Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Stone County Nursing and )
Rehabilitation Center, ) Date: March 9, 2009
(CCN: 04-5146), )
)
Petitioner, )
) Docket No. C-07-532
-v- ) Decision No. CR1918
)
Centers for Medicare & Medicaid )
Services )
)
DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose a civil money penalty (CMP) and denial of payment for new admissions (DPNA)
against Petitioner, Stone County Nursing and Rehabilitation Center (Petitioner or
facility), for failure to comply substantially with federal requirements governing
participation of long-term care facilities in Medicare and Medicaid programs. For the
reasons that follow, I uphold the CMPs of $3050 per day from April 6 through April 7,
2007; $350 per day from April 8 through May 31, 2007; and $50 per day from June 1
through June 14, 2007. I also uphold a DPNA from May 19 through June 14, 2007.
Additionally, I sustain the prohibition on Petitioner conducting a nurse aide training or
competency evaluation program (NATCEP) for a two-year period.

I. Background

This case is before me pursuant to requests for hearing filed by Petitioner on June 22,
2007 and July 2, 2007. Petitioner is a long-term care provider located in Mountain View,
Arkansas.

By letter dated May 4, 2007, CMS informed Petitioner that based on a survey completed
on April 10, 2007, by the Arkansas Department of Health and Human Services (State
survey agency), it was imposing selected remedies due to Petitioner’s failure to be in
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substantial compliance with the applicable federal requirements for long-term care
facilities. The remedies were based on immediate jeopardy deficiencies as well as non-
immediate jeopardy deficiencies. The letter informed Petitioner that CMS was imposing
the following remedies:

. CMP of $3050 per day effective April 6, 2007, and continuing through
April 7, 2007,

. CMP of $350 per day effective April 8, 2007, and continuing until the
facility achieved substantial compliance;

. DPNA effective May 19, 2007; and
. termination of the provider agreement, effective July 10, 2007.

On a revisit survey conducted on June 1, 2007, it was determined that Petitioner was still
out of substantial compliance with participation requirements. The results of that survey
were communicated to Petitioner by letter dated June 19, 2007. It was noted that the
CMP of $350 per day would run from April 8 through May 31, 2007. After that date, and
commencing June Ist, a CMP of $50 per day would be imposed until substantial
compliance was attained, and a DPNA was in effect beginning May 19, 2007. The
proposed termination remedy was modified to become effective on September 10, 2007,
if the facility failed to achieve substantial compliance prior to that date.’ CMS Ex. 43. A
subsequent revisit survey conducted on July 6, 2007, found that Petitioner had returned to
substantial compliance as of June 15, 2007. CMS Ex. 66.

Petitioner filed a request for hearing on June 22, 2007, in response to the notice of
remedies issued by the State survey agency on April 24, 2007. On July 2, 2007,
Petitioner filed a second request for hearing in response to CMS’s notice of remedies sent
May 4, 2007, which basically adopted the State survey agency’s recommendations. The
request for hearing filed by Petitioner on June 22, 2007, made general references to the
survey conducted by the State survey agency and the facility's appeal rights, but did not
address any of the deficiency findings with specificity. In the July 2, 2007 request for
hearing, Petitioner specifically took issue with the State survey agency’s deficiency
findings regarding Resident (R) 12 and R13, but did not address any of the other findings

' Petitioner came into substantial compliance prior to the effective date of
termination of the provider agreement and, therefore, the termination was not effectuated.
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which formed a basis for CMS’s imposition of enforcement remedies.’ Specifically, and
as identified in the Statement of Deficiencies (SOD) dated April 10, 2007:

+ With respect to R13, the surveyors found that the facility failed to
accurately assess and record skin condition, failed to consult with the
physician, failed to obtain treatment appropriate for a stage IV pressure
sore, and accepted no change in ordered treatment after the physician visit
on April 5, 2007. The facts surrounding R13 gave rise to Tags F157, F314,
F490, and F520. These were cited as immediate jeopardy violations.

+ The deficiency as to R12 was cited under Tag F314 as actual harm, but
less than immediate jeopardy.

CMS Ex. 2, at 2.

In view of the foregoing, I find that Petitioner has not appealed the non-immediate
jeopardy findings identified during the survey completed April 10, 2007 (except for the
deficiency as to R12, under Tag F314), nor has Petitioner appealed the deficiencies cited
in the June 1, 2007 survey. Additionally, Petitioner has not appealed the DPNA.

A request for hearing must identify the specific issues with which the affected party
disagrees. 42 C.F.R. § 498.40(b). In its request for hearing, Petitioner asserts that the
facility was in substantial compliance with the immediate jeopardy deficiencies regarding
R13. Petitioner also adequately addresses why it was in substantial compliance with Tag
F314, cited at the less than immediate jeopardy level, with respect to R12.

As for the remaining non-immediate jeopardy level deficiencies cited during the April 10
and June 1, 2007 surveys (including the DPNA), those deficiencies were not properly

> Asa result of the April 10, 2007 survey, Petitioner was determined to be not in
compliance with: 42 C.F.R. §§ 483.10(b)(11)(Tag F157); 483.25(a)(3)(Tag F312);
483.25(c)(Tag F314); 483.25(h)(1)(Tag F323); 483.25(k)(Tag F328); 483.25(1)(Tag
F329); 483.25(m)(1)(Tag F332); 483.25(m)(2)(Tag F333); 483.75(Tag F490);
483.75(j)(1)(Tag F502); 483.75(0)(1)(Tag F520); and 483.70(a)(Tag K19). Additionally,
Petitioner was determined to be not in compliance during the June 1, 2007 revisit survey
with the following participation requirements: 42 C.F.R. §§ 483.25(k)(Tag F328);
483.25(m)(1)(Tag F332); and 483.25(m)(2)(Tag F333). See CMS Exs. 1, 2.
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identified by Petitioner in its requests for hearing. Pursuant to 42 C.F.R. § 498.40(b), the
request for hearing must:

(1) [iJdentify the specific issues, and the findings of fact and conclusions of
law with which the affected party disagrees; and

(2) [s]pecify the basis for contending that the findings and conclusions are
incorrect.

Petitioner did not mention or address any deficiency except to specifically single out the
alleged erroneous findings made by the State survey agency as to R12 and R13.
Therefore, I will only consider whether CMS’s finding of immediate jeopardy was
appropriate and whether the facility was not in substantial compliance regarding R12
under Tag F314 at the non-immediate jeopardy level.

Moreover, as a threshold matter, my review is limited to those issues that Petitioner has
appealed and over which I have jurisdiction. Inasmuch as Petitioner does not challenge
all the deficiencies cited during the April 10 and June 1, 2007 surveys, those findings and
remedies remain uncontested and are therefore final and binding against Petitioner. 42
C.F.R. § 498.20(b).

On June 5, 2008, Petitioner submitted a petition to waive oral hearing. By Order dated
June 6, 2008, I canceled all previously established deadlines and instructed the parties to
simultaneously submit briefs, witness declarations and proposed exhibits by July 18,
2008. CMS filed its brief (CMS Br.) on July 17, 2008. CMS offered 71 exhibits (Exs.),
identified as CMS Exs. 1-71. I receive CMS Exs.1-71 into evidence without objection.
Petitioner filed its brief (P. Br.) on July 18, 2008. Petitioner offered 12 exhibits,
identified as P. Exs. 1-12. I receive P. Exs. 1-12 into evidence without objection. I
established August 11, 2008 as the date for filing simultaneous reply briefs. In
accordance with that directive, Petitioner submitted a reply brief on August 11, 2008.
CMS chose not to file a reply brief.

Based on the documentary evidence, the arguments of the parties, and the applicable law
and regulations, I find that Petitioner was not in substantial compliance, at the immediate
jeopardy level, on the dates determined by the State survey agency and CMS. For the
reasons discussed in this decision, I further find that CMS was authorized to impose
against Petitioner the proposed enforcement remedies including a CMP, a DPNA, anda
prohibition on Petitioner conducting a NATCEP for a two-year period.

If. Applicable Law and Regulations

Petitioner is considered a long-term care facility under the Social Security Act (Act) and
regulations promulgated by the Secretary of Health and Human Services (Secretary). The
statutory requirements for participation by a long-term care facility are found at sections
1819 and 1919 of the Act, and at 42 C.F.R. Parts 483 and 488.

Sections 1819 and 1919 of the Act invest in the Secretary authority to impose CMPs and
DPNAs against a long-term care facility for failure to comply substantially with
participation requirements.

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. Pursuant to
42 C.F.R. Part 488, CMS may impose either a per day CMP or a per instance CMP
against a long-term care facility when a state survey agency concludes that the facility is
not complying substantially with federal participation requirements. 42 C.F.R.

§§ 488.406; 488.408; 488.430. The penalty may start accruing as early as the date that
the facility was first out of compliance until the date substantial compliance is achieved or
the provider agreement is terminated. 42 C.F.R. § 488.440.

