Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Elant at Fishkill,
(CCN: 33-5750),

Petitioner,

Vv.

Centers for Medicare and Medicaid Services.

Docket No. C-11-488
Decision No. CR2465

Date: November 17, 2011

DECISION

THIS MATTER IS BEFORE ME on Petitioner’s Motion for

Summary Judgment of

July 8, 2011, and the Centers for Medicare and Medicaid Services (CMS)’s Motion to

Dismiss and/or for Summary Disposition of July 11, 2011. T!

ose essentially-competing

motions were filed by the parties in response to my Acknowledgment and Initial

Docketing Order of June 9, 2011. The parties have submitted

additional briefing in

support of their Motions pursuant to my Order of July 26, 2011: CMS filed its Response
to Petitioner’s Motion for Summary Judgment on July 29, 2011, and Petitioner filed its
Response to Respondent’s Motion for Summary Judgment and or Dismissal on August

15, 2011. Each side has supported its position with a detaile

proffer of documents, and I

have considered all of them, specifically Petitioner’s Exhibits 1-13 (P. Exs. 1-13) and
CMS’s Exhibits (CMS Exs. 1-7), in resolving the issues presented by the motions. It may

be helpful to note at the outset of this discussion that while th
essentially competing for the ultimate result in this case, they
Petitioner was not in substantial compliance with the terms o

¢ Motions may be seen as
do not disagree that
42 C.F.R. §§ 498.25(h) and

498.75 between January 4, 2011 and January 11, 2011. The competing Motions differ
sharply, however, on the significance and consequence of events after that latter date.
Petitioner asserts that its May 27, 2011 request for hearing timely perfected an appeal in
which there is no genuine issue as to any material fact, and that it is entitled as a matter of
law to judgment that it had returned to compliance with Medicare and Medicaid program
requirements on January 12, 2011. Petitioner asserts that CMS is wrong as a matter of
law in establishing the return-to-compliance date as February 18, 2011, and that there is
no genuine issue of material fact before me as to the correctness of January 12, 2011 and
the incorrectness of February 18, 2011 as the return-to-compliance date.

On the other hand, CMS takes the position that I need not and should not reach the
question of which date might be correct. CMS asserts that Petitioner did not perfect its
appeal in a timely manner, that no good cause exists for extending the deadline for
Petitioner’s request for hearing, and that Petitioner’s appeal should be dismissed. CMS
argues that the action Petitioner seeks to appeal is not an “initial determination” and thus
beyond the jurisdiction of this forum. CMS bolsters its jurisdictional argument with a
second position directed more to the substance of Petitioner’s Motion, and maintains that
if Petitioner’s appeal is to be decided on its merits, then CMS is entitled as a matter of
law to judgment that February 18, 2011 is the correct return-to-compliance date.

As the discussion below will explain, I have attempted to resolve these issues in what
may be an unorthodox fashion. That is, while fully recognizing that the timeliness of
Petitioner’s hearing request is a jurisdictional question normally to be addressed and
resolved as a threshold issue, I have discussed it without explicitly ruling on the CMS
Motion to Dismiss, and have taken that approach because of the uncertainty with which I
view the application of an important recent appellate decision. Instead, I have considered
the parties’ competing efforts to win summary disposition, and have ruled in CMS’s
favor in that context. Prudence and a concern for judicial economy support this
approach, since even if Petitioner's appeal could overcome CMS's jurisdictional
challenge, it would ultimately succumb to the CMS effort to win summary disposition.

I.

Petitioner’s facility is a skilled nursing facility located in Beacon, New York. It
participates in both the Medicare and the Medicaid programs, and its compliance with the
participation requirements of both programs is monitored by surveys conducted by the
New York State Department of Health (NYSDOH).

On the evening of Thursday, December 30, 2010, one of the facility’s residents eloped.
The resident’s elopement was not discovered by the facility. At approximately 8:45 that
evening, the local police were alerted to the fact that an elderly person — who turned out
to be the resident who had eloped — was sitting in the snow along a highway
approximately a quarter-mile from the facility. The police responded and returned the
resident to the facility, which is how and when the facility first became aware that
something was amiss. The facility notified NYSDOH of the incident the next day,
Friday, December 31, 2010.

NYSDOH surveyors arrived at the facility on Monday, January 3, 2011, and began a
survey completed on Monday, January 10, 2011. On that date, NYSDOH told Petitioner
that effective January 4, 2011 its facility was not in compliance with two program
requirements, 42 C.F.R. § 483.25(h), cited as F-Tag F-323, and 42 C.F.R. § 483.75, cited
as F-Tag F-490. Both citations constituted immediate jeopardy and were assessed at a
scope-and-severity level of “K.” These findings were communicated to CMS by
NYSDOH.

On Tuesday, January 11, 2011, CMS wrote to Petitioner and announced that it was
adopting the NYSDOH findings. Thus CMS determined that the facility was non-
compliant with the two cited F-Tags at a scope-and-severity level of “K,” that the
noncompliance constituted immediate jeopardy and a substandard quality of care, and
that the noncompliance was subject to sanctions of a civil money penalty of $5550 per
day beginning January 4, 2011, a denial of payment for new admissions (DPNA)
effective January 13, 2011, and termination of the facility’s participation in the programs
if compliance were not achieved by February 1, 2011. This letter closed with CMS’s
standard notification of the appeal provisions of 42 C.F.R. § 498.40 et seq.

NYSDOH returned to the facility on Tuesday, January 11, 2011 to review the steps taken
there to correct the deficiencies and bring the facility back into compliance. This revisit
survey led surveyors to conclude that the problems had been mitigated but not completely
resolved: NYSDOH found that the violations of F-323 and F-490 continued, but that as
of January 11, 2011 their scope-and-severity level had been reduced to “H” and
immediate jeopardy no longer existed. NYSDOH announced that it would recommend to
CMS that the DPNA continue, that the deadline for termination be extended, and that the
CMP be reduced.

CMS accepted these recommendations, and so notified the facility on January 18, 2011.
CMS’s letter announced the reduction of the per-day CMP from $5550 to $200 beginning
January 11, 2011 and continuing until substantial compliance could be achieved. The
letter reaffirmed the imposition of the DPNA on January 13, 2011 and reaffirmed that it
would remain in effect until substantial compliance could be achieved. The termination
date was extended until July 10, 2011. Like the CMS letter of January 11, 2011, this
letter closed with CMS’s standard notification of the appeal rights available to Petitioner,
and of the provisions of 42 C.F.R. § 498.40 et seg. Like the earlier letter, this CMS letter
of January 18, 2011 specifically made Petitioner aware of the 60-day deadline for filing a
request for hearing. According to CMS’s present position in its Motion and its briefing,
it is this January 18, 2011 letter, and the five-day period allowed for mailing provided by
42 C.F.R. § 498.22(b)(3), that marks the beginning of the 60-day deadline established at
42 C.F.R. § 498.40(b) for the filing of Petitioner’s request for hearing.

Petitioner did not file its request for hearing until May 27, 2011, obviously well outside
the 60-day deadline. Instead, during the time between the CMS letter of January 18,
2011 and February 18, 2011, Petitioner and NYSDOH engaged themselves in exchanging
documents setting out the detailed observations made by the NYSDOH surveyors in
support of the two citations and the detailed steps Petitioner had taken, or proposed to
take, in order to correct the deficiencies. These steps were set out in two versions of
Petitioner’s plan of correction (POC).

Petitioner’s first POC was submitted to NYSDOH in written form on February 10, 2011,
and it claimed January 12, 2011 as the effective completion date for all required
corrective actions. It is this date Petitioner now asserts marks its return to substantial
compliance with program requirements and the end of the $200 per-day CMP and the
DPNA.

That first version of Petitioner’s POC was rejected by NYSDOH on February 16, 2011
because the POC did not satisfactorily assure the safety of other facility residents in
situations of potential elopement. Petitioner amended its POC on February 17, 2011, and
on February 18, 2011 NYSDOH notified Petitioner that the amended POC had been
accepted. CMS asserts that if its jurisdictional arguments related to the timing of
Petitioner’s hearing request fail, then it is entitled as a matter of law to a ruling that
February 18, 2011 is the date on which Petitioner returned to substantial compliance.

A good deal of the controversy over the timeliness of Petitioner’s hearing request arises
from the events that followed NYSDOH’s acceptance of Petitioner’s amended POC. It
will suffice for present purposes to note that when NYSDOH conducted a re-visit survey
of the facility two weeks later on March 4, 2011 — the purpose of which survey was to
verify that the amended POC had been fully implemented — its letter of that date to
Petitioner confirming the successful survey contained an obvious error when NYSDOH
stated that “This office will also recommend that any remedies currently enforced will be
lifted on 01/12/2011.” The error was obvious, for Petitioner knew that NYSDOH had
already rejected Petitioner’s claim that it had achieved substantial compliance on January
12, 2011, and Petitioner had submitted its amended POC precisely because of that
rejection.

This record does not reveal how or when NYSDOH became aware of the obvious error in
its March 4 letter, but it is certain that NYSDOH was aware of it not later than April 5,
2011, when it sent its “AMENDED LETTER?” to Petitioner. Except for the prominent
notation “AMENDED LETTER,” the only change in NYSDOH’s April 5, 2011 letter
was the change in the date it would recommend the enforcement of remedies end. This
time, the critical sentence read: “This office will also recommend that any remedies
currently enforced will be lifted on 02/18/2011.” It is impossible to see the error in the
March 4 letter from NYSDOH as anything other than typographical or clerical, and it is
equally impossible to see it as having any substantive effect on Petitioner’s return-to-
compliance date. As will be seen, NYSDOH addressed the error three weeks later in a
letter dated April 29, 2011.

Petitioner, although aware that its first POC had been rejected and that its amended POC
had been accepted effective only February 18, 2011, chose to react immediately to
NYSDOH’s “AMENDED LETTER” as if it had effected some substantive change in the
status of its rejected first POC. By letter of April 7, 2011, Petitioner challenged “the
determination of the compliance date of February 18, 2011.” It explicitly relied on the
NYSDOH letter of March 4, 2011 — and the obvious error in Petitioner’s favor it
contained — in making its argument, and went on to suggest that the changes in its
rejected POC demanded by NYSDOH and incorporated in the amended POC were
trivial: “The revision of the POC on 2/16/11 was not substantive in nature and did not
enhance the safety of the residents or the security of the facility.” In essence, the theory
Petitioner relied on in its April 7 letter to NYSDOH is identical to the theory it urges here
in support of its Motion for Summary Judgment.

