Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Mark B. Kabins, M.D.,
(O.L. File Number L-10-40339-9),

Petitioner
v.
The Inspector General.
Docket No. C-11-260
Decision No. CR2373

Date: May 23, 2011

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Mark B.
Kabins, M.D., from participating in Medicare and other federally funded health care
programs for a minimum of five years.

I. Background

Petitioner is a physician. The I.G. determined to exclude Petitioner, asserting that he had
been convicted of a criminal offense that falls within the reach of section 1128(a)(3) of
the Social Security Act (Act). That section mandates the exclusion of any individual who
is convicted of a felony offense occurring after August 21, 1996, which relates to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct that
is in connection with the delivery of health care item or service.

Petitioner requested a hearing, and the case was assigned to me for a hearing and a
decision. The I.G. filed a brief and six proposed exhibits (Ex.) that are identified as I.G.
Ex. 1—LG. Ex. 6. Petitioner filed a brief and 45 proposed exhibits that are identified as
P. Ex. 1 — P. Ex. 45. The LG. then filed a reply brief.
The parties object to my receiving certain exhibits. In addition, Petitioner asserts that he
should be given a hearing in person so that I may receive his testimony and that of a
witness. I rule on the parties’ respective objections and Petitioner’s request for an in-
person hearing below.

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

1. Petitioner was convicted of a felony that falls within the reach of section
1128(a)(3) of the Act; and

2. An exclusion of five years is mandatory in this case.
B. Findings of Fact and Conclusions of Law

I make the following findings of fact and conclusions of law.

1, I receive into evidence I.G. Ex. 1 —I.G. Ex. 5, P. Ex. 1, and P. Ex. 8 —
P. Ex. 12. I exclude I.G. Ex. 6, P. Ex. 2—P. Ex. 7, and P. Ex. 13 — P.
Ex. 45. I find no reason to convene an in-person hearing.

As I mention above, the parties objected to my receiving into evidence certain exhibits.
The objected-to exhibits are 1.G. Ex. 6, P. Ex. 2— P. Ex. 7, and P. Ex. 13 — P. Ex. 45. P.
Brief at 34; LG. Reply at 19. I sustain the parties’ objections to these exhibits, and I
exclude them from consideration. I.G. Ex. 6 is a plea agreement in a proceeding that is
related to the criminal conviction of Petitioner that underlies this case. Petitioner objects
to my receiving it primarily because it contains hearsay. I would overrule that objection
if it were the sole basis for my not receiving the exhibit. The fact that a document
contains hearsay is not a basis for excluding it. Moreover, even if the Federal Rules of
Evidence were to apply to this case, the document is an official court record and would
be admissible under the exception governing such documents. I find, however, that the
exhibit is cumulative. I exclude it for that reason.

T exclude P. Ex. 2 — P. Ex. 7 and P. Ex. 13 — P. Ex. 45 because they are irrelevant. As I
shall discuss, Petitioner seeks to enlarge the scope of this case to address issues that are
beyond my authority to hear and decide and that are not germane to deciding whether
Petitioner must be excluded. All of these exhibits relate to Petitioner’s irrelevant
arguments.
Lalso find no basis to convene an in-person hearing in this case. The sole basis for a
hearing in person would be to receive testimony. Petitioner offers his own testimony plus
that of a witness, Ms. Melodie Simon, a former patient of Petitioner, whose care by
Petitioner underlies his conviction of a felony. P. Ex. 3. Petitioner avers that his
proposed testimony would establish that the care he gave to Ms. Simon complied with
applicable standards of care. He asserts that Ms. Simon would corroborate his own
testimony and would testify additionally that Petitioner is a trustworthy provider of care.

This proposed testimony is irrelevant to the issues that I may hear and decide. Neither
Petitioner’s proposed testimony or that of Ms. Simon is germane to the issue of whether
Petitioner was convicted of a felony that falls within the purview of section 1128(a)(3) of
the Act. Rather, the proposed testimony addresses the quality of care that Petitioner
rendered to Ms. Simon. P. Ex. 3. The quality of care that Petitioner provided to Ms.
Simon has no relevance to the issues that I may hear and decide because it is something
that is not encompassed by section 1128(a)(3). For that reason, I exclude Petitioner’s and
Ms. Simon’s testimony, and I find no basis to convene an in-person hearing.

2. Petitioner was convicted of a felony that falls within the reach of
section 1128(a)(3) of the Act.

The mandatory exclusion requirements of section 1128(a)(3) embody the following
necessary elements. An individual must be convicted of a felony occurring after August
21, 1996. The felony must relate to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct. The felony must be in connection with the
delivery of a health care item or service.

The evidence unequivocally establishes that all of these elements are present in this case.

Petitioner was convicted of a felony that occurred after August 21, 1996. Petitioner pled
guilty to misprision of a felony, a felony that occurred in or about 2001, to in or about
July 2002. I.G. Ex. 3 at 1; LG. Ex. 2.

Petitioner’s conviction relates to fraud. He pled guilty to failing to report or covering up
a scheme to defraud one of his patients and other health care providers who were
involved in that patient’s care. In pleading guilty, Petitioner admitted that he knew about
the crime of mail or wire fraud that had been committed by other individuals, that he
concealed material information about that crime, and that he did not as soon as possible
make that crime known to a judge or other person in civil or military authority in the
United States. I.G. Ex. 2 at 10.

In pleading guilty, Petitioner admitted to the following facts. On August 3, 2000,
Petitioner assisted another physician in performing surgery on Ms. Simon. I.G. Ex. 2 at
8. Ms. Simon developed a severe headache after the surgery, which was diagnosed as
being caused by a leak of spinal fluid. The other physician placed a catheter in Ms.
Simon and then left her in Petitioner’s care. /d. at 8-9. Ms. Simon then developed
additional complications that Petitioner diagnosed as the consequence of a spinal epidural
ematoma. On August 9, 2000, Petitioner operated on Ms. Simon to evacuate the
iematoma. However, Ms. Simon ultimately became paraplegic. Id. at 9.

Ms. Simon retained an attorney, Noel Gage, to represent her in a potential malpractice
suit against any physician or other health care provider whose potential negligence
arguably caused her injury. Petitioner knew that medical experts could opine that he
failed to comply with the applicable standard of care by delaying surgery on Ms. Simon.
He also believed that experts could opine that his failure timely to remove Ms. Simon’s
iematoma contributed to her permanent injury. Petitioner believed that she could bring a
viable lawsuit against him. I.G. Ex. 2 at 9.

Petitioner knew an individual named Howard Awand. Mr. Awand was a self-described
medical consultant. He had a financial and business relationship with Petitioner through
which Petitioner received patient referrals from Mr. Awand. Petitioner knew that Mr.
Awand referred cases from Petitioner and other physicians to certain personal injury
lawyers and that these lawyers made money in contingency fees from the referrals.
Petitioner knew that these referrals could influence the personal injury lawyers’ decisions
about whom to sue or not to sue. I.G. Ex. 2 at 9.

Petitioner asked Mr. Awand to intercede with Mr. Gage, Ms. Simon’s attorney, to
persuade Mr. Gage not to sue him in connection with Petitioner’s treatment of Ms.
Simon. Petitioner believed that Mr. Awand would seek to influence Mr. Gage by
referring personal injury cases to him. Mr. Awand agreed to approach Mr. Gage. L.G.
Ex. 2 at 9-10.

During or after a meeting between Petitioner and Mr. Gage that took place in the fall of
2001, Mr. Gage told Petitioner that he had obtained an expert who would testify that
Petitioner had fallen below the applicable standard of care in providing care to Ms.
Simon. This revelation confirmed Petitioner’s belief that Mr. Gage could bring a
successful malpractice suit against him. However, Petitioner was not sued, and Petitioner
believed that Mr. Gage’s decision not to file suit against him was influenced by Mr.
Gage’s financial relationship with Mr. Awand. Petitioner believed that referrals from Mr.
Awand to Mr. Gage influenced Mr. Gage’s decision not to file suit against him. He also
believed that this relationship between Mr. Awand and Mr. Gage created a conflict of
interest for Mr. Gage that Mr. Gage concealed from Ms. Simon. I.G. Ex. 2 at 10.

Subsequently, Petitioner drafted a “Letter of Complaint” to help Mr. Gage bring a lawsuit
against other health care providers who were involved in providing care to Ms. Simon.
Petitioner intentionally omitted from this letter material information about his meeting
with Mr. Gage and about Ms. Simon’s condition as it pertained to the August 9, 2000

surgery that Petitioner had performed on her. Petitioner caused Mr. Awand to mail or fax
this letter from Colorado to Mr. Gage in Nevada. The “Letter of Complaint” was an
affirmative act of concealment giving rise to misprision of a felony. 1.G. Ex. 2 at 10.

