Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Carrington Place at Muscatine, ) Date: October 21, 2009

(CCN: 16-5578), )
)
Petitioner, )
)

-V.- ) Docket No. C-08-750

) Decision No. CR2019
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose remedies against Petitioner, Carrington Place at Muscatine, consisting of the
following:

¢ Civil money penalties of $50 per day for each day of a period that began on
August 28, 2008 and which ran through October 8, 2008;

¢ Civil money penalties of $250 per day for each day of a period that began on
October 9, 2008 and which ran through November 13, 2008; and

e Denial of payment for new Medicare admissions for each day of a period that
began on August 1, 2008 and which ran through November 13, 2008.

I. Background

Petitioner is a skilled nursing facility in Muscatine, Iowa. It participates in the Medicare
program. Its participation in Medicare is governed by sections 1819 and 1866 of the
Social Security Act (Act) and by implementing regulations at 42 C.F.R. Parts 483 and
488. Its right to a hearing in this case is governed by regulations at 42 C.F.R. Part 498.
Medicare compliance surveys were conducted at Petitioner’s facility in January (January
survey), July (July survey), August (August survey) and October (October survey) 2008.
Numerous findings of noncompliance with Medicare participation requirements were
made at these surveys. CMS determined to impose against Petitioner the remedies that I
describe in the opening paragraph of this decision based on the noncompliance findings
that were made at the July, August, and October surveys.'

Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision. I held an in-person hearing in Davenport, lowa on August 6, 2009. At the
hearing, I received into evidence exhibits from CMS which I identified as CMS Ex. 1 —
CMS Ex. 30. I received into evidence exhibits from Petitioner which I identified as P.
Ex. 1 — P. Ex. 33. I received an additional exhibit into evidence which I identified as ALJ
Ex. 1. I heard the cross-examination and redirect testimony of several witnesses.”

IL. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are whether:

1. Petitioner failed to comply substantially with Medicare participation
requirements; and

' More than once I invited CMS to explain to me why it considered the January survey’s
noncompliance findings to be relevant to this case. I observed to counsel that no
remedies were imposed based on those findings and that, in fact, Petitioner would have
had no right to a hearing to challenge those findings in the absence of a remedy
letermination. CMS has not provided me with any explanation of the relevance of the
January survey findings despite my invitation and so I rule them to be irrelevant.

* On October 8, 2009, after I had closed the record of this case, Petitioner filed a motion
to supplement its evidence with what it asserts to be an excerpt of a transcript of a
leposition relating to a State compliance hearing. The transcript excerpt contains
estimony of Margaret Eileen Brotherton, a State agency surveyor, who also testified at
he August 6, 2009 hearing that I conducted. Transcript (Tr.) at 40-46. Petitioner asserts
that I should receive this testimony because it contradicts the testimony that Ms.
Brotherton gave at the August 6, 2009 hearing and because Ms. Brotherton now admits
that she was not truthful at that hearing. I deny the motion for two reasons. First, I rely
on none of Ms. Brotherton’s testimony to decide this case. Whether there are
inconsistencies between her August 6 hearing testimony and her October 6, 2009
leposition is consequently irrelevant. Second, it does not appear to me that the testimony
that Ms. Brotherton gave during her October 6 deposition is materially inconsistent with
he testimony she gave at the August 6 hearing.

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2. The remedies that CMS determined to impose are authorized and
reasonable.

B. Findings of fact and conclusions of law

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

1. Petitioner failed to comply substantially with Medicare participation
requirements.

As I discuss above, this case involves three compliance surveys at which numerous
findings of noncompliance were made. In this decision, however, I make Findings about
only some of these noncompliance findings. It is unnecessary that I address other
noncompliance findings because the noncompliance findings that I do address are, by
themselves, sufficient to support the remedies that CMS determined to impose.*? The
noncompliance findings that I discuss in this decision are Petitioner’s failure to comply
substantially with the requirements of:

© 42 C.F.R. § 483.25(i)(1) (July and October surveys). The regulation requires a
facility to ensure, based on a resident’s comprehensive assessment, that the
resident maintains acceptable parameters of nutritional status, such as body weight
and protein levels, unless the resident’s clinical condition demonstrates that this is
not possible.

© 42 C.F.R. § 483.35(i)(2) (August survey). The regulation mandates that a facility
store, prepare, distribute, and serve food under sanitary conditions.

a. Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.25(i)(1).

There are two distinct instances of noncompliance with this regulation alleged by CMS. I
discuss these separately, beginning with the allegations that were made at the July survey.

