Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Innovative Pain Treatment Surgery ) Date: March 24, 2009
Center of Temecula, Inc., )
)
Petitioner, )
)

-V.- ) Docket No. C-08-666

) Decision No. CR1932
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I enter summary judgment in favor of the Centers for Medicare & Medicaid Services
(CMS). I find the effective date of Petitioner’s participation in the Medicare program is
October 8, 2007.'

I. Background

The following facts are undisputed. Petitioner is an ambulatory surgical center (ASC)
located in Temecula, California, that received certification for initial participation in the
Medicare program but disputes the effective date of its approval. Petitioner received a
six-month term of accreditation from the Accreditation Association for Ambulatory
Health Care, Inc. (AAAHC) or “deemed compliance” status on June 21, 2007 after a two
day survey. Neither party disputes that Petitioner subsequently submitted an application
for Medicare enrollment, CMS Form 855B, in August 2007, which NHIC, the CMS
Contractor for Medicare Provider Enrollment, received on August 27, 2007. P. Brief at 2;

' CMS submitted a motion for summary judgment together with a brief, which I
refer to as CMS Brief, with 19 exhibits, CMS Exhibits (Exs.) 1-19, and a Reply.
Petitioner submitted a brief in response, P. Brief, and 12 exhibits, P. Exs. 1-12. Neither
party objected to the other’s exhibits and the exhibits are admitted into the record.
2

CMS Brief at 3; CMS Ex. 1. By letter dated October 8, 2007, NHIC indicated that
Petitioner’s application for provider enrollment had been approved. CMS Ex. 4; CMS
Ex. 19, at 13. Even though Petitioner had received notice that its application had been
approved, Petitioner submitted a second application to NHIC which was rejected because
it contained photocopied signatures rather than original signatures as required. Petitioner
submitted a third application which was rejected because it did not contain certain
required documents. CMS Ex. 19. But on March 20, 2008, CMS sent notice to
Petitioner that CMS accepted Petitioner’s agreement to participate in the Medicare
program and had countersigned the Health Insurance Benefits Agreement. CMS Ex. 19,
at 20. CMS indicated that Petitioner’s participation for coverage was effective as of
December 19, 2007. Jd. Petitioner made a request to CMS for a retroactive effective date
of June 21, 2007, the date of its AAAHC accreditation. On June 10, 2008, CMS denied
Petitioner’s request, but did revise its original date of December 19, 2007 and granted
Petitioner an effective date of October 8, 2007. CMS Ex. 19, at 7. CMS indicated that
the October 8, 2007 date is the date NHIC had determined that Petitioner’s application
was complete and was approved. Jd.

Petitioner timely appealed CMS’s initial determination of the effective date of
Petitioner’s Medicare approval. 42 C.F.R. § 498.3(b)(15).

II. Applicable Law

Title XVIII of the Social Security Act (Act) provides for payment of part or all of the cost
of covered services furnished to eligible individuals by qualified providers of services and
suppliers. Section 1832(a)(2)(F) of the Act includes under Part B coverage for services
furnished in connection with surgical procedures specified by the Secretary at an ASC
which meets health, safety and other standards specified by the Secretary and has entered
into an agreement with the Secretary to participate and accept payment as an ASC.
(Meeting applicable standards is referred to as “certification.”)

The regulations at 42 C.F.R. Part 416 contain the requirements for ASC participation
agreements as a supplier of reimbursable Medicare services and the substantive health,
safety, and other conditions for coverage as an ASC supplier specified by the Secretary.
The provisions of 42 C.F.R. § 416.26 provide the steps necessary for an ASC to qualify
for and to have its agreement to be a supplier accepted and approved by CMS. An entity
may qualify for a participation agreement after all of the following steps have been taken—
3

° It has “deemed compliance” with the conditions for participation in Subpart C of
Part 416, meaning it is accredited by a national accrediting body or licensed by a
state agency that CMS determines provides reasonable assurance that the
conditions are met. 42. C.F.R. § 416.26(a).

. If the ASC does not have “deemed compliance,” it must be surveyed by the State
survey agency for compliance with the conditions of Subpart C. 42. C.F.R. §
416.26(b).

° CMS must review the recommendation and other evidence relating to the

qualification of the ASC and if the facility meets the requirements of Subpart B of
Part 416, CMS will send the ASC written notice of its determination and two
copies of the ASC agreement. 42 C.F.R. § 416.26.(c).

° If the ASC wishes to participate in the program, it must have both copies of the
agreement signed by its authorized representative and file both with CMS. 42
C.F.R. § 416.26(d).

° If CMS accepts the agreement filed by the ASC, it returns to the ASC one of the
copies of the agreement together with a notice of acceptance specifying the
effective date of the ASC’s participation for coverage in the Medicare program.
42 C.F.R. § 416.26(e).

The effective date for such a participation agreement is subject also to the general
requirements of 42 C.F.R. § 489.13.? Under 42 C.F.R. 489.13(d)(1), there is a separate
tule for the effective date for a provider or supplier “currently accredited by a national
accrediting organization whose program had CMS approval at the time of the
accreditation survey and accreditation, and on the basis of accreditation, CMS has
deemed the provider or supplier to meet Federal requirements.” In that instance, the
effective date depends on whether the provider or supplier is subject to requirements in
addition to those included in the accreditation organization’s approved program. If the
entity is subject to requirements in addition to the accreditation, then the effective date “is
the date on which the provider or supplier meets all requirements, including the additional

> Subpart A of Part 489 largely implements section 1866 of the Act, which
specifies the terms of provider agreements. However, 42 C.F.R. § 489.1(d) specifically
provides that the effective date rules in this part are also made applicable to the approval
of suppliers that meet the requirements specified in § 489.13.
4

requirements.” 42 C.F.R. § 489.13(d)(1)(i). If, at the time of the initial request to
participate, the entity “is not subject to additional requirements,” then the effective date is
the date of the “initial request for participation if on that date the provider or supplier met
all Federal requirements.” 42 C.F.R. § 489.13(d)(1)(ii).

A special rule for retroactive effective date for a participation agreement is available
pursuant to 42 C.F.R. § 489.13(d)(2) if a provider meets the requirements of paragraphs
(d)(1). That section permits an effective date that is retroactive “for up to one year to
encompass dates on which the provider or supplier furnished, to a Medicare beneficiary,
covered services for which it has not been paid.”

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

2. Whether Petitioner became eligible for participation on a date prior to
October 8, 2007.

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. I discuss each Finding in
detail.

1. Summary judgment is appropriate in this case because there are no disputed
issues of material fact and the only question to be decided involves the
application of law to the undisputed facts.

An administrative law judge (ALJ) may decide a case on summary judgment, without an
evidentiary hearing, if the case presents no genuine issue of material fact. Crestview
Parke Care Center v. Thompson, 373 F.3d 743, 750 (6" Cir. 2004); Livingston Care
Center v. Dep’t. of Health & Human Services, No. 03-3489, 2004 WL 1922168, at 3 (6"
Cir. Aug. 24, 2004). By interpretive rule, this tribunal has established a summary
judgment procedure “akin to the summary judgment standard contained in Federal Rule
of Civil Procedure 56.” Crestview Parke Care Center, 373 F.3d 743, 750. Under that
tule, the moving party may show the absence of a genuine factual dispute by presenting
evidence so one-sided that it must prevail as a matter of law, or by showing that the non-
5

moving party has presented no evidence “sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Livingston Care Center, No. 03-3489, 2004 WL 1922168, at 4, citing
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The nonmoving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986). See
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehabilitation Center,
DAB No. 1918 (2004). A mere scintilla of supporting evidence is not sufficient. “If the
evidence is merely colorable or is not significantly probative summary judgment may be
granted.” Livingston Care Center, No. 03-3489, 2004 WL 1922168, at 4, quoting
Anderson v. Liberty Lobby, 477 U.S. 242, at 249-250 (1986). In deciding a summary
judgment motion, an ALJ may not make credibility determinations or weigh conflicting
evidence, but must instead view the entire record in the light most favorable to the non-
moving party, all reasonable inferences drawn from the evidence in that party’s favor.
Innsbruck HealthCare Center, DAB No. 1948 (2004); Madison Health Care, Inc., DAB
No. 1927 (2004).

