Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Grace Nursing Home
(CCN: 19-5258),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-09-623
Decision No. CR2250

Date: September 24, 2010

DECISION

Petitioner, Grace Nursing Home (Petitioner), challenges the decision of the Centers for
Medicare and Medicaid Services (CMS) that it was not in substantial compliance with
program participation requirements and CMS’s imposition of remedies, including a per
instance civil money penalty (PICMP) totaling $10,000 and loss of Petitioner’s ability to
operate a nurse aide training and competency evaluation program (NATCEP). For the
reasons discussed below, | affirm CMS's determination and the imposed remedies.

I. Background

On May 1, 2009, the Louisiana Department of Health and Hospitals (state survey agency)
completed an annual survey at Petitioner’s Clinton, Louisiana facility. CMS notified
Petitioner by letter dated June 11, 2009 that Petitioner was determined not to be in
substantial compliance with certain federal requirements governing participation in the
Medicare and Medicaid programs for long term care facilities. CMS (Exhibit) Ex. 1, at
1-2. Specifically, CMS advised that it agreed with the findings of the state survey agency
that Petitioner was not in substantial compliance with the requirements of F-309, 42
C.F.R. § 483.25 (2008) and F-490, 42 C.F.R. § 483.75 (2008) and that these particular
deficiencies constituted immediate jeopardy to the health and safety of the residents at
Petitioner’s facility. /d. Petitioner was also cited for several other deficiencies at the
non-immediate jeopardy level. Jd. CMS stated that it was imposing several enforcement
remedies including the termination of Petitioner’s Medicare provider agreement, a
PICMP in the amount of $10,000 for the violation of F-309, 42 C.F.R. § 483.25, denial of
payment for all new Medicare and Medicaid admissions (DPNA), and the loss of
approval of Petitioner’s NATCEP. Jd. By letter dated July 9, 2009, CMS advised
Petitioner that it had achieved substantial compliance with the requirements for Medicare
participation and certain enforcement remedies had been rescinded. CMS Ex. 1, at 4-5.
However, the imposed PICMP and the loss of the NATCEP remained in effect.

Petitioner requested a hearing by letter dated July 29, 2009.

I held the hearing in New Orleans, Louisiana from January 11-12, 2010. At the hearing, I
admitted CMS Exs. 1-16 and Petitioner’s Exhibits (P. Exs.) 1-24. A transcript of the
earing was prepared (Tr.). The parties also submitted prehearing briefs (CMS or P.
Prehearing Br.) CMS submitted a post-hearing brief (CMS Br.), and Petitioner submitted
a closing argument brief (P. Br.) and a response to CMS’s closing argument (P. Rep. Br.).

IL. Issues

1. Whether Petitioner was out of substantial compliance with Medicare
participation requirements.

2. Whether CMS’s determination as to the immediate jeopardy level of
noncompliance was clearly erroneous.

3. Whether the enforcement remedies imposed by CMS are reasonable.
II. Applicable Law

The statutory and regulatory requirements for Medicare participation by a long-term care
facility are found at sections 1819 (skilled nursing facility or SNF) and 1919 (nursing
facility or NF) of the Social Security Act (Act), and at 42 C.F.R. Part 483. Section
1819(h)(2) of the Act vests the Secretary of the Department of Health and Human
Services (Secretary) with authority to impose enforcement remedies against a SNF for
failure to comply substantially with federal participation requirements established by
sections 1819(b), (c), and (d) of the Act (section 1919(h)(2) of the Act gives similar
enforcement authority to the states). Included among these remedies are: termination of
a noncompliant facility’s participation in Medicare; imposition of a DPNA; CMPs; and
appointment of temporary management. Act § 1819(h)(2)(B). The Secretary has
delegated authority to CMS and the states to impose remedies against a long-term care
facility that is not complying substantially with federal participation requirements.
“Substantial compliance means a level of compliance with the requirements of
participation such that any identified deficiencies pose no greater risk to resident health
or safety than the potential for causing minimal harm.” 42 C.F.R. § 488.301 (emphasis in
original). A deficiency is a violation of a participation requirement established by
sections 1819(b), (c), and (d) of the Act, or the Secretary’s regulations at 42 C.F.R. Part
483, Subpart B. Facilities that participate in Medicare may be surveyed on behalf of
CMS by state survey agencies to determine whether the facilities are complying with
federal participation requirements. 42 C.F.R. §§ 488.10-.28, 488.300-335.

The regulations specify the enforcement remedies that CMS may impose if a facility is
not in substantial compliance with Medicare requirements, including imposition of
CMPs. 42 C.F.R. § 488.406. CMS may impose a CMP for each day a facility is not in
substantial compliance, or for each instance of noncompliance. The regulation provides
that a CMP that is imposed against a facility on a per day basis will fall into one of two
ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of a CMP, from
$3,050 per day to $10,000 per day, is reserved for deficiencies that pose immediate
jeopardy to a facility’s residents and, in some circumstances, for repeated deficiencies.
42 C.F.R. § 488.438(a)(1)(i), (d)(2). “Immediate jeopardy means a situation in which the
provider’s noncompliance with one or more requirements of participation has caused, or
is likely to cause, serious injury, harm, impairment, or death to a resident.” 42 C.F.R.

§ 488.301 (emphasis in original). CMS is authorized to impose a PICMP from $1,000 to
$10,000, whether or not an immediate jeopardy situation is identified. 42 C.F.R. §
488.438(a)(2).

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

§ 1128(A)(c)(2); Act § 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, DAB CR65 (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 Pavilion,
DAB No. 2030 (2006); Residence at Salem Woods, DAB No. 2052 (2006). A facility has
a right to appeal a “certification of noncompliance leading to an enforcement remedy.”
See 42 C.F.R. § 488.408(g)(1); see also 42 C.F.R. §§ 488.330(e), 498.3. However,
CMS's choice of remedies, or the factors CMS considered when choosing remedies, are
not subject to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the
scope and severity level of noncompliance that CMS finds, if a successful challenge
would affect the range of the CMP that CMS could impose or impact the facility’s
authority to conduct a NATCEP. 42 C.F.R. §§ 498.3(b)(14), 498.3(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 Ctr. v. Thompson, 363 F.3d 583 (6th Cir. 2003). The Departmental
Appeals Board (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. 1750 (2000).
ALJ review of a CMP is subject to 42 C.F.R. § 488.438(e).

IV. Burden of Proof

As an evidentiary matter, CMS must set forth a prima facie case that a facility is not in
substantial compliance with Medicare participation requirements. Petitioner then has the
burden of coming forward with evidence sufficient to establish the elements of any
affirmative argument or defense, and bears the ultimate burden of persuasion. To prevail,
Petitioner must prove, by a preponderance of the evidence that it was in substantial
compliance with relevant statutory and regulatory provisions. See Hillman Rehab.
Center, DAB No. 1611 (1997), aff'd, 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 & Convalescent Center, DAB No. 1904 (2004), aff'd, Batavia
Nursing & Convalescent Center v. Thompson, 129 F. Appendix 181 (6th Cir. 2005);
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004).

V. Findings of Facts, Conclusions of Law, and Discussion

I make findings of fact and conclusions of law to support my decision in this case. I set
forth each finding below, in italics, as a separate heading. I discuss each finding in detail.
I do not, however, make a finding on every deficiency cited in the statements of
deficiencies. I discuss only those examples I find to be necessary to support the
noncompliance and the remedy imposed. See Community Skilled Nursing Center, DAB
No. 1987 (2005); Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004);
Beechwood Sanitarium, DAB No. 1824, at 19-22 (2002).

L. Petitioner was out of compliance with the participation requirement at 42 C.F.R.
§ 483.25 (F Tag 309) as of the survey completed on May 1, 2009.

This regulation requires that each resident of a facility must receive, and the facility must
provide, the necessary care and services to attain or maintain a resident's highest
practicable physical, mental, and psychosocial well-being, in accordance with the
resident's comprehensive assessment and plan of care. The State surveyor found that
Petitioner did not meet this requirement based on clinical record review, review of the
Petitioner’s policy and procedure manual, and interviews with Petitioner’s staff.
Specifically, the surveyor found that Petitioner failed to ensure that ordered PT
(Prothrombin Time)/ INR (International Normalized Ratio) testing was performed on a
resident on anticoagulant therapy with ordered PT/INR laboratory studies on specific
days of the week. I sustain the deficiency citation, as I explain below.

This case involves the care that Petitioner provided during the week of September 15,
2008 to September 19, 2008. The State Surveyor, Sandra Mizell, R.N. (Surveyor Mizell)
cited Petitioner for a violation of F-309, 42 C.F.R. § 483.25 “Quality of Care,” based on
Petitioner’s failure to ensure that PT/INR testing was performed on the days ordered for
one particular resident at Petitioner’s facility, Resident 1. CMS contends that Surveyor
Mizell reviewed the facility’s policy on orders for anticoagulants and determined that the
facility violated its own policy, which required orders for anticoagulants be prescribed
only with proper clinical and laboratory monitoring. CMS Br. at 6-8.

The May 1, 2009 statement of deficiencies asserts that Petitioner was out of compliance
with 42 C.F.R. § 483.25 at the level of immediate jeopardy! and recites that Petitioner:

“placed one of fourteen residents receiving Coumadin therapy (R1) in
immediate jeopardy when the ordered PT/INR studies were not drawn
for one week on Monday, Wednesday, and Friday. When the PT/INR
was drawn on the following Monday, the resident had critical lab values
and Coumadin Toxicity. The facility failed to:
a) ensure residents on Coumadin therapy did not develop Coumadin
Toxicity.
b) have a system in place to ensure PT/INR laboratory studies were obtained as
ordered.

' Scope and severity levels are used by CMS and a state when selecting remedies. The
scope and severity level is designated by an alpha character, A through L, selected by
CMS or the state agency from the scope and severity matrix published in section 7400E
of the State Operations Manual (SOM). See 42 C.F.R. § 488.408. A scope and severity
level of A, B, or C indicates a deficiency that presents no actual harm but has the
potential for minimal harm. Facilities with deficiencies of a level no greater than C
remain in substantial compliance. 42 C.F.R. § 488.301. A scope and severity level of D,
E, or F indicates a deficiency that presents no actual harm but has the potential for more
than minimal harm that does not amount to immediate jeopardy. A scope and severity
level of G, H, or I indicates a deficiency that involves actual harm that does not amount
to immediate jeopardy. Scope and severity levels J, K, and L are deficiencies that
constitute immediate jeopardy to resident health or safety. The matrix, which is based on
42 C.F.R. § 488.408, specifies which remedies are required and optional at each level
based upon the frequency of the deficiency, i.e., whether a deficiency is isolated, part of a
pattern, or widespread. Jd. The immediate jeopardy level deficiencies under review here
were found to be at a level J, which indicates that they are isolated.

c) follow, revise, and update the Care Plan related to anticoagulant therapy for the
resident.

