Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Amberwood Gardens
(CCN: 05-5750),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-09-494
Decision No. CR2369

Date: May 6, 2011

DECISION

Petitioner, Amberwood Gardens, violated 42 C.F.R. § 483.25(c)' as alleged by the survey
of Petitioner’s facility completed on March 30, 2009, and the violation caused actual
harm. There is a basis for the imposition of an enforcement remedy. A per instance civil
money penalty (PICMP) of $4,050 is a reasonable enforcement remedy.

I. Background

Petitioner is located in San Jose, California, and participates in Medicare as a skilled
nursing facility (SNF). On March 30, 2009, the California Department of Public Health
(state agency) completed a survey of Petitioner’s facility and found that Petitioner was
not in substantial compliance with program participation requirements due to an alleged
violation of 42 C.F.R. § 483.25(c). The Centers for Medicare and Medicaid Services
(CMS) notified Petitioner by letter dated April 8, 2009, that it was imposing the

' References are to the 2008 revision of the Code of Federal Regulations (C.F.R.) in
effect at the time of the survey, unless otherwise indicated.
following enforcement remedies: a PICMP of $4,050; a denial of payments for new
admissions (DPNA) effective April 23, 2009, if Petitioner did not return to substantial
compliance before that date; and termination of Petitioner’s provider agreement effective
September 30, 2009, if Petitioner did not return to substantial compliance before that date.
CMS also advised Petitioner that it could not conduct a Nurse Aide Training and
Competency Evaluation (NATCEP) program for two years. CMS notified Petitioner by
letter dated April 17, 2009, that a revisit survey concluded that Petitioner returned to
substantial compliance effective April 13, 2009, and that the DPNA and termination
remedies were rescinded.

Petitioner timely requested a hearing before an administrative law judge (ALJ) on June 3,
2009. The case was assigned to me for hearing and decision on June 8, 2009, and an
Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.
On March 2, 3, and 4, 2010, a hearing was convened in San Jose, California, and a
transcript (Tr.) of the proceedings was prepared. CMS offered CMS exhibits (CMS Exs.)
1 through 19 that were admitted as evidence. Tr. at 34. Petitioner offered Petitioner
exhibits (P. Exs.) 1 through 13 that were admitted as evidence. Tr. at 43, 77, 598.
However, for reasons discussed hereafter, P. Ex. 5 is stricken and not considered for any
purpose. CMS called the following witnesses: Dan R. Berlowitz, M.D. and Surveyor
Grant Maher, R.N. Petitioner called two witnesses: Nayanatara Rao, M.D.; and Mildred
Canlas, R.N., Petitioner’s Director of Nursing (DON). The parties filed post-hearing
briefs (CMS Br. and P. Br., respectively) and post-hearing reply briefs (CMS Reply and P.
Reply, respectively).

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 imposed 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 (nursing facility (NF)) of 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 (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 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
1819(h)(2)(D), 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, civil money penalties (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). “Noncompliance means any deficiency that causes a
facility to not be in substantial compliance” with program participation requirements. 42
C.F.R. § 488.301 (emphasis in original). A deficiency refers to a facility’s failure to meet
or 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. 42 C.F.R.

§ 488.301. State survey agencies survey facilities that participate in Medicare on behalf
of CMS to determine whether the facilities are complying with federal participation
requirements. 42 C.F.R. §§ 488.10-.28, 488.300-.335. The regulations specify the
enforcement remedies that CMS may impose if a facility is not in substantial compliance
with Medicare requirements. 42 C.F.R. § 488.406.

Petitioner was notified in this case that it would be ineligible to conduct a NATCEP for
two years. Pursuant to sections 1819(b)(5) and 1919(b)(5) of the Act, SNFs and NFs
may only use nurse aides who have completed a training and competency evaluation
program. Sections 1819(e) and 1919(e) of the Act impose upon the states the
requirement to specify what NATCEPs they will approve that meet the requirements
established by the Secretary and a process for reviewing and re-approving those programs

> Section 1919(h)(2) of the Act gives similar enforcement authority to the states to
ensure that NFs comply with their participation requirements established by sections
1919(b), (c), and (d) of the Act.
using criteria set by the Secretary. Pursuant to sections 1819(f)(2) and 1919(£)(2), the
Secretary was tasked to develop requirements for approval of NATCEPs and the process
for review of those programs. The Secretary promulgated regulations at 42 C.F.R. Part
483, subpart D. Pursuant to 42 C.F.R. § 483.151(b)(2) and (e)(1), a state may not
approve and must withdraw any prior approval of a NATCEP offered by a SNF or NF
that: (1) has been subject to an extended or partial extended survey under sections
1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act; (2) has been assessed a CMP of not less
than $5,000; or (3) has been subject to termination of its participation agreement, a
DPNA, or the appointment of temporary management. Extended and partial extended
surveys are triggered by a finding of “substandard quality of care” during a standard or
abbreviated standard survey and involve evaluating additional participation requirements.
“Substandard quality of care” is identified by the situation where surveyors identify one
or more deficiencies related to participation requirements established by 42 C.F.R.

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

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

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

§§ 1128A(c)(2), 1866(h); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). The hearing before an
ALJ is a de novo proceeding. The Residence at Salem Woods, DAB No. 2052 (2006);
Cal Turner Extended Care, DAB No. 2030 (2006); Beechwood Sanitarium, DAB No.
1906 (2004); Emerald Oaks, DAB No. 1800, at 11 (2001); Anesthesiologists Affiliated,
DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir. 1991). A facility has a right to appeal a
“certification of noncompliance leading to an enforcement remedy.” 42 C.F.R.

§ 488.408(g)(1); 42 C.F.R. §§ 488.330(e), 498.3(b)(13). However, the choice of
remedies or the factors considered by CMS when choosing remedies are not subject to
review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the scope and severity
level of noncompliance determined by CMS if a successful challenge would affect the
range of the CMP that may be imposed or impact the facility’s authority to conduct a
NATCEP. 42 C.F.R. §§ 498.3(b)(14), (d)(10)(i). The CMS determination as to the level
of noncompliance, including the finding of immediate jeopardy, “must be upheld unless it
is clearly erroneous.” 42 C.F.R. § 498.60(c)(2). Woodstock Care Ctr., DAB No. 1726, at
9, 38 (2000), aff'd, 363 F.3d 583 (6th Cir. 2003). The Departmental Appeals Board (the
Board) has long held that the net effect of the regulations is that a provider has no right to
challenge the scope and severity level assigned to a noncompliance finding, except in the
situation where that finding was the basis for an immediate jeopardy determination. See,
e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB No. 1750 (2000).
ALJ review of a CMP is subject to 42 C.F.R. § 488.438(e).

The 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.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v.
Thompson, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross
Creek Health Care Ctr., DAB No. 1665 (1998); see Hillman Rehab. Ctr., DAB No. 1611
(1997), No. 98-3789, 1999 WL 34813783 (D.N.J. May 13, 1999).

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

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis. The survey that ended on March 30, 2009, was a complaint survey that found
Petitioner in violation of 42 C.F.R. § 483.25(c) (Tag F314) at a scope and severity level
of G, indicating that the violation caused actual harm to Resident 1, the only resident
involved. CMS Ex. 2.

The March 12, 2009, complaint that triggered the survey was received by the state agency
from staff at the Kaiser Permanente®, Santa Clara Medical Center, where Resident 1 was
admitted with unstageable wounds on his right buttock, left heel, and a Stage 4 wound to
the bone on his right foot. Surveyor Grant Maher, R.N., was assigned to investigate the
complaint and he conducted the survey. CMS Exs. 1, 17, at 3-4. The state agency
concluded that the complaint was substantiated based on Surveyor Maher’s investigation.
CMS Exs. 1, 2. The SOD prepared by Surveyor Maher alleges, that Petitioner violated
42 C.F.R. § 483.25(c) and that the violation caused actual harm to Resident 1, because:
(1) Petitioner failed to assess why Resident | put his right foot underneath his left leg
causing pressure on the right foot, which caused the pressure ulcers; (2) Petitioner failed
to alter treatment when the ulcers did not heal after two weeks and worsened; and (3)
Petitioner failed to detect an infection in the ulcer after documenting an odor. CMS Ex. 2,
at 1-2. I conclude that Petitioner did violate 42 C.F.R. § 483.25(c) and that deficiency
resulted in actual harm to Resident 1.

I have carefully considered all the evidence, including the documents and the testimony
at hearing, and the arguments of both parties, though not all may be specifically discussed
in this decision. I discuss the credible evidence given the greatest weight in my decision-
making.* The fact that evidence is not specifically discussed should not be considered
sufficient to rebut the presumption that I considered all the evidence and assigned such
weight or probative value to the credible evidence that I determined appropriate within
my discretion as an ALJ. There is no requirement for me to discuss the weight given
every piece of evidence considered in this case, nor would it be consistent with notions of
judicial economy to do so.

1. Petitioner violated 42 C.F.R. § 483.25(c) (Tag F314).

2. Petitioner’s violation of 42 C.F.R. § 483.25(c) resulted in actual
harm to Resident 1.

3. There is a basis for the imposition of an enforcement remedy.
a. Facts

Resident | was 77 years old when he was admitted to Petitioner’s facility on February 9,
2008. His diagnoses included coronary artery disease and a history of cerebrovascular
accident (stroke) with residual paralysis on his right side. He was incontinent of bowel
and bladder and he was fed by a nasogastric tube. He was dependent on staff for all his
activities of daily living (ADLs), and he was severely cognitively impaired. Resident 1
began positioning his right leg under his left leg in a way that caused pressure on the
lateral aspect of his right foot. Two pressure ulcers developed on the lateral aspect of his
right foot.* The ulcers were first observed as blisters on November 4, 2008. Ulcer 1, or
Site 1 as it is referred to in Petitioner’s records, was documented as two by one and one-
half centimeters and one-tenth centimeter deep without odor or drainage. Ulcer 2, or Site
2, was documented as one and one-half by one and one-half centimeters without odor or
drainage and intact. A physician’s progress note dated December 9, 2008, described the
ulcers as two quarter-sized areas of eschar. > Skin Integrity Sheets from November 4,

> “Credible evidence” is evidence that is worthy of belief. Blacks Law Dictionary 596
(18th ed. 2004). The “weight of evidence” is the persuasiveness of some evidence
compared to other evidence. Id. at 1625.

