’s staff but that staff failed to report those complaints immediately to
Petitioner’s administrator. And, they establish that Petitioner implemented no measures
to protect residents while Resident # 19’s complaints remained unresolved.

It is undisputed that, shortly after 1:30 on the morning of June 17, 2010, Resident # 19
told a licensed practical nurse employed by Petitioner that another member of Petitioner’s
staff had mistreated her and hurt her arm. CMS Ex. 5 at 11. The allegation of abuse or
mistreatment appears to relate to an incident that had occurred just prior to the resident’s
complaint, during which a member of Petitioner’s staff directed the resident away from a
restroom that was reserved for staff members. /d. at 13. It is undisputed also that the
staff member who received the complaint from Resident # 19 failed to report the
resident’s allegations immediately to Petitioner’s administrator. Petitioner’s Response to
CMS’s Motion for Summary Judgment (Response) at 3 § 4.

The undisputed facts establish also that the staff member — a certified nursing assistant
(CNA) — who was the target of Resident # 19’s allegations was approached by another
staff member shortly after the alleged incident and asked whether someone had been
“mean” to Resident # 19. CMS Ex. 5 at 13. The CNA then went to Resident # 19’s room
to apologize to the resident. Jd. It is undisputed that the CNA failed to report
immediately to Petitioner’s administrator the allegation that she or someone else had been
“mean” to Resident #19. Response at 3 { 6.

At about 6:15 on the morning of June 17, 2010, the licensed practical nurse who had
originally heard the allegation of abuse or mistreatment advised another member of
Petitioner’s staff — another licensed practical nurse — that Resident # 19 had complained
of being mistreated or abused. The account that was relayed to this employee was that
Resident # 19 had claimed that someone had hurt her arm. CMS Ex. 5 at 15. It is
undisputed that no one on Petitioner’s staff immediately reported these allegations to
Petitioner’s administrator. Response at 4 J 9.

Sometime later during the morning of June 17, Resident # 19 complained to a physical
therapist who is not a member of Petitioner’s staff, but who works at Petitioner’s facility,
that, during the night, a nurse had grabbed her forcefully in the area of her ribs and told
her in a hateful manner that she could not use the staff’s bathroom. CMS Ex. 5 at 14.
The physical therapist related this complaint to Petitioner’s social worker but did not
personally report the complaint immediately to Petitioner’s administrator.

The complaints of abuse were finally reported to Petitioner’s administrator during a staff
meeting on the morning of June 17, 2010. P Ex. 23 at 1; P. Ex. 25 at 1. In response, the
administrator suspended the CNA who was the target of Resident # 19’s allegations and
determined to discipline the licensed practical nurse who originally heard resident’s
complaint.

On the morning of June 20, 2010, Resident # 19 again complained that she had been
abused or mistreated. On that date, the resident approached the licensed professional
nurse to whom she had originally complained on June 17, and stated:

It’s bad enough that the other nurse hurt my arm the other night, but then
she tried to choke me.

CMS Ex. 4 at 18. It is undisputed that the licensed practical nurse failed to report
immediately this complaint of abuse or mistreatment to Petitioner’s administrator.
Response at 5 § 22. Rather, she made a note of the complaint and slipped a copy of that
note under Petitioner’s administrator’s door the following morning along with a note
expressing her concern about the impact of the resident’s complaints on the staff’s job
security. CMS Ex. 4 at 23.

The undisputed facts establish also that Petitioner failed to take any measures to protect
either Resident # 19 or its other residents from the possibility that an “other nurse” may
ave been capable of committing abuse against residents in the facility. Petitioner’s
administrator, by her own admission, simply assumed that the complaint voiced by
Resident # 19 on June 20, 2010 was a reiteration of her June 17 complaint and made no
attempt to investigate it. P. Ex. 23 at 3-4. Consequently, the possibility that a threat to
residents, in addition to that which was alleged on June 17, went uninvestigated, and no
protections were implemented by Petitioner.

Petitioner’s defense to CMS’s allegations of failure to report complaints of abuse and
mistreatment is that Resident # 19 made no actionable allegations. Petitioner
acknowledges that the allegations made by Resident # 19 were, on their face, allegations
of abuse or mistreatment. However, Petitioner asserts that the resident’s allegations do
not actually describe abuse or mistreatment when viewed in their “factual context.”
Response at 9-14. Petitioner thus contends that the regulation’s reporting requirement
was never triggered.

Essentially, Petitioner is asserting that, when the events surrounding the resident’s
complaints are viewed in hindsight, the complaints were not credible or were fanciful.
Therefore, according to Petitioner, there was never any real abuse or mistreatment, and
the failure to report the resident’s complaints is excused.

However, the regulation does not condone a failure to report when viewed in hindsight,
nor does it allow a facility’s staff to exercise discretion whether to report or not report a
complaint of abuse or mistreatment. The regulation requires a facility to assume that
every complaint of abuse or mistreatment is legitimate until disproved. Whether abuse or
mistreatment actually occurred is irrelevant at the moment that a complaint is voiced.

The implicit premise of the regulation is that residents in skilled nursing facilities, being
among the most vulnerable members of our society, must be protected at all costs from
even the potential of abusive conduct. Consequently, when a resident voices a complaint
of abuse or mistreatment, the facility and its staff may not discount that complaint until it
is thoroughly investigated and either verified or found to be without support.
Furthermore, a subsequent conclusion that the initial complaint was without merit never
excuses a facility’s staff from failing to discharge their duties to report.

Here, Resident # 19 voiced explicit complaints that she had been physically abused or
mistreated by unidentified members of Petitioner’s staff. That triggered an immediate
duty on the part of those staff members who heard those complaints to report them to the
facility’s administrator. The regulation afforded the staff no discretion. They were
obligated to report immediately exactly what they had been told.

