Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Rafael Convalescent Hospital
(CCN: 05-5310),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-807
Decision No. CR2444

Date: October 6, 2011

DECISION

Petitioner, Rafael Convalescent Hospital (Petitioner or facility), is a long-term care
facility located in San Rafael, California, that participates in the Medicare program.
Based on a survey completed March 19, 2010, the Centers for Medicare and Medicaid
Services (CMS) determined that the facility was not in substantial compliance with
Medicare program requirements and imposed a civil money penalty of $1,650 per day for
67 days of noncompliance (March 19 — May 24, 2010), for a total penalty of $110,550.

Petitioner concedes that it was not in substantial compliance with all program
requirements, but challenges twelve of seventeen deficiencies, and argues that the penalty
imposed is not reasonable.'

For the reasons set forth below, I find that only a substantial penalty is likely to produce
corrective action that will endure, and I affirm, as reasonable, the $1,650 per day penalty.

' CMS cited an additional deficiency under 42 C.F.R. § 483.35(i) (Tag F341 — food
storage), which it has decided not to pursue.
I. Background

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

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

Here, following its March 19, 2010 recertification survey, CMS determined that the
facility was not in substantial compliance with multiple program requirements,
specifically:

42 C.F.R. § 483.10(b)(11) (Tag F157 -- notification of change);

© 42C.F.R. § 483.13(c) (Tags F225 and F226 -- staff treatment of residents;
abuse/neglect policies);

e 42 C.F.R. § 483.15(a) (Tag F241-- quality of life — dignity);
© 42C.F.R. § 483.15(e)(1) (Tag F246 -- reasonable accommodation);
© 42 C.F.R. § 483.15(h)(1) (Tag F252 -- sanitary and home-like environment);

e 42C.F.R. § 483.10(d) and 42 C.F.R. § 483.20(k) (Tag F280 -- comprehensive care
plans);?

© 42 C.F.R. § 483.25(h) (Tag F323 -- accident prevention);

© 42C.F.R. § 483.25(i) (Tag F325 -- nutrition);

* The statement of deficiencies cited these regulations incorrectly. CMS Ex. 1. All agree
that the above citations are correct. See Order Following Prehearing Conference at 2
(Jan. 26, 2011).
© 42C.F.R. § 483.25(1) (Tag F329 -- unnecessary drugs);

© 42 C.F.R. § 483.60(b), (d), and (e) (Tag F431 -- pharmacy services);
e 42 C.F.R. § 483.65 (Tag F441 -- infection control);

© 42 C.F.R. § 483.70(d)(1) and (d)(2) (Tag F461 -- resident rooms);

© 42C.F.R. § 483.75(i) (Tag F501 -- medical director/policies);

© 42 C.F.R. § 483.75(1)(1) (Tag F514 -- clinical records);

e 42 C.F.R. § 483.75(1)(3) (Tag F516 -- safeguarding records); and

e 42 C.F.R. § 483.75(m)(1) (Tag F517 -- emergency planning).

CMS Ex. 1. CMS subsequently determined that the facility returned to substantial
compliance on May 25, 2010. CMS Ex. 3.

CMS has imposed against the facility a CMP of $1,650 per day for 67 days (March 19 —
May 24, 2010), for a total CMP of $110,550.

Petitioner timely requested a hearing, challenging some of the deficiencies cited. As
discussed below, the facility did not challenge five of them, which are therefore final and
binding and provide a sufficient basis for imposing a penalty.

On May 2 and 3, 2011, I convened a hearing, via video teleconference, from the offices
of the Departmental Appeals Board in Washington, D.C. Counsel and witnesses
convened in San Francisco, California. Mr. Greg B. Sherman and Mr. Mark Reagan
appeared on behalf of Petitioner. Ms. Claire D. de Chazal and Mr. Michael Propst
appeared on behalf of CMS. I have admitted into evidence CMS Exhibits (CMS Exs.) 1-
36 and Petitioner’s Exhibits (P. Exs.) 1-7, 9-17, P. Ex. 18 pages 1-47, 59-67, 74, 76-84,
P. Exs. 19-20, and P. Exs. 22-48. Order Following Prehearing Conference (Jan. 26,
2011); Transcript (Tr.) at 5-6.

The parties have filed pre-hearing briefs (CMS Pre-Hrg. Br.; P. Pre-Hrg. Br.), post-
hearing briefs (CMS Post-Hrg. Br.; P. Post-Hrg. Br.), and reply briefs (CMS Reply; P.
Reply).
IL. Issues

Based on the uncontested deficiencies, there is no dispute that Petitioner was not in
substantial compliance with Medicare program requirements, and I must affirm a CMP of
at least $50/day.

The remaining issues are:

1. From March 19 through May 24, 2010, was the facility in substantial compliance
with the following Medicare program requirements:

42 C.F.R. § 483.15(a) — Tag F241 (quality of life — dignity);

42 C.F.R. § 483.15(e)(1) — Tag F246 (reasonable accommodation);

42 C.F.R. § 483.15(h)(1) — Tag F252 (sanitary and home-like environment);
42 C.F.R. § 483.25(h) — Tag F323 (accident prevention);

42 C.F.R. § 483.25(i) — Tag F325 (nutrition);

42 C.F.R. § 483.25(1) — Tag F329 (unnecessary drugs);

42 C.F.R. § 483.60(b), (d), and (e) — Tag F431 (pharmacy services);

42 C.F.R. § 483.65 — Tag F441 (infection control);

42 C.F.R. § 483.70(d)(1) and (d)(2) — Tag F461 (resident rooms);

42 C.F.R. § 483.75(i) — Tag F501 (medical director/policies);

42 C.F.R. § 483.75(1)(3) — Tag F516 (safeguarding records); and

42 C.F.R. § 483.75(m)(1) — Tag F517 (emergency planning).*

2. Is the CMP imposed — $1,650 per day — reasonable?

* Ultimately, I do not consider all of the contested deficiencies but make findings
sufficient to justify the penalty imposed. Senior Rehab. and Skilled Nursing Ctr., DAB
No. 2300 at 6 n.5 (2010), aff'd, Senior Rehab. and Skilled Nursing Ctr .v. HHS, 405 F.
App’x 820 (5th Cir. 2010).
III. Discussion

A. CMS’s unchallenged determinations that the facility was
not in substantial compliance with 42 C.F.R.

§§ 483.10(b)(11), 483.13(c), 483.20(k), and 483.75()(1) are
final and binding and justify a significant penalty. *

CMS’s findings of noncompliance that result in the imposition of a remedy are
considered initial determinations that an affected party, such as Petitioner, may appeal.
The regulations governing such actions dictate that CMS send notice of the initial
letermination to the affected party, setting forth the basis for and the effect of the
letermination, and the party’s right to a hearing. 42 C.F.R. §§ 498.20(a)(1), 498.3,
498.5. The affected party may then challenge the determination by filing a hearing
request within 60 days of its receiving the notice. 42 C.F.R. § 498.40. An initial
letermination is final and binding, unless reversed or modified by a hearing decision (or
under circumstances not applicable here). 42 C.F.R. § 498.20(b).

In this case, CMS sent the appropriate notice, and Petitioner requested a hearing. In both
its hearing request and other submissions, Petitioner challenges only some of the
leficiencies cited. See discussion below; P. Pre-Hrg. Br. at 2. CMS’s determinations
that the facility was not in substantial compliance with 42 C.F.R. §§ 483.10(b)(11) (Tag
F157), 483.13(c) (Tags F225 and F226), 483.10(d), and 483.20(k) (Tag F280), and
483.75(1)(1) (Tag F514) are therefore final and binding.

Because we have a final and binding determination that the facility was not in substantial
compliance, CMS has the discretion to impose one or more of the enforcement remedies
listed in 42 C.F.R. § 488.406, which include the per day CMP imposed here. Act

§ 1819(h); 42 C.F.R. § 488.402. So long as CMS has a basis for imposing a remedy, I
have no authority to review its determination to do so (42 C.F.R. § 488.438(e)), nor may I
review CMS’s choice of remedy. 42 C.F.R. § 488.438(a)(1)(ii).

Here, CMS has chosen a per day penalty, which, by law, must be at least $50 per day. 42
C.F.R. §§ 488.408(d)(1)(iii), 488.438(a)(1)(ii).

Because the quality of a facility’s noncompliance affects the amount of the CMP (see
penalty discussion below), I consider briefly the particulars of the uncontested
deficiencies.