* Pressure ulcers are also referred to as “pressure sores” or “decubitus ulcers.” State
Operations Manual (SOM), app. PP, Tag 314. In this decision, I refer to the wound on
Resident 1’s right lateral foot variously as “pressure ulcer,” “pressure sore,” and
“wound.”

5 Eschar is thick, leathery, black or brown in color, dead or devitalized tissue that has lost
its usual physical properties and biological activity. It may be loose or firmly adhered to
the wound. SOM, app. PP, Tag 314.
2008 to March 4, 2009, document a worsening of the pressure sores. By February 24,
2009, the sores had enlarged to the point that they joined, forming a single, large sore
measuring ten centimeters by two centimeters, with an undetermined depth due to a
covering of black eschar that was reported on that date to have a moist border and odor.
Joint Stipulation of Undisputed Facts, {{§ 7-14.

Resident 1’s Minimum Data Set (MDS) with an assessment reference date of February 6,
2009, indicates that he rarely made himself understood; he sometimes understood; he was
totally dependent on staff for ADLs; he was incontinent of bowel and bladder; and he had
two Stage 4 pressure ulcers. CMS Ex. 5, at 17-20. These aspects of his assessment are
consistent with his Resident Assessment Protocol notes dated February 22, 2008. P. Ex.
10. When Resident 1 was admitted to Petitioner on February 9, 2008, he was assessed as
having no skin problems. CMS Ex. 5, at 14. In February 2008, he was assessed as being
at mild risk for developing pressure sores, but in August 2008, November 2008, and
February 2009, he was assessed as being at moderate risk for pressure ulcers. CMS Ex. 5,
at 16.

The evidence includes six care plans that address problems related to skin breakdown.
The earliest care plan has an onset date or beginning date of February 20, 2008, shortly
after Resident 1’s admission. CMS Ex. 5, at 31. The second care plan begins on
November 4, 2008. CMS Ex. 5, at 25. The third care plan is dated December 3, 2008.
CMS Ex. 5, at 24. Both the November and December care plans address the two ulcers
on Resident 1’s lateral right foot. The fourth care plan dated February 5, 2009, addresses
impaired skin integrity and a wound on the resident’s forehead. CMS Ex. 5, at 33. The
fifth care plan dated February 20, 2009, addresses a blister on the resident’s left heel.
CMS Ex. 5, at 32. The sixth care plan in evidence is dated March 9, 2009, the day
Resident | left Petitioner’s facility, and addresses the new ulcer on the resident’s right
buttock or sacrum. CMS Ex. 5, at 2.

The February 20, 2008 care plan shows that Resident 1 was assessed as at risk for skin
breakdown due to immobility, incontinence, and the fact he was in bed most of the time.
CMS Ex. 5, at 31. On November 4, 2008, the poor positioning of his right leg under his
left leg and his annoyance with repositioning were added as problems or concerns. The
care plan reflects that it was reviewed in May, August, and November 2008, and in
February and May® 2009. The following interventions were listed: turn and reposition
every two hours and as necessary; keep him clean and dry; provide pressure-relieving
devices; provide adequate nutrition and hydration; refer to the physician as needed; treat
and medicate as ordered; monitor and document food intake daily; laboratory testing as

® Resident 1 died in March 2009, and I recognize that the May 2009 review date was a
planned or scheduled review that likely did not occur.
necessary; evaluate skin daily; risk assessment with the Braden scale quarterly; clean dry
linens; reduce excessive moisture; and, on November 4, 2008, the intervention of
monitoring the position of the right leg was added. CMS Ex. 5, at 31.

The care plan dated November 4, 2008, reflects updates on November 12 and 18, 2008
and January 16 and 21, 2009, the latter related to an abrasion on the resident’s forehead.”
The care plan states that a problem or concern is the resident’s positioning of his right leg
under his left leg and the resident’s annoyance with repositioning. Interventions related
to the right lateral foot ulcers were: apply betadine and cover with a dry dressing every
lay; monitor position of leg; keep the wound sites off the bed; use heel protector at all
times; and notify physician of any untoward complications. CMS Ex. 5, at 25.

The care plan dated December 3, 2008, with updates on December 4, 9, and 20, 2008 and
January 6, 2009,* addressed the pressure ulcers on Resident 1’s right lateral foot. The
care plan reflects that it was reviewed on December 17, 18, 23, 2008 and January 6 and

3, 2009. The care plan notes visits by the physician and ordered interventions, including
continuing to keep the site clean and dry, to continue betadine dressing, to monitor proper
positioning of the right leg, and to notify the physician of complications. On December
4, 2008, there was a modification that required that the sites continue to be painted with
betadine and have foam applied for protection. On December 20, 2008, the order was to
continue betadine, apply Xeroform (petrolatum gauze), and cover with a dry dressing.
The order to use betadine and Xeroform was continued on January 6, 2009, with no
mention of using a dry dressing. CMS Ex. 5, at 24.

The care plan dated February 5, 2009, lists as a problem the resident’s impaired skin
integrity and lists as interventions that staff should carry-out treatment orders; monitor for
signs and symptoms of infection; and notify the physician as necessary. The care plan
form also includes problems or concerns dated March 1, 2009, related to an abrasion or
wound on the left side of the resident’s forehead; and March 9, 2009, related to the
resident’s altered mental state. CMS Ex. 5, at 33.

A MDS Resident Care Conference Review form dated February 10, 2009, states that
Vitamin C was added to Resident 1’s medications to address his wound and he was to

7 The dates are written “1/16/08” and “1/21/08” but, considering the context, the writing
of “08” was clearly a scrivener’s error. Furthermore, the entries relate to an abrasion on
the resident’s forehead and orders reflect that the abrasion occurred in February 2009.
CMS Ex. 5, at 22.

® The date is written as “1/6/08” but, considering the context, the writing of “08” was
clearly a scrivener’s error.
have range of motion exercise three times per week. CMS Ex. 5, at 21. The physician
actually ordered the Vitamin C on January 30, 2009. CMS Ex. 5, at 29.

The care plan that addressed the left heel blister is dated February 20, 2009, with an
update on March 6, 2009. On February 20, the pressure sore was described as redness
with a blister. On March 6, the ulcer was described as covered with a dark brown scab.
The interventions listed were to apply betadine and cover with a dry dressing daily; keep
load or weight off the site; keep the site clean and dry; and notify the physician of any
untoward complications. CMS Ex. 5, at 32.

The care plan for the right buttock pressure sore dated March 9, 2009, described the sore
as redness with purplish skin discoloration. Interventions listed were to: apply
Calmoseptine®, a multipurpose moisture barrier, every shift; turn and reposition every
two hours; keep the site clean and dry; and notify physician of any untoward
complications. CMS Ex. 5, at 2.

The clinical record presented for my consideration includes the following physician’s
orders on the date or dates indicated, while Resident 1 was in Petitioner’s facility:

Date Order

5/1- 2/2008 | Range of motion exercises and contracture prevention by restorative
nursing assistant (RNA) for upper and lower extremities.? CMS Ex. 5, at
28.

11/4/2008 May use heel protector at all times when in bed. Monitor placement of
heel protector every shift. CMS Ex. 5, at 28.

11/4/2008 Clean blisters, site 1 and 2, on left™ lateral foot with normal saline, pat
dry, apply betadine, cover with dry dressing daily for two weeks and then
reassess. May use heel protector at all times when in bed. Monitor
placement of heel protector every shift. CMS Ex. 5, at 96.

11/18/2008 | Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with dry dressing daily for two weeks and reassess. CMS Ex. 5, at 95.

12/3/2008 Clean right lateral foot with normal saline, pat dry, apply betadine, cover

° An order dated August 29, 2008, required that Resident | wear a “right resting splint,”
but that splint was apparently for the right arm as the “brace” for the right leg was not
ordered until December 2008. Dr. Rao, Resident 1’s treating physician, was uncertain
whether the splint was for the right arm or not. Tr. 171-72.

'° This is obviously a scrivener’s error as the evidence shows blisters on the right lateral
foot not the left.

10

with dry dressing daily for two weeks and then reassess. CMS Ex. 5, at
42.

12/4/2008

Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with dry dressing, apply foam daily for two weeks and then reassess.
CMS Ex. 5, at 41.

12/9/2008

Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with Xeroform, cover with dry dressing daily, apply foam for protection,
for two weeks and then reassess. Occupational therapy (OT) was also
ordered to address the right lower leg contracture. CMS Ex. 5, at 40.

12/23/2008

Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with Xeroform, cover with dry dressing daily, apply foam for protection,
or two weeks and then reassess. CMS Ex. 5, at 38.

1/6/2009

Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with Xeroform, cover with dry dressing daily, apply foam for protection,
or two weeks and then reassess. CMS Ex. 5, at 37.

1/19/2009

Resident will wear right knee brace three times per day, 10 a.m. to Noon,
2 p.m. to 4 p.m., and 6 p.m. to 8 p.m. CMS Ex. 5, at 28.

1/20/2009

Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with Xeroform, cover with dry dressing daily, apply foam for protection,
or two weeks and then reassess. CMS Ex. 5, at 36.

1/30/2009

Vitamin C, 500 milligrams, one tablet, two times each day for wound
ealing. CMS Ex. 5, at 29.