One week after the NYSDOH had written its “AMENDED LETTER,” CMS wrote to
Petitioner on April 11, 2011 repeating the return-to-compliance date of February 18,
2011. The CMS letter also removed the DPNA effective February 18, 2011 and
calculated the total CMP to be imposed based on seven days of immediate jeopardy —
from January 4 through January 10, 2011 — at $5550 per day, and 38 days of non-
immediate jeopardy — from January 11 through February 17, 2011 — at $200 per day,
for a total CMP of $46,450. Since only the period after January 11 is at issue here, the
effective amount of CMP at issue is approximately $7600, and the extension of the
DPNA is similarly at issue. CMS’s letter neither contained nor made reference to CMS’s
standard notification of the appeal provisions of 42 C.F.R. § 498.40 et seq. It is this April
11, 2011 CMS letter on which Petitioner bases its May 27, 2011 request for hearing.

Only two more letters are relevant to this history. The first is NYSDOH’s letter to
Petitioner of April 29, 2011, in which NYSDOH reiterated its position that the facility
was able to reduce considerably the scope and severity of the cited deficiencies by
January 12, 2011, but had not substantially corrected those deficiencies until the amended
POC was accepted effective February 18, 2011. NYSDOH explained the sequence of
events on which it based its position, and pointed out explicitly what had been implicit in
the “AMENDED LETTER”: the reference to January 12, 2011 in its March 4, 2011 letter
was “mistakenly entered” and was therefore “not feasible.”

The second letter is Petitioner’s request for hearing dated May 27, 2011. In it, Petitioner
categorically relies on the erroneous date in the NYSDOH letter of March 4, 2011 as
establishing the date of its return to substantial compliance, dismisses NYSDOH’s
rejection of its first POC as based on concerns “insubstantial and not related to the core
issues of compliance under review,” and asserts that the CMS letter of April 11, 2011
marks the CMS action from which it seeks to appeal.

IL.

The procedural posture of this case presents an obvious jurisdictional issue, and like most
— perhaps all — jurisdictional issues, it is a threshold question: is Petitioner’s May 27,
2011 request for hearing timely within the terms of 42 C.F.R. § 498.40(a)(2)? That
question may depend in large measure on whether the CMS letter of April 11, 2011
represents one of the “initial determinations” for which appeal rights are provided by 42
C.F.R. § 498.3. If it does, then the hearing request is timely. If it does not, then the
request for hearing is on its face an untimely appeal from the CMS notice of
noncompliance of January 18, 2011 and is subject to dismissal, although that defect can
be overcome by the discretionary granting of an extension of time, for good cause shown,
for the filing of an amended hearing request based on what CMS maintains is the
properly appealable “initial determination” set out in its letter of January 18, 2011. 42
CFR. §§ 498.3, 498.40(c)(2).

Petitioner and CMS have both vigorously debated the question, and much of that debate
‘as centered on the parties’ different understandings of two crucial Departmental Appeals
Board (Board) decisions: Taos Living Center, DAB No. 2293 (2009); and Mimiya
Hospital, DAB No. 1833 (2002). Petitioner relies particularly on Taos Living Center
because, at least in Petitioner’s view, the Board’s holding in that case would bring CMS’s
April 11, 2011 letter within 42 C.F.R. § 498.3’s definition of appealable “initial
determinations.” CMS takes a far different view of Taos Living Center, and suggests that
the majority opinion is fundamentally wrong and in conflict with regulations and DAB
precedent. CMS asserts that the dissent in Taos Living Center is the correct view and
urges that I follow it. CMS also argues that because the CMS letter from which the
petitioner in Mimiya Hospital sought to appeal contained the standard recitation of appeal
rights, that fact distinguishes Mimiya from this situation, in which, it will be remembered
only the January CMS letters — and not the CMS letter of April 11, 2011 — contained
the standard language.

There is much to consider in CMS’s analysis of Taos Living Center, and the force of its
argument is not easily resisted. But the majority opinion in Taos is the law of this forum,
and must control this question to the extent that the facts before me now are congruent
with those before the divided Board in Taos. And to a significant extent, they are not.

First, the majority in Taos Living Center was troubled by the delay of approximately four
months between that facility’s submission of its POC and the state agency’s re-visit to
verify that the POC had actually been implemented. In this case, NYSDOH conducted
the re-visit survey within two weeks of Petitioner’s submission of the accepted POC.
Since the return-to-compliance date here is the same date as NYSDOH’s acceptance of
the POC, no extended delay in re-visiting created an artificially-extended period of non-
compliance, one of the factors explicitly pointed out by the majority in Taos. And while
it may not be an essential observation in distinguishing this case from Taos, it is worth
noting that the entire process by which NYSDOH and CMS surveyed, evaluated, and
sanctioned Petitioner was marked by promptness and expedition in the agencies’ actions.

Next, as CMS points out in its briefing, the DPNA in this case was not initiated or
announced by its letter of April 11, 2011. The DPNA had been in effect since January
13, and had been announced in the CMS letters of January 11 and January 18. It had
been announced, as well, by NYSDOH on January 14. The majority in Taos relied on the
effect of the CMS letter in that case as having some substantive effect on the imposition
of the DPNA: “[B]ecause the DPNA could not go into effect unless CMS determined
that [Taos] had continued to be in noncompliance . . . the August 5 [CMS] letter notifying
[Taos] that the DPNA had gone into effect . . . constituted an initial determination of
noncompliance.” Taos Living Center, DAB No. 2293, at 15. There is nothing in the
CMS letter of April 11 that can be so understood.

Third, the overall nature of the CMS letter of April 11 distinguishes it from the situation
in Taos. It cannot be characterized as a rejection of a POC or a rejection of a claim of
substantial compliance. It announces no new or enhanced penalty based on prior
noncompliance. It contains no recitation of appeal rights. There is patently nothing in
the CMS letter of April 11 that marks a change in the sanctions imposed on Petitioner or
the period over which those sanctions were in effect. The last time CMS wrote such a
letter — and thus the last time CMS announced an initial determination of
noncompliance or sanctions — was in its letter of January 18, 2011.

The majority decision in Taos depends on facts unique to that case. Those facts are not
congruent with the facts before me, and so the reasoning and result in Taos are not
persuasive now. No “initial determination” within the meaning of 42 C.F.R. § 498.3 can
be read into the CMS letter of April 11, 2011. The CMS letter of January 18, 2011 is the
last “initial determination” by CMS in the sequence of events that began at Petitioner’s
facility on December 30, 2010, and Petitioner’s right to appeal that determination expired
in late March 2011. Petitioner’s request for hearing was filed May 27, 2011.
Accordingly, and for purposes of this immediate discussion I assume arguendo,
Petitioner’s hearing request is untimely.

Il.

Assuming for the moment that Petitioner’s choice not to appeal the January 18, 2011
CMS letter has placed its appeal in jeopardy of dismissal, should the discretionary
remedy of an extension of time in which to file an amended hearing request be applied on
this record? That is, would the record before me allow a finding of “good cause shown”
for extending to Petitioner the time and opportunity to amend its hearing request and
challenge the January 18, 2011 CMS notice of noncompliance? It is very difficult to see
good cause “under any reasonable definition of that term” (Brookside Rehabilitation and
Care Center, DAB No. 2094, at 7, n.7 (2007)) in Petitioner’s apparently-deliberate
disregard of the clear warnings about the 60-day deadline in the CMS letters of January
11 and January 18, 2011. Petitioner took no measures toward perfecting its appeal after
the erroneous NYSDOH letter of March 4, 2011, nor after the “AMENDED LETTER” of
April 5, 2011 except to tell NYSDOH that it insisted that the erroneously-typed date was
actually correct. Even after NYSDOH explained the error and reiterated the correct date
on April 29, 2011, Petitioner did nothing for another four weeks.

By the time Petitioner filed its May 27, 2011 request for hearing, the only CMS letter or
notice on which the 60-days-plus mailing deadline had not expired by a margin of months
was the CMS letter of April 11. The sequence of these facts reflects at the very least
Petitioner’s determination to “‘act by choosing from many tactical and strategic options,”
about which options “it will be expected to have informed itself . . . before it chooses.”
Brookside Rehabilitation and Care Center, DAB CR1541 (2006). Providers such as
Petitioner are charged with knowledge of the regulations governing program
participation, and are assumed to understand both the importance of the notice of appeal
rights set out in the CMS letter and of the necessity for careful compliance with it in
filing a hearing request. Both CMS’s January letters offered a telephone number and a
name to which Petitioner could have addressed any questions or requests for clarification
of the need for timely action if an appeal were to be pursued. That Petitioner is now
bound by its informed choices to delay the filing of its hearing request, and that no good
cause for relieving it of the consequences of its choices appears in this record is amply
supported by substantial authority. Brookside Rehabilitation and Care Center, DAB No.
2094; Concourse Nursing Home, DAB No. 1856 (2002); Nursing Inn of Menlo Park,
DAB No. 1812 (2002); Cary Health and Rehabilitation Center, DAB No. 1771 (2001).
If Petitioner’s hearing request is untimely, there is no “good cause” in this record for
extending the filing deadline to permit the filing of an amended hearing request.

IV.

But, as I have said above, a ruling on the question of this appeal’s timeliness is not the
vehicle by which I intend to resolve the contending positions. Each side has argued that
if the merits of the case are to be reached, its own side of the controversy is supported by
uncontested facts and is entitled to summary affirmation. What follows is an effort to
examine the competing arguments, and to reach a disposition of this case at a point less
clouded by the debate over Taos. For the immediate purpose of reaching the parties’
opposing motions for summary disposition, I will now assume arguendo that CMS’s
Motion to Dismiss is not persuasive, and that the merits of the case are before me in those
motions.
Petitioner began the exchange of motions seeking summary disposition by asserting that
there is no genuine issue of fact concerning the date it returned to compliance. Petitioner
claims January 12, 2011 as that date, and relies on the uncontested fact that it submitted
its first POC to NYSDOH on that date. Now, there is no serious debate as to those
limited facts, but even if they remain unchallenged, they do not entitle Petitioner to a
summary ruling that its substantial compliance was established on that date by those
facts. What Petitioner attempts to show, in bridging the gap between those facts and the
conclusion it desires, is that the corrections and additions to its first POC demanded by
NYSDOH were so trivial — or, as Petitioner describes them, “neither significant nor
material to the health and safety of the residents” — as to represent NYSDOH’s de facto
acceptance of the first POC. CMS vigorously disagrees with Petitioner’s characterization
of the shortcomings in the first POC and the significance of the changes required by
NYSDOH: CMS describes them as “fundamental and essential changes given the
seriousness of the deficiencies cited and the risk they posed to the facility’s residents.”
Now, the exhibits proffered by both sides offer some insight into the importance of the
changes NYSDOH required, but it is plainly a question of fact whether those changes
were trivial or significant, and thus a question to be resolved only through the evaluation
of evidence and the assessing of weight and credibility where that evidence conflicts.
Since that central question of fact remains, Petitioner’s Motion for Summary Judgment
must be, and it is, DENIED.