* Indeed, the finding of noncompliance that was made at the August survey which I
address in this decision is not, strictly speaking, necessary to support CMS’s remedy
determinations. I discuss it only because that finding of noncompliance provides
additional — if not requisite — evidence to support increasing the civil money penalty
amount imposed against Petitioner from $50 to $250 per day.
i. The July survey findings

The allegations of noncompliance that were made at the J

uly survey center around the

care Petitioner gave to a resident who is identified as Resident # 3 in the July survey

report. CMS Ex. 7, at 25-30. Specifically, the report and
failed to provide interventions for Resident # 3 to address

The resident was admitted to Petitioner’s facility in Januai
the time of admission the resident’s weight was recorded
was not noted as having a history of weight loss. Jd.

CMS allege that Petitioner
her weight loss.

ry 2008. CMS Ex. 7, at 26. At
at 132 pounds and the resident

By April 2008 the resident was assessed by Petitioner’s staff as having experienced a

weight loss. Beginning on April 8, 2008, Petitioner’s sta’
resident’s weight loss — began weighing the resident wee!
weight was documented on April 13, 2008 as 126 pounds.

f — in evident recognition of the
ly. CMS Ex. 7, at 27. Her
. Id. at 26. On April 15,

Petitioner’s dietician notified the resident’s physician that the resident lost 5.7 pounds

over 30 days, a weight loss that the dietician described as

“significant.” CMS Ex. 18, at

57. The dietician noted that the resident’s weight had been previously very stable.

However, Resident # 3 had not only lost significant weig
displaying poor appetite. Jd. The dietician requested the

Resident # 3 be given Resource 2.0, a dietary supplement.

A care plan prepared for the resident on April 15, 2008 i

it, but, as of April 15, was
physician to prescribe that

entified nutrition as being one

of the resident’s problems. CMS Ex. 7, at 26. As an intervention, the resident began
receiving Resource 2.0 twice daily, on April 16, 2008. Jd. at 27.

The resident continued steadily to lose weight. On May 2, 2008, the resident’s weight
was recorded at 124 pounds. On May 8, it was recorded at 123 pounds. On May 16, her
weight had declined to 120.5 pounds and it declined further to 120 pounds on May 23,

2008. The resident’s weight continued to decline in June
recorded at 117 pounds, on June
CMS Ex. 7, at 27.

2008. On June 5, it was

6, 117 pounds, and, finally, at 118 pounds on June 27.

Resident # 3 received the supplement as prescribed from April 16 until April 30, 2008.
However, the supplement was discontinued without explanation by Petitioner’s staff after

April 30. CMS Ex. 7, at 28-29. 1
supplement. There is no record showing that Petitioner’s

[here is no physician’s order rescinding the order for the

staff communicated with the

resident’s physician during the months of May and June 2008 about the resident’s

continued loss of weight. Jd. at 2

8. Nor did the staff discuss the resident’s condition with

the facility’s dietician during the months of May and June 2008 despite the fact that the

resident was steadily losing weig

t during this period. Jd. at 29.
On June 24, 2008, the facility’s dietician reviewed the resident’s record. On that date the
dietician reordered the supplement for Resident # 3. CMS Ex. 7, at 28.

A surveyor observed the resident being fed on July | and 2, 2008. At lunch on July | the
resident ate only a few bites of her meal. The resident left the facility dining room with
the meal unfinished. Petitioner’s staff did not cue or encourage the resident to eat more.
CMS Ex. 7, at 28. At breakfast on July 2 the resident was again observed as eating only a
few small bites of the meal, then leaving, without being assisted during the meal by
facility staff. Id. at 29.

These facts, if unrebutted by Petitioner, are sufficient to establish noncompliance with 42
C.F.R. § 483.25(i)(1). A facility must ensure that a resident maintain sufficient
parameters of nutritional status. That means aggressively pursuing all reasonable
measures that would or might serve to assist a resident in maintaining his or her weight.
Here, the evidence offered by CMS shows that Petitioner failed to undertake necessary
measures on behalf of Resident # 3 even though the staff was on notice of and, in fact,
documented a decline in the resident’s weight accompanied by a loss of appetite that
Petitioner’s dietician determined to be substantial. The evidence shows that after April
2008 the staff simply neglected to provide care to address the resident’s weight loss.
They failed to maintain contact with the resident’s physician and the facility’s dietician
notwithstanding the dietician’s expressed concern about the resident’s loss of weight.
They failed to follow the physician’s treatment order for Resident #3. They failed
assertively to assist the resident with eating and to encourage the resident to eat.