This case is appropriate for summary judgment. Petitioner opposes CMS’s motion and
argues that summary judgement is not appropriate because 42 C.F.R. § 416.26(c) does not
explicitly state that CMS Form 855B must be submitted and approved in order to grant an
effective date. However, the issue of the effective date of the participation agreement is a
legal issue and not a dispute of material fact for which an in-person hearing and testimony
might be useful. Rather, where the only issues before me are legal, those issues
appropriately can be decided based on written submissions without the need for an in-
person hearing. The central legal issue in this case is whether CMS correctly certified
Petitioner to participate in Medicare on October 8, 2007 and not June 21, 2007, the
effective date of AAAHC’s deemed six-month accreditation of Petitioner. In evaluating
the parties’ submissions, I find that even if I construe the entire record in the light most
favorable to Petitioner, as discussed below, I find that CMS correctly certified Petitioner
to participate in Medicare on October 8, 2007.

2. The effective date of Petitioner’s participation in Medicare is October 8, 2007.

There is no dispute that Petitioner had AAAHC accreditation as of June 21, 2007.

CMS maintains that in order to participate in the Medicare Program as an ASC, the
supplier must, in addition to the survey by AAAHC under the Early Option Survey
Program for Medicare deemed status, complete and submit a Provider/Supplier
Enrollment Application Form (CMS Form 855B). CMS states that under the applicable
6

regulations the earliest effective date of participation for Petitioner would be October 8,
2007, the date the contractor informed Petitioner that it had reviewed its application and
found it acceptable.

Petitioner argues that it is entitled to an effective certification date of June 21, 2007, the
date that the AAAHC awarded Petitioner a six-month accreditation or “deemed
compliance” status. P. Ex. 1; P. Br. at 1-2. Petitioner essentially argues that it
detrimentally relied on information provided to it on the telephone by NHIC, the CMS
contractor. Petitioner had a question concerning whether if it began treating Medicare
patients, it would be able to bill for those services. P. Br. at 2. Therefore, on July 3,
2007, its business manager contacted NHIC. He was apparently informed that
Petitioner’s Medicare application, once approved, would be retroactively effective to the
date of its deemed status. Petitioner argues that it assumed this was the case and began to
treat Medicare patients. P. Br. at 2; P. Ex. 4. What Petitioner neglects to add here is that
it did not submit its Medicare Enrollment Application, CMS Form 855B, until after the
AAAHC survey, sometime in late August 2007. P. Br. at 6. Petitioner does not dispute
that NHIC received the Medicare Enrollment Application, CMS Form 855B, on August
27, 2007. Petitioner instead contends that CMS Form 855B was a mere formality and
was not a prerequisite to Medicare certification. P. Br. at 6 and 7. It also contends that
neither the regulations nor the statute explicitly state that CMS Form 855B must be
submitted and approved as an additional requirement to an ASC’s approval as a supplier.

I disagree. Every ASC which wishes to enroll as a Medicare supplier must complete and
submit CMS Form 855B. The information in this form is used in part to ensure that no
payments are made to suppliers who are excluded from participation in the Medicare
program pursuant to section 1128 of the Act or who are prohibited from providing
services to the federal government under section 2455 of the Federal Acquisition
Streamlining Act of 1994, 31 U.S.C. § 6101. See State Operations Manual (SOM),
section 2005 [“Suppliers should be informed of the enrollment process so that they do not
expect instant Medicare effective dates”]. Thus, the provided information is an important
aspect of the Department’s efforts to effectively prevent supplier fraud and abuse and to
ensure that Medicare does business with only trustworthy and qualified providers and
suppliers. The information that is required to be provided in this form is what 42 C.F.R. §
416.26(c) refers to as “other evidence relating to the qualification of the ASC” which
CMS must review in order to determine whether to accept the ASC. Ifthe ASC has not
provided this information prior to its accreditation survey, thereby giving the contractor
and CMS time to verify the information, then that form is considered an additional
requirement under the terms of 42 C.F.R. §489.(d)(1)(i).. Thus, under the applicable
regulation at 42 C.F.R. 489.13(d)(1)(i), the effective date of the approval is the date that
it meets all the additional requirements. Here, the contractor reviewed the information

7

contained in CMS Form 855B and determined on October 8, 2007, that Petitioner had
submitted all the required additional information and that the enrollment application
(CMS Form 855b) was approved.

The absence of specifying CMS Form 855B as an “additional requirement” in the
regulations is not determinative. 42 C.F.R. Part 416 gives CMS the authority to set
requirements for an ASC’s participation in the Medicare program. And Part 416
specifically provides that CMS will review whatever other evidence relating to the
qualification of the ASC for enrollment. 42 C.F.R. §416.26(c). It would be
impracticable, indeed impossible, to specify all forms and information requirements
necessary in the regulation.

I find Petitioner’s argument disingenuous considering that by its submission of Form
855B, Petitioner obviously knew it was required to submit it in order to apply for
Medicare program enrollment. Moreover, the form itself specifies on the first page that
an ASC must complete this application and submit it to initiate the enrollment process.
Thus, since 42 C.F.R. § 416.26(c) dictates that a provider agreement will not be approved
nor an effective date granted until after CMS has reviewed AAAHC’s award of six-month
accreditation to Petitioner and other evidence relating to the qualifications of the ASC, I
conclude that the other evidence relating to the qualification of the ASC in this case refers
to CMS’s review of Form 855B. As for Petitioner’s contention that it had relied on the
oral assurances from the contractor regarding the effective date, the applicable
regulations, which I am bound to apply, provide that an ASC does not qualify for
acceptance for participation in the Medicare program until CMS returns a countersigned
copy of the Health Insurance Benefits Agreement and informs the ASC with a notice of
acceptance specifying the effective date for the ASC’s participation. 42 C.F.R. §
416.26(e). CMS did so and specified first an effective date of December 19, 2007 which
it revised upon reconsideration to October 8, 2007, the date the contractor indicated it had
completed its review of Petitioner’s Form 855B and found that Petitioner met all of the
requirements for participation.

Finally, the provisions of 42 C.F.R. § 489.13(d)(2) do confer discretion on CMS to decide
whether to grant a retroactive effective date. Here, CMS determined not to do so. CMS
based its decision on the fact that Petitioner did not meet all the requirements for
participation until October 8, 2007, the date the contractor determined that Petitioner’s
application was complete and was approved. The regulations and case law establish that
retroactive certification is permitted but is not required. The regulations, as construed by
the Departmental Appeals Board, clearly confer discretion on CMS to decide whether or
not to grant retroactivity on the facts of an individual case. Oak Lawn Endoscopy, DAB
No. 1952, at 11-12 (2004). There is no support in the regulations, statute or preamble
which establish the proposition that this tribunal can require or compel CMS to use its
discretion to certify a retroactive effective date. Thus, I do not have the authority to
award an earlier date of certification or compel CMS to use its discretion to certify a
retroactive effective date. The discretion and the exercise of the discretion to grant or
deny retroactivity as to a certification date clearly lies exclusively with CMS.

IV. Conclusion

I find that Petitioner’s effective date of participation in the Medicare program is October
8, 2007, the date it met all federal requirements. Therefore, I enter summary judgment in
favor of CMS.

/s/
Alfonso J. Montano
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Vivienne Esty-Fenton, ) Date: March 25, 2009
)
Petitioner, )
)
-Vv.- ) Docket No. C-08-699
) Decision No. CR1931
The Inspector General. )
)
DECISION

This matter is before me on the Inspector General’s (I.G.) Motion for Summary
Affirmance of the I.G.’s determination to exclude Petitioner Vivienne Esty-Fenton from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years. The I.G.’s Motion and determination to exclude Petitioner are based
on the terms of section 1128(a)(2) of the Social Security Act (Act).

I. Procedural Background

During the summer of 2005, Petitioner Vivienne Esty-Fenton was employed as a nurse
and as the Assistant Director of Nursing (ADON) at the Eastchester Rehabilitation and
Care Center (Eastchester), located in Bronx, New York. Based on events stemming from
her employment at Eastchester on June 2, 2005, the Medicaid Fraud Control Unit of the
New York State Attorney General's Office filed a four-count felony complaint against
Petitioner and a co-defendant. On June 20, 2006, Petitioner entered a plea of guilty to
Attempted Falsifying Business Records in the First Degree, in violation of N.Y. PENAL
LAW § 110-175.10, a class A misdemeanor. Petitioner’s plea was accepted and she was
convicted and sentenced to a one-year conditional discharge by the Supreme Court of the
State of New York, Bronx County. Following the conviction, Petitioner was excluded
from Medicaid program participation by the New York State Department of Health for a
two-year period commencing July 11, 2006.
2

On June 30, 2008, the I.G. notified Petitioner that she was being excluded from
participation in Medicare, Medicaid and all federal health care programs pursuant to
section 1128(a)(2) of the Act for a period of five years.