CMS Ex. 2, at 16-17.
Petitioner’s Care of Resident 1

Resident 1 was admitted to Petitioner’s facility on September 10, 2008 with diagnoses
that included atrial fibrillation, respiratory insufficiency, congestive heart failure, chronic
obstructive pulmonary disease, lung edema, septicemia, coronary atherosclerotic vascular
disease, hypertension, and cardiomegaly. CMS Ex. 2, at 18. Resident 1 was prescribed
anticoagulant (blood thinning) medication including a daily dose of Coumadin. CMS Ex.
7, at 5-7; Tr. at 45. The admitting physician ordered that PT/INR lab studies be
performed every Monday, Wednesday, and Friday to monitor Resident 1’s Coumadin
therapy. Tr. at 45,51. When Resident 1 was admitted, she was on Coumadin therapy at
8 milligrams a day, a fairly large dose. Tr. at 50.

On September 22, 2008 PT/INR testing was performed on Resident 1. Resident 1’s
Protime (PT) level was 47.5, which is very high and far above the normal range of 11 to
13.5. Tr. at 55-56. Ten days previously, on the date of Resident 1’s last recorded
PT/INR test, her level had been recorded as 12.3, within the normal range. Tr. at 55.
Resident 1’s INR level was recorded as 15.1 on September 22, 2008, also far above the
normal range of .7 to 1.2. Tr. at 55-56. Resident 1 had recorded an INR level of 1.0 ten
days before, shortly after being admitted to Petitioner’s facility. Tr. at 56. On September
22, 2008, Resident 1 was determined to have critical PT/INR levels and was immediately
sent to the hospital emergency room for treatment and evaluation. CMS Ex. 7, at 11, 39;
Tr. at 55. Resident | was treated in the hospital for approximately a week, from
September 22, 2008 to September 29, 2008. Tr. at 57. While in the hospital, Resident
1’s primary diagnosis was Coumadin toxicity. CMS Ex. 7, at 1, 4; Tr. at 57.

At hearing, Surveyor Mizell testified that Coumadin therapy flow sheets were generally
used by the facility to record PT/INR testing results. Tr. at 55. Petitioner’s flow sheets
regarding Resident 1 indicated that the last PT/INR test was performed on September 12,
2008 and testing was not performed again until September 22, 2008. CMS Ex. 7, at 8-9;
Tr. at 55. Surveyor Mizell also reviewed the nurses’ notes between September 12, 2008
and September 22, 2008 and could find no documentation as to why no blood work was
completed on Monday, Wednesday or Friday during the week of September 15, 2008.

Tr. at 53. Petitioner now asserts that Resident 1 refused venipunctures for blood work for
PT/INR lab studies during the timeframe in question, however Surveyor Mizell found no
written record of any refusal in Resident 1’s medical records. Tr. at 173.

Surveyor Mizell also testified that she conducted an interview on April 30, 2009 with the
MDS nurse that wrote the assessments when new residents came into the facility. During
that interview, the nurse admitted that Resident 1 did not have a specific care plan for
anticoagulation therapy that included monitoring side effects and symptoms. Tr. at 58-
60. In addition, Surveyor Mizell testified that during the interview the MDS nurse
confirmed that no PT/INR testing was completed on Resident | during the week of
September 15, 2008. Tr. at 60. Moreover, during an interview with the Director of
Nursing (DON), the DON confirmed that there were no testing results of Resident 1’s
PT/INR levels recorded during the week of September 15, 2008. Tr. at 60. The DON
also confirmed that when the PT/INR levels were analyzed after a week, the results were
abnormal and Resident | was sent to the hospital for drug toxicity. Tr. at 59-61.
Surveyor Mizell testified that Coumadin toxicity is very serious and occurs when a
resident’s blood becomes too thin, resulting in the resident’s becoming vulnerable to life-
endangering bleeding. Tr. at 46. Based upon her review of the records and interviews
with Petitioner’s staff, Surveyor Mizell concluded that Petitioner failed adequately to
ensure that residents on anticoagulant therapy did not develop Coumadin toxicity. Tr. at
61, 68-72.

CMS Presented a Prima Facie Case That Petitioner Was Not In Substantial
Compliance

Petitioner’s policy required that the lab values of residents on anticoagulants be properly
monitored. CMS Ex. 9; Tr. at 47-49. Resident 1 was on 8 milligrams a day of
Coumadin, a fairly large dose, when admitted to Petitioner’s facility. Tr. at 50.

Surveyor Mizell testified that she reviewed the nurse’s notes to ascertain if there was a
reason why the PT/INR tests were not performed as ordered for such a large dose,
however, the nurse’s notes provided no explanation for the lack of PT/INR testing for the
period from September 12, 2008 until September 22, 2008. Tr. at 52-54; CMS Ex. 7 at 8-
9.

Surveyor Mizell concluded that Petitioner’s failure to adhere to its own policy posed
immediate jeopardy to Resident 1’s health and safety, and resulted in Resident 1’s being
hospitalized because of those critical lab values and Coumadin toxicity. Tr. at 61, 70.
Petitioner’s own policy may be relied upon as “evidence of the standard of care the
facility expects its staff to provide” and evidence of the professional standards of care.
Life Care at Hilton Head, DAB CR1908 (2009) (citing The Laurels at Forest Glen, DAB
No. 2182 (2008)). The testimony of Surveyor Mizell, including her interviews with
Petitioner’s staff and review of the nurses’ notes, is prima facie evidence of Petitioner’s
noncompliance with F-309, 42 C.F.R. § 483.25.

Additionally, CMS presented a witness, Captain Daniel McElroy, R.N., a Nurse
Consultant responsible for nursing home regulatory enforcement, to testify that Petitioner
was not in substantial compliance with F-309, 42 C.F.R. § 483.25. Tr. at 156-57.
Captain McElroy testified that Resident 1 was at high risk for side effects and that the
standard of care required close monitoring for patients on a high dose of anticoagulant
medication. Tr. at 159. Captain McElroy also testified regarding the lack of
documentation PT/INR testing and consults with Resident 1’s physician regarding the
inability to perform the physician’s orders. Tr. at 159, 173, 178. Captain McElroy stated
that based upon his review of the events, Resident 1 was placed in immediate jeopardy
and at risk for serious injury or death from potential blood clots, stroke, or severe
bleeding because Petitioner did not monitor Resident 1’s level of Coumadin. Tr. at 159,
186.

Thus, CMS has met its burden of presenting a prima facie case that Petitioner was not in
substantial compliance with F-309, 42 C.F.R. § 483.25. CMS presented evidence of
Petitioner’s failure to ensure the physician ordered PT/INR tests were performed every
Monday, Wednesday and Friday to monitor Resident 1’s dosing of Coumadin and failure
to comply with its own policy which required that orders for anticoagulants be prescribed
only with proper clinical and laboratory monitoring. “The failure to perform basic
nursing monitoring and assessment and to provide the resident with continuous support
are egregious failures to comply with professionally recognized standards of nursing care
and the requirement of 42 C.F.R. § 483.25. Those failures are enough, by themselves, to
establish noncompliance.” Emerald Park Health Care Center., DAB CR1462 (2006).

Petitioner Has Not Proven By A Preponderance of the Evidence That it Was in
Substantial Compliance

Petitioner has failed to meet its burden of proving by a preponderance of the evidence
that it provided the necessary care and services to Resident 1. Petitioner did not
lemonstrate that it was in substantial compliance with Medicare and Medicaid
participation requirements, specifically 42 C.F.R. § 483.25. Petitioner’s witnesses,
Keisha McMillan, Melissa Redditt, Kaley Hill, Dr. Richard Rathbone did not adequately
address Petitioner’s failure to perform PT/INR testing for Resident | as ordered during
the week of September 15, 2008 or sufficiently explain why the nurses’ notes and other
documentation lacked explanation as to why PT/INR laboratory monitoring was not
performed.

Petitioner contends that the staff attempted to obtain Resident 1’s PT/INR levels during
the week of September 15, 2008, however, Resident 1 refused to allow staff to draw her
blood. P. Br. at 15-16. Petitioner also contends that Resident 1’s treating physician, Dr.
Rathbone, was notified of Resident 1’s refusals and instructed staff members to continue
to attempt to obtain the ordered PT/INR tests. P. Br. at 18; P Rep. Br. at 5-6. However,
Petitioner did not provide a consistent explanation as to why the nurses’ notes contain no
reference to the fact that Resident 1 refused the ordered PT/INR draws or why the nurses’
notes failed to document that the physician was notified that the ordered PT/INR tests
were not being performed. Tr. at 279-80, 303-04. Also, although Petitioner attempts to
argue that the PT/INR testing every Monday, Wednesday, and Friday was unnecessary
during this timeframe and was not ordered by Dr. Rathbone, Petitioner seemingly

contradicts this by also arguing that it did attempt to follow the transferring physicians
orders and Dr. Rathbone ordered the nurses to “keep trying” when he learned the PT/INR
testing could not be completed on the days previously ordered. P. Br. at 18-19; P. Rep.
Br. at 5-6. Dr. Rathbone specifically testified that he was informed of Resident 1’s
refusal to participate in PT/INR checks on September 15, 2008, September 17, 2008, and
September 19, 2008 and instructed staff from the facility to keep attempting to obtain
blood work. Tr. at 169-170. However, Dr. Rathbone did not adequately explain why he
allowed for Resident 1’s PT/INR tests to not be performed as previously ordered or why
here is absolutely no documentation of Resident 1’s purported refusals of treatment
luring the week of September 15, 2008 and staff communication regarding the purported
efusals. When asked why Petitioner did not document that these critical tests were not
eing performed, Dr. Rathbone stated that “it could be that they were busy documenting
he entire last week”. Tr. at 390. Furthermore, Surveyor Mizell testified that the staff did
ot volunteer information that Resident 1 was refusing treatment in her interviews with
hem. Tr. at 136.

ct

geooga

os

It is clear that a facility cannot adequately monitor Coumadin levels without testing a
resident’s PT/INR levels. Saturn Nursing and Rehab Center., DAB CR1826 (2008). As
CMS points out, if a refusal of treatment had occurred, Petitioner should have recorded
he refusal, recorded the reasons for the refusal, and recorded that the facility conveyed to
the resident the consequences of such a refusal. CMS Br. at 7, f.n. 4; Tr. at 173. Finally,
if Resident 1 had truly refused treatment during the relevant period, Petitioner should
have had a system in place to deal appropriately with such a refusal. Petitioner has not
shown by a preponderance of the evidence that it had implemented a system to approach
and address correctly Resident 1’s refusal of physician-ordered PT/INR monitoring.