But the facts relied on by CMS in its effort to win summary disposition are rather
different. While Petitioner seeks to characterize and thus minimize the rejection of its
first POC, CMS is content merely to point out the fact that the first POC was rejected and
the related fact that an amended POC was required before NYSDOH could conduct the
re-visit survey and verify that the amended POC had actually been implemented.
Petitioner must concede these two facts, even if it quarrels with the interpretation to be
given them.

There is no genuine doubt that Petitioner submitted its first POC to NYSDOH on
February 10, 2011, and in it claimed — on the basis of the steps set out in that first POC
— that it had returned to substantial compliance almost a month earlier, on January 12,
2011. Nor is there genuine doubt that this first POC was rejected by NBYSDOH as
inadequate to assure the protection of the facility’s residents. Thus, unless the decision of
NYSDOH and CMS to reject the first POC is subject to Petitioner’s challenge here, there
is simply no genuine doubt that Petitioner was not in substantial compliance on the basis
of the measures it claimed to have taken in its first POC. And so, unless the decision of
NYSDOH and CMS to accept only the amended POC of February 17, 2011 is subject to
Petitioner’s challenge here, there is simply no genuine doubt that Petitioner’s progress
toward returning to substantial compliance was incomplete and unsuccessful until its
amended POC had been accepted, thus clearing the way for NYSDOH to re-visit the
facility as it did two weeks later on March 4, 2011.
10

On this critical question, there seems little doubt of the answer: the acceptance or
rejection of Petitioner’s POC is not a matter subject to appeal or to my review. It lies
entirely within the discretion of NYSDOH and CMS. Hermina Traeye Memorial
Nursing Home, DAB No. 1810 (2002). The Administrative Law Judges of this forum
have applied that rule in cases involving nursing homes, clinical laboratories, and home
health agencies, all of which are regulated under statutory schemes similar to the one at
work here. Therapy Management Services, DAB CR1892 (2009); HRT Laboratory, Inc.,
DAB No. 2118 (2007); Rosewood Living Center, DAB CR1293 (2005); On-Call Nursing
of Alaska, DAB CR1142 (2004). Given that the re-visit survey took place promptly after
approval of the amended POC, and given that Petitioner was found to have returned to
substantial compliance as of the date of the amended POC, there remains no genuine
issue of material fact suggesting an earlier compliance date. CMS’s Motion for Summary
Disposition should be, and it is, GRANTED.

CONCLUSION

On the basis of the discussion and authorities set out above, I find and conclude: (1) there
are no genuine issues of material fact as to the date Petitioner returned to substantial
compliance with program requirements; (2) CMS is entitled as a matter of law to
judgment in its favor on that issue; and (3) Petitioner returned to substantial compliance
with the requirements set out at 42 C.F.R. §§ 483.25(h) and 482.75 on February 18, 2011,
but not sooner.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Embassy Health Care Center
(CCN: 14-5316),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-258
Decision No. CR2464

Date: November 8, 2011

DECISION

Petitioner, Embassy Health Care Center (Petitioner or facility), is a long-term care
facility, located in Wilmington, Illinois, that participates in the Medicare program. In
December 2010, state surveyors investigated a complaint that a twenty-four-year-old
facility resident had died from “combined drug intoxication.” Based on the surveyors’
findings, the Centers for Medicare and Medicaid Services (CMS) determined that the
facility was not in substantial compliance with Medicare requirements and has imposed
against the facility a civil money penalty (CMP) of $300 per day. Petitioner appeals, and
CMS moves for summary judgment.

For the reasons set forth below, I grant summary judgment. The undisputed facts
establish that the facility was not in substantial compliance with Medicare requirements
and that the penalty imposed is not unreasonably high.
I. Background

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

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

Here, after receiving a report that a 24-year-old facility resident died of a drug overdose,
surveyors from the Illinois Department of Public Health (State Agency) investigated,
completing a complaint investigation survey on December 16, 2010. Based on their
findings, CMS determined that the facility was not in substantial compliance with: 42
C.F.R. § 483.25 (Tag F309), the “quality-of-care” regulation; and 42 C.F.R. § 483.25(1)
(Tag F329), which protects residents from unnecessary drugs. CMS Exs. 1, 2. As
authorized by 42 C.F.R. § 498.56, CMS subsequently added an additional citation — 42
C.F.R. § 483.10(b)(11), which requires that the facility consult the resident’s physician
about any significant changes in condition. CMS Br. at 2. CMS has imposed against the
facility a $300 per day CMP for 13 days of substantial noncompliance (December 16-28,
2010), for a total CMP of $3,900. CMS Ex. 2.'

Petitioner timely requested a hearing, and CMS now moves for summary judgment.

' CMS initially determined that the facility’s deficiencies under 42 C.F.R. § 483.25
posed immediate jeopardy to resident health and safety and imposed a $10,000 penalty
for one day of immediate jeopardy (December 15). Following an informal dispute
resolution (IDR) proceeding, the scope and severity of that deficiency was reduced to
level G (isolated instance of substantial noncompliance causing actual harm that is not
immediate jeopardy), and the one day $10,000 penalty was rescinded. CMS Ex. 2; CMS
Ex. 5 at 14; see 42 C.F.R. § 488.331. CMS does not contest the IDR result. See Act §
1819(h)(1), (2); 42 C.F.R. § 488.452(a)(2); Britthaven of Chapel Hill, DAB No. 2284 at
6-9 (2009).
CMS submitted a motion for summary judgment and memorandum in support (CMS
Br.), along with 38 exhibits (CMS Exs. 1-38). Petitioner submitted a memorandum in
opposition to summary judgment (P. Br.) and 7 exhibits (P. Exs. 1-7).

IL. Issues
I consider whether summary judgment is appropriate.

On the merits, the issues before me are: 1) was the facility in substantial compliance with
Medicare program requirements; and 2) if the facility was not in substantial compliance,
is the penalty imposed — $300 per day — reasonable?

I also discuss below why I lack the authority to review CMS’s scope and severity
findings.

II. Discussion

Summary judgment. Summary judgment is appropriate when a case presents no issue of
material fact, and its resolution turns on questions of law. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247-48 (1986); Livingston Care Ctr. v. U.S. Dep’t of Health &
Human Servs., 388 F.3d 168, 173 (6th Cir. 2004); see also Ill. Knights Templar Home,
DAB No. 2274 at 3-4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234 at 3-4
(2009)). 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-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 Ctr.,388 F.3d 168, 173 (6th Cir. 2004)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). To avoid summary
judgment, the non-moving party must then act affirmatively by tendering evidence of
specific facts showing that a dispute exists. See 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 Rehab. Ctr., DAB No. 1918 (2004).

To defeat an adequately supported summary judgment motion, the non-
moving party may not rely on the denials in its pleadings or briefs, but must
furnish evidence of a dispute concerning a material fact... .

Ill.Knights Templar, DAB No. 2274 at 4; Livingston Care Ctr. DAB No. 1871 at 5
(2003).

In examining the evidence for purposes of determining the appropriateness of summary
judgment, I must draw all reasonable inferences in the light most favorable to the non-
moving party. Brightview Care Ctr., DAB No. 2132 at 2, 9 (2007); Livingston Care Ctr.,
388 F.3d at 172; Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); but see Cedar
Lake Nursing Home, DAB No. 2344 at 7 (2010); Brightview, DAB No. 2132 at 10 (entry
of summary judgment upheld where inferences and views of non-moving party are not
reasonable). However, drawing factual inferences in the light most favorable to the non-
moving party does not require that I accept the non-moving party’s legal conclusions.
Cedar Lake, DAB No. 2344 at 7; Guardian, DAB No. 1943 at 11 (“A dispute over the
conclusion to be drawn from applying relevant legal criteria to undisputed facts does not
preclude summary judgment if the record is sufficiently developed and there is only one
reasonable conclusion that can be drawn from those facts.”’).

Here, Petitioner all but concedes that no material facts are in dispute and, in any event,
points to none. See P. Br. at 2 (conceding “[m]any of the facts concerning R1’s medical
condition, vital signs, etc. are undisputed”); P. Br. at 19 (agreeing “many of the most
salient facts are not in dispute”). Petitioner argues, however, that the parties’ expert
witnesses draw “substantially different inferences from those facts, and from such
inferences, substantially different conclusions.” P.Br. at 2. But, as the discussion below
establishes, Petitioner makes inferences that are simply not reasonable and confuses
inferences with legal conclusions. Drawing all reasonable inferences in Petitioner’s
favor, the undisputed facts lead to only one reasonable conclusion — that the facility was
not in substantial compliance with program requirements.

Undisputed facts. Resident 1 (R1) was a twenty-four-year-old woman, admitted to the
facility on July 22, 2010. She had a long list of diagnoses, including opiod dependence,
bipolar disorder, fibromyalgia, asthma, endometriosis, rheumatoid arthritis, and scoliosis.
She suffered chronic back pain and had histories of suicidal ideation, cutting herself, and
abusing narcotics. CMS Ex. 23 at 237. Her list of medications was formidable and
included no fewer than four antipsychotics, three antidepressants, and one narcotic pain
reliever:

¢ Medrol (a corticosteroid, commonly used to treat asthma, allergies, and arthritis),
4 mg., by mouth, every morning;

e Lithium (an antipsychotic mood stabilizer, commonly used to treat manic
episodes), 300 mg., by mouth, twice daily;

e Trazodone (an antidepressant), 350 mg., by mouth, daily at bedtime;
e Risperdal (an atypical antipsychotic), 0.5 mg., by mouth, every morning.

e Risperdal, 1 mg, by mouth, daily at bedtime;
Seroquel (an atypical antipsychotic used to treat schizophrenia and bipolar), 200
mg., by mouth, daily at bedtime;

Klonopin (Clonazepam) (an anticonvulsant that was apparently prescribed to treat
R1’s anxiety, see CMS Ex. 23 at 165), 2 mg., by mouth, four times daily;

Wellbutrin (an atypical antidepressant), 300 mg., by mouth, every morning;
Tylenol (Acetaminophen), 650 mg., by mouth, every 4 hours as needed (PRN);
Bentyl (used to treat bowel problems), 10 mg., by mouth, every 6 hours PRN;
Zofran (used to treat nausea and vomiting), 4 mg., by mouth, every 6 hours PRN;
Motrin, 600 mg., by mouth, every 8 hours PRN;

Soma (a muscle relaxant), 300 mg., by mouth, three time daily PRN;

Albuterol INH (a bronchodilator), 2 puffs twice daily PRN;

Imodium (an anti-diarrheal), 2 mg., by mouth, every 4 hours PRN;

Ativan (a tranquilizer) 1-2 mg., intramuscular, every 4 hours PRN;

Ativan, 1-2 mg., by mouth, every 4 hours PRN;

Cogentin (used to treat muscle spasms caused by antipsychotic medications), 1
mg., by mouth, every 4 hours PRN;

Cogentin, 1 mg., intramuscular, every 4 hours PRN;

Maalox 30 ml., by mouth, every 6 hours PRN;

Geodon (an atypical antipsychotic), 20 mg., intramuscular, every 12 hours PRN;
Robitussin, 10 ml., by mouth, every 6 hours PRN;

Milk of Magnesia, 10 ml. every 12 hours PRN;
© Norco (a narcotic pain reliever that combines hydrocodone with acetaminophen), *
10/325 mg., by mouth, every 8 hours PRN; and

e Lexapro (an antidepressant), 20 mg., by mouth, daily at bedtime.
CMS Ex. 23 at 75; P. Ex. 6 at 2 (Hutchens Decl. 5).°

There seems no dispute that R1 was a deeply troubled young woman whose relatively
short stay at the facility was characterized by her heavy medications, repeated falls, and
frequent hospitalizations.