Petitioner timely requested a hearing before an administrative law judge (ALJ) on August
27, 2008, indicating that she was challenging the basis of the exclusion and the
commencement of the exclusionary period. The request for hearing! was received at the
Civil Remedies Division (CRD) of the Departmental Appeals Board (DAB or the Board)
on August 28, 2008. The case was docketed as C-08-699 and assigned to me on August
29, 2008, for hearing and a decision. I convened a telephonic prehearing conference on
September 24, 2008, pursuant to 42 C.F.R. § 1005.6, in order to discuss the issues
presented by the case and procedures for addressing those issues. The parties were
advised that based upon review of the file, it appeared that the issues could be addressed
in summary fashion. The parties were further advised that if I found that the issues could
not be addressed in summary fashion, an evidentiary hearing would be scheduled. There
being no objection, I issued an initial prehearing order to the parties providing
instructions in how the parties were to file their written submissions. See Order (October
1, 2008). The I.G.’s Brief-in-Chief (I.G. Br.) and five exhibits identified as I.G. Exs. 1-5
were filed on October 30, 2008. On December 1, 2008, Petitioner filed her brief (P. Br.)
and six exhibits, identified as P. Exs. 1-6. The LG. filed a Reply Brief (Reply) on
December 16, 2008, with three exhibits which the I.G. incorrectly marked as I.G. Exs. 1-
3. Petitioner filed a Response Brief (Response) on December 31, 2008.

On January 8, 2009, I convened a second telephonic prehearing conference in order to
seek clarification and provide direction following the receipt of the 1.G.’s Reply and
Petitioner's Response. The exhibits the I.G. filed with the Reply were incorrectly marked;
therefore, they were returned to the I.G. for renumbering in sequence with the exhibits the
1.G. had already proffered. Petitioner was also advised during the conference that I lack
jurisdiction to consider the allegation she raised in her Response that any delay in the
1.G.’s determination to exclude her was an abuse of discretion. Petitioner was further
advised that if she wished to develop the record for any prejudice she suffered as a result
of the I.G.’s timing, she was encouraged to do so in her Final Response Brief. See Order
(January 8, 2009). The I.G. re-filed its Reply and exhibits on January 14, 2009 with
revised exhibit numbers identified as I.G. Exs. 6-8; and on January 30, 2009, Petitioner
filed her Final Response Brief amending her December 31, 2008 Response and attaching

' With her request for hearing, Petitioner attached six exhibits, identified as
exhibits A-F. The attachments remain part of the record and attached to the request;
however, the same exhibits were resubmitted by Petitioner with her brief and have been
appropriately identified as Petitioner’s exhibits in the record.
3

10 exhibits, identified as P. Exs. 7-16. The I.G. filed its Final Reply Brief (Final Reply)
on February 17, 2009.

Petitioner objected to my receiving the exhibits the I.G. proffered with its December 16,
2008 Reply. Petitioner states that my Order of October 1, 2008, required the parties to
file their exhibits with their opening brief. P. Response at 2-3. During the January 8,
2009 prehearing conference, the exhibits the I.G. initially proffered with its Reply were
not accepted by me. The I.G. was given the opportunity to re-file those exhibits, and
Petitioner was also afforded the opportunity to file a Final Response Brief which she did,
along with 10 additional exhibits. Therefore, I overrule Petitioner’s objection.

All briefing is now complete, and the record in this case closed on February 18, 2009.
The evidentiary record before me on which I decide the issues contains the parties’
pleadings and the admitted exhibits which include I.G. Exs. 1-8 and P. Exs 1-16.

II. Issues
The issues in this case are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(2) of the Act; and

2. Whether the proposed five-year period of exclusion is unreasonable.

I resolve both issues in favor of the I.G.’s position. Because her predicate conviction has
been established, section 1128(a)(2) of the Act mandates Petitioner’s exclusion. A five-
year period of exclusion is reasonable as a matter of law, for it is the minimum period
established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B).

Ill. Controlling Statutes and Regulations

Section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs for a minimum of five years of any “individual or entity that has been
convicted, under Federal or State law, of a criminal offense relating to neglect or abuse of
patients in connection with the delivery of a health care item or service.” The statutory
provision makes no distinction between felony convictions and misdemeanor convictions
as predicates for mandatory exclusion. The terms of section 1128(a)(2) are restated in
regulatory language at 42 C.F.R. § 1001.101(b).
4

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual ... bya... State . . . court, regardless
of... whether the judgment of conviction or other record relating to criminal conduct has
been expunged;”... “when a plea of guilty or nolo contendere by the individual . . . has
been accepted by a... State... court,” section 1128(i)(3) of the Act; or “when the
individual . . . has entered into participation in a... deferred adjudication . . . program
where judgment of conviction has been withheld,” section 1128(i)(4) of the Act. 42
U.S.C. §§ 1320a-7(i)(1)-(4). These definitions are repeated at 42 C.F.R. § 1001.2.

N.Y. PENAL LAW § 110-175.10 provides:

A person is guilty of falsifying business records in the first degree when he
commits the crime of falsifying business records in the second degree, and
when his intent to defraud includes an intent to commit another crime or to
aid or conceal the commission thereof.

An exclusion based on section 1128(a)(2) of the Act is mandatory and the I.G. must
impose it for a minimum period of five years. Act § 1128(c)(3)(B) of the Act (42 U.S.C.
§ 1320a-7(c)(3)(B)). The regulatory language of 42 C.F.R. § 1001.102(a) affirms that
statutory provision.

The standard of proof in this case is the preponderance of the evidence. Petitioner bears
the burden of proof and persuasion on any affirmative defenses and the I.G. bears the
burden on all other issues. 42 C.F.R. § 1005.15(b).

IV. Findings and Conclusions
I find and conclude as follows:

1. On her plea of guilty on June 20, 2006, in the Supreme Court of the State of New
York, Bronx County, Petitioner was found guilty of the class A misdemeanor offense of
Attempted Falsifying Business Records in the First Degree, in violation of N.Y. PENAL
LAW § 110-175.10. IG. Exs. 2, 4.

2. Petitioner was sentenced on her plea in the Supreme Court of the State of New York,
Bronx County, on June 20, 2006. I.G. Exs. 2; 4, at 6.

3. The accepted plea of guilty, the finding of guilt, and sentence described above
constitute a “conviction” within the meaning of sections 1128(a)(2) and 1128(i)(2) and (3)
of the Act, and 42 C.F.R. § 1001.2.
5

4. A nexus and a common-sense connection exist between the criminal offense to which
Petitioner pleaded guilty and of which she was convicted, as noted above in Findings 1, 2
and 3, and the delivery of an item or service under Medicare or a State health care
program. I.G. Exs. 3; 4, at 3-4; Berton Siegel D.O., DAB No. 1467 (1994).

5. Petitioner was excluded from the New York Medicaid Program by the State of New
York, Office of the Medicaid Inspector General from July 11, 2006 through July 11,
2008, based upon her June 20, 2006 conviction. Petitioner was notified that her program
exclusion was based upon her conviction “of a crime relating to the furnishing or billing
for medical care, services or supplies.” P. Ex. 5, at 1; see also P. Ex. 4.

6. On June 30, 2008, the I.G. notified Petitioner that she was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, based on the authority set out in section 1128(a)(2) of the Act. I. G.
Ex. 1.

7. Through counsel, Petitioner perfected her appeal from the I.G.’s action by filing a
timely hearing request on August 27, 2008.

8. By reason of Petitioner’s conviction, a basis exists for the I.G.’s exercise of authority,
pursuant to section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2), to exclude Petitioner
from participation in Medicare, Medicaid, and all other federal health care programs.

9. By reason of her conviction, Petitioner was subject to, and the I.G. was required to
impose, the mandatory minimum five-year period of exclusion from Medicare, Medicaid,
and all other federal health care programs. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(b).

10. Because the five-year period of Petitioner’s exclusion is the mandatory minimum
period provided by law, it is therefore not unreasonable. Act § 1128(c)(3)(B); 42 C.F.R.
§§ 1001.102(a); 1001.2007(a)(2).

