Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Humility of Mary Health Partners d/b/a) Date: June 24, 2009
St. Elizabeth Boardman Health Center, )
(CCN: 36-0276), )
)
Petitioner, )
)

-V.- ) Docket No. C-08-676

) Decision CR1965
Centers for Medicare and Medicaid )
Services. )
)
DECISION

l affirm the decision of the Centers for Medicare & Medicaid Services (CMS) to certify
Petitioner, Humility of Mary Health Partners d/b/a St. Elizabeth Boardman Health Center,
for participation in the Medicare program effective August 9, 2007, over Petitioner’s
assertion that an earlier certification date of August 1, 2007 is warranted.

I. Background

Petitioner is an acute care hospital located in Boardman, Ohio, that sought certification
for participation in the Medicare program. Petitioner submitted an application for
Medicare enrollment to participate in the Medicare program as an acute care hospital in
early May 2007. CMS notified Petitioner by letter dated October 1, 2007 of its
acceptance into the Medicare program effective August 9, 2007. On November 21, 2007,
Petitioner filed a request for reconsideration of CMS’s initial determination regarding the
August 9, 2007 effective date. CMS informed Petitioner on June 18, 2008 that it affirmed
the initial determination establishing the Medicare certification effective date of August 9,
2007.

Petitioner timely filed a request for hearing before an administrative law judge (ALJ) at
the Departmental Appeals Board (Board) by letter dated August 11, 2008, asserting that
the certification effective date should be August 1, 2007, not August 9, 2007. On August
21, 2008, the matter was assigned to me for hearing and decision. On that date, I issued
an initial Order directing, among other things, the filing of any potentially dispositive
motions within 60 days.

On November 14, 2008, CMS filed a Motion for Summary Disposition (CMS Br.).
CMS’s motion was accompanied by 10 exhibits identified as CMS Ex. 1 through CMS
Ex. 10. A telephone pre-hearing conference was convened with the parties on November
21, 2008. During the conference, Petitioner indicated that it would be filing a response to
CMS’ motion for summary disposition. Additionally, Petitioner stated that this matter
could be decided based on the parties’ written submissions. Based on the parties’
representations that they wished to proceed on the dispositive motions, a briefing
scheduled was issued. See Order dated December 5, 2008. On December 19, 2008,
Petitioner filed its response opposing CMS’s motion and its own cross-motion for
summary disposition (P. Br.). Petitioner’s response was accompanied by 15 exhibits
identified as P. Ex. A through P. Ex. O. On January 23, 2009, CMS filed a reply (Reply)
to Petitioner’s response. Petitioner chose not to file a sur-reply. There being no
objections, I am admitting CMS Exs. 1-10 and P. Exs. A-O into evidence.

After consideration of the written arguments submitted by the parties as well as the entire
record in this matter, I grant CMS’s motion for summary disposition. In doing so, I find
that Petitioner is not entitled to a Medicare certification date earlier than August 9, 2007 —
the date CMS certified Petitioner as a Medicare participating provider.

II. Applicable Law and Regulations

Section 1866 of the Social Security Act (Act) requires that a prospective provider enter
into a provider agreement with CMS in order to participate in the Medicare program.
Before CMS will accept an agreement from a prospective provider, the prospective
provider must meet the conditions of participation relevant to that provider. 42 C.F.R.
§§ 488.3(a)(2) and 489.10(a).

The participation requirements for a hospital, such as Petitioner, to participate in
Medicare are set forth at 42 C.F.R. Part 482. CMS and its agents (such as state survey
agencies or a national accreditation organization) determine whether a prospective
provider is complying with applicable federal requirements pursuant to the survey and
certification process set forth at 42 C.F.R. Part 488. 42 C.F.R. §§ 488.11(a), (d); 488.12;
488.26(c)(1).

The regulation at 42 C.F.R. § 489.13 establishes the general rule for determining the
effective date of a provider agreement for a prospective provider. A prospective provider
may qualify for a participation agreement if CMS finds the entity in compliance based on
a survey of the facility by a state survey agency. 42 C.F.R. § 489.13(a)(1). In the
alternative, a prospective provider may qualify for a participation agreement based on
accreditation “by an accrediting organization whose program has CMS approval at the
time of [the] accreditation survey and accreditation decision.” 42 C.F.R.
§ 489.13(a)(1)(ii).

Until a hospital has been assessed and certified, and until its agreement has been
approved based on that assessment, its status is that of a “prospective provider.” 42
C.F.R. § 498.2. Section 1865(a) of the Act provides that if CMS finds that accreditation
of a hospital by a national accreditation organization provides reasonable assurance that
Medicare participation requirements are met, CMS may then treat the prospective
provider as meeting the requirements. 42 C.F.R. § 488.10(d).

Under 42 C.F.R. § 489.13(d)(2) if the provider is accredited by a CMS-approved national
accrediting organization at the time of the accreditation survey and decision, and CMS
deems the provider to meet the applicable federal participation requirements, then a
retroactive effective date for a participation agreement is available. Section 498.13(d)(2)
permits an effective date that is retroactive for up to one year to encompass dates on
which the provider furnished to a Medicare beneficiary covered services for which it has
not been paid.

III. Issues, Findings of fact and conclusions of law
A. Issues
The issues in this case are:
1. Whether summary judgment is appropriate;

2. Whether the effective date of Petitioner’s participation is August
9, 2007, or an earlier date; and

3. Whether I have authority based on the principle of equitable
estoppel to order CMS to certify Petitioner for participation in the
Medicare program on a date prior to August 9, 2007.

B. Findings of fact and conclusions of law
I make findings of fact and conclusions of law (Findings) to support my decision to grant

CMS’s motion for summary disposition. Each finding is noted below in bold face and
italics, followed by a discussion of each finding.
1. Summary judgment is appropriate in this case because there are no
disputed issues of material fact.

An ALJ may decide a case on summary judgment, without an evidentiary hearing, if the
case presents no genuine issue of material fact and the undisputed facts clearly
demonstrate that one party is entitled to judgment as a matter of law. Crestview Parke
Care Center v. Thompson, 373 F.3d 743, 750 (6" Cir. 2004); Livingston Care Center v.
Dep’t of Health & Human Services, No. 03-3489, 2004 WL 1922168, at *3 (en Cir.
2004); Lebanon Nursing and Rehabilitation Center, DAB No. 1918 (2004). The movant,
or party seeking summary judgment, bears the initial burden of showing the basis for its
motion and identifying the portions of the record that it believes demonstrate the absence
of a genuine factual dispute. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The
nonmoving party must then act affirmatively by tendering evidence of specific facts
showing that a dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 n.11 (1986) (quoting Federal Rules of Civil Procedure 56(e)); see also
Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehabilitation Center,
DAB No. 1918. To accomplish this, the nonmoving party must go beyond mere
allegations, and must come forward with factual evidence that creates a genuine issue of
material fact. In deciding a summary judgment motion an ALJ may not make credibility
determinations or weigh conflicting evidence but must instead view the entire record in
the light most favorable to the nonmoving party, and make all reasonable inferences
drawn from the evidence in that party’s favor. Wade Pediatrics, DAB No. 2153, at 16-17
(2008), citing U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962); Pollock v. American Tel. &
Tel. Long Lines, 794 F.2d 860, 864 (ee Cir. 1986); Innsbruck HealthCare Center, DAB
No. 1948 (2004); Madison Health Care, Inc., DAB No. 1927 (2004).

Under Federal Rules of Civil Procedure 56 (Rule 56), a “material fact” is a fact which, if
it exists, may affect the outcome of a case. A “genuinely disputed” material fact exists
when opposing parties advance different versions of an event. The concept of a genuine
dispute as to the facts is critical to understanding how summary judgment works. A fact
offered by a party is not in dispute simply because the opposing party asserts that it is in
dispute. In order for there to be a dispute as to the facts the opposing party must offer a
version of events that differs materially from the version offered by the moving party.
Additionally, a disagreement between parties as to the meaning of facts is not an
impediment to summary judgment under Rule 56. The trier of fact always has the
authority to draw conclusions from facts, whether the case is disposed of by summary
judgment, or after a hearing. Thus, arguments about the meaning of facts — as opposed to
disputes as to what facts exist — constitute no impediment to granting summary judgment
in a case.

Both parties in this matter have moved for summary judgment and I find that this case is
appropriate for summary judgment. Here, the parties agree on the essential facts of when
Petitioner was surveyed, by whom, and for what purpose. Their difference lies in what
legal significance, in light of the applicable law and regulations, should be attributed to
those facts. With no genuine dispute as to any material fact, I find summary judgment is
appropriate in this case. The central legal issue in this case is whether CMS correctly
certified Petitioner to participate in Medicare on August 9, 2007. In evaluating the
parties’ submissions, | find that even if I construe the entire record in the light most
favorable to Petitioner, as discussed below, I find that CMS correctly certified Petitioner
to participate in Medicare on August 9, 2007.

2. The effective date of Petitioner’s participation agreement may not be
any earlier than August 9, 2007, the date it became accredited by a CMS-
approved national accrediting organization.

Petitioner appeals the effective date of its certification to participate as a hospital in the
Medicare program. Petitioner asks that I find that it satisfied all conditions of Medicare
participation as of August 1, 2007, and that I require CMS to retroactively certify it on
that date. P. Br. at 1. Petitioner contends that it is entitled to a certification date of
August 1, 2007 based on its receipt of a preliminary accreditation from the Joint
Commission on the Accreditation of Healthcare Organizations (JCAHO) effective July
25, 2007, and receipt of its bed registration as a hospital from the Ohio Department of
Health (ODH) on July 31, 2007. Petitioner maintains that these two events entitles it to
Medicare certification as of August 1, 2007. Further, Petitioner argues that this case is
distinguishable from other unsuccessful appeals for two reasons: (1) it had an established
track record of sustained clinical performance; and (2) it had been given “contradictory”
and “confusing” directives from ODH, JCAHO, and CMS which it relied upon to its own
detriment. P. Br. at 2.

CMS maintains that based on Petitioner’s accredited status with JCAHO and its
acceptable application (CMS-855A), CMS certified Petitioner as a Medicare provider as
of August 9, 2007 — the date CMS maintains Petitioner meet all participation
requirements. CMS Br. at 6. CMS further maintains that even though Petitioner
provided services to Medicare beneficiaries during the period from August | through 8,
2007, it cannot be reimbursed for those services as CMS had no assurances that Petitioner
met all federal participation requirements during that time. CMS asserts that it was not
until JCAHO indicated to CMS that Petitioner had met the applicable federal participation
requirements that CMS could certify Petitioner as a Medicare provider with an effective
date of August 9, 2007. CMS Reply at 1-2.