Petitioner’s admissions establish that fraud was the essence of his felony conviction.
What Petitioner concealed and failed to report was a scheme to defraud Ms. Simon.
Petitioner not only knew about that scheme and failed to report it, but he was an integral
element of the scheme. Through his relationship with Mr. Awand, Petitioner helped
create a conflict of interest between Ms. Simon’s attorney and Ms. Simon that induced
the attorney not to file suit against Petitioner. Petitioner materially abetted the fraud
perpetrated by Mr. Gage by drafting a letter that concealed or omitted material facts and
that Mr. Gage could use to further his interests.

The facts also establish unequivocally that the remaining necessary element of an
1128(a)(3) offense — a felony conviction that is in connection with a health care item or
service — is present. The foundation of Petitioner’s crime was the surgery he performed
on Ms. Simon. There would never have been a basis for Mr. Gage to contemplate suing
Petitioner had Petitioner not provided medical care to Ms. Simon. Petitioner’s care of
Ms. Simon was thus an essential fact, something that had to exist for all that followed to
have occurred. There is thus a direct relationship between Petitioner’s treatment of Ms.
Simon and his felony conviction.

Petitioner makes numerous arguments challenging the basis for his exclusion. I find
these to be without merit.

First, Petitioner contends that none of the necessary elements of his conviction relate to a
health care item or service. He argues that misprision of a felony has only four necessary
elements. These are that: (a) the principal committed and completed the felony alleged;
(b) the defendant had full knowledge of that fact; (c) the defendant failed to notify the
authorities; and (d) the defendant took an affirmative step to conceal the principal’s
crime. Petitioner contends, effectively, that these four elements can be found in a
vacuum without any consideration of the facts that actually motivated the principal to
commit a crime, and the defendant to conceal them. In short, Petitioner asserts that I
must look no further than the bare bones of his conviction to decide what his conviction
consisted of.

I find this argument to be unpersuasive because it defies reality. In this case, the essential
elements of Petitioner’s conviction clearly involved fraud, and that fraud just as clearly
related to Petitioner’s delivery of health care items or services to Ms. Simon. One would
have to put on blinders to avoid knowing those facts.

Nothing in section 1128(a)(3) suggests that the Act must be read so technically or
narrowly as to ignore the facts that underlie a conviction. Indeed, the purpose of the Act
— to protect beneficiaries from untrustworthy individuals who have committed health care
related crimes — would be vitiated if I were required to read it as narrowly as Petitioner
suggests.

Next, Petitioner argues that there is no conceivable connection between his conviction
and a health care item or service. He premises this argument on the following assertions:
(1) his crime occurred in 2001 or 2002, “well after” the August 2000 surgery that he
performed on Ms. Simon; (2) his conviction involved only the failure to report the crimes
committed by others — Mr. Gage and Mr. Awand — thereby demonstrating that most of
the facts admitted to by Petitioner are irrelevant to his conviction; (3) the crimes of Mr.
Gage and Mr. Awand did not involve the delivery of health care items or services but
only related to the delivery of legal services; and (4) the “crime” allegedly committed by
Mr. Gage and Mr. Awand is not, in fact, a crime because it does not involve either bribes
or kickbacks. Petitioner’s Brief at 11-13.

These arguments are simply not persuasive. First, there is nothing in section 1128(a)(3)
that suggests that a crime loses its relationship to a health care item or service because
some period of time elapses between the underlying health care item or service and the
commission of the crime. Moreover, in this case, the crimes of Mr. Gage and Mr.
Awand, and Petitioner’s involvement in those crimes, occurred in close temporal
proximity — within some months or at most a year or two — with the surgery that triggered
all subsequent events.

Second, Petitioner’s conviction did not involve “only the failure to report the crimes of
others.” P. Brief at 12-13. Petitioner’s admissions make it clear that he was intimately
involved in the planning and execution of those crimes. But, even if Petitioner’s
conviction was predicated only on his failure to report the crimes committed by Mr. Gage
and Mr. Awand, those crimes related directly to the surgery performed by Petitioner.

Third, the crimes of Mr. Gage and Mr. Awand did not involve “only the delivery of legal
services.” P. Brief at 13. This argument by Petitioner is reminiscent of his contention
that one may only look at the narrowest possible legal definition of misprision of a felony
to decide whether the crime relates to the delivery of a health care item or service. The
crimes of Mr. Gage and Mr. Awand — and of Petitioner — all had a direct relationship to
the surgery that Petitioner performed on Ms. Simon. As I have stated, these crimes
would not have been possible but for the fact that Petitioner performed that surgery.

Fourth, I find to be without merit Petitioner’s argument that he cannot be excluded
because the facts that he failed to report are not, in fact, a crime. In effect, Petitioner now
seeks to attack collaterally his conviction by contending that he is not really guilty of any
criminal offense. This is not the forum for that attack. I have no authority to vacate
Petitioner’s conviction nor may I conclude that there is no basis to exclude him on the
ground that he is not really guilty of a crime. The meaning of the Act is plain. It applies
whenever an individual is convicted of an offense that falls within its reach. If that
conviction is voided through an appeal or other legal process, then the Act no longer
applies to it. But, failing that, I may not look behind a conviction to determine whether
the excluded party is lawfully convicted.

Petitioner then argues that the health care services that he provided to Ms. Simon are too
remotely connected to his conviction to satisfy the “in connection with” test of section
1128(a)(3). Petitioner asserts (without citing any authority for his contention) that the
statutory term “in connection with”:

asks both whether there was a close chronological connection with the
delivery of health care services and whether the criminal conduct was likely
to have in any fashion affected the quality or availability of delivered health
care or its reimbursement.

Petitioner’s Brief at 15. The Act says nothing of the kind. The language of section
1128(a)(3) is drafted broadly, and it must be applied broadly absent some qualifying
language in the Act or some other expression of Congressional intent that the Act be
limited in its reach. Petitioner has pointed to nothing that suggests that the Act must be
read so narrowly as he contends.

Here, the nexus between health care items or services and Petitioner’s conviction is
evident. There is a clear and easy to comprehend relationship between the health care
items and services that Petitioner provided to Ms. Simon and his subsequent crime.
There never would have been a scheme involving Petitioner to defraud Ms. Simon or to
conceal that fraud had Petitioner not provided medical care to her. What is plain from
Petitioner’s admission of fact is that he was acutely aware of the possibility that he might
be sued for malpractice related directly to his surgery and that he worked diligently and
unlawfully to deflect a possible suit.

Petitioner cites Andrew Anello, DAB No. 1803 (2001), alleging that this decision, in
which an exclusion based on misprision of a felony was upheld, is clearly distinguishable
from the present case. Petitioner in Ane//o was convicted of misprision of a felony
consisting of failing to report and concealing a fraud against the Medicare program
perpetrated by another individual. Petitioner argues that the valid distinction between
Anello and this case is that, in Anello, the crime that was concealed consisted of fraud that
targeted Medicare directly, whereas, in this case, Medicare is not implicated as a direct
target of Petitioner’s crime or of the crimes of Mr. Gage and Mr. Awand. He concludes
from that asserted distinction that he may not be excluded because his crime — as opposed
to the crime in Anello — neither targeted Medicare nor had an adverse impact on that
program.

The difference between Anello and this case is not a meaningful distinction. The
exclusion imposed in Ane//lo was pursuant to section 1128(a)(1) of the Act and not
section 1128(a)(3). Section 1128(a)(1) mandates exclusions for crimes related to
Medicare or other federally funded health care programs. Here, the exclusion is for fraud
that is committed in connection with a health care item or service. A nexus to a federally
funded health care program is not a necessary element of an exclusion that is imposed
pursuant to section 1128(a)(3).

Petitioner then asserts that the I.G. makes the untenable argument that Petitioner’s crime
was committed in connection with the delivery of a health care item or service because he
agreed to pay substantial restitution as part of his plea agreement. I do not agree with
Petitioner that the I.G.’s case hinges on Petitioner’s payment of restitution. His
conviction meets the statutory criteria for inclusion under section 1128(a)(3) without
considering any restitution that he may have agreed to pay. Therefore, I find it
unnecessary to address this aspect of Petitioner’s arguments in detail.

Next, Petitioner contends that the care that he gave to Ms. Simon was, in fact, within the
applicable standard of medical care and he that committed no malpractice. Petitioner’s
Brief at 19. Petitioner argues further that Ms. Simon is prepared to testify on his behalf
and to support his contention that he did her no harm. This argument is irrelevant.
Petitioner’s conviction is not based on his providing substandard care to Ms. Simon but
on his failure to report a scheme to defraud her and concealing that scheme. As I have
stated, Ms. Simon’s opinion about the care that Petitioner gave to her is irrelevant to the
issues that I must hear and decide.