11. There are no disputed issues of material fact and summary disposition is therefore
appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007); Thelma
Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(2) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; (2) the conviction must have been related to the neglect or abuse of patients; and,
(3) the patient neglect or abuse to which an excluded individual’s conviction related must
have occurred in connection with the delivery of a health care item or service. Neitra
6

Maddox, DAB CR1218 (2004); Maureen T. Kehoe, DAB CR673 (2000); Gabriel S.
Orzame, M.D., DAB CR587 (1999); Ann M. MacDonald, DAB CR519 (1998); Anthony
A. Tommasiello, DAB CR282 (1993).

The three essential elements necessary to support an exclusion based on section
1128(a)(2) are proven in the record before me. Although Petitioner does not directly
challenge her criminal conviction, she does challenge the classification of the conviction
as one relating to the neglect or abuse of patients and further disputes that the actions that
were the basis of the conviction occurred in connection with the delivery of a health care
item or service. P. Br. at 7-19. Finally, Petitioner further challenges the exclusionary
period of five years in light of her two-year state exclusion from the Medicaid program
which commenced on July 11, 2006, and asks that the federal exclusion run concurrently
with the State exclusion.

A. The LG. has a basis for Petitioner’s exclusion.
1. Petitioner was convicted of a criminal offense.

The evidence of Petitioner’s conviction of a criminal offense is clear and uncontradicted.
1.G. Ex. 2. The evidence before me shows that Petitioner appeared with counsel in the
Supreme Court of the State of New York and pleaded guilty to the crime of Attempted
Falsifying Business Record, in violation of N. Y. PENAL LAW § 110-175.10. I.G. Ex. 4.
The trial court’s acceptance of her counseled plea is demonstrated by the fact that the trial
court found Petitioner guilty and proceeded immediately to the imposition of sentence.
1G. Ex. 4; see also 1.G. Ex. 2. Those events satisfy the definitions of “conviction” set out
at sections 1128(i)(2) and 1128(i)(3) of the Act. The I.G. has proven the first essential
element.

2. Petitioner’s conviction was related to abuse or neglect of a patient.

The I.G. is mandated to exclude an individual convicted of a criminal offense that is
“related to” patient abuse or neglect. Act § 1128(a)(2); 42 U.S.C. § 1320a-7(a)(2). Here,
the I.G. has provided evidence establishing that Petitioner's conviction for her actions
during her employment at a nursing facility involving falsifying both the medical chart
and the facility records surrounding a resident’s elopement was “related to abuse or
neglect of a patient.”

The felony complaint filed by the Medicaid Fraud Control Unit of the New York State
Attorney General’s office recites the name of the victim of Petitioner’s neglect (herein
R1); alleges that R1 was “an 82-year-old male who was unable to care for himself due to
physical disability, mental disease;” and asserts that at the time of the crime, R1 was a
resident at Eastchester. 1.G. Ex. 3. The complaint further charges that while acting in
7

concert with a co-defendant who was also an employee of Eastchester, Petitioner “caused
a false entry in the business records of Eastchester . . ., namely in the Nursing Notes and
Treatment Record . . . and in the 24 Hour Resident Condition Report ....” The
Complaint describes the alleged circumstances under which the offenses were committed.
It alleges that on June 2, 2005, R1 was noted by staff as missing from the fourth floor of
Eastchester. After staff searched the complete facility, the Registered Nurse (RN)
Supervisor at Eastchester notified Petitioner, in her capacity as ADON, of the elopement.
Petitioner, who later came to the facility, told the RN Supervisor not to call 911, and then
proceeded to conduct a second search for R1 at the Eastchester facility. The police were
not notified of R1’s elopement until 30 to 45 minutes later. That same evening, Petitioner
told the RN Supervisor that the resident was found in the basement, and then later that
same evening, acknowledged that he was actually found by police on the Pelham
Parkway. The Complaint notes that the Pelham Parkway is approximately one-half mile
from the Eastchester facility. The RN Supervisor stated Petitioner then told her that if she
were asked, the RN Supervisor was to tell the New York State Department of Health and
the New York State Attorney General’s Office that R1 had been found in the basement at
the facility. The Complaint further states that on June 3, 2005, an LPN at Eastchester was
directed by Petitioner’s co-defendant, in the presence of Petitioner, to generate a 24 Hour
Resident Condition Report entry for June 2, 2005 at 8:30 p.m., by copying the nursing
notes and treatment record which Petitioner’s co-defendant had rewritten with false
information regarding R1’s elopement. On July 5, 2005, the elopement was anonymously
called into the New York State Department of Health. Petitioner is alleged then to have
told an LPN at the facility that, if asked, the LPN should tell the Department of Health
that R1 was found on the first floor of the facility. LG. Ex. 3.

On June 20, 2006, during the plea-and-sentence proceedings in this matter, the District
Attorney read out the charge in open court. A transcript of the plea-and-sentence hearing
appears as I.G. Ex. 4, and it establishes a colloquy reflecting the facts which formed the
basis of Petitioner’s conviction:

[O]n June 2nd 2005, at the Eastchester Nursing Home, which is located at
2700 Eastchester Road in the county of the Bronx, the defendants did
falsify the medical charts and facility records pertaining to an incident
involving the wandering of a patient outside of the facility.

1.G. Ex. 4, at 3 (emphasis added). Petitioner was then asked by the Court:

THE COURT: Ms. Esty-Fenton, have you heard the statement made by the
district attorney?

THE DEFENDANT [Petitioner]: Yes.
8

THE COURT: Is it true, accurate and correct in every respect as it describes your
participation in the crime with which you're charged?

THE DEFENDANT [Petitioner]: Yes.

1.G. Ex. 4, at 4. The Court accepted Petitioner's guilty plea and sentenced her to a
conditional discharge. I.G. Exs. 2, 4.

Petitioner argues that I may not examine the underlying facts of her criminal conviction
and must limit my review to her oral plea in order to determine the circumstances
underlying her plea. Petitioner relies on two cases, Carmencita Alhabsi, DAB CR555
(1998) and Michael S. Rudman, M.D., DAB No. 2171 (2008), to support her assertion.
P. Br. at 8-10. I find Petitioner’s assertions unavailing. The more appropriate line of
authority on the point begins with Narendra M. Patel, M.D., DAB No. 1736 (2000), and
it provides that information extrinsic to the specific charge underlying a conviction may
be relied on if it is credible and reliable. The facts behind the charge to which Petitioner
pleaded guilty are clearly set out in the transcript of the plea agreement. When asked by
the Court about the accuracy of the prosecutor’s elocution outlining the charges to which
she tendered her guilty plea, Petitioner agreed that the prosecutor’s statement was
accurate. The record clearly establishes the actions for which Petitioner pleaded guilty
involved the falsification of medical charts and facility records relating to the wandering
of a patient outside the facility. So, if Petitioner raises any doubt of the association
between her plea and the facts charged in the original complaint, the transcript of the
plea-and-sentence hearing removes that doubt. I.G. Ex. 4, at 3-4. The LG. has offered
clear and convincing evidence to show that the conviction in the record was tied to the
events that led to the complaint, and the plea colloquy shows that Petitioner’s actions
involved neglect or abuse of a patient.

Petitioner advances the argument that in order for a falsification of records conviction to
be related to abuse or neglect, the falsification must have had a direct impact on the
rendering of care and treatment of the patient. Petitioner’s argument fails. The facts
before me are clear: (1) Eastchester was a nursing home facility; (2) Petitioner was
employed by Eastchester as an ADON, and as a nurse; (3) R1 was a resident at
Eastchester where he was receiving medical care and under the professional oversight and
supervision of Petitioner when he eloped. On the evening of July 2, 2005, Petitioner was
functioning in the capacity of ADON and was directly contacted by staff at the facility for
guidance as to R1’s elopement. In her role as ADON she was responsible for the
oversight and physical care and safety of residents. As a medical professional responsible
for R1’s care, she attempted to falsify R1’s medical chart and the facility’s records
regarding the elopement.
9

Moreover, Petitioner's argument avoids the obvious connection between the crimes with
which she was charged and the crime to which she pleaded guilty. The crime of
attempted falsifying business records to which she pleaded guility was not conjured from
thin air. It is well-established that, in determining the elements of a crime for purposes of
deciding whether the authority exists to exclude, one may look at the facts that form the
basis for the charges that are filed against the excluded party. The often opaque language
of a plea agreement or a judgment of conviction will be no impediment to finding
authority to exclude where the agreement or judgment is clearly supported by other
official records that lay out the elements of the crime.