The undisputed facts show that:

(1) In early May 2007, Petitioner filed its application for Medicare certification
(CMS-855A). The application was received by the fiscal intermediary, National
Government Services, on May 3, 2007. P. Br. at 4; P. Ex. D at 61; CMS Br. at 3;
CMS Ex. 1, at 5, 48.
(2) On July 11, 2007, ODH notified Petitioner that it had received its application
to participate in the Medicare program as a hospital, and asked Petitioner when

its facility would be ready for a survey. The notice instructed Petitioner that its
effective date of participation would be based on the criteria found at 42 C.F.R.

§ 489.13. The notice also requested that Petitioner notify ODH if it was opting for
deemed status through an approved accreditation agency. P. Br. at 5; P. Ex. F;
CMS Br. at 3; CMS Ex. 2.

(3) Petitioner sought accreditation with JCAHO through the early survey process.
P. Br. at 6-7; CMS Br. at 3; CMS Ex. 4.

(4) On July 24, 2007, Petitioner underwent a first survey with JCAHO and
Petitioner was granted a preliminary accreditation by JCAHO on July 27, 2007.
P. Br. at 6, 7, 11; P. Ex. G; CMS Br. at 4; CMS Ex. 4.

(5) By letter dated July 31, 2007, Petitioner advised ODH that it was opting for
deemed status through JCAHO for Medicare certification purposes. P. Br. at 7;
P. Ex. H; CMS Br. at 3; CMS Ex. 3.

(6) By notice dated July 31, 2007, ODH notified Petitioner that it had met the
necessary hospital registration requirements and was therefore registered with the

ODH. P. Br. at 7; P. Ex. I; CMS Br. at 4; CMS Ex. 5.

(7) Petitioner commenced admitting patients on August 1, 2007. P. Br. at 7.

(8) Petitioner underwent the second survey by JCAHO on August 6 through 8,
2007. P. Br. at 7-8; CMS Br. at 6.

(9) On August 10, 2007, CMS was notified by JCAHO that Petitioner had been
granted an accreditation decision, and the accreditation cycle was effective August
9, 2007. P. Br. at 8; P. Ex. J; CMS Br. at 4; CMS Ex. 6.

(10) By letter dated October 1, 2007, CMS notified Petitioner that it was certified
as a Medicare provider as of August 9, 2007. P. Br. at 8; P. Ex. L; CMS Br. at 5;
CMS Ex. 7.

Sections 488.4 and 488.5 of the regulations allow CMS to designate an entity to conduct
certification surveys on its behalf. Petitioner had a choice to qualify for a Medicare
participation agreement in one of two ways: based on a survey by the state survey
agency; or where CMS “deems” it to be in compliance with conditions for participation
based on its accreditation by a national accrediting organization. 42 C.F.R.

§ 489.13(a)(1)(i) and (ii). CMS has designated JCAHO as an entity authorized to conduct
Medicare certification surveys. 42 C.F.R. § 488.5. For a “deemed” status, for which
Petitioner opted, the effective date of Petitioner’s agreement is the date on which it meets
all applicable federal participation requirements. 42 C.F.R. § 489.13(d)(1).

Petitioner acknowledges that it opted for the early survey process with JCAHO. P. Br. at
2, 6-7; P. Ex. H; CMS Ex. 3. The selection of the early survey process required Petitioner
to undergo two onsite surveys — the first or initial survey prior to Petitioner providing
patient care, and the second survey after it was operational. P. Br. at 6. The initial survey
was initiated on July 24, 2007, and Petitioner was granted a preliminary accreditation by
JCAHO on July 27, 2007. P. Br. at 6; P. Ex. G. The second survey of Petitioner’s

ospital was completed on August 8, 2007. P. Ex. J.

On August 10, 2007, JCAHO then notified CMS that it had granted accreditation to
Petitioner for all services with an effective date of August 9, 2007. P. Br. at 8; P. Ex. J.
As outlined at 42 C.F.R. §§ 489.13(a)(1)(ii) and 489.13(b), the certification date for a
prospective provider seeking accreditation is the date CMS deems it as meeting all
relevant federal requirements. The provider agreement is effective on the date of the
survey if the provider meets all applicable federal requirements. In the case before me, I
find that the second JCAHO survey finding that Petitioner’s accreditation cycle was
effective August 9, 2007, is the date that Petitioner met all applicable Medicare
participation requirements.

3. ODH’s state registration of Petitioner did not equate to a survey to
certify a prospective provider for Medicare participation.

Petitioner asserts that while ODH does not issue state licenses it does require providers to
undergo a bed registration which requires adherence to standards pertaining to building,
operations, medical staff, quality assurance and patient care. P. Br. at 11. Petitioner
asserts that it met state registration requirements prior to August 1, 2007, and infers that
this should be construed to partially fulfill the requirements for Medicare participation.

P. Br. at 11. Petitioner maintains that “[w]hile a state registration may not be enough
standing alone, a registration in combination with a flawless comprehensive survey is
enough to meet all Federal requirements.” Jd. However, Petitioner’s reliance on this
assumption is unsupported by the regulations or case law, and is incorrect. The
inspection conducted by ODH was for the sole purpose of assessing Petitioner for bed
registration and not Medicare participation requirements. It is well established that CMS
cannot base Medicare certification on a state licensing survey or on the date of issuance
ofa state license. Arbor Hospital of Greater Indianapolis, DAB No. 1591, at 7-8 (1996).
Moreover, the regulation states specifically that a provider must be inspected and found to
be in compliance with Medicare participation requirements before certification will be
granted. 42 C.F.R. § 489.13.

Petitioner is also misguided in its assumption that the preliminary accreditation survey
performed at its hospital in July 2007 by JCAHO sufficed to establish Petitioner as having
met all federal participation requirements as a hospital for the purpose of participation in
the Medicare program. See P. Br. at 11. I find CMS’s assertions persuasive that
Petitioner’s preliminary accreditation was conditional upon the second JCAHO survey
being successfully completed. CMS Reply at 6-7; CMS Ex. 10 (fact sheet from JCAHO
comparing the first and second survey processes).

I find that based upon notice from JCAHO of Petitioner’s full accreditation status and
upon Petitioner’s acceptable application, CMS made a finding that Petitioner met all
Medicare participation requirements. Thus, CMS correctly certified Petitioner as a
Medicare provider as of August 9, 2007, the date Petitioner met all participation
requirements.

4, The “Special Rule” (42 C.F.R. § 489.13(d)(2)) does not apply to
Petitioner because it was not an accredited provider at the time it
applied for participation in the Medicare program.

Petitioner argues that 42 C.F.R. § 489.13(d)(2) entitled it to a retroactive effective date
based on its provision of services to Medicare beneficiaries from August 1 though August
8, 2007. P. Br. at 13-14. The regulation Petitioner cites provides a special rule which
affords a retroactive effective date to a provider for up to one year to cover dates upon
which the provider furnished services to a Medicare beneficiary for which it was not paid.
However, the provider must also satisfy subsection (d)(1) of the regulation which states:

If the provider . . . is currently accredited by a national accrediting
organization . . . and on the basis of accreditation, CMS has deemed the
provider . . . to meet Federal requirements. . . .

42 C.F.R. § 489.13(d)(1) (emphasis added). The regulation is clear on its face that the
provider is required to be currently accredited by a CMS-approved national accrediting
organization. Therefore, Petitioner’s reliance on the special rule is misplaced, as the
special rule does not apply to Petitioner because it was not an accredited provider at the
time it applied for participation in the Medicare program as explicitly required by 42
C.F.R. § 489.13(d)(1). Here, Petitioner did not obtain its accreditation status with
JCAHO as a hospital until August 9, 2007. CMS Ex. 6.

Petitioner asserts that its case is unique in that it had a track record of sustained clinical
performance and had been surveyed by JCAHO seven months earlier as a satellite
outpatient facility of St. Elizabeth Center. P. Br. at 2. However, Petitioner’s argument
fails. Petitioner acknowledged it was a satellite facility prior to that date and not an acute
care hospital. P. Br. at 4. Based on Petitioner’s application to enroll in the Medicare
program as an acute care hospital, JCAHO had to determine that Petitioner met all
applicable federal requirements for hospitals before it could grant Petitioner the status of
accreditation. St. Elizabeth’s full accreditation from JCAHO did not apply to Petitioner’s
pending application and certification before CMS as a hospital under the Medicare

program.

A provider who seeks a participation agreement based on its “deemed status” simply may
not participate unless and until it is accredited. JCAHO did not complete its accreditation
survey of Petitioner’s hospital for assessment as to its adherence to Medicare participation
requirements until August 8, 2007. The on-site JCAHO survey on August 8, 2007
determined that Petitioner met participation requirements as of August 9, 2007 — there is
no prior certification survey to calculate the retroactive effective date which Petitioner
now seeks. Petitioner just did not meet the necessary participation requirements until
August 9, 2007.

Even if I accept, arguendo, Petitioner’s assertion that St. Elizabeth’s full accreditation
was applicable to Petitioner, thus qualifying Petitioner as an accredited provider rather
than a prospective provider, the “Special Rule” exception would still not benefit
Petitioner here because, although retroactive certification is permitted by the regulation, it
is not required. Oak Lawn Endoscopy, DAB No. 1952 (2004). Here, CMS chose not to
grant retroactive certification to Petitioner and an ALJ cannot require or compel CMS to
use its discretion to certify a retroactive effective date. The regulation Petitioner relies on
specifically states:

Special rule: Retroactive effective date. If a provider or supplier meets the
requirements of paragraphs (d)(1) and (d)(1)(i) or (d)(1)(ii) of this section,
the effective date may be retroactive for up to one year to encompass dates
on which the provider or supplier furnished, to a Medicare beneficiary,
covered services for which it has not been paid.

42 C.F.R. § 489.13(d)(2) (emphasis added). The discretion to grant or deny retroactivity
as to a certification date clearly lies exclusively with CMS. The regulation at 42 C.F.R.

§ 489.13, as construed by the Board, clearly confers discretion on CMS to decide whether
or not to grant retroactivity based on the facts of each individual case. Oak Lawn
Endoscopy, DAB No. 1952, at 14 n.7; see also Puget Sound Behavioral Health, DAB No.
1944, at 12-14 (2004) (the Board concluded that the regulatory drafters of section
489.13(d)(2) intentionally used the phrase “may be retroactive” to evidence CMS’s
discretion to retroactively apply the “Special Rule” when it deemed appropriate.); 62 Fed.
Reg. 43,933 (Aug. 18, 1997).
10

5. Ido not have authority to provide Petitioner the relief it seeks
through its equitable and constitutional arguments.

Petitioner advances several arguments based on equitable principles. First, Petitioner
argues that CMS should be ordered to pay for the services Petitioner rendered to
Medicare beneficiaries from August | though August 8, 2007 based on principles of
equitable estoppel and unjust enrichment. P. Br. at 15-17. Petitioner also argues that the
intervening period between when it opened for business and then underwent a full survey
amounts to a regulatory taking which is prohibited under the Fifth Amendment. P. Br. at
17-20. My authority to decide these matters is outlined in the regulations under sections
42 C.F.R. §§ 498.13 and 498.5. The regulations do not grant me the authority to decide
this case based on equitable principles or based on the constitutional arguments Petitioner
advances. Oklahoma Heart Hospital, DAB No. 2183, at 16-17 (2008).