Petitioner then argues that the I.G. is now applying section 1128(a)(3) to him in a way
that is inconsistent with the I.G.’s applications of this section in other cases. To support
this contention, Petitioner cites to various instances in which he claims that the I.G. failed
to exclude individuals who were convicted of misprision of a felony in circumstances that
are comparable to those of Petitioner’s case. Petitioner’s Brief at 22-25.

I have no authority to address this argument, because, rather than challenging the basis
for the I.G.’s exclusion of Petitioner, it addresses the I.G.’s evaluation of facts in other
cases and his determinations whether to exclude or not to exclude in those cases. The
1.G.’s analyses in cases other than this one are discretionary acts, which I have no
authority to address. 42 C.F.R. § 1005.4(c)(5). My authority is limited to deciding
whether the facts of this case establish a basis for an exclusion pursuant to section
1128(a)(3). As I have discussed, the facts of this case clearly establish grounds for
excluding Petitioner.

Petitioner contends that his crime did not involve the essential element of fraud. Thus,
according to Petitioner, he may not be excluded even if his crime was committed in
connection with the delivery of a health care item or service. In advancing this argument,
Petitioner first asserts the identical contention that he makes on the question of whether
his crime was in connection with the delivery of a health care item or service. He
contends that the elements of the crime of misprision of a felony do not involve fraud.
Thus, according to Petitioner, it would be improper to look behind the four corners of his
conviction to find that his crime related to fraud. Petitioner’s Brief at 27-29.

The problem with this argument is that Petitioner’s conviction plainly involved fraud.
Indeed, the essence of Petitioner’s crime was to conceal a fraud that was being
perpetrated against Ms. Simon by her attorney and Mr. Awand. Petitioner’s misprision of
a felony was a criminal act that abetted and furthered the fraud.

Petitioner then argues that his crime did not involve any financial misconduct. He asserts
that he was only convicted of failing to report the fraud of other individuals and not of
perpetrating financial fraud against Ms. Simon.

Petitioner’s crime certainly involved financial misconduct. The intent of the scheme to
defraud Ms. Simon was to deprive her of the opportunity to obtain financial relief
through a malpractice action against Petitioner. However, it is not strictly speaking
necessary that I decide that Petitioner’s crime constituted financial misconduct. Financial
misconduct is just one of the crimes that are a basis for an exclusion pursuant to section
1128(a)(3). Fraud is, in and of itself, a basis for exclusion, and Petitioner was convicted
of a crime that related to criminal fraud.

Next, Petitioner argues that he did not commit fraud because his acts did not include
withholding material information from Ms. Simons. Petitioner’s Brief at 30. But, that is
not the test for deciding whether Petitioner was convicted of a crime relating to fraud.
Petitioner pleaded guilty to knowing about the wire fraud committed by other individuals,
to concealing material information about that fraud, and to not bringing the fraud to the
attention of a person in authority. I.G. Ex. 2 at 10. That is more than enough to establish
that Petitioner was convicted of a crime relating to fraud.

Petitioner argues that the fraud of others (Mr. Gage and Mr. Awand) cannot be a basis for
excluding Petitioner because he did not commit fraud directly. Petitioner’s Brief at 31. I
do not agree with Petitioner’s contention that he did not participate in fraudulent activity.
He admitted to drafting a letter that concealed facts relevant to his performance as a
physician. Moreover, section 1128(a)(3) does not require that an individual commit fraud
to be excludable. It requires only that the individual be convicted of a crime relating to
fraud. Here, Petitioner effectively abetted the fraud of others by failing to report what he
knew. That is enough to satisfy the statutory test.

Petitioner argues that he is a competent and trustworthy professional who does not merit
exclusion. Petitioner’s Brief at 34-36. Many of the exhibits that Petitioner offers address
that assertion. However, the argument is irrelevant. As a matter of law, an individual
10

who is convicted of an offense as is described at section 1128(a)(3) is deemed to be
untrustworthy. This section of the Act mandates the exclusion of any individual
convicted of a crime that falls within its reach. Thus, the evidence that Petitioner offers
as to his trustworthiness to provide care or as to his professional competence is irrelevant,
and I have excluded it for that reason.

3. I must exclude Petitioner for a minimum period of five years.

Any individual who is convicted of a crime that falls within the reach of section
1128(a)(3) must be excluded for a minimum period of five years. Act

§ 1128(c)(3)(B). The LG. determined to exclude Petitioner for the minimum period, and
therefore, I sustain the exclusion.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Evergreen Commons
(CCN: 33-5110),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-324
Decision No. CR2372

Date: May 20, 2011

DECISION

Petitioner, Evergreen Commons (Petitioner or facility), is a long-term care facility,
located in East Greenbush, New York, that participates in the Medicare program. Based
on a survey completed October 22, 2009, the Centers for Medicare and Medicaid
Services (CMS) determined that the facility was not in substantial compliance with
Medicare program requirements and that some of its deficiencies posed immediate
jeopardy to resident health and safety. Among other problems, CMS found that the
facility did not have in place an effective system for identifying its residents’ advance
directives. In CMS’s view, the absence of a coherent system put facility residents at risk,
because staff would not necessarily know whether to resuscitate a resident in respiratory
or coronary distress.

Based on its deficiencies, CMS imposed against the facility a per instance civil money
penalty (CMP) of $10,000.

Petitioner challenges four deficiencies that were cited at the immediate jeopardy level (42
C.F.R. §§ 483.25, 483.75, 483.75(d) and 483.75(0)(1)), as well as the immediate jeopardy
determination itself.

For the reasons set forth below, I find that the facility was not in substantial compliance
with the challenged program requirements. Petitioner has not challenged the amount of
the penalty, and I have no authority to review the immediate jeopardy finding.

I. Background

The Social Security Act (Act) sets forth requirements for nursing facility participation in
the Medicare program and authorizes the Secretary of Health and Human Services to
promulgate regulations implementing those statutory provisions. Act § 1819. The
Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the Medicare
program, a nursing facility must maintain substantial compliance with program
requirements. To be in substantial compliance, a facility’s deficiencies may pose no
greater risk to resident health and safety than “the potential for causing minimal harm.”
42 CFR. § 488.301.

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act § 1864(a);
42 C.F.R. § 488.20. The regulations require that each facility be surveyed once every
twelve months and more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a), 488.308.

Here, following a recertification survey completed October 22, 2009, CMS determined
that the facility was not in substantial compliance with multiple Medicare participation
requirements, specifically:

© 42 C.F.R. § 483.10(b)(11) (Tag F157 — resident rights, notification of changes) at
a D level of scope and severity (isolated instance of noncompliance that causes no
actual harm with the potential for more than minimal harm);

© 42C.F.R. § 483.15(a) (Tag F241 — dignity and respect of individuality) at an E
level of scope and severity (pattern of noncompliance that causes no actual harm
with the potential for more than minimal harm);

© 483.20(k)(3)(i) (Tag F 281 — comprehensive care plans — professional standards)
at an E level of scope and severity;

e 42 C.F.R. § 483.25 (Tag F309 — quality of care) at an L level of scope and severity
(widespread noncompliance that poses immediate jeopardy to resident health and
safety);
e 42 C.F.R. § 483.25(j) (Tag F327 — hydration) at a D level of scope and severity;

e 42 C.F.R. § 483.25(m)(1) (Tag F332 — medication errors) at an E level of scope
and severity;

e 42 C.F.R. § 483.25(m)(2) (Tag F333 — medication errors) at a D level of scope and
severity;

e 42 C.F.R. § 483.75 (Tag F490 — administration) at an L level of scope and
severity;

e 42C.F.R. § 483.75(d) (Tag F493 — governing body) at an L level of scope and
severity;

e 42 C.F.R. § 483.75(1)(1) (Tag F514 — administration, clinical records) at an E level
of scope and severity; and

e 42 C.F.R. § 483.75(0)(1) (Tag F520 — quality assessment and assurance) at an L
level of scope and severity.

CMS Exhibit (Ex.) 1.

CMS has also determined that, prior to completion of the survey, the facility’s
deficiencies no longer posed immediate jeopardy and that the facility returned to
substantial compliance on December 4, 2009. CMS Exs. 2, 3.

CMS has imposed against the facility a per instance CMP of $ 10,000. CMS Exs. 3, 5,
54.

Petitioner timely requested a hearing to challenge four deficiencies that were cited at the
immediate jeopardy level: 42 C.F.R. § 483.25 (Tag F309 — quality of care); 42 C.F.R. §
483.75 (Tag F490 — administration); 42 C.F.R. § 483.75(d) (Tag F493 — governing body);
and 42 C.F.R. § 483.75(0)(1) (Tag F520 — quality assessment and assurance). Petitioner
also challenged CMS’s determinations as to the scope and severity of those deficiencies.