Petitioner’s assertion that falsification of medical records related to R1’s elopement did
not amount to abuse or neglect because R1 was not injured and the falsification did not
create a risk of harm to R1 also fails. P. Br. at 15. Petitioner's assertion is belied by the
record, and it is evident from the record that her actions in attempting to falsify R1’s
medical records to represent that he was not at risk of wandering outside the facility onto
a parkway one-half mile from the facility served to place R1, an elderly resident who was
unable to care for himself, in harm’s way. Petitioner’s conduct falls within the common
and ordinary meaning of the term “neglect.”

Moreover, in her role as an ADON, Petitioner had a responsibility to R1 to document
information accurately in his medical records and facility records pertinent to his
elopement. But here, Petitioner failed. If any resident’s elopement tendencies are not
clearly documented and if facility staff are, as a result, unaware that the resident has these
tendencies and are therefore unable to plan accordingly, that resident is at risk of eloping
from the facility again and heading into some unprotected hazard, in this case, the distant
Pelham Parkway. Petitioner failed in her responsibility to care for R1 on June 2, 2005.

The I.G. is not obliged by the statute to prove that Petitioner personally and directly
committed patient abuse or neglect. Rather, the I.G. meets his burden of proof by
establishing that there was a conviction as defined by the Act and that the criminal
offense of which Petitioner was convicted was re/ated to patient neglect in connection
with the delivery of a health care service. See Westin v Shalala, 845 F. Supp. 1446 (D.
Kan. 1994). Petitioner maintains that she had only an indirect role in the falsification of
the records. P. Br. at 13. However, this argument fails as it directly contradicts her plea.
During the plea colloquy, Petitioner did not qualify or lessen her involvement, and when
asked by the Court whether the statement that she attempted to falsify the medical records
of R1 and facility records of Eastchester related to the elopement of R1 on June 2, 2005,
was correct, she responded that it was. LG. Ex. 4, at 3, 4.

10

The authority to exclude in this case derives from Petitioner’s conviction. The conviction
and those official records relating to it define the basis for the exclusion. The required
nexus and common-sense connection between the crime of which Petitioner was
convicted and the relationship to patient abuse or neglect has been established. Thus, the
second essential element required to support the exclusion based on section 1128(a)(2) of
the Act has been satisfied.

3. The actions that formed the basis of Petitioner’s conviction were
related to the delivery of a health care item or service.

The third essential element, the relation of Petitioner's conviction to the delivery of items
or services under the Medicare program, appears in detailed recitations throughout I.G.
Exs. 4, at 3, 4; 3, at 2-3. Those recitations explicitly and in detail describe how Petitioner
was actively involved in the provision of health care services during the commission of
her crime. Furthermore, the nexus between falsifying medical records and the delivery of
health care, and Petitioner's role as the ADON and a nurse responsible for providing
medical services to residents, are clearly within the meaning, scope, and intent of the Act.

The evidence establishes that Petitioner’s conviction was of a criminal offense in
connection with the delivery of a health care item or service. Specifically, she was
assisting in and overseeing the facility’s response to the elopement of a resident of the
facility. In doing so, she made and caused to be made false statements that affected the
course of the facility’s response. There is an obvious nexus and common-sense
connection between the crime of which Petitioner was convicted and the delivery of a
health care item or service. Berton Siegel, D.O., DAB No. 1467. The I.G. has proven the
third element.

B. Petitioner’s five-year exclusion is not unreasonable.

Petitioner also cites factors in her case that she believes mitigate her role in the charges of
which she was convicted. She argues that her plea of guilty to a misdemeanor, instead of
the felonies originally charged, is evidence of the lack of severity with which both the
prosecution and the Court viewed her conduct. She makes a similar argument related to
the sentence she received, “a mere conditional discharge, with no conditions attached; and
that her license to practice was suspended for just a two-month period and not revoked.”
P. Response at 12-13; Petitioner’s Request for Hearing at 2, 3.

The factors Petitioner advances here provide no support for her position in this forum.
The five-year period of exclusion proposed in this case is the statutory minimum required
by section 1128(c)(3)(B) of the Act. As a matter of law, it is not unreasonable. 42 C.F.R.
§ 1001.2007(a)(2). Neither the Board nor I may reduce it. Mark K. Mileski, DAB No.
1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002); Krishnaswami Sriram, M.D.,
DAB CR1463 (2006), aff'd, DAB No. 2038 (2006).

Having determined that the I.G. had a basis

or excluding Petitioner, I now review

Petitioner’ challenge to the date on which the exclusionary period began. She asks that it
run in a manner beginning as the same time as her state Medicaid program exclusion.

Petitioner states that the timing of the I.G’s five-year exclusion, being two years after the
commencement of her state exclusion, in effect makes the period of her exclusion a total

of seven years rather than five. Petitioner as!
an amount of time essentially concurrent wit!
Petitioner asks that I take into consideration

s that her five-year exclusion be reduced to
her state exclusion. Furthermore,
er employment history subsequent to her

plea and conviction, arguing that the exclusion for a five-year period would create “an
extreme hardship” for her, would be “fundamentally unfair,” and would impose a hardship
on her family. Petitioner’s Request for Hearing at 3, 4; P. Br. at 20; P. Final Response at
2.

Neither the statute nor the regulations require the I.G. to act promptly once an individual
has become subject to exclusion. Chander Kachoria, R.Ph., DAB No. 1380 (1993). An
1.G. exclusion imposed after substantial delay, and even well after the beginning of other
sanctions to which a petitioner may be subject, is in no way any less valid, even if the
results of that delay are enough to shame reason and conscience. An ALJ cannot adjust
the effective date of a validly-imposed exclusion by invoking principles of even the most
basic fairness. See, e.g., Kimberley Mazzeo, DAB CR1591 (2007); Stephen Michael
Cook, M.D., DAB CR1234 (2004). An unbroken line of authority spanning nearly two
decades places the timing of the I.G.’s action completely beyond my review here.
Randall Dean Hopp, DAB No. 2166 (2008); Kevin J. Bowers, DAB No. 2143 (2008);
Kailash C. Singhvi, DAB No. 2138 (2007); Thomas Edward Musial, DAB No. 1991
(2005); Samuel W. Chang, M.D., DAB No. 1198 (1990).

Petitioner has been afforded an opportunity to develop - for purposes of an appeal to the
Article III judiciary, if she chooses - the record regarding her objection to the timing of
the I.G.’s exclusion action and her assertion of an abuse of discretion by the I.G. See
Order (October 1, 2008). I note that although I do not decide this issue, it is properly
preserved for the record. Petitioner asks that I evaluate the delay on the part of the I.G. in
excluding Petitioner. P. Br. at 20. However, since I have no authority to review the I.G.’s
exercise of his discretion, it follows that I cannot weigh and decide facts related to that
exercise of discretion even if some of those facts appear in this record. Once the LG. has
exercised his discretion to impose an exclusion, the regulation fixes the effective date of
the exclusion at 20 days from the date of the notice of exclusion. 42 C.F.R. §
1001.2002(b).

Petitioner’s conviction, as I have observed above, satisfied the three elements essential in
a proceeding under section 1128(a)(2). Both parties have moved for summary judgment

in this matter. Resolution of a case by summary disposition is appropriate when there are
no disputed issues of material fact and when the undisputed facts, clear and not subject to

12

conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of
law. Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary
disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. CIV. P. 56 for guidance in applying that regulation. Robert C. Greenwood, DAB
No. 1423 (1993). The material facts in this case are undisputed, clear, and unambiguous.
They support summary disposition in favor of the I.G.’s position as a matter of law. This
Decision issues accordingly.

VI. Conclusion

For the reasons set out above, the I.G.’s motion for summary affirmance should be, and it
is, GRANTED. The I.G.’s exclusion of Petitioner Vivienne Esty-Fenton from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, pursuant to the terms of section 1128(a)(2) of the Act, 42 U.S.C.

§ 1320a-7(a)(2), is thereby affirmed.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Freedom Home Care, Inc., ) Date: March 24, 2009
)
Petitioner, )
)

-V.- ) Docket No. C-09-65

) Decision No. CR1930
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I grant summary judgment to the Centers for Medicare & Medicaid Services (CMS)
sustaining its determination to terminate Petitioner, Freedom Home Care, Inc.’s, provider
agreement.