* My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion
captions of this decision.
1. 42 C.F.R. § 483.10(b)(11). The facility must protect and promote the rights of each
resident. In this regard, it must immediately inform the resident, consult the resident’s
physician, and (if known) notify the resident’s legal representative, or interested family
member, when there is: a significant change in the resident’s physical, mental, or
psychosocial status (i.e., a deterioration in health, mental or psychosocial status in either
life-threatening conditions or clinical complications); or a need to alter treatment
significantly (i.e., a need to discontinue an existing form of treatment due to adverse
consequences or to commence a new form of treatment). 42 C.F.R. § 483.10(b)(11).

Resident 7 (R7) was an 82-year-old woman, who, with her husband, R26, was admitted
to the facility on September 2, 2008. She suffered from dementia, Parkinson’s Disease,
depression, diabetes with neurological manifestations, anemia, anorexia, and
hypertension. CMS Ex. 12 at 1, 11. To treat these conditions, her physician prescribed
multiple medications, including Aricept (used to treat symptoms of Alzheimer’s),
Remeron (an anti-depressant), metoprolol (a beta blocker), and Cozaar (an anti-
hypertensive). CMS Ex. 12 at 2, 27, 29, 32. In January and February 2010, R7
repeatedly refused to take her medications. According to CMS’s review of the
medication administration records, which Petitioner does not dispute, she refused to take
her noon, 2:00 p.m., 4:00 p.m., and 8:00 p.m. medications for nine days in January and
ten days in February. CMS Pre-Hrg. Br. at 9; CMS Post-Hrg. Br. at 2; CMS Ex. 1 at 7;
CMS Ex. 12 at 27-48; see CMS Ex. 35 at 2, 3 (Boggs Decl. {§ 9, 11) (explaining that,
according to standard nursing practice, a nurse circles her initials on the medication sheet
to signify that the resident did not take the prescribed dose).

The facility did not tell R7’s physician about this significant, and potentially dangerous,
change in her status, much less consult him about any potential treatment changes or
interventions that he might order to address the situation. This failure put the facility out
of substantial compliance with 42 C.F.R. § 483.10(b)(11).

2. 42 C.F.R. § 483.13(c). Facilities must develop and implement written policies and
procedures that prohibit resident neglect. 42 C.F.R. § 483.13(c). “Neglect” means
failure to provide goods and services necessary to avoid physical harm, mental anguish,
or mental illness. 42 C.F.R. § 488.301. See Jennifer Matthew Nursing & Rehab. Ctr.,
DAB No. 2192 at 19 (2008). Among other requirements, the facility must ensure that all
alleged violations involving neglect are “reported immediately” to the facility’s
administrator and to the appropriate state officials. 42 C.F.R. § 483.13(c)(2). It must
have evidence that all alleged violations are thoroughly investigated, and the results of
any investigation must be reported to the administrator, or his designee, and to the
appropriate state officials within five working days of the incident. 42 C.F.R.

§ 483.13(c)(3), (4).

The facility had in place a written policy for reporting and investigating abuse.
Consistent with the regulation, it required staff to report to the appropriate state agencies
“{alll alleged/suspected violations.” CMS Ex. 29 at 3. The policy mandated that all staff,
consultants, family members, attending physicians, visitors, and others “promptly report
any incident or suspected incident of neglect or resident abuse, including injuries of an
unknown source” to the administrator or his designee. CMS Ex. 29 at 10. The policy
also directed the facility administrator, or his designee, to appoint an individual to
investigate any “incident or suspected incident of resident abuse, neglect, injury of an
unknown source, resident-to-resident abuse, and/or resident-to-staff abuse.” CMS Ex. 29
at 4. The policy directed the investigator to review the resident’s medical record and to
interview those involved, including the resident (as appropriate), the person reporting the
incident, all witnesses, the resident’s attending physician (as appropriate), family, staff
and visitors who had contact with the resident during the 48 hours prior to the incident,
the accused, and others. All witness interviews had to be written up, signed, and dated by
the witness. The investigator had to compile a written report, and the administrator had
to provide a copy of that report to the appropriate state agencies. CMS Ex. 29 at 4-5.

Even though multiple incidents of alleged abuse and injuries of unknown origin occurred
at the facility, staff did not report them to the facility administrator; no one investigated
as required, and the facility did not report the incidents to the appropriate state agency.
CMS Ex. 34 at 2-3 (Pochini Decl. 9, 10, 12). In fact, the facility’s abuse coordinator,
Assistant Director of Nursing (ADON), Abshalom Jacob (also referred to as Management
Staff A), told Surveyor Peggy Pochini that no allegations had been reported to the state
agency for an entire year (since March 2009). CMS Ex. 34 at 2 (Pochini Decl. § 9);
CMS Ex. 23 at 23-24; CMS Post-Hrg. Br. at 2.

Below, I discuss in greater detail the instances in which R26 physically and verbally
abused his wife (R7). While Petitioner maintains that it otherwise responded
appropriately to R26’s actions, it admits that it neither formally investigated nor reported
these incidents of spousal abuse. Nurses’ notes establish that, on October 2, 2009,
October 4, 2009, October 25, 2009, and January 6, 2010, R26 likely abused his wife.
Indeed, on January 6, a nurse wrote that she witnessed him hitting and verbally abusing
her. CMS Ex. 12 at 13, 15, 18-19; CMS Ex. 21 at 15, 17. Yet, the abuse coordinator did
not implement any of the required interventions. Nor did he report the incidents to the
appropriate state agency. CMS Post-Hrg. Br. at 2; CMS Ex. 23 at 15; CMS Ex. 34 at 2-3
(Pochini Decl. §¥ 9, 10).

I find these failures to investigate and report particularly disturbing because they are not
simply attributable to the errors of low-level staff but involve management failings. Both
ADON Jacob and Unit I Manager, June McLanahan, R.N. (who supervised the staff on
R7’s unit), knew of alleged abuse and failed to follow the facility’s anti-neglect policies.
Unit Manager McLanahan specifically admits knowing about the January 6 incident and
describes some interventions, but she does not claim to have implemented any of the
facility’s anti-neglect policies. In fact, she does not mention those policies. P. Ex. 33 at
1-3. (McLanahan Decl. ff 1, 2, 7, 9, 11, 14). Similarly, ADON Jacob’s testimony leaves
no doubt that he was fully aware of the dangerous behaviors, particularly the October 25
incident. He claims, vaguely, that he “spoke with the two residents,” and he “spoke with
staff.” But he does not mention the facility’s anti-neglect policies. Tr. at 154-56; see P.

Ex. 27 at 1-2 (Jacob Decl. § 4, 6, 7).

CMS cites additional incidents involving other residents. Both R1 and R13 suffered
injuries of unknown origin. The facility neither investigated nor reported them. CMS
Ex. 23 at 24; CMS Ex. 34 at 3 (Pochini Decl. { 12).

Thus, the undisputed evidence establishes that the facility repeatedly failed to implement
its policies and procedures for prohibiting resident neglect, in violation of 42 C.F.R.
§ 483.13(c).

3. 42 C.F.R. § 483.20(k). The facility must develop a comprehensive care plan for each
resident to meet the resident’s medical, nursing, mental, and psychosocial needs that are
identified in the resident’s comprehensive assessment. The plan must be prepared by an
interdisciplinary team that includes the attending physician, a registered nurse responsible
for the resident, and other appropriate staff, depending on the resident’s needs. The plan
must be reviewed and revised after each assessment.

R7’s care plan identified as a problem that her medical conditions required multiple
medications. According to the plan, her interdisciplinary team would perform a
medication review at each care conference and whenever a significant change of
condition occurred. Medication issues affecting her care were to be “identified and
resolved” as the need arose. CMS Ex. 12 at 22.

As discussed above, R7 began refusing her medications in January 2010. Facility staff
completed R7’s quarterly assessment on February 16, 2010, and her care planning
conference occurred on February 23. CMS Ex. 12 at 4, 5, 8. Yet, the responsible
registered nurse, Unit Manager McLanahan, did not even know that R7 had been refusing
medications. CMS Ex. 12 at 4, 8. The interdisciplinary team did not identify the
problem and, instead, wrongly concluded that there had been no significant change. They
made no changes to R7’s care plan. In fact, the team specifically noted that R7 had a
positive response to an increased dosage of Remeron (up from 15 to 30 mg. at bedtime),
which she took for “depression [manifested by] poor appetite.” CMS Ex. 12 at 4,31. Of
course, she repeatedly had been refusing her Remeron and was eating less. CMS Ex. 12
at 27, 28, 31. And, according to her quarterly assessment, her weight had dropped from
122 to 115 pounds since August 2009. CMS Ex. 12 at 6.