The parties agree that this matter may be decided based on the written record, without
need for an in-person hearing.

I admit into evidence CMS Exhibits (CMS Exs.) 1-18 and Petitioner’s Exhibits (P. Exs.)
1-22. The parties have filed written briefs (CMS Br.; P. Br.).
IL. Issue

Petitioner did not appeal seven deficiencies that were cited at scope and severity levels
that constitute substantial noncompliance. Based on these un-appealed deficiencies, the
facility was not in substantial compliance with Medicare program requirements.

42 C.F.R. § 498.20(b). The only issue before me is whether, at the time of the survey, the
facility was in substantial compliance with 42 C.F.R. §§ 483.25 (quality of care), 483.75
(administration), 483.75(d) (governing body), and 483.75(0)(1) (quality assessment and
assurance).

Petitioner’s hearing request did not explicitly challenge the reasonableness of the CMP.'
Its brief does not address the issue. Without objection from either party, I left open the
possibility that Petitioner could nevertheless pursue the issue. Order Summarizing
Prehearing Conference (August 25, 2010) at 2. Thereafter, however, Petitioner opted to
rest its case on its initial submissions and presented no argument challenging the amount
of the CMP. The issue is therefore not before me.

I discuss below why I lack authority to review CMS’s finding of immediate jeopardy.

Finally, Petitioner complains about the conduct of the survey. Survey performance does
not relieve the facility of its obligation to meet all requirements for program participation
nor does it invalidate adequately documented deficiencies. 42 C.F.R. § 488.318(b).”

' With respect to this issue, Petitioner complained that the penalty imposed “is not
attached to any particular noncompliance” and argued “CMS should not be entitled,
through this vagueness, to frustrate any challenge to any aspect of the findings.” Hearing
Request at 6. Nothing precludes CMS from imposing one per-instance penalty for all of
the cited deficiencies, and the agency’s choice of remedy is not reviewable. 42 C.F.R. §
488.408(g)(2).

> Moreover, as the Departmental Appeals Board (Board) recently noted with approval,
the Administrative Law Judge’s “de novo evaluation of the evidence ‘insulates a facility
from the effect of any perceived disparate treatment or bias on the part of the state survey
agency or CMS.”” Jewish Home of E. Pa., DAB No. 2380 at 7 n.3 (2011) (quoting DAB
CR 2242 (2010)).
II. Discussion

A. CMS’s scope and severity finding is not reviewable in this
forum?

Petitioner bitterly disputes CMS’s determination that the facility’s deficiencies posed
immediate jeopardy to resident health and safety, arguing that the deficiencies should
have been cited (if at all) at a lower level of scope and severity. I have no authority to
review the immediate jeopardy finding in this case. An Administrative Law Judge (ALJ)
may review CMS’s scope and severity findings (which include a finding of immediate
jeopardy) only if a successful challenge would affect the range of the CMP, or if CMS
has made a finding of substandard quality of care that results in the loss of approval of a
facility’s nurse aide training program. 42 C.F.R. § 498.3(b)(14), (d)(10); Cedar Lake
Nursing Home, DAB 2344 at 9 (2010), appeal dismissed, Cedar Lake Nursing Home v.
Dep’t of Health & Human Servs., No. 10-60112 (5th Cir. Filed Sept. 13, 2010) (finding
ALJ and Board decisions not arbitrary and capricious); Evergreen Commons, DAB No.
2175 (2008); Aase Haugen Homes, DAB No. 2013 (2006). Here, the penalty imposed is
a per instance CMP, for which the regulations provide only one range ($1,000 to
$10,000), so the level of noncompliance does not affect the range of the CMP. 42 C.F.R.
§ 488.438(a)(2).

Nor does CMS’s scope and severity finding affect approval of the facility’s nurse aide
training program. At the time of the October survey, the facility did not have in place a
nurse aide training program. The facility had apparently proposed one, but, for reasons
unrelated to the survey findings, the state agency did not process the application.*
Moreover, because CMS has imposed a $10,000 CMP here, the state agency could not
approve the facility’s nurse aide training program. Without regard to CMS’s finding of
substandard quality of care (see CMS Ex. 4), a state may not approve a facility’s program
if that facility has been assessed a CMP of $5,000 or more. Act § 1819(f)(2)(B);

42 CFR. § 483.151(b)(2)(iv).

Petitioner also argues that the Constitution’s due process clause entitles it to review of
CMS’s scope and severity determination. I have no authority to address constitutional
issues. Hermina Traeye Mem’! Nursing Home, DAB No. 1810 at 20-22 (2002).

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

* Ina letter dated October 15, 2009, the state agency listed necessary revisions to the
facility’s proposed program. P. Ex. 15.
B. The facility was not in substantial compliance with
Medicare requirements governing quality of care and
administration because it did not have in place a reliable
system for identifying a resident’s advance directive.

Program requirements. Under the statute and “quality of care” regulation, each resident
must receive, and the facility must provide, necessary care and services to attain or
maintain for each resident the highest practicable physical, mental, and psychosocial
well-being, in accordance with the resident’s comprehensive assessment and plan of care.
Act § 1819(b); 42 C.F.R. § 483.25. The regulation imposes on facilities an affirmative
duty designed to achieve favorable outcomes “to the highest practicable degree.”
Windsor Health Care Ctr., DAB No. 1902 at 16-17 (2003), aff'd, Windsor Health Care
Ctr. v. Leavitt, No. 04-3018 (6th Cir. 2005); Woodstock Care Ctr., DAB No. 1726 at 25-
30 (2000), aff’d, Woodstock Care Ctr. v. Thompson, 363 F.3d 589 (6th Cir. 2003).

The 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. 42 C.F.R. § 483.75. To this end, the
facility must have a governing body, or designated persons functioning as a governing
body, that is legally responsible for establishing and implementing policies regarding the
management and operation of the facility. 42 C.F.R. § 483.75(d). The governing body
appoints an administrator who is responsible for the facility’s management. 42 C.F.R.

§ 483.75(d)(2).

The facility must also have in place a quality assessment and assurance committee made
up of the director of nursing (DON), a physician, and at least three other staff members.
The committee must meet at least quarterly to identify issues for which quality
assessment and assurance activities are necessary. It develops and implements
appropriate plans of action to correct identified quality deficiencies. The committee is
not required to disclose its records to CMS or the state agency “except in so far as such
disclosure is related to” the committee’s compliance with the requirements of 42 C.F.R.
§ 483.75. The committee’s good faith attempts to identify and correct quality
deficiencies cannot be used as a basis for sanctions. 42 C.F.R. § 483.75(0).

The facility’s policies and procedures for identifying and following residents’ advance
directives. CMS charges that the facility was not providing the level of care and services
required by 42 C.F.R. § 483.25 and that it was not administered in a manner that enabled
it to use its resources effectively and efficiently to attain or maintain the highest
practicable well-being of each resident, as required by 42 C.F.R. § 483.75, because it had
no effective system in place to ensure that staff identified and followed the residents’
advance directives. An “advance directive” is a written instrument (e.g., living will,

durable power of attorney for health care), recognized under state law, relating to the
provision of health care when the individual is incapacitated. 42 C.F.R. § 489.100.
Petitioner agrees that “it is crucially important that nursing homes have in place policies
and procedures designed to ensure that the wishes of their residents, both for DNR [do
not resuscitate] and CPR [cardio-pulmonary resuscitation], are accurately recorded, made
accessible, and implemented as desired by the residents.” P. Ex. 2 at 3 (Dolamore Decl. J
14). A facility’s written policies and procedures evidence the practices the facility
considers necessary to ensure the health and safety of its residents. See Woodland Oaks
Healthcare Facility, CR 2175 at 5 n.3 (2010), aff'd, DAB No. 2355 (2010).

Here, CMS has produced two documents, both dated February 2000 and identified as the
facility’s policies and procedures for ensuring that CPR be administered to all residents in
distress except those designated DNR. CMS Ex. 5 at 1-2, 3-5. The policies are similar.
Both say that only a registered or licensed practical nurse is authorized to perform CPR;
in addition, both designate the DON as the person “responsible to ensure full compliance
of the policy and procedure.” CMS Ex. 5 at 1, 3. Both include procedures that call for
color-coded wristbands, and, according to both, a blue wristband means that the person
should be resuscitated. Both say that, if the resident refuses to wear a wristband, staff
must immediately check the resident’s medical record and that staff must immediately
administer CPR to any resident without a DNR order who suffers cardiac and/or
pulmonary arrest. CMS Ex. 5 at 2, 4.