The regulations specify that a per day CMP that is imposed against a facility will fall into
one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of
CMPs, from $3050 per day to $10,000 per day, is reserved for deficiencies that constitute
immediate jeopardy to a facility’s residents, and in some circumstances, for repeated
deficiencies. 42 C.F.R. §§ 488.438 (a)(1), (d)(2). The lower range of CMPs, from $50
per day to $3000 per day, is reserved for deficiencies that do not constitute immediate
jeopardy, but either cause actual harm to residents, or cause no actual harm, but have the
potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii).

The regulations define the term “substantial compliance” to mean:

[A] level of compliance with the requirements of participation
such that any identified deficiencies pose no greater risk to
resident health or safety than the potential for causing
minimal harm.

42 C.F.R. § 488.301.
“Immediate jeopardy” is defined to mean:

[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.

In determining the amount of the CMP, the following factors, specified at
42 C.F.R. § 488.438(f), must be considered:

1. the facility’s history of noncompliance, including repeated
deficiencies;

2. the facility’s financial condition;

3. the seriousness of the deficiencies as set forth at 42 C.F.R.
§ 488.404; and

4. the facility’s degree of culpability.

The Act and regulations make a hearing before an administrative law judge (ALJ)
available to a long-term care facility against whom CMS has determined to impose a
CMP. But the scope of such hearings is limited to whether an initial determination made
by CMS is correct. Act § 1128A(c)(2); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). A facility
may challenge the scope and severity level of noncompliance found by CMS only ifa
successful challenge would affect the range of CMP amounts that could be collected by
CMS or impact upon the facility’s nurse aide training program. 42 C.F.R. § 498.3(b)(14)
and (d)(10)(1). 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 long-term care
facility that: (1) has been subject to an extended or partial extended survey under sections
1819(g)(2)(B)(@) or 1919(g)(2)(B)(ii) of the Act; (2) has been assessed a CMP of not less
than $5000; or (3) has been subject to termination of its participation agreement, denial of
payment, or the appointment of temporary management. CMS’s determination as to the
level of noncompliance must be upheld unless it is clearly erroneous. 42 C.F.R. §
498.60(c)(2). This includes CMS’s finding of immediate jeopardy. Woodstock Care
Center, DAB No. 1726, at 9 (2000), aff'd, Woodstock Care Center v. U.S. Dep’t of
Health and Human Services, 363 F.3d 583 (6" Cir. 2003). In a case involving a CMP,
CMS must make a prima facie case that the facility has failed to comply substantially
with participation requirements. To prevail, a long-term care facility must overcome
CMS’s showing by a preponderance of the evidence. Hillman Rehabilitation Center,
DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. U.S. Dep’t of Health and
Human Servs., No. 98-3789 (GEB), slip op. at 25 (D.N.J. May 13, 1999).
III. Issues

A. Whether the facility was complying substantially with federal participation
requirements on the dates CMS determined to impose a CMP.

B. Whether CMS’s determination of immediate jeopardy was clearly erroneous.

C. Whether the penalty imposed by CMS is reasonable, if noncompliance is
established.

IV. Findings and Discussion

The findings of fact and conclusions of law noted below, in italics, are followed by a
discussion of each finding.

A, Petitioner was not in substantial compliance with federal participation
requirements from April 6 through June 14, 2007.

1. CMS has established that Petitioner was not in substantial compliance
with the requirements of 42 C.F.R. §§ 483.10(b)(11)(Tag F157) and
483.25(c)(Tag F314).

The regulation at 42 C.F.R. § 483.25(c) requires the facility to ensure that a resident who
enters that facility without pressure sores does not develop them unless the individual’s
clinical condition demonstrates that they were unavoidable; and a resident having
pressure sores receives necessary treatment and services to promote healing, prevent
infection and prevent new sores from developing. Further, the facility is required to
immediately consult with the resident’s physician when there is a significant change in
the resident’s status in either life-threatening conditions or clinical complications. 42
C.F.R. 483.10(b)(11).

CMS alleges that the facility failed to ensure that: (1) resident skin condition was
monitored; (2) the physician was consulted regarding the development or deterioration of
pressure sores so that treatment orders could be obtained or changed as necessary; (3)
increased caloric and protein needs were assessed upon development of pressure sores
with interventions developed to promote healing; and (4) pressure relieving devices,
incontinent care, or repositioning provided for residents with pressure sores. CMS also
alleges that this failure related to services for six residents (R2, R6, R12, R13, R21, and
R23) under Tag F157, and six residents under Tag F314 (R2, R6, R12, R13, R21, and
R23). Additionally, CMS determined that Petitioner’s deficient practices resulted in
actual harm to R12, R13, and R2. CMS found the failure regarding R13 to be at the
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immediate jeopardy level. This resident suffered or was likely to suffer serious injury,
harm, impairment, or death.

As stated earlier, inasmuch as Petitioner only appealed the deficiencies as to R12 and
R13, my analysis will be limited to these two residents.’

(a) Petitioner’s violation as to 42 C.F.R. §§ 483.10(b)(11)(Tag
F157) and 483.25(c)(Tag F314) relative to services to R12.

The following is a summary of the deficiency as to R12 as recited in the SOD:

R12 had diagnoses of congestive heart failure and insulin dependent
diabetes mellitus. He was admitted to the facility on February 21, 2007.
The resident assessment conducted on admission documented, under skin
condition, notes that R12 had multiple bruising of the arms — antecubital
front of the elbow] sites and hands, bilaterally, were noted. No
documentation of heel breakdown was noted. On February 24, 2007, R12
was sent to the hospital with complaints of chest pain. He was readmitted
to the facility the following day, with no evidence of pressure sores.
However, he was on a turning/repositioning program. CMS Ex. 2, at 22.

Nurses Notes, dated February 28, 2007, reveal that R12 complained of pain
in the left heel, and he was fitted with a heel protector. Although, at that
time, no skin breakdown was reported, a blister was observed in the left
eel measuring 4cm x 4cm. There was also no documentation that the
physician was consulted regarding this pressure sore. CMS Ex. 2, at 22.

t was not until March 10, 2007, 10 days after the pressure sore was first
identified, that a physician’s order was obtained for antibiotic treatment and
wound dressing. CMS Ex. 2, at 22.

On March 20, 2007 the pressure sore showed deterioration in that it had red
drainage and skin detaching. However, the physician was not consulted
regarding the worsening of the pressure sore. Although the physician was
called that same day, it was to inform him that R12 had difficulty
swallowing and felt bad all over. He did not see the resident, but ordered
that he be taken to the hospital emergency room. CMS Ex. 19, at 80-88.

> CMS cited Petitioner for violations under Tag F314 for R2, R6, R12, R13, R21,
and R23. However, as previously noted, Petitioner only appealed the deficiencies as to
R12 and R13.
9

When R12 returned to the facility from the hospital, he had no new pressure
sores, but the left heel sore was still present with no improvement. CMS
Ex. 19, at 84.

On April 5, 2007, the surveyor observed a Licensed Practical Nurse (LPN)
change R12’s dressing. The back of the heel was stage II, with calloused
skin and a small oval area that was open and indented in the center of the
heel. There were curling edges of skin that had been the blistered area, and
the bed of the blister was pink. As of April 5, 2007, there was no
documentation on the Pressure Sore Form, the Nurses Notes, the Medicare
Nurse Assessment, Physician Orders, or Treatment Procedures, that the
physician was consulted regarding the status of the wound or for further
orders when the wound showed no improvement. CMS Ex. 2, at 23.

The Assistant Director of Nursing (ADON), Jane Humphrey, was asked on
April 5, 2007, how R12 acquired the pressure sore, and she responded that
it was caused after he returned from the hospital from wearing hard leather
shoes during physical therapy.’ After the resident complained of heel pain,
soft leather shoes were procured. Additionally, the facility applied heel
protectors and monitored the blister until it ruptured. It was at that time that
the physician was called (on March 10, 2007), and a treatment order
obtained. When asked why the physician was not consulted when the
blister first appeared (on February 28, 2007), the ADON stated that it was
because they had to wait until it was open. CMS Ex. 2, at 23-24.

See also CMS Ex. 69 (Surveyor Melva Snellenberger Declaration).

Petitioner was cited as violating these participation requirements based on the surveyor’s
determination that Petitioner failed to consult with the residents physician when a new
pressure sore was identified, and when the pressure sore failed to improve or showed
signs of deterioration.’ CMS Ex. 2, at 2.

* Though not specifically mentioned in the SOD, I infer that this statement refers
to the time when the resident was discharged from the hospital on February 25, 2007.
R12 re-entered the hospital on March 20, 2007, and was discharged with the same
pressure sore that he had when admitted. CMS Ex. 19, at 53, 84.