The interdisciplinary team considered none of these problems and did not revise R7’s
care plan to address the medication issue or the weight loss. CMS Ex. 12 at 6; CMS Ex.
35 at 5 (Boggs Decl. 4 26). It was therefore not in substantial compliance with 42 C.F.R.
§ 483.20(k).
4. 42 C.F.R. § 483.75(1)(1). The facility must maintain clinical records on each resident,
in accordance with accepted professional standards and practices that are complete,
accurate, readily accessible, and systematically organized.

R22 was admitted to the facility on January 25, 2010, following knee surgery. CMS Ex.
18 at 8. Her physician ordered stitches removed in two weeks (by February 8, 2010).
CMS Ex. 18 at 6. But her records did not indicate where the stitches were located or
whether they had been removed. CMS Ex. 18 at 4; CMS Ex. 36 at 3-4 (Carnahan Decl.

418).

R23 was admitted to the facility on March 4, 2010, but her clinical record did not include
an admission care plan, which should have been completed within a week of her
admission. CMS Ex. 19 at 4; CMS Ex. 36 at 3-4 (Carnahan Decl. § 18).

B. The facility was not in substantial compliance with 42
CF.R. § 483.25(h) because it did not provide R7 and R26
the supervision they needed to meet their needs and mitigate
foreseeable risks of harm from accidents.

Regulatory requirements. Under the statute and the “quality-of-care” regulation, each
resident must receive, and the facility must provide, the necessary care and services to
allow a resident to attain or maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the his/her comprehensive assessment and
plan of care. To this end, the regulation mandates that the facility “ensure” that each
resident’s environment remains as free of accident hazards as possible. 42 C.F.R.

§ 483.25(h)(1). It must “take reasonable steps to ensure that a resident receives
supervision and assistance devices designed to meet his assessed needs and to mitigate
foreseeable risks of harm from accidents.” Briarwood Nursing Ctr., DAB No. 2115 at 5
(2007); Guardian Health Care Ctr., DAB No. 1943, at 18 (2004) (citing 42 C.F.R.

§ 483.25(h)(2)). The facility must anticipate what accidents might befall a resident and
take steps to prevent them. A facility is permitted the flexibility to choose the methods it
uses to prevent accidents, but the chosen methods must constitute an “adequate” level of
supervision under all the circumstances. Briarwood, DAB No. 2115 at 5; Windsor
Health Care Ctr., DAB No. 1902 at 5 (2003); see Burton Health Care Ctr., DAB No.
2051 at 9 (2006) (holding that determining whether supervision/assistive devices are
adequate for a particular resident “depends on the resident’s ability to protect himself
from harm’).

As a threshold matter, the facility’s undisputed failure to follow its own protocols for
preventing neglect means that the facility was not taking reasonable steps to protect its
residents from harm. I may reasonably rely on the facility’s protocol as evidence of

professional standards of quality, as well as the facility’s “own judgment as to what must
be done to attain or maintain its residents’ highest practicable physical, mental and
10

psychosocial well-being, as required by section 483.25.” Agape Rehab. of Rock Hill,
DAB No. 2411 at 7, 18 (2011); Senior Rehab. and Skilled Nursing Ctr., DAB No. 2300
(2010), aff'd, Senior Rehab. and Skilled Nursing Ctr. v. 405 F. App’x 820 (5th Cir.
2010) (quoting Sheridan Health Care Ctr., DAB No. 2178 at 15 (2008)); Spring
Meadows Health Care Ctr., DAB No. 1966 at 18 (2005) (holding that “it is reasonable to
presume that the facility’s policy reflects professional standards of quality, absent
convincing evidence to the contrary”).

Moreover, by not investigating R7’s “falls” and other allegations of abuse, the facility
lost the opportunity to analyze and correct its problems, which also put it out of
substantial compliance with 42 C.F.R. § 483.25(h). Century Care of Crystal Coast, DAB
No. 2076 at 21 (2007), aff'd, No. 07-1491, 2008 WL 2385505 (4th Cir. 2008).

The facility violated the quality-of-care regulation in other respects. As noted above, R7
and R26 were admitted to the facility on September 2, 2008. R26 suffered from
Alzheimer’s Disease, and staff subsequently identified him as physically aggressive,
making sexual advances, striking out at caregivers, and using foul language. CMS. Ex.
21 at 5; P. Ex. 25 at 2, 3.

From the time of their admission, R7 and R26 shared a bed, apparently at the insistence
of family members. P. Ex. 35 at 1 (Lair Decl. 4 5).

At 1:30 a.m. on October 2, 2009, staff found R7 on the floor of their room, her arm
hanging through the bed’s side rail. When questioned, R7 said, “he pushed me out.”
When R26 denied it, she called him a liar. CMS Ex. 12 at 13-14, 25; CMS Ex. 21 at 17;
P. Ex. 24 at 12; see CMS Ex. 21 at 5 (noting the facility’s social worker reported that the
“resident had episodes of pushing his wife out of their bed”).

A staff member, named Juanita Pfeiffer, completed a document called a “Post Fall
Assessment.” It reiterates that R7 was “found on floor” with her arm through the side rail
and describes her as “very verbal [and] angry [and] a little afraid.” The assessment says
that “husband is the factor. He seems in punishing mode now.” The document also says
that R7 sleeps heavily but that her husband awakens her off and on. It notes that R26
removes and hides the bed alarm. The document contains no real recommendations to
prevent further falls but, instead, concludes with “[R7] is angry [and] afraid that it will
happen again. He laughed when I told they may be separated.” P. Ex. 24 at 12.

A nurse’s note, written at 6:30 a.m. on October 2, says that staff checked on the residents
hourly, apparently over the five hours between 1:30 and 6:30 a.m. CMS Ex. 12 at 14.
According to Diana Ingram, R.N., a nurse consultant who has no personal knowledge of
these events but reviewed certain materials, “[t]he care plan was updated to show that
Resident 7 would be checked frequently and that the family and physician would be
notified.” P. Ex. 38 at 4 (Ingram Decl. § 11). But R7’s care plan is in the record, and no
11

changes were made to it between August 5, 2009 and October 24, 2009. P. Ex. 24 at 1-2;
Tr. at 268.

It appears that Nurse Consultant Ingram was not referring to an actual care plan, but
something she later characterized as a “‘short term care plan” calling for frequent checks.
Tr. at 269-74. Petitioner submitted no such document, and no facility employee
explained or even referred to it, much less claimed to have followed it. See P. Exs. 27
(Jacob Decl.), 28 (Gendelman Decl.), 30 (Seamus Egan Decl.), 31 (Tim Egan Decl.), 33
(McLanahan Decl.), 40 (Bokarius Decl.), 41 (Adelstein Decl.). Nurse Consultant
Ingram’s description of the document is also confusing. In her written declaration, she
mis-identified it as a care plan, and, under cross-examination, she conveyed only that the
document said, “under October an ‘Fall, husband pushed me out’” and “Monitor
something times 72 hours. It could be a V — I can’t read that — or it could be Q shift.” Tr.
at 270-71.

On October 4, 2009, staff again found R7 on the floor, and she again said that her
husband had pushed her out of bed. CMS Ex. 12 at 15, 25; CMS Ex. 21 at 5. A staff
member partially filled out another Post Fall Assessment form, which did not describe the
incident but recommended separate beds. P. Ex. 24 at 13. According to the social
worker’s notes, she and Unit I Manager McLanahan met with the residents’ daughters on
the afternoon of October 5, 2009, to discuss putting the residents in separate beds. CMS
Ex. 12 at 25-26. A nursing note dated October 7 indicates that R7 was given a separate
bed (“kept safe and comfortable in her own bed”), and a note dated October 8 quotes her
saying that she liked her new bed. CMS Ex. 12 at 17. A social worker’s note dated
October 7 confirms that the residents “now sleep in separate beds.” CMS Ex. 12 at 26.

A nurse’s note dated October 25 describes R7 as “visibly shaking [and] crying, refusing
to go to dining room to eat lunch [with] husband.” She said that her husband beat her
under the table and cursed at her in front of everyone in the dining room. Although staff
attempted to feed her at the nurses’ station, she refused to eat. CMS Ex. 12 at 18-19. I
note that, in describing this incident, Unit Manager McLanahan omits any reference to
R7’s shaking and crying and accusing her husband of beating her, stating that R26
“upset” R7 who “expressed that she did not want to eat lunch” with him. P. Ex. 33 at 2
(McLanahan Decl. § 11). Such selective testimony does not enhance a witness’s
credibility.