The evidence and arguments offered by Petitioner to counter CMS’s case of
noncompliance are without merit. Petitioner argues that the resident’s weight loss may
have been due to a variety of factors having nothing to do with nutrition. It contends that
the resident had a history of medical conditions that might have caused the resident to
lose weight even if she was consuming adequate calories. Petitioner’s brief in support of
summary judgment motion (summary judgment brief) at 39.4

+ Prior to the hearing, Petitioner filed a detailed motion for summary judgment which I
denied. At the close of the hearing, I commented that Petitioner’s brief was so extensive
that Petitioner could opt to treat it as a brief on the case-in-chief and offer its post-hearing
brief as a supplement. It has done so, and thus, I consider both briefs in addressing
Petitioner’s arguments and contentions of fact. However, I note that Petitioner attached
several documents to its post-hearing brief as its “Attachment 1” and evidently, it
contends that I should either receive them into evidence or should have received them at
the hearing. At the hearing, I explained why I would not receive the parties’ stipulation
that is part of the attachment and why I was rejecting certain other proffered documents
which also appear to be part of the attachment. I do not receive these documents now,
nor do I consider them in deciding this case.
There is no conclusive evidence in the record of this case establishing precisely what
caused the resident to lose weight. The resident’s weight loss may have been due to
underlying medical conditions or it may have been due simply to the resident’s poor
appetite and failure or refusal to eat. However, I find the underlying cause of the
resident’s weight loss to be irrelevant. What is relevant is that Petitioner’s own staff
recognized that the resident had lost a significant amount of weight between the date of
the resident’s admission and April 15, 2008 and determined that it was necessary to
address this weight loss through interventions that included providing the resident with a
dietary supplement. Moreover, the resident’s treating physician, by ordering that a
supplement be given to the resident, concurred with this assessment of the resident’s
condition. Once the staff identified the weight loss as a significant problem it had a duty
to address that problem. The unrebutted evidence offered by CMS shows that the staff
failed to take even the measures that they had identified as essential. They failed to
provide the resident with the dietary supplement that had been prescribed by the
resident’s physician and they failed to communicate with the two professionals most
knowledgeable in the causes and treatment of weight loss — the treating physician and
Petitioner’s dietician — even as the resident continued to lose weight.

Next, Petitioner asserts that Resident # 3 did not, in fact, lose a significant amount of
weight. Summary judgment brief at 40-41. Petitioner argues that the resident’s “usual
weight” was not 132 pounds, the resident’s weight on admission to the facility, but 122
pounds. /d. According to Petitioner, the nearly 10 pounds of allegedly excess weight
manifested by the resident at the time of her admission was due to her receipt of “massive
amounts” of intravenous (IV) fluids during a hospital stay just prior to the resident’s
admission to Petitioner’s facility. Jd.

I find Petitioner’s assertion to be speculative and unsupported by the evidence. It may be
that the fluid administered to the resident while she was in the hospital over hydrated the
resident causing the resident’s weight to be abnormally high on admission to the facility.
But, the evidence supports an alternative explanation for the resident’s admission weight.
The resident was dehydrated prior to her hospital stay. Nausea, vomiting and
dehydration were the reasons for the resident’s hospitalization. P. Ex. 32, at 1-2. Thus,
the fluids given to the resident while the resident was hospitalized appear to have been
given so that the resident could attain a relatively normal level of hydration and body
weight.

> Petitioner observes that the resident was administered the medication Lasix, a diuretic,
immediately after her admission to the facility so as to eliminate excess fluid. But, even
if some of the weight that the resident manifested on admission was due to fluid
retention, there is nothing in the record to show that all of it was due to that fact. Indeed,
the resident’s weight was documented at 126 pounds on April 13, 2008, about three
months after her admission. The resident continued to lose significant weight after that
date, when the staff first expressed concern about the resident’s weight loss and poor
eating habits.
However, even assuming that Petitioner’s assertion that the resident was over hydrated is
true, it ignores the evidence establishing that Petitioner’s staff — and in particular its
dietician — and the resident’s treating physician concluded in April 2008, more than four
months after the resident’s admission to the facility, that the resident had lost significant
weight possibly due to poor appetite. In other words, the staff and the treating physician
assessed the resident’s condition as an abnormal weight loss and determined to treat the
resident accordingly. That assessment imposed on the staff a duty to diligently attempt to
assure that the resident ate adequately. As I have discussed, the staff clearly failed to
perform that duty when it ceased providing the prescribed supplement to the resident and
failed to communicate the resident’s continuing weight loss either to the dietician or to
the treating physician. Moreover, even if the resident’s “usual” weight was 122 pounds,
the unequivocal evidence is that the resident’s weight declined to 117 pounds — in the
face of the dietician’s expressed concern about the resident’s weight loss — without the
facility carrying through on the interventions that had been developed for Resident # 3.

