Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Ollie Futrell,
(O.1. No. 6-10-40865-9),

Petitioner,
v.

The Inspector General.

Docket No. C-13-343

Decision No. CR2901

Date: August 21, 2013

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner pro se Ollie Futrell
from participation in Medicare, Medicaid, and all other federal health care programs for a
period of 15 years. The I.G.’s Motion and determination to exclude Petitioner are based
on section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(1). The
undisputed material facts of this case demonstrate that the minimum five-year exclusion
must be imposed, and that the I.G.’s determination to enhance that period to 15 years
based on proof of the aggravating factors found at 42 C.F.R. § 1001.102(b)(1), (2), and

(5) is reasonable. Accordingly, I grant the 1.G.’s Motion for Summary Disposition.

I. Procedural Background

On February 8, 2011, the Federal Grand Jury sitting for the United States District Court
for the Northern District of Texas handed up a sealed five-count Indictment charging
Petitioner Ollie Futrell and four other defendants with a scheme to violate federal statutes
intended to protect, among other things, federally-funded health care programs. Futrell
herself was charged with Conspiracy to Commit Health Care Fraud, in violation of 18
U.S.C. § 1349, Conspiracy to Defraud the United States and to Receive and Pay Health
Care Kickbacks, in violation of 18 U.S.C. § 371, and Payment and Receipt of Health
Care Kickbacks, in violation of 42 U.S.C. §§ 1320a-7b(b)(1) and (b)(2) and 18 U.S.C.

§ 2. The Indictment also contained the Forfeiture Notice authorized by 18 U.S.C. § 982.
Each Count of the Indictment set out a lengthy and elaborate recitation of Petitioner’s
part in the scheme and the overt acts she and her co-defendants committed between
November 2008 and November 2010 in carrying it out. LG. Ex. 2.

Petitioner and her counsel reached a Plea Agreement with prosecutors. By the terms of
that Agreement, signed by all concerned on November 29, 2011, Petitioner pleaded guilty
to the Indictment’s first count, the violation of 18 U.S.C. § 1349, and proffered a factual
recitation of her part in the conspiracy to commit health care fraud. Petitioner
specifically acknowledged that her criminal activity had begun in November 2008 and

ad continued until February 17, 2011. L G. Exs. 3, 4.

This record does not show the date on which Petitioner tendered her plea of guilty and the
District Court accepted it, although both parties assert that the plea was offered on or
about the date of the Plea Agreement. What this record does show is that Petitioner
appeared with counsel in the District Court on June 28, 2012, and was sentenced to a 33-
month term of imprisonment.’ She was ordered to serve a two-year term of supervised
probation following her release from prison, and was ordered — jointly with her
codefendants — to pay restitution of $853,702.94 to the District Court, with the funds to
be disbursed to the Centers for Medicare & Medicaid Services (CMS) Debt Collection
program. She was also ordered to pay an assessment of $100.00. Counts 2, 3, 4, and 5 of
the Indictment were dismissed on prosecution motion. I.G. Ex. 5.

On December 31, 2012, the I.G. wrote to Petitioner giving notice that she was to be
excluded pursuant to the terms of section 1128(a)(1) of the Act for a period of 15 years.
The I.G.’s letter told Petitioner that the mandatory minimum five-year period of
exclusion would be enhanced based on the presence of three aggravating factors. Acting
pro se, Petitioner sought review of the I.G.’s determination in a request for hearing
mailed January 16, 2013.

I convened a prehearing conference by telephone on March 1, 2013, pursuant to 42
C.F.R. § 1005.6, in order to discuss procedures for addressing the issues presented by this
case. By order of that date, as amended by my subsequent Orders of June 13, 2013 and
July 9, 2013, I established a schedule for the submission of documents and briefs.

' There is an obvious typographic error on the face of I.G. Ex. 5: it refers to Petitioner’s
having pleaded guilty to Count “1 of the Indictment filed on February 8, 2012” instead of
noting the Indictment’s correct filing date, February 8, 2011.
The evidentiary record on which I decide the issues before me contains 11 exhibits. The
1.G. proffered five exhibits marked I.G. Exhibits 1-5 (I.G. Exs. 1-5). Petitioner has
proffered six exhibits, which she marked Petitioner’s Exhibits A-F (P. Exs. A-F).
Petitioner’s exhibits are obviously not marked in compliance with the plain terms of Civil
Remedies Division Procedures § 9 and my Order of March 1, 2013, but given the
ifficulties and delays inherent in requiring this incarcerated pro se Petitioner to resubmit
them properly marked, I have admitted all proffered exhibits as marked.

The record in this case closed for purposes of 42 C.F.R. § 1005.20(c) on August 16,
2013.

II. Issues

The legal issues before me are limited to those set out at 42 C.F.R. § 1001.2007(a)(1). In
e context of this record, they are:

ct

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

b. Whether the length of the proposed period of exclusion is unreasonable.

These issues must be resolved in favor of the I.G.’s position. Because Petitioner’s
predicate conviction is established in the record before me, section 1128(a)(1) of the Act
mandates Petitioner’s exclusion. A five-year period of exclusion is the minimum period
established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B). The
enhancement of that period to 15 years is not unreasonable because the three aggravating
factors relied on by the I.G. and found at 42 C.F.R. § 1001.102(b)(1), (2), and (5) are
established in the record, and because Petitioner has demonstrated no mitigating factor
that would reduce the proposed period of her exclusion.

III. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
individual or entity convicted of a criminal offense related to the delivery of an item or
service under title XVIII of the Act (the Medicare program) or any state health care
program (the Medicaid program). The terms of section 1128(a)(1) are restated in similar
language at 42 C.F.R. § 1001.101(a). Section 1128(a)(1) does not distinguish between
felonies and misdemeanors as predicates for exclusion.
The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal . . . court, regardless
of . .. whether the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; “when there has been a finding of guilt
against the individual . . . by a Federal . . . court,” section 1128(i)(2) of the Act; “when a
plea of guilty or nolo contendere by the individual . . . has been accepted by a Federal .. .
court,” section 1128(i)(3) of the Act; or “when the individual . . . has entered into
participation ina... deferred adjudication ... program where judgment of conviction
has been withheld,” section 1128(i)(4) of the Act. 42 U.S.C. §§ 1320a-7(i)(1)-(4). These
definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(1) is mandatory and the I.G. must impose it for a
minimum period of five years. Act § 1128(c)(3)(B), 42 U.S.C. § 1320a-7(c)(3)(B). The
regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory provision. The
mandatory minimum period of exclusion may be enhanced in some limited circumstances
and on the I.G.’s proof of certain narrowly-defined aggravating factors listed at 42 C.F.R.
§ 1001.102(b). In this case, the LG. relies on the three aggravating factors set out at 42
C.F.R. § 1001.102(b)(1), (2) and (5) in seeking to enhance the period of Petitioner’s
exclusion to 15 years.

In cases such as this, when the LG. proposes to enhance the period of exclusion by
relying on one or more aggravating factors, a petitioner may attempt to limit or nullify the
proposed enhancement through proof of certain mitigating factors, carefully defined at 42
C.F.R. § 1001.102(c)(1)-(3).

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

1. On her plea of guilty in the United States District Court for the Northern District of
Texas, Petitioner Ollie Futrell was found guilty of Conspiracy to Commit Health Care
Fraud, in violation of 18 U.S.C. § 1349. I.G. Ex. 5.

2. Petitioner was sentenced on her guilty plea and judgment of conviction was entered
against her in the District Court on June 28, 2012. As part of her sentence, Petitioner was
ordered to serve a 33-month term of imprisonment, and was ordered to pay restitution to
the CMS Debt Collection program in the sum of $853,702.94. I.G. Ex. 5.

3. The judgment of conviction and finding of guilt described above in Findings 1 and 2
constitute a “conviction” within the meaning of sections 1128(a)(1) and 1128(i)(1) and
(2) of the Act, and 42 C.F.R. § 1001.2.

4. A nexus and a common-sense connection exist between the criminal offenses of which
Petitioner was convicted, as noted above in Findings 1, 2 and 3, and the delivery of an
item or service under the Medicare and Medicaid programs. I.G. Exs. 7, 8; Berton Siegel,
D.O., DAB No. 1467 (1994).

5. By reason of Petitioner’s conviction, a basis exists for the 1.G.’s exercise of authority,
pursuant to section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), to exclude her from
participation in Medicare, Medicaid, and all other federal health care programs.

6. Because the acts resulting in Petitioner’s conviction caused a financial loss to the
Medicare and Medicaid programs of more than $5000, the aggravating factor set out at
42 C.F.R. § 1001.102(b)(1) is present.

7. Because the acts resulting in Petitioner’s conviction were committed over a period of
one year or more, the aggravating factor set out at 42 C.F.R. § 1001.102(b)(2) is present.

8. Because Petitioner was sentenced to a term of imprisonment, the aggravating factor
set out at 42 C.F.R. § 1001.102(b)(5) is present.

9. None of the mitigating factors set out at 42 C.F.R. § 1001.102(c)(1)-(3) is present.

10. The I.G.’s exclusion of Petitioner for a period of 15 years is supported by fact and
law. It is within a reasonable range and is therefore not unreasonable. Findings 1-10
above.

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

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under title XVIII of the Act (Medicare) or any state health care program
(Medicaid). Tamara Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367;
Boris Lipovsky, M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004),
rev'd on other grounds, DAB No. 1979 (2005), aff'd sub nom. Kai v. Leavitt, Civ. No.
05-005 14 (D. Haw. July 17, 2006); see also Russell Mark Posner, DAB No. 2033, at 5-6
(2006). Those two essential elements are proven by the evidence before me.
Petitioner’s conviction is shown by LG. Ex. 5. The date of the proceeding in which
Petitioner’s plea of guilty was tendered and accepted by the District Court is absent from
the evidence tendered by the LG., but those events can be inferred from the District
Court’s June 28, 2012 Judgment of Conviction. Nevertheless, I.G. Ex. 5 reflects events
that satisfy the definitions of “conviction” set out at sections 1128(i)(1) and 1128(i)(2) of
the Act. The first essential element is established by the record.

The evidence also shows that Petitioner’s conviction is related to the delivery of an item
or service under the Medicare program. Petitioner admitted that she acted as a recruiter
of patients for Alliance Healthcare Services, L.P. (Alliance), a home health agency and
Medicare participant. Alliance’s owners and employees conspired to defraud Medicare
by falsely certifying the majority of its patients as eligible for home health care benefits
under the Medicare program. Petitioner conducted her recruiting efforts by paying
monthly bribes or kickbacks to those ineligible patients to assure that they remained
Alliance patients, thereby assuring that Alliance continued to receive Medicare payments
for those fraudulent claims. I.G. Exs. 2, 3, 4. The submission of false claims to the
Medicaid or Medicare programs has consistently been held to be a program-related crime
within the reach of section 1128(a)(1). Douglas Schram, R.Ph., DAB No. 1372 (1992);
Dewayne Franzen, DAB No. 1165 (1990); Jack W. Greene, DAB No. 1078 (1989), aff'd
sub nom. Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990).