Petitioner claims it furnished to Medicare beneficiaries over $500,000 in services between
August 1 and August 8, 2007, believing that the services would be covered.

P. Br. at 16. Petitioner further claims that it was provided misinformation from ODH,
JCAHO, and CMS, upon which it detrimentally relied. Petitioner maintains that it
understood that it would be granted accreditation for all services with an effective date
earlier than August 9, 2007. P. Br. at 2.

Petitioner’s claim does not establish a need for an in-person hearing or preclude this
matter from being decided on summary disposition. In fact, Petitioner has agreed that the
case should be decided based upon written submissions. For the limited purposes of this
discussion, I accept, arguendo, Petitioner’s assertion that it was misled by the information
provided by representatives from ODH, JCAHO, and CMS which Petitioner claims it
relied upon to its own detriment. P. Br. at 2. But, in accepting the assertions, arguendo, I
note that these questions of fact are immaterial to my resolution of this matter as such
representations cannot bind CMS or estop CMS from following clear regulatory
provisions. I cannot provide Petitioner with the relief it seeks under any equitable theory.
Assuming the truthfulness of its assertions, Petitioner is still not entitled to monetary
payments not otherwise permitted by law. This forum’s well-established case law
pertaining to equitable estoppel arguments in cases such as this one are clear — estoppel
does not lie against the government even in cases where erroneous information from
government employees was received.' A provider cannot rely on an alleged
misrepresentation by a CMS representative regarding the regulatory deadline to request a

' See Office of Personnel Management v. Richmond, 496 U.S. 414 (1990); Surgery
Center of Southwest Kansas, DAB CR619, at 6-7 (1999); New Life Plus Center, CMHC,
DAB CR700, at 11-12 (2000); Tenet HealthSystem Philadelphia, Inc., DAB CR663, at 8-
10 (2000); Ophthalmology Ltd. Eye Surgery, DAB CR658, at 9 (2000); Danville Health
Care Surgery Center, DAB CR892, at 6-8 (2002).
11

hearing in order to relieve itself of acting in accordance with the regulations. See Knox
County Nursing Home, DAB CR15838, at 6-7 (2007); Hamilton County Nursing Home,
DAB CR716, at 6 (2000). Case law has established that neither the doctrine of estoppel
nor any other equitable remedy would entitle Petitioner to claim an earlier effective date.
Maher A.A. Axer (Florence Dialysis Center, Inc.), DAB CR994, at 6-7 (2003) quoting
Arbor Hospital of Greater Indianapolis, DAB No. 1591 (1996) and SRA D/B/A St. Mary
Parish Dialysis Center, DAB CR341 (1994). Moreover, it has been consistently held that
ALJs do not have the authority to hear and decide claims of estoppel against CMS or the
Secretary related to alleged dilatory processing of applications. GranCare Home Health
Service & Hospice, DAB CR464 (1997); The Rivers Health Care Resources, Inc., DAB
CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341, at 18-19;
T.L.C. Mental Health Center, DAB CR636, at 9 (1999); Therapeutic Rehabilitation
Centers, Inc., DAB CR531, at 4 (1998).

The critical issue in this case is whether Petitioner met all applicable provider
participation requirements for hospitals prior to August 9, 2007. The undisputed facts
before me clearly establish that Petitioner was not granted the status of full accreditation
by JCAHO until August 9, 2007, and CMS determined that Petitioner met all Medicare
participation requirements as of that date.

IV. Conclusion

CMS is entitled to judgment as a matter of law. The date of Petitioner’s participation
agreement may not be any earlier than August 9, 2007, the effective date of its
accreditation. CMS’s motion for summary judgment is therefore granted.

/s/
Alfonso J. Montaiio
Administrative Law Judge


Department of Health and Human Service
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: } Date: June 24, 2009
Gateway Nursing Center (CCN: 34-5329), }
) Docket No. C-07-419
Petitioner, ) Decision No. CR1963
)
v. )
)
Centers for Medicare & Medicaid Services. )
)
DECISION

Petitioner, Gateway Nursing Center, violated 42 C.F.R. §§ 483.13(c) (Tag F226') and
483.25 (Tag F309). Petitioner did not violate 42 C.F.R. §§ 483.13(b) or (c)(1)(i) (Tag
F223).’ A civil money penalty (CMP) of $3050 per day from January 21 to February 4,
2007 is not reasonable. A CMP of $3050 for February 5, 2007 and a CMP of $50 per day
from February 6 through March 7, 2007, a total CMP of $4550, are reasonable.

' This is a “Tag” designation as used in the State Operations Manual (SOM), Appendix
PP — Guidance to Surveyors for Long Term Care Facilities. The “Tag” refers to the
specific regulatory provision allegedly violated and CMS’s guidance to surveyors.
Although the SOM does not have the force and effect of law, the provisions of the Act
and regulations interpreted clearly do have such force and effect. State of Indiana by the
Indiana Department of Public Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991);
Northwest Tissue Center v. Shalala, | F.3d 522 (7th Cir. 1993). Thus, while the
Secretary may not seek to enforce the provisions of the SOM, she may seek to enforce
the provisions of the Act or regulations as interpreted by the SOM.

> All references are to the revision of the Code of Federal Regulations (C.F.R.) in effect
at the time of the survey, unless otherwise indicated.
I. Background

Petitioner, located in Lenoir, North Carolina, is authorized to participate in Medicare as a
skilled nursing facility (SNF) and the North Carolina Medicaid program as a nursing
facility (NF). Petitioner was subject to a complaint investigation survey by the North
Carolina Department of Health and Human Services (state agency) that ended on
February 16, 2007, and Petitioner was found not to be in substantial compliance with
program participation requirements. The Centers for Medicare and Medicaid Services
(CMS) notified Petitioner by letter dated March 9, 2007, that it was imposing a CMP of
$3050 per day effective January 21, 2007 through February 4, 2007, and a CMP of $50
per day effective February 5, 2007 and until Petitioner returned to substantial compliance
with program participation requirements. CMS also notified Petitioner that a denial of
payment for new admissions (DPNA) would be imposed effective March 25, 2007, and
termination of its provider agreement would be effective August 16, 2007, if Petitioner
did not return to substantial compliance before those dates. The state agency conducted a
revisit survey on March 19, 2007 that found that Petitioner returned to substantial
compliance effective March 7, 2007. The DPNA and termination remedies were not
effectuated.

Petitioner requested a hearing on April 30, 2007. The case was assigned to me for
hearing and decision on May 10, 2007, and a Notice of Case Assignment and Prehearing
Development Order was issued on that date. A hearing was convened on November 29,
2007, in Charlotte, North Carolina and a 263-page transcript (Tr.) of the proceeding was
prepared. CMS offered and I admitted CMS exhibits (CMS Ex.) 1 through 33. Tr. 14.
Petitioner offered and I admitted Petitioner exhibits (P. Ex.) 1 through 8. Tr. 15. CMS
called as witnesses surveyors Amy Harroff, R.N., B.S.N., and Evelyn Thornton, R.N.
Petitioner elicited testimony from Geoffrey Burbridge, M.D., and Jane Foster, R.N.,
Petitioner’s Administrator. The parties submitted post-hearing briefs and post-hearing
reply briefs.

II. Discussion
A. Issues
The issues in this case are:
Whether there is a basis for the imposition of an enforcement remedy; and

Whether the remedy proposed is reasonable.
B. Applicable Law

The statutory and regulatory requirements for participation by a long-term care facility
are found at sections 1819 (SNF) and 1919 (NF) of the Social Security Act (the Act) and
at 42 C.F.R. Part 483. Section 1819(h)(2) of the Act vests the Secretary of Health and
Human Services (the Secretary) with authority to impose enforcement remedies against a
SNF for failure to comply substantially with the federal participation requirements
established by sections 1819(b), (c), and (d) of the Act.? Pursuant to section
1819(h)(2)(C), the Secretary may continue Medicare payments to a SNF not longer than
six months after the date the facility is first found not in compliance with participation
requirements. Pursuant to section 1819(h)(2)(D) of the Act, if a SNF does not return to
compliance with participation requirements within three months, the Secretary must deny
payments for all individuals admitted to the facility after that date —- commonly referred to
as the mandatory or statutory DPNA. In addition to the authority to terminate a
noncompliant SNF’s participation in Medicare, the Act grants the Secretary authority to
impose other enforcement remedies, including a discretionary DPNA, CMPs,
appointment of temporary management, and other remedies such as a directed plan of
correction. Act § 1819(h)(2)(B).

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

§ 488.301 (emphasis in original). A deficiency is a violation of a participation
requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary’s
regulations at 42 C.F.R. Part 483, subpart B. Facilities that participate in Medicare may
be surveyed on behalf of CMS by state survey agencies in order to determine whether the
facilities are complying with federal participation requirements. 42 C.F.R. §§ 488.10-
488.28; 488.300-488.335. The regulations specify the enforcement remedies that CMS
may impose pursuant to its delegated authority if a facility is not in substantial
compliance with Medicare requirements. 42 C.F.R. § 488.406.

The Act and regulations make a hearing before an administrative law judge (ALJ)
available to a long-term care facility against which CMS has determined to impose an
enforcement remedy. Act § 1128A(c)(2); 1866(h); 42 C.F.R. §§ 488.408(g);
498.3(b)(13). The hearing before an ALJ is a de novo proceeding. Anesthesiologists
Affiliated, et al, DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir. 1991); Emerald Oaks,

> Section 1919(h)(2) of the Act gives similar enforcement authority to the states to
ensure that NFs comply with the participation requirements established by section
1919(b), (c), and (d) of the Act.
DAB No. 1800, at 11 (2001); Beechwood Sanitarium, DAB No. 1906 (2004); Cal Turner
Extended Care, DAB No. 2030 (2006); The Residence at Salem Woods, DAB No. 2052
(2006). A facility has a right to appeal a “certification of noncompliance leading to an
enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also 42 C.F.R. §§ 488.330(e) and
498.3. However, the choice of remedies by CMS or the factors CMS considered when
choosing remedies are not subject to review. 42 C.F.R. § 488.408(g)(2). A facility may
only challenge the scope and severity level of noncompliance found by CMS ifa
successful challenge would affect the range of the CMP that could be imposed by CMS
or impact the facility’s authority to conduct a nurse aide training and competency
evaluation program. 42 C.F.R. §§ 498.3(b)(14) and (d)(10)(i). The CMS determination
as to the level of noncompliance “must be upheld unless it is clearly erroneous” (42
C.F.R. § 498.60(c)(2)), including the finding of immediate jeopardy. Woodstock Care
Center, DAB No. 1726, at 9, 38 (2000), aff'd, Woodstock Care Center v. Thompson, 363
F.3d 583 (6th Cir. 2003). The Departmental Appeals Board (the Board) has long held
that the net effect of the regulations is that a provider has no right to challenge the scope
and severity level assigned to a noncompliance finding, except in the situation where that
finding was the basis for an immediate jeopardy determination. See e.g., Ridge Terrace,
DAB No. 1834 (2002); Koester Pavilion, DAB No. 1750 (2000).