Petitioner asserts that it did take steps to protect Resident # 19 and other residents from
the possibility of further abuse in the wake of the resident’s June 20, 2010 complaint.
Response at 13-14. However, Petitioner has identified no measures that it took to protect
the residents. Rather, it asserts that the facility’s administrator’s conclusion that the
resident’s June 20, 2010 complaint was part and parcel of the resident’s June 17
complaint excused Petitioner from having to take any additional measures to protect its
residents.

This argument is essentially identical to Petitioner’s contention that the “factual context”
of Resident # 19’s complaints excused its staff from reporting those complaints. And, it
fails for the same reason that Petitioner’s argument relating to reporting fails. On June
20, 2010, the resident voiced a very explicit complaint that differed in significant respects
from the complaints that she voiced on June 17. None of the resident’s complaints on
June 17 suggested that she had been choked, whereas, on June 20, the resident explicitly
stated that she had been choked. And, on June 20, the resident referred to an “other
nurse” suggesting plainly that a different individual had been involved than the unnamed
alleged assailant that the resident described on June 17.

It may have been ultimately reasonable — after an investigation was completed — for the
administrator to conclude that the June 20 complaint by Resident # 19 was merely a
restatement of what she had voiced on June 17. But, what the administrator concluded,
either on June 20 or subsequently, did not excuse her from taking immediate action to
protect Resident # 19 and other facility residents when she received the complaint. As is
the case with the reporting requirement, the regulation does not allow for discretion by a
facility or its staff in the face of a complaint of abuse or mistreatment. The duty is plain.
A facility and its staff must treat every complaint as valid until proven otherwise.
Assuming that the June 20 complaint by Resident # 19 was simply a restatement of a
complaint made previously is not a legitimate basis for failing to take protective action.

b. The undisputed material facts establish that Petitioner failed
to comply with the requirements of 42 C.F.R. § 483.13(c).

In relevant part, the regulation requires that a facility must develop and implement
written policies and procedures that prohibit mistreatment, neglect, and abuse of
residents. CMS alleges — and the undisputed facts establish — that Petitioner failed to
implement its own policy as respects the complaints that were voiced by Resident # 19.

Petitioner’s abuse policy explicitly requires that all incidents of alleged resident
mistreatment, neglect, or abuse must immediately be reported to Petitioner’s
administrator. CMS Ex. 6 at 8. The multiple failures by Petitioner’s staff to report the
complaints of abuse and/or mistreatment voiced by Resident # 19 constituted an obvious
violation of this policy.

Petitioner’s defense to CMS’s assertion, and the undisputed facts that support it, is
essentially the same defense that it asserts in response to allegations that its staff failed to
report allegations of abuse and/or mistreatment. Petitioner contends that the staff did, in
fact, comply with its policy because they reasonably believed that Resident # 19’s
complaints were unsubstantiated. Response at 16.

I find this defense to be without merit. It is premised on the unstated contention that,
when faced with allegations by a resident that she had been abused, Petitioner’s staff had
discretion to evaluate those allegations and to decline to report them if they concluded
that the allegations were baseless. Nothing in Petitioner’s policy gives the staff that
discretion. The policy language is mandatory. The facility staff must report every
allegation of abuse or mistreatment to the facility’s administrator, without exception, and
without prejudging the merits of the allegation. Indeed, the policy, on its face, tracks the
language of 42 C.F.R. § 483.13(c)(2), which I have stated allows no discretion in
deciding whether to report an allegation of abuse.

Petitioner’s abuse policy also explicitly requires that its administrator immediately
investigate all allegations of abuse as they are brought to her attention. CMS Ex. 6 at 10-
11. CMS contends, and the undisputed facts establish, that Petitioner’s administrator
failed to comply with this policy when confronted with the allegations of abuse that
Resident # 19 voiced on June 20, 2010. Rather than investigate those allegations the
administrator concluded that these allegations were merely a restatement of allegations
previously made.

Petitioner argues that the administrator concluded that the June 20 allegations were part
of a “continuing investigation into the June 17, 2010 statement.” Response at 17.
Petitioner then describes the administrator’s interpretation of the Resident’s June 20
complaint, contending that these constituted reasonable inferences that the June 20
complaint merely reiterated complaints previously voiced by the resident. Jd.

The problem with this assertion is that Petitioner’s administrator would have been in no
position to make the judgments she made without first investigating the allegations made
by Resident # 19 on June 20. For example, Petitioner asserts that the administrator
interpreted the resident’s June 20 claim that she had been choked as merely describing
the position of the CNA’s hands as she guided the resident away from the staff restroom
on June 17. For purposes of this decision, I will accept as true Petitioner’s description of
what the administrator thought the June 20 complaint meant. But, that does not condone
a failure to investigate because the administrator had no way of knowing with certainty
what Resident # 19 meant by her June 20 complaint without investigating it. How could
the administrator possibly have known what Resident # 19 meant — assuming any
ambiguity in her complaint — without, at a minimum, interviewing the resident?

2. CMS’s remedy determinations are supported by the undisputed facts
and the law.

a. Per instance civil money penalties of $4,500 are reasonable.

At issue here are two civil money penalties, each in the amount of $4,500, that CMS
determined to impose as remedies for Petitioner’s noncompliance with the requirements
of 42 C.F.R. §§ 483.13(c)(2)-(4) and 483.13(c). I find these penalties to be reasonable.

Per-instance civil money penalties are authorized by 42 C.F.R. § 488.438(a)(2). The
regulation allows for a penalty ranging from $1,000 to $10,000 for each instance of
noncompliance. The penalties that CMS determined to impose thus fall more or less at
the midpoint of that range.

Regulatory factors for deciding what is reasonable are set forth at 42 C.F.R.

§§ 488.438(f)(1)-(4) and 488.404 (incorporated by reference into 42 C.F.R.

§ 488.438(f)(3)). These factors include: the seriousness of a facility’s noncompliance;
its compliance history; its culpability; and its financial condition.