In challenging the I.G.’s proof of the second element, Petitioner argues that “In Futrell’s
case there are no probative facts regarding providing service or medical necessities. She
did not contribute to any falsification of claims. There are no consciousness of guilt [sic]
regarding providing services.” P. Ans. Br. at 10. She buttresses this argument by
pointing out that she was neither an officer of Alliance nor bore it a fiduciary
responsibility. That argument is unavailing because the statute requires only that the
conviction be for conduct “related to the delivery of an item or service” in a protected
program. James Randall Benham, DAB No. 2042 (2006). In this case, it is no more than
fair to point out that Petitioner’s conduct was related to Alliance’s swindling of Medicare
by the fact that she recruited the “raw material” for the scheme, those ineligible patients
in whose names Alliance billed Medicare. Her claim that “Petitioner Futrell was not
aware of Alliances [sic] fraud scheme,” made and elaborated in her Answer Brief at
pages 5-6, is directly contradicted by her written and signed admissions in the District
Court. I.G. Exs. 3, 4. I find the admitted facts of Petitioner’s offense demonstrate the
required nexus and common-sense connection between the criminal acts and the
Medicare and Medicaid programs. Berton Siegel, D.O., DAB No. 1467. The second
essential element is established.
The LG. relies on three aggravating factors set out at 42 C.F.R. § 1001.102(b)(1), (2) and
(5) in seeking to enhance the period of Petitioner’s exclusion to 15 years. Although
Petitioner’s briefing is not always clear, it does obviously object to the length of the
period, and so must first be construed to challenge the aggravating factors on which the
1G. relies.

The aggravating factor set out at 42 C.F.R. § 1001.102(b)(1) is present when there is a
showing of financial loss to a government program or certain other entities of more than
$5000. This factor has been proven here. The District Court records show that Petitioner
and her convicted codefendants were jointly obliged to pay restitution to the CMS Debt
Collection program in the sum of $853,702.94. IL.G. Ex. 5. The record before me does
not disclose how large a share of the ordered restitution has been paid by Petitioner, but
the relevant figure is the total amount of restitution ordered, not the amounts individually
paid by the individual codefendants. 42 C.F.R. § 1001.102(b)(1). The actual amount of
restitution ordered has long been considered a reasonable measure of program losses. See
Jason Hollady, M.D., DAB No. 1855 (2002). Petitioner’s crimes caused the Medicare
and Medicaid programs financial losses vastly in excess of the $5000 threshold for
aggravation. The Departmental Appeals Board (Board) has characterized amounts
substantially greater than the statutory standard as an “exceptionally aggravating factor”
entitled to significant weight. Jeremy Robinson, DAB No. 1905 (2004); Donald A.
Burstein, Ph.D., DAB No. 1865 (2003). The calculated abuse of the protected programs
in the sum shown here — a peculation more than one-hundred-seventy times the
threshold amount — more than justifies a significant increase in the period of exclusion,
even if the I.G. could prove no other aggravating factors.

The aggravating factor set out at 42 C.F.R. § 1001.102(b)(2) is present when “[t]he acts
that resulted in the conviction, or similar acts, were committed over a period of one year
or more.” The Count of the Indictment to which Petitioner pleaded guilty sets the span of
Petitioner’s crime from November 2008 to November 2010, and her Factual Resume of
November 29, 2011 makes it even longer, from November 1, 2008 until February 17,
2011. LG. Exs. 2, 4. The “duration of offense” factor is clearly present here, and its span
as admitted by Petitioner projects a course of practiced conduct far more persistently
dishonest than the “short-lived lapse of integrity” to which the Board alluded in Burstein,
DAB No. 1865, at 8. The duration of Petitioner’s illegal conduct renders it obvious that
the need to protect the programs from Petitioner would — even in the hypothetical
absence of any other aggravating factors — amply support a substantial enhancement of
the period of exclusion.

The aggravating factor set out at 42 C.F.R. § 1001.102(b)(5) is present when the
“sentence imposed by the court included incarceration.” In this case, Petitioner was sent
to prison for a total of 33 months. 1.G. Ex. 5. The “incarceration” aggravating factor is
present here, and it is far more significant than a token term spent in jail or under house
arrest. Petitioner is serving her sentence in a federal correctional institution: she will
serve it there for nearly three years. The sentence underscores the District Court’s
serious view of Petitioner’s crime. I adopt that serious view. The length of Petitioner’s
prison term is sufficient, in and of itself, to justify a considerable increase in the period of
exclusion.

Evidence relating to aggravating factors may be countered by evidence relating to any of
the mitigating factors set forth at 42 C.F.R. § 1001.102(c)(1)-(3). Since any petitioner’s
invocation of a mitigating factor is in the nature of an affirmative defense, the petitioner
who claims the factor bears the burden of proving it. This allocation of the burden of
proof is set out at 42 C.F.R. § 1005.15(b)(1) and is acknowledged in Board decisions.
Russell Mark Posner, DAB No. 2033; Stacey R. Gale, DAB No. 1941 (2004); Dr. Darren
James, D.P.M., DAB No. 1828, at 7-8 (2002); Barry D. Garfinkel, M.D., DAB No. 1572
(1996). As I have written above, Petitioner objects to the enhanced period of her
exclusion, but she has not met that burden of proof: Petitioner has shown nothing in this
record that could constitute a mitigating factor.

Although she does not explicitly rely on any of the factors defined by regulation, she does
complain that “Futrell’s exclusion is constitutionally unfair by the Equal Protection of the
law.” She offers the assertion that “Alliance owners and employees have been
defrauding the government before Ms. Futrell came to know them” and by this assertion
presumably suggests that she was not the most blameworthy of the conspirators. P. Ans.
Br. at 7-8. These claims do not invoke any of the mitigating factors defined and
enumerated at 42 C.F.R. § 1001.102(c)(1)-(3). Nothing I have found in this record hints
at the presence of any of those enumerated and defined mitigating factors, and Petitioner
is entitled to claim none of the mitigating factors set out at 42 C.F.R. § 1001.102(c)(1)-

(3).

The remainder of Petitioner’s challenges amount to efforts to minimize her role in the
conspiracy she admitted to sharing with the other Alliance figures, to other collateral
attacks on her conviction, and to exercises in impugning the fairness of the proceedings
surrounding it. Those challenges are irrelevant here, for the regulations explicitly
preclude any collateral attack on Petitioner’s conviction. “When the exclusion is based
on the existence of a criminal conviction . . . where the facts were adjudicated and a final
decision was made, the basis for the underlying conviction . . . is not reviewable and the
individual or entity may not collaterally attack it either on substantive or procedural
grounds, in this appeal.” 42 C.F.R. § 1001.2007(d); Joann Fletcher Cash, DAB No.
1725 (2000); Chander Kachoria, R.Ph., DAB No. 1380, at 8 (1993).

? [also find that Petitioner was well aware that her plea of guilty would result in her
exclusion from the Medicare and Medicaid programs. Page 5 of her Plea Agreement
reads in part:

Futrell understands and acknowledges that as a result of this plea, she will
But even though the I.G. has proven the aggravating factors exactly as alleged, and even
though Petitioner has failed to prove even a single mitigating factor, Petitioner’s claim
that the 15-year length of her exclusion is unreasonably long raises an issue that may
have recently grown more complex.

Formerly, the Administrative Law Judge (ALJ) evaluating such a claim was guided by a
settled line of authority in doing so and the L.G.’s discretion when weighing the
importance of aggravating and mitigating factors commanded great deference. Jeremy
Robinson, DAB No. 1905; Keith Michael Everman, D.C., DAB No. 1880 (2003); Stacy
Ann Battle, D.D.S., et al., DAB No. 1843 (2002). The rationale for that doctrine was
anchored by the drafters of the regulations in the I.G.’s “vast experience” in
implementing exclusions. 57 Fed. Reg. 3298-3321 (January 24, 1992). According to that
doctrine, an ALJ might not substitute his or her own view of what period of exclusion
might seem best in any given case for the view of the I.G. on the same evidence. So long
as the period chosen by the IG. was within a reasonable range and was based on
demonstrated criteria, the ALJ was forbidden to alter it. Jeremy Robinson, DAB No.
1905; Joann Fletcher Cash, DAB No. 1725, at 20. According to that line of authority, an
ALJ might reduce an exclusionary period only when the ALJ discovered some
meaningful evidentiary failing in the aggravating factors upon which the L.G. relied, or
when the ALJ was shown evidence reliably establishing a mitigating factor not
considered by the I.G. in setting the enhanced period. Jeremy Robinson, DAB No. 1905.

That line of authority appeared to have been modified by the Board’s decision in Craig
Richard Wilder, M.D., DAB No. 2416 (2011). Although the Wilder ALJ found that the
1.G. had considered all proven aggravating and mitigating factors, and although the Board
acknowledged that there were no differences whatsoever between the record of those
factors before it and the record before the ALJ and the I.G., the Board nevertheless
departed from its own settled rule and revised the 35-year period of exclusion downward
to 18 years, so that the period might conform more satisfactorily to what the Board
considered best. In doing so, the Board implicitly rejected the 1.G.’s and the ALJ’s
assessment of the value of Wilder’s cooperation and, on exactly the same evidence,
substituted its own assessment.

be excluded from Medicare, Medicaid, and all Federal health programs.
Futrell agrees to complete and execute all necessary documents provided
by any department or agency of the federal government, including but not
limited to the United States Department of Health and Human Services, to
effectuate this exclusion within 60 days of receiving the documents.

LG. Ex. 3, at 5 12.
10

The Board returned to this issue in Vinod Chandrashekhar Patwardhan, M.D., DAB No.
2454 (2012). That decision failed to mention Wilder, and seemed at least to pay lip-
service to the Robinson-Everman-Battle-Cash line of authority. But it also affirmed —
on proof of the same three aggravating factors here proven, and in the absence of any
mitigating factors, as here — the ALJ’s reduction of the I.G.’s proposed 23-year period
of exclusion to 12 years. And eight months later the Board decided Sushil Anniruddh
Sheth, DAB No. 2491 (2012), and there set out at length both its theoretical justification
for its de novo review of enhanced periods of exclusion in general and the specific
rationale for its de novo determination that a 95-year period was unreasonable, but that a
60-year period was best. The Board accomplished this substitution of judgment on the
same evidence considered by the I.G. who set the 95-year term, and examined in detail
with approval by the ALJ who found the 95-year period perfectly reasonable and
declined to reduce it.