ADON Jacob testified that, after this incident, he met with both residents and then spoke
to his unit manager and director of staff development, telling them to “speak to staff
about what’s acceptable and what’s not acceptable.” Tr. at 155. No records were kept of
these encounters, which he characterizes as “informal.” ADON Jacob is vague as to the
content of the “informal” instructions. Unit Manager McLanahan describes telling staff
that the couple “needed to be closely supervised and separated when they verbalized or
otherwise expressed that they were annoyed with each other,” but “the mere fact that they
12

were arguing did not necessarily require separation.” P. Ex. 33 at 2 (McLanahan Decl. §
12). Ido not consider such conversations with unidentified staff adequate to address the
problem of spousal abuse.

Unit Manager McLanahan also claims that the facility’s “administration considered and
rejected the idea of preventing the residents from eating together” but “determined that
the residents would need to be supervised when they ate together and separated when
there] were verbal or other cues that indicated that the residents needed to be separated.”
P. Ex. 33 at 2-3 (McLanahan Decl. 13).

Petitioner also suggests that R7 may have been delusional because she later accused staff
of swearing at her. P. Post-Hrg. Br. at 4. Inasmuch as the facility did not investigate

R7’s October 25 allegations against R26 or her later allegations against staff, it is not ina
position to challenge the veracity of her allegations on either occasion. In any event, the
charge that her husband beat her had to be taken seriously. R26 had demonstrated
aggression toward his wife and others. At a minimum, R7’s complaints put the facility
on notice that the couple needed especially close supervision. When eating together, staff
needed to pay special attention to ensure that he was not assaulting her under the table.

Nurse Practitioner Susan Degutes, who worked with R26’s attending physician, assessed
R26 on October 30, 2009. Remarkably, facility nursing staff did not tell her about the
incidents of October 2, 4, and 25. They said R26 was “doing ok” and that he and his wife
were in single beds in the same room. P. Ex. 25 at 3; Tr. at 143-44. According to
Petitioner’s consultant, Psychiatrist Vladimir Bokarius, these omissions were justified
because the nurse practitioner should confine herself to her “physical health assessment;”
she “is nothing to do with psychology, nothing to do with psychiatry and very little to do
with behavior so it’s actually great for her to write a note like that,” but “it’s not in the
realm of her profession.” Tr. at 146. I reject this remarkable opinion. Staff should
immediately have consulted the attending physician (which includes his nurse
practitioner) following each of the incidents. 42 C.F.R. § 483.10(b)(11). I find no
justification for its misleading her in this way. R26 had recently behaved in an
aggressive and dangerous manner (to himself as well as his wife); he was not “doing ok.”

At 3:00 a.m. on January 6, 2010, a nurse heard R26’s bed alarm and witnessed him
“hitting his wife in bed” and verbally abusing her. CMS Ex. 21 at 15. The nurse wrote
that she separated the residents, monitored them the rest of the night, and reported the
incident to the AM nurse. CMS Ex. 21 at 15.

This was a very serious incident that was again not properly investigated or reported.
Unit Manager McLanahan suggests that she learned that something happened on January
6, although she again mischaracterizes the incident, claiming that “the residents were
arguing and the facility acted to separate them.” She says that she “spoke with [R26],”
reminding him to respect his wife. P. Ex. 33 at 3 (McLanahan Decl. 14). She
13

apparently did not document the conversation. ADON Jacob does not even mention the
incident.

A Resident Care Conference Summary, dated March 9, 2010, says that R7 “expressed
“she wants to be in a room without him’” and that the facility planned to move R26 to
another unit because of his behavior against his spouse. CMS Ex. 21 at 9.

A nursing note, dated March 13, says that R26 visited his wife in the dining room that
morning and “became loud [and] aggressive with her.” She asked to return to her room
because she was not feeling well. CMS Ex. 21 at 13.

Finally, Surveyor Karen Boggs testified, credibly, that she observed R26 “hitting or
tapping [R7’s] legs during dinner on March 17, 2010.” Staff neither responded nor
intervened. CMS Ex. 35 at 3 (Boggs Decl. J 16); Tr. at 113-14. In fact, Surveyor Boggs
did not see any staff member monitoring the couple’s behavior during dinner. Tr. at 115.
Petitioner challenges this testimony, but offers no reasonable argument or evidence to
undermine its reliability. Instead, Petitioner points to May 2010 entries in R7’s care plan,
which obviously did not even exist at the time of the survey. Petitioner also cites: a May
21, 2010 progress note that says that R7 likes to sit with her husband, but they have to be
supervised; a May 21, 2010 social worker progress note that says that R7 and R26 have
supervised visits; and a March 14, 2010 nursing note that says the residents had been in
the TV room together that morning. P. Ex. 24 at 8-10; CMS Ex. 21 at 13. From this
thinnest of evidence, Petitioner argues that, “[i]n light of this increased supervision,
Surveyor Boggs’ testimony that staff failed to observe Resident 26 ‘hitting’ or ‘tapping’
Resident 7’s leg strains credibility.” P. Post-Hrg. Br. at 7. None of these notes tell us
anything about what was happening at the dinner table on March 17.

Petitioner also argues that Surveyor Boggs’ testimony is inconsistent with the note she
wrote at the time she made the observation, which says that R26’s hand was in R7’s lap
during dinner. CMS Ex. 24 at 10. I agree that the surveyor’s testimony is more detailed
than her note, but I do not see them as inconsistent, and both establish that the surveyor
was specifically observing what went on between the two during dinner. No staff
member has come forward to claim responsibility for supervising the residents at meals
then, or any other time, from which I can reasonably infer that no staff member was
watching; only the surveyor was watching. Nor does Petitioner explain what procedures
it had in place to assure that staff were closely observing the couple during meals, which
suggests that it had no specific procedures in place.

Petitioner insists that the residents’ strongest desire was to stay together, so the facility
“was required to respect the right of the residents to share a room together,” at least until
March 9, 2010, when R7 “stated that she no longer wanted to share a room with her
husband.” P. Post-Hrg. Br. at 3 (emphasis in original). I do not see much support in R7’s
record for the proposition that she insisted on staying with her husband, and I am

14

concerned about what appear to be significant miscommunications to family as to the
seriousness of the incidents. According to the residents’ daughter, in late 2009, ADON
Jacob told her that the facility wanted her parents to have separate beds “because my
mother had fallen out of bed a few times.” P. Ex. 35 at 1 (Lair Decl. 4.6). This obviously
greatly misrepresents what occurred; her mother did not fall out of bed — she was pushed.
It seems that facility staff did not convey to the resident’s family the seriousness of the
situation or the dangers posed to R7 (and, for that matter, to R26, who might have
seriously injured his wife or himself). In any event, the residents’ daughter plainly did
not understand or accept that her father was repeatedly physically abusing her mother.

Accepting the proposition that the residents and/or their family insisted that they not be
separated makes it all the more critical that the facility develop and implement
interventions that would keep R7 safe while honoring the couples’ desire to stay together.
And the facility did not develop a coherent approach for ensuring that R7 would be safe.
At most, individual staff members instituted ad hoc and short-lived approaches.
Knowing that a husband is prone to physically abusing his wife, as the evidence
conclusively establishes here, the facility nevertheless regularly left them alone and
unsupervised. Ignoring its own protocols, it did not investigate; it did not report the
incidents; it did not alter the residents’ care plans. It was therefore not in substantial
compliance with 42 C.F.R. § 483.25(h).

C. The penalty imposed -- $1,650 per day -- is
reasonable.

To determine whether a CMP is reasonable, I apply the factors listed in 42 C.F.R.

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

I consider whether the evidence supports a finding that the amount of the CMP is at a
level reasonably related to an effort to produce corrective action by a provider with the
kind of deficiencies found, and in light of the section 488.438(f) factors. I am neither
bound to defer to CMS’s factual assertions nor free to make a wholly independent choice
of remedies without regard for CMS’s discretion. Barn Hill Care Ctr., DAB No. 1848 at
21 (2002); Cmty. Nursing Home, DAB No. 1807 at 22 et seg. (2002); Emerald Oaks,
DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1638 at 8 (1999).
15

Here, the penalty imposed -- $1,650 per day -- is in the middle of the penalty range ($50-
$3,000) for per-day CMPs where the facility’s deficiencies do not pose immediate
jeopardy to resident health and safety. 42 C.F.R. §§ 488.408(d), 488.438(a)(1).
Petitioner has a dismal compliance history. In every annual survey since April 2006, the
facility was out of substantial compliance with multiple program requirements. Indeed,
the sheer number of deficiencies cited every year, as well as the number of repeat
deficiencies, suggests a facility for which only a very significant penalty is likely to
produce much in the way of enduring corrective actions.

e In March 2009, the facility was not in substantial compliance with 13
requirements (10 health and 3 life safety code);

e In April 2008, 10 deficiencies were cited (7 health and 3 life safety code);
e In February 2007, 12 deficiencies were cited (7 health and 5 life safety code); and
e In April 2006, 11 deficiencies were cited (7 health and 4 life safety code).