2/4/09

Clean right lateral foot with normal saline, pat dry, apply betadine, cover
with Xeroform, cover with dry dressing daily, apply foam for protection,
or fourteen days, then reassess. CMS Ex. 5, at 35.

2/5/09

Right knee flexion contractures worsening with right lateral foot necrotic
eschars — inevitable/unavoidable wounds. Ok to leave foot open to air
during daytime and bootie at night time. CMS Ex. 5, at 28, 35.

2/5/09

Paint right lateral foot with betadine daily, leave open to air for two
weeks and then reassess. Apply booty at night time. CMS Ex. 5, at 34.

2/18/2009

Continue to paint right lateral foot with betadine daily. Leave open to air
for two weeks and then reassess. CMS Ex. 5, at 22.

2/20/2009

Paint left heel blister with betadine and cover with a dry dressing every
day for fourteen days and then reassess. Resident may use heel protector
on left heel. CMS Ex. 5, at 22.

2/26/2009

Apply betadine to right lateral foot and cover with a dry dressing for
fourteen days then reassess. Apply heel protector each shift. CMS Ex. 5,
at 23.

3/6/2009

Continue to paint left heel with betadine and cover with dry dressing
every day for fourteen days and then reassess. Apply Calmoseptine® to
buttocks every shift. CMS Ex. 5, at 23.

3/9/2009

Apply Calmoseptine® to right buttock, Stage I sore, every shift for two

11

weeks then reassess. CMS Ex. 5, at 26.

Skin Integrity Sheets refer to the ulcers on the right lateral foot as Site 1 and Site 2. First
noted on November 4, 2008, Site 1 is described as a Stage II, two by one and one-half
centimeters and one-tenth centimeter deep, that appeared as a dry blister, reddened, with
no bleeding, and superficial skin thickness loss. The treatment was betadine dressing.
On November 11, 2008, the ulcer was noted to be an undetermined stage, one and three-
tenths centimeter by one and four-tenths centimeter, of undetermined depth, and it
appeared as a dry blister covered with a black scab and the surrounding area was
reddened. The treatment continued to be a betadine dressing. On November 18, 2008,
Site 1 had increased to two by one and eight-tenths centimeters of undetermined depth
and stage, covered with a dry black scab, and betadine dressing remained the treatment.
No odor, necrosis, tunneling, or drainage was noted on any of these dates. CMS Ex. 5, at
78. On November 25, December 2, and December 9, 2008, Site 1 was assessed as two
and one-half by two centimeters, depth and stage undetermined, covered with an intact
dry, black scab, and betadine continued as the treatment. On December 9, 2008, a
Xeroform dressing and dry dressing are also listed as part of the treatment. On December
16, 2008, Site 1 was larger at three by two centimeters, covered by a dry and intact black
scab, and treatment was listed as betadine, Xeroform, and dry dressing. On December 24,
2008, the wound was larger at three and one-half by two centimeters, stage and depth
undetermined, covered by a dry and intact black scab, and with no change in treatment.
No necrosis, drainage, tunneling, or odor was noted on any of these dates. CMS Ex. 5, at
79. From December 30, 2008 through January 13, 2009, Site 1 is described as three by
two and one-half centimeters of undetermined depth and stage, covered by an intact, dry,
black scab, and betadine, Xeroform, and/or dry dressings are listed as the treatment. No
necrosis, drainage, tunneling, or odor was noted on any of these dates. CMS Ex. 5, at 80.
On January 20, 2009, Site 1 had increased in size to four by two centimeters but was
otherwise unchanged. Treatment listed was betadine, Xeroform, and dry dressing. On
January 27 and February 3, 2009, the wound measured five by two centimeters but the
description was otherwise the same. Betadine and Xeroform were listed as treatments on
January 27 but only betadine was listed on February 3, 2009. On February 10, 2009, Site
1 was measured as four and two-tenths by two centimeters and the black scab was
described as having the appearance of eschar. On February 17, 2009, Site 1 was
measured at five by three and one-half centimeters, still covered by a dry black scab or
eschar, no bleeding, undetermined stage and depth, and betadine was listed as the
treatment. No necrosis, drainage, tunneling, or odor was noted on any of these dates.
CMS Ex. 5, at 81.

On November 4, 2008, Site 2 was described as a blister on the right lateral foot, Stage I,
with dry skin intact, measuring one and one-half by one and one-half centimeters. The
entry for November 11, 2008, describes the site as one and four-tenths by one and three-
tenths centimeters, undetermined depth and stage, with a dark brown scab and reddened
area around the scab. On November 18, 2008, the size of the site had changed to one and

12

one-half by one and two-tenths centimeters and the reddened area was described as
betadine stained. No odor, drainage, necrosis, or undermining or tunneling was noted on
the three days and betadine dressing was listed as the treatment. CMS Ex. 5, at 82. On
November 25, the size of Site 2 was two by two centimeters. On December 2, the size
was two by one and seven-tenths centimeters. On December 9, the size was reported to
be two by one and eight-tenths centimeters. On December 16 and 24, 2008, the size was
reported as increased to two and one-half by two centimeters. Site 2 was described as a
dry, intact, black scab covering the blistered area; of undetermined depth and stage; with
no odor, drainage, necrosis, undermining, or tunneling. The treatment for November 25
and December 2 was listed as betadine, with Xeroform and dry dressing added on
December 9, 16, and 24. CMS Ex. 5, at 83. Site 2 measurements for December 30 were
two and one-half by two centimeters. On January 6, 2009, the site measured two by two
and one-half centimeters. On January 13, measurements were three by two centimeters.
On January 20, the site measured three by two centimeters. On January 27, the site
measured two and one-half by two centimeters. On February 3, the site measured three
by two and one-half centimeters. On February 10 and 17, 2009, the site measured three
and one-half by two centimeters. From December 30, 2008 through February 17, 2009,
the site was described as covered by an intact, dry black scab or eschar; the wound was of
undetermined depth and stage; and there was no odor, drainage, necrosis, tunneling, or
undermining. The February 17, 2009 note also states that there was no bleeding.
Treatments listed on various dates and in various combinations were betadine, Xeroform,
and dry dressing. CMS Ex. 5, at 75-76.

Assessments dated February 24 and March 4, 2009, show that Sites 1 and 2 had merged
into a single wound covered with a black scab. On February 24, the wound measured ten
by three centimeters, of undetermined depth and stage, the black scab was noted to have
moist margins, and there was an odor. Treatment continued to be betadine. On March 4,
2009, the wound measured nine by three centimeters, of undetermined depth and stage,
with a black scab that had moist margins, slight bleeding, and odor, and the treatment was
still betadine. CMS Ex. 5, at 77.

Skin Integrity Sheets also document the discovery of a Stage II ulcer on Resident 1’s left
heel on February 20, 2009, that was three by two centimeters. The ulcer had increased in
size to six by seven centimeters on March 4, 2009. The ulcer appeared as a blister and
subsequently developed a dry scab. Betadine was the only treatment listed. CMS Ex. 5,
at 84. The presence of the left heel ulcer was documented at the hospital on March 10,
2009. CMS Ex. 5, at 124. The record before me does not include Skin Integrity Sheets
for a right buttock pressure sore, but a care plan was prepared that reflects an onset date
of March 9, 2009. CMS Ex. 5, at 2. The right sacral/buttock pressure ulcer was
documented at the hospital on March 10, 2009, as three by two and one-half centimeters,
covered with black eschar, and unstageable. CMS Ex. 5, at 121. The hospital also
documented a two by three centimeters ulcer on the top of the left foot on March 10,
2009. CMS Ex. 5, at 122.

13

Interdisciplinary Progress Notes dated between August 29, 2008 and March 9, 2009, and
Weekly Nursing Summaries from October 27, 2008 through March 1, 2009, are in
evidence. The progress notes generally reflect that Resident 1 was being tube fed, he was
being turned and repositioned, and he was receiving OT services, though the frequency of
these cares and services is not consistently documented. CMS Ex. 5, at 44-74, 85-94,
101-02.

A Weekly Nursing Summary for October 27 to November 2, 2008, shows that Resident 1
could be up in his wheelchair for short periods; his position in bed needed to be changed
every two hours; his skin was intact but dry and fragile; there was redness in the groin,
and there was no mention of any pressure ulcer. CMS Ex. 5, at 87. A progress note at
9:00 a.m. on November 4, 2008, indicates that the CNA found a blister on the resident’s
right lateral foot and the nurse found two blisters on the lateral right foot when she
examined Resident 1. The note states that Resident 1’s physician, Dr. Rao, was contacted
and she ordered application of betadine, covering with a dry dressing, and the use of a
heel protector at all times. CMS Ex. 5, at 93. A note dated November 18, 2008, at 2:40
p.m. indicates that the resident’s right lateral foot was reassessed. Site 1 was dry and
covered with an intact black scab. Site 2 was dry and with a dark brown scab over part of
the site. The surrounding area is noted to be betadine stained. The physician ordered
continuation of use of betadine dressing for two weeks and then the sites were to be
reassessed. CMS Ex. 5, at 85. A Weekly Nursing Summary for November 16 to 23,
2008, indicates that Resident 1 could be up in his wheelchair most of the day, he needed
to change his position every two hours, his skin was intact but dry and fragile, and he had
two blisters on his right lateral foot that were to be washed with normal saline, patted dry,
coated with betadine, covered with a dry dressing for two weeks, then reassessed. CMS
Ex. 5, at 101.