I. Background

Petitioner, located in Rancho Cucamonga, California, was certified by Medicare as a
ome health agency (HHA). On August 11, 2008, the California Department of Public
Health (DPH) completed a recertification survey of Petitioner. CMS determined that the
survey documented deficiencies that Petitioner failed to meet four conditions of
participation — 42 C.F.R. § 484.14 Organization, services, and administration; 42 C.F.R.
§ 484.16 Group of professional personnel; 42 C.F.R. § 484.18 Acceptance of patients,
plan of care, and medical supervision; and 42 C.F.R. § 484.30 Skilled nursing services —
and that some of the deficiencies under the condition of participation at section 484.18
posed immediate jeopardy to the health and safety of Petitioner’s patients. CMS further
determined that those documented deficiencies either individually or in combination
substantially limited Petitioner’s capacity to render adequate care or adversely affected
patient health and safety. Consequently, because Petitioner was not in compliance with
all conditions of participation, CMS, by notice dated October 8, 2008, determined to
terminate Petitioner’s provider agreement effective October 31, 2008.

2

Petitioner timely requested review and this matter was assigned to me. Pursuant to my
initial order, CMS filed a Motion for Dismissal and/or Summary Disposition with a brief
(CMS Br.) together with CMS Exhibit (Ex.) 1. Petitioner responded to CMS’s motion (P.
Br.) and submitted Petitioner’s Exhibits (P. Exs.) 1-12. CMS filed a Request for Leave to
Reply (CMS Reply), which I granted, together with CMS Ex. 2. Neither party objected to
the other’s exhibits, and they are admitted.

II. Issue, applicable law, and findings of fact and conclusions of law
A. Issue

In its motion, CMS raises two issues. First, it contends that Petitioner’s hearing request is
on its face inadequate to respond to the allegations of noncompliance made by CMS. It
urges that I dismiss the hearing request for the reason that it fails to comply with the
requirements of 42 C.F.R. § 498.40(b) that a hearing request identify the specific findings
of fact and conclusions of law with which the affected party disagrees and specify the
basis for contending that the findings and conclusions are incorrect. Alternatively, CMS
urges that I grant it summary disposition, contending that Petitioner has not contested
allegations of fact which are, on their face, sufficient to establish that Petitioner has
contravened HHA participation conditions.

I find it unnecessary to address CMS’s motion to dismiss. In this decision I address
CMS’s alternative argument that summary disposition is appropriate.

B. Applicable law.

The Social Security Act (Act) sets forth requirements for HHAs participating in the
Medicare and Medicaid programs, and authorizes the Secretary of Health and Human
Services to promulgate regulations implementing the statutory provisions. Act, sections
1861(m) and (0), and 1891 (42 U.S.C. §§ 1395x(m) and (0); 1395bbb). The Secretary’s
regulations governing HHA participation in the Medicare program are found at 42 C.F.R.
Part 484.

In order to participate in the Medicare program and obtain reimbursement for its services
a HHA must be in compliance with all applicable “conditions” as specified in 42 C.F.R.
Part 484. 42 C.F.R. § 488.3(a)(2). Periodic review of compliance with the conditions of
participation is required and such reviews or surveys are generally conducted by the state
agency. Based upon its survey, the state agency either certifies compliance or
noncompliance of the surveyed provider. 42 C.F.R. §§ 488.20, 488.24, 488.26.

The state agency certifies that a HHA is not in compliance with the conditions of
participation when “the deficiencies are of such character as to substantially limit the
provider's . . . capacity to furnish adequate care or which adversely affect the health and
3

safety of patients.” 42 C.F.R. § 488.24(b). Whether or not there is compliance with a
condition of participation depends upon the “manner and degree to which the provider . . .
satisfies the various standards within each condition.” 42 C.F.R. § 488.26(b); CSM Home
Health Services, DAB No. 1622, at 6-7 (1997). Surveyors are required to “directly
observe the actual provision of care and services to residents, and the effects of that care,
to assess whether the care provided meets the needs of individual residents... .” 42
CFR. § 488.26(c)(2).

CMS is authorized to terminate a provider agreement when the provider no longer meets
the requirements of the Act or fails to meet the conditions of participation, among other
grounds listed in the regulation. 42 C.F.R. § 489.53.

C. 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.

I. Summary judgment is appropriate where there are no
disputed issues of material fact.

2. The undisputed material facts alleged by CMS support a
finding that Petitioner failed to comply with a condition of
participation.

The regulations governing hearings at 42 C.F.R. Part 498 do not explicitly provide for
summary judgment as a means of deciding cases. But these regulations have been
interpreted consistently in this forum and by the Departmental Appeals Board (Board) to
allow for summary judgment in circumstances that are analogous to those for which
summary judgment is appropriate under FED. R. CIv. P. 56.

Rule 56 permits summary judgment where there is no dispute as to the material facts of a
case. A fact is “material” where it is necessary to deciding a case’s outcome. Summary
judgment may be granted when a moving party alleges facts which, if not disputed, would
be sufficient to establish a basis for that party to prevail on the merits.

Allegations of facts which if undisputed establish a basis for a judgment favorable to the
moving party impose a burden on the party opposing summary judgment to allege facts
which create a genuine dispute. A party opposing a motion for summary judgment need
not prove that the weight of the evidence in the case supports its position in order to
prevail on the motion. But, at a minimum, it must allege facts and claim inferences
which, if ultimately proven, would create a genuine controversy as to the facts of a case.
The Board’s most recent discussion of the evaluation of facts and inferences in the context

4

of summary disposition appears in Brightview Care Center, DAB No. 2132 (2007), and I
have followed the principles set out in that case here.

CMS’s allegations of condition-level noncompliance by Petitioner are based on a
compliance survey. That survey determined that Petitioner failed to comply with four
conditions of participation for a HHA as stated in the following regulations:

© 42 CFR. § 484.14 (Organization, services & administration);

© 42 C.F.R. § 484.16 (Group of professional personnel);

© 42 C.F.R. § 484.18 (Acceptance of patients, plan of care, & medical
supervision); and

© 42 CFR. § 484.30 (Skilled nursing services).
CMS Ex. 1; CMS Notice Letter dated October 8, 2008.

In its motion for summary disposition, CMS argued that Petitioner had admitted facts
sufficient to warrant summary judgment in CMS’s favor with respect to at least three of
the conditions. CMS pointed out that each of the admitted deficiencies involved a serious
breach by Petitioner’s professional staff concerning the care given or, in some instances,
not given to Petitioner’s patients. In its response to the motion, Petitioner failed to
respond to many of CMS’s arguments, failed to dispute certain facts and findings or failed
to present credible evidence to establish the existence of a genuine issue of material fact
in a number of instances which were critical to ruling against CMS’s motion.

In deciding this case, it is unnecessary that I find that Petitioner failed to comply with all
four of the conditions that were cited by CMS. As I discuss below, failure by Petitioner
to comply with even one of these conditions gives CMS grounds to terminate its
participation in Medicare. Thus, viewing the evidence in the light most favorable to
Petitioner, and drawing every inference in Petitioner’s favor that can reasonably be
supported by that evidence, the undisputed facts establish that Petitioner was not in
substantial compliance with all the conditions of participation and summary judgment is
therefore appropriate.

3. CMS is authorized to terminate Petitioners provider agreement
when Petitioner no longer meets the requirements of the Act for
participation as a HHA.

The regulations at 42 C.F.R. Part 484 establish the conditions of participation and
standards by which HHA compliance with the Medicare program is determined. The
standards set forth in the regulations are essentially the yardsticks by which surveyors
5

measure the level of compliance of the HHA. Ifa HHA’s performance does not measure
up to the regulatory standard, a deficiency exists. If a deficiency exists, the question is
whether that deficiency alone or considered in combination with another deficiency is “of
such character as to substantially limit the provider's . . . capacity to furnish adequate care
or which adversely affect the health and safety of patients. ...” 42 C.F.R. § 488.24(b). If
the provider’s capacity to furnish adequate care is substantially limited or if the health and
safety of patients is adversely affected then a condition-level deficiency exists and
termination may be appropriate. If no condition-level deficiency exists, CMS may still
consider whether one or more standard-level deficiencies are repeated on survey and
resurvey and, if no correction has occurred, CMS may declare the provider agreement
terminated on that basis. If I determine that Petitioner failed to meet even one condition
of participation, I may conclude that there is a basis for termination of Petitioner's
provider agreement. 42 C.F.R. § 489.53(a) (CMS may terminate a HHA’s provider
agreement if it no longer meets the appropriate conditions of participation.)