CMS Ex. 9.°

Many of the deficiencies cited during the March 2010 survey had been cited in prior
years. Among them:

e Section 483.13(c) (Tag F226) (staff treatment of residents; abuse/neglect policies)
was cited in 2009 and 2008;

e Section 483.15(a) (Tag F241) (quality of life — dignity) was cited in 2007;
e Section 483.25(h) (Tag F323) (accident prevention) was cited in 2008 and 2009 at
the G level of scope and severity (isolated instance of actual harm that is not

immediate jeopardy);

e Section 483.25(1) (Tag F329) (unnecessary drugs) was cited in 2007;

* For each of these years, additional deficiencies were cited, but at scope and severity
levels B (pattern of noncompliance causing no actual harm with the potential for no more
than minimal harm) and C (widespread noncompliance causing no actual harm with the
potential for no more than minimal harm). Although the facility should correct its A, B,
and C level deficiencies, they do not constitute substantial noncompliance, so I do not
include them in my consideration of facility history.
16

e Sections 483.60(b),(d), and (e) (Tag F431) (pharmacy services) were cited in
2006, 2007, and 2009;

e Section 483.65 (Tag F441) (infection control) was cited in 2007 and 2009; and
© Section 483.75(m)(1) (Tag F517) (emergency planning) was cited in 2007.°

When Congress passed nursing home reform legislation in 1987, it expressed particular
concern about what it characterized as a “yo-yo or roller coaster phenomenon” — nursing
homes that were chronically out of compliance when surveyed, temporarily corrected
their deficiencies, but then lapsed into noncompliance.’ To prevent this, Congress gave
CMS the authority to impose significant penalties. But the penalty must not be “just
another cost of doing business”; particularly for facilities that display chronic
noncompliance, it must be significant enough to produce real and enduring corrections. I
do not know whether a penalty of $1,650 per day is sufficient to induce lasting
corrections for this chronically deficient facility. However, based on facility history
alone, it seems unlikely that any lower penalty would do so.

Petitioner does not claim that its financial condition affects its ability to pay the CMP.

With respect to the other factors, the facility’s failure to investigate or report any
incidents of suspected — and even verified — abuse is very serious and, by itself, justifies a
significant penalty. That professional staff knew about the alleged abuse but did not
report it to the administrator or to the state agency greatly increases the facility’s
culpability for the deficiencies cited under sections 483.13(c) and 483.25(h).

° I recognize that I have not reviewed all of these repeat citations. Based on the facility
history and other factors discussed here, I would find the penalty reasonable, even if I did
not consider that some of those deficiencies were repeated during the March 2010 survey.
CMS Ex. 9 at 1.

7 The House Report cited findings from the General Accounting Office that 41 percent of
skilled nursing facilities were, during three consecutive inspections, out of compliance
with requirements likely to affect patient health and safety. These skilled nursing
facilities were nevertheless able to remain in the program for years by making just
enough corrections to prevent termination whenever time they were caught. H.R. REP.
No. 100-391(I) (1987). The House Report also discussed a study by the Institute of
Medicine of the National Academy of Sciences, which found that large numbers of
nursing homes were “chronically out of compliance when surveyed, may or may not”
have been subject to mild sanctions, temporarily corrected their deficiencies under a plan
of correction, “and then quickly lapse[d] into noncompliance until the next annual
survey.” Id. at 471; see Heartland Manor at Carriage Town, DAB No. 1664 at 17
(1998).
17

I also found particularly disturbing staff’s failure to consult R7’s attending physician
when she began refusing her medications. Then, even though she was regularly refusing
the medication ordered to combat her anorexia and she had lost a significant amount of
weight, her interdisciplinary team did not identify a problem, much less revise her care
plan to address the medication issue or the weight loss. This demonstrates further
indifference and disregard for the resident’s care, comfort, and safety, for which the
facility is culpable.

IV. Conclusion

From March 19 through May 24, 2010, the facility was not in substantial compliance
with Medicare participation requirements, specifically 42 C.F.R. §§ 483.10(b)(11),
483.13(c), 483.20(k), 483.25(h), and 483.75(1)(1), and I affirm, as reasonable, the penalty
imposed.

/s/

Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Gregory J. Salko, M.D.,
(O.1. File Number 3-05-40539-9),
Petitioner
v.

The Inspector General.
Docket No. C-11-542
Decision No. CR2443

Date: October 5, 2011

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Gregory
J. Salko, M.D., from participating in Medicare and other federally funded health care
programs for a period of five years.

I. Background

Petitioner is a physician. The I.G. determined to exclude Petitioner from participating in
Medicare because he concluded that Petitioner was convicted of a criminal offense as is
described at section 1128(a)(1) of the Social Security Act (Act). This section mandates
the exclusion of anyone who is convicted of a criminal offense relating to the delivery of
an item or service under Medicare or a State health care (Medicaid) program.

Petitioner requested a hearing, and the case was assigned to me for a hearing and a
decision. The I.G. filed a brief, a reply brief, and five proposed exhibits that he identified
as I.G. Exhibit (Ex.) 1 —1.G. Ex. 5. Petitioner filed a brief and, with it, a collection of
documents that Petitioner did not mark or identify as proposed exhibits. For purposes of
the record, I am identifying these documents, collectively, as P. Ex. 1.
Neither the I.G. nor Petitioner requested that I convene an in-person hearing. Therefore, I
decide this case based on the parties’ submissions. I receive into the record I.G. Ex. 1 —
1.G. Ex. 5 and P. Ex. 1.

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

The issue in this case is whether the I.G. must exclude Petitioner from participating in
Medicare and other federally funded health care programs for a minimum period of five
years.

B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law.

1. Petitioner was convicted of a criminal offense as is described at
section 1128(a)(1) of the Act, and, therefore, the I.G. must exclude
him.

The undisputed facts of this case are that, on June 23, 2009, Petitioner pled guilty to the
federal crime of filing a false statement in a federal health care program (Medicare). I.G.
Ex. 2 at 1-2. Petitioner entered his guilty plea in response to a criminal information that
charged him with knowingly and willfully causing to be made a false representation of a
material fact for use in determining rights to a payment or benefit from Medicare. LG.
Ex. 3 at 1. Specifically, Petitioner was charged with, and pled guilty to, falsely
representing that he had examined a patient and making false statements about that
patient’s medical condition. Jd. at 1-2.

The undisputed facts describe a criminal offense related to the delivery of an item or
service under the Medicare program. There is no dispute that the patient whose care was
involved in Petitioner’s crime was a Medicare beneficiary. Nor is there any dispute that
Petitioner made a material misrepresentation of fact concerning the care that he had
provided to this patient in connection with the delivery of a Medicare item or service to
the patient.

The two necessary elements of Petitioner’s crime were: (1) making a false statement or
misrepresentation of a material fact; and (2) making that statement for use in determining
rights to a benefit or payment under Medicare, a federal health care program. I.G. Ex. 4
at 11-12. Petitioner’s crime is intimately related to the delivery of health care under the
Medicare program. Indeed, the care that Petitioner alleged that he provided to a
Medicare beneficiary was the essence of Petitioner’s crime. Petitioner would not have
committed the crime for which he was charged and pled guilty to had he not provided
care to a Medicare beneficiary and then made a material misrepresentation of fact about
that care for use in determining rights to a Medicare benefit or payment.

Petitioner asserts that there is no basis for the I.G. to exclude him. He contends that he
committed no crime that is related to the delivery of a Medicare item or service because
he never filed a reimbursement claim premised on the false representation that is the basis
for his conviction. However, actually filing a claim is not a prerequisite for committing a
program-related crime under section 1128(a)(1) of the Act. Petitioner admitted that he
made his misrepresentation for the purpose of determining rights to a benefit or a
payment under the Medicare program. That is all that is needed to establish that his
crime relates to a Medicare item or service. The fact that he never filed a claim for
benefits does not mean that his crime is unrelated to Medicare.