The deficiencies at issue here were determined by CMS to be immediate jeopardy level
deficiencies. The term “immediate jeopardy” is defined at 42 C.F.R. § 488.301 to mean
noncompliance that is so severe as to cause or to pose a likelihood of causing serious
injury, harm, impairment, or death to a resident. It is not, strictly speaking, necessary that
I find the presence of immediate jeopardy in evaluating the reasonableness of the
penalties that are at issue here because the presence of immediate jeopardy is not a
regulatory prerequisite for imposing a per-instance penalty of any amount.

Nevertheless, the deficiencies that are at issue here were very serious. That, coupled with
Petitioner’s prior history of citations for very similar deficiencies, is ample basis for me
to find that the penalties that CMS determined to impose are reasonable.

The undisputed facts establish that Petitioner’s staff ignored allegations that described
staff misconduct at least bordering on criminal assault. Resident # 19 variously
contended that she had been mistreated by staff, that staff had injured her arm, that a
nurse had come up from behind her and grabbed her rib, and that an “other” nurse had
tried to choke her. Petitioner’s staff had no way of verifying or rejecting the resident’s
allegations without reporting and, then, investigating them.

That the underlying complaints may not have been true is irrelevant. The failure of
Petitioner’s staff and administrator to follow internal policy and to comply with
regulatory requirements in the face of these complaints demonstrates a wholesale
breakdown in a system that was designed to protect vulnerable individuals from abuse
and mistreatment. That breakdown put residents at risk of great harm because it meant
that serious allegations — which might have been true — were going unreported and
uninvestigated. That in turn meant that residents were left unprotected against potential
abuse and mistreatment.

Petitioner argues that its noncompliance was not serious because the allegations that were
made by Resident # 19 were at bottom not credible. That argument — as with Petitioner’s
other arguments in this vein — is not persuasive because it rests on the faulty premise that
Petitioner’s staff had the discretion to discount and ignore the resident’s complaints based
on their on-the-spot judgments that the complaints were not credible. The purpose of
both the governing regulation and Petitioner’s own policy was to assure that allegations
of abuse not be subject to the whim and discretion of Petitioner’s staff, but rather, to
guarantee that all allegations be reported and thoroughly investigated either to verify
them or to find them to be unsubstantiated. Petitioner consistently argues that its staff
was free to short circuit this process based on their intuition and judgment. That is
simply incorrect.

It may well be that the staff correctly assumed that Resident # 19 was exaggerating or
even deliberately misstating what happened to her. But, the staff should not be permitted
to interpose their judgments on an objective process that is designed to protect residents.
For one thing, Petitioner’s staff had a clear and obvious conflict of interest. It was in
their interest that the resident’s allegations of abuse and mistreatment be found not
credible. That is precisely why the regulations require immediate reporting of all
complaints and a thorough and impartial investigation of them. Furthermore, even if a
facility’s staff operates in good faith and discounts allegations of abuse, that
impermissible exercise of discretion could have catastrophic effects for residents if the
staff’s judgment turns out to be incorrect.

The undisputed facts establish also that Petitioner has a previous history of
noncompliance involving deficiencies that are similar in character to those that are at
issue here. A few months prior to the incident that is at the heart of this case, Petitioner
was cited for other instances of failing to report an allegation of abuse immediately to its
administrator, failing to investigate thoroughly allegations of abuse, and failing to
implement its internal abuse policy. CMS Ex. | at 20-29. Petitioner attempts to
distinguish these previous deficiencies by arguing that they involved a bruise of unknown
origin and verbal abuse of a resident and not the kind of alleged abuse that is at issue
here. Response at 20. I find this purported distinction to be meaningless.

b. Loss of authority to conduct nurse aide training is authorized
as a matter of law.

As a matter of law, loss of authority to conduct nurse aide training is mandatory where
aggregate civil money penalties exceed $5,000, or where there is a finding of care of a
substandard quality. 42 C.F.R. § 483.151(b)(2) and (3). Both of these criteria are met in
this case. Petitioner has made no argument to challenge CMS’s determination.

/s/
Steven T. Kessel
Administrative Law Judge


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

Glenda Gail Feuge
(O.I. No. 6-10-40652-9),

Petitioner
v.
The Inspector General.
Docket No. C-11-209
Decision No. CR2381
Date: June 6, 2011
DECISION

Petitioner, Glenda Gail Feuge, asks review of the Inspector General’s (I.G.’s)
determination to exclude her for five years from participation in the Medicare, Medicaid,
and all federal health care programs under section 1128(a)(4) of the Social Security Act
(Act). For the reasons discussed below, I find that the I.G. is authorized to exclude
Petitioner, and that statute mandates a minimum five-year exclusion.

I. Background

Petitioner is a certified medication nurse aide in the State of Texas, who pled guilty in
state court to felony prescription fraud. I.G. Exs. 2,5. The court accepted the plea,
sentenced her to two years probation, and ordered her to pay a $500 fine and costs. I.G.
Ex. 2.

In a letter dated December 30, 2010, the I.G. notified Petitioner that she was excluded
from participation in Medicare, Medicaid, and all federal health care programs for a
period of five years, because she had been convicted of a felony related to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance. The
letter explained that section 1128(a)(4) of the Act authorizes the exclusion. I.G. Ex. 1.
Petitioner timely appealed. Each party has submitted an initial brief (1.G. Br.; P. Br.).'
The I.G. submitted six exhibits (I.G. Exs. 1-6), and Petitioner submitted what we have
determined to be seven exhibits (P. Exs. 1-7).” The I.G. submitted a reply brief (I.G.
Reply).

' The LG. initially filed a brief that identified someone other than Glenda Gail Feuge as
Petitioner. This was obviously in error, and the I.G. substituted a revised brief that
correctly identified the petitioner. Petitioner sent her brief and submissions to the LG.,
but not to this office. The I.G. subsequently forwarded copies of the submissions to us.