4. Petitioner did not meet the condition of participation at
42 C.F.R. § 484.14 (Organization, services &

administration) because it failed to meet certain standards of
the condition of participation and these deficiencies both
alone and in combination with each other substantially
limited Petitioner's capacity to furnish adequate care or
adversely affected the health and safety of the patients.

The surveyors determined that Petitioner failed to meet four standards under this
condition of participation. I address two standards here and find they are sufficient to
support CMS’s finding that Petitioner did not meet the condition of participation. Thus, I
need not discuss the other two standards found deficient under this condition because
even if Petitioner established that it was in compliance with the other standards, it still
would not be in substantial compliance with the condition of participation.

a. G 134! (42 C.F.R. § 484.14(c) Administrator)

This standard requires that an administrator employ qualified personnel. The survey
found that the Petitioner’s Administrator failed this standard when she hired a licensed
vocational nurse (LVN) who did not have one year of professional nursing experience as
required by California state law. California state law requires that a LVN who provides
services in a patient’s temporary or permanent place of residence through a home health
agency must have one year of prior professional nursing experience. CAL. CODE REGS.,

' This is the prefix tag reference for the applicable standards and conditions of
participation as indicated on the Statement of Deficiencies. Each tag represents a
particular regulatory provision.
6

tit. 22 § 74707; CMS Ex. 2. The survey found that according to Petitioner’s personnel
records, the LVN was hired on July 29, 2008 and, after the surveyors uncovered her lack
of experience, the LVN was terminated on August 11, 2008. Petitioner does not dispute
that this LVN was hired without the requisite experience required by state law. Instead,
Petitioner contends that the LVN in question was hired mistakenly but there was no
problem because the LVN had no visits to patients scheduled nor were any patients yet
assigned to her. CMS Ex. 1, at 7.

I conclude that the undisputed evidence is that Petitioner's Administrator failed to ensure
that the HHA employed only qualified personnel. It is only fortuitous that the unqualified
LVN had not yet been assigned any patients or had any visits to patients scheduled when
the survey disclosed that the LVN did not have the requisite experience. That does not
diminish the fact that an unqualified LVN was hired. I conclude that CMS found a clear
violation of this standard. Besides being a violation of state licensing requirements,
Petitioner’s failure to hire qualified staff also adversely affects the health and safety of the
patients. Accordingly, I find that Petitioner failed to meet the standard at G 134.

b. G 143 (42 C.F.R. § 484.14(g) Coordination of patient services)

This standard requires that all personnel furnishing services maintain liaison to ensure
that their efforts are coordinated effectively and support the objectives outlined in the

plan of care. The clinical record should establish that effective interchange, reporting,
and coordination of patient care does occur.

The survey determined that this standard was not met with respect to two patients, Patient
1 and Patient 9, when there was no documentation in the patients’ clinical records to
indicate that the HHA nursing staff notified the patients’ physicians of significant changes
in the patient’s condition or notified the other HHA staff to ensure that care was
coordinated effectively. Petitioner did not dispute the findings with respect to Patient 1.
As for the findings with respect to Patient 9, Petitioner disputed one small aspect of the
findings but failed to dispute the material aspects of the surveyor’s findings.

Patient 1’s plan of care showed he had diagnoses which included diabetes mellitus type 2
insulin dependent and peripheral vascular disease. His physician ordered the HHA to
provide skilled nursing services twice a week for 60 days. CMS Ex. 1. The surveyor
accompanied the skilled nurse (SN) to her visit with Patient 1. The surveyor observed
that Patient 1 had a3 ‘2 inch by 4 inch open wound on the shin of his left leg. The SN
told the surveyor that she had observed the open wound the day before but that she had
not notified the physician. The SN claimed that the patient would not let her do anything
about the wound but when the SN asked the patient in the surveyor’s presence if he
wanted her to call the doctor, the patient stated, “Sure.” The surveyor later spoke with the
Administrator and the Director of Patient Care Services about the open wound and they
informed the surveyor that the SN had not notified the agency about the wound. The

7

surveyor’s review of the clinical record indicated that the SN ha
open wound nor did she document that she contacted Patient 1’s

not documented the
doctor. CMS Ex. 1.

Petitioner failed to respond to this deficiency anywhere in its pleadings before me.

Any observation of such a wound should have triggered a comment in the home visit
documentation of the patient’s clinical record, a consultation with the patient’s physician,
and an immediate notification to the HHA Administrator and Director of Patient Care
Services. The important purpose of skilled nursing home health care services for the
home-bound patient is to be the “eyes” of the treating physician; the SN provides reliable
information about the patient, especially any new or perceived changes in the patient’s
condition, so that the physician can properly assess whether changes to the plan of care
are necessary and whether new interventions should be implemented. Manifestly, the
appearance of a large, open wound for a patient with diabetes is significant and should
have been documented in the clinical record. It also required the skilled nurse to either
consult personally with the treating physician or to contact the HHA Administrator and
Director of Patient Care Services to notify them to consult with the physician. This is an
obvious failure to meet the required standard and, more importantly, the failure adversely
affected the health and safety of this patient.

Patient 9 began receiving home health care from Petitioner on June 23, 2008. Her plan
of care, dated June 23 to August 21, 2008, revealed diagnoses which included traumatic

fracture of the hip, status
the femur. Her physician

post surgical repair with an open reduction internal fixation of
ordered skilled nursing services twice a week for the first week,

and once a week thereafter for the next eight weeks. The physician also ordered the HHA

to report to him any signi

The surveyor reviewed th
indicated that on June 27,
times a night and burning
was contacted regarding t

ficant changes in Patient 9’s condition.

e clinical record of the patient. The review of a home visit note
2008, Patient 9 complained of urinary frequency three to four
with urination. The note further indicated that the HHA office
 patient’s condition. There was no documentation showing

that the physician was contacted regarding the change in the patient’s condition and her
complaint. The nursing note from the home visit on July 3, 2008, indicated that Patient 9
continued to complain about the urinary burning and frequency and that this was reported
to the on-call nurse. However, the records revealed that the physician was not contacted
regarding Patient 9’s urinary complaints until July 7, 2008. The physician ordered a
urinalysis and a culture and sensitivity test. The nurse’s notes of the home visit on July 8,
2008, indicated that Patient 9 was still complaining of burning. The results of the test
were not received until some three days later and showed a significant bacterial infection.
On July 15, 2008, the physician ordered the agency to administer the prescribed
antibiotic but on that same date Patient 9’s family requested to discontinue the HHA’s
services. CMS Ex. I.
8

Petitioner does not dispute its failure to notify Patient 9’s physician of her urinary
complaints until 10 days after she first brought it to the nurse’s attention. Nor do they
dispute that while the nurse reported the information to the Administrator, neither the
nurse, the Administrator or the Director of Patient Care Services notified and consulted
with the physician in a timely manner so that the physician could order new interventions
for her condition. Rather, the only argument or dispute that Petitioner makes in response
to CMS’s motion for summary judgment is to single out the surveyor finding that there
was no documentation showing that the SN monitored the patient while she was on
antibiotic therapy. Petitioner contends that it could not do so since the physician did not
order the antibiotics until July 15, 2008, and the family requested that HHA services be
discontinued that same date. P. Br. at 3. Even accepting Petitioner’s contention as true, it
does not rebut the finding that the HHA staff from the SN who provided the actual
services to Patient 9 to the Administrator and Director of Patient Care Services failed to
coordinate and maintain effective liaison so that Patient 9’s physician was contacted and
consulted in a timely manner. Clearly, after Patient 9 complained again of urinary
burning and frequency during the July 3, 2008 home visit, the SN should have contacted
both HHA staff as well as the physician to ensure that new interventions were planned by
the physician. The fact that the physician was not notified for over 10 days after the
patient first complained of this condition is unconscionable and certainly fails to meet the
requisite standard. I further find that Petitioner's failure under this standard adversely
affected the health and safety of Patient 9. I also conclude that Petitioner’s failures under
this standard (G 143) as well as its failures under the previous standard (G 134)
demonstrate that Petitioner’s ability to furnish adequate care was substantially limited by
the failures of both the skilled nursing staff as well as the administrative staff, supporting
my conclusion that there was a condition-level violation of 42 C.F.R. § 484.14.

5. Petitioner did not meet the condition of participation at
42 C.F.R. § 484.18 (Acceptance of patients, plan of care,
and medical supervision) because it failed to meet certain
standards of the condition of participation and these
deficiencies both alone and in combination with each other
substantially limited Petitioner's capacity to furnish
adequate care or adversely affected the health and safety of
the patients.