Do Wilder, Patwardhan, and Sheth announce the Board’s assumption of a new authority
in overseeing the I.G.’s application of his “vast experience,” and do Wilder, Patwardhan,
and Sheth vest the ALJ with discretion to alter — that is, to lengthen or to shorten — the
period determined by the I.G? It is impossible for me not to conclude that the Robinson-
Everman-Battle-Cash line of authority has been overruled sub silentio by Wilder,
Patwardhan, and now, Sheth. I have suggested as much in Anthony Lynn Hester, DAB
CR2529, at 9 (2012); Edward Alexander Birts, DAB CR2516, at 9, n.1 (2012) and
Marcellius Jhekwuoba Anunobi, DAB CR2480, at 10 (2012), cases in which, as here,
each Petitioner appeared pro se. Those decisions were not appealed to the Board
(although Anunobi was cited by the Board without obvious disapproval in Sheth) and no
further explication of Wilder, Patwardhan, and Sheth is available in any other Board
decision to date. But if the Robinson-Everman-Battle-Cash rule has been abandoned and
no longer restricts an ALJ’s considering what term of exclusion might be best on the facts
of record, I can see no reason why an ALJ now lacks the authority to lengthen as well as
to shorten the term proposed by the I.G. Were it not for the fact that this Petitioner
appears pro se this case presents an attractive opportunity to exercise that authority and
lengthen the period of this exclusion. An array of cases including Mark A. Maher, DAB
CR678 (2000); Golden G. Higgwe, D.P.M., DAB CR1229 (2004); Peggy A. Bisig, a/k/a
Peggy A. Fritz, DAB CR1416 (2006); Dinesh Dayabhai Shah, DAB CR2143 (2010); and
Edward Alexander Birts, DAB CR2516 (2012) suggests that this 15-year exclusion falls
short of a “reasonable range” and would be best lengthened.

But here it is enough to repeat that all three of the aggravating factors pleaded by the I.G.
have been established and Petitioner has established none of the mitigating factors
defined in 42 C.F.R. § 1001.102(c)(1)-(3). Overall, the record in this case establishes that
Petitioner is untrustworthy and a menace to the protected health care programs. She is a
felon convicted of a crime characterized by fraud as a goal, and by persistent, deliberate,
coordinated, dishonest activity as a means. Her crimes constituted an eight-hundred-
fifty-thousand dollar attack on Medicare’s financial resources. She demonstrated a
11

constancy of purpose and a consistency of method in doing so: her conspiracy spanned at
least two years. Her crime was serious enough to earn a sentence of 33 months in prison.
Perhaps most significantly, it will be noted that by bribing ineligible patients to join
Alliance and remain on its roster, she suborned the criminal acts of many others, thus
adding exponentially to the evidence that she is untrustworthy and a proven danger to the
protected programs.

Given these considerations, the 15-year term of Petitioner’s exclusion is not unreasonably
long. Comparison with other cases is of limited utility and is certainly not controlling,
but that comparison can illustrate what a reasonable range has been understood to mean
when the ALJ examines an exclusion longer than the statutory minimum. Paul D.
Goldenheim, M.D., et al., DAB No. 2268, at 29 (2009). The length of this exclusion is
commensurate with the range established as reasonable in Russell Mark Posner, DAB
No. 2033; Stacey R. Gale, DAB No. 1941; Jeremy Robinson, DAB No. 1905; Thomas D.
Harris, DAB No. 1881 (2003); Fereydoon Abir, M.D., DAB No. 1764 (2001); and Joann
Fletcher Cash, DAB No. 1725.

I note once more that Petitioner appears here pro se. Because of that I have borne in
mind the Board’s admonition that pro se litigants should be offered “some extra measure
of consideration” in developing their records and their cases. Louis Mathews, DAB No.
1574 (1996); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991). I have searched
all of Petitioner’s pleadings for any arguments or contentions that might raise a valid,
relevant defense to the I.G.’s Motion, but have found nothing that could be so construed.?

Resolution of a case by summary disposition is fitting when settled law can be applied to
undisputed material facts. Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley,
DAB No. 1367. Summary disposition is authorized by the terms of 42 C.F.R.

§ 1005.4(b)(12). This forum looks to Rule 56 of the Federal Rules of Civil Procedure for
guidance in applying that regulation. Robert C. Greenwood, DAB No. 1423 (1993). The
material facts in this case are undisputed and unambiguous. They support summary
disposition as a matter of settled law. This Decision issues accordingly.

> Petitioner’s final brief devotes much argument to a discussion of Alleyne v. United
States, 133 S. Ct. 2151 (June 17, 2013). That case has no application here, since it deals
with factors involved in determining sentences in federal criminal convictions. These
proceedings are not criminal, and the exclusion here at issue is not a criminal sentence
but a civil measure, remedial in nature. W. Scott Harkonen, M.D., DAB No. 2485
(2012); Susan Malady, R.N., DAB No. 1816 (2002); Narendra M. Patel, M.D., DAB No.
1736 (2000); Joann Fletcher Cash, DAB No. 1725 .
12

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Ollie Futrell from participation
in Medicare, Medicaid, and all other federal health care programs for a period of 15 years

pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), is
sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Walleye Mart, Inc.
d/b/a Potholes General Store,

Respondent.

Docket No. C-13-970
FDA Docket No. FDA-2013-H-0806

Decision No. CR2899

Date: August 23, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Walleye Mart, Inc. d/b/a Potholes General Store
(Respondent), which alleges facts and legal authority sufficient to justify imposing
a $500 civil money penalty. Respondent did not timely answer the Complaint, nor
did Respondent request an extension of time within which to file an Answer.
Therefore, I enter a default judgment against Respondent and assess a civil money
penalty of $500.

CTP began this case by filing a copy of the Complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management and serving the
Complaint on Respondent. The Complaint alleges that Respondent unlawfully
sold a tobacco product to a minor on two separate occasions and failed to verify
that a purchaser of a tobacco product was of sufficient age, thereby violating the
Federal Food, Drug, and Cosmetic Act (Act), codified at 21 U.S.C. §§ 301 — 399d,
and its implementing regulations found at 21 C.F.R. Part 1140. CTP seeks a civil
money penalty of $500 for these violations.

On July 10, 2013, CTP served the Complaint on Respondent by United Parcel
Service (UPS), pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent must
take one of the following three actions: pay the penalty, file an answer, or request
an extension of time within which to file an answer. CTP further stated that if
Respondent does not comply with one of the actions within 30 days, an
Administrative Law Judge (ALJ) may issue an initial decision ordering
Respondent to pay the full amount of the proposed penalty. 21 C.F.R. § 17.11.

Respondent has neither filed an Answer within the time provided by regulation,
nor timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), I am required
to “assume the facts alleged in the complaint to be true, and, if such facts establish
liability under [the Act],” issue an initial decision and impose a civil money
penalty. Accordingly, I must determine whether the allegations in the Complaint
establish violations of the Act.

Specifically, CTP alleges that:

e Respondent owns Potholes General Store, an establishment that sells
tobacco products and is located at 6897 Highway 262 Southeast, Othello,
Washington 99344. Complaint § 3.

e On July 19, 2012, an FDA-commissioned inspector observed a violation of
21 C.F.R. § Part 1140 at Potholes General Store. The inspector observed
that “a person younger than 18 years of age was able to purchase a package
of Camel Filters cigarettes . . . at approximately 10:27 AM PT.” Complaint
q 10.

e “[O]n October 4, 2012, CTP issued a Warning Letter to Potholes General
Store.” The letter informed Respondent of the violations the FDA-
commissioned inspector observed on July 19, 2012, and explained that
Respondent’s failure to correct the violations “may result in a civil money
penalty . . . or other regulatory action by the FDA.” Moreover, CTP further
explained that the Warning Letter was not intended to provide an
exhaustive list of violations and that Respondent was responsible for
complying with the law. Complaint § 10.

e The “FDA did not receive a response to the Warning Letter.” “UPS records
show that the Warning Letter was received on October 5, 2012, by
“Mckernan’.” Complaint § 11.
e On December 20, 2012, FDA-commissioned inspectors documented two
additional violations at Respondent’s establishment. First, “a person
younger than 18 years of age was able to purchase a package of Marlboro
Smooth cigarettes . . . at approximately 1:40 PM PT.” The inspector also
documented that “the minor’s identification was not verified before the sale
....” Complaint § 1.

e¢ On December 26, 2012, CTP issued a Notice of Compliance Chec
Inspection (Notice) informing Respondent that an inspection had been
conducted on December 20, 2012, and “that during the inspection a minor
entered the establishment and purchased a regulated tobacco product.” The
notice also warned Respondent that other potential violations of the federal
tobacco law may have been observed and if CTP determined that there
were additional violations of federal law, the establishment may receive
further notification from the FDA. Complaint § 2.

Taking these facts as true, I must find, pursuant to 21 C.F.R. § 17.11(a), that
Respondent is liable under the Act. The Act prohibits misbranding of a tobacco
product. 21 U.S.C. § 331(k). A tobacco product is misbranded if sold or
distributed in violation of regulations issued under section 906(d) of the Act,
codified at 21 U.S.C. § 387f(d); 21 U.S.C. § 387(a)(7)(B); 21 C.F.R. § 1140.1(b).
The regulations prohibit the sale of cigarettes or smokeless tobacco to any person
younger than 18 years of age. 21 C.F.R. § 1140.14(a). The regulations also
require retailers to verify, by means of photo identification containing the
purchaser’s date of birth, that no purchaser of cigarettes or smokeless tobacco is
younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1).

In the present case, Respondent violated 21 C.F.R. § 1140.14(a) on two separate
occasions and violated 21 C.F.R. § 1140.14(b)(1) once. First, on July 19, 2012,
Respondent unlawfully sold a regulated tobacco product to a minor.
Subsequently, on December 20, 2012, Respondent again sold a regulated tobacco
product to a minor and failed to verify, by means of photo identification, that the
purchaser was 18 years of age or older. Therefore, Respondent’s actions on two
separate occasions constitute violations of law for which a civil money penalty is
warranted.

The regulations require me to impose a civil money penalty that is either the
maximum amount provided for by law, or the amount sought in the Complaint,
whichever amount is smaller. 21 C.F.R. § 17.11(a)(1); 21 C.F.R. § 17.11(a)(2).
Respondent received a Warning Letter after the first violation and subsequently
committed an additional violation within a 24-month period. The regulations
provide that the maximum penalty for this action is $500. 21 C.F.R. § 17.2. In its
Complaint, CTP seeks a civil money penalty in the amount of $500. Because
Respondent failed to file a timely Answer or request an extension of time to file an
Answer. I impose a civil money penalty in the amount of $500.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Capitol House Nursing and Rehabilitation Center,
(CCN: 19-5476)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-11-803
Decision No. CR2898

Date: August 23, 2013

DECISION

Petitioner Capitol House Nursing and Rehabilitation Center challenges the determination
of the Centers for Medicare & Medicaid Services (CMS) that it was not in substantial
compliance with program participation requirements based on a survey completed June
28, 2011. Specifically, Petitioner challenges the CMS findings of noncompliance of

42 C.F.R. §§ 483.25(h), 483.15(g)(1), and 483.75 and the associated remedies of denial
of payment for new admissions (DPNA) and three per instance civil money penalties
(PICMP) of $4,000, $4,000, and $2,000, respectively. Petitioner also challenges findings
based on a survey completed on May 27, 2011. However, the survey completed on May
27, 2011, is not properly before me because CMS did not impose associated remedies.
For the reasons discussed below, I sustain CMS’s imposition of the PICMPs and DPNA.