es

Petitioner also contends that its staff was operating under an increased burden as a result
of the influx of new residents and other exceptional circumstances created as a result of
Hurricanes Ike and Gustav. Petitioner essentially argues that the lack of documentation
of Petitioner’s system at this time was reasonable. For example, Melissa Redditt, the
Director of Nurses (DON) at Petitioner’s facility testified that during this time period the
system became “skewed” due to moving residents and nurses have to spend a great deal
of time providing care and reassurance to residents. Tr. at 320-21. Kaley Hill, a
registered nurse at Petitioner’s facility also testified that additional demands were placed
on staff during this period and patient care became difficult under such extraordinary
conditions. Tr. at 351-54. Also, Keisha McMillan, the licensed practical nurse (LPN)
who provided care to Resident 1 during the week of September 15, 2008 testified
regarding the difficulties in caring for residents during this period and stated that she was
spending much more time providing direct patient care and had less time available for
documenting. Tr. at 296. She stated that Petitioner’s records lack essential
documentation because “we were focusing on care at the time.” Tr. at 304.
10

Petitioner also asserts that compliance with certain regulations was temporarily waived
when the Secretary of HHS declared a public health emergency as a result of Hurricanes
Ike and Gustave. P. Br. at 24-31. However, CMS presented testimony the quality of care
requirements of 42 C.F.R. Part 483 had not been waived during the survey period in
question. Tr. at 170. CMS contends that the waivers applicable during the relevant time
period were intended to be administrative in nature and designed to facilitate access to
care and to allow for reimbursement to a facility in times of emergency. CMS Br. at 19.
CMS argues that the waiver cannot be used as a rationale for a facility to provide
substandard care to residents, especially those residents on powerful medications which
require proper clinical and laboratory monitoring. Tr. at 191-92, 215. The CMS
Regional Office previously articulated which specific regulations were of critical
importance to the care of residents during an emergency and the regulation at issue was
not determined to be waivable. Tr. at 170. Captain McElroy testified that although the
emergency situation regarding the hurricane would have been considered by CMS in its
enforcement decision, it would not have affected the ultimate determination as to whether
Petitioner was found to be noncompliant at the immediate jeopardy level. Captain
McElroy stated that “[t]here’s a certain level of care that people need. And we’re talking
in this case basic safety in giving a very dangerous drug for very dangerous conditions. . .
And this one . . . rises to a level that whatever the situation was at the time that that’s not
sufficient to say it’s okay.” Tr. at 202-03.

The Waiver or Modification of Requirements under Section 1135 of the Social Security
Act states that the Secretary waives or modifies “requirements of Title XI of the Act, and
regulations thereunder, insofar as they relate to Titles XVIII, XIX, or XXI of the Act, but
in each case, only to the extent necessary, as determined by the Centers for Medicare &
Medicaid Services, to ensure that sufficient health care items and services are available to
meet the needs of individuals enrolled in the Medicare ... programs...” P. Ex 8, at 1.
In this case, CMS determined that its regulations, specifically the quality of care
requirements of 42 C.F.R. § 483.25 would not be waived under the circumstances. CMS
was vested with the authority to make this decision, and | will not disturb CMS’s
determination.

Essentially, Petitioner contends that the fact that no ordered PT/INR testing was
performed on Resident 1 during the week of September 15, 2008 was reasonable under
the circumstances. However, the circumstances alone do not excuse Petitioner’s failure
to comply with the basic requirements of 42 C.F.R. § 483.25 to provide quality care. I
have taken into account the extraordinary circumstances at Petitioner’s facility during this
period and I recognize that Petitioner was attempting to deal with a difficult situation.
Nothing in this decision should be understood to trivialize or to minimize the challenges
— implicit and explicit — in the effects of two hurricanes and an influx of new residents
at Petitioner’s facility, and nothing in this decision should be understood to marginalize
or to undervalue the remarkable efforts extended by all of Petitioner’s staff and
management in meeting those challenges. However, though Petitioner was quite
11

obviously operating under suboptimal conditions, these facts alone do not excuse
Petitioner’s failure to comply with federal regulations which require that necessary care
and services remain available to meet the needs of residents.

I find that Petitioner was not in substantial compliance with F-309, as this regulation has
been interpreted to require a facility to provide its residents with care that meets
professionally recognized standards of care. Royal Manor, DAB No. 1990 (2005). CMS
has provided strong evidence that Petitioner was not providing Resident 1 with care
consistent with regulatory standards and Petitioner has not presented adequate evidence
to prove it was in substantial compliance with program requirements. Thus, I conclude
that Petitioner did not provide the care and services necessary to allow Resident | the
highest practicable physical well-being in accordance with federal requirements.

2. Petitioner does not have a right to challenge F-490, 42 C.F.R. § 483.75, because
CMS did not impose a remedy against Petitioner as a result of F-490.

The hearing rights of a long-term care facility are established by federal regulations at 42
Part 498. A provider dissatisfied with CMS's initial determination is entitled to further
review, but administrative actions that are not initial determinations are not subject to
appeal. 42 C.F.R. § 498.3(d). The regulations specify which actions are “initial
determinations” and sets forth examples of actions that are not. A finding of
noncompliance that results in the imposition of a remedy specified in 42 C.F.R. §
488.406 is an initial determination for which a facility may request an administrative law
judge (ALJ) hearing. 42 C.F.R. § 498.3(b)(13). No right to a hearing exists pursuant to
42 § 498.3(b)(13), unless CMS actually imposes one of the specified remedies. Lutheran
Home — Caledonia, DAB No. 1753 (2000). The remedy, not the citation of a deficiency,
triggers the right to a hearing. Schowalter Villa, DAB No. 1688 (1999); Arcadia Acres,
Inc., DAB No. 1607 (1997).

It is clear that the finding of noncompliance with F-490, 42 C.F.R. § 483.75 did not result
in the imposition of a remedy specified in 42 C.F.R. § 488.406. The PICMP imposed
related specifically to F-309. CMS Ex. 1, at 2. Also, Act § 1819(f)(2)(B) and §
1919(£)(2)(B) prohibit an NATCEP to be offered by any facility which was assessed a
CMP of not less than $5,000 within the previous two years. Thus, because CMS did not
impose a remedy relating to this deficiency, Petitioner has no right to a hearing to
challenge Tag F-490.

3. CMS’s immediate jeopardy finding is not clearly erroneous.
Immediate jeopardy is defined as a situation in which a facility’s noncompliance with one

or more requirements of participation “has caused, or is likely to cause, serious injury,
harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s determination as
12

to the level of noncompliance must be upheld unless it is clearly erroneous. 42 C.F.R. §
498.60(c). Under the clearly erroneous standard, CMS’s immediate jeopardy finding is
presumed to be correct, and the facility has a heavy burden to overturn it. Stone County
Nursing & Rehabilitation Center, DAB No. 2276, at 17; Edgemont Healthcare, DAB No.
2202, at 20 (2008); Daughters of Miriam Center, DAB No. 2067, at 7 (2007).

Petitioner placed Resident | in immediate jeopardy when it failed to perform physician
ordered PT/INR tests for a 10 day period, resulting in the resident being hospitalized for
critical lab values and Coumadin toxicity. Resident 1 experienced dangerous levels of
Coumadin and the INR level fluctuated from 1.0 to 15.1 in tests taken in September of
2008. Tag F-329 details that an INR level above 9.0 is considered immediate jeopardy.
Tr. at 184.

Immediate jeopardy has been found when the Petitioner did not act reasonably to ensure
that the resident received necessary are and services as required by 42 C.F.R. § 483.25, as
in this case when the physician’s orders were not properly followed. Sunnyview Nursing
Home & Apartments, DAB CR 1745 (2008). Petitioner’s failure to perform physician
ordered PT/INR testing placed Resident 1 at risk of serious injury, harm, impairment or
death as Resident 1 could have developed a blood clot, suffered a stroke, or developed
uncontrollable bleeding. Tr. at 159, 175. Although Petitioner argues that Resident 1 was
not at risk of serious injury or death during the period from September 15, 2008 to
September 19, 2008 because she exhibited no other side effects, signs, or symptoms of
bleeding and bruising which would indicate any clinical complications were present, the
fact remains that Petitioner’s failure to monitor Resident 1’s dosing of Coumadin resulted
in an abnormally high lab reading and in Resident 1’s being hospitalized for Coumadin
toxicity for a week.

CMS’s determination is thus, in this instance, not clearly erroneous. Because I have
concluded that CMS’s determination was not clearly erroneous, I do not address CMS’s
argument that Petitioner may not challenge CMS’s immediate jeopardy determination
given CMS’s imposition of a PICMP.

4. The remedies imposed are reasonable.

CMS imposed remedies consisting of a PICMP in the amount of $10,000 for F-309 and
the loss of Petitioner’s NATCEP. I find Petitioner noncompliant at a level of immediate
jeopardy. A PICMP of $3050 to $10,000 per day is authorized for each day of immediate
jeopardy level noncompliance. 42 C.F.R. § 488.438(a)(1)(i). Deciding on a penalty
amount within this range must be based on evidence relating to factors which include:
the seriousness of a facility’s noncompliance; its noncompliance history; and its financial
condition. 42 C.F.R. §§ 488.438(f)(1)-(4); 488.404 (incorporated by reference into 42
C.F.R. § 488.438(f)(3)). I find the single PICMP in the amount of $10,000 imposed by
13

CMS to be supported by evidence establishing the seriousness of Petitioner’s
noncompliance. In addition, CMS could have cited Petitioner for a per-day CMP for the
entire week of September 15, 2008, or the entire period until the survey was conducted in
May of 2009, due to the apparent ongoing nature of the immediate jeopardy. Tr. at 184-
185, 192. Instead, CMS chose to impose a PICMP of $10,000.

Also, because Petitioner was not in substantial compliance with program requirements,
and CMS assessed a penalty within the range authorized, I have other no authority to
review CMS’s choice of remedies. 42 C.F.R. § 498.3(b)(13); see also 488.408(g)(2).
Finally, it is clear that Sections 1819(f)(2)(B) and 1919(f)(2)(B) prohibit approval of
NATCEP where a facility has been subject to has been assessed a CMP of not less than
$5000. Thus, I conclude that all the remedies imposed by CMS in this case were
reasonable.