The standard of proof or quantum of evidence required is a preponderance of the
evidence. CMS has the burden of coming forward with the evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense. See
Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Ctr.
v. United States Dep’t of Health and Human Services, Health Care Fin. Admin., No. 98-
3789 (GEB), slip op. at 25 (D.N.J. May 13, 1999); Cross Creek Health Care Center,
DAB No. 1665 (1998); Emerald Oaks, DAB No. 1800; Batavia Nursing and
Convalescent Center, DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr.
v. Thompson, 129 F. App’x. 181 (6th Cir. 2005); Batavia Nursing and Convalescent Inn,
DAB No. 1911 (2004).

C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by my findings of fact and analysis.

The surveyors allege in the Statement of Deficiencies (SOD) dated February 16, 2007,
that Petitioner violated 42 C.F.R. §§ 483.13(b) and 483.13(b)(1)(i) * (Tag F223) (scope

* There is no 42 C.F.R. § 483.13(b)(1)(i). The surveyors recite the language of 42
C.F.R. § 483.13(c)(1)(i) under Tag F223 and I recognize that the surveyors’ reference to
§ 483.13(b)(1)(i) was a simple clerical error. The erroneous citation caused no prejudice
to Petitioner as the language of the correct subsection is recited.
and severity (S/S) J), 483.13(c) (Tag F226) (S/S J), and 483.25 (Tag F309) (S/S D).
CMS Ex. 2. The surveyors allege that the violations of 42 C.F.R. §§ 483.13(b) and
(c)(1)(i) (Tag F223) and 483.13(c) (Tag F226) posed immediate jeopardy to Petitioner’s
residents from January 21, 2007 to February 5, 2007. CMS Ex. 2, at 1. The alleged
violations cited under Tags F223 and F226 are closely related and they involve the same
facts so they are discussed together.

1. Petitioner did not violate 42 C.F.R. § 483.13(b).
2. Petitioner violated 42 C.F.R. § 483.13(c).

3. Immediate jeopardy was clearly erroneous from January 21, 2007
to February 4, 2007 but not clearly erroneous as to February 5, 2007.

(a) Facts.

Resident 1, a female born in 1915, was 91 years old when the events that gave rise to the
deficiency occurred. Her diagnoses included severe dementia with psychosis, confusion
and poor judgment; depression; muscle atrophy and weakness with difficulty walking and
lack of coordination; spinal stenosis, degenerative disc disease, and osteoarthritis, and
chronic back pain; peripheral neuropathy, and she had a history of sleeping during the
day and then screaming and yelling during the night. CMS Ex. 11, at 6-13. According to
a Minimum Data Set (MDS) with an assessment reference date of October 9, 2006 and an
MDS from January 2007, and her care plan, Resident 1 ambulated with a wheelchair and
required supervision and assistance when using her wheelchair. CMS Ex. 11, at 16-17,
38; P. Ex. 1, at 9.

During the early morning of February 5, 2007, Resident 1 was yelling and screaming.
One of Petitioner’s staff, LPN John Tellefsen, directed the Certified Nurse Assistants
(CNAs) to get Resident 1 out bed and into her wheelchair. Resident 1 was wheeled to the
front desk and she was quiet for 30 to 45 minutes but then started screaming again that
she wanted to go home. LPN Tellefsen then wheeled her outside the facility for one to
three minutes and told Resident | that it was too cold for her to go home. Resident 1 was
wearing only a hospital gown and diaper. Resident | was reported to say that she nearly
froze to death. CMS Ex. 14, at 7, 11-12, 13, 14. During the early morning hours on
February 5, 2007, the outdoor temperature in the area ranged from 23 to 28 degrees
Fahrenheit. CMS Ex. 23, at 3, 9. The incident was reported to an R.N. and LPN on
February 5, 2007, but not to the Administrator of the facility. CMS Ex. 14, at 17.
Petitioner does not dispute that this incident occurred. Tr. 23-24.

The evidence shows that on February 8, 2007, LPN Tellefsen was suspended pending
investigation of the incident of February 5, 2007. He was not scheduled to work and did
not return to the facility after his shift ended at about 7:00 p.m. on February 5, 2007. He
was terminated effective February 12, 2007. CMS Ex. 14, at 1-2.

The surveyors also alleged in the SOD that a similar incident involving LPN Tellefsen
wheeling Resident | outside into the cold occurred on January 21, 2007, the date the
surveyors found immediate jeopardy began. CMS Ex. 2, at 1, 7, 9-10, 12, 16, 18-21. The
surveyors report in the SOD that on February 15, 2007, a nurse gave them a statement
written by CNAs 3, 4, and 5, in which the CNAs state that there were two instances when
LPN Tellefsen took Resident 1 outside — January 21, 2007 and February 4/5, 2007. CMS
Ex. 2, at 7, 19; Tr. 75. The SOD indicates that the surveyors interviewed CNA 3 on
February 16, 2007, she alleged that she witnessed the incident on February 5, 2007, but
the SOD does not indicate she mentioned the alleged January 21 incident. The SOD
indicates the surveyors interviewed CNA 4 on February 16, 2007, she indicated she was
not present the night of February 5, but she alleged facts about an incident on January 21,
2007. The SOD indicates the surveyors interviewed CNA 5 on February 16, 2007 and
she claimed to have witnessed the incident on January 21, 2007. CMS Ex. 2, at 7-9, 18-
19, 20-21. The surveyors also allege in the SOD that on February 16, 2007, the
Administrator stated that incidents occurred on both January 21, 2007 and February 5,
2007, and also stated that it was not unusual for staff to take Resident 1 outside for
redirection. CMS Ex. 2, at 9-10, 21. Petitioner does not concede before me that the
incident occurred on January 21, 2007. The evidence shows that CNA 3 was Brenda
Gill, CNA 4 was Tammy Hamby, and CNA 5 was Alice Caton.* The written statement
to which the surveyors refer is in evidence as CMS Ex. 14, at 10 and P. Ex. 7.
Subsequent statements by CNA Gill and CNA Hamby indicate that they did not witness
an incident on January 21, 2007. CMS Ex. 14, at 8, 9. CNA Caton’s pay record shows
that she was not paid for working on January 21, 2007. P. Ex. 2, at 5. CNA Gill’s pay
record shows that she was not paid for working on January 21, 2007. P. Ex. 4, at 4. All
three CNAs were disciplined by Petitioner after the survey in March 2007 for having
made false statements to the surveyors and for impeding Petitioner’s investigation of
possible resident abuse. CMS Ex. 14, at 3-5; Tr. 48. Surveyor Harroff testified that the
three CNAs alleged a second incident occurred but she could not say when it occurred as
Petitioner failed to investigate. She testified that the surveyors nevertheless declared
immediate jeopardy as of January 21, 2007 based upon the three CNAs’ written

* CMS indicates in Addendum D to its Post-Hearing Brief that Tammy Hamby was CNA
3, Brenda Gill was CNA 4, and Alice Caton was CNA 5, consistent with the testimony of
Surveyor Thornton at hearing. Tr. 107. However, the CMS Addendum D is inconsistent
with the notations on the evidence that CMS offered at hearing. CMS Ex. 14, at 3, 5, 8,
9, and 10. The identity of the CNAs is not disputed and the correctness of their
identifiers as used by the surveyors has no impact on my factual findings and
conclusions.
statement. Tr. 41-43. Surveyor Thornton agreed that it was not possible to determine the
date of a second incident, but she believed a second incident occurred. Tr. 102. Surveyor
Thornton also testified that when she interviewed CNAs Hicks and Hamby about an
incident on January 21, 2007, they told her they had not witnessed the incident but had
heard about it. Tr. 104, 142-43, 163-64.

Petitioner’s Administrator, Jane Foster, testified the first she had heard about an incident
on January 21, 2006 was when Surveyor Thornton showed her a copy of the statement of
the three CNAs (CMS Ex. 14, at 10) on February 16, 2007 at about 8:30 a.m. She also
testified that she did not agree that two incidents actually occurred contrary to what is
stated in the SOD. She testified that she told surveyors that she was unaware of any
incident on January 21, 2007, prior to being told by Surveyor Thornton. Tr. 204-06, 238-
39. She testified that after being told about the alleged incident she interviewed CNAs
Gill, Hamby, and Caton. Based on her investigation, she concluded that the statement of
the three CNAs was false and all three employees were disciplined. She also concluded
that there was no other credible evidence of any other incident involving Resident 1. Tr.
207-12, 235-36; P. Exs. 2-4.

Administrator Foster testified that she was first informed of the incident on February 5,
2007 at 8:30 p.m. on February 7, 2007, when she was called at home by a former
employee who heard that a complaint was going to be filed. She immediately called her
Director of Nursing, Pat Hafner, and they agreed to begin the investigation the next
morning. Tr. 226-28. She participated in an interview of LPN Tellefsen. He admitted he
took Resident 1 outside on February 5, 2007, but only briefly to show her it was too cold
for her outside, and only after all other efforts to stop her yelling failed. He denied any
other incident. Tr. 230-33.

There is no dispute that Petitioner had an Abuse Prevention Program policy that was

originally issued in February 2005. CMS Ex. 17, at 1-6; P. Ex. 6. Petitioner’s abuse

prevention policy requires each employee to immediately report any suspected abuse.
CMS Ex. 17, at 1; P. Ex. 6, at 1.

(b) Analysis.

The surveyor’s alleged in the SOD that Petitioner violated 42 C.F.R. §§ 483.13(b) and
483.13(c)(1)() (Tag F223) because Petitioner failed to ensure that Resident 1 was not
subject to mental abuse on two occasions; that immediate jeopardy began on January 21,
2007, the date of the first alleged incident; that immediate jeopardy was abated on
February 5, 2007, the date LPN Tellefsen left the facility; and that after February 5, 2007,
the Petitioner remained out of compliance with the two regulatory provisions with the
potential for more than minimal harm pending completion of training staff and
incorporating corrections into Petitioner’s quality assurance program. CMS Ex. 2, at 1.
The surveyors allege that Petitioner also violated 42 C.F.R. § 483.13(c) (Tag F226)
because Petitioner failed to implement its written policies and procedures for the
reporting of abuse as evidenced by the alleged incidents involving Resident 1. CMS Ex.
2, at 12. The allegations regarding immediate jeopardy were the same as those under Tag
F223. CMS Ex. 12, at 13. The surveyors specifically alleged that Petitioner failed to
implement specific provisions of its abuse prevention policy. CMS Ex. 12, at 13-14. The
CMS arguments to me are consistent with the allegations of the SOD, except CMS also
argues that a similar incident involving Resident 1 occurred December 17, 2006. CMS
Post-Hearing Brief (CMS Brief) at 4-13; CMS Reply Brief (CMS Reply) at 3-8.