> Petitioner did not mark her exhibits in accordance with my order and Civil Remedies
Division procedures. Rather than returning the submissions to Petitioner, we have
marked the documents as follows:

« P.Ex. 1 is a one-page statement from the Gillespie County Community
Supervision and Corrections Department dated December 29, 2010;

« P.Ex. 2 is a one-page statement from Rex Dickerson, D.C. dated June 4, 2010;

« P.Ex. 3 consists of five pages of documents from the Hill Country Community
MHMR Center Substance Abuse Services — a Certificate of Achievement dated
December 15, 2010 (page 1); a discharge plan dated November 22, 2010 (pages
2-4); and a referral sheet from the Hill Country Community MHMR Center signed
May 20, 2010 (page 5);

+ P.Ex. 4 consists of eight pages of documents from the 216" Judicial District

Community Supervision & Corrections Department — a checklist of requirements

(page 1); instructions for community service dated May 20, 2010 (page 2);

Payment Policy signed May 20, 2010 (page 3); Explanation of Probation signed

May 20, 2010 (page 4); Consent of Disclosure and Authority to Release

Information signed May 20, 2010 (page 5); Certification of Explanation of Terms

and Conditions of Probation signed May 20, 2010 (page 6); Statement of

Agreement signed May 20, 2010 (page 7), and Civil Rights and Gun Control Act

signed May 20, 2010 (page 8);

« P.Ex. 5 is the first page of the district court’s judgment (see I.G. Ex. 2 at 1);

« P.Ex. 6 are three statements made by Petitioner dated December 15, 2010 (pages
1-2), January 3, 2011 (page 3), and February 23, 2011 (page 4);

« P.Ex.7 is a one-page Certificate of Completion of the Texas Drug Offender
Education Program dated February 2, 2011.
In the absence of an objection, I admit into evidence I.G. Exs. 1-6 and P. Exs 1-7.

I directed the parties to indicate in their briefs whether an in-person hearing is necessary
and, if so, to “describe the testimony it wishes to present, the names of the witnesses it
would call, and a summary of each witnesses’ proposed testimony.” I specifically
directed the parties to explain why the testimony would be relevant. Order and Schedule
for Filing Briefs and Documentary Evidence, Attachment 1 (Informal Brief of Petitioner
§ ILD and Attachment 2 (Informal Brief of I.G. § II) (February 4, 2011). The LG.
indicates that an in-person hearing is not necessary. Petitioner, on the other hand,
contends that an in-person hearing is necessary, lists the witnesses she intends to call, and
explains the purpose of their testimony. Petitioner’s listed witnesses would: explain that,
under Texas law, she has not been convicted of a felony; show that she has physical
limitations; and show that she has completed the requirements of her probation, including
a substance abuse program. P. Br. at 3.

Whether Petitioner was convicted of a felony within the meaning of section 1128(a)(4) is
a question of law, not fact. Her physical limitations and her having satisfied the
requirements of her probation (which no one disputes) are simply irrelevant to the issue
before me. By regulation, I must exclude irrelevant or immaterial evidence. 42 C.F.R.

§ 1005.17(c). Iam therefore obligated to exclude the testimony that Petitioner proposes,
so an in-person hearing would serve no purpose.

IL. Issues

The sole issue before me is whether Petitioner was convicted of a felony relating to the
unlawful manufacture, distribution, prescription, or dispensing of a controlled substance,
within the meaning of section 1128(a)(4) of the Act, thus providing a basis for her
exclusion. Because an exclusion under section 1128(a)(4) must be for a minimum of five
years, the reasonableness of the length of the exclusion is not an issue.

III. Discussion

Petitioner must be excluded from program participation because she was
convicted of a felony relating to the unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance, within the meaning of
section 1128(a)(4) of the Act. 3

Section 1128(a)(4) of the Act requires that any individual or entity convicted of a felony
criminal offense “relating to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance” be excluded from federal health care programs.

* I make this one finding of fact/conclusion of law.
In this case, Petitioner was a certified medication aide at a nursing home. She ordered the
narcotic, Hydrocodone, from a pharmacy, ostensibly for facility residents. She used the
names of residents who had not been prescribed the Hydrocodone, and she then diverted
the drugs from the facility for her own personal use. I.G. Ex. 6 at 2. She was charged
with, and pled guilty to, prescription fraud — she “intentionally and knowingly
possess[ed] a controlled substance, to-wit Hydrocodone, by misrepresentation, fraud,
forgery, deception and subterfuge, through the use of a fraudulent prescription form.”
1.G. Ex. 2 at 1-6. Prescription fraud, section 481.129(a) of the Texas Health and Safety
Code, is a second degree felony if the drug involved is listed under Schedule I or II of the
Texas Schedules of Controlled Substances. I.G. Ex. 3 at 2. Hydrocodone is listed under
Schedule II. I.G. Ex. 4 at 7.

Thus, the court documents establish that Petitioner was convicted of a felony relating to
the unlawful prescription or dispensing of a controlled substance, and she must be
excluded from program participation.

Petitioner, however, maintains that she was not convicted of a felony because she
participated in a deferred adjudication program. The Departmental Appeals Board
(Board) has consistently rejected this, and similar arguments, and characterizes as “well
established” the principle that the term “conviction” includes “diverted, deferred and
expunged convictions regardless of whether state law treats such actions as a conviction.”
Henry L. Gupton, DAB No. 2058 at 8 (2007), and Ruling on Reconsideration, Ruling No.
2007-1(2007), aff'd, Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008).