V. Conclusion

Because I have found Petitioner to have been out of substantial compliance with
participation requirements, and at a level of immediate jeopardy, I sustain the remedies
imposed by CMS, including the PICMP totaling $10,000 and the loss of NATCEP.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Lakeridge Villa Healthcare Center
(CCN: 366145),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-09-262
Decision No. CR2249

Date: September 23, 2010

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
impose remedies against Petitioner Lakeridge Villa Healthcare Center. The remedies that
I sustain include two per-instance civil money penalties (PICMPs) in amounts of $5,100
for failing to comply with 42 C.F.R. § 483.13(b) (F-tag 223) and $4,900 for failing to
comply with 42 C.F.R. § 483.25 (F-tag 309).

I. Background

Petitioner is a nursing facility (NF) located in Cincinnati, Ohio. On November 19, 2008,
a survey was completed at Petitioner’s facility to determine if the facility was in
compliance with federal requirements for nursing homes participating in the Medicare
and Medicaid programs. The survey found that the facility was not in substantial
compliance. The deficiencies were cited as: F-tag 223, 42 C.F.R. § 483.13(b)
concerning abuse; and F-tag 309, 42 C.F.R. § 483.25, concerning failure to perform
Cardio-Pulmonary Resuscitation (CPR).
As a result of the survey findings, CMS determined to impose two PICMPs one of $5,100
for failing to comply with 42 C.F.R. § 483.13(b), (F-tag 223) and one of $4,900 for
failing to comply with 42 C.F.R. § 483.25, (F-tag 309). CMS also determined to impose
a denial of payments for new Medicare and Medicaid admissions (DPNA) effective
February 19, 2009. By letter dated March 11, 2009, CMS indicated that the DPNA
would not go into effect because Petitioner had returned to substantial compliance. CMS
Ex. 2.

Petitioner timely requested a hearing before an administrative law judge (ALJ), and the
case was assigned to Judge Alfonso J. Montafio for hearing and decision.

On June 5, 2009, CMS filed its Motion for Summary Judgment arguing that Judge
Montajio should grant summary judgment on the two PICMPs imposed against
Petitioner. On September 29, 2009, Judge Montafio granted summary judgment to CMS
on F-tag 223 concerning the failure of Petitioner to ensure that Resident 46 (R-46)
remained free from physical abuse. I discuss this F-tag later in this decision. However,
Judge Montajio ruled that there were material facts in dispute concerning F-tag 309 that
required a hearing.

Judge Montajfio conducted an in-person hearing in Cincinnati, Ohio, on January 12, 2010.
CMS offered exhibits (CMS Exs.) 1 through 38, which were admitted into evidence.
Petitioner offered exhibits (P. Exs.) 1 through 20, which were also admitted into
evidence. P. Ex. 21 was admitted on January 14, 2010, after the in-person hearing. CMS
elicited testimony from Laura McClure, a surveyor with the State agency, and Alice Cox,
supervising surveyor with the State agency. Petitioner elicited testimony from Bernard
Moskowitz, Petitioner’s Assistant Administrator and President; Dr. Syed Mogeeth, M.D.,
Medical Director and attending physician to Resident 100 (R-100), Dinah Lynn Studt,
RN., Petitioner’s Director of Nursing (DON), and Debbie Ohl, Petitioner’s expert
witness. On April 8, 2010, the hearing was continued by telephone. Telephone
testimony was elicited by CMS from Roberta Ann Kaplow, CMS’s expert witness.
During the telephone hearing, CMS Exs. 39-41 were admitted into evidence. Each party
submitted a post hearing brief (CMS Brief and P. Brief, respectively) and a reply brief
(CMS Reply and P. Reply, respectively) and each party received a copy of the in-person
hearing transcript (Tr.) and the telephone hearing transcript (Tr.2). Petitioner submitted
two attachments, identified as O.A.C. 4731-14-01(B) entitled Pronouncement of Death
and the Ohio Board of Nursing Pronouncement of Death Pub. No. OBN-102, with its
reply brief. I have labeled these two attachments as ALJ Exs. | and 2 respectively, and in
the absence of objection, have admitted ALJ Exs. 1 and 2 into evidence.

This case was reassigned to me when Judge Montaiio left the Departmental Appeals
Board’s Civil Remedies Division in August 2010. On August 23, 2010, I issued an Order
informing that parties that I was prepared to decide the case and giving the parties 10
days in which to object to my proceeding. Neither party objected to my deciding the
case. On September 8, 2010, I closed the record of this case.

II. 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. Under Part 488, CMS may impose a per-instance or per day CMP
against a long-term care facility when a State survey agency ascertains that the facility is
not complying substantially with participation requirements. 42 C.F.R. §§ 488.406,
488.408, 488.430. The regulations in 42 C.F.R. Part 488 also give CMS a number of
other remedies that can be imposed if a facility is not in compliance with Medicare
requirements.

Pursuant to 42 C.F.R. Part 488, CMS may terminate a long-term care facility’s provider
agreement when a survey agency concludes that the facility is not complying
substantially with federal participation requirements. CMS may also impose a number of
alternative enforcement remedies in lieu of or in addition to termination. 42 C.F.R.

§§ 488.406; 488.408; 488.430. In addition to termination and the alternative remedies
CMS is authorized to impose, pursuant to section 1819(h)(2)(D) of the Act and 42 C.F.R.
§ 488.417(b), CMS must impose the “mandatory” or “‘statutory” DPNA. Section
1819(h)(2)(D) requires the Secretary to deny Medicare payments for all new admissions
to a SNF, beginning 3 months after the date on which such facility is determined not to be
in substantial compliance with program participation requirements. The Secretary has
codified this requirement at 42 C.F.R. § 488.417(b).

The regulations specify that a CMP that is imposed against a facility on a per day basis
will fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The
upper range of CMP, of from $3,050 per day to $10,000 per day, is reserved for
deficiencies that constitute 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 $3,000 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. 42 C.F.R.

§ 488.438(a)(1)(ii). There is only a single range of $1000 to $10,000 for a PICMP, which
applies whether or not immediate jeopardy is present. 42 C.F.R. §§ 488.408(d)(1)(iv);
488.438(a)(2).

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 that is 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.” Jd. The Act and regulations make a hearing before an ALJ available to a
long-term care facility against whom CMS has determined to impose a CMP. Act,
section 1128A(c)(2); 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 CR65 (1990), aff’’d,
941 F2d. 678 (8th Cir. 1991).

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 if a
successful challenge would affect the amount of the CMP that could be collected by CMS
or impact upon the facility’s nurse aide training program. 42 C.F.R. §§ 498.3(b)(14) and
(d)(10)(1). CMS's determination as to the level of noncompliance “must be upheld unless
it is clearly erroneous.” 42 C.F.R. § 498.60(c)(2). This includes CMS’s 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 or DAB) 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 governed by
42 CFR. § 488.438(e).

In a CMP case, CMS must make a prima facie case that the facility has failed to comply
substantially with participation requirements. To prevail, a long-term care facility must
overcome CMS's showing by a preponderance of the evidence. Hillman Rehabilitation
Center, DAB No. 1611 (1997); aff'd, Hillman Rehabilitation Center v. U. S. Dept. of
Health & Human Services, No. 98-3789, 1999 WL 34813783 (D.N.J. May 13, 1999).

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 bold type, and then discuss each in detail.

1. Petitioner failed to comply substantially with the requirement at
42 C.F.R. § 483.13(b) (F-tag 223) that Petitioner’s residents be
protected from physical abuse.

Judge Montafio granted summary judgment to CMS on F-tag 223, 42 C.F.R. § 483.13(b),
concerning the failure of Petitioner to ensure that R-46 remained free from physical
abuse. This deficiency was determined to be at a scope and severity (s/s) level J.' The
regulation at 42 C.F.R. § 483.13(b) provides that a resident has the right to be free from
verbal, sexual, physical, and mental abuse, corporal punishment, and involuntary

' Scope and severity levels are used by CMS and a state when selecting remedies. The
scope and severity level is designated by an alpha character, A through L, selected by
CMS or the state agency from the scope and severity matrix published in the SOM, Chap.
7, § TA00E. A scope and severity level of A, B, or C indicates a deficiency that presents
no actual harm but has the potential for minimal harm, which is an insufficient basis for
imposing an enforcement remedy. Facilities with deficiencies of a level no greater than
C remain in substantial compliance. 42 C.F.R. § 488.301. A scope and severity level of
D, E, or F indicates a deficiency that presents no actual harm but has the potential for
more than minimal harm that does not amount to immediate jeopardy. A scope and
severity level of G, H, or I indicates a deficiency that involves actual harm that does not
amount to immediate jeopardy. Scope and severity levels J, K, and L are deficiencies
that constitute immediate jeopardy to resident health or safety. The matrix, which is
based on 42 C.F.R. § 488.408, specifies which remedies are required and optional at each
level based upon the frequency of the deficiency.
seclusion. In his Order granting summary judgment dated September 29, 2009, Judge
Montaiio stated that:

The facts are undisputed that on September 23, 2008, Housekeeper
#9 (H9) pulled R46 across a corridor in the behavior unit on the
second floor of the facility, then pushed her into a wall, grabbed her
neck, and struck her at least once in the left eye and on her face.
CMS Exs. 9, at 2, 3-4; CMS Ex. 11, at 5, 10; CMS Ex. 12, at 7;
CMS Ex. 18, at 1; P. Ex. 2; P. Ex. 5, at 3,5, 12. Petitioner admits
that H9 did injure R46. P. Summary Judgment Reply Br. at 9.
Immediately subsequent to this incident, H9 was left alone with R46
and another resident while Laundry Aide #7 (LA7), who reported H9
hitting R46 two or three times, went to find the Director of Nursing
(DON). Activity Aide #2 (AA2) saw R46 after this incident and
reported that R46’s eye was bloodshot, red and swollen. CMS Ex. 9,
at 5; CMS Ex. 11, at 11. Additionally, nursing notes indicate that
the white of R46’s eye was “very red” with “clear drainage” and
“excessive tearing.” CMS Ex. 9, at 4; CMS Ex. 18, at 1; P. Ex. 5, at
7. It is well settled that a facility is liable for the actions of its
employee acting within the scope of his employment. North
Carolina State Veterans Nursing Home, Salisbury, DAB No. 2256
(2009). H9, a staff member who was hired by Petitioner, was on
duty as a member of Petitioner’s staff at the time of the incident and
was thus acting as Petitioner’s agent. Petitioner’s argument that it
had no way of knowing that H9 would hit R46 does not present a
dispute as to a genuine issue of material fact. What Petitioner knew
or did not know relative to what its employee would do does not
negate well settled case law and the undisputed fact that the resident
was hit by Petitioner’s employee and Petitioner is responsible for the
conduct of its employee.

l agree with Judge Montafio’s view of the evidence and his analysis of the legal
principles involved. For purposes of this decision, I adopt his Order of September 29,
2009 and find that Petitioner was deficient with F-tag 223, 42 C.F.R. § 483.13(b),
concerning the failure of Petitioner to ensure that R-46 remained free from physical
abuse.