On August 12, 2010, three weeks after her admission to the facility, R1 was hospitalized
for a week because of worsening depression with suicidal ideation. CMS Ex. 22 at 1-4;
CMS Ex. 23 at 2.*

In a September 1, 2010 report, the facility’s consulting pharmacist, Melissa J. McGuire,
PharmD, opined that R1’s falls could be attributable to her multiple medications.
Pharmacist McGuire also noted that the resident had “many behaviors and drug seeking
tendencies.” She recommended that R1’s physicians, Dr. Shah and Dr. Lozono, evaluate
ten listed medications — Wellbutrin, Risperdal, Klonopin, Geodon, Cyclobenzaprine,
Benadryl, Norco, Ativan, Trazodone, and Lexapro — “‘as possibly causing or contributing
to falls.” Ifthe therapy were to continue, she recommended that the prescribers
document an assessment of risk versus benefit “‘indicating that the medication is not
believed to be contributing to falls” and that the facility’s interdisciplinary team “ensure
ongoing monitoring for effectiveness and potential adverse consequences” of the drugs.
CMS Ex. 23 at 166.

Petitioner has come forward with no evidence to suggest that either the prescribers or
facility staff responded to the pharmacist’s report. The sections of that report calling for
a response are left blank. CMS Ex. 23 at 166. Petitioner’s witnesses do not mention it
either. P. Ex. 4 (Jude Decl.); P. Ex. 5 (Neese Decl.); P. Ex. 6 (Hutchens Decl.); P. Ex. 7
(Kaufman Decl.).

> Norco is also marketed under the brand names Lorcet, Lortab, Vicodin, Zydone, and
others.

* [have not necessarily been able to discern from the record before me an articulation of
the specific condition for which each of these drugs was prescribed. Sometimes a
justification is written in; sometimes it is not. See CMS Ex. 23 at 47-120.

* The resident herself reported the problem, surrendering her razors so that she would not
be able to cut herself. CMS Ex. 23 at 125-26.
The falls continued. See CMS Ex. 23 at 26, 28, 29, 31.

R1 was hospitalized again on October 3, 2010, complaining of abdominal pain. In a
bizarre episode, physicians diagnosed appendicitis, but, while performing the surgery, her
physician discovered that her appendix had already been removed. CMS Ex. 22 at 5-6;
CMS Ex. 23 at 2. She returned to the facility, and, in response to her ongoing complaints
of pain, staff continued administering PRN Norco. See CMS Ex. 23 at 24, 27, 28.
Occasionally, staff delayed or declined her requests for Norco because she had exceeded
the prescribed maximum of six tablets per day. CMS Ex. 23 at 20, 22.

In a report dated November 3, 2010, Consultant Pharmacist McGuire expressed particular
concerns about the dosages of two prescribed drugs, Clonazepam (Klonopin) and
Lorazepam (Ativan). R1’s prescriptions called for 2 mg. Klonopin four times daily (or 8
mg. per day) as well as 1 mg. Ativan every four hours as needed (or up to 6 mg. per day).
Pharmacist McGuire pointed out that the recommended maximum daily dose thresholds
for these medications were 1.5 mg. for Klonopin and 2 mg. for Ativan. The pharmacist
again asked that the prescribers evaluate continued use of the medications. She
recommended that they document a risk versus benefit analysis, indicating that the
medications continue to be valid therapeutic interventions. She again recommended that
the facility’s interdisciplinary team “ensure both ongoing monitoring for potential
adverse consequences” and that it implement and monitor resident-specific non-
pharmacologic interventions. CMS Ex. 23 at 165.

Ina brief note, Dr. Lozono declined the recommendation, writing that the patient
“continues to display out of control behaviors which may require PRN meds.” CMS Ex.
23 at 165. According to the facility’s director of nursing (DON), Jodi Foster Jude, R.N.,
Dr. Lozano rejected the pharmacist’s recommendations, after she told him that R1’s
medications had curbed the resident’s out-of-control behaviors. P. Ex. 4 at 2 (Jude Decl.
49). Neither the physician nor anyone from the facility responded to the pharmacist’s
recommendations that they ensure ongoing monitoring for potential adverse
consequences and that they consider non-pharmacologic interventions.

* Throughout R1’s medical record, staff document the resident’s “drug-seeking”
behavior as they give her the drugs that she requests. CMS Ex. 23 at 8, 27. Also striking
are the times that staff administered Norco, documenting on the pain medication
monitoring sheets that R1’s pain was “severe” or “excruciating,” even though the
corresponding nurses’ notes do not suggest anything near that level of pain, and, in one
significant instance, describe her as “in no apparent distress.” Compare, e.g., P. Ex. 23 at
88 (noting excruciating pain at 7:00 a.m. and 1:00 p.m.) with CMS Ex. 23 at 16 (noting
“up to request [receive] PRN meds. Conversing [with] staff. In no apparent distress . . .
sleeping soundly for most of shift’).
R1 was last hospitalized on November 16, 2010, with complaints of chest pain. CMS Ex.
22 at 8-69; CMS Ex. 23 at 17, 19. Cardiac and neurological testing were normal. CMS
Ex. 22 at 42-44, 51, 52, 58, 60, 62, 63. Her hospital physician, James D. Wright, M.D.,
opined that her problems more likely related to “chronic pain, opioid dependence, and her
underlying psychiatric problems, which no doubt include an element of post-

traumatic stress disorder.” He told R1 that her complaints of pain were “at least in part
psychologically based and that the more pain medicine she takes, the more habituated her
body becomes.” CMS Ex. 22 at 51-52.

Nevertheless, for reasons that have not been explained, Dr. Wright prescribed a Fentanyl
patch in addition to the PRN Norco, R1’s already-prescribed narcotic pain reliever. CMS
Ex. 22 at 33, 52. Fentanyl (Duragesic) is an opioid analgesic. It is a very powerful drug,
at least 50 to 100 times as potent as morphine. CMS Ex. 29 at 11; CMS Ex. 30 at 1; but
see CMS Ex. 24 at 9 (noting that the coroner’s office reports it to be 80 to 200 times as
potent as morphine). Those wearing the patches must be monitored closely, particularly
“within the initial 24-72 hours when serum concentrations from the initial patch will
peak.” CMS Ex. 30 at 2.

In an order dated November 18, Dr. Wright also renewed the order for Norco PRN (as
needed), but specified that no more than 6 Norco tablets could be administered per 24-

our period. CMS Ex. 22 at 33, 52.

No one at the facility questioned these prescriptions.

R1 returned to the facility at about 11:00 p.m. on November 18. Her respirations were
“easy and unlabored”; she showed no signs of distress. CMS Ex. 23 at 5, 16. Staff began
to fill out a 3-day assessment tool, with each shift recording her vital signs and other
information. According to the form, the first shift reported her blood pressure (BP) at
136/71; pulse (P) at 90; and respirations (R) at 20. CMS Ex. 23 at 5.

For the next shift (6:00 a.m. to 2:00 p.m. on November 19), her vitals were: BP 120/73;
P 114; and R 20. CMS Ex. 23 at 7.° During that shift, however, she showed signs
consistent with the drug manufacturer’s warnings of adverse consequences. She refused
breakfast. CMS Ex. 23 at 16. At 7:00 a.m., according to a monitoring form, she
complained of nausea and vomiting (recorded on the form as N/V). Staff administered
Zofran. CMS Ex. 23 at 93. At 9:25 a.m., according to the nurses’ notes, R1 said that she

° Citing CMS Ex. 23 at 7 and 8, Petitioner asserts that these and the third shift vital signs
were taken at 1:30 p.m. and 9:30 p.m., respectively. P. Br. at 6. Iam willing to accept
the assertion, which, in any event, I do not find material. Nevertheless, after carefully
reviewing the pages relied upon, I found no mention of the times the vitals were taken
beyond a general reference to the hours of each shift.
was tired and complained of pain. Staff administered PRN Norco. R1 returned to bed,
and slept “soundly for most of [the] shift,” waking solely to request and receive PRN
meds. CMS Ex. 23 at 16.

The third shift following her admission (2:00 p.m. to 10:00 p.m. on November 19)
recorded her vital signs as: BP 142/84; P 88; R 20. CMS Ex. 23 at 8. During that shift
(at 5:15 p.m.), she again complained of nausea and vomiting, and staff gave her Zofran.
CMS Ex. 23 at 93. According to a late entry in the nurses’ notes (written on the day of
R1’s death), during this shift, R1 requested and received her PRN medications. She spent
most of the shift “resting in bed” but emerged when medications were passed. R1 told
staff that she was “groggy” because the hospital put her on scheduled Geodon and
Dilaudid, and she wanted to “sleep it off.” CMS Ex. 23 at 16. Staff did not contact her
physician, and they continued to administer her regularly scheduled drugs. CMS Ex. 23
at 87-88, 90, 92-95.

On the fourth shift following her readmission (10 p.m. to 6:00 a.m. on November 19-20),
R1’s vital signs were disturbing: BP was low at 100/58 (normal range for a healthy adult
is 120/80); P was high at 128 (normal is 60-80), R 18. CMS Ex. 23 at 9; CMS Ex. 37.7
At 1:15 a.m. during that shift, R1 was again complaining of nausea and vomiting, and
staff again administered Zofran. CMS Ex. 23 at 93. She must also have been
complaining of pain because staff administered an additional PRN dose of Norco, which,
both parties agree, was her eighth dose in 18 hours, and, with this dosage, the facility
exceeded the dosage limits Dr. Wright had included in his November 18 order — no more
than 6 tablets per 24-hour period. CMS Ex. 23 at 88, 95; CMS Br. at 22; P. Br. at 7.

According to a nurse’s note, at 7:00 a.m., R1 was still sleeping. Staff apparently woke

er up, but “after waking up [R1] noted to be groggy so I held 8 AM meds.” Staff did not
take the resident’s vital signs. CMS Ex. 23 at 17. A nurse aide later wrote that R1 told
er that she did not want to eat breakfast. CMS Ex. 20 at 7. Someone else, whose
position is not identified, wrote that she observed R1 “in bed snoring lightly” some time
after 10:50 a.m. CMS Ex. 20 at 5. A housekeeper wrote that she observed the resident
sleeping at about 11:00 a.m. CMS Ex. 20 at 7.