The policies differ in their instructions for identifying residents with DNR orders. One
says that a white wristband means that the resident has a current DNR order and that a
white dot on the binder of the resident’s medical record also indicates a DNR order.
CMS Ex. 5 at 2. In contrast, the other policy says nothing about wristbands (of any
color) for residents designated DNR and says that a red dot on the resident’s medical
record indicates that the resident has a current DNR order. CMS Ex. 5 at 4.

Petitioner does not comment on either of the written policies, but the policy it claims to
have implemented combines an element of each. According to the facility’s chief
executive officer (CEO), Anthony Scalera, and its (then) DON, Serena Hamel, a white
wristband signified DNR. P. Ex. 1 at 3 (Hamel Decl. ¥ 13); P. Ex. 3 at 2 (Scalera Decl. J
8). They also say that a red dot on the spine of the resident’s chart meant that the resident
was DNR, and that the absence of a dot meant that the resident should be resuscitated. P.
Ex. | at 3 (Hamel Decl. ¥ 12); P. Ex. 3 at 2 (Scalera Decl. § 6). Further, the medical
orders for life-sustaining treatment were in the resident charts on hot pink forms so that
staff could find them quickly. P. Ex. 1 at 3 (Hamel Decl. § 11); P. Ex. 3 at 2 (Scalera
Decl. {| 7); see CMS Ex. 6. Both DON Hamel and CEO Scalera claim that errors
regarding a resident’s wristband or the dot on his/her chart were of minor significance
because: 1) the nurses knew the residents well enough to know their advance directives;°
and 2) nurses were always expected to check the chart before deciding whether to
administer CPR. P. Ex. 1 at 2-3 (Hamel Decl. {9 9, 12, 16); P. Ex. 3 at 2-3 (Scalera Decl.
995, 7, 13).

But these claims are not consistent with either version of the facility’s written policy.
Neither written policy tells staff to check the resident’s medical record in all cases of
emergency. Instead, they direct staff to check the resident’s identification band. CMS
Ex. 5 at 2, 4. Checking the medical record is limited to instances in which “the resident
refuses to wear an identification band.” CMS Ex. 5 at 2, 4.°

Although not mentioned in either written policy, the surveyors also observed an advance
directive list posted on the bulletin board at the nurses’ station. CMS Ex. 14 at 7, 8 (Hale
Decl. § §] 25, 33). The facility administrator, Richard Sents, confirmed that facility staff
used these lists to determine a resident’s advance directive. He told Surveyors Vicki
Nash, John DeBellis, and Lynne Robbins that each unit made up its own list, so they
were not uniform. CMS Ex. 15 at 8-9 (Nash Decl. § 29).

The residents’ wristbands. In light of the above, it is not surprising that the surveyors
observed a confusing and inconsistent use of colored wristbands:

Resident 130 (R130). R130 was “full code,” which means that staff were to provide her
full CPR, without limitation. CMS Ex. 7 at 54-58. On October 15, 2009, Surveyors Amy
Hale and Vicki Nash observed both a white wristband and a blue wristband on the side of
R130’s wheelchair. They saw a third wristband — white with a red dot -- on the back of

> In an emergency, relying on a nurse’s memory is not sufficient to assure that staff
accurately determine the resident’s wishes. Memories fail, and advance directives
change. Even DON Hamel concedes that “some nurses float” and “don’t necessarily
know the wishes of each of their charges,” so “it is important” that the nurse confirm the
resident’s wishes when an emergency occurs. P. Ex. | at 2 (Hamel Decl. 10).

® Again, however, the two policies diverge. One simply says to check the medical record
if the resident refuses to wear an identification band. CMS Ex. 5 at 4. The other instructs
staff that the resident’s “medical record must be checked immediately and care planned”
if the resident in distress has no wristband. I assume that this provision means that, when
a resident refuses to wear a wristband, his care plan should address that problem, and,
presumably, the plan should be developed at some time other than during a medical
emergency.
the wheelchair. R130 had no wristband on her body. CMS Ex. | at 21-22; CMS Ex. 14
at 5 (Hale Decl. 16); CMS Ex. 15 at 7 (Nash Decl. § 23).”

Resident 123 (R123). Surveyor Hale observed that R123 had a blue wristband on her
wrist. An undated advanced directive list on the nurses’ station bulletin board identified
er as full code. CMS Ex. 14 at 7 (Hale Decl. § 24-25). Her chart, however, included
DNR orders dated December 1, 2008. CMS Ex. 8 at 15-23.

Resident 147 (R147). Surveyor Hale saw that R147 had both a blue wristband and a

white wristband with a red dot on the side of his walker. CMS Ex. 14 at 8 (Hale Decl. {
29). According to his medical chart, he was DNR. CMS Ex. 9 at 17-24; CMS Ex. 14 at
8 (Hale Decl. 28).

Resident 124 (R124). Resident 124’s medical record indicated that he was full code, and
e had a blue wristband on his wrist. But he was not included among the full code
residents on the advance directive list kept at the nurses’ station. CMS Ex. 11 at 5-9;
CMS Ex. 14 at 8 (Hale Decl. {ff 32, 33).

With respect to the advance directive list’s failure to include R124 as full code, Petitioner
suggests that it is unaware of the advance directive lists and argues, disingenuously, that
the surveyors “apparently consulted some other document, which is not included in their
submission and is not used by the staff to make clinical decisions and were concerned
about its contents.” P. Br. at 15. Not so. CMS specifically identified the document to
which it refers — the advance directive list kept at the nurses’ station. Surveyor Hale
testified that the surveyors asked Facility Administrator Sents about those lists, and he
confirmed that staff used them to determine a resident’s advance directive. CMS Ex. 15
at 8-9 (Hale Decl. § 29). Neither Administrator Sents (who offered no testimony) nor
any of Petitioner’s witnesses denies the existence of the advance directives lists, and no
evidence challenges Administrator Sents’s statement that staff used the lists to identify
the residents’ CPR status. If the assertion were untrue, I would expect DON Hamel or
some other member of the nursing or administrative staff to have challenged it, but no
one did. See P. Ex. 1 (Hamel Decl.); P. Ex. 2 (Dolamore Decl.); P. Ex. 3 (Scalera Decl.);
P. Ex. 4 (Locke Decl.).

I agree with CMS that the existence of such lists, not incorporated into any articulated
facility policy, is likely to cause confusion, especially where, as with R124, the list
inaccurately reflects the resident’s code status.

7 Although apparently a common practice at the facility, neither version of the facility’s
written policy suggests that a resident’s CPR status be designated by attaching a colored
wristband to the resident’s wheelchair or walker.
10

Resident 96 (R96). R96’s chart included a physician DNR order. CMS Ex. 10 at 89;
CMS Ex. 15 at 5 (Nash Decl. § 16). On October 16, Surveyor Nash saw that R96 had no
wristband in place. She asked Certified Nursing Assistant (CNA) Arlene Waters about
the missing wristband, but CNA Waters said that she did not know where it was. CMS
Ex. 15 at 6 (Nash Decl. § 19). The following day, Surveyor Nash again saw R96 without
a wristband. She asked staff about it, and a CNA said that R96 did not usually wear a
band, but was supposed to have it replaced that day. CMS Ex. 15 at 6 (Nash Decl. § 21).

On October 20, another employee, RN Manager Darla Starson, told Surveyor Nash that,
on October 16, she put a wristband on R96, and she did not know why it was missing
because R96 was not someone who removed her wristband. CMS Ex. 13 at 49; CMS Ex.
15 at 6-7 (Nash Decl. § 22). R96’s care plan did not indicate that she would not wear a
wristband, and it did not call for any alternative placement. CMS Ex. 15 at 6-7 (Nash
Decl. § 22). See CMS Ex. 10 at 6-58, 127-81.

Resident 159 (R159). According to her medical record, R159 was full code. CMS Ex.
12 at 7, 25; CMS Ex. 14 at 9 (Hale Decl. § 36). Her care plan also said that she tended to
remove her wrist bracelet. Among other interventions, the plan directed staff to put a
bracelet on her wheelchair. CMS Ex. 12 at 5. Surveyor Hale observed R159 without a
wristband. The resident told staff that she left it on her washstand. She had no bracelet
on her wheelchair. CMS Ex. 13 at 1, 27; CMS Ex. 14 at 9 (Hale Decl. § 35).