2. Petitioner failed to comply substantially with the requirement at
42 C.F.R. § 483.25 (F-tag 309, s/s J) that it provide CPR to a full code

resident.

The quality of care 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.

It is undisputed that R-100 was a “full code” resident as confirmed by a July 2008 order
by her physician. CMS Ex. 24, at 6; P. Ex. 6, at 1. On the facility’s Full Measures form,
R-100 had requested that, in the event that she required emergency medical treatment,
acility staff would provide her with “resuscitative, life sustaining and/or life-support
measures.” CMS Ex. 24, at 3. The Full Measures form specifies that R-100 did not have
a “Do Not Resuscitate” (DNR) order. Id.

R-100 was an 80-year-old female and had a tracheotomy that required suctioning and a
gastrointestinal tube, and whose diagnoses included leukemia, cerebral aneurysm,
respiratory failure and an enlarged goiter. /d. at 13, 17. On July 19, 2008 at 1:45 a.m.,
R-100 was transported to the hospital because of low oxygen saturation levels. At that
time, R-100 was described as “ashen in color.” R-100 was returned to the facility by 4:00
a.m. that same morning with oxygen saturation levels at 97 percent. Jd. at 2.

That afternoon R-100 was taken to the bathroom by a licensed practical nurse (LPN),
identified as LPN-30, at 3:45 p.m. The nurse’s notes indicate that R-100 was taken to
the bathroom, tracheotomy care was given, R-100 was resting comfortably, vital signs
were stable, oxygen saturation was at 93-94 percent per cool air mist and two liters of
oxygen and no distress was noted. CMS Ex. 24, at 1, 2; P. Ex. 3, at 1, 23

LPN-30’s next entry in the nurse’s notes is at either 4:10 p.m. or 4:15 p.m. on July 19,
2008, and it indicates that R-100 was stiff with eyes closed, unresponsive, skin cool, vital
signs absent, no blood pressure, no pulse, and no heart rate. LPN-30 notified her
supervisor of R-100’s condition. /d. It is undisputed that LPN-30 failed to initiate CPR

* It is unclear from the nurse’s notes the exact time LPN-30 took R-100 to the bathroom.
The handwriting is not clear but it was either 3:35 p.m., 3:45 p.m., or even 3:55 p.m. The
exhibit submitted by Petitioner, P. Ex. 3, at 1, 2, is clearer and seems to indicate that the
time was really 3:55 p.m. For ease of discussion I use 3:45 p.m. as the time of this entry.
CMS Ex. 24, at 1, 2; P. Ex. 3, at 1, 2.

> There are two separate entries in R-100’s nurse’s notes, similar but not identical, for the
3:45 p.m. entry on July 19, 2008. CMS Ex. 24, at 1, 2; P Ex. 3, at 1, 2.

+ Again, the handwriting of this entry is not clear. For ease of discussion I use 4:10 p.m.
as the time of this nurse note entry.
when she discovered R-100 unresponsive at 4:10 p.m. LPN-30’s supervisor, a Registered
Nurse (RN), identified as RN-20, also failed to initiate CPR when she was informed of R-
100’s condition. It is undisputed that CPR was not attempted or performed by anyone at
the facility.

Surveyor McClure interviewed RN-20. According to the surveyor’s notes of that
interview (CMS Ex. 12, at 9) and Ms. McClure’s testimony (Tr. at 24-25), RN-20 stated
that LPN-30 came to her and told her that R-100 had died. RN-20 notified the family,
called the doctor, and left a message for the DON. This call to the physician was made at
4:30 p.m., 20 minutes after R-100 was discovered unresponsive by LPN-30. CMS Ex.
24, at 1,7. The DON returned RN-20’s call at about 5:00 p.m. and RN-20 notified the
DON that R-100 had died. CMS Ex. 25, at 5. The DON asked if R-100 was a full code
and then, evidently for the first time, RN-20 checked R-100’s code status. Jd. There is
no indication that LPN-30 or RN-20 ever checked R-100’s code status until 5:00 p.m., 50
minutes after R-100 was discovered unresponsive. Upon discovering R-100’s full code
status, the DON instructed LPN-30 to call the doctor. /d. During this second call to the
doctor at approximately 5:00 p.m., the doctor stated that it was too late to perform CPR
because too much time had passed. Surveyor McClure asked RN-20 if she had looked in
R-100’s chart for R-100’s code status. RN-20 replied that she had not. According to the
surveyor’s interview, RN-20 then went to see R-100. R-100 was described as having no
pulse and not breathing but R-100 was not cold and stiff. Tr. at 25; CMS Ex. 12, at 9.

The information obtained during the surveyor’s interview of RN-20 was confirmed by the
testimony of Dr. Mogeeth. Dr. Mogeeth, Petitioner’s Medical Director and R-100’s
attending physician, testified that he received two telephone calls from the facility. In the
first telephone call Dr. Mogeeth was notified that R-100 was found dead and he was
asked if the facility could release the body. During the first call CPR was not discussed.
Tr. at 29. During the second telephone call, approximately 20 minutes later, CPR was
discussed but CPR was not started because “[b]y that time it was too late, there was no
reason for doing CPR then.” Jd. R-100’s time of death is listed as 4:25 p.m. on the
Record of Death form. CMS Ex. 24, at 7; P. Ex. 10, at 9.

In an undated report, the DON indicated that she asked LPN-30 why she had not
performed CPR. According to the report, LPN-30 had stated to the DON that R-100
“was dead obviously for some time” and indicated that R-100 was stiff, dusky, and very
cold. CMS Ex. 25, at 5. LPN-30 was not called to testify. RN-20 was not called to
testify.

As a result of LPN-30’s failure to perform CPR, LPN-30 was terminated as an employee.
As a result of RN-20’s failure to properly supervise LPN-30 who failed to perform CPR,
RN-20 was suspended for three days. Jd. at 1-4. In taking this action against LPN-30,
Petitioner noted on LPN-30’s Termination Report that LPN-30 did not follow proper
nursing clinical practice standards. Jd. at 2. In a written statement made on July 22,
2008, three days after the incident with R-100, the DON stated that LPN-30’s failure to
institute CPR and life saving measures until R-100 was properly pronounced dead by a
physician or by an emergency squad is “‘against policies and professional nursing
practices.” Jd. at 1. On Petitioner’s disciplinary form for RN-20, it is noted that when a
resident “dies” the nurse must immediately check the code status and if the resident is full
code then the nurse must “start CPR immediately and/or follow advanced directives as
stated.” Jd. at 4. The Facility Incident Report described this incident as “not following
nursing clinical practice standards.” Jd. at 6. In addition, Petitioner inserviced its entire
staff on advanced directives. P. Exs. 1, 12; Tr. at 151.

Four months later, during the November 2008 survey and based on a record review, CMS
cited Petitioner under the deficiency before me. The issue under this deficiency is
whether LPN-30’s failure to initiate CPR upon discovering a full code resident
unresponsive at 4:10 p.m. on July 19, 2008 was a violation of the regulation at 42 C.F.R.
§ 483.25.

Petitioner’s CPR policy states that proper CPR procedure includes following the
American Heart Association (AHA) CPR guidelines, checking the resident’s care plan to
determine whether or not a CPR order exists, initiating CPR and continuing to perform
CPR until paramedics arrive or a physician pronounces the resident dead and gives orders
to discontinue CPR. CMS Ex. 26, at 1-3; Tr. at 113-14, 148-49. Clearly neither
LPN-30, RN-20, nor anyone else at the facility followed Petitioner’s own CPR policy.

CPR is designed to be given when an individual shows no signs of life. Tr. at 55, 148.
The administration of CPR assumes signs of clinical death. Petitioner’s own CPR policy
states that the purpose of CPR is to “establish circulation on a resident with absence of
respiration and pulse.” CMS Ex. 26, at 1. AHA guidelines state that CPR should be
provided unless there is a Do Not Resuscitate (DNR) order; there are signs of irreversible
death, such as rigor mortis, decapitation, decomposition, or dependent lividity; or no
physiological benefit can be expected because vital signs have deteriorated despite
maximal therapy (e.g., progressive septic or cardiogenic shock). CMS Ex. 37, at 14.
None of the AHA exceptions to providing CPR are present in the case of R-100. ALJs
and the Board have recognized the AHA guidelines as authoritative. Epsom Healthcare
Center, CR1749 (2008); John J. Kane Regional Center — Glen Hazel, DAB No. 2068
(2007). I also accept these guidelines as authoritative.

LPN-30 was neither authorized to decide nor qualified to decide to not perform CPR on
R-100. Nor was LPN-30 authorized or qualified to determine how much time had
elapsed since R-100 had become unresponsive, because in this situation the nurse came
upon a resident who was already unresponsive. Tr. at 83. Neither was LPN-30
authorized or qualified to decide if it would be futile to perform CPR. In Ohio, according
10

to the Ohio Board of Nursing, a nurse may not, by herself or himself, pronounce a patient
dead. ALJ Ex. 2. Petitioner’s DON testified that only a physician can make the decision
to stop CPR or not to begin it. Tr. at 55, 148-50, 157-58. Petitioner’s expert witness
agreed that a nurse could not pronounce death. Tr. at 186-88. The evidence shows that
R-100 was found unresponsive at either 4:10 or 4:15 p.m. and RN-20 notified Dr.
Mogeeth at 4:30 p.m. but CPR was not discussed at that time. Dr Mogeeth’s testimony
about the first telephone call was that the nurse told him that the “patient was found dead,
you know, cold, clammy, can we release the body.” Tr. at 129. At no point in Dr.
Mogeeth’s testimony did he state that he pronounced R-100 dead. At approximately 5:00
p.m. when the DON confirmed R-100’s full code status, the DON instructed LPN-30 to
place a second telephone call to Dr. Moqeeth and CPR was discussed for the first time.
Dr. Mogeeth indicated that it was then too late to perform CPR on R-100. There is no
evidence that LPN-30 consulted with or was advised by a physician at 4:10 p.m. that she
should not initiate CPR. The evidence shows that LPN-30 did not have any contact with
a physician until approximately 5:00 p.m. RN-20, when informed of R-100’s condition,
also did not initiate CPR. LPN-30 and RN-20 both failed to perform CPR against
accepted nursing policy, the physician’s order, the facility’s CPR policy, and accepted
AHA guidelines.