> Petitioner was cited under Tag F157 for R2, R6, R12, and R13; however, the
discussion will only address services provided to R12 and R13 as Petitioner did not
appeal the findings for R2 and R6 under this tag. See CMS Ex. 2, at 2; June 22, 2007
Request for Hearing.
10

CMS’s official interpretation of 42 C.F.R. § 483.10(b)(11)(i)(B), set forth in the State
Operations Manual (SOM), and discussed similarly in the preamble to the regulation, for
purposes of notification to the treating physician, reads as follows:

For purposes of § 483.10(b)(11)(i)(B), life-threatening conditions are
such things as a heart attack or stroke. Clinical complications are
such things as development of a stage II pressure sore (emphasis
added), onset or recurrent period of delirium, recurrent urinary tract
infection, or onset of depression. A need to alter treatment
significantly means a need to stop a form of treatment because of
adverse consequences (e.g. an adverse drug reaction), or commence
a new form of treatment to deal with a problem (e.g., the use of any
medical procedure, or therapy that has not been used on that resident
before).

See SOM, Appendix PP, Guidance to Surveyors for Long Term Care Facilities, Tag
F157;° see also, 56 Fed. Reg. at 48,833 (Sept. 24, 1991).

Contrary to Petitioner’s assertions, there is no indication in the SOM that a pressure sore
blister has to rupture before the physician is notified.

With respect to the treatment of R12’s pressure sore, Petitioner raises the following

contentions:

It was erroneous for CMS to conclude that after the treating physician was
consulted on March 10, 2007, no further orders were obtained when the
wound failed to show improvement, because the course of treatment for
R12 was appropriately changed. In support of this argument, Petitioner
makes reference to the SOM, Appendix PP, Guidance to Surveyors for
Long Term Care Facilities, that states that if a pressure sore fails to show
some evidence of progress toward healing within 2-4 weeks, the pressure
sore (including potential complications) and the resident’s overall clinical
condition should be assessed. Petitioner adds that R12 was admitted to the
hospital on March 20, 2007, that is, within the 2-4 week time frame allowed
to determine the progress of healing the pressure sore. P. Br. at 22-23.

® The SOM is available on CMS’s public website at
http://www.cms.hhs.gov/Manuals/IOM/list.asp.
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. The survey findings in reference to R12 stating that as of April 5, 2007
there was no documentation on the Pressure Sore Form, the Nurses Notes,
the Medicare Nurse Assessment, Physician Orders, or Treatment
Procedures that the physician was consulted, is erroneous. A Nurse’s Note
dated March 10, 2007, shows that R12’s physician was consulted, and on
March 20, 2007, his physician ordered his transfer to the hospital when he
was feeling bad all over. Additionally, on March 27, 2007, the physician
ordered specific treatment for the pressure sore. P. Br. at 22-23.

The record, as concerns R12, shows that when he entered the facility on February 21,
2007, he exhibited no pressure sores on his heels. He was transferred to the hospital on
February 24, 2007, for a one-day stay due to complaints of chest pain, and was readmitted
to the facility on February 25, 2007. Upon readmission, it was documented that he had
no pressure sores, and was on a turning/repositioning program. On February 28, 2007, at
11:30 a.m., it was discovered that R12 had a 1 cm bruised area on the left heel. A heel
protector was applied. CMS Ex. 19, at 42. However, at 2:30 p.m., on that same day, it
was noted that the left heel exhibited a 4 cm x 4 cm fluid-filled blister. CMS Ex. 19, at
44. In spite of the rapid worsening of the pressure sore, the treating physician was not
consulted. It was not until March 10, 2007, that the physician was consulted since the
pressure sore first surfaced, at which time he provided a telephone order for Triple
Antibiotic Ointment and 4 x 4 border gauze to be applied daily.

As previously noted in this decision, on April 5, 2007, the ADON was asked why the
physician was not consulted when the blister first appeared, and she responded that at that
time the blister was not open. There was no need, she said, to call the doctor until the
blister was open. CMS Ex. 2, at 24. I find nothing in the regulation that lends support to
that theory. The regulation at 42 C.F.R. § 483.25(c)(2) mandates that the facility must
ensure that a resident having pressure sores receives necessary treatment and services to
promote healing, prevent infection, and prevent new sores from developing. The record
in this case is silent as to the measures taken by the facility to promote healing and
prevent infection since February 28, 2007, when R12 was first noted to exhibit a pressure
sore until the physician was consulted on March 10, 2007. It was the facility’s duty to
immediately inform the treating physician of any significant change in the resident’s
physical status. The facility failed to do so.

Further, there is nothing in the record that shows that the physician was consulted
between March 10, 2007 and March 27, 2007, or that the treatment was appropriately
changed. The implication that the physician was consulted on March 20, 2007, regarding
R12’s pressure sore is misplaced. P. Br. at 22. Rather, the record before me clearly
supports that the treating physician was called on March 20, 2007, because the resident
complained of feeling bad all over. The call had nothing to do with R12’s pressure
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wound nor is there any reference in the record to any change in treatment for the left heel
sore. There is merely a factual description of the pressure sore, but no indication that the
physician was consulted on the matter or that he gave new treatment instructions. P. Ex.
2, at 52-53. From March 10, 2007 to March 20, 2007, the pressure sore showed no
improvement, and the physician was not notified of the deterioration in the resident's
condition as required by the regulations at 42 C.F.R. §§ 483.25(c)(2) and
483.10(b)(11)(B). CMS Ex. 19, at 6. Petitioner argues that Dr. Scott Dibrell’s March 27,
2007 order was within the SOM guidelines allowing for a 2-4 week time frame to
determine the progress of healing the pressure sore (SOM, Appendix PP, Guidance to
Surveyors for Long Term Care Facilities). However, those guidelines do not relieve the
facility of the duty to provide residents with pressure sores the necessary treatment and
services to promote healing and notify the treating physician of a significant change or
deterioration in a resident’s physical or mental condition.

In view of the foregoing, I find that CMS has established a prima facie case that
Petitioner was in violation of Tags F157 and F314 regarding R12 at the less than
immediate jeopardy level. Petitioner has not overcome that showing by a preponderance
of the evidence.

(b) Petitioner’s violation as to 42 C.F.R. §§ 483.10(b)(11)(Tag
F157) and 483.25(c)(Tag F314) relative to services to R13.

The following is a summary of the deficiency as to R13 as recited in the SOD:

R13 had a diagnosis of cerebral vascular accident (CVA) and was totally
dependent on staff for bed mobility. The admission Minimum Data Set
(MDS) dated February 1, 2007, revealed no pressure sores and no history of
resolved pressure sores. CMS Ex. 20, at 169. However, the resident was
noted to be at risk for skin breakdown due to status post CVA.

On February 1, 2007, R13 was transferred to the hospital and readmitted to
the facility on February 11, 2007. No pressure sore or skin problems were
noted.

A Pressure Sore Form for the right heel first documented a 1 cm x 1 cm
pressure sore (stage II) on February 12, 2007.

Facility assessments of the pressure sore on the right heel documented
continuous decline of the pressure sore and the development of additional
pressure sores. CMS Ex. 2, at 17, 18.
13

The facility documented on March 12, 2007, that the pressure sore on the
right heel had declined to a stage [V and measured 4 cm x 3 cm. CMS Ex.
2, at 18. On March 26, 2007, the facility also documented the observation
of a stage IV pressure sore above the resident’s right heel, and on March 27,
2007, a stage II pressure sore on the resident’s right outer ankle.

There was no documentation on the Pressure Sore Form regarding
consultation with the physician concerning the deterioration in the pressure
sore on R13’s right heel. There was no documentation in the Medicare
Nurse Assessment dated February 25, 2007, March 12, 2007, March 18,
2007, March 26, 2007, or March 27, 2007 regarding consultation with the
physician concerning the deterioration in the pressure sore on the right heel
or the development of additional pressure sores. CMS Ex. 2, at 18, 19.

On April 5, 2007, the ADON admitted that the physician had not been
notified, and that an order would have been obtained had the pressure sore
opened.

The weekly skin audit report which was signed April 6, 2007, documented a
1 cm x .5 cm black area at the top of the resident’s right foot; a .3 cm x .4
cm black area on the resident’s right ankle; a stage [V 8 cm x 7 cm black
area on R13's right inner heel; and a stage IV 3 cm x 3 cm black area on the
resident’s back right foot/leg.

A call to the treating physician on April 7, 2007, resulted in an order for
Exuderm Satin to be applied to the resident’s right ankle after cleaning with
Dermal wound cleaner every three days, and as needed.

On April 6, 2007, a Medical Nutrition Therapy Screening and Assessment
Summary Plan, signed by the Dietary Manager, referred the resident to the
Registered Dietician due to the pressure sores. An entry signed by the
Registered Dietician Consultant on April 6, 2007, recommended a protein
increase to aid in decubitus healing.

On April 7, 2007 at 3:25 p.m., a LPN was unable to feel a pulse in either of
R13’s feet, and the right foot was cold to the touch. At 3:30 p.m., the
Administrator spoke by phone with the physician and expressed her concern
regarding the resident’s right foot. After speaking with the Nurse

14

Supervisor, the physician ordered transfer of R13 to the hospital for evaluation.
CMS Ex. 2, at 16-21.