Petitioner points out that ensuring the accuracy of the residents’ armbands is not a simple
matter. Residents are able to remove them, and some did so frequently. P. Br. at 4. For
those residents, the facility placed the band on the resident’s wheelchair. According to
Petitioner, this solution may have created an additional problem, because the wheelchair
could also have on it a clear tag, identifying the wheelchair’s owner. P. Ex. 3 at 4
(Scalera Decl. § 20). Petitioner speculates that the surveyors may have mistaken these
clear tags for white DNR tags. But Petitioner offers no support for this theory. The
surveyors specifically and unambiguously described the tags they saw and said exactly
where they were located. No facility employee or other witness disputes those surveyor
observations. Indeed, Surveyors Hale and Nash say that they showed (then) Assistant
DON (ADON) Nora Locke the multiple, inconsistent wristbands affixed to R130’s
wheelchair, that she explained the significance of each tag, and that she conceded that
there would be confusion if the resident went into cardiac arrest. CMS Ex. 14 at 6 (Hale
Decl. §] 20); CMS Ex. 15 at 7 (Nash Decl. § 24). ADON Locke does not deny that
surveyors showed her R130’s three wristbands affixed to the wheelchair (a blue, a white,

11

and a white with a red dot). She challenges only the claim that she said the situation
would be confusing. P. Ex. 4 at 3 (Locke Decl. 4 12, 13).*

Petitioner points to some additional steps the facility took to insure that its residents’
wristbands were in place. In administering medications, nursing staff were supposed to
identify the resident by reading his/her wristband. P. Ex. 14 at 2. Staff checked weekly
to insure that accurate wristbands were in place and that they accurately reflected the
residents’ advance directives, as evidenced by weekly checklists. P. Ex. 3 at 3 (Scalera
Decl. f[ 9, 10); P. Ex. 10. It seems that these procedures were not particularly effective,
at least with respect to the residents discussed above. For example, according to the
weekly checklist, R159’s wristband was always in place. P. Ex. 10 at 1-17. Staff had to
replace it only once (on October 30, 2009 — after the time of the survey), because the
resident’s room number changed, not because the resident had removed it. P. Ex. 10 at
18. Similarly, according to the weekly audit documents, R130’s wristband was always in
place. P. Ex. 10 at 1-18. Yet, she was observed without a wristband on her body, but had
multiple bands on her wheelchair.

Staff understanding of the facility policies. The surveyors also questioned staff about the
facility procedures for determining a resident’s advance directive. Some staff were able
to describe the facility’s policies and procedures (at least as articulated by DON Hamel
and CEO Scalera). However, others were sufficiently confused to present the potential
for more than minimal harm.

ADON Locke told Surveyors Hale and Nash that a white wristband meant DNR and a
blue wristband meant provide CPR. She also explained that the white band with the red
dot was from an older system, no longer in use, that identified the resident as DNR. CMS
Ex. 13 at 3; CMS Ex. 14 at 6 (Hale Decl. § 20); CMS Ex. 15 at 7 (Nash Decl. § 24).

An RN Manager, identified as “Annette” or “RNM #3,” told surveyor Hale that residents
with blue wrist bands were full code, which meant that staff should perform CPR and that
the charts of DNR residents had a red dot on the spine. Initially, she said that a white
wristband meant that the resident was DNR. CMS Ex. 14 at 5-6 (Hale Decl. § 18). But
she later corrected herself and told surveyor Hale that a white wristband with a red dot
affixed to a wheelchair meant that the resident was DNR, and that the white wristband on
the wheelchair just meant that the wheelchair belonged to the resident. CMS Ex. 14 at 6
(Hale Decl. { 18).

® According to ADON Locke, “the surveyors [put] words in my mouth... . In fact, what
I explained to them was that in these circumstances, the nurses are trained to check the
patient’s medical record. There would not be confusion, but instead, an appropriate
response.” P. Ex 4 (Locke Decl. J 12, 13).
12

RN Manager Starson told Surveyor Nash that the facility used a dot system to distinguish
residents with DNR orders from residents wishing to be resuscitated. A red dot on the
wristband and spine of the medical record meant that the resident had a DNR order; a
green dot on the wristband and spine of the chart indicated resuscitate. CMS Ex. 13 at
25; CMS Ex. 15 at 5 (Nash Decl. § 17). RN Manager Starson also told Surveyor Nash
that, if a resident did not wear a wristband, the band should be placed on the resident’s
wheelchair, walker, or other chair, and that information should be recorded in the
resident’s care plan. CMS Ex. 15 at 6-7 (Nash Decl. § 22).

Petitioner did not offer RN Manager Starson as a witness but submits an undated,
unauthenticated written statement, in which she claims that she initially told surveyors
that a red band indicated DNR, but she “immediately corrected herself and stated a white
band.” She also claims to have told the surveyors that a blue band indicates full code. P.
Ex. 9.

An LPN, identified as “Tori” or “LPN #2,” told Surveyor Hale that either a blue
wristband or a white wristband with a red dot meant that the resident was DNR. CMS
Ex. 14 at 6, 8 (Hale Decl. § 19, 30); CMS Ex. 13 at 3. Petitioner challenges this,
claiming that the surveyor notes establish that LPN #2 told the surveyors that, in an
emergency, she would check the resident’s binder. P. Br. at 17. In fact, the surveyor
notes are generally consistent with the surveyor’s declaration. They identify “LPN Tori”
as the speaker and indicate that she was interviewed at noon. According to the notes, she
said that she “would check the name band if resident was not breathing” and that she
would also look for a red dot on the chart. She said that: a white wristband with a red
dot means DNR; a red dot on the spine of the chart means DNR; and blue band also
means DNR. CMS Ex. 13 at 3. The notes do not mention checking any portion of the
chart other than the outside binder. Petitioner has not presented a denial from LPN #2 or
any other evidence indicating that her answer differed from that represented by the
surveyors and their notes.

Another LPN, identified as “Chie Ner” or “LPN #6,” told surveyor Hale that a red dot on
the resident wristband meant that the resident was full code. He said he was unsure
whether a resident’s DNR status had a color code or was otherwise reflected on the
resident’s wristband. He said that he would consult the resident chart. CMS Ex. 14 at 6-
7 (Hale Decl. § 21); CMS Ex. 13 at 2.

CNA Randy Ford told Surveyor Nash that the facility had trained her in CPR some years
before and that, if she found an unresponsive resident, she would call the nurse and start
CPR. She said that a blue wristband meant that the resident was DNR, and a red
wristband meant that the resident should be resuscitated. CMS Ex. 13 at 26, 72; CMS
Ex. 15 at 5-6 (Nash Decl. § 18).
13

CNA Desiree Bekalaze told Surveyor Nash that, if she found an unresponsive resident,
she would start CPR, call a nurse, or scream and have another CNA stay with the
resident. She would ask the nurse whether the resident was DNR, because she was not
sure about the meanings of the colored dots on the resident wristbands. CMS Ex. 13 at
25; CMS Ex. 15 at 6 (Nash Decl. § 20).

According to Surveyors Hale and Nash, DON Hamel also told them that CNAs were
allowed to perform CPR if they were certified. CMS Ex. 14 at 7 (Hale Decl. § 27). DON
Hamel denies saying this. She claims that the surveyors misunderstood her when she told
them that the facility offers its CNAs access to the CPR training that it provides to the
licensed staff. P. Ex. 1 at 6 (Hamel Decl. {ff 32, 33).

According to the surveyors, Administrator Sents understood that only licensed nurses
could perform CPR and said that he expected that they would know how to do so. He
was unsure about staff training and could not say that drills had been conducted to
evaluate staff response to a cardiopulmonary event. He dismissed the surveyors’
concerns about his staff’s errors in describing the facility policy and procedures, claiming
that the surveyors made them nervous. He expressed confidence that staff would respond
correctly, even if a resident wore the wrong wristband, because they would know the
resident. CMS Ex. 15 at 8-9 (Nash Decl. § 29, 30).

Notwithstanding these staff responses, Petitioner claims that it made “significant efforts”
to ensure that its staff knew the meaning of the color-coding. According to Erin Marro,
RN, the facility’s in-service coordinator, new employees are told, as part of their general
orientation, that a blue wristband means full code, a white wristband means DNR, and a
red dot on the resident’s binder means DNR. P. Ex. 5 at 2 (Marro Decl. 5, 6). She
then repeats the information during the employees’ annual reviews. She gives staff a
written test that includes a question about the significance of the colored wristbands. P.
Ex. 5 at 2 (Marro Decl. §§ 10, 11, 12). She concedes that some staff did not answer the
question correctly, but maintains that the vast majority did. P. Ex. 5 at 3 (Marro Decl. 4
13).

Quality of Care. As the above discussion shows, the facility lacked a coherent and
consistent policy for identifying, and thus honoring, its residents’ advance directives.
Instead, it had in place two inconsistent written policies, neither of which accurately
reflected what Petitioner claims were the facility’s actual practices. In practice, resident
preferences were not consistently and accurately designated. Staff were not uniformly
familiar with the procedures they were supposed to be following. The facility was thus
unable to assure that advance directives would be followed. Since the facility lacked the
capacity to provide the necessary care and services called for in it residents’ assessments
and plans of care, it was not in substantial compliance with 42 C.F.R. § 483.25.