Additionally, Petitioner argues that his exclusion should not fall under the mandatory
exclusion requirements of section 1128(a)(1) of the Act because his conviction is of an
offense that is described under the permissive exclusion language of section 1128(b)(1)
of the Act. Section 1128(b)(1) of the Act permits the I.G. to exclude any individual who
is convicted of a misdemeanor offense relating to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct in connection with the delivery of
a health care item or service.

This argument has been addressed and rejected on innumerable occasions. The more
stringent mandatory exclusion language of section 1128(a)(1) of the Act plainly controls
the facts of this case. The facts of this case squarely fall within the reach of the
mandatory exclusion authority of section 1128(a)(1). The fact that Petitioner’s crime
may also fit within the less stringent discretionary authority of section 1128(b)(1) does
not exclude application of section 1128(a)(1) of the Act to the case.

Petitioner also appears to argue that he should not be excluded because the Centers for
Medicare and Medicaid Services (CMS) reviewed his case and determined not to revoke
his enrollment as a Medicare provider for a five-year period. Rather, CMS revoked his
enrollment only for a period of one year based on Petitioner’s failure to report his
criminal conviction to CMS. P. Ex. 1. Petitioner seems to contend that this
determination by CMS effectively immunizes him from exclusion by the I.G. for any
length of time that is greater than one year.

I disagree. Petitioner’s argument addresses authority vested in CMS that is independent
from that of the I.G. to revoke a provider’s enrollment status. For example, CMS may
revoke the enrollment of a provider who has been convicted of a felony that CMS
determines to be detrimental to the best interest of Medicare and its beneficiaries. 42
C.F.R. § 424.535(a)(3). CMS may also revoke a provider’s enrollment, pursuant to 42
C.F.R. §§ 424.535(a)(1) and 424.516(d)(1)(ii), where a provider fails to report to CMS
the occurrence of an adverse legal action. That independent authority — and the manner
in which CMS determines to exercise it — does not serve as a check or limitation on the
1.G.’s obligations under section 1128 of the Act. Even as CMS may function
independently to exercise its authority so also may, and in some circumstances must, the
1.G. exercise his own statutory authority.

As I discuss above, the exclusion authority under section 1128(a)(1) of the Act is
mandatory. The I.G. must exclude an individual who is convicted of a crime that falls
within the reach of that section. There is nothing in section 1128 of the Act, or in any
other section of the Act, that suggests that the I.G.’s authority is limited by additional,
discretionary authority conferred on CMS to revoke provider enrollment by other
sections of the Act or by implementing regulations. Therefore, the fact that CMS may
have exercised discretion not to revoke Petitioner’s enrollment for a period of time
greater than one year is of no significance here.

Finally, Petitioner argues that the I.G.’s exercise of his statutory authority violates the
United States Constitution. I have no authority to address that issue.

2. Petitioner’s exclusion is reasonable as a matter of law.

An exclusion that is imposed pursuant to section 1128(a)(1) of the Act must be for a
period of at least five years. Petitioner’s exclusion is reasonable as a matter of law,
inasmuch as the I.G. excluded him for the minimum period.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS DAB

Civil Remedies Division

Madison County Ambulance,
NPI No. 1740369784,

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-382
Decision No. CR2442
Date: October 4, 2011
DECISION

Petitioner filed a September 27, 2010 Medicare enrollment application for revalidation,
which the Centers for Medicare and Medicaid Services (CMS) denied. Petitioner now

appeals, and CMS moves for summary judgment. Petitioner has shown good cause for
filing an untimely hearing request; however, the undisputed facts compel the denial of

Petitioner’s enrollment application because Petitioner filed the application during a one
year reenrollment bar. Therefore, I grant CMS’s Motion for Summary Judgment.

I. Background

Cigna Government Services (Cigna), a Medicare contractor, sent a request to Petitioner
on October 14, 2009, directing Petitioner to submit a revalidation application within 60
days. CMS Ex. 1, at 23. Petitioner did not submit the revalidation application, which
resulted in the revocation of Petitioner’s billing privileges, effective April 4, 2010. CMS
Ex. 1, at 34. CMS imposed a one-year reenrollment bar so that Petitioner could not
reenroll in Medicare until April 4, 2011. Jd. at 34. Petitioner eventually filed an
interlocutory enrollment application for revalidation on September 27, 2010. CMS Ex. 2,
at 5,51. On October 14, 2010, Cigna denied Petitioner’s request to be enrolled in the
Medicare program because of the reenrollment bar. CMS Ex. 1, at 27-28. Petitioner
requested reconsideration, and Cigna issued an unfavorable reconsideration
determination to Petitioner on January 7, 2011 and informed Petitioner of its appeal
rights. Jd. at 3.

Petitioner’s hearing request to the Departmental Appeals Board (DAB) is dated February
9, 2011, but the DAB received it on April 8, 2011 by facsimile. The facsimile cover
sheet had a handwritten note on it from Petitioner’s billing agent stating “[w]e had
originally sent this appeal on 2-8-11 but your office doesn’t have any record of receiving
it.”

In response to Petitioner’s hearing request, this case was assigned to me for hearing and
decision. An Acknowledgment and Pre-hearing Order was sent to the parties on April 8,
2011. CMS filed a Motion for Summary Judgment accompanied by four exhibits, CMS
Exs. 1-4. Petitioner filed a response to CMS’s Motion for Summary Judgment
accompanied an affidavit from Mikel Walker, which I have labeled as Petitioner’s exhibit
1 (P. Ex. 1).

On August 1, 2011, I issued an Order to Show Cause because of my question about the
timeliness of Petitioner’s request for hearing. On August 11, 2011, Petitioner submitted
its response to the Order to Show Cause accompanied by an affidavit from its billing
agent and four exhibits, labeled A-D (P. Exs. A-D). On August 19, 2011, CMS
submitted its reply to Petitioner’s Response. I receive and admit all the exhibits into the
record of this case.

IL. Issues
The issues in this case are whether:

Petitioner’s hearing request must be dismissed as untimely under 42 C.F.R. §
498.70(c); and

CMS had a legitimate basis to deny Petitioner’s September 27, 2010 Medicare
enrollment application.
Ill. Findings of Fact, Conclusions of Law, and Supporting Discussion

My findings of fact and conclusions of law are set out as separate headings followed by
supporting discussion.
A, Good cause exists to extend the time for filing of Petitioner’s hearing
request.

1 initially questioned the timeliness of Petitioner’s hearing request. Clear authority
requires that Petitioner must file its request for hearing in writing within 60 days from
receipt of the notice of the reconsidered determination. 42 C.F.R. § 498.40(a)(2). The
“date of receipt will be presumed to be 5 days after the date on the notice unless there is a
showing that it was, in fact, received earlier or later.” 42 C.F.R. § 498.22(b)(3). If the
request for hearing was not filed within 60 days, the affected party must show good cause
as to why I should extend the time for filing a request for hearing. 42 C.F.R. § 498.40(c).
The number of days between the presumed date of the reconsideration decision, January
12, 2011, and the date of receipt of the request for hearing, April 8, 2011, is clearly more
than 60 days.

Petitioner contends that it prepared an appeal letter on February 9, 2011 to the DAB and
sent it by regular mail to the DAB’s address. As support, Petitioner provides an affidavit
from Petitioner’s billing agent, who avers that she personally prepared and mailed the
hearing request to the correct address. Further, Petitioner points to a stamp showing the
late March 4, 2011 on the bottom right corner of the copy of the hearing request, which
CMS provided in its exchange, and states that “[i]t appears to me that would be the date
the Department of Health and Human Services received the letter.” Affidavit of Brandy
Young; P. Ex. C; CMS Ex. 1, at 2. Petitioner contends that, when it had not heard from
the DAB about its hearing request, Petitioner contacted the DAB and was informed that
the February 9, 2011 hearing request had never been received. Petitioner reportedly
faxed the hearing request to the DAB immediately thereafter.

The date stamp Petitioner described was in fact on a proposed CMS exhibit provided with
CMS’s prehearing exchange. CMS did not deny stamping the document, and I have no
other reasonable explanation as to what other organization may have stamped it. I will
therefore infer that March 4, 2011 is the date that CMS received Petitioner’s hearing
request at CMS’s address. The hearing request, therefore, would have been timely filed
had Petitioner sent the hearing request to the correct DAB address or if CMS had
properly forwarded the hearing request to the DAB. I find it likely that CMS did not
forward the request to the DAB because it simply believed it was a courtesy copy, even
ough it was not notated as such. Because Petitioner apparently did send a timely
written request for hearing to CMS, I will find good cause to allow an untimely hearing
request pursuant to 42 C.F.R. § 489.40(c)(2).

ct

B. This case is appropriate for summary judgment.

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

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (citations omitted). An
Administrative Law Judge’s (ALJ’s) role in deciding a summary judgment motion differs
from its role in resolving a case after a hearing. The ALJ should not assess credibility or
evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre Dame, Inc, DAB
No. 2291 at 5 (2009). The Board has further stated, “[i]n addition, it is appropriate for
the tribunal to consider whether a rational trier of fact could regard the parties’
presentation as sufficient to meet their evidentiary burden under the relevant substantive
law.” Dumas Nursing and Rehab., L.P., DAB No. 2347, at 5 (2010).