Petitioner maintains that the attending physician was aware of R13’s pressure sore
inasmuch as he had seen the resident one day prior to the declaration of immediate
jeopardy. P. Br. at 11. Furthermore, Petitioner contends that according to Dr. Dibrell, the
treating physician, R13’s right heel pressure sore had been stable since he first noted its
existence back in October 2006. P. Br. at 10. In a written declaration, Lisa Rhoades, the
Director of Nursing (DON) states that Dr. Dibrell made rounds, was aware of the
resident’s condition, and asserts that there was no lack of notification. P. Ex. 9, at 1.
Additionally, the DON also states that the SOD misconstrues the ADON’s statement that
physician had not been notified because the pressure sore had not opened. Ms. Rhoades
explains the intent of the ADON’s statement by averring that such utterance was not made
in reference to R13. P. Br. at 11.

Petitioner’s records present inconsistent accounts of R13’s pressure sore history. Whereas
the admission assessment made on February 1, 2007, one day after admission, reflects
neither a history nor the presence of pressure sores (CMS Ex. 20, at 166, 169), a Pressure
Sore Form dated February 12, 2007, refers to a non-facility acquired, pre-existing stage II
pressure sore. The Pressure Sore Form employed by the facility describes the stage II
pressure sore as a “partial thickness loss of skin layers that presents clinically as an
abrasion, blister, or shallow crater.”’ P. Ex. 3, at 11. Inasmuch as Dr. Dibrell stated that
he had observed the resident with a pressure sore in October 2006, the indication on the
MDS as to the absence of a history of pressure sores appears to be an oversight.

The aforementioned Pressure Sore Form defines the four stages of a pressure sore and
classifies a pressure sore as stage IV when a full thickness of skin and subcutaneous
tissue is lost, exposing muscle and/or bone. P. Ex. 3, at 11. I infer that the nursing staff
identified the resident’s right heel pressure sore as having progressed from a 1 cm x 1 cm
stage II sore to a 4 cm x 3 cm stage IV sore, based on the previously stated definition.
Petitioner contends that the sore in question was labeled as stage IV, in accordance with
clinical guidelines in the SOM, only because of the presence of eschar and its unstageable
quality, and is therefore not indicative of the severity of the sore. P. Br. at 5. However,
Petitioner provides no support in the record for the reasoning employed in designating the
resident’s sore on March 12, 2007, as stage IV. Specifically, there is an absence of
facility rationale in the documentation that reflects a basis for labeling the sore as stage

7 The MDS assessment form describes a stage II pressure sore as a “partial
thickness loss of skin layers that presents clinically as an abrasion, blister, or shallow
crater.” CMS Ex. 20, at 169.
15

V for a reason other than the definition found in the Pressure Sore Form. Thus,
Petitioner’s position regarding this issue is presented as mere argument in the aftermath
without any reference in the record of a failed attempt to “stage” the sore in question.

However, as argued by Petitioner, even if the pressure sore was properly designated as
stage IV, based on the SOM instructions to facilities, to code the pressure sore as stage IV
if eschar and necrotic tissue are covering and preventing adequate staging of the pressure
sore regardless of degree of severity, it is also true that R13’s sore evolved from a 1 cm x
cm wound on February 12, 2007 to a 4 cm x 3 cm by March 12, 2007. P. Reply Br. at
9. That is certainly not evidence of a wound that remained stable, as asserted by Dr.
Dibrell. More importantly, at no time during the deteriorating progression of the sore was
the treating physician notified of the change. On February 25, 2007, March 12, 2007,
March 18, 2007, March 26, 2007, and March 27, 2007 (the dates of the Medicare Nurse
Assessments), there was not only an indication that R13’s right heel pressure sore had
deteriorated, but also that new sores had developed. CMS Ex. 2, at 17, 18. One of the
new sores was labeled stage IV, and measured 8 cm x 7 cm. In addition to this stage IV
sore, others had also developed, but there is no record that the treating physician was
notified. Petitioner argues that Dr. Dibrell saw the resident one day prior to the
declaration of immediate jeopardy, and was thus aware of her pressure sores. However,
the surveyor found no documentation of any change in the treatment order for the right
heel wound nor was there any documentation of treatment orders for the additional sores
to the right outer ankle and above the right heel. CMS Ex. 2, at 19. In fact, it was on the
same day that immediate jeopardy was declared that the treating physician was notified of
the deteriorating condition of R13’s right foot. Additionally, it was not until the surveyor
inquired about the resident’s pedal pulse on April 7, 2007, that it was determined that she
had no pulse in either foot. This prompted another call to the physician, who ordered a
transfer to the hospital for evaluation, at which time R13 was admitted to Stone County
Medical Center. CMS Ex. 2, at 20, 21.

It should also be noted that it was not until April 6, 2007, that a Medical Nutrition
Therapy Screening and Assessment Summary Plan signed by the Dietary Manager
documented a referral to the Registered Dietician because of the pressure sores. That
same day, the Registered Dietician Consultant documented a recommendation to increase
the protein nutrients to aid in healing decubitus. CMS Ex. 2, at 20.

Petitioner’s additional argument that the SOD misconstrues a statement by the ADON
that the physician had not been notified because the pressure sore had not opened, is
without merit. Moreover, the DON’s explanation that the ADON’s statement was not
made in reference to R13, but in regard to another resident, is also unavailing. P. Br. at
11; P. Ex 9, at 2, 7 6.
16

At 5:45 p.m. on April 5, 2007, surveyor Melva Snellenberger interviewed the ADON.
The surveyor questioned Ms. Humphrey as to how R12 acquired the pressure sore on his
heel. In response, the ADON provided the following explanation:

When he came back from the hospital, he was on PT [physical
therapy] and was wearing hard leather shoes and PT [staff]
walked him in those shoes and he wore them all day. When he
complained of pain we put those shoes away. His wife
brought in soft shoes. We put heel protectors on and
monitored the blister until it ruptured. Then we called the
doctor and got a treatment order. It was not open. No need to
call the MD until it opened.

CMS Ex. 19, at 4.

At 7:30 p.m. on April 5, 2007, another surveyor, Dennis Adams interviewed the ADON
regarding R13’s pressure sore. The ADON stated that she had not notified the physician
about R13’s pressure sore because it had not opened. She thought that the physician was
aware of the heel sore, and that he had signed an order for application of medication.
Upon record review, the surveyor found that the physician did not issue a treatment order
until April 6, 2007. CMS Ex. 20, at 4.

The surveyor interview notes show that ADO
two different surveyors regarding R12 and R
the practice was to notify the physician of the
had opened and not before.

IN Humphrey made similar statements to
3. In both instances, she maintained that
existence of a pressure sore only when it

As has been stated earlier, CMS’s official interpretation of 42 C.F.R. § 483.10(b)(11), set

forth in the SOM and discussed similarly in t
pertinent:

For purposes of § 483.10(b)(11
complications are such things a
pressure sore....

¢ preamble to the regulation, reads, where

)@)(B), . . . Clinical
s development of a stage II

See SOM, Appendix PP, Guidance to Surveyors for Long Term Care Facilities, Tag

F157; see also, 56 Fed. Reg. at 48,833 (Sept.

24, 1991).
17

Additionally, the MDS defines a blister on the skin as a stage II pressure sore. Thus, with
respect to pressure sores designated by the facility as stage II or blisters* (whether open or
not), staff were required to notify the physician and treat them according to regulatory
requirements. In this regard, 42 C.F.R. § 483.25(c) provides as follows:

(c) Pressure sores. Based on the comprehensive assessment
of a resident, the facility must ensure that (1) A resident who
enters the facility without pressure sores does not develop
pressure sores unless the individual's clinical condition
demonstrates that they were unavoidable; and (2) A resident
having pressure sores receives necessary treatment and
services to promote healing, prevent infection and prevent
new sores from developing.

Inasmuch as Petitioner maintains that ADON Humphrey was referring to another resident
and not R13 when she stated that the physician would not be notified until the pressure
sore had opened, I infer that Petitioner is arguing that the “other resident” intended in the
ADON’s remark was R12. However, the implication that the facility practice which was
to not notify the physician of the existence of a pressure sore until it ruptures, is
something facility staff would apply in the case of R12, but not in the case of R13, is
unconvincing. In fact, the argument is unpersuasive whether the ADON was referring to
R12 or any other resident.

In view of the foregoing, I find that the delay in physician involvement in the treatment of
R13’s pressure sores prevented the resident from receiving the necessary treatment and
services to promote healing. I further find that CMS has established a prima facie case
that Petitioner failed to ensure: (1) that skin condition was monitored; (2) that the
physician was consulted regarding the development or deterioration of pressure sores so
that treatment orders could be obtained or changed as necessary; and (3) that increased
caloric and protein needs were assessed upon development of pressure sores with
interventions developed to promote healing. Moreover, I find that the deficiencies under
Tags F157 and F314 constitute violations at the immediate jeopardy level.

* One of the new sores was labeled stage IV, and the physician had not been
notified of its existence. CMS Ex. 2, at 19.
18

2. CMS has established that Petitioner was not in substantial compliance
with the requirements of 42 C.F.R. § 483.75(Tag F490).

The April 10, 2007 survey found that Petitioner was not in substantial compliance, at an
immediate jeopardy level (K scope and severity level), with the regulation at 42 C.F.R.
§ 483.75.