The regulations provide that a resident has the right to be free from verbal, sexual,
physical, and mental abuse, corporal punishment, and involuntary seclusion. 42 C.F.R. §
483.13(b). The definition for “abuse” is found at 42 C.F.R. § 488.301, which provides
that abuse is “the willful infliction of injury, unreasonable confinement, intimidation, or
punishment with resulting physical harm, pain or mental anguish.” Section 483.13(c) of
42 C.F.R. provides:

(c) Staff treatment of residents. The facility must develop and
implement written policies and procedures that prohibit
mistreatment, neglect, and abuse of residents and
misappropriation of resident property.

(1) The facility must--

(i) Not use verbal, mental, sexual, or physical abuse,
corporal punishment, or involuntary seclusion;

According to CMS there were three incidents that I need to consider. Though not alleged
in the SOD as the basis for a deficiency, CMS argues that Petitioner’s clinical records
reflect that on December 17, 2006, Petitioner’s staff took Resident 1 outside when other
efforts to redirect her from yelling failed. CMS Brief at 5, n.4; 11; CMS Reply at 3, n.3.°
The December 17, 2006 progress note reflects the time 7:00 p.m. indicating that Resident
1 was taken outside at or before that time. The note also indicates that the resident was
taken outside for the legitimate purpose of attempting to redirect her. I am aware of no
authority to support a proposition that taking a resident outside is abuse per se. Further,
the record includes no evidence that permits an inference that taking the resident outside
might have been abusive, such as low outdoor temperature, the clothing worn at the time,
or evidence related to the demeanor or behavior of staff that took her outdoors. The fact
that the event was recorded in Petitioner’s clinical records is inconsistent with an
inference that the event was perceived to be an incident of abuse by staff. Furthermore,

° CMS incorrectly states in its reply brief the date was December 6, 2006, citing CMS
Ex. 44, at 11. The dates for the progress notes at CMS Ex. 44, at 11 are December 16
through 19, 2006.
the surveyors did not allege that the progress note from December 17, 2006 reflected
abuse and they did not allege that conduct violated any regulations even though they
clearly had the progress note at the time they made their findings. Because the SOD
includes no allegations regarding an incident on December 17, 2006, Petitioner was not
on notice to defend any alleged deficiency based on an incident on that date. Based upon
my decision on the deficiencies alleged, I find it unnecessary to remand the case to CMS
to address this new issue raised after hearing or to reopen the record for the taking of
further evidence. 42 C.F.R. § 498.56.

CMS also encourages me to conclude that Resident 1 was wheeled outside on or about
January 21, 2007, and that that also constituted an incident of abuse. The evidence does
not support a conclusion that Resident | was taken outside on or about January 21, 2007.
In finding that an incident occurred on or about January 21, 2007, the surveyors relied
upon an undated and unsigned written statement that indicates on its face that it was a
statement of Brenda Gill, Tammy Hamby, and Alice Caton. It is alleged in the statement
that they:

[Witness [sic] the matter of John Tellefson [sic] taking the
patient [Resident 1] out side [sic] on two occasion [sic]
because she was loud and could not sleep. So instead of
giving her something to calm her down he put her out in the
cold 1-21-07 and 2-4-07. [H]e left her out about 35 to 45
seconds at a time.

CMS Ex. 14, at 10; P. Ex. 7.
In different hand-writing is the statement:

John Tellefson [sic] took resident out B Hall on 1-21-07 and
Alice Caton was coming up hall and heard resident yelling
and asking nurse to bring her back in and bring her ‘some
firewood she was freezing to death.’

CMS Ex. 14, at 10; P. Ex. 7. The surveyors received the statement from LPN Corley
who told the surveyors that on the morning of February 6, 2007, she heard CNAs Gill,
Hamby, and Caton discussing the incident and she had the CNAs write the statement but
she thought that R.N. Walsh, who was with her at the time, had turned-in the statement.’
CMS Ex. 2, at 6-7, 18-19; Tr. 75-78, 162. Surveyor Thornton testified that she

7 According to Surveyor Harroff, there was a second page to the statement that included
a statement by LPN Corley and R.N. Walsh that they signed. However, the second page

was not offered or admitted as evidence and Petitioner denied any knowledge of a second
page. Tr. 75-78.
10

interviewed CNAs Hamby and Hicks and they denied witnessing an incident on January
21, 2007, but they told her that they heard about an incident on that date. Tr. 104, 164.
Surveyor Thornton also interviewed CNA Caton, who worked at Petitioner’s facility
every other weekend and claimed to have witnessed LPN Tellefsen returning from
outside pushing Resident | in her wheelchair during the night shift on January 21, 2007.
CMS Ex. 18, at 31-32; Tr. 154. Surveyor Thornton agreed on cross-examination that
Petitioner’s records show that CNA Caton did not work January 21, 2007. Tr. 146-47.
She testified that she did not question CNA Caton’s credibility, but rather concluded that
she simply had the wrong date. Tr. 152, 165. However, she admitted on cross-
examination that CNA Caton admitted to her that she did not actually witness the incident
on February 5, 2007, contrary to her prior assertion that she witnessed two incidents. Tr.
164-67; CMS Ex. 14, at 10. Surveyor Thornton also admitted in response to my
questioning, that CNA Caton was the only person who alleged she actually saw an
incident on or about January 21, 2007. Tr. 165. After reviewing all the evidence,
including the surveyors’ testimony regarding their interviews of staff related to an alleged
incident on or about January 21, 2007, I conclude that the hearsay statements do not have
sufficient indicia of reliability to be accepted as weighty evidence that LPN Tellefsen
took Resident | outside on or about January 21, 2007, or at any time between December
17, 2006 and February 4, 2007. Accordingly, I conclude that the evidence does not show
that an incident of abuse occurred on or about January 21, 2007, contrary to the
allegations of the surveyors and CMS.
There is no dispute that during the early morning on February 5, 2007, LPN Tellefsen
took Resident 1 outside in her hospital gown and diaper and that it was cold outside. Tr.
23-24; P. Br. at 5. The evidence shows that Resident | was outside only briefly and the
expert testimony of Resident 1’s physician was that her brief exposure was unlikely to
cause her any physical harm. Tr. 122-30. The evidence shows that LPN Tellefsen took
Resident | outside in an effort to make her stop yelling. Viewed from Petitioner’s
perspective, LPN Tellefsen was simply redirecting Resident 1 by convincing the
judgmentally impaired resident that it was too cold for her to be outside and thereby
quieting her. The other perspective is that LPN Tellefsen took Resident | outside to scare
or intimidate her, thereby quieting her. “Abuse” as defined in the Secretary’s regulations
includes willful intimidation and mental anguish. 42 C.F.R. § 488.301. Petitioner’s
abuse prevention policy also includes intimidation that results in mental anguish within
its definition of abuse. P. Ex. 6, at 1. Considering the facts that: it was cold outside, a
fact no doubt known to LPN Tellefsen; that Resident 1 was wearing only a hospital gown
and a diaper at the time; and that the resident suffered an impaired mental state; I
conclude that LPN Tellefsen’s act of wheeling the resident outside, even for a brief
period, constituted an act of intimidation that was abusive. The reported statement of
Resident | following the incident is sufficient evidence that she suffered fear or some
other form of mental anguish as a result of the incident. The suggestion by Petitioner that
LPN Tellefsen may have acted innocently or exercised bad judgment (CMS Ex. 14, at 6),

11

does not change the abusive nature of the incident. Accordingly, I conclude that the
incident on February 5, 2007, was an incident of abuse.

The Board has held that “‘[p]rotecting and promoting a resident’s right to be free from
abuse necessarily obligates the facility to take reasonable steps to prevent abusive acts,
regardless of their source.” Western Care Management Corp., DAB No. 1921, at 12
(2004); Pinehurst Healthcare & Rehabilitation Center, DAB No. 2246, at 5 (2009). The
Board’s prior holdings reflect the conclusion that 42 C.F.R. § 483.13(b) does not make a
facility strictly liable for all incidents of abuse that may occur. In this case, I find that
Petitioner did take reasonable steps to protect its residents, including Resident 1 from
abuse. Surveyor Harroff testified that Petitioner had an abuse prevention policy that met
the requirements of the regulation, though staffs’ delay in reporting the incident is
evidence the policy was not fully implemented. Tr. 33. My review of Petitioner’s abuse
prevention policy (P. Ex. 6) reveals that it had all the elements required by the regulation
and suggested by the SOM.* 42 C.F.R. § 483.13(c); SOM, App. PP, Tag F226. The
evidence also shows that staff was appropriately screened, staff was aware of Petitioner’s
abuse prevention policy, and staff was regularly trained regarding abuse prevention. Tr.
59. The evidence does not show that Petitioner had any reason to foresee that LPN
Tellefsen would abuse Resident | in the manner that he did. The evidence also shows
that when on February 7, 2007, Petitioner’s DON and Administrator learned of the
February 5, 2007 incident they immediately took action to investigate, suspended LPN
Tellefsen to ensure he did not return to the facility, subsequently terminated LPN
Tellefsen, filed all required reports (Tr. 53, 55), and took other actions consistent with
Petitioner’s abuse prevention policy and 42 C.F.R. § 483.13(c). Accordingly, I conclude
that Petitioner did not violate 42 C.F.R. §§ 483.13(b) or 483.13(c)(1)(i) as alleged by the
surveyors.