In Gupton, the Board explained why, in these I.G. proceedings, the federal definition of
“conviction” must apply. See Act § 1128(i). That definition differs from many state
criminal law definitions. For exclusion purposes, Congress deliberately defined
“conviction” broadly to ensure that exclusions would not hinge on the state criminal
justice policies. Quoting the legislative history, the Board explained:

The rationale for the different meanings of “conviction” for state
criminal law versus federal exclusion law purposes follows from the
distinct goals involved. The goals of criminal law generally involve
punishment and rehabilitation of the offender, possibly deterrence of
future misconduct by the same or other persons, and various public
policy goals. [footnote omitted] Exclusions imposed by the L.G., by
contrast, are civil sanctions, designed to protect the beneficiaries of
health care programs and the federal fisc, and are thus remedial in
nature rather than primarily punitive or deterrent... . In the effort to
protect both beneficiaries and funds, Congress could logically
conclude that it was better to exclude providers whose involvement
in the criminal system raised serious concerns about their integrity
and trustworthiness, even if they were not subjected to criminal
sanctions for reasons of state policy.

Gupton, DAB No. 2058 at 7-8. I agree with the Board’s analysis and conclude that
Petitioner was convicted within the meaning of the Act.

IV. Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid and all federal health care programs, and the statute mandates a
five-year minimum period of exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Lake Country Nursing Center,
(CCN: 37-5310),

Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-988
Decision No. CR2380

Date: June 6, 2011

DECISION

The Centers for Medicare and Medicaid Services (CMS) has failed to show that
Petitioner, Lake County Nursing Center, was not in substantial compliance with program
participation requirements based on the survey completed in July 2010. Accordingly, for
the July 2010 survey, CMS has not shown a basis for an enforcement remedy and no
remedy is reasonable based on that survey. However, Petitioner was not in substantial
compliance with program participation requirements based on the September 2010 survey
and a $50 per-day civil money penalty (CMP) from September 8, 2010 through
September 14, 2010 is required as a matter of law.

I. Background

On July 18, 2010, a survey was concluded to determine whether Petitioner was
complying with federal participation requirements. As a result of the July 18, 2010
survey, Petitioner was cited with four deficiencies: F-272, scope/severity (s/s) level D,
42 C.F.R. § 483.20(b), Comprehensive Assessments; F-309, s/s level J, 42 C.F.R.

§ 483.25, Quality of Care; F-441, s/s level D, 42 C.F.R. § 483.65, Infection Control; and
F-514, s/s level E, 42 C.F.R. § 483.75(1)(1), Clinical Records. Another survey was
conducted on September 8, 2010 and Petitioner was cited with one deficiency for F-309,
s/s level D, 42 C.F.R. § 483.25, Quality of Care.

By letter dated July 20, 2010, CMS notified Petitioner that it would be imposing the
following remedies: termination of its provider agreement unless substantial compliance
was achieved by December 18, 2010, a CMP in the amount of $3,050 per-day for June 15
and 16, 2010, a per-day CMP in the amount of $200 beginning June 17, 2010, a denial of
payment for new admissions (DPNA) beginning August 4, 2010, and a withdrawal of
approval for Nurse Aide training and Competency Evaluation program (NATCEP) and
Competency Evaluation Program (CEP).

By letter date October 4, 2010, CMS notified Petitioner that it was imposing a per
instance civil money penalty (PICMP) of $10,000 for the instance on March 18, 2010!
described as deficiency F-309, s/s level J, and a CMP of $50 per-day beginning on
September 8, 2010. In addition, CMS notified Petitioner that it was rescinding the $3050
per-day CMP for June 15 and 16, 2010 and the $200 per-day CMP beginning June 17,
2010.

By letter dated October 21, 2010, CMS rescinded the termination of Petitioner’s provider
agreement and lifted the DPNA as of September 15, 2010. The per-day CMP of $50 was
determined to remain in effect from September 8 through 14, 2010, for a total of $350.
The combined total of the PICMP and the $50 per-day CMP is $10,350.

By letter dated September 15, 2010, Petitioner timely requested a hearing. By motion
dated December 8, 2010, Petitioner stated that an in-person hearing would not be
necessary and requested a decision based on written submissions. Accordingly, I set a
briefing schedule. CMS submitted 16 exhibits (CMS Exs. 1-16) on December 21, 2010.
CMS filed its initial brief (CMS Br.) on January 21, 2011 accompanied by four
declarations. I am labeling the declaration of Melissa Lowe concerning the September 8,
2010 survey as CMS Ex. 17, the declaration of Melissa Lowe concerning the July 18,
2010 survey as CMS Ex. 18, the declaration of Rhonda McComas as CMS Ex. 19, and
the declaration of Susan LeBlanc as CMS Ex. 20. Petitioner submitted 10 exhibits (P.
Exs. 1-10) on December 20, 2010 and filed its initial brief (P. BR.) on January 19, 2011.
On February 16, 2011 Petitioner filed its Response Brief (P. Response) accompanied by
three additional exhibits marked as rebuttal exhibits (P. Rebuttal Exs. 11-13) and three
declarations. I am labeling the declaration of Julieta Laguna as P. Ex. 14, the declaration
of Martha Greer as P. Ex. 15, and the declaration of Debra Franklin as P. Ex. 16. By
electronic transmission on February 25, 2011, CMS stated that it would not be filing a
response brief. I admit into evidence CMS Exs. 1-20 and P. Exs. 1-10, P. Rebuttal Exs.
11-13, and P. Exs. 14-16.

' The October 4, 2010 notice letter incorrectly stated that the PICMP was based on
events that occurred on June 18, 2010. The events at issue occurred on March 18, 2010.
IL. Issues, Applicable Law, Findings of Fact and Conclusions of Law
A. Issues
The issues in this case are:

1. Whether Petitioner failed to comply with one or more Medicare participation
requirements; and

2. Whether the remedies imposed are reasonable.
B. Applicable Law and Regulations

Petitioner is considered a long-term care facility under the Social Security Act (Act) and
regulations promulgated by the Secretary of Health and Human Services (Secretary).

The statutory requirements for participation by a long-term care facility are found at
sections 1819 and 1919 of the Act, and at 42 C.F.R. Part 483. Sections 1819 and 1919 of
the Act vest the Secretary with authority to impose civil money penalties (CMPs) and
other remedies against a long-term care facility for failure to comply substantially with
participation requirements.