It was the surveyor’s opinion that LPN-30 should have performed CPR on R-100. CMS
Ex. 38. R-100 was a full code resident and no evidence was presented that either LPN-30
or RN-20 checked R-100’s code status until the DON requested R-100’s code status at
approximately 5:00 p.m. Roberta Kaplow testified as an expert on the performance of
CPR on a patient without a pulse. Tr.2 at 21. She has been a Basic and Advanced
Cardiac Life Support Instructor and an AHA Instructor. Ms. Kaplow confirmed the
surveyor’s conclusion, stating that LPN-30 violated standard nursing practice as well as
her facility’s CPR policy by failing to immediately initiate CPR on R-100. CMS Ex. 40,
at 2. Further, Ms. Kaplow stated that, “LPN-30 did not have the discretion, and it was
not in the scope of her practice, to determine that CPR would be futile, and to decide...
not to perform CPR on R-100 . . . especially since R-100 had been noted to be in no
distress less than 30 (and probably less than 20) minutes earlier.” Jd. Ms. Kaplow
concluded that, “LPN-30 should have immediately commenced CPR when she found
R-100 unresponsive. CPR was R-100’s only chance of being resuscitated (however small
it might have been), and LPN-30’s failure to perform CPR on R-100 deprived R-100 of
this chance.” /d. In addition, Petitioner’s DON, Medical Director, and Assistant
Administrator all testified that CPR should have been done. Tr. at 55-56, 100, 131.

Petitioner argues that CPR should not have been performed on R-100 because the
resident was obviously dead and clearly beyond resuscitation. P. Br. at 4-5. Petitioner
claims that the survey was done four months after R-100’s death and is based solely on a
record review. Petitioner argues that LPN-30 was experienced and had completed all the
course work to become a Registered Nurse, except for taking the licensing exam.
11

According to Petitioner LPN-30 assessed R-100, concluded that R-100 had been dead for
some time, that emergency treatment was not needed (according to Petitioner) and, Dr.
Mogeeth agreed that R-100 had been dead between 20-30 minutes. CMS Ex. 24, at 1,
CMS Ex. 25, at 5, Tr. at 125-26, 128-31 In essence, Petitioner asserts that “LPN-30 made
a clinical decision not to commence CPR because R-100 was beyond the need for the
“emergency medical services’ called for by the facility’s full measure policy.” P. Reply
Br. at 2. Petitioner argues that, in Ohio, a nurse is authorized to “assess whether a patient
is deceased and phone the patient’s death in to a physician who, upon reliance of the
nurse’s assessment, pronounces death without personally examining the body.” P. Reply
Br. at 2-3; ALJ Exs. 1; 2. Petitioner claims that based on LPN-30’s assessment of R-100,
Dr. Mogeeth pronounced R-100 dead by telephone, citing the Record of Death. P. Reply
Br. at 2-3; P. Ex. 10, at 9. However, Petitioner’s argument is without merit. The Record
of Death does not show that Dr. Mogeeth pronounced R-100 dead. It merely indicates
that Dr. Mogeeth was R-100’s attending physician and that he was notified of R-100’s
death at 4:30 p.m. Nowhere in Dr. Mogeeth’s declaration or his testimony at hearing
does he state that he pronounced R-100 dead by telephone based on LPN-30’s
assessment. P. Ex. 17; Tr. at 121-32. The evidence clearly shows that Dr. Moqeeth was
not notified until 4:30 p.m. and this was done by RN-20, not LPN-30, since the nurse
note at 4:30 p.m. indicates that, “Supervisor [RN-20] notified MD and DON at this time.”
CMS 24, at 1. Finally, even if Dr. Moqeeth did pronounce R-100’s death at 4:30 p.m.,
that would still not have relieved LPN-30 of her duty to initiate CPR at 4:10 p.m. — as
soon as she discovered R-100 to be unresponsive — and to continue performing CPR
until R-100’s death was pronounced by a professional competent to do so.

Petitioner also argues that CPR would have been futile and that to begin CPR on R-100
would have been to “violate her body.” P. Br. at 11. Petitioner relies on Dr. Mogeeth’s
opinion and the opinion of Ms. Ohl, Petitioner’s expert witness. This argument is
unpersuasive. First, neither a LPN nor a RN is authorized to determine medical futility.
Tr.2 at 29. The intended audience of the discussion of medical futility in the AHA
guidelines is physicians, not nurses. Tr.2 at 30. Therefore, neither LPN-30 nor RN-20
were authorized or qualified to decide that CPR would have been futile for R-100.
Second, no matter what Dr. Mogeeth’s opinion concerning futility, the fact is that his
opinion is irrelevant since he did not even discuss CPR until sometime after 5:00 p.m.,
45-50 minutes after R-100 was discovered unresponsive. At the time Dr. Mogeeth first
considered CPR, it was indeed too late to initiate CPR. Dr. Mogeeth clearly testified that
LPN-30 was not authorized to decide not to do CPR on her own judgment and that she
should have started CPR when she discovered R-100 was unresponsive. Tr. at 131.
Third, R-100 was unquestionably alive 25 minutes before being discovered unresponsive.
After that observation, the time at which R-100 became unresponsive is the merest
speculation. Even assuming that R-100’s chances of being resuscitated were extremely
low, that assessment of her chances was simply not LPN-30’s call to make. Additionally,
12

RN-20 should have intervened and started CPR herself as soon as she discovered that
LPN-30 had not initiated CPR.

Ms. Ohl’s opinion relies on nursing judgment and nursing assessment. Ms. Ohl testified
that from a clinical standpoint she would have acted the same as LPN-30. Tr. at 182.
However, Ms. Ohl also testified that if a nurse did not know whether a resident was a full
code patient, then the nurse should have started resuscitation, and that once CPR is
started it is not stopped until the patient is pronounced dead. Tr. at 185-86. At the
hearing Judge Montajio directly questioned Ms. Ohl as follows:

Judge Montano: So when you studied as an RN and you worked as an RN, did
you have it in your mind or during your course of study as an RN, were you ever
instructed that you can make a decision whether a person should have CPR?

Ms. Ohl: No, but clinical judgment, you look at, but no, they don’t say you
can’t—

Judge Montano: Let me finish the question. All right. So nobody told you in
nursing school you can decide who gets CPR and who doesn’t get CPR?

Ms. Ohl: Right.
Judge Montano: Who has the authority, the physician?

Ms. Ohl: The physician.

Judge Montano: Okay. So there is nothing legally that would give an RN the
authority to decide not to give CPR?

Ms. Ohl: No.

* * * * *

Judge Montano: Okay. Is there a legal nursing standard that says that’s
appropriate [not initiating CPR]?

Ms. Ohl: No. That’s a judgment.

Judge Montano: And does the nursing standard say that you have the judgment to
decide?
13

Ms. Ohl: No, but there is a standard there that you respect all life and that you
respect every human being, whether they are alive or dead, and how you treat and
care for them in their body.

Tr. at 186-88.

As Ms. Ohl’s opinion is based on what she describes as nursing judgment and not on any
objective standard of care, I give Ms. Ohl’s testimony little weight. Ms. Kaplow’s
opinion however, carries great weight because of her background and the fact that she is
an expert in the subject of giving CPR to a patient without a pulse.

There was some discussion at the hearing about the time at which LPN-30 took R-100 to
the bathroom prior to R-100’s being found unresponsive. Whether the time lapse
between these two nurse’s notes was 15 minutes, 25 minutes or 35 minutes makes no
difference to my decision. The point at which R-100 ceased to have a pulse, blood
pressure, or heart rate was undetermined since R-100 was alone at the time. It could have
appened immediately after she was taken to the bathroom or immediately before she
was discovered. In either case, once R-100 was discovered to be unresponsive, the
acility had a duty to initiate CPR in accordance with R-100’s wishes on the Full
Measures form and her physician’s order. R-100’s only chance of resuscitation was CPR
and Petitioner’s staff failed to perform CPR. Where, as here, a resident’s advance
directive explicitly calls for CPR, the universally accepted standard of care mandates that
acilities honor that instruction. Oceana County Medical Care Facility, CR1993 (2009).
Here, a physician did not pronounce death and none of the signs of irreversible death as
described by the AHA guidelines existed. CMS Ex. 37, at 14-15. Once a resident has
expressly decided that a facility should attempt resuscitation, a facility may not refuse to
provide the services that it promised to provide absent a pronouncement of death by a
physician or signs of irreversible death as described in the AHA guidelines.

There is also no evidence to demonstrate that either LPN-30 or RN-20 checked R-100’s
code status prior to 5:00.p.m. If either of them checked the code status, neither of them
acted on that knowledge. RN-20 only checked R-100’s code status when directed to by
the DON, 50 minutes after R-100 was found unresponsive. R-100’s only chance to be
resuscitated was ignored by two staff members at the facility, one of whom was a
supervisor. I find that LPN-30 and RN-20 failed to provide R-100 with CPR, depriving
R-100 of her only chance at resuscitation, in disregard of professional nursing practice,
facility policy, her physician’s order, and R-100’s wishes as expressed in her advance
directive. All of these facts demonstrate that Petitioner was not in substantial compliance
with the regulation at 42 C.F.R. § 483.25.
14

3. Petitioner’s objections to CMS Exs. 6 and 41 are overruled.

Petitioner objected to CMS Ex. 6, a 2006 Medicare cost report, as irrelevant because it
does not report Petitioner’s current financial condition. Judge Montafio admitted CMS
Ex. 6 into evidence and I see no reason to disturb his ruling. As CMS points out, the
2006 cost report was the most recent information available to CMS. Petitioner was free
to produce any evidence it could produce if it hoped to show its inability to pay the
PICMP or its current financial position. It failed to do so. Petitioner’s objection to CMS
Ex. 6 is overruled.

Petitioner also objected to CMS Ex. 41, a 2007 bulletin from the Ohio Health Care
Association (OHCA) on CPR, because it was not new evidence. Petitioner claims that
the hearing was essentially closed at the time it was submitted. However, CMS Ex. 41
was submitted after the in-person hearing was completed but not after the telephone
hearing was completed. CMS Ex. 41 was received into evidence during the telephone
hearing. Neither the hearing nor the record was closed when this Exhibit was proffered.
Petitioner’s objection to CMS Ex. 41 is overruled. But beyond that, although CMS Ex.
41 is admitted as evidence, I have not relied on it in my decision. Therefore, Petitioner’s
objection to it must be regarded as moot.

4. The alleged scope and severity of the deficiencies is not subject to
my review, as the scope and severity of the deficiencies has no effect on
the range of the PICMPs that may be imposed. 42 C.F.R.