I do conclude, however, that Petitioner was in violation of 42 C.F.R. § 483.13(c) because
it failed to fully implement its abuse prevention policy based upon the evidence in this
case. There is no dispute that Petitioner had an abuse prevention policy that satisfied
regulatory requirements. CMS Ex. 17, at 1-6; P. Ex. 6; Tr. 33. There is also no dispute

* The SOM is not a substantive regulation promulgated pursuant to the Administrative
Procedure Act (APA) (5 U.S.C. § 500 et. seg.) and the provisions of the SOM are not
enforceable as law. Rather, SOM provisions reflect the CMS interpretation of the Act
and regulations implementing the Act and provide policy guidance for surveyors.
Although SOM provisions are not enforceable as law, the provisions of the Act and the
Secretary’s regulations they interpret are. See Vencor Nursing Centers, L.P. v. Shalala,
63 F. Supp. 2d. 1, 11-12 (D.D.C. 1999); Beverly Health & Rehabilitation Services, Inc.,
et al. v. Thompson, 223 F. Supp. 2d 73, 98-103 (D.D.C. 2002); Cal Turner Extended
Care Pavilion, DAB No. 2030 (2006); see also State of Indiana by the Indiana
Department of Public Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991); cf: Northwest
Tissue Center v. Shalala, | F.3d 522 (7th Cir. 1993).
12

that staff was aware of Petitioner’s abuse prevention policy and that staff received regular
training on the policy. Tr. 59. However, it is also undisputed that the incident that
occurred on February 5, 2007 was not reported by staff to the Administrator or DON until
February 7, 2007, despite the fact that staff recognized the incident as possible abuse of
Resident 1. The regulations require that “[t]he facility must ensure that all alleged
violations involving mistreatment, neglect, or abuse, including injuries of unknown
source, and misappropriation of resident property are reported immediately to the
administrator of the facility ....” 42 C.F.R. § 483.13(c)(2). Petitioner’s policy provided
that each employee is responsible to report abuse (P. Ex. 6, at 1) and required that staff be
instructed that they are required to report immediately “any knowledge or suspicion of
suspected abuse, neglect, mistreatment, and/or misappropriation of property” (P. Ex. 6, at
4). Staff failed to immediately report the suspected abuse on February 5, 2007, a
violation of both the regulation and Petitioner’s policy. Although a single event might
not always be sufficient evidence of a failure to implement a policy, in this case the
number of staff, including CNAs, LPNs, and R.N.s, who observed the event or indicated
knowledge of the event on February 5, 2007, but failed to report, is sufficient evidence of
a general failure by Petitioner to ensure its policy was fully implemented as required.
Accordingly, I conclude that Petitioner violated 42 C.F.R. § 483.13(c).”

“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. The surveyors declared
that immediate jeopardy for Petitioner’s residents began on January 21, 2007 and ended
on February 5, 2007. CMS Ex. 2, at 1, 13. The surveyors’ determination that immediate
jeopardy began on January 21, 2007, was based upon their conclusion that an incident of

° The surveyors stated at hearing and CMS alleges in its briefs that Petitioner failed to
implement its abuse prevention policy because it failed to investigate the incident that
allegedly occurred on or about January 21, 2007. Tr. 32-33, 41-43; CMS Brief at 12;
CMS Reply at 7-8. According to the SOM Guidance to Surveyors, failure to adequately
investigate an allegation of abuse would normally be cited under Tag F225. SOM, App.
PP, Tag F225. Tag F225 was not cited by the surveyors in this case. Thus, other than the
general allegations under Tag F226, arguably Petitioner was not properly noticed to
defend the adequacy of its investigation. Furthermore, the evidence adduced does reflect
that an investigation was conducted when the Administrator was advised of the alleged
incident. Administrator Foster testified that she told the surveyors that she had no
knowledge of an alleged incident on January 21, 2007 prior to being told about it by the
surveyors and being shown the CNAs statement (CMS Ex. 14, at 10). Obviously she had
not investigated the alleged incident in January prior to hearing the allegation. She
testified that she then investigated the three CNAs and their allegations. Tr. 206-12; P.
Ex. 2, 3, 4. I find it unnecessary to address the adequacy of the investigation of the
alleged January 21, 2007 incident or whether it amounted to a violation of Petitioner’s
policy, as I conclude that Petitioner violated 42 C.F.R. § 483.13(c) on other grounds.
13

abuse occurred on or about that date. Tr. 41. I have concluded that the evidence does not
establish that an incident of abuse occurred prior to the incident during the early morning
of February 5, 2007. Accordingly, I find and conclude that the determination that
immediate jeopardy existed from January 21, 2007 through February 4, 2007 was clearly
erroneous.

The surveyors were of the opinion that a potential for serious harm, physical or mental,
existed prior to LPN Tellefsen’s departure from the facility around 7:00 a.m. on February
5, 2007, but that immediate jeopardy was abated that day with his departure from the
facility. CMS Ex. 2, at 1, 11, 13, 22; Tr. 85. Resident 1 was exposed to the cold for only
a brief period and the unrebutted expert testimony is that she was unlikely to suffer
serious harm or death on account of that exposure. However, it is not necessary for
actual serious harm or death to occur, it is sufficient that it was likely such harm could
occur. Pinehurst Healthcare & Rehabilitaiton Center, DAB No. 2246, at 13 (2009).
Petitioner has not met its heavy burden to show that the determination that immediate
jeopardy was posed for Resident | and other residents on February 5, 2007, was clearly
erroneous. Accordingly, I conclude that there was immediate jeopardy for one day —
February 5, 2007.

4. Petitioner violated 42 C.F.R. § 483.25 (Tag F309).

The regulation requires that a facility provide necessary care and services for a resident to
“attain and maintain the highest practicable physical, mental, and psychological well-
being in accordance with the comprehensive assessment and plan of care.” 42 C.F.R. §
483.25. The surveyor’s allege that Petitioner failed to follow its care plan for one
resident by failing to monitor oxygen saturation levels. CMS Ex. 2, at 24. Petitioner
advised me at hearing that it would not continue to pursue its appeal of the violation of 42
C.F.R. § 483.25 (Tag F309). Petitioner further stated on the record that it did not dispute
the imposition of a $50 per day CMP for the period Petitioner was not in substantial
compliance. Tr. 24-25; Petitioner’s Post-Hearing Brief (P. Brief) at 5, n.1. Accordingly, I
conclude that Petitioner violated 42 C.F.R. § 483.25 (Tag F309) as alleged in the SOD.

5. A civil money penalty (CMP) of $3050 per day from January 21 to
February 4, 2007 is not reasonable.

6. A CMP of $3050 for February 5, 2007 is reasonable.

7. A CMP of $50 per day from February 6 through March 7, 2007 is
reasonable.

Ifa facility is not in substantial compliance with program participation requirements,
CMS has the authority to impose one or more of the enforcement remedies listed in 42
C.F.R. § 488.406, including a CMP. CMS may impose a CMP for the number of days
14

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). There are two ranges for per day CMPs.
42 C.F.R. §§ 488.408, 488.438. The upper range of CMPs of $3050 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 CMPs of $50 per day to $3000 per day is reserved for
deficiencies that do not constitute immediate jeopardy, but either cause actual harm to
residents, or cause no actual harm, but have the potential for causing more than minimal
harm. 42 C.F.R. § 488.438(a)(1)(ii). In this case, CMS imposed a CMP of $3050 per
day for the period of immediate jeopardy from January 21 to February 4, 2007, and a
CMP of $50 per day from February 6 through March 7, 2007. CMS Ex. 4, at 2.

I have concluded the immediate jeopardy existed for one day only, February 5, 2007.
Accordingly, a CMP of $3050 per day from January 21 through February 4, 2007 is not
reasonable. The minimum authorized CMP for one day of immediate jeopardy is $3050.
Accordingly, a CMP of $3050 for February 5, 2007 is reasonable. Further, Petitioner
conceded on the record at hearing that there is a basis for imposing a $50 per day CMP
for the remaining period of noncompliance. Tr. 24. A CMP of $50 per day is the lowest
CMP authorized if there is a basis for imposing an enforcement remedy. Accordingly, a
$50 per day CMP for the period February 6, 2007 through March 7, 2007 is reasonable.
The total CMP of $4550 (1 day at $3050 and 30 days at $50) is reasonable.

Generally, the reasonableness of any enforcement remedy is reviewed de novo applying
the regulatory factors at 42 C.F.R. § 488.438(f): (1) the facility’s history of non-
compliance, including repeated deficiencies; (2) the facility’s financial condition; (3) the
seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and (4) the facility’s
degree of culpability. In this case, the proposed CMP amounts are reasonable as a matter
of law as they are the minimum amounts authorized.

Il. Conclusion

For the foregoing reasons I conclude that Petitioner violated 42 C.F.R. §§ 483.13(c) (Tag
F226) and 483.25 (Tag F309); but Petitioner did not violate 42 C.F.R. §§ 483.13(b) or
483.13(c)(1)(i) (Tag F223). I further conclude that a CMP of $3050 per day from
January 21 to February 4, 2007 is not reasonable. However, a CMP of $3050 for
February 5, 2007 and a CMP of $50 per day from February 6 through March 7, 2007, a
total CMP of $4550, are reasonable.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Peter McCambridge, C.F.A., ) Date: June 16, 2009

)
Petitioner, )
)

-V.- ) Docket No. C-09-215

) Decision No. CR1961
Centers for Medicare & Medicaid )
Services. )
)
)

DECISION

This matter is before me on the Centers for Medicare & Medicaid Services’
(CMS’s) Motion for Summary Affirmance. I find that the Provider Enrollment
Appeals Department for First Coast Service Options (FCSO) (a CMS contracted
intermediary and carrier) correctly determined that Petitioner pro se Peter S.
McCambridge, as a certified first assistant, did not meet the requirements as a
covered health care provider for purposes of Medicare enrollment. Therefore, I
affirm the December 19, 2008 determination of FCSO to uphold the denial of
Petitioner’s application for a Medicare billing number.

I. Background

Petitioner received a certificate of completion for the First Assistant Course for
Surgical Technologists from an organization known as the National Institute of
First Assisting. Petitioner describes this designation as a “certified first assistant.”
Petitioner lives and works in the State of Florida, however, Florida law does not
provide for the licensing of certified first assistants. Petitioner did not provide any
additional information regarding his educational background or experience.

On August 13, 2008, Petitioner submitted an application for a Medicare billing
number as a non-physician practitioner. Assignment of a Medicare billing number
would allow Petitioner to bill Medicare directly for, and receive direct payment
for, services eligible for payment by the Medicare program. FCSO denied
Petitioner’s application for Medicare enrollment on September 22, 2008. On
December 19, 2008 the Appeals Department for FCSO upheld the denial of
Petitioner’s enrollment application. Petitioner appealed the decision of FCSO by
his January 8, 2009 Request for Hearing. On January 27, 2009 the case was
assigned to me for hearing and decision.

I convened a prehearing conference with the parties by telephone on Wednesday,
February 11, 2009 pursuant to 42 C.F.R. § 498.47. A summary of that conference
appears in my Order of February 11, 2009.

CMS filed a motion for summary disposition and supporting brief, (CMS Br.)
along with CMS Exhibits (CMS Exs.) 1-5. Petitioner filed an answer brief (P.
Br.) and a brief in opposition to the CMS motion for summary disposition (P. Opp.
Br.) Petitioner also filed a document dated January 28, 2009 entitled “Matters to
be discussed during the Prehearing Conference” in support of his argument.
Without objection from Petitioner, CMS Exs. 1-5 are admitted. Petitioner has
proffered no additional exhibits of his own.