When a nurse went to her room at 12:15 p.m., R1 did not respond and had no pulse. Staff
called 911 and attempted CPR, but R1 was pronounced dead. CMS Ex. 23 at 17.

’ According to Petitioner, staff took R1’s vital signs at 5:30 a.m. P. Br. at 7. Again, the
authority cited indicates only that the signs were taken between 10 p.m. and 6:00 a.m. It
does not specify a time. CMS Ex. 23 at 9. As noted above, the exact timing is not
material.
10

Following an autopsy, the coroner concluded that R1 died of combined drug intoxication.
CMS Ex. 24. Among other findings, her Fentanyl blood level was 4.4 ng/ML
(nanograms per milliliter). The coroner also found that R1’s level of hydroxybupropion,
to which Bupropion (Wellbutrin) metabolizes, was 420 ng/ML, just under a level (446)
known to cause a delayed death due to overdose. CMS Ex. 24 at 6, 9.

A, CMS is entitled to summary judgment that the facility was not in
substantial compliance with 42 C.F.R. §§ 483.25 and 483.25()(1) because
the undisputed evidence establishes that: 1) in contravention of her
physician’s order, facility staff administered to R1 an excessive dose of
Norco, a powerful narcotic pain medication; and 2) the facility did not
adequately justify administering to that resident questionable drug
combinations and dosages *

Program requirements. Under the statute and the “quality of care” regulation, each
resident must receive, and the facility must provide, the necessary care and services to
allow a resident to attain or maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the resident’s comprehensive assessment
and plan of care. Act § 1819(b); 42 C.F.R. § 483.25. To that end, each resident’s drug
regimen must be free from unnecessary drugs. Unnecessary drugs are defined as any one
or combination of the following: drugs used in excessive doses (including duplicate drug
therapy); drugs used for an excessive duration; drugs that are not adequately monitored;
drugs used without adequate indications for their use; and drugs whose adverse
consequences indicate that they should be reduced or discontinued. 42 C.F.R. §
483.25(I)(1).

Application of law to the undisputed facts: staff administered an excessive dose of
Norco. Here, everyone agrees that, between 7:00 a.m. on November 19 and 1:15 a.m. on
November 20 (just over 18 hours), staff administered to R1 eight tablets of Norco, even
though her physician’s order explicitly limited the dosage to no more than six tablets per
24-hour period. CMS Ex. 22 at 33, 52; CMS Ex. 23 at 88, 95; CMS Br. at 22; P. Br. at 7,
17.

Staff thus administered an excessive dose of Norco, in contravention of the physician’s
order. No one disputes that the standard of care mandates that staff follow physician’s
orders.

Nevertheless, citing the testimony of its own forensic pathologist, Michael W. Kaufman,
M_D., Petitioner argues that R1’s death was caused by “respiratory depression caused by

* My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion
captions of this decision.
11

excessive presence of Fentanyl” and that “the administration of Norco was not a cause or
contribute to cause the resident’s death.” P. Br. at 7-8 (citing P. Ex. 7 at 2 (Kaufman
Decl. {§ 5, 7)). Dr. Kaufman also opines that “the administration of the two tablets of
Norco at 1:15 AM on November 20, 2010 did not present a threat of actual harm to the
resident, even in light of the other drugs [that] had been prescribed for her.” P. Ex. 7 at 3
(Kaufman Decl. { 8). For purposes of summary judgment, I accept Dr. Kaufman’s
opinion that Fentanyl, not excessive Norco, caused R1’s death and that the excessive
Norco caused no actual harm.

The standard for substantial noncompliance, however, is not whether the excessive dose
of Norco actually killed the resident, nor even whether it caused her actual harm. The
standard is whether the deficiency presented the potential for more than minimal harm.
Whether the deficiency meets this standard is a legal conclusion, not a finding of fact, so,
for summary judgment purposes, I need not defer to Dr. Kaufman’s opinion as to whether
that standard is met. I note, nevertheless, that, in his carefully-worded declaration, Dr.
Kaufman stops short of claiming that giving an already-heavily-sedated woman
significantly more narcotics (a third more within a twenty-four hour period) than
authorized by her physician poses no potential for more than minimal harm.

Moreover, no one claims that staff can safely disregard medication orders, and the
deficiency here is broader than an instance of their administering narcotics that were not
authorized by a physician’s order. When it came to drugs, R1 was especially vulnerable.
She was taking a lot of drugs in high doses; the facility’s consulting pharmacist had twice
questioned whether the drug regimen was justified; a powerful narcotic (Fentanyl) had
just been added to her already-extensive drug regimen; the Norco itself contains
hydrocodone, which is more toxic than codeine. CMS Ex. 24 at 9. Facility staff
therefore had a heightened duty to monitor carefully the drugs R1 was taking, particularly
the PRN narcotics, and to ensure that she was not administered anything more than had
been ordered. The staff’s failure to follow the physician’s order when it really mattered
raises questions about the procedures the facility had in place to ensure that staff did not
exceed physician orders for narcotics.

In defending the charge that it over-medicated R1, Petitioner makes much of its
obligation to follow physicians’ orders. Yet, the facility shows no apparent concern for
its staff’s disregard of the physician’s order in this critical instance. Petitioner’s
witnesses are quick to opine that the facility complied with the regulations protecting
residents from unnecessary drugs, but, in doing so, they fail even to acknowledge this
error, much less to explain why it occurred and why I should not conclude that the
deficiency posed the potential for more than minimal harm. Petitioner submits no
statements from the nurse who administered the drug. DON Jude says nothing about it.
P. Ex. 4. Nurse Consultant Barbara Hutchens, R.N., talks about the staff administering
the Norco at 1:15 a.m. (during the 10 p.m. to 6 a.m. shift on November 19-20), but she
disregards the fact that the drug was administered without a valid physician order. She

12

says “in my professional opinion, it was appropriate for the staff to administer the Norco
in response to the resident’s complaints of pain, as ordered by her physician” and
concludes that “[t]he administration of the resident’s medications on November 19, 2010
did not violate the standard of care or any federal regulations.” P. Ex. 6 at 6 (Hutchens
Decl. ¥ 11); see P. Ex. 6 at 3 (Hutchens Decl. ]5).”

I reject these conclusions as unreasonable. Administering a narcotic in contravention of a
valid physician order is neither “appropriate” nor within the standard of care, and it
violates the federal regulations governing quality of care (42 C.F.R. § 483.25) and
protecting residents from unnecessary drugs (42 C.F.R. § 483.25(1).

Also troublesome, Nurse Consultant Hutchens recognizes that staff administered the drug
because R1 requested it, but she describes the resident as “conversing with staff” and “in
no apparent distress” at the time, which should have raised additional significant
questions as to why the drug was given. P. Ex. 6 at 3 (Hutchens Decl. § 5). Yet, it seems
that no one at the facility asked this question.

Thus, because staff administered excessive Norco to R1, in contravention of her
physician’s order, the facility violated 42 C.F.R. §§ 483.25 and 483.25(1).

Application of law to the undisputed facts: the facility did not justify questionable
combinations and dosages of drugs. On September 1, Consultant Pharmacist McGuire
questioned ten of R1’s medications and recommended that the prescribers and facility
staff reassess their benefits versus risks and develop a plan for monitoring their
effectiveness and adverse consequences. CMS Ex. 23 at 166. Petitioner has not disputed
any of this and cites no evidence suggesting that facility staff responded to the
pharmacist’s legitimate concerns. Indeed, Petitioner’s brief and its witness declarations
are conspicuously silent regarding the pharmacist’s September | report.

In her second report, Consultant Pharmacist McGuire raised more specific concerns. She
pointed out that the prescribed dosages of two drugs, Clonazepam (Klonopin) and
Lorazepam (Ativan), far exceeded the manufacturers’ recommendations. The
manufacturer recommended no more than 1.5 mg. per day of Klonopin; R1 took 8 mg.
per day. The manufacturer recommended no more than 2 mg. per day of Ativan; R1 was
prescribed up to 6 mg. per day. CMS Ex. 23 at 165; CMS Ex. 28 at 45-46. R1 was thus
regularly taking more than five times the maximum recommended dosage of Klonopin
plus up to triple the maximum dosage of Ativan. CMS Ex. 23 at 165.

° Tam assuming that Nurse Consultant Hutchens refers to all of the Norco administered
on the 10 p.m. to 6 a.m. shift of November 19-20, which, as discussed, makes her
conclusion unreasonable. However, if she is limiting her opinion to the drugs given on
November 19, then she apparently does not claim that staff acted appropriately in
administering the eighth dose.

13

Further, as noted above, “unnecessary drugs” include duplicate drug therapy. 42 C.F.R. §
483.25(1)(1). In its State Operations Manual (SOM), CMS defines “duplicate therapy” as
“multiple medications of the same pharmacological class/category or any medication
therapy that substantially duplicates a particular effect of another medication that the
individual is taking.” CMS Ex. 28 at 4.

Duplicate therapy is generally not indicated, unless current
clinical standards of practice and documented clinical
rationale confirm the benefits of multiple medications from
the same class or with similar therapeutic effects ....
Documentation is necessary to clarify the rationale for and
benefits of duplicate therapy and the approach to monitoring
for benefits and adverse consequences.

CMS Ex. 28 at 20.

CMS points out that Lorazepam (Ativan) and Clonazepam (Klonopin) fall into the same
category of medications — they are both anxiolytics. CMS Ex. 28 at 45; CMS Ex. 36 at 7
(Kaplow Decl. { 35) (stating that Lorazepam and Clonazepam “are in the exact same
family of drugs”).'° Combining the two drugs is therefore inappropriate, unless the
facility shows that “current clinical standards” and “documented clinical rationale” justify
the practice. Petitioner offers no evidence that current clinical standards of practice
“confirm the benefits” of combining these two drugs. Nor has Petitioner produced
documentation to clarify the rationale for or benefits of the therapy. I see no
documentation of its approach to monitoring for benefits/adverse consequences.

Petitioner’s response to this is that Dr. Lozano “expressly confirmed that he wanted his
orders followed.” P. Br. at 17. A physician’s order, however, is insufficient to satisfy the
requirements of the regulation. Responding to comments, the drafters of the regulation
explained that an “unnecessary drug” is “reserved for drug therapy circumstances” that
CMS guidelines establish “are a potential threat to the resident’s health and safety, and
for which the facility is unable to justify why using a drug under such circumstances is in
the best interest of the resident.” The facility “can certainly rely on physician
justification of the risk-benefit of the drug use,” but it cannot simply claim that “the
doctor ordered it.” Requiring only a physician’s order to justify a questionable drug
“would render the regulation, and the statutory underpinnings for it, meaningless.” 56
Fed. Reg. 48,826, 48,85 1-52 (Sept. 26, 1991) (emphasis added).