A progress note dated December 3, 2008 at 11:55 a.m., indicates that the right lateral foot
was reassessed; there were two sites; both were betadine-stained; and Dr. Rao ordered to
continue the betadine paint for fourteen days and then reassess. CMS Ex. 5, at 57. A
note dated December 4, 2008 at 11:00 a.m., indicates that Dr. Rao saw the resident and
ordered a change of treatment for the right lateral foot, but the change is not reflected in
the note. CMS Ex. 5, at 57. On December 9, 2008, an 11:40 a.m. note indicates Dr. Rao
saw the resident again and ordered that treatment be changed for the right lateral foot, but
again the note does not reflect how treatment was changed. CMS Ex. 5, at 57. A note
dated December 23, 2008 at 2:30 p.m. indicates the resident’s blisters on his right lateral
foot were reassessed and they were observed to be dry blisters that were betadine stained.
Dr. Rao is noted to have seen the resident and she ordered that the betadine dressing be
continued for another fourteen days and then reassessed. CMS Ex. 5, at 58. On
December 30, 2008, a note indicates that the physician was contacted for an order for
four scoops of protein powder that were added to the resident’s liquid tube feeding. CMS
Ex. 5, at 58.
14

A January 6, 2009 note at 1 p.m. indicates the resident’s right lateral foot was reassessed,
the two blisters were still covered with a blackish scab that was dry and intact, and the
physician ordered new treatment to continue, though the note does not indicate what
treatment. CMS Ex. 5, at 58. A note at 1 p.m. on January 19, 2009, reflects an order for
aright knee brace. CMS Ex. 5, at 48. A note at 10 a.m. on January 20, 2009, indicates
that the right lateral foot was reassessed, and the two sites were still covered by intact,
dry, black scabs. Dr. Rao ordered new treatment, which was to keep the sites clean and
dry and to continue betadine and Xeroform treatment for two weeks. CMS Ex. 5, at 45.

A note dated February 4, 2009 at noon, indicates that Resident 1’s right lateral foot was
reassessed and the two sites were still covered by intact, dry, dark brown scabs. The
physician’s order was to continue to treat with betadine and Xeroform and cover with a
dry dressing daily for fourteen days and then reassess. The physician also ordered that
the resident be kept clean and dry. CMS Ex. 5, at 46. However, a note dated February 5,
2009 at 11 p.m., states that Dr. Rao saw Resident 1 and ordered that treatment be changed
to just painting the sites with betadine and leaving them open to the air, except at night
when a booty was to be applied. CMS Ex. 5, at 46. A note dated February 18, 2009 at 1
p.m., shows that the right lateral foot was reassessed as still having two sites of dry black
scab or eschar. The sites were dry and intact, and Dr. Rao gave a new treatment order to
continue painting with betadine. CMS Ex 5, at 46. A note dated February 20, 2009 at
10:30 a.m., documents the discovery of a small, fluid-filled, intact, blister on Resident 1’s
left heel and the physician’s order to apply betadine and cover with a dry dressing. CMS
Ex. 5, at 46. A note dated February 26, 2009, indicates that Resident 1 was seen by Dr.
Rao, that the two sites had merged into one covered by a black scab; that Dr. Rao had
ordered a change in treatment, but how is not specified; and Dr. Rao ordered that a heel
protector be applied every shift. CMS Ex. 5, at 44.

Weekly Nursing Summaries for December 28, 2008 to February 15, 2009, show that the
resident was bedbound, he was to be repositioned every two hours, his skin was intact,
and no new treatment was listed for the wounds on his right foot. CMS Ex. 5, at 61-74.
A Weekly Nursing Summary for the period February 22, 2009 to March 1, 2009,
indicates that the resident was bedbound, his position was to be changed every two hours;
his skin was intact; and a new treatment listed was to apply betadine to the right lateral
foot for fourteen days. CMS Ex. 5, at 7, 59.

A March 6, 2009 note indicates that the left heel was reassessed and the blister still had a
dry, intact, brown scab, with a small amount of drainage. Dr. Rao gave a new treatment
order to paint the left heel with betadine and to apply Calmoseptine® to the left and right
buttocks as a preventive measure. CMS Ex. 5, at 44. On March 9, 2009 at about 11 a.m.,
a red area with purplish/bluish skin color in the middle of the site was discovered on the
resident’s right buttock. The note states the physician was contacted, and she gave a
treatment order for the redness, but what order was received is not specified, except that
the site was to be kept clean and dry. CMS Ex. 5, at 44. A note dated March 9, 2009 at 4

15

p.m., indicates that Resident 1 was sent to the emergency department with a rapid
respiratory rate and altered mental status. CMS Ex. 5, at 44.

A physician’s progress note by Dr. Rao, dated December 9, 2008, states that facility
nursing staff was concerned that Resident | was always keeping his right leg under the
left; the right leg was contracted at the knee; he had non-healing eschar on the lateral
aspect of the right foot despite dressings and booties; and he was not cooperative lately
with activities of daily living. Dr. Rao described Resident 1’s right lateral foot as having
two areas of quarter-size, black eschar, not moist, no drainage, soft to touch, and touching
the bed constantly with pressure of the left leg on the right foot. She ordered that the
right foot be cleaned with normal saline, to apply betadine to “thicken skin to prevent
breakdown;” to keep the right foot from being positioned under the left leg; to place
pillows between the legs; and prevent worsening of the contracture at the knee. CMS
Ex. 5, at 5-6. An OT plan of treatment dated December 15, 2008, states that Resident 1
was going to have a knee brace applied to his right knee three times per day for two hours
each to prevent further contracture and that OT would be working to maintain or improve
is ROM. CMS Ex. 5, at 12. OT notes dated January 13 and 14, 2009, show that
Resident | received his knee brace and it was being used. CMS Ex. 5, at 10. An OT note
dated January 19, 2009, indicates that CNA’s were trained to apply the resident’s knee
brace and the splinting schedule was posted in the room by the nurse. CMS Ex. 5, at 9.
A nurse practitioner’s progress note dated February 20, 2009, states that the contracture
of the right knee is increasing. CMS Ex. 5, at 30.

Resident 1 was sent to the emergency room on March 9, 2009, where he was evaluated as
being nonresponsive. CMS Ex. 5, at 103. He was admitted to the hospital with a
diagnosis of septic shock. He was noted to have pressure ulcers on his lateral right foot
and left heel and a pressure ulcer on his coccyx. CMS Ex. 5, at 104-09. On March 11,
2009, a podiatry consult evaluated the right foot pressure ulcer as having no odor or
drainage, dry eschar on most of the lateral right foot, with edema, and the examiner could
probe the wound to the bone. The left heel ulcer was noted to have superficial necrosis.
Osteomyelitis was diagnosed related to the right foot ulcers. It was recommended that
the family consult with orthopedics regarding a below the knee amputation. The order
was to continue wet to dry dressing and betadine for the wound. CMS Ex. 5, at 111. A
hospital patient progress record dated March 13, 2009, indicates that Resident | suffered
from right foot osteomyelitis and Methicillin-resistant Staphylococcus aureus (MRSA).
The note indicates that the family declined a below the knee amputation of Resident 1’s
right leg and the family was considering changing the level of care to comfort care. CMS
Ex. 5, at 133. Resident 1 died on March 15, 2009, due to sepsis secondary to
osteomyelitis and bacteremia. CMS Ex. 5, at 110, 129.

16

b. Analysis
(i) The Participation Requirement

The quality of care regulation includes the requirement that a facility ensure that a
resident who enters the facility without a pressure sore does not develop one unless
clinically unavoidable, and that a resident entering with a pressure sore receives care and
services necessary for healing, to prevent infection and prevent other sores from
developing. 42 C.F.R. § 483.25(c). CMS has adopted definitions for terms related to 42
C.F.R. § 483.25(c) that surveyors are to apply in conducting surveys. A “pressure sore,”
often referred to as a “pressure ulcer,” is any lesion of the skin caused by unrelieved
pressure that damages the underlying tissue. SOM, app. PP, Tag F314.

The Board has applied the regulation in various decisions, including Koester Pavilion,
DAB No. 1750 and Cross Creek Health Care Ctr., DAB No. 1665, which are leading
decisions in this area. The Board has noted that the pressure sore regulation contains two
prongs: (1) a facility must ensure a resident who enters the facility without sores does not
develop sores, unless the resident’s clinical condition demonstrates that pressure sores are
unavoidable; and (2) a resident with pressure sores must receive necessary treatment and
services to promote healing, prevent infection, and prevent new sores. With respect to
prevention and treatment of pressure sores, the Board has concluded that a facility bears a
duty to “go beyond merely what seems reasonable to, instead, always furnish what is
necessary to prevent new sores unless clinically unavoidable, and to treat existing ones as
needed.” Koester Pavilion, DAB No. 1750, at 32; see also Meadow Wood Nursing Home,
DAB No. 1841 (2002) (noting loose dressing contaminated with fecal matter constitutes
violation); Ridge Terrace, DAB No. 1834, at 15-16 (2002) (holding a single observation
by a surveyor of a nurse aide cleaning an open sore area with a stool-stained washcloth
was sufficient to sustain a deficiency finding under this Tag). Once CMS establishes a
prima facie case, the facility bears the burden of showing that the development or
deterioration of a pressure sore was clinically unavoidable.

The Board in Clermont Nursing and Convalescent Ctr., DAB No. 1923, at 9-10 (2004),
aff'd, Clermont Nursing and Convalescent Ctr. v. Leavitt, 142 Fed. App’x 900 (6th Cir.
2005), provided the following analysis:

The standard of necessity is expressly articulated in the
regulation. The primary regulatory requirement is that
residents must receive, and facilities must provide, “the
necessary care and services” for attainment or maintenance of
the highest practicable resident well-being. 42 C.F.R.

§ 483.25 (emphasis supplied). The regulation then goes on to
provide that a resident with pressure sores must receive
“necessary treatment and services” for healing, prevention of
17

infection, and prevention of yet more pressure sores. 42
C.F.R. § 483.25(c)(2) (emphasis supplied). We therefore
reject Clermont’s contention that the standard is “nowhere in
the regulation.” That argument is belied by the plain
language of the regulation.