Il. Applicable Law

Section 1866(j)(1) of the Social Security Act (Act), 42 U.S.C. § 1395cc(j)(1),
authorizes the Secretary of Health and Human Services (Secretary) to establish a
process for the enrollment in the Medicare Part B program of providers of services
and suppliers. Section 1866(j)(2) of the Act, 42 U.S.C. § 1395cc(j)(2), gives
providers and suppliers appeal rights for certain determinations involving
enrollment, using the procedures that apply under section 1866(h)(1)(A) of the
Act, 42 U.S.C. § 1395cc(h)(1)(A). These procedures are set out at 42 C.F.R. Part
498, et seq., and provide for hearings by Administrative Law Judges (ALJs) and
review of ALJ decisions by the Departmental Appeals Board (Board).

In provider appeals under 42 C.F.R. Part 498, the Board has determined that CMS
must make a prima facie case that an entity has failed to comply substantially with
federal requirements. See MediSource Corporation, DAB No. 2011 (2006).
“Prima facie” means that the evidence is “[s]ufficient to establish a fact or raise a
presumption unless disproved or rebutted.” To prevail, the entity must overcome
CMS’s showing by a preponderance of the evidence. Batavia Nursing and
Convalescent Center, DAB No. 1904 (2004), aff'd, Batavia Nursing and
Convalescent Center v. Thompson, 129 F. App’x. 187 (6th Cir. 2005); Emerald
Oaks, DAB No. 1800 (2001); Cross Creek Health Care Center, DAB No. 1665
(1998).

Section 1861(s) of the Act, 42 U.S.C. § 1395x(s), defines a broad range of medical
and other health services that are eligible for Medicare Reimbursements, including
services provided by a non-physician practitioner or an allied health professional.
Under section 1842(b)(18)(C) of the Act, 42 U.S.C. § 1395u(b)(18)(C), 42 C.F.R.
§ 405.400, eligible “practitioners” include the following: physician assistant,
nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist,
certified nurse midwife, clinical psychologist, clinical social worker, registered
dietitian or nutrition professional.

Petitioner bases some of his arguments on his interpretations of certain provisions
of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and
although they are, as matters of law, neither correct interpretations nor applicable
to this controversy, they will be mentioned briefly below. In general, those
HIPAA provisions appear at sections 1171-1179 of the Act.

IIL. Issue

The issue before me in this case is whether Petitioner satisfied the requirements
necessary to obtain a Medicare billing number as a non-physician practitioner, as
set forth in 42 C.F.R. § 405.400.

IV. Discussion

CMS has moved for summary disposition in its favor by its Motion for Summary
Affirmance. While Fed. R. Civ. P. 56 is not directly applicable to proceedings
under 42 C.F.R. Part 498, it does provide guidance for the standard of review for
motions seeking summary disposition. Summary disposition is generally
appropriate when the record reveals that no genuine dispute exists as to any
material fact and the undisputed facts clearly demonstrate that one party is entitled
to judgment as a matter of law. White Lake Family Medicine, P.C., DAB No.
1951 (2004).

Here, Petitioner opposes summary disposition and disagrees with CMS’s
contention that there are no genuine issues of material fact in dispute in this case.
Petitioner believes that whether his services are reimbursable under Medicaid and
whether there is a conflict in the HIPAA and Medicaid regulations are factual
disputes, not legal ones. I disagree. There are no genuine issues of material fact
in dispute in this case. The parties do not dispute the fact that Petitioner received a
certificate for the completion of the first assistant course for surgical technologists.
The dispute between the parties is over whether or not a “certified first assistant”
meets the qualifications under the regulations to qualify for Medicare
reimbursement. Thus, the parties’ disagreement lies in the application of the law
to the facts. Therefore, summary disposition is appropriate in this case.
CMS maintains that Petitioner is not qualified to enroll in the Medicare program
because the Medicare Part B program does not recognize certified first assistants
as non-physician practitioners eligible for Medicare enrollment under 42 C.F.R.
§ 405.400.

Petitioner contends that a certified first assistant is a qualified non-physician
practitioner eligible for Medicare enrollment. Petitioner advances the following
related arguments:

First, he asserts that he is eligible for enrollment because he is a health care
provider as defined in 45 C.F.R. § 160.103 and 45 C.F.R. § 162.402;

Second, he argues that Medicaid regulations and The Health Insurance Portability
and Accountability Act of 1996 are in conflict with each other. HIPAA is
controlling, he says, and Congress intended that a certified first assistant be a
covered practitioner eligible to enroll in Medicare;

Third, he claims that Medicare regulations at 42 C.F.R. 410.26, 410.26(7)(b), and
0.26(7)(b)(5), afford coverage for a certified first assistant; and

ay

Finally, in culmination of his arguments, Petitioner maintains that Medicare is a
health plan and as such it must obey the administrative simplification standards set
out in HIPAA; that CMS Publication 100-8, Medicare Program Integrity Manual,
Chapter 10 must be amended to reflect congressional intent; the Medicare
Program Integrity Manual is flawed, causing the carrier to act ultra vires.

P. Br. 1-8; P. Opp. Br. 1-4.

The carrier denied Petitioner’s Medicare enrollment application, stating that a
certified first assistant is not a recognized category of non-physician practitioner
eligible to enroll in the Medicare program as an individual practitioner, and that
Petitioner does not have a license to qualify as a provider of services in the
Medicare program.

Section 1171(3) of the Act defines “health care provider” as “‘a provider of
services (as defined in section 1861(u)), a provider of medical or other health
services (as defined in section 1861(s)), and any other person furnishing health
care services or supplies.” According to Petitioner, this section of the Act defines
covered health care provider for purposes of Medicare enrollment. Thus Petitioner
reasons that a certified first assistant is, “a provider of medical or other health
services‘, and therefore is eligible for Medicare reimbursement as a person that
furnishes medical services. Petitioner maintains that the authority for this position
is derived from HIPAA, defined by the Secretary in the regulations at 45 C.F.R.
§ 160.103 and 45 C.F.R. § 162.402. Petitioner states his argument as follows:

The section 1171 of the HIPPA (sic) Act explicitly makes Medicare
subject to the standards and implementation specifications
promulgated by the Secretary, while entities carrying out others are
implicitly covered by the scope of the term “health care provider.”
Congress’ express inclusion of certain federal programs in the statute
also has significance, as it constitutes an express Congressional
statement that the HIPAA standards and implementation
specifications apply to Medicare.

P. Br. 4.

Petitioner is incorrect. The Secretary has established a process for the enrollment
of medical providers and suppliers. Only certain medical and other health services
performed by participating suppliers are eligible for Medicare reimbursement. For
purposes of Medicare participation and reimbursement, the term “supplier” means
a physician or other practitioner, a facility, or other entity that furnishes items or
services under this title. 42 U.S.C. § 1395x(d). Under 42 C.F.R. § 405.400, a
non- physician practitioner is defined as a physician assistant, nurse practitioner,
clinical nurse specialist, certified registered nurse anesthetist, certified nurse
midwife, clinical psychologist, clinical social worker, registered dietitian, or
nutritional professional, who is currently legally authorized to practice in that
capacity by each state in which he or she furnishes services to patients or clients.

A certified first assistant simply is not included as a category in the definition of
practitioners eligible for enrollment in the Medicare program, and it is significant
that Congress declined to approve a statutory change that would have granted
Certified Registered Nurse First Assistants the Medicare Part B status Petitioner
now claims. See H.R. 822, 107" Congress (2001). It is also significant that
Petitioner has been unable to show that he is “legally authorized to practice” as a
certified first assistant in Florida or any other state. Thus, Petitioner, as a certified
first assistant, is not a practitioner for purposes of Medicare enrollment and his
services are not eligible for Medicare reimbursement.

Petitioner contends that he is a health care provider as defined in 45 C.F.R.

§ 160.103 and 45 C.F.R. § 162.402, that implements sections 1171 through 1179
of HIPAA. Petitioner argues that Congress intended that a “health care provider”
as defined more broadly in the HIPAA regulations as, “‘a provider of medical or
other health services .. . and any other person furnishing health care services or
supplies,” is controlling, and therefore he is eligible to participate in the Medicare
program as a provider of medical services. P. Br. 3-8. Citing Chevron U.S.A. v.

6

Natural Resources Defense Council, Inc. 467 U.S. 837 (1984), Petitioner further
argues that HIPAA and Medicare regulations are in apparent conflict with each
other, and that the agency must give effect to the unambiguous expressed intent of
Congress. According to Petitioner this “conflict” should be resolved in favor of
the HIPAA regulations.

Petitioner’s arguments are misguided. No such conflict exits. HIPAA simply is
not applicable with respect to determining non-physician practitioner eligibility.
Congress passed HIPAA in order to provide the first national standards for
protecting the privacy of health information and for facilitating health care related
electronic transactions. In this context, Congress intentionally broadly defined
“health care provider” so that almost all health care workers who handle patient
information would be subject to HIPAA requirements. See Pub. L. No. 104-191
§§ 261, 262 (1996). While the definition of a health care provider found in 45
C.F.R. § 160.103 and 45 C.F.R. § 162.402 may include the Petitioner, these
definitions are only applicable to those specific regulations and HIPAA
requirements. The regulations contained at 45 C.F.R. §§ 160, 162, and 164
specifically pertain to HIPAA administrative simplification rules which establish
standards and requirements for the electronic transmission of certain heath
information. These regulations do not affect or amend the requirements for
Medicare enrollment and reimbursement set forth in 42 C.F.R. § 405.400. The
regulation specifically delineates which non-physician practitioners are eligible for
Medicare reimbursement. Appellate panels of the Board and Administrative Law
Judges (ALJs) of this forum have consistently adhered to the rule that the plain
language of a statute or regulation is always the best evidence of the meaning of
that statute or regulation. Florence Peters, D.P.M., DAB No. 1706 (1999);
Muhamad Salah Zoobi, DAB _CR1324 (2005). The ALJs of this forum have
applied the relevant statues and regulations narrowly with respect to Medicare
enrollment eligibility. Revathi Bingi, Ed.D., DAB CR1573 (2007); Roger
Aveyard, DAB CR1558 (2007). Petitioner is not a physician assistant, nurse
practitioner, clinical nurse specialist, certified registered nurse anesthetist, certified
nurse midwife, clinical psychologist, clinical social worker, registered dietitian, or
nutritional professional, as defined in 42 C.F.R. § 405.400, and therefore is not
eligible to enroll as a non-physician practitioner.