© This is not the only instance of duplicate therapy. R1 had prescriptions for Tylenol
(acetaminophen) and Norco, which is hydrocodone with acetaminophen. The SOM
specifically cites this as a problematic example of duplicate therapy, noting that it can
increase the risk of acetaminophen toxicity. CMS Ex. 28 at 20. CMS did not cite this
particular combination as a problem here, so I do not consider the question.

14

Thus, without regard to the excess dose of Norco, undisputed evidence establishes
that the facility administered to R1 unnecessary drugs within the meaning of 42
C.F.R. § 483.25(1) and was therefore not in substantial compliance with program
requirements.

B. CMS is also entitled to summary judgment because the undisputed
evidence establishes that the facility staff: 1) did not adequately monitor
R1 for potential adverse consequences from her drug regimen, in
contravention of 42 C.F.R. §§ 483.25 and 483.25()); and 2) in
contravention of 42 C.F.R. § 483.10(b)(11), did not immediately consult
the resident’s physician when she exhibited symptoms of a drug overdose.

Program requirements. As noted above, drugs that are not adequately monitored are
considered unnecessary. 42 C.F.R. § 483.25(1)(1). Referring specifically to opioids (like
Norco and Fentanyl), the SOM emphasizes the importance of monitoring for adverse
consequences:

Adverse consequences may be especially problematic when
the resident is receiving other medications with significant
effects on the cardiovascular and central nervous systems.
Therefore, careful titration of dosages based on
monitoring/evaluating the effectiveness of the medication and
the occurrence of adverse consequences is necessary. The
clinical record should reflect the ongoing communication
between the prescriber and the staff. . . necessary for the
optimal and judicious use of pain medications.

CMS Ex. 27 at 22.

In addition, to protect and promote the rights of each resident, the facility must
immediately inform the resident, consult the resident’s physician, and (if known) notify
the resident’s legal representative or interested family member when there is: a
significant change in the resident’s physical, mental, or psychosocial status (i.e., a
deterioration in health, mental or psychosocial status in either life-threatening conditions
or clinical complications); or a need to alter treatment significantly (i.e., a need to
discontinue an existing form of treatment due to adverse consequences or to commence a
new form of treatment). 42 C.F.R. § 483.10(b)(11) (emphasis added).

“Significant” means “all cases, whether or not there is a medical emergency.” 56 Fed.
Reg. at 48,833. “Immediately” means “as soon as the change . . . is detected, without any
intervening interval of time.” Magnolia Estates Skilled Care, DAB No. 2228 at 8 (2009);
The Laurels at Forest Glen, DAB No. 2182 at 13 (2008).
15

Application of law to the undisputed facts — inadequate monitoring and failure to consult
physician about a significant change. The dangers associated with Fentanyl are well-
documented. The drug’s manufacturer, the Food and Drug Administration (FDA), and
others provide stern warnings to those who administer the drug and those who take it.
According to its manufacturer:

Fentanyl is a very strong opioid narcotic pain medicine that can
cause serious and life-threatening breathing problems. Serious
and life-threatening breathing problems can happen because of
an overdose or if the dose you are using is too high for you."
Call your doctor right away or get emergency medical help if
you:

e have trouble breathing, or have slow or shallow breathing

e have a slow heartbeat

e have severe sleepiness

e have cold, clammy skin

e feel faint, dizzy, confused, or cannot think, walk, or talk normally
e have a seizure

e have hallucinations.

CMS Ex. 30 at 8 (emphasis in original).
The FDA issued its own warnings in the form of a 2007 public health advisory that says:

Healthcare professionals who prescribe and patients who use the fentanyl
patch should be aware of the signs of fentanyl overdose including the
following: trouble breathing or slow or shallow breathing; slow heartbeat;
severe sleepiness; cold, clammy skin; trouble walking or talking; or feeling
faint, dizzy or confused. If these signs occur, patients or their caregivers
should get medical attention right away.

CMS Ex. 31 at 4; accord CMS Ex. 28 at 29 (in which the SOM notes that adverse
consequences include nausea, vomiting, sedation, lethargy, weakness, confusion, and
unintended respiratory depression); CMS Ex. 29 at 8 (per 2010-2011 Drug Information

"' According to Petitioner, the facility “could not have known of the patch release
medication at a rate resulting in overdoses.” P. Br. at 9 (quoting IDR findings) (emphasis
in original). I am puzzled by this statement. While facility staff may not have
understood the precise mechanism by which the patch delivered the drug, the drug’s
manufacturer warns — in bold letters — of the potential for overdose. For this reason, I
cannot understand why facility staff “could not have known” of the danger and monitored
the resident accordingly.
16

Handbook, drowsiness, fatigue, sedation, nausea/vomiting, and hyper-hypotension (low
blood pressure) are adverse reactions to Fentanyl).

A 2009 article from the journal Nursing warns that even opioid-tolerant patients “can
experience serious or life-threatening opiod-induced hypoventilation when starting
therapy with a fentanyl patch” and advises “[c]losely monitor your patient to avoid
oversedation.” CMS Ex. 33 at 1. The article lists signs of an overdose and instructs
healthcare providers to “intervene immediately” if the patient develops respiratory
distress, extreme sleepiness or sedation, or other symptoms listed. CMS Ex. 33 at 2.

In light of these warnings, the facility should have had in place a plan to assure the close
level of monitoring appropriate for a highly-medicated resident who had just been given a
Fentanyl patch. Instead, by its own admission, it treated R1 as it would any resident,
taking her blood pressure and vital signs just once per shift. According to Nurse
Consultant Hutchens, “staff should be monitoring the resident and taking vital signs once
a shift” regardless of the resident’s medication orders. P. Ex. 6 at 4 (Hutchens Decl. 8).
Certainly, a routine blood pressure check every eight hours does not constitute the careful
monitoring required for a patient taking Fentanyl.

Even if the facility could be excused for initially treating R1 as it would any other
resident, it should have ratcheted up the monitoring when she began to exhibit symptoms
of Fentanyl overdose, and, as CMS argues, it should have consulted her physician
immediately when she first exhibited such symptoms: nausea and vomiting; extreme
sleepiness; and a drop in blood pressure accompanied by an elevated pulse.

By all accounts, when R1 returned to facility on the night of November 18, she was fine;
her vital signs were normal, and she showed no signs of distress. CMS Ex. 23 at 5, 16.
By November 19, however, she began to show some of the symptoms associated with a
drug overdose. That morning, she complained of nausea and vomiting. She refused
breakfast. CMS Ex. 23 at 16, 93. By the afternoon/evening shift, she again complained
of nausea/vomiting, and said that she felt groggy and wanted to “sleep it off.” She
attributed her grogginess to medications (Dilaudid and Geodon) she took while
hospitalized, and staff apparently never questioned her opinion. CMS Ex. 23 at 16.

By the morning of November 20, her symptoms were more pronounced. Her severe
sleepiness continued (even though she had been sleeping or resting most of the time since
she returned from the hospital). CMS Ex. 23 at 16-17. In fact, she was so groggy that
the nurse withheld her 8:00 a.m. medications. Her blood pressure dropped from 142/84
to 100/58 and her pulse rose from 88 to 128. CMS Ex. 23 at 8, 9, 17.

Staff did not contact her physician; they did not increase their level of monitoring; they
did not even take her vital signs again.
17

Petitioner excuses its staff’s actions (or inactions) by arguing that R1’s symptoms were
few and did not suggest life threatening conditions. According to Petitioner, R1’s
symptoms were not so significant that they “should have alerted a reasonably prudent
nurse that R1 was at risk for a fatal overdose of Fentanyl.” P. Br. at 12. But “significant”
does not mean “life-threatening”; it does not even require a medical emergency. Drafters
of the regulation emphasized that, “in all cases, whether or not there is a medical
emergency,” the facility must immediately consult the attending physician. 56 Fed. Reg.
at 48,833; The Laurels at Forest Glen, DAB No. 2182 at 11-13.

Next, Petitioner argues that, because R1 had exhibited virtually all of these symptoms
before, they could not be considered significant. Under this theory, staff did not have to
consult the physician about a drop in her blood pressure, because her blood pressure was
erratic; staff did not have to consult the physician about her nausea and vomiting, because
she had been nauseous and vomiting before; staff did not have to consult the physician
about her sleepiness, because she regularly slept until noon, which DON Jude
characterizes as a “lifestyle choice.” P. Ex. 4 at 2 (Jude Decl. § 7).

Setting aside the questionable characterization of this heavily-sedated resident’s
inclination to sleep as a “life style choice,” Petitioner’s theory means that the facility
would virtually never be compelled to consult the resident’s physician when she
exhibited symptoms of a drug overdose, because, at one time or another, she exhibited
virtually all of these symptoms (which is not surprising, considering how heavily
medicated she was).

Vital signs. In any event, Petitioner’s argument fails because the undisputed evidence
leads to only one reasonable conclusion — in the roughly 36 hours following her return to
the facility, R1’s condition changed significantly. I accept that her blood pressure was
erratic and occasionally dipped as low as, or lower than, it was on the morning of
November 20. But her pulse had never been as high as 128, and the combined low blood
pressure/elevated pulse was unusual for her. See Ex. P. Ex. 4 at 3-4 (Jude Decl. § 11)
(showing only one instance of combined low blood pressure and elevated pulse, which, at
101, was not nearly as high as the 128 recorded on the morning of November 20). In
testimony that Petitioner does not challenge, Surveyor Cheryle D. Strother, R.N.,
explains

When the blood pressure suddenly drops, the heart will speed
up in an attempt to raise the blood pressure. If the blood
pressure does not return to normal range, then the whole
system shuts down. When this happens, the blood pressure,
heart rate and respiratory rate all continue to drop until the
person dies.
18

CMS Ex. 34 at 3 (Strother Decl. § 14). Staff should thus have consulted R1’s physician
immediately when she exhibited low blood pressure/high pulse. Even if they did not
recognize the significance of these changes (which they should have), their subsequent
failure to monitor R1’s vital signs is simply inexplicable. Had they done so, they might
have recognized that her blood pressure, heart rate, and respiratory rate were dropping,
giving them the opportunity to intervene before it was too late.”

Nausea/vomiting. Facility staff say nothing about R1’s symptoms of nausea/vomiting on
or before November 19-20. See P. Ex. 4 (Jude Decl.); P. Ex. 5 (Neese Decl.). Without
any citation to the record, Petitioner claims that R1 “demonstrated . .. symptoms [of
nausea] long before the Fentanyl patch was administered.” P. Br. at 17-18. Nurse
Consultant Hutchens, who has no personal knowledge of R1’s symptoms, is the only
facility witness who addresses the question. She declares:

The presence of the complaint of nausea was not related to
the administration of Fentanyl. The same complaint of
nausea was present in this resident before she was ever given
Fentanyl, and there was no change in this complaint after the
Fentanyl patch was administered.