Moreover, as we explained in Koester Pavilion, in the
preamble to the final regulation, CMS expressly declined to
use “less demanding” language with respect to a facility’s
obligation to “ensure” outcome of treatment for pressure
sores. Koester Pavilion at 30, quoting 56 Fed. Reg. 48,826, at
48,850 (Sept. 26, 1991). CMS recognized that factors beyond
required treatment and services, such as disease process and
resident compliance, affect care outcome. Jd. However,
CMS also recognized that the regulation allows a facility to
put forward “available clinical evidence” to show that “a
negative resident care outcome was unavoidable.” Jd. The
preamble further provides that facilities “should always
furnish the necessary treatment and services” for pressure
sore prevention or healing. /d. at 30-31(emphasis supplied).
Thus, a facility may provide necessary treatment and services
to ensure the prevention or healing of pressure sores, yet still
be confronted with a negative outcome. In that instance, the
facility may put forward clinical evidence to show that the
outcome was unavoidable.

See also Woodland Vill. Nursing Ctr., DAB No. 2172, at 12-14 (2008).
(ii) The Prima Facie Showing of a Violation

Petitioner and CMS debate in detail the treatment ordered by Dr. Rao for Resident 1.
However, the parties’ focus upon Dr. Rao and her selected treatment is in error. Dr. Rao
was the treating physician for Resident 1 and her relationship was with Resident 1 and
her responsibility was to her patient. Dr. Rao was not Petitioner’s Medical Director, and
there was no evidence that she was employed by or under contract to Petitioner as staff.
While some evidence suggests that Dr. Rao’s chosen treatment modality may not be
favored by all in her profession, there is no lack of disagreement in the medical
profession regarding proper treatment for complicated problems such as pressure ulcers
and diabetes. But I need not resolve whether or not Dr. Rao’s treatment modality was the
best for Resident 1. I also need not resolve whether Petitioner’s Medical Director should
have intervened and challenged Dr. Rao’s decision-making. Rather than question Dr.
Rao’s choice of treatment, the correct focus in this proceeding is upon Petitioner, the
regulated entity. 42 C.F.R. § 488.26. Indeed, my jurisdiction is limited to the issues of
whether or not Petitioner was in substantial compliance with program participation
18

requirements and whether or not reasonable enforcement remedies are proposed by CMS.
42 C.F.R. §§ 488.408(g); 498.1; 493.3(b)(13). Petitioner attempts to focus upon Dr. Rao
and her chosen treatment to support its positions that the development and worsening of
the ulcers was unavoidable and that Petitioner had no alternative but to follow Dr. Rao’s
orders. However, Petitioner cannot hide behind the physician arguing that it did all that
the physician ordered. Petitioner cannot meet its burden to establish the defense of
unavoidability, as I conclude that Petitioner has failed to show by a preponderance of the
evidence that it provided the necessary care and treatment identified by the care planning
team and specified by Resident 1’s care plan.

The SOD alleges that Petitioner violated 42 C.F.R. § 483.25(c) and that the violation
caused actual harm to Resident 1, because: (1) Petitioner failed to assess why Resident 1
put his right foot underneath his left leg causing pressure on the right foot, which caused
the pressure ulcers; (2) Petitioner failed to alter treatment when the ulcers did not heal
after two weeks and worsened; and (3) Petitioner failed to detect an infection in the ulcer
after documenting an odor. CMS Ex. 2, at 1-2. The SOD clearly alleges that Petitioner
violated both prongs of 42 C.F.R. § 483.25(c), i.e. Petitioner failed to provide necessary
treatment and services to prevent pressure ulcers and Petitioner failed to provide
necessary care and services to promote healing, prevent infections, and prevent the
development of new ulcers.

Surveyor Maher testified at hearing that he cited Petitioner for a deficiency under Tag
F314 because:

[Petitioner] did not do all necessary things, to prevent the sore
and then they did not do what was necessary to prevent
further sores, to treat the sores he had, or to prevent infection.
So, I think they failed to meet the regulation on both
prevention and on treatment.

Tr. at 504. Surveyor Maher’s testimony was consistent with his Declaration, in which he
opined that Petitioner failed to prevent the development of Resident 1’s pressure ulcers
and failed to heal the pressure ulcers and prevent infection. CMS Ex. 17, at 5-7, 9-11, 12.
On cross-examination, however, Surveyor Maher testified that there was a decision made
in his office to have the SOD focus upon treatment of the pressure ulcers rather than their
prevention. Tr. at 533-34, 547-49. Petitioner argues based on Surveyor Maher’s
testimony, that it was not cited for violation of both prongs of 42 C.F.R. § 483.25(c). P.
Br. at 4. Counsel for CMS advised me at hearing that, regardless of the testimony of
Surveyor Maher, CMS proceeds upon both prongs of the regulation and that the CMS
position is that the SOD gave Petitioner adequate notice to defend against both prongs.
Tr. at 551-54. Surveyor Maher’s testimony was, at best, confusing. Surveyor Maher
made clear that he thought Petitioner violated both prongs of the regulation and that he
disagreed with others at the state agency on how to proceed. Of course, it was CMS that

19

imposed the PICMP in this case and it is CMS that is before me, not the state agency.
Furthermore, the issue before me is whether or not there is a basis to impose the PICMP.
My construction of the allegations of the SOD is that it provided Petitioner adequate
notice that it needed to defend against both prongs of 42 C.F.R. § 483.25(c) and that is, in
fact, what Petitioner has done. P. Br. at 4-16. Contrary to Petitioner’s assertion, the
disagreement was not between the surveyor and CMS, but rather between the surveyor
and some unspecified persons at the state agency. Contrary to Petitioner’s assertion, I do
not conclude that the fact that officials at the state agency viewed the facts differently
than the surveyor or CMS undermines the credibility of the charged violation of 42 C.F.R.
§ 483.25(c). Evidence, its weight and credibility, is often viewed differently by different
individuals or parties, which partly explains why ALJs are necessary.

I have no difficulty concluding in this case that there has been a prima facie showing of a
violation of 42 C.F.R. § 483.25(c)(1) and (2). The evidence shows that Resident | did
not have pressure sores upon admission to Petitioner; Resident 1 subsequently developed
pressure sores on his right lateral foot; Resident 1’s pressure ulcers did not heal, but
became infected; Resident 1 developed additional pressure sores; and the evidence shows
that Petitioner failed to follow care planned interventions, which were necessary care and
services to prevent and promote the healing of pressure ulcers. There is no dispute that
the pressure ulcers in this case amounted to actual harm. Thus, the burden is upon
Petitioner to rebut the prima facie showing or to establish an affirmative defense.

(iii) Petitioner’s Defense

Petitioner does not argue that CMS failed to make a prima facie showing of a violation of
both prongs of 42 C.F.R. § 483.25(c). Rather, Petitioner argues that the evidence shows
that the development and deterioration of Resident 1’s pressure ulcers were unavoidable.
Tr. 66-70. Petitioner argues that the definitions of avoidable and unavoidable adopted by
CMS in the SOM should be treated as establishing the elements of the affirmative
defense of unavoidability. P. Br. at 5-7. The SOM sets forth CMS guidance and policy
to guide and direct state survey agencies in the survey process. Guidance to surveyors for
each condition for participation is set forth in the SOM, app. PP by “Tag.” 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. Northwest Tissue Ctr. v. Shalala, 1
F.3d 522 (7th Cir. 1993); State of Indiana by the Indiana Dep’t of Public Welfare v.
Sullivan, 934 F.2d 853 (7th Cir. 1991). Thus, while the Secretary may not seek to
enforce the provisions of the SOM, she may seek to enforce the provisions of the Act or
regulations as interpreted by the SOM. The SOM, app. PP, Tag F314 provides the
following definitions of avoidable and unavoidable pressure ulcers:

20

“Avoidable/Unavoidable” Pressure Ulcers

“Avoidable” means that the resident developed a pressure
ulcer and that the facility did not do one or more of the
following: evaluate the resident’s clinical condition and
pressure ulcer risk factors; define and implement
interventions that are consistent with resident needs, resident
goals, and recognized standards of practice; monitor and
evaluate the impact of the interventions; or revise the
interventions as appropriate.

“Unavoidable” means that the resident developed a pressure
ulcer even though the facility had evaluated the resident’s
clinical condition and pressure ulcer risk factors; defined and
implemented interventions that are consistent with resident
needs, goals, and recognized standards of practice; monitored
and evaluated the impact of the interventions; and revised the
approaches as appropriate.

The definitions adopted by CMS for the SOM, are consistent with prior discussions of the
terms by the Board in the context of pressure ulcer cases. I conclude that SOM
definitions accurately summarize the elements of the affirmative defense of
unavoidability. However, applying these definitions to the facts of this case compels the
conclusion that Petitioner has failed to establish that Resident 1’s ulcers were
unavoidable because Petitioner has not produced evidence to show that it implemented
care planned interventions; that it monitored the impact of interventions implemented;
and that it took appropriate action to revise interventions as necessary.