14

Petitioner suggests that its shortcomings with respect to identifying advance directives
presented the potential for no significant harm, because administering CPR to a nursing
home resident is generally futile. I reject Petitioner’s argument. In Woodland Oaks, the
Board recognized a “bright-line rule” with respect to treating its residents in distress: a
patient without a do-not-resuscitate order must be administered CPR, unless that resident
is irreversibly dead. Woodland Oaks Healthcare Facility, DAB No. 2355 at 16 (2010).

Petitioner also argues that CMS wrongly cited the quality of care regulation, because no
full code resident was, in fact, denied the requested treatment. According to Petitioner,
the portion of the State Operations Manual (SOM) relating to surveyor review of

42 C.F.R. § 483.25 (Tag F309) “makes no mention at all of advance directives,” but
directs the surveyors to the “more detailed requirements of other sections. ...” P. Br. at
7. From this, Petitioner argues that a deficiency can be cited under this tag number only
if someone makes “an actual improper care decision.” Jd. at 10. Short of that, issues
regarding advance directives should be reviewed only under tags F155 (42 C.F.R.

§ 483.10(b)(4)) and F156 (42 C.F.R. § 483.10(b)(1)). Petitioner’s arguments fail for
multiple reasons.

First, the SOM provides useful guidance as to CMS’s interpretations of applicable law,
but its provisions do not constitute enforceable, substantive rules. Beverly Health and
Rehab. Servs. v. Thompson, 223 F. Supp. 2d 73, 99-106 (D.D.C. 2002); Oakwood Cmty.
Ctr., DAB No. 2214 at 16 (2008); Aase Haugen Homes, Inc., DAB No. 2013 at 15.

Second, Petitioner is simply wrong in claiming that the SOM does not mention advance
directives under its discussion of the quality-of-care regulation. The manual specifically
recommends that surveyors “use guidance at F309 (of the SOM) for review of quality of
care not specifically covered by 42 C.F.R. § 483.25(a)-(m). Tag F309 includes, but is not
limited to, care such as end-of-life. .. .” SOM, Appendix PP at 146. The facility’s
ability to recognize and follow a resident’s advance directive is a critical aspect of end-
of-life care.

Finally, although other regulations specifically address the resident’s right to refuse
treatment (including end-of-life treatment) and, to this end, require that the facility have
in place written policies and procedures to assure that residents are afforded those rights,
it does not follow that the facility’s failure to have such policies in place implicates only
that one regulation. To the contrary, if a facility lacks the capacity to honor a resident’s
advance directive, it is not providing the care and services the resident needs to maintain
his/her highest practicable well-being in accordance with his/her comprehensive
assessment and plan of care. This puts the facility out of substantial compliance with

42 C.F.R. § 483.25. CMS need not wait until a resident is improperly treated before
citing that deficiency.
15

stration. The facility’s governing body, its administrator, and its quality
assessment (QA) committee were responsible for insuring that the facility had in place
the necessary policies and procedures for assuring that residents’ advance directives
would be honored. Because these institutions did not meet their responsibilities, the
facility was not in substantial compliance with 42 C.F.R. §§ 483.75, 483.75(d), and
483.75(0)(1); Jewish Home, DAB No. 2380 at 10-11 (holding that the facility was not in
substantial compliance with section 483.75(0) because its QA committee was not doing
what the regulation requires), accord, Alexandria Place, DAB No. 2245 at 22 (2009); see
also Woodland Oaks Healthcare Facility, DAB No. 2355 at 17; Stone County Nursing
and Rehab. Ctr., DAB No. 2276 at 15-16 (2009) (holding that a deficiency citation
alleging noncompliance with section 483.75 may be derived from findings of
noncompliance with other participation requirements).

IV. Conclusion

The parties agree that the facility was not in substantial compliance with the following
Medicare program requirements: 42 C.F.R. §§ 483.10(b)(11); 483.15(a); 483.20(k)(3)(i);
483.25(j); 483.25(m)(1); 483.25(2); and 483.75(1)(1). On that basis alone, CMS could
appropriately impose a penalty.

With respect to the cited deficiencies that Petitioner challenges, I find that, based on the
evidence discussed above, the facility was not in substantial compliance with 42 C.F.R.
§§ 483.25, 483.75, 483.75(d), and 483.75(0)(1).

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Health Connect at Home
(Provider No. 28-7011),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-165
Decision No. CR2371

Date: May 18, 2011

DECISION

Petitioner, Health Connect at Home, appeals an October 28, 2010 reconsideration
decision. I sustain the determination of the Centers for Medicare and Medicaid Services
(CMS) to revoke Petitioner’s Medicare enrollment and billing privileges. I do so because
Petitioner has failed to show that it met all Medicare enrollment requirements.

I. Background and Procedural History

Petitioner is a home health agency located in Kearney, Nebraska, with a branch office
located in Broken Bow, Nebraska. Around July 1, 2009, as part of a corporate
restructuring, Petitioner underwent a change of ownership whereby the home health
business of Good Samaritan Hospital was consolidated into a new entity, and Petitioner
took over both the Kearney and Broken Bow offices. P. Br. at 1; P. Ex. 28, at 1 (Martin
Aff.). Cahaba GBA (Cahaba), the Medicare contractor, received Petitioner’s information
update on form CMS-855A regarding this change of ownership on August 6, 2009, and
Cahaba acknowledged the change of ownership request on April 13, 2010. CMS Ex. 1,
at 1. On July 9, 2010, CMS informed Petitioner that it would send a new provider
agreement following a determination that Petitioner met the ownership disclosure and
civil rights requirements. CMS Ex. 1, at 3-4; P. Ex. 13, at 1.
According to Petitioner, until the week of April 20, 2010, Petitioner’s Kearney office was
located at 5 West 31" Street. P. Br. at 1; P. Ex. 29, at 1 (Jones Aff.). Petitioner claims
that, during the change of ownership process, a reconstruction project began that involved
the demolition of the building at 5 West 31“ Street. P. Br. at 2; P. Ex. 30, at 2 (Surmeier
Aff.). This construction project caused Petitioner to move to 1755 Prairie View Place in
Kearney. Jd. Petitioner began operating its Kearney office out of the 1755 Prairie View
Place location in late April 2010. Jd. Also, when Petitioner submitted the change of
ownership request to the CMS contractor, Petitioner’s Broken Bow branch office was
located at 145 Memorial Drive in Broken Bow, Nebraska. P. Br. at 6. Petitioner claims
that it moved this office location to 420 South 10 Avenue in Broken Bow around
February 24, 2010 and reported this change of address to the State of Nebraska! but did
not report the change to CMS until August 24, 2010. P. Br. at 6; P. Exs. 17 and 18.

On July 21, 2010, Petitioner’s Director of Homecare, Marjorie Jones, received a phone
call from Diana Moran, a nurse consultant for the division of survey and certification of
CMS. P. Br. at 3. Ms. Moran explained that she had sent the July 9, 2010 letter
regarding the reassignment of the provider agreement to Petitioner at its CMS address of
record at 5 West 31* Street in Kearney, and the letter came back to CMS as undelivered
with no forwarding address. Jd. Ms. Moran then asked Ms. Jones where she should
resend the letter, and, because Petitioner “had just moved to a new address and Ms. Jones
was not sure if mail could be received at the 1755 Prairie View Place address yet, Ms.
Jones explained to Ms. Moran that she should send her correspondence to 10 East 31*
Street in Kearney, which is an address for Good Samaritan Hospital.” P. Br. at 3-4; P.
Ex. 29, at 2-3.

CMS then sent a letter to Petitioner at the 10 East 31“ Street address stating that its
previous letter was returned as not deliverable and informing Petitioner that it needed to
submit a CMS-855A that includes a notification of the change in address. P. Ex. 14.
Subsequently, on July 31, 2010, a Cahaba investigator attempted an on-site review of
Petitioner’s location at 5 West 31* Street in Kearney but found that the building had been
demolished. CMS Ex. 4, at 1 (Gordon Aff.). The investigator also attempted to conduct
the on-site review at the 10 East 31* St. address. In addition, the Cahaba investigator
attempted to visit the two addresses for Petitioner in Broken Bow and found that Melham
Medical Center occupied the 145 Memorial Drive address. In addition, the signage at the
420 South 10" St. address indicated Good Samaritan Hospital Homecare occupied it. P.
Br. at 6; CMS Ex. 3, at 2; CMS Ex. 4, at 2.