CMS argues that it is entitled to summary judgment because there “are no material facts
in dispute.” CMS Br. at 13. Petitioner has not disputed the material facts in this case,
specifically, that Petitioner never requested a reconsideration decision from its revocation
and reenrollment bar effective April 4, 2010 — April 4, 2011. Therefore, the revocation
and reenrollment bar became the final Agency decision after the time period to request a
reconsideration decision expired. Further, Petitioner does not dispute that it filed its
September 27, 2010 enrollment application during this reenrollment bar. Therefore,
summary judgment in favor of CMS is appropriate.

C. CMS’s prior determination, to revoke Petitioner’ s Medicare billing
privileges and to impose a one-year bar on reenrollment, became final and is not
the subject of this appeal.

To maintain Medicare billing privileges, a supplier must resubmit and recertify the
accuracy of its enrollment information every five years. 42 C.F.R. § 424.515. CMS also
reserves the right to perform off-cycle revalidations or to adjust the five-year revalidation
schedule. 42 C.F.R. § 424.515(d)(1)-(2). A carrier, such as Cigna, may request that an
ambulance supplier complete and return the CMS designated ambulance supplier form
and provide the carrier with documentation of compliance with emergency vehicle and
staff licensure and certification requirements in accordance with State and local laws. 42
CFR. § 410.41(c)(2).

A supplier must furnish complete and accurate information, and all supporting
documentation, within 60 calendar days of receiving notice from CMS to submit an
enrollment application. 42 C.F.R. § 424.535(a)(6). CMS can revoke a currently enrolled
supplier’s Medicare billing privileges and supplier agreement if the supplier fails to
provide complete and accurate information and all supporting documentation within 60
calendar days of receiving CMS’s notification to submit or resubmit and certify the
accuracy of its enrollment certification. Jd. Revocation becomes effective 30 days after
CMS or its contractor mails the notice of its determination to the supplier. 42 C.F.R. §
424.535(g). Depending of the severity of the revocation, a supplier is subject to a
reenrollment bar that is a minimum of one year, but not greater than three years. 42
C.F.R. § 424.535(c).

Petitioner had previously been enrolled in the Medicare program since 1993. CMS sent
Petitioner an enrollment revalidation request on October 14, 2009. CMS Ex. 1, at 23.
Petitioner was required to submit a Medicare enrollment application and all supporting
documentation within 60 calendar days of the October 14, 2009 letter. The October 14,
2009 letter informed Petitioner that “[fJailure to submit a complete application and all
supporting documentation within 60 days of the date of this letter may result in your
Medicare billing privileges being revoked.” Jd.

On December 14, 2009, Cigna sent Petitioner notice that it was revoking Petitioner’s
billing privileges, effective January 13, 2010, pursuant to 42 C.F.R. § 424.535(a)(6), for
failure to furnish complete and accurate information and all supporting documents within
60 days of CMS’s notification. Jd. at 21. With this notice, Cigna gave Petitioner an
opportunity to submit a corrective action plan (CAP) and provided notice on how
Petitioner could request reconsideration within sixty days. Jd. Petitioner never submitted
a CAP or requested reconsideration.

Cigna apparently did not follow through on its timeline because, on March 5, 2010,
Cigna sent Petitioner another notice, notifying it this time that Cigna was revoking
Petitioner’s billing privileges effective as of April 4, 2010, pursuant to 42 C.F.R. §
424.535(a)(6), for failure to furnish complete and accurate information and all supporting
documents within 60 days of CMS’s notification. CMS Ex. 1, at 34. Cigna also cited 42
C.F.R. § 424.515, which requires a supplier to resubmit and recertify the accuracy of its
enrollment information every five years to maintain Medicare billing privileges. Jd. The
March 5, 2010 letter stated that Cigna had previously requested that Petitioner submit a
revalidation application, and, as of March 5, 2010, Cigna had not received an application
from Petitioner. Cigna also informed Petitioner that “[p]ursuant to 42 C.F.R. §
424.535(c), Cigna Government Services is establishing a re-enrollment bar for a period of
one year.” CMS Ex. 1, at 35. Cigna gave Petitioner an opportunity to submit a CAP

6

within 30 days of the postmark date of the March 5, 2010 letter. Petitioner never
submitted a CAP to Cigna. Cigna also informed Petitioner that Petitioner could request
reconsideration of this determination within 60 days of the postmarked date. Id.
Petitioner never requested reconsideration of the revocation, and the revocation and one-
year reenrollment bar became final with no further right to a hearing request. See 42
C.F.R. §§ 498.22, 498.40(a)(2), 498.5(d). Petitioner admits receiving the notice letters
dated October 14, 2009, December 14, 2009, and March 5, 2010. CMS Ex. 1, at 17.
However, despite CMS’s multiple warnings of the revocation of its Medicare billing
privileges, Petitioner never contacted CMS to report that it was actively trying to obtain
information to complete its application.

D. CMS properly denied Petitioner’s September 27, 2010 Medicare enrollment
application because Petitioner filed it during Petitioner’s April 4, 2010 — April 4,
2011 bar on reenrollment.

Petitioner submitted its enrollment application on September 27, 2010, almost one year
after the October 14, 2009 request for revalidation. CMS Ex. 2, at 5,51. On October 14,
2010, Cigna denied Petitioner’s enrollment in the Medicare program based on its
September 27, 2010 application because Petitioner had not timely revalidated its
enrollment, resulting in a revocation of its billing privileges and a reenrollment bar of one
year that was still in effect until April 4, 2011. CMS Ex. 1, at 27. Petitioner wrote to
Cigna on November 18, 2010 requesting reconsideration, stating that its September 27,
2010 application was late due to “difficulty obtaining the correct documentation from the
[Internal Revenue Service (IRS)].” Jd. at 17.

Petitioner does not dispute that it failed to timely submit an application and
supporting documents that CMS had requested several times. Thus, even if
inferring for summary judgment purposes that Petitioner’s September 27, 2010
application was fully complete and accurate, this fact may not now change the
legitimate revocation and reenrollment bar. See 73 Fed. Reg. 36,448, 36,452 (June
27, 2008)( “[A] provider or supplier is required to furnish the evidence that
demonstrates that the Medicare contractor made an error at the time an adverse
determination was made, not that the provider or supplier is now in compliance.”).
See also Eastern Plumas Dist. Hosp. d.b.a. Eastern Plumas Health Care, DAB
CR2168, at 7 (2010) (“A showing of compliance subsequent to a revocation is not
grounds to reverse the revocation.”).

CMS has authority to further determine the duration of a provider’s billing privileges
revocation in any case where it has the authority to impose revocation. The regulations
provide:

After a provider, supplier . . . has had their billing privileges
revoked, they are barred from participating in the Medicare program
from the effective date of the revocation until the end of the re-
enrollment bar. The re-enrollment bar is a minimum of | year but
not greater than 3 years depending on the severity of the basis for
revocation.

42 C.F.R. § 424.535(c). CMS determined to bar Petitioner from reenrolling for a period
of one year, until April 4, 2011. However, Petitioner submitted its enrollment application
on September 27, 2010, prior to the expiration of the reenrollment bar on April 4, 2011.
CMS Ex. 2, at 5, 51. On October 14, 2010, in response to Petitioner’s September 27,
2010 application, CMS denied Petitioner enrollment in the Medicare program because
Petitioner had not timely revalidated its enrollment resulting in a revocation of its billing
privileges and a reenrollment bar of one year that was still in effect until April 4, 2011.
Cigna issued an unfavorable reconsideration decision on January 7, 2011. The
reconsideration decision found that, because the one-year reenrollment bar was still in
effect, Petitioner could not reenroll in the Medicare program until April 4, 2011.