On February 9, 2008, when Resident 1 was admitted to Petitioner’s facility, he was
assessed as being at risk for the development of pressure ulcers, albeit a mild risk. CMS
Ex. 5, at 1, 14, 16. Resident 1’s February 20, 2008 care plan shows that his care planning
team'' adopted the following interventions: turn and reposition every two hours and as
necessary; keep Resident 1 clean and dry; provide pressure-relieving devices; provide
adequate nutrition and hydration; refer to the physician as needed; treat and medicate as
ordered; monitor and document food intake daily; laboratory testing as necessary;
evaluate skin daily; risk assessment with the Braden scale quarterly; clean dry linens; and
reduce excessive moisture. CMS Ex. 5, at 31. The fact that the care planning team
adopted these interventions supports my conclusion that the team determined that the

' Also referred to as the interdisciplinary team. 42 C.F.R. § 483.20(k)(2)(ii).
21

interventions were necessary care and services for the prevention of pressure ulcers.
Applying the definitions of “avoidable” and “unavoidable” that Petitioner advocates from
the SOM, the evidence shows that in February 2008, the resident’s clinical condition and
pressure ulcer risk factors were evaluated; the interventions were defined consistent with
the resident’s identified needs and goals. It is undisputed in this proceeding that the
interventions from February 2008 were consistent with the standards of practice. The
problem for Petitioner is that the evidence does not show that the interventions planned
by the care planning team in February 2008 were actually implemented, monitored and
evaluated, and then modified as necessary. Specifically, the evidence does not show
which, if any, pressure-relieving devices were attempted or implemented; there is no
nutritional assessment in the clinical records or evidence reflecting monitoring of the
resident’s nutritional intake and level of hydration; and there is no evidence of laboratory
testing”? that might indicate malnutrition or dehydration or other factors that might
contribute to the formation of pressure ulcers or their delayed healing. There is some
evidence that the resident had a special mattress, but the type of mattress is not
specifically indicated and there is no evidence of the assessment of its effectiveness. Tr.
200-03. The evidence shows that Resident 1 was dependent upon tube feeding for his
nutrition and likely his hydration. There is no nutritional assessment that indicates the
necessary caloric intake or level of hydration and no documentary evidence that daily
intake was being monitored as required by the care plan. Other than the addition of four
scoops of protein powder to the residents feeding on December 30, 2008 (CMS Ex. 5, at
58) and the addition of Vitamin C on January 30, 2009 (CMS Ex. 5, at 21, 29), there is no
evidence that Resident 1’s nutritional or hydration status was evaluated or monitored
after the pressure ulcers on his right lateral foot developed in November 2008.

Petitioner acknowledges in its Post-Hearing Brief the interventions that were planned
when Resident 1 was admitted to the facility in 2008. Petitioner argues that Dr. Rao’s
testimony supports its position that nursing staff consistently implemented the planned
interventions. P. Br. at 8. However, Dr. Rao’s testimony is not as unequivocal as
Petitioner suggests. Dr. Rao’s testimony was that she believed that staff carried out her
orders — she did not testify that she knew staff carried out her orders or the care planned
interventions. Her self-limited response does not support a conclusion that the
interventions were consistently implemented. Tr. at 118-27, 200-03. Dr. Rao readily
admitted that she did not know the type of mattress used for Resident 1, a clear indication
that she was not supervising or monitoring the interventions being implemented, other
than perhaps, her orders regarding treatment of the specific pressure ulcers. The evidence
shows that Dr. Rao was frequently at the facility (Tr. at 583) and initially she saw

The SOM, app. PP, Tag 314, recognizes that laboratory tests are of limited utility.
Nevertheless, Resident 1’s care planning team planned the intervention, which should
have been attempted, monitored, and modified as necessary.
22

Resident 1 every week (Tr. at 159-60, 194-95) but she could not recall whether she or her
nurse practitioner saw Resident 1 more often than every thirty days (Tr. at 122-24, 160)
after his pressure ulcers developed. Certainly, Dr. Rao was not at the facility all the time
(Tr. at 197) and she was not supervising facility staff or their implementation of care
planned interventions. Thus, I conclude that Dr. Rao’s testimony is not credible on the
issue of whether staff was implementing care planned interventions, particularly absent
corroborating documentary evidence. Even if I accept Dr. Rao’s testimony as
establishing that staff consistently carried out all the care planned interventions, that does
not establish that the staff or the care planning team actually evaluated the effectiveness
of those interventions and modified them to meet the resident’s needs as required.

The evidence also shows that Petitioner failed to perform care planned pressure ulcer risk
assessments. The February 2008 care plan required that Resident 1’s risk for developing

pressure ulcers be assessed every quarter. CMS Ex. 5, at 31. There is no dispute that no

assessment was done for six months between February 2008 and August 2008. CMS Ex.
5, at 16; P. Br. app. A, at 1; P. Reply at 3.

The care plan dated November 4, 2008, shows that the care planning team assessed the
cause of the pressure ulcers on the right lateral foot to be the positioning of the right leg
under the left leg resulting in pressure on the right lateral foot. The planned interventions
to address the positioning of the right leg were to monitor the position of the leg and to
wear a heel protector. It was noted that the resident became annoyed when attempts were
made to reposition the leg, but no interventions were listed to address the resident’s
resistance to repositioning and I have received no separate care plan that addressed his
resistance. CMS Ex. 5, at 25. On November 4, 2008, the intervention to monitor the
position of the right leg was added to the February 20, 2008 care plan. CMS Ex. 5, at 31.
The care plan dated December 3, 2008, also required monitoring of the position of the
right leg. CMS Ex. 5, at 24. It was not until December 9, 2008, that Dr. Rao addressed
the positioning of the right leg in her progress note recording her visit with the resident
on December 9, 2008. She notes that nursing staff expressed concern because of the
positioning of the right leg and she also notes that the resident was resisting care. Her
plan was for the RNA to administer range of motion exercises; to keep the right foot from
being positioned under the left leg; to use pillows between the legs; and to prevent
worsening of the contracture of the knee. CMS Ex. 5, at 5-6. The December 3 care plan
was updated on December 9, 2008, with a note that the resident was seen by Dr. Rao. No
intervention to use pillows between the legs was added to the care plan dated December 3,
2008 (CMS Ex. 5, at 24), the care plan dated November 4, 2008 (CMS Ex. 5, at 25), or
the care plan dated February 20, 2008 (CMS Ex. 5, at 31).

Although not mentioned in her progress note, the record shows that Dr. Rao issued an

order on December 9, 2008, for OT to addre:
40. OT began seeing Resident | related to t

ss the right leg contracture. CMS Ex. 5, at
e right knee contracture on December 11,

2008 and on December 15, 2008, Dr. Rao approved an OT plan for the resident to receive
23

aright knee brace. CMS Ex. 5, at 12. However, it was not until January 13, 2009, that
the brace was received and applied by OT staff, the treatment nurse was not trained until
January 16, 2009, and the CNA’s were not trained to apply the brace until January 19,
2009. CMS Ex. 5, at 9-12. It was not until January 19, 2009, that Dr. Rao ordered the
use of the right knee brace three times per day for two hour periods. CMS Ex. 5, at 28;
Tr. 179. The use of the right knee brace was not added as an intervention on the care
plans. Dr. Rao testified that if the brace was not used as ordered, the contracture could
have worsened. Tr. at 180. An order dated February 5, 2009, indicates that the right
knee flexion contracture was worsening. CMS Ex. 5, at 35. Nurse Practitioner Schuler
saw Resident | on February 20, 2009, and she specifically noted that the right knee
contracture was increasing. CMS Ex. 5, at 30. However, there is no evidence that the
effectiveness of the knee brace was evaluated by the care planning team or whether there
was any consideration of whether to modify or change that intervention.

Dr. Rao testified that she was not aware of any signs of infection, including redness
around the eschar, swelling of the foot or area surrounding the eschar, a fever, or elevated
white blood cell count. Tr. 142-44. She testified that had she been notified that the
wound on the right foot had changed to having a moist area around the eschar, she would
have examined the wound or had her nurse practitioner do so as that was a sign of
possible infection. She testified that odor or drainage could also indicate that the wound
was infected. The possibility of infection would cause her to change her treatment orders
and to order laboratory testing. Tr. 226-28. Petitioner’s clinical records show that on
February 24, 2009, the wound measured ten by three centimeters, the black scab was
noted to have moist margins and there was an odor. Treatment continued to be betadine.
On March 4, 2009, the wound measured nine by three centimeters, of undetermined depth
and stage, with a black scab that had moist margins, slight bleeding, and an odor. CMS
Ex. 5, at 77. Petitioner has presented no evidence that Dr. Rao was actually notified of
the changes in the wound. | infer based on Dr. Rao’s testimony and the fact that there
was no change in treatment of the wounds on and after February 24, 2009, that Petitioner
failed to comply with the requirements of its care plans to notify the physician of any
“untoward complications.” CMS Ex. 5, at 24-25; Tr. 268-70. The evidence does show
that Dr. Rao saw Resident 1 on February 26, 2009, and ordered a change of treatment, but
the progress note does not record how treatment was changed. CMS Ex. 5, at 44, Tr.
305-06. An order dated February 26, 2009 indicates that betadine was to be applied to
the right lateral foot and then covered with a dry dressing for 14 days, then reassessed.
The order also states that a heel protector was to be applied every shift. CMS Ex. 5, at
22-23; Tr. 306.

Dr. Rao opined that Resident 1’s pressure sores became chronic, and worsening was
unavoidable and inevitable, about December 9, 2008, four to six weeks after the pressure
ulcers developed. Tr. at 230-32, 263. Dr. Rao did not opine that the pressure ulcers were
unavoidable when they formed on about November 4, 2008. She also did not opine that
the ulcer on Resident 1’s sacrum or left heel were unavoidable. I do not accept Dr. Rao’s
24

opinion that worsening or infection of the pressure sores was unavoidable, as her opinion
is based on the unsupported assumption that all ordered care and services were provided
and the evidence shows that Petitioner failed to deliver care planned care and services
necessary to prevent pressure ulcers or to promote their healing.