I. Background

Petitioner is a long-term care facility located in Baton Rouge, Louisiana. Petitioner
participates in the Medicare and Medicaid programs. The Louisiana Department of
Health and Hospitals (state agency) completed a complaint survey of Petitioner’s facility
on May 27, 2011. The state agency determined that Petitioner was noncompliant with
participation standards. Then, on June 28, 2011, the state agency completed a follow-up
survey of Petitioner’s facility. The state agency determined that Petitioner was
noncompliant with participation standards, including citations that represented immediate
jeopardy (IJ).

Ina July 29, 2011 letter, CMS notified Petitioner that that it proposed the following
enforcement remedies: termination effective November 27, 2011 if substantial
compliance was not reached before that date; a PICMP in the amount of $2,000 each for
tags F-250, F-272, F-309, F-323, and F-490, levied in the June 28 survey; and a DPNA
effective August 13, 2011. P. Prehearing (PH) Br. at 3; CMS (Exhibit) Ex. 1 at 3-6. The
state agency found Petitioner had returned to substantial compliance on August 26, 2011,
and on September 22, 2011 issued a notice revising the previous proposed remedies.
CMS Ex. | at 1-2. CMS revised the penalties and rescinded the termination. The DPNA
was already imposed and in effect from August 13, 2011, through August 25, 2011, but
payments for new admissions would resume beginning August 26, 2011. CMS also
revised the PICMPs to $4,000 for F-250, $4,000 for F-323, and $2,000 for F-490 and
CMS rescinded the previously imposed PICMPs for F-272 and F-309. CMS Ex. | at 1-2.

Petitioner requested an administrative law judge (ALJ) hearing based on the May 27
survey on August 3, 2011. This case was docketed C-11-656. On September 21, 2011,
Petitioner filed a second hearing request challenging the June 28 survey. This appeal was
docketed as C-11-803 and Petitioner’s appeal docketed as C-11-656 was consolidated
into C-11-803, by order issued on September 22, 2011.

I conducted a hearing in New Orleans, Louisiana on April 11, 12, and 13, 2012, during
which CMS witness Becky Knight (Surveyor Knight), a surveyor with the state agency,
testified. A 637-page transcript (TR.) was prepared. I continued the hearing by
deposition and declaration. CMS chose to rest its case in chief after completion of
Surveyor Knight’s testimony, but Petitioner submitted the testimony of four witnesses
submitted as exhibits. In addition to the transcript of the hearing, the evidentiary record
consists of CMS Exs. 1-8 and Petitioner’s Exs. 1-10 (including P. Ex. 5A).

Both parties filed post-hearing briefs (CMS Br. and P. Br.) and post-hearing reply briefs
(CMS Reply and P. Reply).

IL. Issues

1. Whether Petitioner was in substantial compliance with participation
requirements in the Medicare and Medicaid programs, and if not;

2. Whether the enforcement remedies imposed are reasonable.
III. Statutory and Regulatory Framework

The Social Security Act (Act) establishes the requirements that a long-term care facility
must meet to participate in the Medicare and Medicaid programs, and authorizes the
Secretary of Health and Human Services (Secretary) to promulgate regulations
implementing those statutory requirements. Act §§ 1819, 1919.' Specific Medicare
participation requirements for long-term care facilities are at 42 C.F.R. Part 483. A long-
term care facility must remain in substantial compliance with program requirements to
participate in Medicare. 42 C.F.R. § 483.1(b). “Substantial compliance” means “a level
of compliance with the requirements of participation such that any identified deficiencies
pose no greater risk to resident health or safety than the potential for minimal harm.”

42 C.F.R. § 488.301. By contrast, “noncompliance” means “any deficiency that causes a
facility not to be in substantial compliance.” Jd. A “deficiency” is a violation of a
statutory or regulatory participation requirement. Id.

The Act authorizes the Secretary to impose enforcement remedies against a long-term
care facility for failure to comply substantially with the federal participation
requirements. See Act § 1819(h); 42 C.F.R. § 488.402. The Secretary may not continue
Medicare payments to a long-term care facility for more than six months after the facility
is first found not to be in substantial compliance. Act § 1819(h)(2)(C). Ifa facility does
not return to substantial compliance within three months, the Secretary must deny
payments for all individuals admitted to the facility after that date - commonly referred to
as the mandatory or statutory denial of payments for new admissions (DPNA). See Act

§ 1819(h)(2)(D). The Act also grants the Secretary discretionary authority to impose
other remedies, including termination, a discretionary DPNA, CMPs, appointment of
temporary management, and other remedies such as a directed plan of correction. Act

§ 1819(h)(2)(B).

The Secretary has delegated to CMS and the states the authority to impose remedies
against a long-term care facility not in substantial compliance with program participation
requirements. State agencies survey facilities on behalf of CMS to determine whether the
facilities comply with federal participation requirements. 42 C.F.R. §§ 488.10-.28,
488.300-.335. The regulations specify the enforcement remedies that CMS may impose
if a facility is not in substantial compliance with Medicare requirements. See 42 C.F.R.

§ 488.406.

' The Act, as amended, is available at http://www.ssa.gov/OP_Home/ssact/ssact.htm.
On this website, each section of the Act contains a reference to the corresponding chapter
and code in the United States Code.
CMS may impose a per-day CMP for the number of days a facility is not in substantial
compliance or a PICMP for each instance of the facility’s noncompliance. 42 C.F.R.

§ 488.430(a). A PICMP, which CMS imposed in this case, may range from $1,000 to
$10,000, and the range is not affected by the scope and severity of the facility’s
noncompliance. 42 C.F.R. § 488.438(a)(2).

A long-term care facility may request a hearing before an administrative law judge (ALJ)
to challenge a noncompliance finding and enforcement remedies. Act §§ 1128A(c)(2),
1866(h); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). The hearing rights of a long-term care
facility are established by federal regulations at 42 C.F.R. Part 498. 42 C.F.R. § 498.3(d).
A finding of noncompliance that results in the imposition of a remedy specified in

42 C.F.R. § 488.406 is an initial determination for which a facility may request a hearing.
42 C.F.R. § 498.3(b)(13). Unless the finding of noncompliance results in the actual
imposition of a specified remedy, the finding is not an “initial determination” and the
facility is not entitled to review. 42 C.F.R. § 498.3(d)(10)(ii). Golden Living Center-
Grand Island Lakeview, DAB No. 2364 (2011); Fountain Lake Health & Rehab., Inc.,
DAB No. 1985 (2005); Lakewood Plaza Nursing Center, DAB No. 1767 (2001); The
Lutheran Home -Caledonia, DAB No. 1753 (2000); Schowalter Villa, DAB No. 1688
(1999); Arcadia Acres, Inc., DAB No. 1607 (1997).

If the facility has a right to a hearing, the hearing before the ALJ is de novo. The
Residence at Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care, DAB No.
2030 (2006); Beechwood Sanitarium, DAB No. 1906 (2004); Emerald Oaks, DAB No.
1800 (2001); Anesthesiologists Affiliated, DAB CR65 (1990), aff'd, 941 F.2d 678 (8th
Cir. 1991). The choice of remedies or factors CMS considered when choosing remedies
is not subject to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the
scope and severity level of noncompliance if a successful challenge would affect the
range of the CMP that may be imposed or impact the facility’s authority to conduct a
nurse aid training and competency evaluation program (NATCEP). 42 C.F.R.

§ 498.3(b)(14), (d)(10)(i).

The standard of proof, or quantum of evidence required, is a preponderance of the
evidence. CMS has the burden of coming forward with the evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense.
Batavia Nursing & Convalescent Center, DAB No. 1904 (2004), aff’d, 129 F. App’x. 181
(6th Cir. 2005); see Hillman Rehab. Center, DAB No. 1611 (1997), aff'd, No. 98-3789,
1999 WL 34813783 (D.N.J. May 13, 1999).
IV. Discussion
A. Scope of review

Petitioner does not have a right to a hearing related to the deficiencies issued based on the
survey completed May 27, 2011, or the citations based on F-272 or F-309 based on the
survey completed June 28, 2011, because CMS did not impose associated remedies.

The parties disagree about scope of review, that is, the range and identity of survey
findings to be debated in these proceedings. Petitioner claims that it has the right to
challenge “each and every finding of noncompliance” from the May 27 and June 28
surveys, arguing that CMS imposed the DPNA based on the findings of noncompliance
in both surveys. P. PH Br. at 8-9; P. Br. at 1; P. Ex. 1; P. Ex. 4. CMS argues that the
only reviewable citations are the three deficiencies from the June 28 survey that had
corresponding PICMPs, did not further discuss the remedies imposed, and addressed only
the findings of noncompliance that had associated PICMPs in its briefings. CMS PH Br.
at 4. CMS asserts that if I find that the facility was not in substantial compliance with
program requirements, CMS has a basis to impose the DPNA remedy and I do not have
authority to review the reasonableness of, or modify, that remedy. CMS PH Br. at 14;
CMS Reply at 1-2. However, CMS does not address Petitioner’s argument that the
DPNA was based on all the findings of noncompliance in both the May 27 and June 28
surveys. Based on its presumption that the DPNA was based on both surveys, Petitioner
argues that CMS failed to make a prima facie showing of noncompliance from the May
27 survey, or the deficiencies that did not have corresponding PICMPs from the June 28
survey. P. PH Br. at 10-11.

The imposition of an enforcement remedy and not the citation of a deficiency triggers the
right to a hearing under 42 C.F.R. Part 498. I find that the PICMPs and DPNA were
imposed on the findings of noncompliance with F-Tags F250, 323, and 490 of the June
survey. Even if Petitioner’s arguments were correct, it would not change the outcome of
this case because there is sufficient basis to impose the DPNA on the basis of the
deficiencies linked to the PICMPs. The parties agree that these IJ deficiencies linked to
the PICMPs are at issue in this case. And as discussed later, these deficiencies provide a
fully-adequate basis to impose the DPNA.

B. Findings of Fact and Conclusions of Law
I make numbered findings of fact and conclusions of law (Findings) to support my

decision. I set them forth below as separate headings, in bold and italic type, and discuss
each in detail.”

> Thave reviewed the entire record, including all the exhibits and testimony. Because the
Federal Rules of Evidence do not control the admission of evidence in proceedings of this
The deficiencies in this case arise primarily from Petitioner’s care of Resident 70 (R70).
R70 was a 63-year-old man who had a long history of being in and out of acute-care
hospitals because of violent and aggressive behaviors associated with schizophrenia.