The regulation at 42 C.F.R. § 483.75 provides that:

A facility must be administered in a manner that enables it to
use its resources effectively and efficiently to attain or
maintain the highest practicable physical, mental, and
psychosocial well-being of each resident.

CMS alleges that Petitioner failed to meet this participation requirement by not ensuring
that, as to Residents 2, 6, 12, 13, 21, and 23, “skin assessments were done timely, the
physician was consulted and treatment orders obtained and changed, provide pressure
relieving devices, provide incontinent care, and provide turning and repositioning of
residents with pressure sores.” CMS Br. at 24. CMS concluded that Petitioner’s failure
resulted in immediate jeopardy to R13, actual harm to R2, R12, and R13, and the
potential for more than minimal harm to R6, R21 and R23. Jd. As Petitioner limited its
appeal under this tag only to the findings related to R12, and R13, I will only address the
facts relative to those two residents. However, as previously noted, inasmuch as
Petitioner does not challenge all the deficiencies cited during the April 10 and June 1,
2007 surveys, those findings and remedies remain uncontested and are therefore final and
binding against Petitioner. 42 C.F.R. § 498.20(b).

In support of the allegations associated with Tag F490, CMS relies on the same set of
facts which form the basis for the deficiencies cited at Tags F157 and F314 (42 C.F.R.
§§ 483.10(b)(11) and 483.25(c)).

The Administration deficiency is a derivative deficiency based on findings of other
deficiencies. See Cross Creek Health Care Center, DAB No. 1665, at 19 (1998); Asbury
Center at Johnson City, DAB No. 1815 (2002); Eastwood Convalescent Center, DAB
No. 2088 (2007). The regulation requires a facility’s management to both assure that its
staff identify and address resident needs and that staff follow established procedures and
protocols.

In neither its opening brief nor its reply brief does Petitioner address the deficiency cited
at Tag F490. Instead, Petitioner focuses its argument and assertions on Tag F520 which I
address in the next section of this decision.
19

As discussed above, I have determined that Petitioner was not in substantial compliance
with participation requirements at 42 C.F.R. §§ 483.10(b)(11) and 483.25(c). Ihave no
difficulty finding the nexus between the deficiency findings I have addressed and the
allegation that those deficiencies establish that Petitioner was not being administered
effectively and efficiently. As such, I find that Petitioner was not in compliance with the
requirements at section 483.75. Despite the facility’s policy in place for addressing the
issue of prevention and treatment of pressure sores (see CMS Attachment D, at 2 — Pat
Casey affidavit), R13 developed a substantial pressure sore on her right heel, which
ultimately progressed to a stage IV pressure sore that was not addressed and not treated
properly. Petitioner’s systems, even if in place, were not effective to prevent the
violations I have discussed above. To reiterate, Petitioner failed to ensure that R13’s skin
condition was sufficiently monitored; that the resident’s physician was consulted
regarding the development/deterioration of pressure sores in order for treatment orders to
be timely obtained or changed as needed; and to assess R13’s increased caloric and
protein needs upon the development of pressure sores with development of interventions
to promote healing. I therefore conclude that Petitioner’s facility was not administered in
a manner so that its resources were used effectively to help R13 attain the highest
practicable physical, mental, and psychosocial well-being. Accordingly, I find that
Petitioner was in violation of 42 C.F.R. § 483.75, and that the deficiency cited is at the
immediate jeopardy level of noncompliance.

3. CMS did not establish a prima facie case that Petitioner failed to
comply substantially with the requirements of 42 C.F.R.
§ 483.75 (0)(1)(Tag F520).

In the SOD, the surveyors specifically allege Petitioner’s failure to comply with the
provisions at 42 C.F.R. § 483.75(0)(1). CMS Ex. 2, at 74-98. The regulation at section
483.75(0)(1) provides that:

A facility must maintain a quality assessment and assurance
committee consisting of:

(i) The director of nursing services;
(ii) A physician designated by the facility; and
(iii) At least 3 other members of the facility’s staff.

The SOD further alleges that Petitioner’s substantial noncompliance was at a K scope and
severity level. CMS Ex. 2, at 74-98.
20

CMS contends that Petitioner failed to comply with this requirement in that it:

... failed to have an “effective Quality Assessment and
Assurance Committee [QA&A Committee] that identified and
evaluated systems or lack thereof that affected the quality of
services provided to residents by failure to ensure that skin
assessments were done timely, the physician consulted and
treatment orders were obtained or changed, provide pressure
relieving devices, provide incontinent care, and turn and
reposition residents with pressure sores.”

CMS Br. at 25.

In the April 10, 2007 SOD, the surveyors alleged that Petitioner failed to meet the
regulatory standards under Tag F520 in that the QA&A Committee did not ensure that:

issues were identified and corrective actions were
implemented to ensure staff promptly identified new pressure
sores and declines in pressure sores, staff promptly consulted
the physician to obtain or revise treatment, to ensure pressure
relieving devices were used, to ensure incontinent care and
turning/repositioning were provided at least every two hours
and more frequently if needed for 6 of 10 [residents] with
pressure sores.

CMS Ex. 2, at 74-75.

I find that this particular allegation fails to establish a prima facie case that Petitioner did
not substantially comply with the participation requirements at 42 C.F.R. § 483.75(0)(1).
CMS has presented no evidence to show that Petitioner was not compliant with section
483.75(0)(1). The facts relied upon by both the surveyors and CMS with regard to this
specific deficiency may possibly support an allegation of substantial noncompliance
under section 483.75(0)(2)’; but the facts do not support a deficiency citation pursuant to
section 483.75(0)(1). There is nothing in the record to demonstrate that Petitioner failed
to establish a QA&A Committee which consisted of the Director of Nursing Services, a
facility physician, and, at least, three other staff members. To the contrary, as noted in

° The regulation at section 483.75(0)(2) requires that the QA&A Committee meet
at least quarterly to identify issues relative to quality assessment and assurance activities,
and develop and implement plans of action to correct identified quality care deficiencies.
21

the SOD, a surveyor stated that, when questioned on this point, the facility Administrator
advised the surveyor that the QA&A Committee consisted of the facility Medical
Director, Administrator, DON, Dietary Manager, Continuous Quality Improvement
Coordinator, and Maintenance Director. CMS Ex. 2, at 75; see also, P. Ex. 8, at 3; P. Ex.
9, at 2; P. Ex. 12, at 1. The primary focus of CMS’s arguments go to the effectiveness of
the QA&A Committee at identifying and evaluating systems which provide sufficient
quality of services to ensure proper assessment and treatment of pressure sores. CMS Br.
at 25-26. Clearly the regulatory provision cited at Tag F520 does not go to the
effectiveness of the QA&A Committee, although there may be other provisions within
Part 483 which specifically address this issue. If it is CMS’s position that section
483.75(0)(1) in fact governs the question of the effectiveness of the QA&A Committee, it
did not present an argument in support of this specific assertion in its brief. See CMS Br.
at 25-26.

B. CMS’s finding of immediate jeopardy was not clearly erroneous.

Immediate jeopardy exists where a 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. Fora finding of immediate
jeopardy, it is not necessary to show that the noncompliance caused serious injury, harm,
impairment, or death. It is sufficient to show that the noncompliance was likely to cause
serious injury, harm, impairment, or death. Fairfax Nursing Home, Inc., DAB No. 1794,
at 14 (2001).

It is Petitioner’s burden to prove clearly erroneous a finding by CMS that a deficiency
puts residents at immediate jeopardy. 42 C.F.R. § 498.60(c)(2). Here, CMS established
strong prima facie evidence of immediate jeopardy level deficiencies under Tags F157,
F314, and F490. Petitioner contends in its brief that there were no immediate jeopardy
level deficiencies with respect to R13. Petitioner argues that the survey team erred in
finding immediate jeopardy on the assumption that no pressure sore was present on
February 12, 2007, and then a stage II pressure sore suddenly developed on February 12,
2007. P. Br. at 12. Petitioner’s assertions are unavailing. That is not why a finding of
immediate jeopardy is justified as to R13. Immediate jeopardy is based on the facility’s
failure to consult the treating physician regarding R13’s pressure sores from February 17,
2007, until after the ADON was interviewed on April 5, 2007. It was not until then that a
treatment order was obtained from the physician for antibiotic therapy and a change in
treatment. Additionally, it was not until the surveyor’s inquiry that the Consultant
Dietician addressed R13's nutritional needs due to pressure sores on April 6, 2007, when
an increase in feeding pump rate and the administration of Beneprotein were
recommended to “aid in healing decubitus.” CMS Ex. 68, at 3. Petitioner knew, or
should have known, that if the resident’s development of pressure sores was not timely

22

made known to the treating physician, the condition could deteriorate and could, or
would, be likely to cause serious injury, harm, impairment, or death to the resident.

C. Petitioner is properly subject to a two-year prohibition on conducting a
NATCEP.

In addition to the CMP, I conclude that the State survey agency was required to prohibit
Petitioner from conducting a NATCEP for a period of two years.