Finally, I do not have the authority to amend the Medicare Program Integrity
Manual (CMS Publication 100-8, Chapter 10, section 12.4) as Petitioner urges.
The Program Integrity Manual, was created by CMS and was designed to protect
the Medicare Trust Fund from fraud, waste and abuse. Congress (through the
Secretary) granted CMS broad authority to achieve this goal, and CMS is not
acting outside the scope of its authority by providing guidance to contractors and
others to ensure that they pay the right amount for covered services rendered to
eligible beneficiaries and providers.
V. Conclusion

For the reasons set out above, I grant CMS’s motion for summary disposition.
Having determined as a matter of law that Petitioner Peter McCambridge is not
entitled to the relief he seeks, I conclude that the determination of FCSO to uphold
the denial of Petitioner’s application for a Medicare billing number should be, and
it is, AFFIRMED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Marian Estates, (CCN: 38-5240), ) Date: June 19, 2009

)
Petitioner, )
)

-Vv.- ) Docket No. C-09-241

) Decision No.CR1960
Centers for Medicare & Medicaid )
Services. )
)

DECISION

Having considered the parties’ arguments and exhibits, I dismiss Petitioner’s hearing
request as it relates to the Centers for Medicare & Medicaid Services’ (CMS) notice letter
dated December 2, 2008. Petitioner did not file a timely request for hearing as required
by 42 C.F.R. § 498.40(a)(2). Petitioner has not established good cause for extending the
time within which it may file its hearing request.

I. Background

Petitioner, a long-term care facility located in Sublimity, Oregon, participated in the
Medicare program as a skilled nursing facility (SNF) and in the Oregon Medicaid
program as a nursing facility (NF). On September 17, 2008, the Oregon Bureau of
Facility Standards’ Client Care Monitoring Unit (state survey agency) and the Office of
the State Fire Marshal conducted surveys of Petitioner’s facility to determine whether
Petitioner was in substantial compliance with federal participation requirements.
Petitioner was found out of substantial compliance. On December 2, 2008, CMS
imposed a $3,000 civil money penalty (CMP) based on that noncompliance and advised
Petitioner of its right to a hearing. Specifically, the December 2, 2008 letter stated,
If you disagree with this determination, you or your legal representative may
request a hearing before an administrative law judge of the Department of

Health and Human Services, Departmental Appeals Board. Procedures governing
this process are set out in 42 CFR § 498.40, et seq. A written request for a hearing
must be filed no later than 60 days from the date of receipt of this letter.

CMS exhibit (CMS Ex.) 7, at 2. Petitioner received a copy of CMS’s December 2, 2008
notice letter on December 2, 2008 by FAX. CMS Ex. 7, at 4. A copy of the notice letter
was sent to Petitioner by certified mail and the receipt was signed by an individual named
Shirley Henkel on December 5, 2008. CMS Ex. 7, at 5. Petitioner requested a hearing by
letter dated February 5, 2009, 65 days after the December 2, 2008 date on the notice letter
and 62 days after Ms. Henkel signed the certified mail receipt.!

CMS filed a motion to dismiss for untimely filing on April 13, 2009 (CMS Br.),
accompanied by CMS Exs. 1-14. Petitioner responded on May 13, 2009 (P. Br.),
accompanied by Petitioner’s exhibits (P. Ex.) A-C and the affidavits of Kelly Giampa and
Cindi Franck. I am marking Ms. Giampa’s affidavit P. Ex. D and Ms. Franck’s affidavit
P. Ex. E. In the absence of objection, I admit CMS Exs. 1-14 and P. Exs. A-E.

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

1. Whether Petitioner timely filed a request for hearing as it relates to
CMS’s notice letter of December 2, 2008.

2. Whether Petitioner has shown good cause to extend the time in which to
file a request for hearing related to CMS’s notice letter of December 2,
2008.

B. Findings of Fact and Conclusions of Law
I make Findings of Fact and Conclusions of Law (Findings) to support my decision. I set

forth each Finding below as a separately numbered heading. I discuss each Finding in
detail.

‘lL only consider whether Petitioner’s hearing request is untimely with regard to the notice
letter sent by certified mail, not with regard to the FAX sent on December 2, 2008. See
Riverview Village, DAB No. 1840, at 8 (2002) (CMS’s mailed notice, not the facsimile,
triggered the period for Riverview to request a hearing because the FAX did not clearly
and unambiguously specify that it was the notice document).
1. Petitioner failed to file its hearing request within 60 days of CMS’s
December 2, 2008 notice letter, as required by the applicable statute
and regulations.

Section 1866(h) of the Social Security Act (Act) authorizes administrative review of
determinations that a provider fails to comply substantially with a provider agreement
entered into with the Secretary of Health and Human Services (Secretary). The
Secretary’s regulations mandate that an affected party file its hearing request “in writing
within 60 days from receipt of the notice . . . unless that period is extended in accordance
with paragraph (c) of this section (Presumed date of receipt is determined in accordance
with § 498.22(b)(3)).” 42 C.F.R. § 498.40(a). Under section 498.22(b)(3), receipt is
“presumed to be 5 days after the date on the notice unless there is a showing that it was,
in fact, received earlier or later.”

Here, Petitioner’s compliance officer, Ms. Franck, admits in her affidavit that “Shirley
Henkel is a former receptionist at Marian Estates. She worked in the reception office
where mail is received.” P. Ex. E, at 249. CMS submitted evidence that Ms. Henkel
certified receipt by Petitioner of the notice letter 62 days before Petitioner requested a
hearing. CMS Ex. 7, at 5. Although the regulations allow for a presumption of five days
for mailing, where there is a showing, as here, that the notice was received earlier, the
specific showing of receipt trumps the presumption of receipt. Ms. Henkel’s signature
shows Petitioner in fact received the notice letter on December 5, 2009. Petitioner filed
its hearing request on February 5, 2009 — 62 days later. Petitioner’s hearing request was
thus untimely filed.

2. No good cause exists to extend the time for filing.

On the motion of a party, or on his or her own motion, an administrative law judge (ALJ)
may dismiss a hearing request where that request was not timely filed and the time for
filing was not extended. 42 C.F.R. § 498.70(c). The regulations set the conditions under
which an ALJ may decline to dismiss a hearing request. First, a petitioner must file a
request to extend the time limit stating why the hearing request was not filed on time and,
second, there must be “good cause” to grant the extension. The regulations state:

(c) Extension of time for filing a request for hearing. If the request was not filed
within 60 days —

(1) The affected party or its legal representative or other authorized official may
file with the ALJ a written request for extension of time stating the reasons why
the request was not filed timely.

(2) For good cause shown, the ALJ may extend the time for filing the request for
hearing.
42 C.F.R. § 498.40(c)(1) and (2). I construe Petitioner’s hearing request, and the related
response to CMS’s motion to dismiss, as Petitioner’s request for an extension of time to
file its hearing request. I then evaluate Petitioner’s arguments to determine whether good
cause exists to extend the time for filing.

Good cause has been defined as “circumstances beyond the ability of the provider to
control.” Hospicio San Martin, DAB No. 1554, at 5 (1996); see also Quality Total Care,
L.L.C. d/b/a the Crossings, DAB No. 2242, at 4 n. 4 (2009). Here Petitioner asserts the
“circumstances of Marian Estate’s receipt of CMS’s determination notice support the
ALJ’s denial of CMS’s motion to dismiss.” P. Br. at 7. Specifically, Petitioner asserts
that because it could not identify the precise date CMS’s notice letter arrived it relied on
the presumptive guidelines set forth in detail above. Additionally, Petitioner argues that
CMS’s service of notice created legitimate confusion as to when filing should be made.

The reasons Petitioner gives for its inability to identify the precise date CMS’s notice
letter arrived include that,

Marian Estates is a large campus with five assisted living and elder care facilities.
(Franck Aff., § 3.) Marian Estates has approximately 500 staff members and up to
500 residents within those five facilities. Jd. When mail arrives at the facility, it
goes through a reception desk at the Reece Center. Jd. The incoming mail is
neither opened nor date stamped when it arrives at the receptionist’s desk. (Franck
Aff., 94.) It would be highly impractical to implement a procedure where mail is
time stamped upon receipt. (Franck Aff., 45). Rather, the mail is sorted and then
delivered to the mailbox of the intended recipient. (Franck Aff., § 4.) Because of
the size of the facility, mail typically takes an additional business day to reach its
destination even after it... reaches the Marian Estates Campus. (Franck Aff., [ff
4-6.

In this particular case, CMS offers a certified mail receipt indicating that its notice
letter was signed for by a former Marian Estates receptionist. (CMS Ex. 7, p. 5);
(Franck Aff., § 9). The notice letter itself was addressed to Administrator Denise
Gould, rather than compliance officer Cindi Franck, who handled Marian Estate’s
IDR of the citations imposed by the state survey agency. (Giampa Aff., Ex. B, p.
1); (Franck Aff., § 2). Therefore upon reaching Gould, the letter had to be re-
routed to Franck. (Franck Aff., § 8.)

Although CMS argues that Marian Estates received mail notice of its
determination on Friday, December 5, it is highly likely that CMS’s letter did not
reach either Gould or Franck until Monday, December 8, or later. (Franck Aff., J
10.) Because there was no practical procedure to stamp incoming mail, it would
have been nearly impossible for either Gould or Franck to determine the precise
date the notice arrived. (Franck Aff., §§ 4-8.) Further, the notice itself provides
little information about determining the date of receipt. Specifically the letter
states only that “[p] rocedures governing this process are set out in 42 CFR

§ 498.40 et. seq.”: (Giampa Aff., Ex. B, p. 2.)

P. Br. at 7.

Petitioner’s assertions highlight that Petitioner could not specify the exact date of receipt
of the notice letter due to its own processes for receipt and disbursement of mail, not
because of any defect in CMS’s notice or problem outside of Petitioner’s own control.
That Petitioner’s mail practices may have delayed receipt of the notice letter by the
individual detailed by Petitioner to deal with the issues by a day or two does not act to
extend the 60-day period Petitioner had to request a hearing. Moreover, waiting until the
last minute to request a hearing, as Petitioner did here, does not make sense where the
process for mail receipt at the facility does not ensure a known date of receipt. Further,
although Petitioner argues that the notice is confusing, the appeal rights section of the
notice is crystal clear that Petitioner’s hearing request needed to be filed no later than 60
days from the date of receipt of the letter. It is simply not good cause to assert that a
function over which Petitioner had the ultimate control (how mail is received and
disbursed on its own campus) constitutes good cause for untimely filing.

Petitioner also insinuates that it should be allowed a hearing because it filed its hearing
request within the presumption of receipt period. However, as noted above, the
presumption of receipt is only applicable when there is no specific showing of receipt.
CMS made that showing. Although Petitioner’s hearing request may have been two
days, not two months or two years out of time, it was, nevertheless, untimely without
good cause.

II. Conclusion

Petitioner’s hearing request was filed 62 days from its receipt of CMS’s notice letter and
is untimely. Petitioner has not shown good cause to extend the filing date. Accordingly,
I dismiss Petitioner’s hearing request.

/s/
Alfonso J. Montano
Administrative Law Judge