After the unsuccessful attempts at site visits, on August 13, 2010, Cahaba sent Petitioner
a notice of revocation of Medicare billing privileges and informed Petitioner of CMS’s
intent to terminate Petitioner’s provider agreement. The notice letter stated that

' Petitioner explains its lease erroneously shows the address as 404 South 10" Avenue,

and this is the address it supplied to the State of Nebraska.
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Petitioner was “no longer operational to furnish Medicare covered items or services” in
violation of 42 C.F.R. § 424.535(a)(5), based on the fact that Petitioner’s home health
agency office in Kearney and branch office in Broken Bow were not located at the
reported addresses during on-site visits, and Petitioner failed to submit CMS-855A forms
for a change of address. P. Br. at 7; CMS Ex. 1, at 10.

Petitioner submitted a reconsideration request and corrective action plan (CAP) to CMS
in response to the notice of revocation. P. Ex. 27. The CAP provided an explanation of
the Kearney and Broken Bow office address changes. Jd. The CAP stated that Petitioner
provided Cahaba a letter and form CMS-855A informing CMS of the office location
change to 1755 Prairie View Place, Kearney Nebraska on August 10, 2010. P. Br. at 4;

P. Ex. 16; P. Ex. 27, at 2, 16-25. The CAP also indicated that, on August 24, 2010,
Petitioner sent a CMS-855A to Cahaba, informing CMS of the change in location of the
Broken Bow branch office. P. Br. at 6; P. Ex. 18; P. Ex. 27, at 2, 64-73.

On September 30, 2010, CMS issued a reconsideration decision, which denied the CAP
and affirmed the decision to revoke Petitioner’s Medicare billing privileges. CMS Ex. 1,
at 12-14. CMS issued a corrected reconsideration decision on October 28, 2010. CMS
Ex. 1, at 15-17.

Petitioner filed a timely hearing request with the Civil Remedies Division of the
Departmental Appeals Board to appeal the reconsideration decision. I issued an
Acknowledgment and Pre-hearing Order, and in accordance with that order, CMS filed a
Brief and Motion for Summary Judgment (CMS Br.), accompanied by four exhibits
(CMS Exs. 1-4). Petitioner filed its Pre-Hearing Brief and Response to CMS’s Summary
Judgment Motion (P. Br.), accompanied by 32 exhibits (P. Exs. 1-32). In the absence of
objection, I receive into the record of this case CMS Exs. 1-4 and P. Exs. 1-32.

II. Applicable Law

Federal regulations articulate specific requirements regarding the reporting of any
changes to enrollment with which certain providers, including home health agencies,
must comply. 42 C.F.R. § 424.516(e). CMS requires that a home health agency must
report to CMS any change to enrollment address within 90 days. See 42 C.F.R. §
424.516(e)(2).

Also, CMS may perform onsite review of a provider to verify that the enrollment
information submitted to CMS or its agents is accurate and to determine compliance with
Medicare enrollment requirements. 42 C.F.R. § 424.517(a). The regulation further
states:

Based upon the results of CMS’s onsite review, the provider may be subject
to denial or revocation of Medicare billing privileges as specified in...
§ 424.535 of this part.

(1) Medicare Part A providers. CMS determines, upon on-site review, that
the provider meets either of the following conditions:

(i) Is unable to furnish Medicare-covered items or services.
(ii) Has failed to satisfy any of the Medicare enrollment
requirements.

42 CFR. § 424.517(a).

Furthermore, 42 C.F.R. § 424.535 provides that a provider’s Medicare enrollment and
billing privileges may be revoked for a variety of reasons including:

(5) On-site review. CMS determines, upon on-site review, that the provider
or supplier is no longer operational to furnish Medicare covered items or
services, or is not meeting Medicare enrollment requirements under statute
or regulation to supervise treatment of, or to provide Medicare covered
items or services for, Medicare patients. Upon on-site review, CMS
determines that —

(i) A Medicare Part A provider is no longer operational to furnish Medicare
covered items or services, or the provider fails to satisfy any of the

Medicare enrollment requirements.

42 CFR. § 424.535(a)(5)(i).

Ill. Issue, Findings of Fact, Conclusions of Law
A. Issue

The sole issue in this case is whether CMS had a legitimate basis to revoke Petitioner’s
Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5).

B. Applicable Standard
The Departmental Appeals Board (Board) stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . .. The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of
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law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc., DAB No. 2291, at 5 (2009). The Board has further stated, “[i]n addition, it is
appropriate for the tribunal to consider whether a rational trier of fact could regard the
parties’ presentation as sufficient to meet their evidentiary burden under the relevant
substantive law.” Dumas Nursing and Rehab., L.P., DAB No. 2347, at 5 (2010).

Neither party alleges that any material facts are in dispute, and they debate only whether
CMS had the authority under those facts to revoke Petitioner’s enrollment and billing
privileges. Accordingly, summary judgment is appropriate.

C. Findings of Fact and Conclusions of Law

My sole finding and conclusion is in the italicized heading supported by the subsequent
discussion below.

CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and
billing privileges because Petitioner was not in compliance with the applicable
regulations.

Petitioner admits moving its Kearney office around April 20, 2010 but not reporting this
change in location to CMS until August of 2010. P. Br. at 2-4; P. Ex. 16; P. Ex. 27, at 2,
16-25; P. Ex. 30. Petitioner concedes that “[f]rom its move in April 2010, up to and
including the date of the site visit . . . on July 31, 2010, and thereafter, [Petitioner]
operated out of its Kearney office located at 1755 Prairie View Place, Kearney
Nebraska.” See P. Br. at 4; see also P. Exs. 29, 31, 32. Yet, in July of 2010, Petitioner
reported to the CMS contractor that it was unsure it could receive mail at the new
Kearney address. P. Br. at 3-4; P. Ex. 29, at 2-3. Regarding the Broken Bow location,
Petitioner claims it moved its office around February 24, 2010 and reported this change
of address to the State of Nebraska but did not report the change to CMS until August 24,
2010. P. Br. at 6; P. Exs. 17 and 18. Petitioner also concedes it did not have a sign for
the Broken Bow facility until August 26, 2010. P. Br. at 6-7; P. Exs. 20, 21, 28.
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Petitioner concedes it did not report either address change within the 90 day regulatory
deadline and was non-operational at the addresses on file with CMS at the time of the
July 31, 2010 on-site review. Petitioner’s defense is that it was precluded from reporting
a change of address pending CMS’s response and assignment of the Medicare provider
agreement relating to Petitioner’s change of ownership request. P. Br. at 14. Petitioner
cites no legal authority for this proposition, and I am aware of no regulation or other
authority that excuses the reporting requirements regarding changes to enrollment
information pending the approval of a change of ownership request. In fact, the CMS
State Operations Manual (SOM) instructs the Medicare contractor to specifically consider
whether an address change or relocation is permissible with a concurrent change of
ownership request depending on whether the provider is serving clients in the same
geographical with the same employees. SOM § 3210.10B 5.

Petitioner supports its argument by referencing a portion of a CMS exhibit consisting of
email exchanges between CMS and Cahaba employees (CMS Ex. 1, at 20-25). Petitioner
did not learn of these emails until it received CMS’s pre-hearing exchange in February of
2011 and clearly did not rely upon these emails before Petitioner’s Medicare enrollment
and billing privileges were revoked pursuant to 42 C.F.R. § 424.535(a)(5) for failure to
comply with Medicare reporting and enrollment requirements. Despite an apparent intra-
agency discussion of this issue, there is no indication in the record that the Medicare
contractor advised Petitioner not to file a change of address pending the approval of a
change of ownership request. And even if Petitioner were so advised, estoppel against
the federal government, if available at all, is presumably unavailable absent “affirmative
misconduct.” See, e.g., Pacific Islander Council of Leaders, DAB No. 2091, at 12
(2007); Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 421 (1990); Huron
Potawatomi, Inc., DAB No. 1889, at 5 (2003) (holding allegation that incorrect advice
was provided was not to be evidence of affirmative misconduct).

Petitioner concedes that it was not operational at either office location on record with
CMS on July 31, 2010, the time of the on-site review. P. Br. at 2-6. However, Petitioner
maintains that it was operational at both locations at new addresses that it reported to the
State of Nebraska Department of Health and Human Services. P. Br. at 3, 6, 8-9. For
purposes of summary judgment, I will presume this information to be true. Petitioner still,
however, was not in compliance with federal reporting requirements. 42 C.F.R. §§
424.516(e)(2), 424.517(a)(1)(ii), and 424.535(a)(5)(i). CMS correctly determined that
Petitioner failed to satisfy all of the Medicare enrollment requirements because Petitioner
was not physically present at the addresses of record with CMS at the time of the on-site
review, and Petitioner failed to report these changes in enrollment information within 90
days as is required by law.

IV. Conclusion

For the reasons explained above, I sustain CMS’s determination to revoke Petitioner’s
Medicare billing privileges.

/s/
Joseph Grow
Administrative Law Judge