Pursuant to 42 C.F.R. § 483.151(b)(2) and (e)(1), a state may not approve and must
withdraw any prior approval of a NATCEP offered by a skilled nursing facility or nursing
facility that: 1) has been subject to an extended or partial extended survey under sections
1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act; 2) has been assessed a CMP of not less
than $5000; or 3) has been subject to termination of its participation agreement, denial of
payment, 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.
42 C.F.R. § 488.301. “Substandard quality of care” is identified in instances where
surveyors identify one or more deficiencies related to participation requirements
established by 42 C.F.R. § 483.13 (Resident Behavior and Facility Practices), 42 C.F.R. §
483.15 (Quality of Life), or 42 C.F.R. § 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. Jd.

As [have found Petitioner to be noncompliant at the immediate jeopardy level with a
participation requirement under 42 C.F.R. § 483.25 (Quality of Care), and that a total
CMP of more than $5000 is reasonable, a two-year prohibition of Petitioner conducting a
NATCEP is required by law.

D. Ido not have authority to address and resolve the issue regarding the alleged
inappropriate conduct of one of the surveyors.

In its opening brief, Petitioner alleges that Surveyor Pat Casey “displayed inappropriate
and questionable behavior during the Survey which calls into question the motivation for
and appropriateness of the finding of [i]mmediate [jJeopardy.” P. Br. at 13-14. In
support of these allegations, Petitioner offers the sworn affidavits of Tammy Romero,
Facility Administrator (P. Ex. 8); Lisa Rhoades, DON (P. Ex. 9); and David Jarvis,
Assistant Administrator and Chief Operating Officer for White River Health Systems (P.
Ex. 11). Among other things, the affiants commented on: the surveyor’s negative
demeanor toward the facility’s primary physician, Dr. Scott Dribell; her references to
23

certain facility staff members as a “problem;” and in some instances, her yelling at the
staff members. See, e.g., P. Ex. 11, at 1-2; P. Ex. 8, at 1. As part of her affidavit,
Administrator Romero included statements obtained from four staff members who either
witnessed or were subjected to the surveyor’s adverse behavior. P. Ex. 8A, at 1-8. Ms.
Romero further noted that she was contacted by the Director of the Office of Long Term
Care on the last day of the April 2007 survey regarding survey activities. Ms. Romero
states that she advised the Director of the concerns of various members of the facility’s
staff regarding Ms. Casey’s behavior and noted the receipt of written statements from
staff. P. Ex. 8, at 2. Ms. Romero also states that the Director apologized for the
surveyor’s behavior, requested that the written staff statements be forwarded to her, and
subsequently, the survey team was instructed to remove themselves from the facility and
report to the Office of Long Term Care on the following business day. Jd. at 2-3.

Petitioner did not request any specific relief regarding the aforementioned; however, I
have assumed that the issue was raised for the purpose of demonstrating the surveyor’s
alleged negative attitude which gives pause as to whether the immediate jeopardy citation
is a legitimate and credible citation.

While the issue of the alleged inappropriate behavior of a member of a survey team
during the course of official business is of major concern, unfortunately, it is not an issue
which I have authority to entertain. My review as to the alleged deficiencies is a de novo
review. A de novo review requires that the ALJ make an independent decision, based
solely on the evidence which is introduced by the parties either at hearing or through the
agreed-upon briefing process. Therefore, I am required to make my decision in this case
based on the record independent from the determination of the State survey agency whose
action is being challenged.

E. The CMPs CMS proposed to impose against Petitioner of $3050 per day from
April 6 through April 7, 2007; $350 per day from April 8 through May 31, 2007;
and $50 per day from June 1 through June 14, 2007 are reasonable.

If a facility is not in substantial compliance with program requirements, CMS has the
authority to impose one or more of the enforcement remedies listed in 42 C.F.R.

§ 488.406, including a CMP. CMS may impose a CMP for the number of days that the
facility is not in compliance or for each instance that a facility is not in substantial
compliance. 42 C.F.R. § 488.430(a). There are two ranges for per day CMPs. 42 C.F.R.
§§ 488.408; 488.438. The upper range of CMP, of from $3050 per day to $10,000 per
day, is reserved for deficiencies that constitute immediate jeopardy to a facility’s
residents, and, in some circumstances, for repeated deficiencies. 42 C.F.R.

§ 488.438(a)(1)(i), (d)(2). The lower range of CMP, from $50 per day to $3000 per day,
is reserved for deficiencies that do not constitute immediate jeopardy, but either cause
24

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)(I)(ii). In this case, CMS chose to impose a
CMP of $3050 per day from April 6 through April 7, 2007; $350 per day from April 8
through May 31, 2007; and $50 per day from June 1| through June 14, 2007.

My responsibility in deciding what penalty amounts are reasonable is to make a de novo
analysis of the evidence as it relates to the regulatory criteria governing penalty amounts.
In determining whether the amount of the CMP is reasonable, the following factors as
specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history of
noncompliance, including repeated deficiencies; (2) the facility’s financial condition; (3)
the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and (4) the
facility’s degree of culpability.

I have received no evidence of prior noncompliance and Petitioner has not submitted
information related to its financial condition nor has it claimed an inability to pay the
amount of the proposed penalty. Where Petitioner has failed to take advantage of its
opportunity to submit evidence of its financial condition, that opportunity is waived.
Community Nursing Home, DAB No. 1807, at 15-16 (2002); Emerald Oaks, DAB No.
1800 (2001). Consequently, I base my decision as to penalty amounts solely on the
seriousness of the deficiencies based on the violations Petitioner did not challenge’® and
which are now binding on Petitioner, as well as the violations of 42 C.F.R.

§§ 483.10(b)(11); 483.25(c); and 483.75, and Petitioner’s relative culpability for them.

As already discussed, the evidence did not substantiate that Petitioner was in violation of
42 C.F.R. § 483.75(0)(1)(Tag F520), and, therefore, I take that into consideration in my
review.

Petitioner did not challenge all the deficiencies cited during the April 10 and June 1, 2007
surveys. Specifically, Petitioner did not appeal the non-immediate jeopardy findings
identified during the survey completed April 10, 2007 (except for the deficiency as to
R12, under Tag F314), which were cited at a scope and severity level of “D” and “E,” nor
did it appeal any of the deficiencies cited in the June 1, 2007 resurvey. As previously
noted, those findings and remedies remain uncontested and are therefore final and binding
against Petitioner. 42 C.F.R. § 498.20(b). As such, CMS has established a finding of

'° Petitioner did not challenge the following citations: 42 C.F.R.
§§ 483.10(b)(11)(Tag F157 for R2 and R6); 483.25(a)(3)(Tag F312); 483.25(c)(Tag F314
for R2, R6, R21, and R23); 483.25(h)(1)(Tag F323); 483.25(k)(Tag F328);
483.25)(1)(Tag F329); 483.25(m)(1)(Tag F332); 483.25(m)(2)(Tag F333); 483.75 (Tag
F490); 483.75(j)(1)(Tag F502); and 483.70(a)(Tag K19). See CMS Exs. 1, 2; June 22,
2007 Request for Hearing.
25

noncompliance which provides a basis for its imposition of a CMP at the lower range of
$50 to $3000 per day for deficiencies that do not constitute immediate jeopardy, but
either cause actual harm or caused no actual harm, but have the potential for more than
minimal harm. See 42 C.F.R. § 488.438(a)(ii).

As for the deficiencies related to R12 which Petitioner did challenge, I find that
Petitioner’s violation of Tags F157 and F314 at the less than immediate jeopardy level,
specifically, the facility staff’s failure to provide R12 the necessary services and treatment
to be a serious failure on the part of Petitioner which further justifies CMS’s imposition
of a CMP against Petitioner at the lower range of $50 to $3000 per day. A central reason
for housing a resident in a long-term care facility is to provide the resident with care,
including supervision, which the resident is unable to provide for himself or herself, or
that the resident’s family is unable to provide at home. The evidence before me shows
that facility staff were not diligent in meeting their fundamental responsibility to residents
in ensuring that a resident with pressure sores received necessary treatment and services
and communicating with a resident’s physician to facilitate the provision of appropriate
treatment.

Moreover, for the reasons described earlier, I find that Petitioner’s violation at the
immediate jeopardy level of participation requirements at 42 C.F.R. §§ 483.10(b)(11)(Tag
F157); 483.25(c)(Tag F314); and 483.75(Tag F490) related to R13 justify the imposition
of a CMP in the amount of $3050 from April 6 through April 7, 2007. I note that $3050
is the minimum daily penalty amount for deficiencies that constitute immediate jeopardy
to a facility’s residents. 42 C.F.R. § 488.438(a)(1)(D.

further note that for both R12 and R13, I find that Petitioner’s staff manifested a high
degree of culpability.

Petitioner has not appealed the DPNA and, as such, that penalty is binding against
Petitioner. Although, had Petitioner challenged the DPNA, I find sufficient evidence
efore me to justify the imposition of a DPNA against Petitioner from May 19 through
June 14, 2007. As Petitioner is subject to denial of payment, section 1819(f)(2)(B) of the
Act prohibits approval of Petitioner from conducting a NATCEP for a two-year period.