§§ 488.438(a)(2), 488.438(e), 498.3(b)(14), 498.3(d)(10)(ii).

CMS may impose a CMP for the number of days that the facility is not in compliance or
for each instance that a facility is not in substantial compliance. 42 C.F.R. § 488.430(a).
In this case, CMS has imposed PICMPs totaling $10,000, consisting of $5,100 for failing
to comply with 42 C.F.R. § 483.13(b) (F-tag 223) and $4,900 for failing to comply with
42 C.F.R. § 483.25 (F-tag 309).

Although Petitioner disagrees with CMS’s determination that its deficiencies posed
immediate jeopardy, that determination is not subject to my review. A facility may only
challenge the scope and severity level of noncompliance found by CMS if a successful
challenge could affect the range of the CMP that CMS could impose or impair the
facility’s authority to conduct nurse aide training and competency evaluation programs.
42 C.F.R. §§ 498.3(b)(14) and (d)(10)(i). Per-instance penalty amounts are not limited
by the presence or absence of immediate jeopardy. In other words, CMS may impose
any amount within the range of $1,000 to $10,000 for each PICMP regardless of whether
immediate jeopardy was found. 42 C.F.R. § 488.438(a)(2).
15

5. Petitioner’s regulatory violations provide a basis for the imposition
of two PICMPs, and the PICMPs imposed, totaling $10,000, are
reasonable.

In determining whether the amounts of the PICMPs are reasonable, the following factors
specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history of
noncompliance, including repeated deficiencies; (2) the facility’s financial condition; (3)
the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and (4) the
facility’s degree of culpability, i.e., neglect, indifference, or disregard for resident care,
comfort, or safety.

I have been shown no evidence concerning the facility’s history of noncompliance. The
only evidence I have been shown concerning Petitioner’s financial condition is the 2006
Medicare cost report. CMS Ex. 6. That cost report indicates that Petitioner is in a
financial condition that would allow it to pay a PICMP totaling $10,000. The
deficiencies are extremely serious. Physical abuse of a resident is very serious and H9
was a possible threat to other residents. Petitioner does not deny that R-46 was injured
by H9. As to the deficiency based on failure to perform CPR, Petitioner in essence
maintains that a dead person cannot suffer harm. However, failure to perform CPR ona
resident who had the full expectation that she would receive CPR based on her code
status, her physician’s order, and the facility’s own policies, deprived her of her only
chance to be resuscitated. Petitioner’s failure to provide CPR to R-100 revealed a similar
threat to other full code residents. Both deficiencies demonstrate a complete disregard
for the safety of its residents and thus a high degree of culpability. In light of the
potential for harm, the PICMPs imposed are reasonable.

II. Conclusion

For the foregoing reasons I conclude that Petitioner violated 42 C.F.R. §§ 483.13(b) and
483.25 and that PICMPs totaling $10,000 are reasonable.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Persio Pereyra,
Petitioner
Vv.
The Inspector General.
Docket No. C-10-721
Decision No. CR2248

Date: September 20, 2010

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Persio
Pereyra, from participating in Medicare and other federally-funded health care programs
for a period of at least ten years.

I. Background

Petitioner is a nurse. On March 31, 2010, the I.G. informed Petitioner that he was being
excluded from participating in Medicare and other federally-funded health care programs
for a period of at least ten years, based on the I.G.’s determination that Petitioner had
been convicted of a criminal offense as is described at section 1128(a)(1) of the Social
Security Act (Act).

Petitioner requested a hearing, and the case was assigned to me for a hearing and a
decision. At my direction, the parties exchanged briefs, and the I.G. filed his proposed
exhibits (Ex.). These are identified as I.G. Ex. 1 —1.G. Ex. 8. Petitioner did not object to
my receiving these exhibits into evidence, and, so, I receive them. Both the I.G. and
Petitioner advised me that they did not desire an in-person hearing.
IL. Issues, Findings of Fact, and Conclusions of Law
A. Issues
The issues in this case are whether:

1. The LG. is required to exclude Petitioner for having been convicted of a
criminal offense as is described at section 1128(a)(1) of the Act; and

2. An exclusion of at least ten years is reasonable.
B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law.

1. The I.G. must exclude Petitioner, because Petitioner was convicted
of a criminal offense as is described at section 1128(a)(1) of the Act.

Section 1128(a)(1) of the Act mandates the exclusion of any individual who is convicted
of a criminal offense relating to the delivery of an item or service under Medicare or a
State Medicaid program. The undisputed evidence establishes that Petitioner was
convicted of an 1128(a)(1) offense.

Petitioner was charged with having filed false Medicaid claims, on behalf of a Medicaid
recipient, in a criminal indictment that the Supreme Court of the State of New York,
Nassau County, issued. I.G. Ex. 3 at 3. The indictment alleged that, during a period
beginning on or about September 1, 2004 and continuing through August 17, 2007,
Petitioner filed, or caused to be filed, false Medicaid claims on behalf of an individual
who is named Jane Doe in the indictment. Jd. at 3, 5. The essence of the scheme charged
by the indictment is that Petitioner, in concert with his common law wife, filed false
Medicaid reimbursement claims on behalf of Jane Doe, who is their child. The claims
were alleged to be palpably false, inasmuch as Petitioner claimed to have provided
services for work performed in excess of 24 hours in a single day on at least 180 separate
days. LG. Ex. 6 at 1.

On February 29, 2007, Petitioner pled guilty to the crime of grand larceny in the fourth
degree, a felony under New York law. I.G. Ex. 7 at 12. He specifically admitted to filing
claims with the New York Medicaid program seeking reimbursement for services that he
had not provided. Jd. at 11-12.

Petitioner’s conviction is for a crime that is described at section 1128(a)(1) of the Act.
Petitioner was convicted of filing false claims with the New York Medicaid program
demanding reimbursement for services that he did not provide. That is clearly a

program-related crime, because the essence of Petitioner’s crime was his theft of program
funds through false claims for covered items or services.

2. An exclusion of at least ten years is reasonable.

An exclusion that is imposed pursuant to section 1128(a)(1) of the Act must be for a
minimum of five years. Act § 1128(c)(3)(B). The I.G. determined to impose a ten-year
exclusion in this case.

Section 1128 of the Act is a remedial statute. Its purpose is to protect program funds and
their beneficiaries and recipients from untrustworthy individuals. The Act’s remedial
purpose is satisfied where exclusion is found to relate reasonably to the statutory purpose.

Regulatory factors govern what evidence may be considered in deciding whether the
length of an exclusion is reasonable. They are set forth at 42 C.F.R. § 1001.102 and are
described as either “aggravating” or “mitigating” factors. The aggravating factors
function as rules of evidence, determining what evidence is relevant to the issue of
reasonableness of the length of an exclusion. Evidence that relates to a specific
aggravating or mitigating factor is relevant and may be considered in deciding the
ultimate question of trustworthiness. Evidence that does not relate to a specific
aggravating or mitigating factor is irrelevant and may not be considered.

The I.G. offered proof of evidence relating to three specific aggravating factors. First, he
proved that Petitioner’s crimes caused a financial loss to the New York Medicaid
program of more than $5,000. 42 C.F.R. § 1001.102(b)(1). Petitioner admitted to having
defrauded that program of $26,648.12. I.G. Ex. 7 at 2. He was sentenced to pay
restitution in the amount of $36,116.23. Jd. at 3.

Second, the I.G. proved that Petitioner perpetrated his crimes over a period of more than
one year. 42 C.F.R. § 1001.102(b)(2). He was convicted of stealing funds from the New
York Medicaid program during a period that began in 2004 and that continued through
August 2007. I.G. Ex. 7 at 11.

Third, the LG. established that Petitioner was the subject of another adverse action by a
government agency based on the same set of circumstances that are the basis for his
exclusion. 42 C.F.R. § 1001.102(b)(9). On May 10, 2010, the New York Medicaid
program excluded Petitioner based on the conviction that is at issue here. I.G. Ex. 8.

Petitioner has offered no mitigating evidence. He asserts that he cost the New York
Medicaid program nothing, because he actually provided the services that were found to
be falsely claimed. That is tantamount to arguing that he is not really guilty of the crime
to which he pleaded. I find that assertion to be irrelevant. It is irrelevant, because the
exclusion in this case is based on Petitioner’s conviction and not on underlying evidence
of guilt or innocence. The proper forum for contesting the criminal charges filed against
Petitioner was the New York Supreme Court. Petitioner chose not to exercise the right to
contest the charges, and that closes the door on subsequent claims of innocence.
Petitioner’s assertion of innocence is also irrelevant, because “innocence in reality” is not
a mitigating factor that I may consider. See 42 C.F.R. § 1001.102.

I note, moreover, that Petitioner’s present claim of innocence is highly self-serving.
Petitioner freely admitted his guilt and the specific elements of his crimes, when it was in

is interest to plead guilty to reduced charges. Now, when it is in his interest to claim
innocence, Petitioner urges that I disregard his prior admission of guilt.

Petitioner submitted with his brief a Certificate of Relief from Disabilities from the State
of New York, dated April 3, 2009, without explanation. The certificate is meant to grant
relief from all or certain disabilities, forfeitures, or bars to employment automatically
imposed by law by reason of his conviction. However, the very terms of that Certificate
excludes any right to relief by Petitioner from the I.G.’s actions here as the Certificate
will “not prevent any judicial, administrative . . . board or authority from relying upon the
conviction specified . . . as the basis for the exercise if its discretionary power to suspend,
revoke, refuse to issue or renew any license, permit or other authority or privilege.”

Petitioner argues also that he was led to believe by the attorney who prosecuted the
criminal case against him that he would only be excluded for five years. That assertion is
not evidence that relates to any mitigating factor, and it is irrelevant for that reason.
Furthermore, Petitioner has offered nothing, other than his uncorroborated and clearly
self-serving claim that this alleged representation was made to him. I would not find
Petitioner’s assertion to be credible, even if it were relevant.

Petitioner also protests that he was convicted in 2007 and that the I.G. did not impose the
exclusion until 2010. In effect, he asserts that it is unfair that the I.G. wait for so long
before imposing an exclusion. That argument relates to no mitigating factor. Moreover,
it is beyond my authority to consider in any event. There is nothing in the regulations
that permits me to modify an exclusion so as to impose an earlier start date than that
determined by the L.G.