P. Ex. 5 at 201-221. R70’s diagnoses included schizophrenia; paranoia; chronic
personality disorder; psychosocial problems related to long history of mental illness;
chronic subdural hematoma; hyperlipidemia; cataracts; prostate cancer; and arthritis.

P. Ex. 5 at 90, 201, 203, 217.

Although the parties characterize the events giving rise to the cited deficiencies
differently, the following facts are not in dispute and the following is a timeline of events
related to R70 - derived primarily from Petitioner’s own timeline of events:

February 14, 2011: Petitioner admitted R70 to its facility. P. Ex. 5 at 90, 201,
203.

February 17: Petitioner’s staff noted concern that in the middle of the night R70
was staying in the bathroom for a long time, insisting that he was bathing. P. Ex.
5 at 76-77, 90, 264-265.

February 18: The Social Services Director (SSD) documented performing the
initial social service history of R70. P. Ex. 5 at 385, 386; CMS Ex. 2 at 25.

February 23: The SSD documented a second interaction with R70 related to his
admission. P. Ex. 5 at 385; CMS Ex. 2 at 25.

March 23: In the morning, R70 refused his monthly Haldol D injection. P. Ex. 5
at 91. Later that afternoon, R70 requested to meet with the SSD. Nursing
explained it was after hours and noted R70 was agitated. P. Ex. 5 at 266-267.

March 24: In the morning, R70 eloped (left the facility without signing out) and
was returned to the facility by local police. R70 had been causing a disturbance at
a drugstore and bank. P. Ex. 5 at 91, 267. R70 was agitated, using profanity, and

kind (see 42 C.F.R. § 498.61), I may admit evidence and determine later, upon a review
of the record as a whole, what weight or relevance, if any, I should accord that evidence
or testimony. To the extent that any contention, evidence, or testimony is not explicitly
addressed or mentioned, it is not because I have not considered that material. Rather, it is
because I find in the context of this record as a whole that the evidence is not relevant, or
that the contentions are not supported by the weight of credible evidence or testimony.
stated that he was trying to contact the FBI because people were stealing from him
and posting nude photos of him on the internet. P. Ex. 5 at 91, 267, 385. The SSD
documented that she and the Director of Nursing (DON) attempted calm R70
down following the incident. P. Ex. 5 at 385.

March 26: R70 received his monthly Haldol D injection. P. Ex. 5 at 91, 268, 331.

April 13: R70 was observed as growing increasingly protective of his room,
blocking hall and bath door to keep staff out. Nursing staff was required to call-
out to R70 to assure his well-being. P. Ex. 5 at 91; CMS Ex. 2 at 18.

April 14: R70 wielded a butter knife at staff; told staff to remove his roommate’s
possessions from the room they shared. P. Ex. 5 at 92; CMS Ex. 2 at 18.

April 15: R70 ordered nurse to get out of his room, using profanity. P. Ex. 5 at
92.

April 18 & 25: Nursing staff noted R70 to be anxious. P. Ex. 5 at 92.

April 28: R70 was found standing over R58 with knife (or scissors) in hand
stating, “say something, I’Il stab you m-----f------ , you killed my brother and I’m
going to kill you.” P. Ex. 5 at 92, 270; CMS Ex. 2 at 19.

April 29: R70 isolated himself in room, blocked both doors, and refused to allow
staff into his room. P. Ex. 5 at 92; CMS Ex. 2 at 19.

May 1: R70 eloped (left without signing out) again and threatened a woman at a
local store, stating “I’ll stab you in your head,” and called her vulgar names.

P. Ex. 5 at 92, 271; CMS Ex. 2 at 19. Nursing staff noted that R70’s behaviors
were escalating. P. Ex. 5 at 271. Police came to the facility and interviewed R70.
No charges were filed against R70 at that time. CMS Ex. 2 at 20.

May 3: PEC?- Dr. Holder certified that R70 was a danger to himself and others.
Dr. Holder noted that R70’s erratic behavior was increasing, and that R70 was
currently violent and abusive towards staff and refusing medication. P. Ex. 5 at
272. Nursing staff noted that the SSD informed them of the PEC. CMS Ex. 2 at
20. A sheriff deputy escorted R70 out of the facility. P. Ex. 5 at 274.

May 20: Petitioner readmitted R70. CMS Ex. 2 at 20. P. Ex. 5 at 93, 274.

> A Physician Emergency Certificate (PEC) is an involuntary admission to an inpatient
treatment facility for observation, diagnosis, and treatment. LA. REV. STAT. § 28:53.
May 22: R70 threatened two other residents and told one resident: “I’ll break your
neck,” P. Ex. 5 at 93; CMS Ex. 2 at 20.

May 23: R70 was seen exiting another resident’s room; when questioned, he
stated “the television was too loud[;] I turned it down.” CMS Ex. 2 at 20.

May 27: Nursing staff noted that R70 paced constantly and demonstrated episodes
of anxiety/anger. CMS Ex. 2 at 20; P. Ex. 5 at 93. R70 threatened another
resident by stating that he would stab him with a knife. Three nurses intervened
and searched R70 for weapons. No weapons were found but R70 remained
agitated and shut the door in the nurse’s face. CMS Ex. 2 at 20; P. Ex. 5 at 93.

May 28: R70 was observed pacing in his room and ambulating in the hall slightly
agitated at 2:00 AM. CMS Ex. 2 at 20-21; P. Ex. 5 at 93, 276.

June 2: R70 refused his evening Rispirdol. P. Ex. 5 at 93.

June 3: R70 was observed obstructing his door at night. When nursing staff were
able to enter, they found a wood-handled object in R70’s hand. A nurse released
the wooden object and returned it to a hiding place. CMS Ex. 2 at 21; P. Ex. 5 at
93.

June 5: R70 refused to allow the housekeeper to clean his room, obstructing the
housekeeper by cursing and using various obscenities. CMS Ex. 2 at 21; P. Ex. 5
at 93, 277.

June 6: R70 refused PM care, and was observed murmuring to himself. CMS Ex.
2 at 22; P. Ex. 5 at 93, 277.

June 7: 1:10 AM, R70 remained awake, and agitated, criticizing his roommate for
his incontinence. CMS Ex. 2 at 22; P. Ex. 5 at 93,277. At 6:10 AM, R70 chased
CNAs with a razor and threatened to cut the neck of another resident while
holding the razor in his hand. CMS Ex. 2 at 22-23; P. Ex. 5 at 93-94, 277-279.
Police arrived and found R70 carrying a small garden rake and a razor. Police
persuaded R70 to relinquish the weapons. A body search of R70 was conducted
but no other weapons were found. CMS Ex. 2 at 23; P. Ex. 5 at 94, 278-279.

PEC - NP Melancon certified that R70 was a danger to himself and others, and
currently violent. P. Ex. 5 at 279. Petitioner discharged R70 to the acute hospital
for emergency treatment in accordance with the PEC. P. Ex. 5 at 242.

June 16: Petitioner readmitted R70. P. Ex. 5 at 94, 280; CMS Ex. 2 at 24.
June 21: R70 was involved in an altercation with another resident in which R70
threatened to “cut” the other resident. The administrator and DON intervened.

P. Ex. 5 at 95, 282. The DON, SSD, and QA Nurse contacted R70’s sister, who
stated that R70 could not live with her, that R70 had come at her with a knife last
year. P. Ex. 5 at 282. The DON contacted Nursing Home Psychological Services
(NHPS), the facility’s contracted psychological services provider, to make
immediate arrangements for an on-site psychological evaluation. P. Ex. 5 at 95,
214, 282. R70 was observed calling another resident, without provocation, a
“b----” and a “dog” without provocation. The DON attempted to counsel R70
without success and described him as very agitated. P. Ex. 5 at 281;CMS Ex. 2 at
24.

June 22: NHPS conducted the assessment of R70. NHPS recommended (1)
immediate assessment for inpatient psychological treatment if R70’s aggressive
behavior increased, (2) the facility follow emergency protocol for R70 as needed,
and (3) counseling services by a NHPS supportive counselor. NHPS would
conduct a full psychological evaluation upon its next visit to rule out bipolar
disorder or any other psychological issues that might have been contributing to
R70’s agitation and to his verbally - and physically - aggressive behavior. P. Ex. 5
at 213.

June 23: PEC - Dr. Holder certified that R70 had homicidal ideations, was
threatening staff and residents, that R70 was currently homicidal and dangerous to
others. R70 had threatened to “‘cut” a resident, and weapons were in easy access
to R70. Dr. Holder noted “repeated behavior with [R70] involving razor blade,
knife, scissors,” noted that the “medical restraint” (Haldol) had been used but was
not adequate, observed that R70’s “homicidal ideations continued to increase,”
and concluded that R70 “is a real threat to safety of staff/residents.” P. Ex. 5 at
284. Petitioner discharged R70 to the acute hospital for emergency treatment in
accordance with the PEC. Jd.

June 28: Petitioner readmitted R70. P. Ex. 5 at 96, 285.

July 6: R70 cursed and threatened to cut another resident. R70 began rapidly
approaching as if to attack the other resident. DON stepped in and told R70 to
return to his room. P. Ex. 5 at 102.

July 7: PEC - R70 was discharged first to the acute-care hospital, and then found
appropriate placement at a facility for the psychologically impaired. P. Ex. 5 at
97.
10

1. Petitioner failed to comply substantially with the requirement to provide
medically-related social services to R70 to attain or maintain his highest
practicable mental and psychosocial well-being as required by 42 C.F.R.
§ 483.15(g)(1) (Tag F-250).

Section 483.15(g)(1) requires that a long-term care facility participating in the Medicare
and Medicaid programs “must provide medically-related social services to attain or
maintain the highest practicable physical, mental, and psychosocial well-being of each
resident.” Brookshire Health Care Center, DAB No. 2190 (2008); Park Manor Nursing
Home, DAB No. 2005 (2005); Harmony Court, DAB No. 1968 (2005); Vandalia Park,
DAB No. 1939 (2004); Ivy Woods Health Care and Rehabilitation Center, DAB 1933
(2004); Milpitas Care Center, DAB No. 1864 (2003).

CMS asserts that the facility failed to have a process in place to implement social service
interventions for R70, whom the facility knew had diagnoses of paranoia and
schizophrenia with recent homicidal thoughts, depression, with mental and psychosocial
difficulties. CMS PH Br. at 6, citing CMS Ex. 4 at 5-10, 13-19, CMS Ex. 7 at 28-50, 62.
lagree, and in agreeing note that the evidence of Petitioner’s failure is as dramatic as it is
overwhelming.