26

V. Conclusion

Based on the documentary evidence, the arguments of the parties, and the applicable law
and regulations, I find that Petitioner was not in substantial compliance at the immediate
jeopardy level from April 6 through April 7, 2007, and that the imposition of a CMP of
$3050 per day during that period is reasonable. I find that a CMP of $350 per day from
April 8 through May 31, 2007, and a CMP of $50 per day from June | through June 14,
2007, is also reasonable. CMS was also justified in the imposition of a DPNA from May
19 through June 14, 2007. Additionally, the two-year prohibition on conducting a
NATCEP is consistent with the law and regulations.

/s/
José A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Oak Park Healthcare Center, )
(CCN: 19-5266), ) Date: March 5, 2009
)
Petitioner, )
)
-Vv.- ) Docket No. C-09-239
) Decision No. CR1917
Centers for Medicare & Medicaid )
Services. )
)
DECISION

For the reasons set forth below, I dismiss as untimely the hearing request filed by
Petitioner, Oak Park Healthcare Center (hereafter Petitioner or facility).

I. Background
The following facts are not in dispute:

Petitioner is a skilled nursing facility located in Lake Charles, Louisiana, that participates
in the Medicare program as a provider of services. Following a complaint investigation
survey completed on August 7, 2008, the Centers for Medicare and Medicaid Services
(CMS) determined that the facility was not in substantial compliance with program
requirements. In a notice letter dated October 8, 2008, CMS advised Petitioner that,
based on its noncompliance, CMS would, among other penalties, terminate the facility’s
Medicare provider agreement, effective February 7, 2008, unless the facility achieved
substantial compliance before that date. CMS Ex. 1; P. Ex. 2.

The notice further advised Petitioner that, if it disagreed with CMS’s determination, it
could request a hearing before an administrative law judge (ALJ). The letter said that the
“written request for hearing must be filed no later than December 7, 2008 (60 days from
the date of receipt of this letter via fax).” CMS Ex. 1, at 3. The letter also pointed out the
procedural rules governing the hearing process, 42 C.F.R. § 498.40 et seq., and told
2

Petitioner that its request for hearing should “identify the specific issues, and the findings
of fact and conclusions of law” with which Petitioner disagrees, and should specify the
bases “for contending that the findings and conclusions are incorrect.” CMS Ex. 1,

at 2-3.

In a subsequent letter, dated December 3, 2008, CMS advised Petitioner that, based on the
findings of an October 24, 2008 revisit, the facility remained out of substantial
compliance, so, among other remedies, its provider agreement would terminate on
February 7, 2009. The letter also advised Petitioner that it could request an ALJ hearing
to challenge the determination of noncompliance for the October 24, 2008 survey, and
that such request “must be filed no later than February 1, 2009 (60 days from the date of
receipt of this letter via fax).” CMS Ex. 2, at 2; P. Ex. 4, at 2. The notice then repeated
CMS’s earlier instructions as to the procedural and content requirements for the hearing
request.

Following two additional revisit surveys (which are not the subject of this appeal), CMS
determined that the facility still failed to achieve substantial compliance. CMS then
extended the facility termination date to February 11, 2008, to allow for appropriate
publication of the termination notice, and so notified Petitioner in letters dated January
27, 2009, and February 5, 2009. CMS Exs. 3, 4; See, 42 C.F.R. § 488.456.

In a letter dated February 3, 2009, Petitioner requested an expedited hearing and an
extension of time in which to file its hearing request.

CMS now moves to dismiss the hearing request as untimely.”
II. Discussion

A, Petitioner is not entitled to a hearing because it did not file a timely
hearing request and no good cause justifies extending the time for filing.’

The parties agree that Petitioner’s hearing request was not timely filed.

> CMS accompanies its brief with four exhibits (CMS Exs. 1-4). With its brief in
opposition (P. Opp. Br.), Petitioner submits five exhibits (P. Exs. 1-5) and two
attachments.

> My findings of fact and conclusions of law are set forth, in italics and bold, in
the discussion captions.
3

Section 1866(h) of the Social Security Act authorizes administrative review of
determinations that a provider fails to comply substantially with Medicare program
requirements “to the same extent as is provided in section 205(b) [of the Act].” Under
section 205(b), the Secretary must provide reasonable notice and opportunity for a
hearing “upon request by [the affected party] who makes a showing in writing that his or
her rights may be prejudiced” by the Secretary’s decision. The hearing request “must be
filed within sixty days” after receipt of the notice of CMS’s determination (emphasis
added). Act, section 205(b). The 60 day time limit is thus a statutory requirement. See,
Cary Health and Rehabilitation Center, DAB No. 1771, at 8 - 9 (2001).

Similarly, the regulations mandate that the affected party “file the request in writing
within 60 days from receipt of the notice . . . unless that period is extended... .” 42
C.F.R. § 498.40(a). On motion of a party, or on his or her own motion, the 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). Under §§ 498.40(a)(2)
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, the language in both of CMS’s notice letters is clear and unconditional: Petitioner’s
appeal had to be filed within 60 days of receipt, and, because the notices were sent by
facsimile machine, they were, in fact, received on the dates they were sent. Thus,

to challenge the August 7, 2008 survey findings, Petitioner’s hearing request had to be
filed no later than December 7, 2008, and, to challenge the October 24, 2008 revisit
findings, the request was due no later than February 1, 2009.

Petitioner’s February 3, 2009 hearing request was therefore untimely, and, absent a
showing of good cause for my granting an extension of time in which to file, should be
dismissed pursuant to 42 C.F.R. § 498.70.

Petitioner does not claim that it filed a timely appeal, but argues that good cause justifies
its failure to file earlier, listing the following reasons:

. the deadline for the facility to achieve substantial compliance and avoid the
imposition of any remedy was after the deadline to appeal, and the facility “had
every reason to believe it would achieve substantial compliance timely”;

. until the appeal deadline had passed, no one advised the facility that the survey
agency would conduct only three revisit surveys to determine if it had achieved

substantial compliance;

and
. until the appeal deadline had passed, no one advised the facility that its Medicaid
provider agreement would be terminated along with its Medicare agreement.’

P. Opp. Br. at 6.° None of these reasons constitutes good cause.

The regulations do not define “good cause” but leave that determination to the discretion
of the ALJ. Looking to regulations governing certain Social Security benefit appeals for
guidance, many ALJs have ruled that “good cause” means circumstances beyond a party’s
ability to control. See, e.g., Hillcrest Healthcare, L.L.C., DAB CR976 (2002), aff'd DAB
No. 1879 (2003); Hammonds Lane Center, et al., DAB CR913 (2002), aff'd DAB No.
1853 (2002); Glen Rose Medical Center, DAB CR918 (2002), aff'd, DAB No. 1852
(2002); Parkview Care Center, DAB CR785 (2001); Hospicio San Martin, DAB CR387
(1995), aff'd, DAB No. 1554 (1996); 20 C.F.R. § 404.911; 20 C.F.R. § 404.933(c).°
CMS urges me here to adopt that standard. CMS Motion to Dismiss at 4-7. Petitioner
opposes, characterizing such a standard as unreasonable, creating “an impossible-to-
satisfy standard [that] effectively denies any extension of the deadline, contrary to the
intent of the regulation.” P. Opp. Br. at 6-7.

The Departmental Appeals Board has never reached the issue of whether “good cause” is
limited to circumstances beyond a party’s ability to control. Hammonds Lane Center, et

* Petitioner should have known that the loss of its provider agreement jeopardized
its receipt of Medicaid payments. Under the Social Security Act and its implementing
regulations, federal financial participation (FFP) is available under the Medicaid program
for services provided in a properly certified facility. Social Security Act, section
1905(a)(4); 42 C.F.R. § 440.40. Upon termination or expiration of the facility’s provider
agreement, FFP may continue for up to 30 days. 42 C.F.R. § 441.11. Moreover, in a
letter dated August 20, 2008, the Louisiana Department of Health and Hospitals
specifically told Petitioner that its failure to submit an acceptable plan of correction “may
result in termination of your Medicaid Provider Agreement.” P. Ex. 1, at 1.

> Petitioner also raises some constitutional claims, arguing that the entire appeal
process violates its procedural and substantive due process rights. P. Opp. Br. at 7. I
have no authority to adjudicate constitutional claims.

° Under those regulations, to determine whether good cause exists, the ALJ
considers 1) the circumstances that kept Respondent from making the request on time; 2)
whether any SSA action misled him; 3) whether Respondent understood the requirements
for filing; and 4) whether Respondent had any physical, mental, educational, or linguistic
limitation that prevented him from filing a timely request, or from understanding or
knowing about the need to file a timely request for review. 20 C.F.R. § 404.911.
5

al., DAB No. 1853, at n. 3; Wellington Oaks Care Center, DAB No. 1626 (1997).
Nevertheless, the Board has consistently ruled that where, as here, a party consciously
chooses, for reasons of its own, not to request a hearing, it must accept the consequences
of its inaction — loss of its right to an in-person hearing. Hammonds Lane Center at 1;
Hillcrest Healthcare, L.L.C. DAB No. 1879 (2003).