Pursuant to the Act, the Secretary has delegated to CMS the authority to impose various
remedies against a long-term care facility that is not complying substantially with federal
participation requirements. Facilities which participate in Medicare may be surveyed on
behalf of CMS by State survey agencies in order to ascertain whether the facilities are
complying with participation requirements. 42 C.F.R. §§ 488.10-488.28; 42 C.F.R.

§§ 488.300-488.335.

The regulations specify that a CMP 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
CMP, $3050 per-day to $10,000 per-day, is reserved for deficiencies that pose immediate
jeopardy to a facility’s residents and, in some circumstances, for repeated deficiencies.
42 C.F.R. §§ 488.438(a)(1)(i), (d)(2). The lower range of CMP, from $50 per-day to
$3000 per-day is reserved for deficiencies that do not constitute immediate jeopardy, but
either cause actual harm to residents, or cause no actual harm, but have the potential for
causing more than minimal harm. There is only a single range of $1000 to $10,000 for a
PICMP. 42 C.F.R. §§ 488.408; 488.438.

The regulations define the term “substantial compliance” to mean “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. Non-compliance at the level of immediate jeopardy is defined as
“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.” Id.

A state agency may be required to withdraw a facility’s approval to conduct a NATCEP.
Pursuant to sections 1819(b)(5) and 1919(b)(5) of the Act, skilled nursing facilites
(SNFs) and nursing facilites (NFs) may only use nurse aides who have taken a training
and competency evaluation program. 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 established by the Secretary and a process for reviewing and
reapproving those programs using criteria set by the Secretary. Pursuant to sections
1819(f)(2) and 1919(f)(2) the Secretary was directed to develop requirements for
approval of NATCEPs and the process for review of those programs. 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 skilled nursing or nursing facility that: (1) has been 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) has been assessed a CMP of not less than $5000; or (3)
that has been 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” occurs 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 with no actual harm. 42
CR. § 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. Anesthesiologists
Affiliated, et al, DAB CR-65 (1990), aff'd, 941 F.2d 678 (8th Cir. 1991); Emerald Oaks,
DAB No. 1800, at 11 (2001); Beechwood Sanitarium, DAB No. 1906 (2004); Cal Turner
Extended Care, DAB No. 2030 (2006), The Residence at Salem Woods, DAB No. 2052
(2006). A facility has a right to appeal a “certification of noncompliance leading to an
enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also 42 C.F.R. §§ 488.330(e) and
498.3. However, the choice of remedies by CMS 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 found by CMS ifa
successful challenge would affect the range of the CMP that could be imposed by CMS
or impact the facility’s authority to conduct a nurse aide training and competency
evaluation program. 42 C.F.R. §§ 498.3(b)(14) and (d)(10)(i). The CMS determination
as to the level of noncompliance “must be upheld unless it is clearly erroneous” (42
C.F.R. § 498.60(c)(2)), including the finding of immediate jeopardy. Woodstock Care
Center, DAB No. 1726, at 9, 38 (2000), aff'd, Woodstock Care Center v. Thompson, 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). Review of a CMP by
an ALJ 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 the 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. See
Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation
Center v. United States Department of Health and Human Services, No. 98-3789, 1999
WL 34813783 (D.N.J. May 13, 1999); Cross Creek Health Care Center, DAB No. 1665
(1998); Emerald Oaks, DAB No. 1800; Batavia Nursing and Convalescent Center, DAB
No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Center v. Thompson, 129 F.
App’x. 181 (6th Cir. 2005); Batavia Nursing and Convalescent Inn, DAB No. 1911
(2004).

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

I make findings of fact and conclusions of law to support this decision. I set them forth
below as separate headings in italics and bold type, and then discuss each in detail.

1. Petitioner was in substantial compliance with participation
requirements based on the July 18, 2010 survey.

The PICMP imposed as a result of the July 18, 2010 survey is based on the events of
March 18, 2010 involving Resident 2 (R-2), and cited under the deficiency noted at
F-309, 42 C.F.R. § 483.25, Quality of Care.

The regulation at 42 C.F.R. § 483.25 provides:

Each resident must receive and the facility must provide the necessary care and
services to attain or maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the comprehensive assessment and
plan of care.
R-2 was admitted to Petitioner’s facility with various diagnoses including diabetes
mellitus, anxiety, and airway obstruction. CMS Ex. 2, at 5; CMS Ex. 7, at 5-6. The
March 15, 2010 care plan for R-2 states that R-2’s blood sugar levels should be within
acceptable limits and to report any of the following signs or symptoms to the charge
nurse immediately: cold, clammy, change in level of consciousness, hypoglycemia or
yperglycemia. /d.; P. Ex. 3, at 1. The March 2010 monthly physician orders were for
“Glutose 15 PRN [as needed] per hypoglycemia, please read policy & procedure pm,
Glucagon | mg IM PRN [by intramuscular injection, as needed] per hypoglycemia, read
policy & procedure.” CMS Ex. 2, at 6.

The events that form the basis of this deficiency took place on March 18, 2010. At 4:00
p.m., R-2’s blood sugar was recorded to be 147 mg/dl. P. Rebuttal Ex. 11, at 1. Pursuant
to R-2’s physician’s order, Humulin N, a long acting insulin,” was administered. Jd. at 2.
At 5:00 p.m., a nurse’s note documented that R-2 was very agitated and was putting her
ands on her forehead. A narcotic pain medication, Lortab, was given by crushing it and
mixing it into pudding. R-2 ate the pudding-Lortab mixture and took 120 cc. of water
and was “‘self-mobile” in her wheelchair. At 6:00 p.m., R-2 was still “self-mobile” in her
wheelchair and drank 120 cc. of orange juice followed by 120 cc. of water. CMS Ex. 2,
at 6; CMS Ex. 7, at 11.