Petitioner argues that it “abhors equity” for CMS to revoke its billing privileges when
Petitioner’s failure to submit a complete and accurate timely application is “based solely
on the failure of the federal government.” P. Br. at 6-7.' Petitioner also acknowledges
that at the time of its revocation, although amended later, 42 C.F.R. § 424.535(a)(6) had
no specific hardship exception for certain circumstances. Petitioner argues though, that,
while the “regulation at issue does not explicitly contain a good cause exception, a good
cause exception must be contained implicitly in the regulation.” P. Br. at 6.

I may not, however, find good cause to make an exception to the regulations in this case.
lam unable to exercise my discretion to find good cause, if CMS relies on a legitimate
basis to revoke. See 18661CPayday.com, L.L.C., DAB No. 2289, at 14 (2009) (“An ALJ
is bound by applicable laws and regulations and may not invalidate either a law or
regulation on any ground.”). Here, Petitioner did not appeal CMS’s determination to
revoke for one year on account of Petitioner not providing the required information
updates. If Petitioner wanted to argue good cause for extending the time for filing a
request for reconsideration, it needed to make that argument to CMS at the time of the
original revocation process, an explicit regulatory requirement. 42 C.F.R. § 498.22(d)(2)
(“CMS will extend the time for filing a request for reconsideration if the affected party
shows good cause for missing the deadline.”).

' Tn support of its argument, Petitioner attached an affidavit from Mikel Walker. P. Ex. 1. Mr.
Walker’s affidavit characterizing the interactions between Petitioner and the IRS is vague and
not corroborated by any documentary evidence. Mr. Walker does not state the dates of his
telephone conversations or the name of any IRS agents involved in any reported conversations.
To ensure accountability to the public, CMS must be able to verify the information of its
enrollees in a timely manner. CMS was not able to do this prior to the Petitioner’s April
4, 2010 revocation.

IV. Conclusion

Petitioner has shown good cause for me to consider its hearing request, despite a late
filing. The undisputed facts, however, compel me to sustain CMS’s Motion for Summary
Judgment. CMS had a legitimate basis to deny Petitioner’s September 27, 2010
Medicare enrollment application because Petitioner filed it during Petitioner’s
reenrollment bar. I may not disturb CMS’s prior determination of Petitioner’s revocation
and reenrollment bar because Petitioner never appealed that decision pursuant to 42
CR. § 498.22.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Izgel Medical Services, PLLC,
(NPI: 1669645628),

Petitioner
v.
Centers for Medicare and Medicaid Services.

Docket No. C-11-609

Decision No. CR2441

Date: October 4, 2011

DECISION

I find that the Centers for Medicare and Medicaid Services (CMS), acting through
its contractor, National Government Services, Inc. (NGS), was authorized to
revoke the Medicare provider enrollment of Petitioner, Izgel Medical Services,
PLLC.
I. Background
Petitioner is an internal medical practice owned by Emerth Lance Coburn, M.D.
On March 23, 2011, NGS, acting on behalf of CMS, revoked Petitioner’s
participation in Medicare. Petitioner requested a hearing, and the case was
assigned to me for a hearing and a decision.
The parties exchanged briefs and proposed exhibits. Neither party requested that I
convene an in-person hearing. CMS filed ten proposed exhibits that it designated
as CMS Exhibit (Ex.) 1 - CMS Ex. 10. Petitioner filed five proposed exhibits that

it designated as P. Ex. 1 — P. Ex. 5. I receive all of the parties’ proposed exhibits
into the record.
II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue in this case is whether Petitioner timely reported to CMS a change in its
practice location. Medicare regulations require that a physician must report a
change in his or her practice location within 30 days of that event. 42 C.F.R. §
424.516(d)(1)(iii). CMS contends that Petitioner failed to comply with this
requirement when it changed its practice location. It argues that it may revoke
Petitioner’s Medicare billing privileges due to Petitioner’s failure to comply with
Medicare reporting requirements. 42 C.F.R. § 424.535(a)(9). Petitioner argues
that it timely reported the relocation of its practice, and, therefore, CMS may not
revoke its participation.

B. Findings of Fact and Conclusions of Law

I find that Petitioner did not prove that it timely reported the change of its practice
location by filing a CMS-855I Medicare enrollment application on November 9,
2010. Consequently, CMS may revoke Petitioner’s participation.

The relevant facts are as follows. In July 2009, Dr. Coburn filed on behalf of
Petitioner a Medicare enrollment application form to add an address in Forest
Hills, New York, as an office location (76-05 113 Street, Forest Hills). CMS Ex. 1
at 18, 28; CMS Ex. 2 at 1. On January 13, 2011, an employee of a Medicare
contractor came to these premises to inspect them. CMS Ex. 3 at 2. He
discovered that Petitioner was not located there.

On March 23, 2011, NGS revoked Petitioner’s Medicare participation effective
January 13, 2011. The grounds for the revocation determination were that
Petitioner: (1) was no longer operating at the Forest Hills site on January 13,
2011; and (2) had failed to notify CMS within 30 days of its move from its
location in Forest Hills to a new location.

Petitioner contends that, effective October 15, 2010, it moved its practice location
to another Forest Hills address (108-27 63" Avenue, Forest Hills). CMS Ex. 6 at
1. It asserts that, on November 9, 2010, it timely filed a CMS-855I Medicare
enrollment application in which it reported this change of address. Thus,
Petitioner argues, it complied with Medicare reporting requirements. Petitioner
argues additionally that, even if it did not successfully file on November 9, it
subsequently cured that failure by filing a Medicare enrollment application on
March 25, 2011 that reported the address change.

NGS did not receive the purported November 9, 2010 change of address notice,
and Petitioner has produced no documentation showing that the notice was filed.
It has not offered a copy of the document, nor has it offered proof that it was
mailed. As for the March 25, 2011 notice, which Petitioner filed only after its
Medicare participation had been revoked, it does report a change of practice
address. CMS Ex. 5 at 17-18, 28. However, it also reports that Petitioner began
treating Medicare beneficiaries at the new location on October 1, 2010. Jd. In
other words, it reports that Petitioner began treating patients at the new practice
location in Forest Hills more than 30 days prior to November 9, 2010, the date
when Petitioner purportedly sent its first notice to the contractor. CMS Ex. 5 at
17. Petitioner now contends that the October | inception of practice date is a
typographical error and that the actual inception of practice date at the new
location is October 15, 2010.

I find Petitioner’s assertions not to be credible. First, I do not find to be credible
its claim that, on November 9, 2010, it filed an application to report its change of
address in Forest Hills. The contractor has no record of having received the
purported application, and Petitioner has produced nothing in the way of
documentary corroboration of its claim. Most telling, Petitioner has not produced
a copy of the purported November 9 application. I am not persuaded that
Petitioner actually filed this document.

As for the March 25, 2010 application, I note initially that CMS is under no
obligation to accept it. The regulation requires that Petitioner report a change of
its practice address within 30 days from the date that it makes the change. 42
C.F.R. § 424.516(d)(1)(iii). Petitioner may not cure its failure to file the required
report by filing one, months after the fact, in the guise of seeking reconsideration
of CMS’s determination.

Reconsideration affords a party the opportunity to provide evidence that it had
done what it was required to do. For example, Petitioner might have provided a
copy of its purported November 9 application, assuming the application actually
had been filed, to show on reconsideration that it had done what the regulation
required. But, reconsideration does not afford a party the opportunity to comply
with obligations that it had failed to comply with initially. Thus, filing an
application untimely as part of reconsideration does not cure the failure to file the
application timely.

Furthermore, and as I have found, the March 25, 2010 application that Petitioner
filed with its reconsideration request reports that Petitioner began seeing patients
at its new location more than 30 days prior to allegedly filing a November 9, 2010
application. Thus, the March 25, 2010 application would not “cure” Petitioner’s
failure to timely report, even if CMS accepts it.

Moreover, Petitioner offers confusing and unbelievable evidence about the
October 1 inception date. Petitioner submitted the declaration of Mishelle
Neginsky to support its assertion that it filed an application on November 9, 2010.
P. Ex. 4. In that declaration, Ms. Neginsky states that she made a typographical
error in the November 9, 2010 application, allegedly reporting incorrectly in that
document that Petitioner began seeing patients at its new location on October 1,
2010, when, in fact, it began doing so on October 15. However, it is not the
November 9, 2010 application (which has never been produced) that contains this
error, it is the March 25, 2011 application that contains it. CMS Ex. 5 at 17.

The credible evidence of record shows that Petitioner changed its practice location
within Forest Hills at some point after it filed its first application in 2009 and
failed to report that change timely. That is sufficient ground for CMS to revoke
Petitioner’s participation in Medicare.

/s/
Steven T. Kessel
Administrative Law Judge