Petitioner also offered the testimony of Mildred Canlas, its DON since November 2003.
Tr. at 568-69. DON Canlas knew Resident | from visiting him on her rounds and visits
to his room in the mornings or on her way home but she did not provide care to him or
participate in his care planning. Tr. at 577, 580, 607-08. She testified that she did review
his clinical chart. Tr. at 571. DON Canlas testified that when visiting Resident 1, she
noticed the way his foot was positioned, saw pillows on the floor of his room, knew that
he had to have a pillow between his legs, and she told staff to ensure the pillows were not
on the floor but in the correct position between his legs. Tr. at 578-80. According to
DON Canlas, Dr. Rao spoke to the nurses and was receptive to their suggestions. Tr. at
575-76. She testified that she believed that Petitioner’s nursing staff properly kept Dr.
Rao informed of Resident 1’s condition. Tr. at 576. She testified further that staff
presented Dr. Rao with various alternatives for the treatment of Resident 1. Tr. at 603.
However, she was unable to recall what suggestions staff made to Dr. Rao for alternative
interventions. Tr. at 604. DON Canlas did not testify that staff delivered all care planned
care and services and she did not opine that Resident 1’s pressure ulcers were
unavoidable. DON Canlas’ testimony was forthright and credible regarding her limited
involvement with the care and treatment of Resident 1, and her limited involvement
greatly limits the weight of her opinions regarding the thoroughness of staff in complying
with the resident’s care plan or quality of care and services actually delivered.

I conclude based upon my review of all the evidence that CMS made a prima facie
showing of a violation of 42 C.F.R. § 483.25(c) that caused actual harm to Resident 1. I
further conclude that Petitioner has failed to establish that Resident 1’s pressure ulcers
were unavoidable because Petitioner has not produced evidence to show that it
implemented care planned interventions; that it monitored the impact of interventions
implemented; and that it took appropriate action to revise interventions as necessary.

4. A PICMP of $4,050 is a reasonable enforcement remedy.

I have concluded that Petitioner was not in substantial compliance with program
participation requirements due to its violation of 42 C.F.R. § 483.25(c), which caused
actual harm to Resident 1, and there is a basis for the imposition of an enforcement
remedy for that period. Petitioner did not specifically challenge the reasonableness of the
proposed PICMP, if I found a deficiency. P. Reply at 27-28. I nevertheless review the
reasonableness of the proposed remedy.
25

If I conclude, as I have in this case, that there is a basis for the imposition of an
enforcement remedy and the remedy proposed is a CMP, my authority to review the
reasonableness of the CMP is limited by 42 C.F.R. § 488.438(e). The limitations are:

(1) I may not set the CMP at zero or reduce it to zero; (2) I may not review the exercise
of discretion by CMS in selecting to impose a CMP (or the CMS selection of any other
authorized remedy); and (3) I may only consider the factors specified by 42 C.F.R.

§ 488.438(f) when determining the reasonableness of the CMP amount. In determining
whether the amount of a CMP is reasonable, the following factors specified at 42 C.F.R.
§ 488.438(f) must be considered: (1) the facility’s history of noncompliance, including
repeated deficiencies; (2) the facility’s financial condition; (3) the seriousness of the
deficiencies as set forth at 42 C.F.R. § 488.404(b), noting the same factors CMS and/or
the state considers when setting the CMP amount; and (4) the facility’s degree of
culpability, including, but not limited to, the facility’s neglect, indifference, or disregard
for resident care, comfort, or safety, and the absence of culpability is not a mitigating
factor. The factors that CMS and the state were required to consider when setting the
CMP amount and that I am required to consider when assessing the reasonableness of the
amount are set forth in 42 C.F.R. § 488.404(b): (1) whether the deficiencies caused (i) no
actual harm but had the potential for minimal harm, (ii) no actual harm but had the
potential for more than minimal harm, but not immediate jeopardy, (iii) actual harm that
is not immediate jeopardy, or (iv) immediate jeopardy to resident health or safety; and (2)
whether the deficiencies are isolated, constitute a pattern, or are widespread. My review
of the reasonableness of the CMP is de novo and based upon the evidence in the record
before me. In reaching a decision on the reasonableness of the CMP, I consider whether
the evidence supports a finding that the amount of the CMP is at a level reasonably
related to an effort to produce corrective action by a provider with the kind of
deficiencies found, and in light of the above factors. I am not bound to defer to the CMS
determination of the reasonable amount of the CMP to impose but my authority is limited
by regulation as already explained. I am to determine whether the amount of any CMP
proposed is within reasonable bounds considering the purpose of the Act and regulations.
Emerald Oaks, DAB No. 1800, at 10 (2001); CarePlex of Silver Spring, DAB No. 1683,
at 14-16 (1999); Capitol Hill Cmty. Rehab. & Specialty Care Ctr., DAB No. 1629 (1997).

The proposed enforcement remedy at issue is the $4,050 PICMP."* The authorized range
for a PICMP is $1,000 to $10,000 for a PICMP. 42 C.F.R. § 488.438(a)(2). The PICMP
proposed is in the middle of the authorized range. Petitioner does not deny the history of

‘3 CMS notified Petitioner that it could not be authorized to conduct a NATCEP and that
any prior approval would be withdrawn. CMS Ex. 14. However, no DPNA was imposed,
the CMP was not $5,000 or more, no extended survey was conducted, and none of the
other events occurred that would have triggered the ineligibility. Accordingly, there was
no loss of approval to conduct NATCEP and that is not an issue before me.
26

noncompliance that CMS urges me to consider. CMS Br. at 27; CMS Ex. 8. Petitioner
does not allege an inability to pay the modest PICMP. The deficiency did cause actual
harm to Resident 1. I also conclude that Petitioner was culpable in its failure to comply
with Resident 1’s care plans. Accordingly, I conclude that a PICMP of $4,050 is
reasonable.

5. The CMS post-hearing motion to strike P. Ex. 3 is denied.

6. The CMS post-hearing motion to strike the declaration of Robin
Curley, R.N. (P. Ex. 5), is granted.

The resume of Robin Curley, R.N. (P. Ex. 3) and her declaration, dated November 3,
2009 (P. Ex. 5), were admitted at hearing without objection from CMS. Tr. at 37-43.
Petitioner elected not to call RN Curley to testify at hearing. Tr. at 641-42, 692. CMS
did not make any objection at hearing to my consideration of P. Exs. 3 and 5 based on the
fact that RN Curley did not appear at hearing. CMS did not request a subpoena to
compel the attendance and testimony of RN Curley. Tr. at 692. On March 5, 2010, after
the hearing had adjourned, CMS filed “Objections to the Admission of Petitioner’s
Exhibits 3 and 5.” Because both exhibits were already admitted to the record at hearing, I
construe the CMS motion to be a motion to strike the exhibits. Counsel for CMS argues
that he did not object to P. Exs. 3 and 5 at hearing, as he assumed that Petitioner would
call RN Curley to testify and CMS would then have the opportunity to cross-examine.
CMS asserts that Petitioner made RN Curley unavailable for cross-examination by failing
to call her as a witness. CMS makes the general assertion that the conduct of Petitioner
was both unfair and prejudicial.

The CMS motion to strike P. Ex. 3 is denied. CMS waived any objection to the
admissibility or my consideration of P. Ex. 3 by failing to preserve the objection by
raising it prior to the hearing (Prehearing Order, § II.4.b; II.12.e). CMS has not stated
good cause for why no objection was made to the admissibility of P. Ex. 3, before RN
Curley was called to testify at hearing. CMS has failed to articulate any specific
prejudice to the government due to the admission of P. Ex. 3.

The CMS motion to strike P. Ex. 5 is granted pursuant to Prehearing Order, § I.12.h.

The Prehearing Order, § I.12.h permits a party to offer a written witness statement in the
form of an affidavit or declaration, in lieu of live, direct testimony at hearing. However,
the Prehearing Order requires that a party produce for purposes of cross-examination the
witness whose written testimony is offered. The Prehearing Order provides that if the
witness is not produced for cross-examination, the written statement will be stricken upon
motion of opposing counsel. There is no requirement for opposing counsel to specifically
articulate prejudice under the Prehearing Order, § II.12.h, because deprivation of the right
to cross-examination is presumed to be prejudicial. The Prehearing Order is clear that all
that is required is for opposing counsel to object to the written witness statement, and it
27

will be stricken if there was no opportunity for cross-examination. The Prehearing Order
is clear that the party offering the written testimony is obligated to ensure that the witness
is present and available for cross-examination, if that party wants the written testimony
considered. Accordingly, P. Ex. 5, the declaration of RN Curley, is stricken and not
considered as substantive evidence.

II. Conclusion

For the foregoing reasons, I conclude Petitioner violated 42 C.F.R. § 483.25(c); the
violation caused actual harm to Resident 1; Petitioner was not in substantial compliance;
there is a basis for the imposition of an enforcement remedy; and a PICMP of $4,050 is a
reasonable enforcement remedy.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Arkady Stern, M.D.,
Petitioner
Vv.
Centers for Medicare and Medicaid Services
Docket No. C-11-268
Decision No. CR2368

Date: May 5, 2011

DECISION DISMISSING REQUEST FOR HEARING

I dismiss the hearing request of Petitioner, Arkady Stern, M.D. Petitioner forfeited his
right to a hearing because he: failed to comply with the pre-hearing order that I issued
directing him to submit evidence and a brief supporting his arguments and contentions;
failed to reply to the motion of the Centers for Medicare and Medicaid Services (CMS)
that I dismiss his hearing request; and failed to provide any documentary evidence
supporting his contentions and arguments.

I. Background

This is the second incarnation of this case. In 2009, Petitioner filed a hearing request
challenging CMS’s determination that he was entitled to participate in the Medicare
program with an effective date of May 19, 2009. In that request, Petitioner asserted that
he was entitled to an effective date of participation in October 2008. I heard and decided
that case, and, on February 26, 2010, I issued a decision that was unfavorable to
Petitioner. Arkady Stern, MD., DAB CR2078 (2010). [held that Petitioner failed to
produce any documentary evidence to support his contention that he had filed an
application for participation in 2008 that would entitle him to a participation date that is
earlier than the May 19, 2009 effective date determined by CMS.
Petitioner appealed my decision to the Departmental Appeals Board, and, on September
16, 2010, a Board appellate panel issued a decision remanding the case. Arkady B. Stern,
M.D., DAB No. 2329 (2010). The panel held, essentially, that Petitioner had been denied
an opportunity to produce documentary evidence supporting his contention that he was
entitled to an earlier participation date than May 19, 2009, and it remanded the case so
that Petitioner would have the opportunity to come forward with that documentation.