At 10:00 p.m., R-2 was found in her recliner. At that time, she was diaphoretic and she
slightly opened her eyes when verbally and tactilely stimulated. R-2’s blood glucose
level was 41 mg/dl. Orange juice in the amount of 240 cc. was given orally by syringe
which R-2 sluggishly swallowed. One tube of glutose was given. R-2’s blood sugar
level was 39 mg/dl at 10:10 p.m., and 36 mg/dl at 10:20 p.m. The physician was notified
at 10:30 p.m.* The physician’s order was to give 1 amp of 50 percent dextrose by IV
push, start an IV, monitor blood sugar level in 15 minutes, then in 30 minutes, and
transfer to the emergency room for further evaluation and treatment. At 10:45 p.m., R-
2’s blood sugar was 225 mg/dl. At 10:45 p.m., R-2 became short of breath with circum-
oral cyanosis. Oxygen was given, the nursing staff performed oral pharyngeal
suctioning, an ambulance was called, and R-2 was transferred to the emergency room of
the local hospital. P. Ex. 4; CMS Ex. 2, at 6; CMS Ex. 7, at 11-12; CMS Ex. 19.

The hospital emergency room admitting diagnosis was respiratory distress after a sudden
onset of a hypoglycemic episode and probable aspiration. CMS Ex. 2, at 7; CMS Ex. 7,
at 15-21; CMS Ex. 19. On March 21, 2010, R-2 died. The hospital summary of the
episode documented aspiration pneumonitis and respiratory distress. Id.

> Humulin N is a long-acting insulin with onset usually between four to eight hours and
at most 10 to 30 hours. P. Response at 2; P. Rebuttal Ex. 12, at 3.

* R-2’s physician could not be contacted and another physician issued the order for R-2.
P. Ex. 7, 8.
CMS argues that the facility failed to follow its own protocol for diabetic residents with
severe hypoglycemic symptoms. The facility’s protocol required that the staff provide
residents experiencing severe hypoglycemia with 1 amp of 50 percent dextrose IV or
glucagon, contact the physician, monitor vital signs frequently and follow up every 15
minutes until blood sugar levels became normal. CMS Ex. 9, at 1. The facility’s
protocol defines severe hypoglycemia as a blood sugar level of below 40 mg/dl. Jd.
CMS accepted the facility’s policies as evidence of the standard of care its staff is to
provide and also evidence of the standard of care in the medical community. CMS Br. at
9; Life Care at Hilton Head, DAB CR1908 (2009). According to the survey, the staff
should have assessed R-2 for hypoglycemia at 5:00 p.m. when she was agitated and
putting her hands to her forehead. Instead, at 5:00 p.m. the facility staff determined that
R-2 was suffering pain gave her a narcotic pain medication, but she was not assessed for
ypoglycemia. CMS argues that Petitioner failed to provide R-2 with the care and
services required by the regulations since the Resident was experiencing hypoglycemia
symptoms for a five hour period from 5:00 p.m. to 10:00 p.m. CMS Br. at 10.

Petitioner argues that at 10:00 p.m., the nurse assessed R-2’s blood sugar level at 41
mg/dl and immediately followed its policy for moderate hypoglycemia which it defines
as blood sugar levels of between 40-60 mg/dl. P. Ex. 6, at 2. Petitioner’s policy and
procedures for moderate hypoglycemia directs staff to give the resident either eight
ounces of orange juice or two tubes of Glutose. /d. The nurse administered 240 cc. of
orange juice, which is equivalent to just over eight ounces of orange juice. In addition
one tube of Glutose was given to R-2. P. Ex. 4; P. Ex. 6, at 2. Petitioner claims that,
during the survey, the surveyors were mistakenly given only the last page of three pages
of the facility’s policy and procedures for hypoglycemia. P. Ex. 10; P. Br. at 4. The last
page is for treating residents with severe hypoglycemia, blood sugar levels below 40
mg/dl. Petitioner argues that at 10 p.m. R-2’s blood sugar level was 41 mg/dl and
therefore the nurse properly followed the procedures for moderate hypoglycemia, blood
sugar levels between 40 to 60 mg/dl. Petitioner contends that its nursing staff acted in
compliance with its policy and procedure. Petitioner contends that when R-2 did not
improve after receiving the orange juice and Glutose, the nurse contacted R-2’s physician
and new orders were obtained for the Resident which were strictly followed. R-2’s
treating physician provided a letter in which he stated that the physician’s orders on file
for the Resident, although given by a physician who was filling in for him, were
complied with to his satisfaction. P. Ex. 8. Petitioner argues that R-2’s shortness of
breath was due to R-2’s documented problems with asthma. Petitioner therefore argues
that it was in compliance with 42 C.F.R. § 483.25.

According to Petitioner, R-2 had a urinary tract infection (UTI) which was being treated
with Macrobid, an antibiotic. Macrobid has side effects including abdominal pain,
asthmatic attacks, and pulmonary sensitivity reaction. P. Ex. 14. In addition, a UTI can
itself cause pain and agitation. Jd. According to the declaration of the charge nurse,
Julieta Laguna, R-2’s agitation and her activity in placing her hands on her forehead at
5:00 p.m. were signs of pain and not low blood sugar. P. Ex. 14. Nurse Laguna
concluded that R-2 was experiencing pain at 5:00 p.m. based on the length of time she
ad been caring for the Resident. /d. Significantly, R-2 could not verbalize the cause of
er agitation at 5:00 p.m. because of her dementia. Based on her assessment of the
situation — including her acquaintance with the Resident’s history at the facility —
Nurse Laguna administered pain medication. Shortly afterward, R-2’s agitation ceased,
which supports the view that Nurse Laguna was correct — or at the very least reasonable
— in determining that at 5:00 p.m. R-2 was agitated by pain rather than by
rypoglycemia.