P. Ex. 6 at 4 (Hutchens’ Decl. § 8).

Nurse Consultant Hutchens’ logic is flawed. Just because R1 had previously experienced
nausea, for reasons unrelated to Fentanyl, does not mean that her complaints of nausea
and vomiting on November 19 and 20 were therefore unrelated to the Fentanyl."

Moreover, Nurse Consultant Hutchens’ inference that R1 was consistently nauseous — so
that her complaints of November 19 and 20 did not represent a change — is contrary to the
evidence and therefore not reasonable. In fact, the record shows that R1’s prior
complaints of nausea were relatively few, and each one led to a significant medical
intervention.

R1’s complaints of nausea and vomiting were first documented on October 3, when she
was hospitalized, complaining of “significant amounts of nausea and vomiting.” CMS
Ex. 22 at 5; CMS Ex. 23 at 29. Following her return to the facility, however, she had no
such complaints until October 25. At that time, she complained of nausea and difficulty

® The drug Naloxone can be administered as an antidote to Fentanyl overdose. CMS Ex.
32 at 3.

® The fallacy of her reasoning is illustrated by the following example: Mary ate tainted
food; Mary has a stomach ache; Mary has had stomach aches without eating tainted food;
therefore, tainted food did not cause Mary’s stomach ache.
19

urinating, which resulted in her being catheterized. CMS Ex. 23 at 22. She had the same
problems on October 30 and was sent to the emergency room, where she was again
catheterized. CMS Ex. 23 at 23.'4 I found no evidence that she experienced any other
symptoms of nausea/vomiting until November 16. CMS Ex. 23 at 18, 20, 21.'° She
vomited once immediately prior to her hospitalization that day; although, by the time of
her hospital admission, she no longer complained of nausea/vomiting. CMS Ex. 22 at
39-41; CMS Ex. 23 at 17. When she returned to the facility on the night of November
18, she had no such symptoms. CMS Ex. 23 at 6, 16.

Only one reasonable inference can be drawn from these undisputed facts — when R1
exhibited symptoms of nausea/vomiting, she had a significant underlying problem that
required immediate medical attention. Thus, even if staff did not recognize her nausea as
a symptom of Fentanyl toxicity, they should have recognized it as evidence of a need to
alter her treatment and should have consulted her physician immediately.

Severe sleepiness. I recognize that R1 generally had a sleepy affect and that she regularly
slept late.'° But her behavior on November 20 went far beyond anything she had
displayed before. She had been sleeping/resting virtually non-stop since she returned
from the hospital. Nursing notes describe her as sleeping through most of the 6:00 a.m.
to 2:00 p.m. shift on November 19. She spent the entire 2:00 p.m. to 10:00 p.m. shift
“resting in bed.” She was still sleeping at 7:00 a.m. the following morning, having only
gotten up at 1:15 a.m. to request medication, and she remained asleep until the time of
her death, between 11:00 a.m. and 12:15 p.m. CMS Ex. 23 at 16-17; CMS Ex. 20 at 7.

The responsible nurse was so concerned that she unilaterally altered the resident’s
treatment, withholding her 8:00 a.m. medications. She drafted a physician’s order to
justify her withholding the medications but did not call the physician for approval of that
order. CMS Ex. 23 at 46. According to Nurse Consultant Hutchens, the nurse withheld
medications because the resident was sleeping at the time of the medication pass. P. Ex.
6 at 5 (Hutchens Decl. § 9). Based on what the nurse wrote, this is not a reasonable
inference. The nurse wrote, “[a]fter waking up [resident] she was noted to be groggy so I

'* Severe stomach/abdominal pain and difficulty urinating are “unlikely but serious side
effects” of Norco. www.nlm.nih.gov/medlineplus/druginfo/meds;
www.rxlist.com/narco-drug.htm.

'S Prior to November 19, no monitoring sheets indicate that PRN Zofran was
administered to treat nausea. See CMS Ex. 23 at 93, 111.

‘© DON Jude and the facility’s behavioral health director, Licensed Practical Nurse
Steven Neese, concede that R1’s drug regimen left her sleepy most of the time but say
that, because they considered the heavy sedation necessary to control her behavior, they
told her physician they did not want it changed, and her physician complied. P. Ex. 4 at 2
(Jude Decl. § 9); P. Ex. 5 at 2 (Neese Decl. 7).
20

held 8 AM meds.” CMS Ex. 23 at 17. Even though R1 usually had a sleepy affect, no
evidence suggests that staff had ever before considered the symptom of such concern that
they withheld ordered medications. In fact, notwithstanding her sleepiness, R1 regularly
got out of bed to request her medications.

No monitoring. Finally, the undisputed evidence establishes that facility staff were not
adequately monitoring R1 on the morning of November 20. I accept, for summary
judgment purposes, that two or three staff members happened to observe R1 while they
engaged in other duties. Someone, who came into the room to fetch her roommate,
noticed R1 sleeping; a housekeeper, engaged in other duties, also happened to see her.
CMS Ex. 20 at 5, 7. But such casual observations do not constitute the careful
monitoring called for when a resident has been administered large doses of powerful
drugs, particularly where that resident has been exhibiting symptoms of drug toxicity.

Thus, the undisputed facts establish that, from November 19 until the time of her
death on November 20, R1 exhibited alarming symptoms consistent with a
Fentanyl overdose. Because facility staff failed to monitor her deteriorating
condition and failed to consult her physician about her symptoms, the facility was
not in substantial compliance with 42 C.F.R. §§ 483.25, 483.25(1), and
483.10(b)(11).

C. The penalty imposed is not unreasonably high.

To determine whether a CMP is reasonable, | apply the factors listed in 42 C.F.R. §
488.438(f): 1) the facility’s history of noncompliance; 2) the facility’s financial
condition; 3) factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of
culpability, which includes neglect, indifference, or disregard for resident care, comfort
or safety. The absence of culpability is not a mitigating factor. The factors in 42 C.F.R.
§ 488.404 include: 1) the scope and severity of the deficiency; 2) the relationship of the
deficiency to other deficiencies resulting in noncompliance; and 3) the facility’s prior
istory of noncompliance in general and specifically with reference to the cited
deficiencies.

I consider whether the evidence supports a finding that the amount of the CMP is at a
level reasonably related to an effort to produce corrective action by a provider with the
ind of deficiencies found, and in light of the section 488.438(f) factors. I am neither
bound to defer to CMS’s factual assertions, nor free to make a wholly independent choice
of remedies without regard for CMS’s discretion. Barn Hill Care Ctr., DAB No. 1848 at
21 (2002); Cmty. Nursing Home, DAB No. 1807 at 22 et seg. (2002); Emerald Oaks,
DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1638, at 8 (1999).

Here, the penalty imposed — $300 per day — is at the low end of the penalty range ($50-
$3,000) for per-day CMPs where the facility’s deficiencies do not pose immediate
jeopardy to resident health and safety. 42 C.F.R. §§ 488.408(d); 488.438(a)(1).

21

Petitioner has a dismal compliance history. By its own admission, it is a “special focus
facility,” which means that, because of its significant history of noncompliance, it is
subject to more careful monitoring. See Jennifer Matthews Nursing & Rehab. Ctr.,
CR1717 at 30 (2007), aff’d, DAB No. 2192 (2008). Its history of noncompliance
includes repeated failures to comply with the quality-of-care regulation (42 C.F.R. §
483.25 — Tag F309). In May 2005, November 2007, and June 2010, its deficiencies
under that tag were also cited at scope and severity level G, which means that the
deficiency caused actual harm. In August 2005 and March 2007, the facility’s quality-of-
care deficiencies posed immediate jeopardy to resident health and safety. CMS Ex. 3.
The facility’s history alone justifies a significant penalty.

Petitioner does not claim that its financial condition affects its ability to pay the $3,900
CMP.

I need not even consider the remaining factors to sustain this astonishingly low penalty.
But I consider the deficiencies very serious. Any one of them would more than justify
the penalty imposed. This heavily-sedated woman exhibited symptoms of drug toxicity,
including falling blood pressure, yet staff did not even make a follow-up blood pressure
check or otherwise monitor her condition. This failure evidences a significant disregard
for her care, comfort and safety, for which the facility is culpable.

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

CMS cited deficiencies at scope and severity level G, which indicates actual harm.
Petitioner challenges those scope and severity findings. According to Petitioner, “the
scope and severity findings have an unusually adverse impact on the facility and its
owners’ ability to market the facility,” because, based on those findings, the facility’s
designation as a “[s]pecial [flocus [flacility” will likely continue. P. Br. at 2 n.2.

I recognize that scope and severity findings may cause unfavorable collateral
consequences, but such considerations do not override the regulations by which I am
bound. Those regulations limit my authority to review scope and severity.

An ALJ may review CMS’s scope and severity findings, only if a successful challenge
would affect the range of the CMP or if CMS has made a finding of substandard quality
of care that results in the loss of approval of a facility’s nurse aide training program. 42
C.F.R. § 498.3(b)(14); 42 C.F.R. § 498.3(d)(10); Cedar Lake Nursing Home, DAB No.
2344 at 9; Evergreen Commons, DAB No. 2175 (2008); Aase Haugen Homes, DAB No.
2013 (2006). Here, the deficiencies were cited at a G level of scope and severity, rather
than immediate jeopardy, which means that the per-day penalty is already in the lower
range ($50 to $10,000). A successful challenge to scope and severity would therefore not
affect the range of the CMP. 42 C.F.R. § 488.438(a)(2). The parties also seem to agree

22

that the facility has not lost approval of its nurse aide training program. CMS Br. at 4; P.
Br. at 2-3 n.2. CMS’s scope and severity determination is therefore not reviewable here.

IV. Conclusion
I grant CMS’s motion for summary judgment, because the undisputed facts establish that

the facility was not in substantial compliance with 42 C.F.R. §§ 483.25, 483.25(1), and
483.10(b)(11). I sustain the penalty imposed ($300 per day).

/s/

Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Sue A. Sherrod, M.D.,
(NPI No. 1376731695),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-461
Decision No. CR2463

Date: November 8, 2011

DECISION

Petitioner, Sue A. Sherrod, M.D., appeals the determination of TrailBlazer Health
Enterprises (TrailBlazer), a Medicare contractor, that she is not eligible for payment of
services she rendered to Medicare-eligible beneficiaries earlier than June 14, 2010. I
grant the Centers for Medicare and Medicaid Services’s (CMS’s) motion for summary
judgment and uphold TrailBlazer’s reconsideration determination. Consequently,
Petitioner is not entitled to bill for services provided from May 1, 2010 through June 14,
2010, while she was involved with a group practice to which she had reassigned her
Medicare benefits. Neither the group practice nor Petitioner submitted any claims, and
the time permitted in which to do so has expired.