Petitioner failed to assess and care-plan for R70’s violent and dangerous behaviors, to
evaluate the “triggers” that precipitated those behaviors, and to develop or implement
interventions to address R70’s behaviors. During R70’s four-month stay he was sent to
the hospital outside the facility though a PEC four times, police intervention was required
both inside and outside the facility three times, he somehow secured a total of five
weapons (e.g., knives, scissors, razors) and threatened to cut or stab facility staff, other
residents, and victims outside the facility eight times. Yet, R70’s chart contains only
three short entries by the SSD. P. Ex. 5 at 385. It took four months for someone at the
facility to request an outside psychological consultation. The facility’s Interdisciplinary
Team (IDT) never met to discuss R70’s behaviors. The IDT could have — and I find
ere that they should have — conferred and consulted with the various disciplines and
staff leaders to develop effective and safe interventions to limit R70’s outbursts, thereby
protecting staff, other residents, local store- and bank-clerks, and R70 himself from
abuse, assault, and injury approaching criminal violence. But Petitioner never care-
planned for R70’s aggressive and violent behaviors. It was not until the fourth month
that Petitioner started to track R70’s behavior, to review for “triggers” or patterns. The
facility failed to implement sufficient interventions to address R70’s dangerous
behaviors, and certainly never took proactive steps to prevent or decrease the severity or
frequency of R70’s violent and aggressive behaviors.

Petitioner was perfectly aware of R70’s psychiatric history and special needs. Petitioner
admitted R70 from the inpatient geriatric psychiatric unit of the local hospital. R70’s
ospital records clearly informed Petitioner that R70 struggled with serious mental illness

11

that often manifested itself in highly aggressive behavior. The hospital records stated that
R70 is “well-known” to the inpatient service because of his multiple hospitalizations and
long history of schizophrenia. Prior to his hospitalization, R70 resided at a nursing
facility, but the facility found it necessary to hospitalize R70 on a PEC related to
agitation, paranoia, and homicidal thoughts. Specifically, R70 cursed, threatened others,
and attempted to hit a door with a chair. The records showed that R70 also had a history
of multiple suicide attempts, as well as efforts at treatment through electroconvulsive
therapy. P. Ex. 5 at 201. The plain truth is that when it admitted R70, Petitioner’s

facility had before it a body of data perfectly predictive of what R70’s next four months
of conduct would be like in every frightening detail.

The State Operations Manual(SOM) states that ““Medically-related social services’
means services provided by the facility’s staff to assist residents in maintaining or
improving their ability to manage their everyday physical, mental, and psychosocial
needs.” SOM, App. PP at F250. The SOM further provides examples of medically-
related social services. These services might include:

e identifying and seeking ways to support residents’ individual needs through
the assessment and care planning process;

e arranging for counseling services (such as arranging for a psychologist or
licensed professional to evaluate for ongoing or intermittent counseling);

e making referrals and obtaining services from outside entities (such as
outpatient therapy);

e providing alternatives to drug therapy or restraints by understanding and
communicating to staff why residents act as they do, what they are
attempting to communicate, and what needs the staff must meet; (such as
working with or training staff on the best way to approach a particular
resident with schizophrenia);

e assisting staff to discuss health care choices and their ramifications with
residents (such as choosing to refuse medication or other treatment);

e working with staff to enhance the residents’ dignity in recognition of each
resident’s individuality (such care planning privacy issues);

e Finding options that most meet the physical and emotional needs of each
resident;

¢ participating on the IDT (such as brainstorming with the other disciplines to
develop effective and safe interventions);

e discharge planning (such as helping a resident get on a waiting list for
alternative housing or treatment);
12

The SOM clarifies that “[w]here needed services are not covered by the Medicaid State
plan, nursing facilities are still required to attempt to obtain these services.” Jd.

When admitting R70, Petitioner should have — indeed must have — known that R70
would require significant support, suprvision, and management to meet his needs and to
assure his safety and the safety of its other residents and staff. Because Petitioner
admitted R70 with the primary diagnosis of a serious mental illness marked by disturbing
actions, and because it knew that R70 had been violent, suicidal, and homicidal in the
past, Petitioner’s SSD should have been on heightened alert to the need for enhanced
involvement in the care and treatment of R70, for extra vigilance in protecting the other
residents from R70’s behaviors, and for interventions as proactive as possible to
minimize R70’s violent, aggressive, assaultive, and extremely dangerous outbursts. Yet
during R70’s entire four-month tumultuous stay, the SSD only documented three
interactions with R70: the first two notes were related to an initial assessment and the
third was related to the first incident where R70 exhibited threatening, aggressive, or
violent behavior. P. Ex. 5 at 385.

The licensed mental health counselor who conducted R70’s psychosocial evaluation at
the acute-care hospital recommended that R70 participate in outpatient follow-up. P. Ex.
5 at 222. R70’s attending physician also recommended an outpatient treatment plan.

P. Ex. 5 at 203. The SSD informed the surveyor that she was not able to locate a day
program or any other placement for R70. CMS Ex. 2 at 26. However, she did not
specify when this alleged search began and there is no documentation in Petitioner’s
records or anywhere else of any such search or research related to it. There is absolutely
no documented or otherwise-supported evidence that the SSD or any other staff member
researched outpatient treatment options for R70 as recommended at admission.

Petitioner argues that 42 C.F.R. § 483.15(g)(1) does not require that the social services
are provided only by a SSD. Petitioner argues that those critical services can properly be
provided by anyone at the facility, including nursing staff, however credentialed,
qualified, or experienced. In this vein, Petitioner presents several arguments including:
that the facility’s entire staff provided social services to R70; that the IDT provided social
services to R70; that the DON provided social services to R70 because R70 preferred to
work with a male; and that the SSD was present almost all of the time when the DON
provided social services to R70. P. Br at 24; P. Ex. 8 at 102-103; P. Ex. 9 at 16-17.

Although Petitioner asserts that any staff member can provide social services, that
assertion is meaningless because the record does not support Petitioner’s assertion that
anyone actually did so in any comprehensive or meaningful way. For example,
Petitioner’s assertion that the DON provided social services in the place of the SSD
because of R70’s preference to work with a male was never care planned as an intended
intervention. Although the nursing notes frequently state “DON notified,” the notes very
rarely point to DON Starkey’s actual involvement or provision of frequent social

13

services. Moreover, there was one nursing note penned by DON Starkey that indicated
the SSD was involved, but the note only states that the SSD called R70’s sister, and
reflects no actual involvement with R70 himself. P. Ex. 5 at 282.

Additionally, even when R70 specifically requested social services, the SSD remained
unresponsive. Specifically, the evening of March 23, 2011, R70 requested to meet with
the SSD. DON Starkey testified that the SSD met with R70 the following morning of
March 24. P. Ex. 8 at 174-175. However, there is no documentation indicating that the
SSD met with R70 on the morning of March 24 as requested, even though the SSD made
a notation that very afternoon. P. Ex. 5 at 385. The record shows that the SSD failed to
meet with R70 as requested and allowed him to leave the premises — at which time his
behavior escalated into a situation which could have been gravely perilous to R70 and
others. Because of the SSD’s unresponsiveness, Petitioner may have actually
exacerbated R70’s serious and dangerous behaviors and the dangers to others that they
directly and unmistakably created.

Petitioner had R70 involuntarily committed to an inpatient psychiatric facility four times
in four months: on May 3 (P. Ex. 5 at 272), on June 7 (P. Ex. 5 at 279), on June 23

(P. Ex. 5 at 284), and finally on July 7 (P. Ex. 5 at 97). According to the PEC protocol
the physician may execute an emergency certificate only when the physician determines
that the individual is “in need of immediate care and treatment in a treatment facility”
because the physician “determines the person to be dangerous to self or others or to be
gravely disabled.” LA. REV. STAT. § 28:53.

Petitioner argues that it provided psychiatric treatment including evaluation, therapy, and
medication review, through each PEC. P. Br. at 25-27; P. Answer Br. at 7. Petitioner
explains, ““A PEC is actually a resource used by long-term care facilities when a patient
requires unique treatment due to mental illness.” P. Br. at 26, citing P. Ex. 9 at 18.
Petitioner asserts that “[p]articularly in the Baton Rouge area, the PEC is the best and
nearly the only option for a geriatric-psychiatric patient who is in need of in depth
treatment and medication review.” P. Br. at 26, citing P. Ex. 9 at 42.

On the other hand, Petitioner also argues that the PEC “interventions” were responsible
for R70’s behaviors increasing in frequency and these PEC “psychiatric evaluations”
were “actually the catalyst for a significant number of R70’s outbursts.” P. Br. at 27,
citing P. Ex. 8 at 112. Petitioner argues that the record supports DON Starkey’s assertion
that “after R70 was sent for psychiatric evaluations, his behaviors became more
frequent.” P. Br. at 27, citing, P. Ex. 5 at 834-841, P. Ex. 4 (timeline of events).

Under the guidance to surveyors, one example of medically-related social services is
making referrals and obtaining services from outside entities. Petitioner states that by
having R70 admitted for inpatient treatment through a PEC, it was providing social
services by making referrals and obtaining services from outside entities. P. Answer Br.
14

at 9, citing SOM, Appendix PP. Petitioner’s administrator testified that he felt that they
should have been given some credit for doing that. It is true that discharge to an intensive
therapy program is perhaps an option in providing medically-related social services,
however, that is not where the social services begin. Discharging a resident on a PEC is
not a valid way of providing medically necessary social services or an appropriate
starting point to obtain a psychiatric or psychological evaluation. The facility must
provide a number of intermediate interventions and services to the resident and not
simply wait until the resident has decompensated into bizarre, terrifying, combative, and
weapon-wielding outbursts.

CMS asserts that Petitioner failed to be proactive in that the facility failed to assess
“triggers” for R70’s behaviors, implement approaches to address “triggers” or behaviors,
care plan, or instruct staff on how to deal with R70’s behaviors. Petitioner counters that
there is no evidence that it is “even possible with a schizophrenic” to be proactive with
assessing possible “triggers” for R70’s behaviors. P. Answer Br. at 8. Petitioner argues
that I should rely on Dr. Holder’s testimony, that it is “nearly impossible to predict the
behaviors of a schizophrenic, or to be ‘proactive’ in attempting to limit the outbursts.”

P. Br. at 27, citing P. Ex. 10 at 4. Dr. Holder further testified that “‘staff acted
appropriately in responding to R70’s behaviors after the fact with verbal counseling,
redirecting, and one-time doses of Haldol.” Jd. Petitioner also argues that “when [DON]
Starkey took proactive measure, such as calling the police during R70’s outburst, the
facility is persecuted and accused of failing to provide care to R70... .” P. Answer Br. at
3. Calling the police to intervene once a resident has decompensated is far from
proactive. Petitioner is not charged with responsibility for predicting R70’s behavior, but
rather with taking proactive steps to minimize the severity or frequency of outbursts so
far as practicable for R70. However, Petitioner did not attempt preventative interventions
and its argument — that such interventions would be fruitless — is without merit.