Further, Petitioner points out that had R-2 been suffering hypoglycemia at 5:00 p.m., she
would not have been “self-mobile” in her wheelchair at 6:00 p.m., when Nurse Laguna
administered 120 cc. of orange juice and 120 cc. of water to R-2 to avoid dehydration,
because the Resident had not eaten all of her dinner. At 6:45 p.m., R-2 received wound
care. P. Ex. 15. At 7:00 p.m., a Certified Nurse Assistant (CNA) provided R-2 witha
snack consisting of animal crackers and ice cream approved for diabetics. P. Ex. 16. R-2
was observed to consume her entire snack. Jd. At 8:00 p.m., she received a cool
compress for her eyes. P. Rebuttal Ex. 13; P. Ex. 15. Her room was next door to the
medication and medical supply room, and as a consequence, R-2 was observed a number
of times during the evening of March 18, 2010 by a staff member who was going to and
from that supply room. P. Ex. 16. Petitioner supplied declarations from the staff member
who provided the wound care at 6:45 p.m., the staff member who fed R-2 her snack at
7:00 p.m., the staff member who provided the cool compress for R-2’s eyes at 8:00 p.m.,
and Nurse Laguna. All the staff members declared that prior to 10:00 p.m. R-2 exhibited
no signs of hypoglycemia. P. Exs. 14; 15; 16.

Inexplicably, but apparently as a matter of tactical choice, CMS failed to file any
response to Petitioner’s initial brief. This is troubling for many reasons, but it is
especially disturbing because CMS’s prima facie case as set out in its initial brief
collapsed as soon as Petitioner documented that the quality of care citation was based on
the surveyor’s review of incomplete records. As I have noted above, the surveyors were
only given the facility’s policies and procedures for severe hypoglycemia and not its
policies and procedures for moderate hypoglycemia. Petitioner presented evidence, that
CMS has not offered to refute, that R-2 was suffering from a UTI and receiving an
antibiotic, the side effects of which might well include abdominal pain, asthma attacks,
and respiratory problems. Petitioner offered an alternate explanation for R-2’s agitation
at 5:00 p.m., an explanation that CMS has not attempted to refute or challenge.

Further, CMS failed to address questions raised by all the care R-2 did receive after 5:00
p.m. There is no documentation that R-2 was exhibiting any signs or symptoms of
hypoglycemia at any time prior to 10:00 p.m. if one assumes arguendo that her agitation
at 5:00 p.m. was caused by pain. This critical assumption was not refuted by CMS, and it
is perfectly consistent with the evidence before me. Nor has CMS discussed Petitioner’s
suggestion that the Resident could not have been “self-mobile” in a wheelchair at 6:00
p.m. if she had been hypoglycemic and untreated at 5:00 p.m. Petitioner presented
declarations from three staff members, which CMS did not attempt to refute, that the
Resident was not exhibiting signs and symptoms of low blood sugar prior to 10:00 p.m.
(P. Exs. 14, 15, 16). These staff members provided care to R-2 during the time in
question. Petitioner has presented evidence, unrefuted by CMS on this record, that its
staff complied with its own policies and procedures and complied with

R-2’s physician’s orders. P. Exs. 4, 9, 10. I can see no reason — and CMS has not
suggested one — to doubt the credibility or reliability of the representations made by the
three staff members (P. Exs. 4, 9, and 10) and supplemented by the declarations attached
to its response brief (P. Exs. 14, 15, and 16). R-2’s treating physician stated that the
physician’s orders on file for R-2, although given by a physician standing in for the
treating physician, were complied with to his satisfaction by the facility staff. P. Ex. 8.
These exhibits effectively refute CMS’s prima facie case, and for whatever reason, CMS
as chosen to leave them unchallenged and uncontradicted. Considering CMS’s lack of
response to Petitioner’s initial and response briefs, I am compelled to find that CMS has
not established its prima facie case of a deficiency at an immediate jeopardy level, or of
any deficiency whatsoever, under the quality of care regulation during the July survey.

2. Petitioner was not in compliance with participation requirements
based on the survey of September 8, 2010.

A complaint survey was conducted on September 8, 2010. The surveyors determined
that Petitioner was not in compliance with one deficiency, F-309, s/s D, Quality of Care,
involving Resident 8 (R-8) during the September 8, 2010 survey. According to CMS,
Petitioner failed to ensure that R-8’s condition was observed and documented following a
sliding scale insulin administration. Further, Petitioner failed to document R-8’s blood
pressures. CMS Ex. 10, at 1-3.

CMS conceded in its October 8, 2010 Report of Readiness that the only deficiency before
me was F-309 from the July survey, discussed above. However, subsequently, by letter
dated October 21, 2010, CMS imposed a $50 per-day CMP from September 8, 2010
through September 14, 2010, totaling $350.

CMS discussed the September survey when it filed its initial brief on January 21, 2011.
Petitioner failed to discuss the September 2010 survey when it filed its initial brief on
January 19, 2011, possibly relying on CMS’s October 8, 2010 Report of Readiness.
However, once Petitioner received CMS’s initial brief, Petitioner was on notice that
CMS, based on its subsequent notice letter of October 21, 2010, had put the September
survey also at issue in this case. Petitioner had an opportunity to contest the September 8,
2010 survey when it filed its Response brief. Petitioner failed to do so and was
completely silent concerning the September 8, 2010 survey. CMS established a prima
10

facie case concerning the September 8, 2010 survey. Petitioner failed to contest the basis
for this deficiency or the duration of the CMP imposed. The minimum amount of a CMP
is $50 for each day of non-compliance. I do not have authority to reduce a penalty to
zero. 42 C.F.R. § 488.438. Therefore, a $50 per-day CMP from September 8 through
September 14, 2010 is reasonable as a matter of law.

III. Conclusion

CMS has shown no basis for the PICMP enforcement remedy assessed as a result of the
July 2010 survey and therefore no remedy is authorized or reasonable. However,
Petitioner was not in substantial compliance with program participation requirements
based on the September 2010 survey and a $50 per-day CMP from September 8, 2010
through September 14, 2010, totaling $350, is required as a matter of law.

/s/
Richard J. Smith
Administrative Law Judge