I. Background

Petitioner is a licensed psychiatrist practicing in Dallas, Texas. She filed a CMS-8551I
application requesting enrollment in the Medicare program as a solo practitioner. CMS
Ex. 5. TrailBlazer received this enrollment application on June 16, 2010. By letter dated
September 2, 2010, TrailBlazer notified Petitioner that it approved her enrollment
application as a solo practitioner with an effective date of June 14, 2010, the date she first
began seeing Medicare patients at her current practice location. CMS Ex. 2, at 4.
Petitioner requested reconsideration review, asking that her effective date be changed to
May 1, 2010. CMS Ex. 1, at 1. On April 8, 2011, TrailBlazer upheld its initial
determination and denied Petitioner’s request. CMS Ex. 2.

On May 13, 2011, Petitioner filed a hearing request with the Civil Remedies Division of
the Departmental Appeals Board (DAB). An Acknowledgment and Pre-hearing Order
was sent to the parties on May 19, 2011. On June 22, 2011, CMS filed a Motion for
Summary Judgment and a brief in support of its motion (CMS Brief), accompanied by 10
proposed exhibits (CMS Exs. 1-10). On August 21, 2011, Petitioner filed her responsive
brief (P. Brief). Neither party submitted any written direct testimony pursuant to my
prehearing order. Absent any objection, I admitted all proposed exhibits in the record.

I determined that a telephone conference with the parties was necessary to clarify some
issues. The conference was held on October 3, 2011, the summary of which is
documented in my Order Following Telephone Conference (Order) issued October 5,
2011. L advised the parties that questions still remained as to the billing period of May 1,
2010 through June 14, 2010, when Petitioner was working with the group practice
Innovative Housecalls, LLC (Innovative). I asked CMS to further brief the issue of
whether Petitioner would be precluded, under her individual billing number, from
seeking Medicare reimbursement for the services she provided to Medicare beneficiaries
for the time period of May 1 through June 14, 2010, when she was working with
Innovative. Petitioner was afforded opportunity to submit further argument and evidence
in response. On October 13, 2011, CMS filed its supplemental brief (CMS Supp. Br.).
On October 20, 2011, Petitioner filed her response (P. Response).

II. Issue

The issue in this case is whether CMS had a legitimate basis to determine Petitioner’s
effective date as June 14, 2010 for Medicare enrollment and billing privileges.

III. Analysis

This case involves two Medicare enrollment applications. The most recent is Petitioner’s
enrollment application as a solo practitioner, when she was assigned a Medicare Provider
Transaction Access Number (PTAN) with an effective date of June 14, 2010. The other
application involves the Medicare benefit reassignment application to Innovative that was
approved and assigned both group and individual PTANs with effective dates of May 1,
2010. While she was under contract at the Innovative group practice location, Petitioner
provided services to Medicare beneficiaries from May 1, 2010 through June 14, 2010.

My findings of fact and conclusions of law are set forth below in italics and bold.
A, Summary judgment is appropriate in this case as a matter of law.

CMS argues that it is entitled to summary judgment because no genuine dispute exists as
to any material fact. CMS Brief at 3. The DAB Board members (Board) explained:

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

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).

The Board has further explained that the role of an Administrative Law Judge (ALJ) in
deciding a summary judgment motion differs from the ALJ’s role in resolving a case after
a hearing. The ALJ should not assess credibility or evaluate the weight of conflicting
evidence. Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291, at 5 (2009).

Having accepted all of Petitioner’s factual assertions as true and having drawn all
reasonable inferences in her favor, I find that Petitioner has not disputed the key material
facts in this case: the date on which Petitioner began furnishing services at her new
practice location as a solo practitioner; and the fact that neither she nor Innovative
submitted any Medicare reimbursement claims for services she provided from May 1,
2010 through June 14, 2010, while her Medicare billing privileges were reassigned to the
Innovative group practice. Accordingly, for the reasons set forth below, I agree with
CMS that summary judgment is appropriate in this case.

B. TrailBlazer correctly determined June 14, 2010 as Petitioner’s effective date
of enrollment as a solo practitioner.

The effective date for enrollment for physicians is “the /ater of the date of filing of a
Medicare enrollment application that was subsequently approved by a Medicare
contractor or the date an enrolled physician . . . first began furnishing services at a new
practice location.” 42 C.F.R. § 424.520(d) (emphasis added). The filing date is when
TrailBlazer receives a signed application that is able to be processed to approval. See 73
Fed. Reg. 69,726, 69,769 (Nov. 19, 2008). In addition, CMS permits limited
retrospective billing privileges:

Physicians ... may retrospectively bill for services when a physician . . .
[has] met all program requirements, including State licensure requirements,
and services were provided at the enrolled practice location for up to—

(1) 30 days prior to their effective date if circumstances
precluded enrollment in advance of providing services to
Medicare beneficiaries, or

(2) 90 days [in certain emergencies which do not apply to the
case before me.]

42 CFR. § 424,521.

On June 16, 2010, Petitioner submitted a CMS-855I to TrailBlazer to enroll in the
Medicare program as a solo practitioner. On the application, Petitioner noted that she
first began providing services to Medicare beneficiaries at her new location in Dallas,
Texas as of June 14, 2010. CMS Ex. 5, at 9. TrailBlazer then received Petitioner’s
enrollment application, which it subsequently approved with — in effect — a retrospective
billing date of June 14, 2010.' CMS Ex. 9, at 4; CMS Ex. 2, at 4. I find this billing date
determination is consistent with the regulatory requirements at 42 C.F.R. §§ 424.520 (d)
and 424.521 and is the earliest date for which Petitioner is eligible.

C. Petitioner is precluded from receiving reimbursement from Medicare for
services she provided for the period from May 1 to June 14, 2010 because
neither Petitioner nor her previous group practice submitted any timely claims.

Petitioner seeks to challenge her assigned enrollment effective date as a solo practitioner
to receive reimbursement for services she provided while with Innovative’s group
practice. CMS Ex. 10; P. Response. Upon joining the practice, Petitioner submitted an
individual Medicare enrollment application form CMS-855I to enroll into the Medicare
program and an application form CMS-855R for reassignment of her right to bill the
Medicare program and to receive Medicare reimbursement payments. Petitioner
submitted both of these applications on April 13, 2010. At that time, Petitioner requested
a May 1, 2010 effective enrollment date, which TrailBlazer granted. CMS Ex. 4, at 4, 5,
9.

Petitioner started providing services with the understanding that Innovative would bill
Medicare for the services she provided. Innovative did not, however, establish billing

' TrailBlazer characterized June 14, 2010 as the effective date rather than the
retrospective billing date. CMS Ex. 2, at 4.
capability under Medicare and did not reimburse Petitioner. CMS Ex. 1, at 1,2; CMS
Ex. 2, at 1-3; CMS Ex. 4; CMS Ex. 10. Petitioner never submitted the claims to
Medicare under her individual PTAN either. CMS Ex. 1, at 2; CMS Ex. 4, at 3; Order
issued October 5, 2011.

Starting January 1, 2010, the Patient Protection and Affordable Care Act (PPACA),
PUBL. L. No. 111-148, prohibits a Medicare contractor from providing reimbursement for
claims that are filed more than one year from the date the practitioner provided the
service. PPACA § 6404 (reducing maximum period of time claims can be submitted to
Medicare for reimbursement from three calendar years). Petitioner argues she challenged
the enrollment date assigned to her as a solo practitioner in December 2010, which was
less than one year from the May | through June 14, 2010 time period for which she now
seeks to receive reimbursement. P. Response at 1. Petitioner further argues generally
that section 6404 of the PPACA allows for exceptions to the one-year rule for filing
claims.

Iam uncertain why Innovative did not submit Petitioner’s reimbursement claims pursuant
to their private agreement, and I do not need to resolve that issue for them. Although I
may be sympathetic to Petitioner’s predicament, the PPACA’s one-year bar precludes
Petitioner or Innovative from now filing these claims and provides a legitimate basis for
CMS to refuse to consider reimbursing Petitioner during the May | through June 14,
2010 period. Although Section 6404 of PPACA gives CMS the authority to specify
exceptions to the one calendar year time limit for filing claims, I am not aware of any
exception that currently exist for which Petitioner qualifies, including any exception for
filing a challenge to a Medicare effective date determination.

Petitioner states that she acted in good faith and that she should be able to recover
compensation for 142 patient visits, which total $9,199.10, even though Innovative did
not bill Medicare for her services. P. Response at 1-2. However, Petitioner has not
shown any basis that would support a different eligibility than that which TrailBlazer has
established. I am bound by the applicable statute and regulations and am not authorized
to provide Petitioner with the equitable relief she seeks. See, e.g., Pepper Hill Nursing &
Rehab. Ctr., LLC, DAB No. 2395, at 10-11 (2011) (holding that an ALJ is bound by the
applicable statute and regulations and is not authorized to provide equitable relief by
enrolling a supplier that does not meet Medicare statutory and regulatory requirements).

Petitioner also argues that, prior to December 10, 2010, she placed a call to Medicare for
advice on how to recoup payment for the services she rendered from May | to June 14,
2010. Petitioner states that a Medicare employee recommended that she file a solo
practitioner enrollment application and then attempt to pursue retroactive reimbursement
through that application process. CMS Ex. 10. For the purposes of summary judgment, I
will accept these claims as true. Nonetheless, Petitioner’s argument amounts to a claim
of equitable estoppel, and I do not find that a defense exists where either CMS or

TrailBlazer can be estopped from enforcing valid regulations based on the
misrepresentations of government employees or their agents. It is well-established by
federal case law, and in Board precedent, that: (1) estoppel cannot be the basis to require
payment of funds from the federal treasury; (2) estoppel cannot lie against the
government, if at all, absent a showing of affirmative misconduct, such as fraud; and (3) I
am not authorized to order payment contrary to law based on equitable grounds.
Erroneous oral advice is inadequate, as a matter of law, to estop the government from
enforcing federal law. See, e.g., Office of Personnel Mgmt. v. Richmond, 496 U.S. 424
(1990); Heckler v. Cmty. Health Servs. of Crawford County, Inc., 467 U.S. 51 (1984);
Wade Pediatrics, DAB No. 2153, at 22 n.9 (2008) (citing 467 US. 51 at 61 n.10), aff'd,
567 F.3d 1202 (10th Cir. 2009). Petitioner has not alleged any affirmative misconduct
regarding TrailBlazer’s actions.

IV. Conclusion

For the reasons described above, I find that CMS is entitled to summary judgment.
Petitioner’s date of enrollment started on June 14, 2010, the date she began providing
services to Medicare-eligible beneficiaries at her new practice location in Dallas, TX.
Consequently, Petitioner may timely bill for services rendered from June 14, 2010
forward as a solo practitioner. I find CMS had a legitimate basis to deny Petitioner’s
eligibility for Medicare reimbursement from May | through June 14, 2010, considering
neither Petitioner nor her previous billing group submitted any claims before the statutory
deadline.

/s/
Joseph Grow
Administrative Law Judge