The relevant evidence relating to aggravating factors is strong evidence that Petitioner is
a highly untrustworthy individual. Petitioner engaged in a protracted and deliberate
scheme to defraud the New York Medicaid program. He perpetrated his scheme over a
period of more than two and one-half years by filing many false reimbursement claims.
He was successful in stealing a fairly substantial sum of money from the program. This
evidence convinces me that excluding Petitioner for at least ten years is not unreasonable.
An exclusion of that length is merited given the evidence of untrustworthiness.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Arkady B. Stern, M.D.,
(CCN: 09260011100766),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-979
Decision No. CR2246
Date: September 20, 2010

DECISION REMANDING CASE
TO CENTERS FOR MEDICARE AND MEDICAID SERVICES

I remand this case to the Centers for Medicare and Medicaid Services (CMS) consistent
with the Departmental Appeals Board’s (Board) remand of this case to me in Arkady
Stern, M.D., DAB No. 2329 (2010). On remand, CMS or the contractor must determine
whether Petitioner, Arkady Stern, M.D., is entitled to an effective date of participation in
Medicare that is earlier than May 19, 2009. If that date is inconsistent with the date
requested by Petitioner (October 2008), CMS or the contractor must afford Petitioner a
right of reconsideration. If Petitioner is dissatisfied with the reconsideration
determination, then he will have a right to request a hearing before me.

This case was originally before me as a hearing request by Petitioner challenging the
effective date of his enrollment in Medicare. Petitioner contended that he should have
been granted an effective date of enrollment in October 2008, whereas CMS argued that
the effective date of enrollment is May 19, 2009. In my first decision in this case, I
sustained CMS’s determination. The Board has now remanded the case so that I may re-
decide it or that, alternatively, CMS or its contractor may make a new determination.
A basis for the Board’s remand was its concern that CMS and its contractor had not
responded to Petitioner’s implicit contention that either of them may possess

locumentary evidence supporting his argument that he filed an application for enrollment
in October 2008. Additionally, the Board was concerned that Petitioner — who is
appearing pro se — may not have understood that he could present documentary evidence
to support the contentions that he and his supporting witness made via declaration.

The Board gave me the option of re-hearing the case or of remanding it to CMS for a new
determination that is consistent with its decision. I find that it would be more efficient

‘or CMS and the contractor to make a new determination. They control the documentary
record of Petitioner’s application, and, furthermore, the contractor has expertise in
determining whether an application is acceptable. For that reason, I have decided to
remand this case rather than simply to re-hear it.

However, I am concerned that the contractor and CMS faithfully address the concerns
stated in the Board’s decision. It will be a waste of time if this case is re-determined
based on a cursory review of the record already created. I anticipate, therefore, that CMS
or its contractor will conduct the record search that the Board’s decision clearly envisions
and that, furthermore, they will give Petitioner all of the rights he is entitled to exercise
under law to present evidence and to argue his contentions.

In its decision, the Board speculated that CMS or its contractor might possess documents
that establish that Petitioner filed an enrollment application in October 2008. I direct
these entities to search their records to determine whether documents pertaining to an
October 2008 enrollment application exist. These documents may include: (1) whatever
Petitioner filed or caused to be filed; and (2) whatever record the contractor or CMS
made of the evaluation of these documents. If such documents do not exist, then CMS or
its contractor must explain what their search consisted of. If such documents do exist,
then CMS or its contractor must determine whether these documents constitute an
acceptable application for enrollment and must decide what effective date of participation
would be justified based on that determination. CMS or its contractor must also afford
Petitioner the opportunity to provide them with whatever documentation he may possess
that corroborates his assertion that he filed an application for enrollment in October 2008.
CMS or its contractor must document its offer to Petitioner. Any determination that
CMS makes concerning Petitioner’s effective date of enrollment must reference
specifically the supporting documentation on which that determination relies and must
explain why that documentation supports the effective date that is determined.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
KCI Home Medical, Inc.
(PTAN: 6114560001),
Petitioner
Vv.
Centers for Medicare & Medicaid Services.

Docket No. C-10-874
Decision No. CR2245

Date: September 20, 2010

DECISION DISMISSING APPEAL FOR CAUSE

For the reasons set forth below, I deny Petitioner’s request for a hearing before an
Administrative Law Judge (ALJ). I find that Petitioner failed to file a timely request for a
hearing or establish good cause to extend the time for such filing. 42 C.F.R. § 498.40(c).
I therefore dismiss this case pursuant to 42 C.F.R. § 498.70(c). Petitioner does not have a
right to an ALJ hearing to review the Medicare contractor’s December 27, 2009,
reconsideration decision.

I. Background

On December 27, 2009, the Medicare contractor upheld the revocation of Petitioner’s
supplier number. The contractor’s reconsideration decision explained that the request for
hearing must be filed no later than 60 days from the date of receipt of the decision. 42
C.F.R. § 498.40(a).

Ifa request for hearing is not filed within 60 days, the affected party may request an
extension of time to file. 42 C.F.R. § 498.40(c)(1). If good cause is shown, the ALJ may
extend the time for filing the request for hearing. 42 C.F.R. § 498.40(c)(2). If, however,
the ALJ determines that good cause is not established, the ALJ may, upon his or her own
motion, dismiss the untimely request for hearing for cause. 42 C.F.R. § 498.70(c).

As examined more fully below, Petitioner did not file a request for an ALJ hearing within
the prescribed 60 days. Instead, on July 27, 2010, Petitioner filed a request for an ALJ
hearing, acknowledging that it is “beyond the 60 day appeal” period. Hearing Request
(H.R.) Petitioner proffered as cause for late filing that it did not fully understand the
basis of the revocation until after the December 27, 2009 reconsideration decision was
issued and that it did not appeal further at the time because the location was closed. The
apparent trigger for the belated appeal, however, is that the contractor informed Petitioner
that one of the consequences of the revocation of one location is the denial of enrollment
for a new location. Specifically, on July 22, 2010 the contractor returned Petitioner’s
application for enrollment of a new location because “[o]ne or more of the individuals
listed on the application submitted is affiliated with a revoked supplier” and consequently
the re-enrollment bar must expire before a new application can be accepted for
processing. H.R.; see 42 C.F.R. § 424.535(b) and (c).

On August 23, 2010, I issued an Order to Show Cause (Order) why I should not dismiss
the case. I explained that I was unable to determine from the hearing request whether
Petitioner disputes the July 22, 2010 returned application for enrollment of a new location
and/or the December 27, 2009 reconsideration. I directed that if Petitioner seeks review
of the December 27, 2009 contractor reconsideration, Petitioner must show cause why I
should determine that good cause exists for a delay of approximately 147 days in filing
its request.

On August 31, 2010, Petitioner responded to my Order presenting argument as to why I
should find good cause for its belated appeal of the December 27, 2009 reconsideration
decision. (P. Resp.) Petitioner also indicated that it did not seek to appeal the July 22,
2010 returned application for enrollment for a new location. Jd. I also provided the
Centers for Medicare & Medicaid Services (CMS) an opportunity to reply. On
September 13, 2010, CMS filed its reply contesting Petitioner’s assertion of good cause.

II. Issues

1. Whether Petitioner filed a timely request for hearing in accordance with
42 C.F.R. § 498.40(a); and, if not,

2. Whether Petitioner has demonstrated good cause for extending the time
to file a request for hearing under 42 C.F.R. § 498.40(c)(2).
III. Findings of Fact, Conclusions of Law, and Supporting Discussion

I make two combined findings of fact and conclusions of law to support my decision in
this case. I set forth each below as a separate heading followed by my supporting
discussion.

A. Petitioner did not submit a request for an ALJ hearing within 60 days
of receipt of the December 27, 2009 reconsideration decision and
therefore failed to timely file in accordance with 42 C.F.R. § 498.40(a).

Petitioner’s right to a hearing is governed by the provisions of 42 C.F.R. Part 498.
Section 498.40(a)(2) of 42 C.F.R. expressly provides that:

[an] affected party or its legal representative or other authorized official
must file the request [for hearing] in writing within 60 days from receipt of
the notice of initial, reconsidered, or revised determination unless that
period is extended in accordance with paragraph (c) of this section.

The contractor issued its reconsideration decision on December 27, 2009.! Therefore,
Petitioner was required to file any request for hearing no later than March 2, 2010.
42 C.F.R. § 498.40(a)(2).

As noted, Petitioner did not submit its request for hearing until July 27, 2010, 147 days
after the time for filing expired. H.R. Petitioner expressly acknowledged that it was
filing past the regulatory deadline. H.R.

Therefore, I conclude that Petitioner did not submit a timely request for hearing.

B. Petitioner has not demonstrated good cause to extend the time for
filing provided by 42 C.F.R. § 498.40(c)(2).

I may extend the time for filing the request “for good cause shown.” 42 C.F.R.

§ 498.40(c)(2). A definition of “good cause” does not exist in the applicable regulations,
and the “[Departmental Appeals Board] has never attempted to provide an authoritative
or complete definition of the term ‘good cause’ in section 498.40(c)(2).” Hillcrest
Healthcare, L.L.C., DAB No. 1879, at 5 (2003).

' The date of receipt is presumed to be five days after the date on the notice, unless a
showing exists that it was, in fact, received earlier or later. 42 C.F.R. §§ 498.40(a)(2),
498.22(b)(3). Petitioner does not contend that the decision was received at a later date.
In response to my Order, Petitioner contends that “[h]ad the [Medicare contractor]
provided the true reason from the beginning as to why our number was being revoked, we
could have been allowed more time to resolve the issue by submitting a correctly signed
surety bond during the appeals process.” P. Resp. at 1. Petitioner asserts: “We didn’t
know the root cause of the problem - an invalid signature - until we heard from the
Hearing Officer with an unfavorable hearing decision. By this time, we had closed the
location and didn’t see the need to pursue another hearing as the surety bond was to be
cancelled.” /d. at 2.

While I do not attempt a single comprehensive definition of what constitutes good cause,
it cannot be merely the choice not to appeal, later regretted. Any issue about the clarity
of the grounds for the revocation that remained after the reconsideration decision could
have formed part of a timely appeal, but KCI has not shown that it was affirmatively
misled in some way that precluded its making a timely appeal.

KCI does not deny that the reconsideration decision explained the steps required to
perfect an appeal. In its reply, CMS properly notes that KCI was responsible for
knowing the legal consequences of its choice not to appeal, and given the scale of the
enterprise as described in its own submission, had the resources to make an informed
decision. KCI cannot now avoid the consequences of that decision.

I conclude that Petitioner has not demonstrated good cause to extend the time for filing
its request for hearing.

II. Conclusion

Petitioner did not timely file a request for hearing, and I do not find good cause to justify
extending the time for filing. I therefore, on my own motion, dismiss this case for cause.
42 CFR. § 498.70(c).

/s/
Leslie A. Sussan
Board Member