In the case of R70, the nursing staff should have monitored R70’s behaviors to see if they
could identify “triggers” or patterns in his behavior well before the end of his fourth
month. For instance, review of the timeline shows that R70 was “territorial” about his
room and did not adjust to having a roommate. It would have been an easy intervention
to provide R70 with a private room but maintain a safe environment for R70 within his
room to assure his safety and access to him. Further, he valued privacy punctiliously, and
he preferred to bathe himself privately in his own bathroom without staff assistance.
Social services or the facility is responsible for assuring for a home-like environment,
control, dignity, privacy. SOM, App. PP at F250. Although Petitioner identified R70’s
preference to clean himself in his room, they did not address this as a privacy issue or
offer approaches to accommodate or ameliorate his discomfort with the facility’s normal
routines. P. Ex. 5 at 849.

15

Additionally, R70’s most serious violent episodes seem to have been preceded by
escalating patterns of what might be characterized as defiant, resistant, confrontational
activity, such as becoming increasingly protective of his room and privacy, isolating
imself and not allowing staff to enter his room, and demanding that his roommate’s
possessions be removed from their room. This could have given the staff an opportunity
to decrease his anxiety or paranoid behavior prior to his more serious outbursts.

Despite the fact that Petitioner and its staff were inarguably on notice that they would be
called on to be involved closely and constantly in managing the psychosocial well-being
of R70, the SSD did relatively little to proactively address R70’s needs. The SSD’s
involvement with R70’s care and services for the most part ended on March 28, with the
SSD’s third and final notation following R70’s first encounter with the police at
Petitioner’s facility. The three SSD notes reflect no “one-on-one” counseling or
psychological consults for R70. TR. 71. SSD did not consult a psychologist until the
survey at issue was underway, on June 22, 2011. TR. 72. A psychological or psychiatric
evaluation could have assessed R70 for other psychiatric illness that might have
complicated or frustrated his treatment. A clinician could have recommended
interventions, approaches, and alternative treatment options if any were indicated. But in
the face of numerous examples of R70’s agitated, abusive, and violent behaviors,
Petitioner failed to assess and care-plan his violent and aggressive behaviors and failed to
implement interventions to address his behaviors. P. Ex. 5 at 307-309.

Petitioner was obliged to identify problems (e.g. schizophrenia exhibited by violent
physical and verbal outbursts); to examine how they were exhibited (threatening and
cursing at residents, staff, and outside individuals with words and/or aggressive posture,
with and without weapons); to identify possible interventions (restrict access to sharp
objects such as knives, scissors, and razors; provide a private room; staff accompany on
outings; redirect by offering private time and or cleaning options); and to evaluate the
effectiveness of the interventions actually carried out. If the interventions were not
successful it was the facility’s responsibility to create new or seek alternative
interventions.

Under the regulation, a facility assesses and evaluates a residents' behavior and then
develops and implements interventions to prevent the behavior from occurring or to allow
the behavior to occur in a safe manner. See Brookshire Healthcare Center, DAB No. 2190
(2008). Petitioner did not meet this standard. Accordingly, the facility failed to comply
substantially with the requirement to provide medically-related social services.
16

2. Petitioner failed to comply substantially with the accidents/hazards and
supervision requirement at 42 C.F.R. § 483.25(h) (Tag F-323).

Section 483.25(h) references accidents“ and states:

(h) Accidents. The facility must ensure that —
(1) The resident environment remains as free of accident hazards as
is possible; and
(2) Each resident receives adequate supervision and assistance
devices to prevent accidents.

In Meridian Nursing Center, DAB No. 2265, at 3 (2009), the Board described the
requirements of this subsection, stating:

Section 483.25(h)(1) requires that a facility address foreseeable risks of
harm from accidents “by identifying and removing hazards, where possible,
or where the hazard is unavoidable because of other resident needs,
managing the hazard by reducing the risk of accident to the extent
possible.” Maine Veterans’ Home — Scarborough, DAB No. 1975, at 10
(2005). Section 483.25(h)(2) requires that a facility take “‘all reasonable
steps to ensure that a resident receives supervision and assistance devices
that meet his or her assessed needs and mitigate foreseeable risks of harm
from accidents.” Briarwood Nursing Center, DAB No. 2115, at 11 (2007),
citing Woodstock Care Center v. Thompson, DAB No. 1726 (2000) (facility
must take “all reasonable precautions against residents’ accidents”), aff'd,
Woodstock Care Center v. Thompson, 363 F.3d 583 (on Cir. 2003).

The Board has also held that facilities “have the ‘flexibility to choose the methods of
supervision’ to prevent accidents so long as the methods chosen are adequate in light of
the resident’s needs and ability to protect himself or herself from a risk.” Briarwood
Nursing Center, DAB No. 2115, at 5, citing Liberty Commons Nursing and Rehab —
Alamance, DAB No. 2070, at 3 (2007).

* The Board references the Medicare State Operations Manual (SOM) in defining an
accident as:

“an unexpected, unintended event that can cause a resident bodily injury,”
excluding “adverse outcomes associated as a direct consequence of
treatment or care (e.g., drug side effects or reactions).”” SOM Appendix PP,
Guidance to Surveyors, Part 2, SOP 483.25 Quality of Care (Rev. 274, June
1995 (SOM Guidance).

Woodstock Care Center, DAB No. 1726, at 4.
17

The focus is on whether the facility took all reasonable steps to ensure that a resident
receives supervision and assistance devices that met his or her assessed needs and
mitigate foreseeable risk of harm from accidents. Briarwood Nursing Center, DAB No.
2115, at 11-12, citing Woodstock Care Center v. Thompson, 363 F.3d at 590.

The regulation speaks in terms of ensuring that what is “practicable” and
“possible” to do is done. What is thus required of facilities is not
prescience but reason and professional judgment in assessing what can be
done to make residents (given their special needs) safe, through removing
accident hazards, providing appropriate devices, and ensuring adequate
supervision.

Josephine Sunset Home, DAB No. 1908, at 14-15 (2004).

The Board has also held that the regulations permit facilities some flexibility in choosing
the methods they use to prevent accidents, so long as the chosen methods constitute an
adequate level of supervision. Windsor Health Care Center, DAB No. 1902 (2003), aff'd
Windsor Health Center v. Leavitt, 2005 WL 858069 (6th Cir. April 13, 2005). A facility
must anticipate what accidents might befall a resident and take steps — such as increased
supervision or the use of assistance devices, for example — to prevent them. Aase
Haugen Homes, DAB No. 2013 (2006).

In this case, Petitioner failed to supervise R70 adequately, to keep him safe from
foreseeable accidents, and to assure that other residents such as R58 were adequately
protected from R70. Petitioner failed to protect R70 from himself and potential outside
dangers and failed to protect other residents, including R58, from R70.

Petitioner failed to protect R70 from foreseeable accidents/ hazards by not providing
adequate supervision from foreseeable risks that could — and from some that did —
occur. Petitioner failed to supervise R70 and allowed R70 to gain access to dangerous
items such as a razor and knives. Petitioner failed to adequately supervise R70 from
foreseeable risks, both by allowing him to elope and by allowing him independent leave
of absence. Without supervision or discussion, Petitioner allowed R70 to leave the
facility unattended, and twice those unattended forays required police intervention, once
when his paranoid delusions led him to cause a disturbance at a drugstore and bank and in
a later incident when he threatened to stab a woman at a shop.

Petitioner also failed to protect R58 from R70, on both physical and emotional levels. It
is clear that when R70 was admitted he was known to be aggressive toward staff. Once
e was residing in the facility it immediately became obvious that he was aggressive
toward all individuals, whether a resident at the facility, a nurse, a housekeeper, a bank
clerk in town, or a shopper at a local store. Petitioner failed to keep R58 safe from R70’s
threats. But it is also hard to imagine that the other residents, among them R70’s

18

roommate, were not frightened by R70. He frequently threatened other residents by
exclaiming that he would stab them, which he often emphasizes by brandishing a knife or
other weapon over the resident while making the threats. And it may be as well if I write
as clearly as possible: it does not matter under the statutes and regulations I apply here
whether the weapon in question was a butter knife or a Bowie knife, an old-fashioned
cut-throat straight razor or a throw-away Bic. Despite Petitioner’s arguments to the
contrary — and on this record those arguments discredit their source and defy
categorization as “reasonable” — butter knives and safety razors are dangerous weapons,
entirely capable of inflicting pain, injury, and permanent damage, especially in the hands
of an aggressive and uncontrolled paranoid schizophrenic like R70, and even more
especially when those weapons are brought into play by an aggressor of that sort in the
environment of a skilled nursing facility and its vulnerable population.

Petitioner argues that I should rely on the testimony of Dr. Holder, R70’s treating
physician, and DON Starkey over that of Surveyor Knight who, says Petitioner, lacked
knowledge and experience with psychiatric patients, especially schizophrenics, and did
not contribute to the F-Tag. P. Br. at 28. Now, Dr. Holder testified that R70 was not a
danger to others, and specifically not a danger to R58. P. Ex. 10 at 2, 38. Yet,
presumably this same Dr. Holder was describing the same patient in each of R70’s PECs,
in which Dr. Holder and NP Melancon certified that R70 was a danger to himself and/or
others. In addition, these clinicians certified under penalty of perjury in supporting detail
that:

— R70 was “violent toward staff & other [residents];
— R70 “chased staff [with] razor blade [and] tried to hit another resident”;
— R70’s “homicidal ideations continue to increase”;

— R70 “isa real threat to safety of staff/residents”; and

— “weapons [are] in easy access to [R70].”

P. Ex. 5 at 272, 279, 284.

I find the doctor’s certifications in the PECs, when he found no difficulty in certifying
that R70 was a danger to others, to be the more convincing evidence. P. Ex. 10 at 38;
P. Ex. 5 at 272, 279, 284. For one thing, the PECs were sworn out contemporaneously
with the events that led up to them. For another, it cannot be overlooked that there is an
outcome in these proceedings that might color Dr. Holder’s view, but in the PECs his
only apparent interest would have been the safety of R70, the facility and the others who
lived and worked there, and the local community in general. As a third consideration, it
is objectively plain that R70’s behavior as reported in Petitioner’s records shows him to
be dangerous. And it strains credulity for Petitioner to argue that although R70 was in
fact violent and dangerous as certified to on the PEC form, but only “at that moment,
immediately before and immediately after these incidents ....” P. Answer Br. at 7. A
look at the timeline shows a different story and refutes such an embarrassing assertion:
19

the timeline creates a picture of Petitioner’s inaction over the four-month period of R70’s
repeated outbursts and chronic aggression, of the threat of trouble manifested by
querulous recalcitrance even in R70’s most benign moods, and of their sudden escalation
into raging violence.

If more explanation is needed for my rejection of Dr. Holder’s testimony, it is here:
nursing notes also support the information certified on the PECs. DON Starkey’s
testimony is not only unsupported by the evidence, but is directly contradicted by those
nursing notes and thus by the nurses he supervised. For example, DON Starkey testified
that R70 “never even made an aggressive move toward someone when he made a verbal
threat.” P. Ex. 8 at 75. And yet, in a note penned by DON Starkey himself, he cites an
incident where “[R70] cursed and threatened to cut the fellow resident and began rapidly
approaching as if to attack the other resident.” P. Ex. 5 at 102.