Petitioners in Hammonds complained that their reliance on an informal CMS policy —
which purportedly would have allowed them to correct their deficiencies without
incurring a penalty — induced them to delay filing their requests for hearing. By the time
they learned that the policy had been unexpectedly changed, the time for appeal had
passed. In rejecting their good cause argument, the Board observed that the petitioners
knowingly decided not to request a hearing based on a series of assumptions similar to
those Petitioner made in this case: 1) that the state survey agency would revisit the
facility within the 60-day period to file a hearing request; 2) that the state survey agency
would find that the facility had achieved substantial compliance; 3) that the finding of
substantial compliance would be applied retroactively to a date prior to that revisit; and
4) that CMS would then not impose the designated penalty (denial of payment for new
admissions). The Board noted that “if one of these assumptions proved false,” petitioners
would not have been able to complain about the purported policy change, their right to a
hearing would have elapsed with the passing of 60 days, and the question of good cause
for extending the filing deadline “would simply not arise.”

Here, where Petitioner does not complain about any purported policy change, but relied
on assumptions that ultimately proved false, its position is akin to that hypothetical
position described by the Board in Hammonds where the question of good cause for
extending the filing deadline “would simply not arise.”

Similarly, in Hillcrest, DAB No. 1879 (2003), the petitioner argued that it had been
attempting to resolve the dispute through the state’s informal dispute resolution (IDR) and
revisit processes. Further, it did not know “the full extent of imposed sanctions” and
could not make an intelligent decision about waiving its hearing rights. The Board
concluded that under any reasonable definition of “good cause,” petitioner’s election to
resolve its dispute by other means and its deliberate decision to focus its resources on
achieving compliance rather than challenging adverse survey findings did not excuse its
failure to file a timely hearing request. See also, Nursing Inn of Menlo Park, DAB No.
1812 (2002) (provider must bear the consequences of its “conscious decision” to focus on
its plan of correction and resurvey rather than to prepare an appeal.)

Thus, under any reasonable definition, Petitioner has not shown good cause for its failure
to file a timely request for hearing.
6

B. Petitioner has not challenged any of the findings from
either the August 7, or October 24, 2008 surveys, and I have
no authority to review the issues it raises in this appeal.

Even if Petitioner had timely filed its hearing request, neither that request nor its
Opposition Brief suggests any challenge to the August 7 or the October 24, 2008 survey
findings. In claiming that CMS “erroneously determined that Oak Park was not in
substantial compliance,” Petitioner is plainly referring to a later survey, conducted
January 20, 2009, which is not the subject of this appeal. According to the hearing
request, the challenged survey “basically found three record-keeping errors related to
three residents.” Hearing Request, at 4.

Substantial compliance does not require the unattainable
standard of perfection. Here, although the three record-
keeping errors are certainly regrettable, they do not rise to the
level of posing risk of more than minimal harm, on an isolated
basis. The survey’s conclusion to the contrary, and CMS’s
resulting determination that Oak Park is not in “substantial
compliance” are erroneous.

Hearing Request at 7. This does not describe the surveys here. The August 7, 2008
survey cited seventeen separate deficiencies, ranging in scope and severity from level D
(isolated incident that caused no actual harm but with the potential for more than minimal
harm) through level J (isolated incident that posed immediate jeopardy to resident health
and safety). P. Ex. 2. The October 24, 2008 survey cited six deficiencies, at scope and
severity levels D and E (pattern of noncompliance that caused no actual harm, but with
the potential for more than minimal harm). P. Ex. 4.

Nowhere, in either the hearing request or Petitioner’s opposition brief does Petitioner
challenge any of the earlier survey findings. Rather, it argues that the facility would (or
did) bring itself “back into substantial compliance before February 7, 2009.” Hearing
Request, at 6, 8 (“Oak Park contends that it achieved substantial compliance by the time
of the third re-visit on January 20, 2009” and “Oak Park unquestionably will [have]
achieved ‘substantial compliance’ by February 6, at the latest... .”)

Petitioner raises some additional arguments questioning CMS’s authority to terminate the
facility’s provider agreement. Hearing Request at 9-11. The regulations specifically
authorize CMS to terminate a provider agreement in the absence of an immediate
jeopardy finding and they mandate termination if the facility does not correct its
deficiencies within six months. 42 C.F.R. §§ 488.412, 488.456. In any event, I have no
authority to review CMS’s choice of remedy. 42 C.F.R. § 488.408(g)(2).
7

Thus, Petitioner has not raised any issue that I have the authority to review, and, even if
its hearing request had been timely filed, I would be compelled to dismiss. 42 C.F.R.
§ 498.70(b).

Finally, Petitioner cites Carlton at the Lake, DAB No. 1829 (2002), for the proposition
that I may not dismiss based on the adequacy of its hearing request. However, this is not
the situation presented in Carlton at the Lake, DAB No. 1829 (2002). There, the
petitioner’s hearing request did not meet the content requirements of 42 C.F.R.

§ 498.40(b) because it failed to identify the specific issues and findings of
fact/conclusions of law with which petitioners disagreed, and failed to specify the bases
for contending that those findings/conclusions were incorrect. Here, in contrast,
Petitioner has filed a lengthy and detailed hearing request. But it does not raise an issue
that I have the authority to review, plainly conceding the appealable issues: whether it
was in substantial compliance with program requirements at the times of the August and
October 2008 surveys. Moreover, in Carlton, the Board did not nullify the regulatory
requirement for specificity; eventually a petitioner must disclose what it is complaining
about. Here, Petitioner had an additional opportunity to identify the survey findings with
which it disagrees. Like its hearing request, its opposition brief does not challenge any of
the findings from the August or October surveys, but instead reiterates issues that I have
no authority to resolve.

III. Conclusion

Because Petitioner did not timely file its hearing request, and no good cause justifies
extending the time for filing, I grant CMS’s motion and order this case dismissed.

42 C.F.R. § 498.70(b). I note also, that even if the request had been timely, Petitioner
raises no issue that I have the authority to review.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


The Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the case of: )
)
Mangat R. Pathak, ) Date: March 4, 2009
)
Petitioner, ) Docket No. C-09-150
) Decision No. CR1916
-V.- )
)
The Inspector General. )
)
DECISION

I dismiss the hearing request of Petitioner Mangat R. Pathak because it was untimely
filed.

I. Background

On September 30, 2008 the Inspector General (I.G.) sent a letter to Petitioner notifying
him that he was excluded from participating in Medicare and other federally funded
health care programs. On December 12, 2008 Petitioner filed a request for a hearing.

The I.G. moved to dismiss Petitioner’s hearing request on the ground that it was untimely
filed. Petitioner responded to the motion with a letter which he faxed to the Departmental
Appeals Board on February 9, 2009.

IL. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether I must dismiss Petitioner’s hearing request.
B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each Finding below as a separate heading.

1. I must dismiss a hearing request that is not timely filed.

Hearings in cases involving the I.G. are governed by regulations at 42 C.F.R. Part 1005.
These regulations provide that an individual who is the subject of an adverse
determination by the I.G. is entitled to a hearing before an administrative law judge, but
only if he or she files a hearing request within 60 days after receiving notice of the LG.’s
determination. 42 C.F.R. § 1005.2(c). The date of receipt of the notice is presumed to be
five days after the date of the notice absent some showing to the contrary by the
individual who is the addressee. Jd.

The regulations direct an administrative law judge to dismiss any hearing request that is
untimely filed by stating that the judge “will” dismiss any untimely request. 42 C.F.R.
§ 1005.2(e)(1). An administrative law judge has no discretion to grant a hearing in the
case where the hearing request is untimely.

2. I must dismiss Petitioner’s hearing request because it is untimely.

The hearing request in this case is, on its face, untimely. Petitioner has offered no
explanation that would refute a finding of untimeliness. Consequently, I must dismiss his
hearing request.

Petitioner had 60 days from his receipt of the I.G.’s September 30, 2008 notice to him
within which to request a hearing. Petitioner’s presumed deadline for filing a hearing
request was December 5, 2008 if one assumes that he received the notice on October 6,
2008.” Petitioner did not file his request until December 12, 2008, a date beyond the
presumed deadline. I must conclude that Petitioner’s hearing request is untimely absent
proof by him that he actually received the notice on a date that is after October 6, 2008.

* In fact, five days after September 30 is October 5, 2008 but that date was a Sunday.
Petitioner offered no facts to overcome the presumption that he received notice of the
1.G.’s exclusion determination by October 6, 2008. Indeed, Petitioner does not even
contend that he filed his hearing request timely. In his February 9, 2009, letter
responding to the I.G.’s motion to dismiss Petitioner contends that he is not, in fact,
culpable for the conduct that underlies his exclusion. He also states the he is “sorry for
the misunderstanding about the time for appeal.” But, he does not claim that he received
the I.G.’s notice letter at a date that is later than the presumed receipt date nor does he
deny that his hearing request is untimely.

/s/
Steven T. Kessel
Administrative Law Judge