The surveyors found Petitioner violated two of the standards under this condition and that
the cumulative effects resulted in the failure of Petitioner to meet the condition of
participation.

I address the standards here and find that Petitioner’s failures adversely affected the health
and safety of several of its patients and that these failures demonstrate a significant
systemic problem which shows that Petitioner’s capacity to furnish adequate care was
9

substantially limited. I find and conclude that these failures support the ultimate
conclusion that Petitioner was not in compliance with the condition of participation.

a. G 164 (42 C.F.R. § 484.18(b) Periodic review of plan of care)

Under this standard, the HHA professional staff must promptly alert the physician to any
changes in a patient’s condition that suggest a need to alter the plan of care. The surveyor
found that this standard was not met because the HHA failed promptly to alert the
physician about a large open wound on the leg of a diabetic patient, Patient 1, and failed
to inform the physician that Patient 9 complained of urinary burning and urgency. The
failures under this standard are based on the same undisputed facts as discussed under
Tag G 143 and I need not repeat them here. Again, Petitioner did not respond with
respect to CMS’s motion for summary judgment with respect to this finding nor did it
dispute the facts except for one aspect with respect to Patient 9 noted above which does
not materially affect the other more serious failures for this patient which Petitioner did
not dispute.

The failure of the HHA’s nurses to notify the patients’ physicians in any timely fashion
about these significant changes in their condition was indeed a violation of this standard.
Moreover, the HHA’s failures under this standard adversely affected the health and safety
of Patient 1 and Patient 9 and demonstrated that Petitioner's capacity to furnish adequate
care was substantially limited.

b. G 165 (42 C.F.R. § 484.18(c) Conformance
with physician orders)

This standard requires that drugs and treatments are administered by agency staff only as
ordered by the physician. The survey determined that Petitioner failed to meet this
standard with respect to four out of 11 of the patients reviewed.

The Survey findings 1. A-H with respect to Patient 1. Patient | was an insulin-
dependent diabetic. The physician ordered skilled nursing services for this patient twice a
day for 60 days. The order required the nurse to administer both Humulin N insulin, 12
units in the morning, and 10 units every evening, subcutaneously, as well as Humulin R
insulin two times a day, the amount of which, if any, was based on a sliding scale
determined by the patient’s blood sugar reading at the time. The orders also required that
if the patient’s blood sugar was more than 400 mg/dl, the physician was to be called.
CMS Ex. 1, at 27. The survey report detailed eight different deficiencies (1. A-H) in the
administration of the patient’s insulin.
10

Petitioner alleges certain facts with alleged supporting evidence which, if ultimately
proven, would create a genuine controversy as to the facts of this case with respect to
findings 1. A, B, C, D, and E.?,* For purposes of summary judgment, I accept these
assertions, both factual and inferential, in the light most favorable to Petitioner.
However, Petitioner presents no facts or arguments in response to the deficiency findings
set forth at 1. F,G, and H. The deficiency findings at 1. F and H indicated two instances
when Patient 1 was administered four units of Humulin R insulin rather than two units as
ordered under the sliding scale for the patient’s blood sugar level.’ In both instances,
Petitioner does not dispute that the wrong amount of insulin was given to the patient.
Rather, the only response Petitioner makes is to argue whether the failure to give the
requisite amount of insulin to this patient in two separate instances constituted immediate

> Petitioner presented the Diabetic Flow Sheet for Patient 1 for the month of June
2008, which it contends shows the correct amount of Insulin N and R given to the patient
as opposed to the Nursing Notes for Home Visit Records for the dates in question. P. Ex.
8. No Diabetic Flow Sheet was presented, however, for July 2008.

> Petitioner contends that the surveyors only reviewed the home visit notes and not
the Diabetic Flow Sheet. Petitioner admits these documents were in conflict but argues
that they were not deficient under the standard for conformance with Physician Orders
but were deficient under the standard for clinical records, for which they were not cited. I
need not address these contentions here since Petitioner’s overall undisputed deficiencies
are sufficient to support the termination. However, even if I accept Petitioner’s
contentions that for findings A-E, their failures were the result of bad record keeping and
not failures to give the requisite amount of medication, their failures to have accurate and
non-contradictory records of the amount of insulin being given to a diabetic patient is
particularly egregious. The purpose of the home visit records is to provide an accurate
description of all aspects of a patient’s condition and care so that any practitioner caring
for that homebound patient can ascertain from reviewing the clinical records just what
actions have been taken with respect to that patient. But even accepting Petitioner’s claim
as true that the Diabetic Flow Sheet accurately represented the amount of insulin given, it
is clear — and Petitioner does not dispute — that the Home Visit Notes and
documentation, which include the nurse’s notes which should be contemporaneous notes
from the home visit, are inconsistent with the Diabetic Flow Sheets.

* The nursing record indicates that on June 29, 2008, Patient 1’s blood sugar level
was 186 and she was administered four units of Humulin R insulin. The physician sliding
scale indicates that for blood sugar levels of 151 to 200 mg/dl, the patient should be given
two units of Humulin R. Survey Finding 1. F, CMS Ex. 1, at 30. The nursing record
indicates that on July 12, 2008, Patient 1’s blood sugar was 165 and the nurse
administered four units of Humulin R when Patient 1 should only have received two
units. Survey Finding 1. H, CMS Ex. 1, at 31.
11

jeopardy because there was no crisis situation, and there was no actual serious injury,
harm, impairment or death of the resident. Petitioner did not respond to the deficiency
finding at G that on July 7, 2008, it gave Patient 1, eight units of Humulin R based on his
blood sugar level of 367 when the patient should have received 10 units. These
undisputed deficiencies plainly show egregious failures by Petitioner’s staff to accurately
and correctly follow and conform its provision of care to the physician’s orders. Despite
Petitioner’s argument, these undisputed failures created a very clear, palpably real
possibility of serious injury to Patient 1 and unanswerably show that Petitioner’s capacity
to furnish adequate care was substantially limited. Therefore, I find that Petitioner’s
egregious failure under this standard, G 165, was sufficient in and of itself, let alone in
combination with the violation of the standard for periodic review of the plan of care, G
164, to support a determination that Petitioner failed to meet the condition of participation
at 42 C.F.R. § 484.18 (Acceptance of patients, plan of care, and medical supervision).°

6. Petitioner ’s violation of even one condition of
participation is sufficient to sustain CMS’ termination.

The undisputed facts support a determination that Petitioner did not meet at least two
conditions of participation. A finding of a violation of even one condition is sufficient to
sustain the termination. Here, I find and conclude that Petitioner violated at least two
conditions of participation and these violations were sufficient to sustain CMS’s
termination of Petitioner.°

> Petitioner did not dispute the findings under this condition with respect to certain
deficiencies with respect to the care of Patient 3 (failure to take fasting blood sugar as
ordered; failure to notify physician of medications not being taken or to notify pharmacy
of prescription change; administering medications not included in physician’s order),
Patient 13, and Patient 14. For example, the surveyors found that Patient 13 was taking
Coumadin and because this medication requires careful laboratory monitoring to ensure a
balance between excessive bleeding and blood clots, her physician ordered that certain
blood tests be drawn on July 28, 2008. The records indicate that no lab test was obtained
as ordered. As for Patient 14, her physician ordered the SN to administer a certain
antibiotic via a peripherally inserted central catheter but the order also indicated that prior
to the administration of this drug, a lab test for a Vancomycin trough (to determine the
amount of the Vancomycin medication presently in the blood stream as well as to
determine other levels) be done and reported to the physician prior to any infusion.
Instead, the nurse infused the patient before the lab test was performed. This was in
direct conflict with the physician’s order.

® T did not discuss whether Petitioner violated the conditions of participation at 42
C.F.R. § 484.16 (Group of professional personnel) and 42 C.F.R. § 484.30 (Skilled
nursing services), since the other violations were more than sufficient to sustain CMS’s
termination action here. I do note, however, that many of the deficiencies cited under the

(...continued)

12

II. Conclusion

Based on the above findings and analysis, I sustain CMS’s determination that there was a
condition-level violation of the Medicare conditions of participation and, therefore, a
basis for termination of Petitioner’s provider agreement and participation in Medicare
effective October 31, 2008.

/s/
Richard J. Smith
Administrative Law Judge

°(continued. i)

condition at section 484.18 were cited also as deficiencies under the condition at section
484.30 with respect to skilled nursing services.