The records speak for themselves, and I will let them do so here. In the June 7 incident,
R70 very aggressively walked toward some nurses who were gathered at the nursing
station demanding “Which one of you m----- f------ called me a b----, one of you b------
called me a b----.” Wielding the razor in his hand, R70 chased the nurses into the break
room while shouting extreme profanity. The nurses locked themselves into the bathroom
in the break room to protect themselves. R70 then approached another resident in the
hallway, stood over the resident’s wheelchair, holding onto the wheelchair handle and
daring the resident to tell R70 to let his wheelchair go. R70 shouted to the seated resident
“T will cut your m----- f------ neck off, you m----- f-----.” A brave nurse seized R70’s
raised hand — the hand that was gripping the razor — and managed to prevent R70 from
striking the seated and defenseless resident. The nurse told the seated resident to self-
propel the wheelchair away from R70; the seated resident complied, while R70 continued
to shout obscenities at the retreating defenseless wheelchair-rolling victim of the attack.
The nurse was able to redirect R70 to his room. The nursing staff called the DON who
told the nurses to contact the police. CMS Ex. 2 at 22-23; P. Ex. 5 at 93-94, 277-279.
Petitioner asserts that no one was in any real danger, and that the DON only suggested
that the police be called out of “an abundance of caution.” The nurses were clearly
frightened by R70 — enough to lock themselves in the break room bathroom — and
certainly R70’s behavior was enough to frighten a vulnerable resident. And let us be
plain: “an abundance of caution” is what suggests calling the police when one hears an
unexplained noise under one’s window in the middle of a dark night; considerations of
life and death are what compel calling the police when directly confronted with a violent
armed assault on a helpless victim whose usual protectors have been driven off by the
assault.

* | find that there is significant evidence to support a finding that Petitioner violated
498.25(h) with respect to its treatment of R70. Accordingly, I need not address whether
Petitioner’s care and treatment of R101 and R102 also violated the accidents/hazards
regulation.
20

In summary of the few paragraphs above, these points stand out. First, Dr. Holder’s
testimony denying R70’s dangerous nature is entitled to no weight at all, and to only as
much respect as he apparently extended to this fact-finding process. Next, DON
Starkey’s suggestion that the June 7 incident fell short of a dangerous situation is beyond
the most generous extension of credibility, for it is contradicted by every objective fact
recorded at the time. Third, Petitioner’s argument that the objects R70 used as weapons
simply weren’t weapons at all is singularly wrongheaded, given the recorded facts
showing that in R70’s hands they terrorized the victims of R70’s attacks because they had
the potential to do serious and lasting harm.

3. Petitioner failed to comply substantially with the administration regulation at
42 CF.R. § 483.75 (Tag F-490).

A facility “must be administered in a manner that enables it to use its resources
effectively and efficiently to attain or maintain the highest practicable physical, mental,
and psychosocial well-being of each resident.” 42 C.F.R. § 483.75.

The Board has held that a finding of noncompliance with respect to 42 C.F.R. § 483.75
may be derived from findings of noncompliance with other participation requirements.
Life Care Center of Tullahoma, DAB No. 2304 at 45 (2010), citing Stone County Nursing
and Rehab. Center, DAB No. 2276 at 15-16 (2009); Cedar View Good Samaritan, DAB
No. 1897, at 23-24 (2003); Asbury Center at Johnson City, DAB No. 1815, at 11 (2002).

Petitioner’s failure to comply substantially with sections 483.15(g)(1) and 483.25(h)
establishes that the facility was not administered effectively to help R70, R58, and others
attain their highest practicable well-being. Additionally, the facility’s administration
failed to have a process in place to ensure that residents admitted with psychiatric
disorders received psychological or psychiatric consultations once the resident began to
exhibit aggressive or violent behaviors. The CMS surveyors found that Petitioner placed
R70 in immediate jeopardy beginning on March 24th, when the police brought R70 back
to the facility after R70 was exhibiting aggressive, bizarre, paranoid behavior at a local
bank. The facility did not assure that R70 was provided an appropriate professional
assessment or that the in-house SSD or IDT assessed R70 for causative factors, plan
interventions, or monitor their effectiveness. Instead, the administration allowed R70’s
behavior to risk the health and safety of himself and the other residents, as well, of
course, as the health and safety of Petitioner’s own staff. On April 14, R70 threatened a
nurse while brandishing a butter knife. On April 28, R70 threatened to kill R58 while
standing over him with a knife or scissors. On May 1, R70 eloped and threatened to stab
a woman at the store and police were called a second time.

It is the administration’s responsibility to assure that the facility is operating in such a
way that not only maintains the safety of the residents, but also that the facility attain or
maintain the highest practicable physical, mental, and psychosocial well-being of each
21

resident. R70 was clearly a very challenging resident, but that is really the point: when
the facility admitted R70 its administrators and staff accepted responsibility to assure
R70’s highest practicable physical, mental, and psychosocial well-being. Often it may be
difficult to find appropriate placement for such a challenging resident, however, it
remains the facility’s responsibility to search for all available resources (outside
psychological consultations, in-house assessments, outpatient therapy, private room, etc.)
to address the resident’s needs while at the facility. The facility failed to comply
substantially with the administration requirement.

4. CMS’s determination that the facility’s noncompliance posed immediate
jeopardy to resident health and safety is not clearly erroneous.

CMS concluded that the violations of 42 C.F.R. §§ 483.25(h), 483.15(g)(1), and 483.75
posed immediate jeopardy. However, because CMS imposed PICMPs in this case, and
not per-day CMPs, I am not authorized to review CMS’s finding that the deficiencies
here constituted immediate jeopardy.

The scope and severity determination of immediate jeopardy can be appealed “only if a
successful challenge on this issue would affect” the range of the CMP that can be
imposed or if it would affect the facility’s nurse aide training program. 42 C.F.R.

§§ 498.3(b)(14)(), (ii) and 498.3(d)(10)(i), (ii). Petitioner did not have an approved
NATCEP. Further, there is but a single range for PICMPs and the amount of a PICMP is
not affected by whether or not there is a finding of immediate jeopardy. 42 C.F.R.

§§ 488.408; 488.438. Thus, the immediate jeopardy finding is not subject to appeal or
my review in this case.

However, to the extent that a declaration of immediate jeopardy reflects upon the
seriousness of the deficiency, it is reasonable for me to consider whether immediate
jeopardy existed as an evidentiary matter for the reasonableness of the PICMPs.
Immediate jeopardy is a situation in which a facility’s noncompliance with one or more
requirements of participation “has caused, or is likely to cause, serious injury, harm,
impairment, or death to a resident.” 42 C.F.R. § 488.301. I must uphold CMS’s
determination as to the level of noncompliance unless it is clearly erroneous. 42 C.F.R.
§ 498.60(c). The “clearly erroneous” standard imposes a heavy burden on facilities to
show that no immediate jeopardy was present as cited. The Board has sustained
determinations of immediate jeopardy where CMS presented evidence “from which
‘[o]ne could reasonably conclude’ that immediate jeopardy exists.” Barbourville Nursing
Home, DAB No. 1962, at 11 (2005); Florence Park Care Center, DAB No. 1931, at 27-
28 (2004), citing Koester Pavilion, DAB No. 1750.

The “clearly erroneous” standard, the Board has explained, is highly deferential to the
CMS determination and places a heavy burden on the facility to upset CMS’s finding
regarding the level of noncompliance. See, e.g., Claiborne-Hughes Health Center, DAB
22

No. 2179, at 20, (2008), aff'd, Claiborne-Hughes Health Center v. Sebelius, 609 F.3d 839
(6th Cir. 2010), quoting Liberty Commons Nursing & Rehab Center, DAB No. 2031 at 18
(2006), aff'd, Liberty Commons Nursing & Rehab Center—Johnston v. Leavitt, 241 F.
App’x 76 (4th Cir. 2007). When CMS issued the nursing facility survey, certification
and enforcement regulations, it acknowledged that “distinctions between different levels
of noncompliance . . . do not represent mathematical judgments for which there are clear
or objectively measured boundaries.” 59 Fed. Reg. 56,116, 56,179 (1994). “This
inherent imprecision is precisely why CMS’s immediate jeopardy determination, a matter
of professional judgment and expertise, is entitled to deference.” Daughters of Miriam
Center, DAB No. 2067, at 15 (2007).

Petitioner placed R70, R58, and other residents in immediate jeopardy when its staff
failed to provide medically-related social services, prevent accidents and hazards, and
provide sufficient administration. Petitioner knowingly took on a difficult, vulnerable,
volatile, and violent Resident and then simply ignored any proactive steps they could
have taken to avoid the problems of which they were well aware. Petitioner ignored
warning signs, allowed R70 to obtain weapons on at least five occasions, and simply
allowed R70’s agitated behaviors to escalate until an emergency shot of Haldol and
emergency inpatient treatment became necessary. It is nothing short of miraculous that
no other residents were physically harmed. CMS’s immediate jeopardy finding is, thus,
not clearly erroneous.

5. The enforcement remedies imposed are reasonable.

To determine whether the PICMPs imposed are reasonable, I apply the factors listed in
42 C.F.R. § 488.438(f), which are: (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 listed 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 history of noncompliance in general and
specifically with reference to the cited deficiencies.

In reaching a decision on the reasonableness of the CMP, I must 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 Petitioner with the kind of deficiency found, in
light of the above 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 Center, DAB No. 1848, at 21 (2002).

23

The PICMPs of $4,000, $4,000, and $2,000 are at the low-to-middle penalty range for
any scope and severity level of noncompliance. See 42 C.F.R. § 488.438(a)(2), which
sets the range for PICMPs at $1,000 to $10,000. Overall, the PICMP is exceedingly
modest when considering the possible penalty CMS could have imposed. Petitioner
chose not to submit evidence relating to its financial condition or to argue that the remedy
would risk its financial viability. Petitioner has a history of noncompliance. Moreover
the factors established in 42 C.F.R. § 488.404, including the scope and severity, the
relationship of the deficiency to the others resulting in noncompliance, and prior history
of noncompliance in general, show that CMS was exceedingly modest in setting the level
of its chosen penalties. The seriousness of Petitioner’s violations, the serious lack of
involvement of the SSD, the danger in which Petitioner’s lapses placed R70 and the other
residents, and management’s lack of oversight, are overwhelming support for these
CMPs. Petitioner’s culpability is high: all the evidence of value demonstrates that the
facility showed at the very least a profound indifference for residents’ comfort, care, and
safety.

I therefore find the penalties imposed are reasonable.

V. Conclusion

For the reasons discussed above, I find that Petitioner’s facility was not in substantial
compliance with Medicare participation requirements at 42 C.F.R. §§ 483.25(h),
483.15(g)(1), and 483.75, and that the PICMP enforcement remedies imposed are
reasonable.

/s/
Richard J. Smith
Administrative Law Judge