The appellate panel did not find that my analysis of the facts before me at the time of my
decision was incorrect but, rather, found that Petitioner might be in possession of
additional facts and evidence that could change the posture of the case. The panel
advised me that I could remand the case to CMS for additional development of the record
if I determined that to be appropriate, and so, I remanded the case back to CMS.

Pursuant to my order of remand, CMS afforded Petitioner an opportunity to file
additional documentation to support his contentions. On September 22, 2010, CMS
determined that Petitioner had not provided such evidence. Petitioner requested
reconsideration, and CMS affirmed its determination in a letter that is dated January 6,
2011. Petitioner then requested a hearing, and Petitioner’s case was again assigned to me
or a hearing and a decision.

On February 17, 2011, I issued an acknowledgment and pre-hearing order that directed
the parties to file proposed exhibits, including the written direct testimony of all proposed
witnesses, and pre-hearing briefs. On March 11, 2011, CMS complied with my pre-
earing order by filing a motion for summary judgment and brief, along with four
proposed exhibits that it identified as CMS Ex. 1 — CMS Ex. 4.

Petitioner’s exchange was due no later than April 25, 2011. He filed nothing, neither a
pre-hearing exchange, nor a reply to CMS’s motion for summary judgment.

I receive into the record CMS Ex. 1 — CMS Ex. 4.
IL. Issue, Findings of Fact, and Conclusions of Law

A. Issue
The issue in this case is whether Petitioner has forfeited his right to a hearing by failing to
file a pre-hearing exchange and failing to respond to CMS’s motion for summary
judgment.

B. Findings of Fact and Conclusions of Law

I make the following findings of fact and conclusions of law in support of my decision
dismissing Petitioner’s hearing request.
The case before me constitutes Petitioner’s seventh bite at the apple. He has had seven
opportunities — his first application for participation, his request for reconsideration from
CMS’s first determination about that application, his first hearing request before me, his
appeal to the Departmental Appeals Board from my first decision in his case, his
determination on remand, his request for reconsideration from that determination, and
lastly, his current hearing request — to provide documentary proof that he was entitled to a
participation date that is earlier than May 19, 2009. In each instance, Petitioner has
asserted that he filed an application earlier than May. Yet, and despite all of these
opportunities, Petitioner never came forward with any documentation to establish his
contentions.

In the latest iteration of his contentions in his most current hearing request, Petitioner
asserts that he was a victim of a series of “comedies of errors” in which CMS failed to
recognize that he was in active practice throughout 2008.' He contends that he attempted
to rectify these asserted misunderstandings by filing a new enrollment application in
October 2008. He did not offer any documentation of this asserted new application,
either with his hearing request, or in response to my pre-hearing order.

He has been given the opportunity, in spades, to offer additional evidence, and he has
failed to avail himself of that opportunity. This case stands on exactly the same footing
today as it did on February 26, 2010, when I issued my first decision. Petitioner makes
the same contentions now that he did then, and these contentions remain unsupported by
any documentation.

An administrative law judge may dismiss a party’s request for a hearing where that party
has no right to a hearing. 42 C.F.R. § 498.70(b). Here, Petitioner forfeited his right to a
hearing because he failed to comply with my pre-hearing order, directing that he submit
evidence and a brief and failed to file a response to CMS’s motion for summary
judgment. Additionally, Petitioner failed to file any evidence that would alter in any

' Petitioner seems to assert that he maintained an active practice in 2008 and that he
should never have been required to submit an application for certification as a Medicare
provider. This is apparently the “comedies of errors” that he refers to. In his latest
hearing request, he alludes to documents that he filed “previously” that he contends
establish the existence of this practice. Evidently, he is referring to documents that were
submitted as part of CMS’s exhibits in the original case before me (Docket No. C-10-57)
or documents he filed with the Departmental Appeals Board in connection with his
appeal of my first decision in this case. However, those documents are not relevant to the
issues in this case. Petitioner was required to submit a new participation application
when he materially changed the circumstances of his practice, something that happened
by his own admission in 2008 when he changed his practice location. Petitioner has
never offered any documentation that he submitted this application at any time prior to
May 19, 2009.

respect the record of the case as it was on the date of my original decision.
Consequently, I dismiss Petitioner’s hearing request.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Nicolai Y. Foong, M.D.,

(OI No.: 9-09-40471-9),

Petitioner,

Vv.

The Inspector General.

Docket No. C-11-155
Decision No. CR2367

Date: April 29, 2011

DECISION

Petitioner, Nicolai Y. Foong, M.D., asks review of the Inspector General’s (1.G.’s)
determination to exclude him for five years from participation in the Medicare, Medicaid,
and all federal health care programs under section 1128(a)(1) of the Social Security Act.
For the reasons discussed below, I find that the I.G. is authorized to exclude Petitioner
and that the statute mandates a minimum five-year exclusion.

Discussion

The sole issue before me is whether the I.G. has a basis for excluding Petitioner from
program participation. Because an exclusion under section 1128(a)(1) must be for a
minimum period of five years, the reasonableness of the length of the exclusion is not an
issue. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

The parties agree that an in-person hearing is not required and that the matter may be
resolved based on written submissions. I.G. Br. at 5; P. Br. at 3. The parties have
submitted briefs. The I.G. submitted three exhibits (I.G. Exs. 1-3). In the absence of any
objections, I admit into evidence LG. Exs. 1-3.
Petitioner must be excluded for five years because he was
convicted of a criminal offense related to the delivery of an
item or service under the Medicare or a state health
program, within the meaning of section 1128(a)(1) of the
Social Security Act.’

On March 3, 2009, Petitioner, a physician practicing in California, and his professional
corporation, Nicolai Y. Foong, M.D., Inc., were indicted on seven felony counts of grand
theft, making false or fraudulent claims to the State Medicaid program (Medi-Cal), and
receiving and selling misbranded medical devices. I.G. Ex. 3. On August 20, 2009, he
pled guilty in California State Court to one misdemeanor count of receiving and
delivering a misbranded device, a foreign-made intrauterine device. I.G. Ex. 1 at 3-6; see
1G. Ex. 3 at 4.

The court accepted the plea, sentenced him to two years probation, 150 hours of
community service, and ordered him to pay restitution. I.G. Ex. | at 8; I.G. Ex. 2.

In a letter dated October 29, 2010, the I.G. advised Petitioner that, because he had been
convicted of a criminal offense related to the delivery of an item or service under the
Medicare or state health care program, the I.G. was excluding him from participation in
Medicare, Medicaid, and all federal health care programs for a period of five years. I.G.
Ex. 1. The letter further stated that Section 1128(a)(1) of the Act authorizes such
exclusion. I.G. Ex. 1.

Section 1128(a)(1) of the Act requires that the Secretary of Health and Human Services
exclude an individual who has been convicted under federal or state law of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program.” 42 C.F.R. § 1001.101.

Petitioner concedes that he was convicted of a criminal offense but argues that he was not
convicted of an offense for which an exclusion is required. The indictment charged that
he “did unlawfully receive in commerce, deliver, or proffer for delivery to the Medi-Cal
program drugs or devices, to wit[,] foreign made intrauterine devices with the intent to
defraud or mislead the Medi-Cal program.” I.G. Ex. 3 at 4. Petitioner concedes that he
pled guilty to a misdemeanor version of that charge, but, in pleading guilty, he explicitly
omitted the words: “with the intent to defraud or mislead the Medi-Cal program.” LG.

' [make this one finding of fact/conclusion of law.

> The term “state health care program” includes a state’s Medicaid program. Act §
1128(h)(1); 42 U.S.C. § 1320a-7(h)(1).
Ex. | at 4. In his view, this means that his crime was not “related to” the delivery of a
health care item or service under that state health care program.

In determining whether a conviction is program-related within the meaning of section
1128(a)(1), I may look beyond both the language of the statute under which the
individual was convicted as well as beyond the precise wording of his plea. An offense is
related to the delivery of an item or service under Medicare or a state health care program
if there is “a nexus or common-sense connection” between the conduct giving rise to the
offense and the delivery of the item or service. Lyle Kai, R.Ph., DAB No. 1979 (2005);
Berton Siegel, D.O., DAB No. 1467 (1994). It is well-settled that the LG. may rely on
extrinsic evidence to explain the circumstances underlying a conviction. The regulations
specifically provide that evidence of “crimes, wrongs, or acts other than those at issue in
the instant case is admissible in order to show motive, opportunity, intent, knowledge,
preparation, identity, lack of mistake, or existence of a scheme.” 42 C.F.R. §1005.17(g)
see Narendra M. Patel, DAB No. 1736 (2000); Tanya A. Chuoke, R.N., DAB No. 1721
(2000); Bruce Lindberg, D.C., DAB No. 1280 (1991).

Here, however, I need not even look at extrinsic evidence to find the necessary
connection between his crimes and the Medi-Cal program. The criminal court judge
specifically asked Petitioner if he “did unlawfully receive in commerce and deliver or
proffer for delivery to the Medi-cal program, drugs or devices, to wit, foreign made
intrauterine devices,” and he answered “guilty.” I.G. Ex. 1 at 7 (emphasis added).
Petitioner was therefore convicted of a crime related to the delivery of an item under the
Medi-Cal program and is subject to a minimum five-year exclusion. Act §
1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

Conclusion

The I.G. properly excluded Petitioner from participation in Medicare, Medicaid, and all
federal health care programs, and I sustain the five-year exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge