Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Brenham Nursing and Rehabilitation Center,
(CCN: 67-5799),

Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-13-1068

Decision No. CR3312

Date: July 28, 2014

DECISION
I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose civil money penalties against Petitioner, Brenham Nursing and Rehabilitation

Center, consisting of the following:

¢ Penalties of $6,600 per day for each day of a period that began on April 22, 2013
and that ran through April 25, 2013; and

¢ Penalties of $2,000 per day for each day of a period that began on April 26, 2013
and that ran through May 24, 2013.

The total amount of the civil money penalties that I sustain is $84,400.
I. Background
Petitioner is a skilled nursing facility in the State of Texas. It participates in the Medicare

program. CMS determined to impose the remedies that I recite in the opening paragraph
of this decision and Petitioner requested a hearing to challenge CMS’s determination.
The case was assigned originally to another administrative law judge and then reassigned
to me. I held a hearing on May 12, 2014. I received into evidence from CMS exhibits
that are identified as: CMS Ex. 1; CMS Ex. 2; CMS Ex. 4— CMS Ex. 18; CMS Ex. 21 —
CMS Ex. 28: CMS Ex. 53 — CMS Ex. 58; CMS Ex. 60; CMS Ex. 63; CMS Ex. 64; CMS
Ex. 66; CMS Ex. 67; CM Ex. 75; CMS Ex. 76; CMS Ex. 86 — CMS Ex. 88; CMS Ex. 90
— CMS Ex. 98; CMS Ex. 101; CMS Ex. 103. I received into evidence from Petitioner
exhibits that are identified as: P. Ex. 1 — P. Ex. 44.

IL. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are whether: Petitioner failed to comply substantially with Medicare
participation requirements; CMS’s determination of immediate jeopardy level
noncompliance is clearly erroneous; and CMS’s remedy determinations are reasonable.

B. Findings of Fact and Conclusions of Law

Many of the material facts of this case are essentially undisputed even if the parties
dispute the inferences to be drawn from the facts and their legal significance. This case
centers on the care that Petitioner and its staff gave to one of its residents, a 101-year old
woman who is identified in relevant exhibits as Resident # 4. By all accounts the resident
was frail, demented, and helpless. She suffered from osteoporosis, pressure sores,
depression, and anxiety. CMS Ex. 26 at 49, 58. She had severe cognitive impairment to
the extent that she was unaware of the current season, the location of her room at
Petitioner’s facility, the names and faces of Petitioner’s staff, or even that she was ina
nursing facility. /d. at 81. The resident was totally dependent on Petitioner’s staff for
care and her condition was exacerbated by the fact that she was resistant to receiving
care. Id. at 17 — 18, 31, 58, 59, 81.

On April 12, 2013, two nursing assistants on Petitioner’s staff discovered that the resident
had extensive bruising. CMS Ex. 26 at 161; CMS Ex. 97 at 7. The bruises were massive,
covering much of Resident # 4’s body. CMS Ex. 15 at 1; CMS Ex. 101 at 3. Bruising
was continuous and extended from the resident’s breast and under both of her arms below
both sides of her rib cage. The bruises wrapped around the resident’s posterior thoracic
area. There was extensive bruising and swelling on the resident’s left elbow. Resident #
4’s left foot had a six-inch by two-inch bruise that extended from the ankle to the toes
and the ankle was swollen. Id.

To this day the cause of the resident’s bruises and other injuries remains unknown. As I
shall discuss, Petitioner and its staff made only half-hearted efforts, at best, to learn how
and why the resident was hurt.
After discovering the bruising on April 12 the two nursing assistants reported what they
had seen to the evening shift charge nurse. The resident’s extensive bruising stunned the
charge nurse. She reported her findings to Petitioner’s director of nursing. CMS Ex. 13
at 1; CMS Ex. 15 at 3—4. She subsequently completed an incident report. CMS Ex. 4 at
29; CMS Ex. 26 at 157 — 158; CMS Ex. 101 at 4-5.

There is no evidence showing that the report to the director of nursing prompted him to
initiate an extensive investigation into the causes of Resident # 4’s bruising or even into
the extent and seriousness of the resident’s injuries. There is nothing to show, for
example, that Petitioner’s management appointed any individual to coordinate an
investigation. No extensive interviews were conducted of Petitioner’s staff. No attempt
was made to identify all of the personnel or residents who might have had access to
Resident # 4 prior to April 12 or on that date. No efforts were made to determine
whether the resident might have been subjected to physical violence or to determine
whether any individual posed an ongoing threat to the welfare of this resident or of other
residents. No investigation was initiated into the possibility that an accident hazard of
some sort might have been the cause of the resident’s injuries.

Indeed, the credible evidence shows that even the most basic care for Resident # 4 was,
inexplicably, delayed. The resident — even though she suffered from osteoporosis and
was vulnerable to sustaining fractured bones as a consequence — was not sent for x-rays
for nearly two weeks after the bruising was discovered. She was finally sent for x-rays
on the initiative of a nurse practitioner, who decided on her own and without an order or
request from Petitioner’s management that x-rays should be taken. CMS Ex. 101 at 4.
Petitioner did not inform Resident # 4’s treating physician about the injuries sustained by
his patient until April 23, 2013, 11 days after the bruising was first observed. CMS Ex.
15 at 4.' Petitioner’s medical director was not informed of the resident’s bruising until
April 22, 2013. CMS Ex. 15 at 4-5.

' The “Resident Accident or Incident Report” prepared by Petitioner’s staff on April 12,
2013, indicates that Petitioner’s physician was informed of the bruising on April 12. That
conflicts with the physician’s statement that he did not learn of Resident # 4’s injuries
until April 23, 2013. CMS Ex. 15. I find the physician’s statement to be the more
credible evidence of when he was informed. Petitioner does not identify any evidence
that corroborates the comment in its incident report. It has not offered nurses’ notes,
records of phone or other communications with the physician, or physician’s orders to
show that the physician was advised of the bruising on April 12. Given that, the best and
most credible evidence of when the physician was first informed is the physician’s own
recollection.
Both the treating physician and the medical director opined, after learning about the
resident’s injuries, that abuse was certainly a possible cause of the resident’s bruising.
Both physicians believed that Petitioner should have reported to the Texas State Agency
the possibility that Resident # 4 had been abused. CMS Ex. 97 at 7— 8. Yet, Petitioner
made no notification to that agency and was not prompted by either physician’s concern
to initiate a wide-ranging or comprehensive investigation into the cause or causes of the
resident’s bruising.

Petitioner’s management hypothesized that the resident’s bruising might be the
consequence of a blood disorder. However, management waited four days from the first
report of the resident’s bruising — until April 16, 2013 — to order laboratory tests. CMS
Ex. 15 at 2; CMS Ex. 26 at 197. The test results ruled out a blood disorder as a cause of
the bruising. CMS Ex. 97 at 7. But, with those results in hand, Petitioner’s management
made no effort to investigate thoroughly alternative hypotheses as to the cause or causes
of the resident’s bruising.

Subsequently, Petitioner’s management theorized that Resident # 4 had been injured
while being transferred in a device known as a Hoyer Lift. See CMS Ex. 15 at 4. I take
notice that a Hoyer Lift is a machine that utilizes a sling to transfer debilitated or helpless
individuals from a location such as a bed to another location such as a wheelchair.
However, Petitioner’s management made no credible efforts to determine whether a
botched Hoyer Lift transfer was the cause of the resident’s injuries and the theory that
transfer with a Hoyer Lift was the cause is not grounded in fact. Both of the nursing
assistants who provided care to the resident denied using a Hoyer Lift to transfer her.
CMS Ex. 97 at 7. One of the nursing assistants later related to a surveyor that she had
been instructed by Petitioner’s director of nursing to say that she had used a Hoyer Lift to
transfer Resident # 4 despite the fact that she denied using that device. Id.

The inference that I draw from Petitioner’s management’s response to the information
that it received about Resident # 4’s injuries was that it was at best indifferent to the very
real possibility that neglect or abuse might have been the cause of those injuries.
Management failed to react meaningfully to initial reports about the resident’s injuries. It
waited ten days to report the injuries to responsible physicians and it failed to organize an
extensive or in-depth investigation into the injuries’ cause. It advanced a couple of
theories as to the cause of the bruising but these theories either led to no dispositive
findings (the possibility of a blood disorder causing the bruising) or were not fact-based
(that a botched Hoyer Lift transfer caused the bruising). And, Petitioner failed to follow
up at all when these theories proved to be baseless.

CMS alleges that Petitioner failed to comply substantially with several regulations that
govern skilled nursing facilities’ participation in the Medicare program. These
regulations are: 42 C.F.R. §§ 483.13(c)(1)(ii) — (iii), (c)(2) — (4) (describing a skilled
nursing facility’s duty to report and investigate allegations of abuse); 483.13(c) (imposing

on a skilled nursing facility the duty to implement policies and procedures to prevent
neglect and abuse of residents); and 483.75 (requiring a skilled nursing facility to 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 of its residents). The facts and evidence that I discuss above are ample support
for the conclusion that Petitioner contravened all or parts of these regulations.
Furthermore, the evidence establishes not to be clearly erroneous CMS’s determination
that Petitioner’s noncompliance with the regulations was so egregious as to constitute
immediate jeopardy for the facility’s residents.

A skilled nursing facility must: ensure that all allegations of neglect or abuse are
reported to appropriate authorities including the facility administration and relevant State
Agency; thoroughly investigate all allegations of abuse and neglect and prevent potential
abuse while an investigation is ongoing; and report the results of all investigations to the
facility administrator and appropriate State authorities within five days of the incident
prompting the investigation. 42 C.F.R. § 483.13(c)(2) — (4). Petitioner failed to comply
with any of these requirements.”

Petitioner violated the requirements of 42 C.F.R. § 483.13(c)(2) because it made no
report to the Texas State agency concerning the possibility that Resident # 4 had been
injured as a consequence of abuse or neglect. Petitioner did not make that notification
initially nor did it do so after it had communicated with the resident’s physician and its
medical director, both of whom opined that a report was appropriate.

In its defense Petitioner asserts that it made the “reasonable business and professional
conclusion that the bruising incident did not meet the guidelines for reporting accidents
and incidents to the state agency . .. .” Petitioner’s post-hearing brief at 8.5 However,

> CMS has not offered evidence to show that Petitioner failed to comply with subparts
(c)(1)(ii) and (iii) of 42 C.F.R. § 483.13. These subparts address a facility’s duties not to
employ individuals who have been found guilty of abusing, neglecting or mistreating
individuals and to report actions by a court of law against an employee that would show
unfitness for service on facility staff.

> Petitioner bases much of its defense on the testimony of one witness, Ms. Mardie Kay
Ellington, a nurse consultant hired by Petitioner as an expert. P. Ex. 44. I find her
testimony not to be credible. Ms. Ellington was not a witness to any of the events that are
at issue here. Rather, she reviewed some of the evidence in the case and pronounced
herself satisfied that Petitioner was compliant with regulatory requirements. That
testimony adds nothing to the case. More important, I find her opinions simply not
grounded in reality. Ms. Ellington opined, for example, that Petitioner adequately
investigated the possibility that Resident # 4 was abused, but the facts do not support that
conclusion in the least.
review of the evidence relied on by Petitioner for this assertion shows that its
management could not possibly have come up with a “reasonable business and
professional conclusion” because it did virtually nothing to identify the root cause of the
resident’s injuries.

Petitioner’s reasoning is essentially circular. It contends that it didn’t report the incident
because it didn’t perceive a need to report it. However, the evidence shows conclusively
that Petitioner’s management and staff never bothered to find out whether there was
abuse involving Resident # 4. The evidence supports a conclusion, rather, that
Petitioner’s management and staff blinded themselves to the possibility of abuse and then
relied on their failure to get to the bottom of the issue to justify their not reporting it.

Petitioner asserts that, among other things, its staff created a “Resident Accident or
Incident Report” that documented the injuries to Resident # 4. Petitioner’s post-hearing
brief at 7; CMS Ex. 26 at 178 — 79. But, this report is not a report of an investigation. To
call it cursory would be to understate the lack of information in the report. Although the
report documents that the resident was bruised it says nothing about the causes of the
bruises. There is no analysis at all of what happened and why.

Petitioner asserts also that it interviewed a “key nurse aide.” Petitioner’s post-hearing
brief at 7; CMS Ex. 26 at 182. That interview report, in its entirety, says this:

When getting... . [Resident # 4] up for a shower I noticed
multiple bruises under her arms and down the sides of her
back and breasts. I notified the nurse.

Id. That laconic statement is the sum and substance of the interviews that Petitioner
conducted with its staff. No attempt was made to ascertain what employees might have
interacted with Resident # 4 in the hours before she was found bruised. No dialogue took
place between Petitioner’s management and staff concerning the possible source or cause
of the resident’s injuries.

Any reasonable person considering the extent and severity of the resident’s bruises might
have thought of at least four possible causes for those bruises: (1) an underlying medical
condition; (2) an accidental injury such as a fall resulting from the resident’s lack of
stability or dementia; (3) an injury committed by staff inadvertently while providing care;
or (4) an injury caused by some deliberate and abusive action such as an assault. Each of
those possibilities raises a myriad of additional questions in turn. For example, when
considering the possibility of an assault, one would surely want to know who had access
— whether that person was another resident or a staff member — to Resident #4. An
investigator would want to know if anyone had animus towards the resident. He or she
would want to learn whether any staff member or another resident had a history of
abusive behavior. He or she would interview all people who potentially might have
interacted with the resident and all people who might have witnessed another person
interacting with the resident. And, all of that would be carefully and completely
documented.

Petitioner did none of that. Rather, its management conducted a cursory interview of one
staff member and that staff member was not asked about anything other than her
observation of the resident’s injuries.

Petitioner also asserts that its director of nursing determined that the bruising that was
sustained by Resident # 4 was caused during a transfer via a Hoyer Lift and that the
resident’s low hemoglobin and prothrombin time contributed to the bruising. Petitioner’s
post-hearing brief at 7. However, and as I have discussed, the evidence supports neither
of those conclusions. The credible evidence is that not only was a Hoyer Lift not used to
transfer Resident # 4, but also that staff told the director of nursing that they did not
transfer the resident via the lift. And, the credible evidence also supports the conclusion
that no underlying blood disorder contributed to the resident’s bruising.

Petitioner says that it took other actions such as amending the resident’s plan of care and
making follow-up assessments of the resident’s condition. Petitioner’s post-hearing brief
at 8. But these actions, whether or not they were necessary and/or beneficial, have
nothing to do with the need to report and investigate the possibility that the resident was
abused.

Petitioner violated the requirements of 42 C.F.R. § 483.13(c)(3) because it did not
thoroughly investigate the possibility that Resident # 4 was abused. I have discussed in
detail all of the failures by Petitioner’s management and staff to investigate the nature and
causes of Resident # 4’s bruising. In truth, Petitioner conducted not even a shadow of an
investigation. The evidence offered by CMS and Petitioner shows not even a cursory
review of the resident’s situation with the intent of either identifying whether the resident
had been abused or determining the source of abuse, if it occurred.

There were certainly multiple individuals — residents and staff — who had access to
Resident # 4 and who might have harmed her. Petitioner obtained a statement from only
one member of its staff and that statement didn’t even touch on the possibility of abuse.
Beyond that, Petitioner did nothing. And, even the care that it provided to the resident in
the wake of the discovery of her injuries was cursory and uncoordinated. Blood tests
were not ordered until four days after the bruises were discovered. X-rays weren’t
ordered until 11 days had transpired and then, on the order of a nurse practitioner and not
at the request of Petitioner’s management.

Petitioner hangs its defense here on its assertion that a CMS witness conceded at the
hearing that an investigation was conducted. Petitioner’s post-hearing brief at 9; see Tr.
at 89. But, the fact that someone on Petitioner’s staff is said to have conducted an
“investigation” (the term is undefined in the witness’ testimony) is meaningless. There is
no evidence to show that Petitioner conducted the thorough investigation that is
demanded by the regulation.

Petitioner violated the requirements of 42 C.F.R. § 483.13(c)(4) because it did not notify
State authorities of the results of any investigation that it conducted into the potential
abuse of Resident # 4. Of course, Petitioner did not conduct an investigation as is
mandated by regulation so it is axiomatic that it didn’t provide the State with the sort of
notification that is contemplated by the regulation.

The essential requirement of 42 C.F.R. § 483.13(c) is that a skilled nursing facility must
develop and implement policies and procedures that prohibit mistreatment, neglect, or
abuse of residents. CMS alleges, and the evidence supports the conclusion, that
Petitioner failed to implement its own anti-neglect and abuse policies in the case of
Resident # 4.

Petitioner’s policy concerning “accidents and incidents” consists of a two-page document
that incorporates by reference the abuse investigation standards of the Texas Department
of Aging and Disability Services. CMS Ex. 27 at 1. Those standards may be found at:

ttp://www.dads.state.tx.us/providers/communications/2006/letters/PL2006-43.pdf.

The standards include guidelines for reporting possible incidents of resident-to-resident
abuse but no guidelines that address specifically those incidents that might comprise
staff-to-resident abuse.* But, assuming that Petitioner intended these guidelines to cover
all forms of potential abuse, they require, at a minimum, that a facility report to State
authorities all incidents that require medical attention. They require that the facility
conduct and document a thorough investigation of each incident and develop a plan of
action designed to prevent recurrence.

Petitioner manifestly did not comply with these policies. The bruising sustained by
Resident # 4 required medical attention, even if Petitioner supplied that attention
belatedly. That triggered the necessity for reporting and conducting a thorough
investigation and Petitioner failed completely to perform either of these duties.

An implicit element of 42 C.F.R. § 483.13(c) is that a facility must train its staff
adequately so that policies respecting neglect and abuse may be implemented effectively.

* Tf Petitioner interprets these guidelines to apply only to resident-to-resident abuse, then
Petitioner would have had no policy in place to deal with possible staff-to-resident abuse
and that would be a regulatory violation. Moreover, Petitioner had no way of knowing
whether Resident # 4’s bruises resulted from resident-to-resident or staff-to-resident
abuse without thoroughly investigating the incident that led to the bruising.
Petitioner failed to provide meaningful training to its staff. There is no evidence to show
that several of Petitioner’s staff members ever received training about policies intended to
protect residents against neglect or abuse. CMS Br. at 14, citing CMS Ex. 13 at 1; P. Ex.
5 at 1—4; P. Ex. 7 at 1; P. Ex. 11; P. Ex. 12; P. Ex. 15; P. Ex. 16; P. Ex. 18. In response,
Petitioner contends that it provided training for all of its staff on such policies. It states
that three of Resident # 4’s caregivers signed acknowledgments confirming that they
received training on Petitioner’s prohibition of abuse policy and procedures. P. Ex. 5 at
1, 4. However, Petitioner only attaches signed acknowledgments from two of the three
caregivers it alleges signed the acknowledgments. The other exhibits Petitioner cites do
not show that staff were trained on these or related policies. Petitioner’s post-hearing
brief at 6, citing P. Ex. 7; P. Ex. 8 at 4; P. Ex. 9; P. Ex. 11; P. Ex. 12 (and P. Ex. 15); P.
Ex. 14; P. Ex. 16; P. Ex. 18; P. Ex. 44 at 2—3 97, 10. But, and as CMS points out,
Petitioner — its general assertions aside — did not offer proof that specific members of its
staff actually did receive training other than acknowledgments that for four individuals
(including two caregivers) the individuals were trained on the facility “Prohibition of
Abuse Policy and Procedure.” P. Ex. 5.

Petitioner violated the requirements of 42 C.F.R. § 483.75 because it was not effectively
and efficiently managed. That is evidenced by the failure of Petitioner’s director of
nursing to take any meaningful action to report and investigate the possibility of abuse
after Resident # 4’s bruising had been brought to his attention. The nursing director not
only failed to conduct a meaningful investigation but he developed a theory as to the
source of the resident’s injuries (botched use of a Hoyer Lift) that was unsupported by
any facts whatsoever. The failure of management to assure that the bruising of Resident
# 4 was reported, and its failure to assure that the resident’s treating physician and the
facility’s medical director were notified promptly, is an additional failure of management.

CMS determined all of the foregoing noncompliance to comprise immediate jeopardy for
Petitioner’s residents and it did so for good reasons. “Immediate jeopardy” is defined as
noncompliance that is so egregious as to cause or to be likely to cause serious injury,
harm, impairment, or death to one or more residents of a facility. Here, Resident #4
sustained a serious injury by any measure, sustaining massive bruising. However, it is
not the injury sustained by the resident that constitutes immediate jeopardy. It is the
probability that other residents might be injured similarly that comprises the jeopardy in
this case. Petitioner’s management and staff had no way of knowing — given their failure
to investigate the cause of Resident # 4’s bruising — whether the resident remained
vulnerable to some predatory or abusive individual. They had no way of knowing
whether other residents were similarly vulnerable. In looking the other way, management
and staff left the facility’s residents exposed to the real probability of serious harm.
Indeed, to this day no one has ever determined the source of Resident # 4’s injuries and
hence, there remains no assurance at Petitioner’s facility that the source of the injuries
has been identified and that recurrences can be prevented.
10

Petitioner asserts that CMS’s findings of immediate jeopardy are clearly erroneous.
According to Petitioner any regulatory violations that it committed were “technical
violation[s] at best ... .” Petitioner’s post-hearing brief at 14. But, it offers no evidence
to explain why its noncompliance was “technical” or that CMS’s findings were clearly
erroneous. Essentially, Petitioner argues that the Texas State agency did not make
findings of immediate jeopardy level noncompliance until about April 24, 2013, 12 days
after the bruising involving Resident # 4 was first reported within Petitioner’s staff. It
argues that, by then, the resident’s bruises were healing and that there had been no
recurrences. Therefore, according to Petitioner, any problems that might have occurred
were already in the past and could not be the basis for findings of immediate jeopardy.

But, and as I have observed, the bruising sustained by the resident is not the essential
element of immediate jeopardy. The immediate jeopardy in this case consists of
Petitioner’s cavalier failure to deal with the implications of the bruising and the
probability for new harm to Resident # 4 and to other residents caused by this failure.
Petitioner had no way of knowing whether an abusive individual lurked on its staff or
among its residents because it made no effort to find out whether that was so.
Consequently, Petitioner could not protect its residents because it did not know whether
there had been abuse and if so, what constituted its cause.

CMS imposed civil money penalties against Petitioner for immediate jeopardy level
noncompliance at $6,600 per day. It imposed non-immediate jeopardy level penalties of
$2,000 per day for the period after Petitioner abated its immediate jeopardy level
noncompliance but during which it remained out of compliance at a lower level than
immediate jeopardy. Petitioner has not challenged the duration of its noncompliance. In
other words, although it denies that it was noncompliant, it has not argued that if it was
noncompliant, it abated its noncompliance on a date that is earlier than CMS determined
that Petitioner attained compliance. Petitioner has challenged the dollar amount of the
penalties, arguing that the penalty amounts are arbitrary. Therefore, what remains to be
decided is whether the penalty amounts are reasonable.

I find that both the $6,600 per day immediate jeopardy level penalties and the $2,000 per
day non-immediate jeopardy level penalties are reasonable. They are amply justified by
the seriousness of Petitioner’s noncompliance and by Petitioner’s culpability.

Penalties for immediate jeopardy level noncompliance may be imposed in a range of
from $3,050 to $10,000 per day. Penalties for non-immediate jeopardy level
noncompliance may be imposed in a range of from $50 to $3,000 per day. 42 C.F.R. §
488.438(a)(1)(i), (ii). The determination of where within these ranges penalty amounts
should lie is not an exact science but it depends on weighing evidence that addresses
regulatory factors for determining penalty amounts set forth at 42 C.F.R. §§ 488.438(f)(1)
— (4) and 488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)). These
11

factors may include the seriousness of a facility’s noncompliance, its culpability for
noncompliance, its compliance history, and its financial condition.

I find the penalty amounts to be justified in this case for two reasons. First, Petitioner’s
noncompliance was extremely serious. The injuries sustained by Resident # 4 suggested
the reasonable possibility that she had been badly beaten by an abusive individual, either
a member of Petitioner’s staff or another resident. That possibility in turn raised the
frightening possibility that a predator was on the loose in Petitioner’s facility, an
individual who had shown the capacity to inflict grievous injuries on a demented and
helpless elderly woman and who might be in a position to do it again. Confronted with
that possibility, Petitioner’s management chose to do nothing. It made no effort to
conduct a meaningful investigation, failed to notify immediately the resident’s treating
physician and the facility’s medical director, failed to order medical tests immediately
that might have either revealed the true cause of the resident’s injuries or enabled
appropriate treatment of the injuries that she had sustained, and failed to notify State
authorities who, had they known, might have ordered or implemented protective
measures at Petitioner’s facility. Doing nothing meant that Resident # 4 and all other
residents of the facility were left unprotected, potentially additional victims to an un-
apprehended abuser.

Second, Petitioner’s culpability is especially high in this case because the injuries to
Resident # 4 were detected and reported immediately to management by Petitioner’s
staff. Management was on notice right away that something potentially very serious and
dangerous had happened on the premises. And, yet, management did nothing. It not only
ignored the very ominous evidence of potential abuse but it in effect directed the staff to
invent a story to explain the resident’s bruising — that the bruising was the consequence

of a botched Hoyer Lift transfer — that had no basis in fact and that management knew

ad no basis in fact. So, management not only ignored the possibility of abuse but it
attempted to cover up that possibility. All the while, Resident # 4 and other residents
were left unprotected.

Petitioner complains that CMS imposed the penalties without providing any meaningful
explanation or rationale. That is no defense because the evidence amply justifies the
penalties whether or not CMS provided a detailed explanation for its penalty
determination. However, CMS did provide Petitioner with the report of the survey that
led to the penalty determination and that survey report contains extensive explanation for
CMS’s findings. CMS Ex. 4.

Petitioner also asserts that penalties that CMS imposed based on findings of a survey
made after the events that are at issue here were rescinded as the consequence of an
independent dispute resolution proceeding (IDR). Evidently, it asserts that if those
penalties were found ultimately to be unjustified then so are the penalties that are at issue

12

ere. The findings that were rescinded at IDR are based on different evidence than that
which is at issue here and are, therefore, irrelevant.

Petitioner argues that its compliance history does not support the penalties that were
imposed, pointing out that the facility had not previously been penalized while managed
by Petitioner. That may be so, but the seriousness of Petitioner’s noncompliance and its
culpability are sufficient to justify the penalty amounts.

Finally, Petitioner complains that CMS failed to take into consideration Petitioner’s
financial condition in determining the penalty amounts. But, Petitioner has offered no
evidence to show that it lacks the wherewithal to pay the penalties that are at issue here.
CMS is not required to prove a negative. If Petitioner believed that its financial condition
made it impossible for it to pay the penalties that are at issue then it should have
presented evidence to prove that.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-0613)

Complainant
v.
Norbona LLC d/b/a Norbona Food Mart,

Respondent.

Docket No. C-14-1103

Decision No. CR3311

Date: July 28, 2014
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Norbona LLC d/b/a Norbona Food Mart, at 1921 33rd Street,
Everett, Washington 98201, and by filing a copy of the complaint with the Food and
Drug Administration’s (FDA) Division of Dockets Management. The complaint alleges
that Norbona Food Mart unlawfully sold cigarettes to minors, thereby violating the
Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140. CTP seeks to impose a $250 civil money
penalty against Respondent Norbona Food Mart.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on May 29, 2014, CTP served the
complaint on Respondent Norbona Food Mart by United Parcel Service. In the complaint
and accompanying cover letter, CTP explained that, within 30 days, Respondent should
pay the penalty, file an answer, or request an extension of time in which to file an answer.
CTP warned Respondent that, if it failed to take one of these actions within 30 days, the
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering it to pay the full amount of the proposed penalty.

Respondent Norbona Food Mart has neither filed an answer within the time prescribed,
nor requested an extension of time within which to file an answer. Pursuant to 21 C.F.R.
§ 17.11, Lassume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically:

e At Respondent’s business establishment, 3027 Broadway, Everett, Washington
98201, on May 15, 2013, at approximately 4:47 PM, an FDA-commissioned
inspector observed Respondent’s staff sell a package of Newport Box 100s
cigarettes to a person younger than 18 years of age;

e Ina warning letter issued on May 30, 2013, CTP informed Respondent of the
inspector’s observation from May 15, 2013, and that such an action violates
federal law, 21 C.F.R. § 1140.14(a). The letter further warned that if Respondent
failed to correct its violation, the FDA could impose a civil money penalty or take
other regulatory action;

e At Respondent’s business establishment, 3027 Broadway, Everett, Washington
98201, on September 13, 2013, at approximately 3:58 PM, FDA-commissioned
inspectors documented Respondent’s staff selling a package of Marlboro
cigarettes to a person younger than 18 years of age.

These facts establish Respondent’s liability 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.

21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). The
Secretary issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act. 21
U.S.C. § 387(a); see 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,229 (Mar. 10, 2010). Under
21 C.F.R. § 1140.14(a), no retailer may sell cigarettes or smokeless tobacco to any person
younger than 18 years of age.

A $250 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, | enter default judgment in the amount of $250 against Respondent
Norbona LLC d/b/a Norbona Food Mart. Pursuant to 21 C.F.R. § 17.11 (b), this order
becomes final and binding upon both parties after 30 days of the date of its issuance.

/s/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Debora Lynn Rivera,
(OI File No. H-13-40414-9),

Petitioner,
v.
The Inspector General.
Docket No. C-14-740
Decision No. CR3309

Date: July 23, 2014

DECISION

Petitioner, Debora Lynn Rivera, is excluded from participating in Medicare, Medicaid,
and all federal health care programs pursuant to section 1128(a)(1) of the Social Security
Act (Act) (42 U.S.C. § 1320a-7(a)(1)), effective January 20, 2014. There is a proper
basis for Petitioner’s exclusion based upon her conviction of a criminal offense related to
the delivery of an item or service under Medicare or a state health care program.
Petitioner’s exclusion for the minimum period of five years is mandatory pursuant to
section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).'

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after
the period of exclusion expires. Reinstatement is not automatic upon completion of the
period of exclusion.
I. Background

The Inspector General for the Department of Health and Human Services (I.G.) notified
Petitioner by letter dated December 31, 2013, that she was being excluded from
participation in Medicare, Medicaid, and all federal health care programs for a period of
five years. The I.G. cited section 1128(a)(1) of the Act as the basis for Petitioner’s
exclusion, and stated that the exclusion was based upon her conviction in the Suffolk
County Court of the State of New York, of a criminal offense related to the delivery of an
item or service under the Medicare or a state health care program. I.G. Exhibit (Ex.) 1.

Petitioner timely requested a hearing by letter dated February 16, 2014. The case was
assigned to me for hearing and decision on February 28, 2014. A telephone prehearing
conference was convened on March 13, 2014, the substance of which is memorialized in
my Prehearing Conference Order and Schedule for Filing Briefs and Documentary
Evidence (Prehearing Order) issued on that date.

The LG. filed a motion to dismiss or, in the alternative, a motion for summary judgment
and a brief in support of the motions (I.G. Br.) on April 11, 2014, with LG. exhibits (I.G.
Exs.) 1 through 5. Petitioner filed her opposition to the I.G.’s alternative motions on May
9, 2014 (P. Br.), with Petitioner’s exhibits (P. Exs.) 1 through 3. The I.G. filed a reply
brief on June 2, 2014 (LG. Reply) and I.G. Ex. 6. No objections have been made to my
consideration of I.G. Exs. | through 6 and P. Exs. 1 through 3, and they are admitted as
evidence.

II. Discussion
A. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights to a
hearing by an administrative law judge (ALJ) and judicial review of the final action of
the Secretary of Health and Human Services (the Secretary).

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation
in any federal health care program any individual convicted under federal or state law of
a criminal offense related to the delivery of an item or service under Medicare or a state
health care program. The Secretary has promulgated regulations implementing this
provision of the Act. 42 C.F.R. § 1001.101(a).”

? References are to the revision of the Code of Federal Regulations (C.F.R.) in effect at
the time of the I.G. action, unless otherwise indicated.
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act will be for a period of not less than five years. Pursuant to 42 C.F.R.
§ 1001.102(b), the period of exclusion may be extended based on the presence of
specified aggravating factors. Only if the aggravating factors justify an exclusion of
longer than five years are mitigating factors considered as a basis for reducing the period
of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence, and there may be no collateral
attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c), (d).
Petitioner bears the burden of proof and the burden of persuasion on any affirmative
defenses or mitigating factors, and the I.G. bears the burden on all other issues. 42
C.F.R. § 1005.15(b).

B. Issues

The Secretary has by regulation limited my scope of review to two issues:

Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs; and

Whether the length of the proposed exclusion is unreasonable.
42 CFR. § 1001.2007(a)(1).
C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold followed by the pertinent findings of fact and
analysis.

1. Petitioner’s request for hearing was timely and I have jurisdiction.

2. Summary judgment is appropriate in this case.*

> The I.G.’s motion to dismiss pursuant to 42 C.F.R. § 1005.2(e)(4) for failure to raise
any issue that may be properly addressed in a hearing is not well-founded. Raising an
issue that one must lose as a matter of law is not the same as failure to raise an issue that
may be properly addressed by the tribunal, which appears to be the intent of the
regulation. Further discussion is not required as the I.G. prevails on summary judgment.
There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction
pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to
reasonable notice and an opportunity for a hearing. The Secretary has provided by
regulation that a sanctioned party has the right to hearing before an ALJ, and both the
sanctioned party and the LG. have a right to participate in the hearing. 42 C.F.R.

§§ 1005.2-.3. Either or both parties may choose to waive appearance at an oral hearing
and to submit only documentary evidence and written argument for my consideration. 42
C.F.R. § 1005.6(b)(5). An ALJ may also resolve a case, in whole or in part, by summary
judgment. 42 C.F.R. § 1005.4(b)(12).

Summary judgment is appropriate, and no hearing is required where either: there are no
disputed issues of material fact and the only questions that must be decided involve
application of law to the undisputed facts; or the moving party prevails as a matter of law
even if all disputed facts are resolved in favor of the party against whom the motion is
made. A party opposing summary judgment must allege facts which, if true, would
refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. P. 56(c); Garden
City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. and Med. Ctr., DAB No. 1628,
at 3 (1997) (holding in-person hearing required where non-movant shows there are
material facts in dispute that require testimony); Thelma Walley, DAB No. 1367 (1992);
see also New Millennium CMHC, DAB CR672 (2000); New Life Plus Ctr., DAB CR700
(2000).

There are no genuine issues of material fact in dispute in this case. Petitioner does not
contest the authority of the I.G. to exclude her for five years. She also does not deny that
she was convicted as alleged by the LG. or that her conviction is a proper basis for her
exclusion. P. Br. at 1-2.* Petitioner does not dispute that her conviction subjects her to a
minimum period of exclusion of five years. Act § 1128(c)(3)(B); 42 C.F.R.

§ 1001.102(a). Petitioner challenges the effective date of her exclusion and argues that
the I.G.’s delay in effectuating her exclusion effectively extended her period of exclusion
beyond five years making the period of the exclusion unreasonable. P. Br. at 1-2. The
issues raised by Petitioner must be resolved against her as a matter of law. Accordingly,
summary judgment is appropriate.

* Petitioner did not number the pages in her brief. However, Petitioner’s brief consists of
seven pages, and I will refer to those pages in order as if marked 1through 7.
3. Petitioner’s exclusion is required by section 1128(a)(1) of the Act.

The LG. cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute provides:

(a) MANDATORY EXCLUSION. - The Secretary shall
exclude the following individuals and entities from
participation in any Federal health care program (as defined
in section 1128B(f)):

(1) Conviction of program-related crimes. — Any
individual or entity that has been convicted of a criminal
offense related to the delivery of an item or service under
title XVIII or under any State health care program.

Act § 1128(a)(1). Section 1128(a)(1) of the Act requires that the Secretary exclude from
participation in Medicare, Medicaid, and all federal health care programs, any individual
or entity: (1) convicted of a criminal offense; (2) where the offense is related to the
delivery of an item or service; and (3) the delivery of the item or service was under
Medicare or a state health care program. The definition of a “[s]tate health care program’
includes state Medicaid plans. Act § 1128(h) (42 U.S.C. § 1320a-7(h)).

On March 18, 2011, Petitioner, a licensed practical nurse in the State of New York, was
indicted by a grand jury in the County Court of the State of New York, Suffolk County,
of one count of grand larceny in the third degree and ten counts of offering a false
instrument for filing in the first degree. I.G. Ex. 2. The grand jury indictment alleged
that between September 11, 2006, and February 11, 2009, Petitioner submitted multiple
Medicaid claims to the State of New York that Petitioner knew contained false statements
and false information charging for nursing services that were never provided to the
Medicaid recipients. 1.G. Ex. 2. On April 9, 2012, Petitioner was convicted by a jury of
nine of the counts of offering a false instrument for filing in the first degree. I.G. Ex. 3;
P. Br. at 2. On June 4, 2012, Petitioner was sentenced to five years of probation and
ordered to pay restitution of $3,063. I.G. Exs. 3 and 5 at 10-11; P. Br. at 2. Petitioner
does not dispute any of the foregoing facts. There is no dispute that she was convicted
and that the conviction related to delivery of a health care item or service under the New
York Medicaid program. Petitioner concedes that her conviction subjects her to
exclusion pursuant to 1128(a)(1) of the Act. P. Br. at 1-2. Accordingly, I conclude that
all three elements of section 1128(a)(1) of the Act are met and there is a basis for
Petitioner’s exclusion.

4. The minimum period of exclusion under section 1128(a) is five
years. Act § 1128(c)(3)(B).
5. Petitioner’s exclusion for five years is not unreasonable as a matter
of law.

Petitioner does dispute that five years is the minimum period of exclusion authorized by
Congress for exclusions pursuant to section 1128(a). Act § 1128(c)(3)(B). Pursuant to
42 C.F.R. § 1001.2007(a)(2), when the I.G imposes an exclusion pursuant to section
1128(a) of the Act for only five years, there is no issue of whether or not the period is
unreasonable. Accordingly, I conclude that Petitioner’s exclusion for a period of five
years is not unreasonable as a matter of law.

However, Petitioner challenges the effective date of her exclusion arguing that the L.G.’s
delay in effectuating her exclusion effectively extended her period of exclusion beyond
five years making the period of the exclusion unreasonable. P. Br. at 1-2. Petitioner
argues that the I.G. was aware of her conviction as early as February 2013. P. Ex. 3. But
the I.G. waited 10 months, until December 31, 2013, before notifying her of the
exclusion, thereby delaying the running of the period of exclusion. I.G. Ex. 1; P. Br. at 3.
Petitioner claims that “there was no justification for [the] undue delay in imposing the
exclusion.” P. Br. at 3-4.

Petitioner acknowledges that the Departmental Appeals Board (Board) has consistently
held that an ALJ and the Board do not have jurisdiction to alter the effective date of an
exclusion. Petitioner requests that I reconsider the rationale underlying the prior
decisions of the Board and impose a rule of reasonableness.

Petitioner advocates for an interpretation that a period of exclusion should run from the
time of the criminal conviction or sentencing, or at latest, from the time the I.G. receives
notice of the conviction. P. Br. at 4. Petitioner requests that in this case I rule that the
five-year exclusion began on the June 4, 2012, the date of her sentencing, or February 25,
2013, the date Petitioner’s counsel sent a letter to the I.G. regarding Petitioner’s
exclusion. P. Br. at 6-7; P. Ex. 3.

Petitioner’s concern that the I.G. can effectively extend an exclusion by simply delaying
notification of the exclusion is not without some merit. However, the Act and regulations
are clear in this regard. The Act provides that an exclusion “shall be effective at such
time and upon such reasonable notice to the public and to the individual . . . excluded as
may be specified in regulations.” Act § 1128(c). The Secretary has provided by
regulation that exclusion is effective 20 days from the date of the I.G.’s written notice of
exclusion to the affected individual or entity. 42 C.F.R. § 1001.2002(b). It is
fundamental that I am bound to follow the Secretary’s regulations. 42 C.F.R.

§ 1005.4(c)(1). Furthermore, the Board has consistently held that the applicable statute
and regulations give an ALJ and the Board no authority to adjust the beginning date of an
exclusion period by ruling that the effective date was some date prior to 20 days
following the notice of exclusion. Randall Dean Hopp, DAB No. 2166, at 3 (2008); Lisa
Alice Gantt, DAB No. 2065, at 2-3 (2007); Thomas Edward Musial, R.Ph., DAB No.
1991 (2005), citing Douglas Schram, R.Ph., DAB No. 1372, at 11(1992) (“Neither the
ALJ nor this Board may change the beginning date of Petitioner’s exclusion.”); David D.
DeFries, DAB No.1317 (1992) (“The ALJ cannot . . . decide when [the exclusion] is to
begin.”); Richard D. Phillips, DAB No. 1279 (1991) (An ALJ does not have “discretion .
. . to adjust the effective date of an exclusion, which is set by regulation.”). The Board’s
rationale in its prior decisions is sound and Petitioner offers me no justification for a
departure. I conclude that I have no authority to change the effective date of Petitioner’s
exclusion as Petitioner requests. Accordingly, the effective date of Petitioner’s
mandatory exclusion is January 20, 2014, twenty days after the December 31, 2013, LG.
notice of exclusion. 42 C.F.R. § 1001.2002(b).

II. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all other federal health care programs for the minimum statutory period of
five years, effective January 20, 2014.

/s/
Keith W. Sickendick
Administrative Law Judge