Petitioner asserts that Resident # 3’s physician, Matthew Sojka, M.D.., testified that he did
not consider it to be significant that a resident would lose one to two pounds “a week.”
Petitioner’s post-hearing brief at 19; see Tr. at 26. From this assertion Petitioner seems to
argue that the physician did not consider the resident’s weight loss to be significant,
thereby excusing Petitioner from its regulatory duties with respect to Resident # 3.

This argument is without merit for two reasons. First, Dr. Sojka did not testify that a
weight loss of one to two pounds “a week” was not significant. Rather, he testified that
he would not consider it to be significant for a resident to lose one or two pounds “in a
week.” Tr. at 26. A very short-term weight loss of one or two pounds is, perhaps, not a
significant event. But, what is at issue here is a substantial weight loss over a period of
months and one which Petitioner’s own dietician considered to be significant.

Second, Dr. Sojka testified that, even assuming that the resident remained above her ideal
body weight at all times during her stay at Petitioner’s facility, a weight loss of 11 pounds
in six months was a basis for further investigation. Tr. at 24-25. He also testified that he
expected that his treatment orders be followed. Id.

Petitioner also contends that it is “undisputed” that the resident was, in fact, receiving
adequate nutrition. Summary judgment brief at 41. Petitioner bases this argument on
the amount of calories that its staff offered to Resident #3. Jd. It asserts that the
resident’s planned menu delivered from several hundred to nearly a thousand calories
more per day to the resident than the resident needed to maintain her body weight. Jd.
Assuming this to be true, it simply begs the question of whether Petitioner’s staff was
doing what was needed to assure that Resident # 3 consumed adequate amounts of food.
As was observed by the surveyors, the resident was only picking at the food that was
offered to her, consuming only small amounts of the totals provided. Moreover, the
resident was continuing to lose weight steadily, notwithstanding what was offered to her.
The resident’s steady weight loss and the dietician’s expressed concern that this was due
to poor appetite imposed on Petitioner’s staff the duties to investigate, assess, and
determine why simply offering adequate quantities of food to the resident was not all that
was needed to maintain the resident’s weight. Petitioner’s staff failed to do any of these
things.

Next, Petitioner asserts that, if Resident # 3 did lose weight due to not eating, that was not
due to any misfeasance on Petitioner’s part. As support for this assertion, it contends that
failure to provide the resident with the prescribed supplement was “the result of a
pharmacy error, not . . . [Petitioner’s] error.” Summary judgment brief at 42. This
argument is incorrect as a matter of law. It was Petitioner, and not a pharmacy, that
assumed responsibility for the resident’s care. If the resident’s supplement was not
provided due to a pharmacy error, it was Petitioner’s obligation to identify that error
immediately and to do whatever was necessary to rectify it. The undisputed facts of this
case are that Petitioner’s staff neglected to provide the prescribed supplement to Resident
# 3 for nearly two months.

Petitioner asserts also that it discussed the resident’s condition at weekly weight meetings
between its director of nursing, its MDS coordinator, its dietician, and its food service
supervisor. Summary judgment brief at 42; P. Ex. 20, at 8. I find the evidence relied on
by Petitioner as support for this contention to be unpersuasive. It consists of the
deposition testimony of Ms. Donna Stewart, who served as Petitioner’s director of
nursing at the time of the July survey. Jd. at 2. However, Ms. Stewart did not assert that
she had been present at any meetings involving Petitioner’s staff and the dietician nor did
she specifically rebut the dietician’s assertion to the surveyor that she had received no
communications from the staff about the failure to provide the supplement to the resident
or the resident’s continued weight loss in May and June 2008. Moreover, Petitioner has
offered no documents, in the form of assessments, minutes of meetings, or staff notes,
which would show communications with the dietician or the physician about Resident

# 3’s weight loss in the May-June 2008 period.

Petitioner argues next that, if Resident # 3 lost weight, it was a volitional act over which
Petitioner had no control and against which Petitioner had no right to intervene.
Summary judgment brief at 43. As support for this assertion Petitioner argues that any
resident in a nursing facility has a right to refuse care and that Resident # 3 was simply
exercising that right by rejecting the food that was offered to her. P. brief at 19.

I do not disagree with the general premise that a resident in a skilled nursing facility has
the right to refuse care. 42 C.F.R. § 483.10(b)(4). However, the right to refuse care is
not a license to a skilled nursing facility to avoid discharging its responsibilities to the
resident. A facility must assess a resident’s needs, plan that resident’s care, and attempt
to implement that care even if the resident exercises his or her free will and decides to
decline that which the facility offers. Koester Pavillion, DAB No. 1750, at 28 (2000).
Where a resident refuses care despite a facility’s best efforts to provide it, the facility
must document that refusal and the efforts it made to induce the resident to accept care.
Innsbruck HealthCare Center, DAB No. 1948, at 7-8 (2004).

Here, Petitioner has not contended that it closely assessed Resident # 3’s eating patterns
and any possible refusal by the resident to accept care. There is not even a hint of
evidence showing that Petitioner discontinued providing the nutritional supplement to
Resident # 3 because the resident refused to accept it. Nor does the evidence suggest that
the lack of communication between Petitioner and its dietician and the resident’s treating
physician in May and June 2008 was directed by the resident’s knowing refusal to accept
care.

Finally, Petitioner argues that the resident was consuming adequate amounts of food even
if she was losing weight. Summary judgment brief at 41. Petitioner premises this
assertion on its contention that laboratory tests showed that the resident had normal pre-
albumin levels, test results that were compatible with adequate nutrition. Jd.; P. Ex. 18,
at 41. However, while pre-albumin levels are a measure of nutritional adequacy, they
are not the only measure. A significant weight loss over a period of time is an
independent measure of possible nutritional problems. Tr. at 25. And, in this case,
Petitioner’s dietician determined that the resident’s weight loss was significant. That
imposed on Petitioner the duty to address the problem and to implement the interventions
it developed. It manifestly failed to do that.

ti. The October survey findings

The allegations of noncompliance with the requirements of 42 C.F.R.

§ 483.25(i)(1) that were made at the October survey center around the care that Petitioner
provided to a resident who is identified as Resident # 1 in the October survey report.

This resident was admitted to Petitioner’s facility on or about August 8, 2008. CMS Ex.
9, at 5. His weight was documented on admission to be 188 pounds. Jd. at 6.

Petitioner’s dietary manager planned to monitor the resident’s weight weekly for four
weeks. Thereafter the resident would be weighed monthly assuming his weight remained
stable during the initial four weeks. Id.

The undisputed evidence is that the resident rapidly lost weight. Petitioner’s staff
documented a total weight loss for Resident # 1 of 17 pounds in a one-month period. On
August 15, 2008, the resident’s weight had declined to 181 pounds. On August 18, it was
recorded at 180.5 pounds. On August 29, 2008 it had declined to 175 pounds and by
September 9, 2008, it had declined further to 171 pounds. CMS Ex. 9, at 6-7.

On August 26, 2008, Petitioner’s dietician reviewed Resident # 1’s record and became
concerned about his weight loss. CMS Ex. 9, at 6. As of that date, the resident’s weight
had declined by about eight pounds from his admission weight. The dietician talked with
10

the resident’s family regarding his weight loss and documented that the family planned to
bring in the resident’s favorite foods from home in order to encourage him to eat. Id.
However, the resident’s care plan was not amended to record this possible intervention
and no instructions were provided to Petitioner’s staff.

Petitioner’s staff did not notify the resident’s physician about his weight loss until
September 9, 2008. On that date, the dietician faxed a note to the physician advising him
about the weight loss and recommending that the resident be prescribed a dietary
supplement. CMS Ex. 9, at 7. As of that date, the resident’s weight had declined by
nearly 10 additional pounds.

The evidence offered by CMS describes a lack of comprehensive planning and
consultation by Petitioner’s staff in the face of a sudden and very substantial weight loss
by one of Petitioner’s residents. Between August 8 and September 4, 2008 the only
intervention that the staff developed was to encourage the resident’s family to bring food
rom home in order to tempt the resident to eat. But, even that intervention was not
closely documented, planned, or monitored by Petitioner’s staff. During that first month
of the resident’s stay, there was no consultation with the resident’s physician about the
substantial loss of weight experienced by the resident, nor was there any comprehensive
planning done by Petitioner’s staff to address the problem. Tr. at 126.

Petitioner makes several arguments and contentions in opposition to CMS’s evidence. I
do not find them to be persuasive.

First, Petitioner argues that the resident’s “normal weight” prior to his admission to
Petitioner’s facility was 182, and not 188, pounds. Summary judgment brief at 44.
According to Petitioner, the resident’s weight of 188 pounds as of admission to
Petitioner’s facility was as a consequence of his having received IV fluids while
ospitalized prior to admission. Id.; see CMS Ex. 23, at 7, 9.

The inference Petitioner would have me draw from this assertion is that the resident did
not lose nearly so much weight as is indicated by the weights recorded at Petitioner’s
acility prior to September 2008. Rather than losing about thirteen pounds between the
date of his admission on August 8 and August 29, the resident lost “only” about seven
pounds from his pre-admission weight, according to Petitioner.

I find this argument to be unpersuasive and also largely irrelevant. First, it is speculative

to assume that the resident’s “normal” weight prior to his admission was 182 and not 188
pounds. The evidence cited by Petitioner to support this assertion, CMS Ex. 23, at 7, 9,

does not — contrary to Petitioner’s argument — describe the resident’s “normal” weight.
Moreover, although the resident may have received fluids while hospitalized prior to

11

admission to Petitioner’s facility, those fluids may have been administered for the
purpose of countering dehydration. Thus, the resident’s weight may not have, in fact,
been excessive as of the date of his admission and Petitioner certainly hasn’t proven that
it was.

However, even if the resident’s “normal” weight was 182 — and not 188 — pounds, the
fact remains that this resident lost a large amount of weight during the first three weeks of
his stay at Petitioner’s facility. Even by Petitioner’s calculation, Resident # 1 lost about
seven pounds during those first three weeks. That amount of weight loss was determined
to be a matter of concern by Petitioner’s dietician and it was a basis for her attempting to
develop an intervention consisting of having the resident’s family bring food to the
resident. Given that level of concern, Petitioner’s staff should have assessed the resident
for his weight loss, planned his care comprehensively, and consulted with competent
professionals including the resident’s physician in August. It failed to do any of this.

Petitioner argues, however, that it, in fact, implemented a variety of interventions to
prevent Resident # | from losing weight. Summary judgment brief at 44. The
interventions listed by Petitioner include the following:

e Petitioner weighed the resident weekly;

e Petitioner’s dietician discussed the resident’s eating habits with the resident’s wife
and she told the dietician that she had difficulty getting the resident to eat; and

e It was agreed that the resident’s family would bring food in from home in order to
induce the resident to eat more.

Id. at 44-45. While I have no doubt that Petitioner did these things, they were clearly
inadequate to address Resident # 1’s weight loss and the concern that Petitioner’s
dietician expressed about it. As I discuss above, Petitioner failed completely to develop a
comprehensive and methodical approach to deal with the issue. Having the family agree
to bring in food for the resident may not have been inappropriate, but without
comprehensive planning and a systematic approach to the resident’s condition, it hardly
represented a meaningful response to the resident’s weight loss.

Petitioner argues also that the resident’s weight loss was unavoidable and the
consequence of illness that he experienced while residing at Petitioner’s facility. As
proof of this assertion, Petitioner recites that the resident began feeling ill on August 23,
2008 and began experiencing nausea, vomiting and diarrhea. Summary judgment brief at
45. The resident was treated for a bacterial infection and, according to Petitioner,
received an antibiotic that could have reduced the resident’s appetite. Id.
12

I don’t question the facts cited by Petitioner concerning the resident’s illness in late
August and early September 2008. But, these facts do not excuse Petitioner’s failure
prior to early September to address the resident’s weight loss in a comprehensive and
systematic manner. If anything, the resident’s illness should have caused Petitioner to
address the resident’s weight problems even more urgently.

Petitioner’s argument seems to be premised on the assumption that a facility is excused
from its responsibility to ensure that a resident receives adequate nutrition if the resident
loses weight due to some cause other than lack of nutrition. I disagree with that
assumption. The duty to assure that each resident receives adequate nutrition is not
relieved if a resident loses weight due to factors other than nutrition. That duty exists
independently of those factors and must be performed regardless of what may actually be
causing a resident to lose weight. Ifa facility performs its duties acceptably, then, of
course, weight loss due to factors other than nutrition would be no basis for finding the
facility deficient in complying with the requirements of 42 C.F.R. § 483.25(i)(1). But,
weight loss due to non-nutritional factors is never an excuse for failing to comply with
those requirements.

b. Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.35(i)(2).

CMS’s allegations of noncompliance with the food handling regulation are based on
observations of Petitioner’s facility made by surveyors at the August survey. Their
observations included the following:

¢ Observation of Petitioner’s walk-in refrigerator on August 26, 2008 revealed an
opened and undated 64 ounce bottle of prepared orange juice bearing the name of
a resident who had died about two weeks previously and containing a label which
stated “best when used by 8/15/08.” CMS Ex. 8, at 3.

e A large plastic container was positioned under the cooling condenser in the
refrigerator. There was at least three inches of water, totaling 11 quarts, in the
container. Water was observed to be dripping from the condenser into the
container. CMS Ex. 8, at 3-4. Food was stored in close proximity to the dripping
water. Tr. at 104-05.

e The refrigerator contained an unopened one-gallon container of skim milk which
had 8 to 10 spots measuring two to three millimeters across of black-green fuzzy
residue. CMS Ex. 8, at 4.

e There were plates stacked on both sides of a plate warmer. All of the plates were
wet. Five of them had visible egg residue on them. Petitioner had served eggs to
its residents that morning. CMS Ex. 8. The dietary supervisor instructed the
kitchen staff to wash all of the plates in the plate warmer.
13

e However, about an hour after the first observation of the plate warmer the
surveyor returned to observe that one of the plates continued to have food residue
on its back. Others remained wet. CMS Ex. 8.

e On the morning of the next day, August 27, 2008, the surveyor returned to the
kitchen and observed the top plate on the right side of the plate warmer with a
dried strand of chicken or pork adhering to it. CMS Ex. 8, at 5.

e Of eight stacked plate warmers, six had a thick brown liquid residue on their top
surfaces. Two of them had visible dried food on them. CMS Ex. 8.

These observations, if not rebutted by Petitioner, are sufficient to sustain a finding that
Petitioner failed to store food under sanitary conditions. They support the conclusion that
there was expired food in Petitioner’s refrigerator and that the refrigerator had a leaking
condenser that was dripping water in the vicinity of stored food. They also support the
conclusion that Petitioner was using unclean and food-contaminated dishes and that the
staff failed to correct the problem after the surveyor observed it.

Petitioner disputes whether the plates observed by the surveyor were contaminated with
food particles or simply were scratched.° On this question, I find to be credible the
testimony of Jeannine Gothard, the surveyor who viewed Petitioner’s facility on August
26 and 27, 2008. Ms. Gothard testified that she personally scraped food residue off the
plates. Tr. at 108-09. Petitioner also argues that there is no significance to the dripping
water in its refrigerator, that this posed no possibility of more than minimal harm to
residents. But, in fact, and as was testified to credibly by Ms. Gothard, the water was
dripping into a container that was placed adjacent to stored food (cantaloupes). Tr. at
104-105.

° Petitioner argues that I erroneously excluded from evidence certain surveyors’ notes
which, according to Petitioner, show that Petitioner’s food supervisor told the surveyor
that the plates were scratched but not contaminated with food debris. I excluded these
notes because Petitioner could have offered them prior to the hearing pursuant to the
requirements of my initial pre-hearing order and failed to do so. Petitioner made no
showing of good cause for failing to comply with my initial pre-hearing order. It did not
claim that it was surprised by any of the evidence that was introduced at the hearing.
Moreover, Petitioner had the direct testimony of CMS’s witnesses in its possession for
months prior to the hearing as well as the documents it sought to offer at the hearing.
Petitioner could have offered them as evidence before the hearing and it failed to provide
a cogent explanation for its failure to do so. Tr. at 109-10.
14

Petitioner suggests that CMS is attempting to hold it to a strict liability standard,
apparently on the theory that CMS regards even the slightest evidence of contamination
of food or utensils as proof of noncompliance with regulatory requirements. But, this is
not a case of a vague or ambiguous regulation being interpreted or applied in an unfairly
strict way against a facility. The regulation is clear: a facility must maintain sanitary
conditions for its storage and handling of food items. Failing to wash dishes sufficiently
to remove encrusted food violates the regulation’s plain meaning as does maintaining a
food storage facility that exposes stored food to dripping water and condensation.

2. CMS’s remedy determinations are reasonable.
This case involves the imposition of civil money penalties in two amounts ($50 and $250
per day) for defined periods of time and a denial of payment for new Medicare

admissions. I find these remedies to be reasonable.

a. The civil money penalties are reasonable in amount and
duration.

None of the deficiencies that are at issue here were determined by CMS to be so
egregious as to constitute immediate jeopardy for Petitioner’s residents. Consequently,
any civil money penalties imposed against Petitioner must fall within the lower range of
civil money penalties of from $50 to $3,000 which are prescribed by regulation for non-
immediate jeopardy level civil money penalties. 42 C.F.R. § 488.438(a)(1)(ii).

The civil money penalties of $50 per day that CMS determined to impose for the period
beginning on August 28, 2008 and which ran through October 8, 2008 are reasonable as a
matter of law. They constitute the minimum penalty amount allowed by regulation.
Petitioner has not offered affirmative evidence showing that it was in compliance with
participation requirements on any dates during the period. Consequently, I sustain these
penalties, both in amount and in duration.

I find also that the penalties of $250 per day that CMS determined to impose for the
period beginning on October 9, 2008 and which ran through November 13, 2008 are
reasonable.

There are regulatory factors which must be used to decide whether penalties in a
prescribed penalty range (from $50 to $3,000 per day in this case) are reasonable. These
include: the seriousness of a facility’s noncompliance; its compliance history; its
culpability; and its financial condition. 42 C.F.R. §§ 488.438(f)(1)-(4); 488.404
(incorporated by reference into 42 C.F.R. § 488.438(f)(3)). In this case evidence relating
to these factors supports increasing the penalties from $50 to $250 per day effective
October 9.

15

First, Petitioner’s noncompliance — particularly with the requirements of 42 C.F.R. §
483.25(i)(1) — was relatively serious. The residents whose care is at issue in this case are
vulnerable individuals who were dependent on Petitioner and its staff to provide care.
They were not in a position to assess their own weight loss or to seek care for it. Thus, it
was incumbent on Petitioner and its staff to identify these residents’ problems and to deal
with them effectively. Petitioner failed to do so, not once, but twice.

Furthermore, the fact that Petitioner failed to comply with the regulation’s requirements
in the period prior to the July survey and again, afterward, is evidence from which | infer
that Petitioner and its staff did not learn from the deficiency identified in July or make
serious efforts at remediation prior to the October survey. In that sense, its culpability for
noncompliance was heightened as of October and that fully justified increasing the
penalty amount to $250 per day.

The additional factor is Petitioner’s deficiency in August. That is added basis for
increasing the penalty amount. However, I would find sufficient reason to increase the
penalty amount from $50 to $250 per day based solely on Petitioner’s repeated
noncompliance with the regulation governing nutrition. The August deficiency,
therefore, is unnecessary to my decision although it does provide added evidence for
increasing the penalty amount.

b. As a matter of law, CMS may impose a denial of payment for
new Medicare admissions against Petitioner and, therefore,
the remedy is reasonable.

CMS is authorized to impose the remedy of denial of payment for new admissions to
address any substantial failure by a skilled nursing facility to comply with Medicare
participation requirements. 42 C.F.R. § 488.417(a). The remedy is authorized here and
is reasonable as a matter of law because of Petitioner’s noncompliance beginning at least
as early as the July survey and extending through November 13, 2008, the date when
CMS determined that Petitioner became compliant with participation requirements.

At the hearing, the parties proffered a stipulation which I rejected. In relevant part, the
stipulation states that the parties agreed that CMS would not have been justified in
imposing a denial of payment for new admissions absent a finding of actual harm at the
July survey. I rejected that stipulation because it is wrong as a matter of law. The
regulation which permits CMS to impose the remedy of denial of payment for new
admissions is explicit and unambiguous: CMS may impose the remedy where there is
any failure by a facility to comply substantially with Medicare participation requirements.
42 CFR. § 488.417(a); 42 C.F.R. § 488.408(d)(1)(i) and (d)(3). CMS’s authority to
impose the remedy is not conditioned on a finding of actual harm. Consequently, a basis
exists for a denial of payment for new admissions whenever substantial noncompliance
exists and not only in those instances where actual harm to residents is established.
16

However, the issue of whether harm is a legal prerequisite to imposition of a denial of
payment for new admissions is moot in this case. That is because the deficiencies that I
have found present as of the July and October surveys were determined by CMS to have
caused actual harm to residents. CMS Ex. 7, at 25; CMS Ex. 9, at 4. I have no authority
to decide whether CMS’s scope and severity determination is correct in a case which
does not involve a challenge to the level (immediate jeopardy versus non-immediate
jeopardy) of a civil money penalty or a loss of approval to conduct nurse aide training.
42 C.F.R. § 498.3(b)(14). In a case which does not involve those issues, the level of a
facility’s noncompliance (including a finding of actual harm) is not an initial
determination which gives a facility a right to a hearing. /d. Petitioner has no right here
to challenge the level of the deficiencies that I have sustained because none of them were
at the immediate jeopardy level, nor did CMS impose a denial of Petitioner’s right to
conduct nurse aide training.

/s/
Steven T. Kessel
Administrative Law Judge