Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Desaline Gittens,
Petitioner
v.
The Inspector General.
Docket No. C-11-371
Decision No. CR2404

Date: July 27, 2011

DECISION

Petitioner, Desaline Gittens, 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 February 20, 2011, 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. There is a proper basis for exclusion. 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 (I.G.) for the Department of Health and Human Services (HHS)
notified Petitioner by letter dated January 31, 2011, 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. advised Petitioner that she was being excluded pursuant to section
1128(a)(1) of the Act, based on her conviction in the Kings County Supreme Court of the
State of New York of a criminal offense related to the delivery of an item or service
under Medicare or a state health care program.

Petitioner timely requested a hearing on March 30, 2011. The case was assigned to me
for hearing and decision. A prehearing telephone conference was convened on April 15,
2011, the substance of which is memorialized in my order of the same date. During the
prehearing conference, Petitioner declined to waive an oral hearing, and the LG.
requested to file a motion for summary judgment. Accordingly, I set a briefing schedule
for the parties.

The 1.G. filed a motion for summary judgment and a supporting brief (I.G. Brief) on May
16, 2011, with I.G. exhibits (I.G. Exs.) 1 through 8. Petitioner filed a brief in opposition
to the I.G. motion on June 20, 2011 and a “corrected” brief on June 21, 2011 (P. Brief),
with Petitioner exhibits (P. Exs.) 1 through 3. The I.G. filed a reply brief on July 5, 2011.
No objections have been made to my consideration of the offered exhibits and all are
admitted.

II. Discussion
A. Applicable Law

Petitioner’s rights to an administrative law judge (ALJ) hearing and judicial review of the
final action of the HHS Secretary (Secretary) are provided by section 1128(f) of the Act
(42 U.S.C. § 1320a-7(f)).

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation
in the Medicare and Medicaid programs any individual convicted of a criminal offense
related to the delivery of an item or service under Medicare or a state health care
program. Pursuant to section 1128(i) of the Act, an individual is convicted of a criminal
offense when: (1) a judgment of conviction has been entered against him or her in a
federal, state, or local court whether an appeal is pending or the record of the conviction
is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is
accepted by a court; or (4) the individual has entered into any arrangement or program
where judgment of conviction is withheld.
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act shall be for a minimum period of 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 I.G. does not cite
any aggravating factors in this case and does not propose to exclude Petitioner for more
than the minimum period of five years.

Petitioner bears the burden of going forward with the evidence and the burden of
persuasion on any affirmative defenses or mitigating factors. The I.G. bears the burden
on all other issues. 42 C.F.R. § 1005.15(b) and (c). The burden of persuasion is judged
by a preponderance of the evidence. 42 C.F.R. §§ 1001.2007(c), 1005.15(d). Petitioner
may not in this forum, obtain review of, or collaterally attack on procedural or
substantive grounds, a criminal conviction or civil judgment of a federal, state, or local
court or another government agency that is cited as the basis for exclusion. 42 C.F.R. §
1001.2007(d).
B. Issue

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

Whether there is a basis for the imposition of the exclusion; and

Whether the length of the 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.
There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction.
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 right to hearing before an ALJ is

accorded to a sanctioned party by 42 C.F.R. §§ 1001.2007(a) and 1005.2, and the rights
of both the sanctioned party and the LG. to participate in a hearing are specified by
42 C.F.R. § 1005.3. 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 that, if true, would refute the facts that the
moving party relied upon. 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)
(finding 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 Life
Plus Ctr., DAB CR700 (2000); New Millennium CMHC, DAB CR672 (2000).

There is no dispute that Petitioner was convicted of a criminal offense. Whether
Petitioner was convicted of an offense related to the delivery of an item or service under
Medicare or Medicaid, is a mixed question of law and fact. However, there is no genuine
dispute as to the facts that could result in a favorable decision for Petitioner, and the issue
of law that Petitioner raised must be resolved against her. Accordingly, summary
judgment is appropriate.

3. There is a basis to exclude Petitioner pursuant to section 1128(a)(1)
of the Act.

Petitioner states in her brief that she was an employee of “Holistic Home Care,” a
Brooklyn based home care agency from around May 8, 2006 to about August 21, 2006.
Petitioner contends that she never held herself out as being able to practice the profession
of nursing nor did she know that her employer billed the State of New York Department
of Health for her services. P. Brief at 3. The New York Medicaid Fraud Control Unit, an
Office of the Attorney General of the State of New York, initiated an investigation of
Holistic Home Care. On December 2, 2008, Petitioner was indicted on charges of grand
larceny in the third degree and the unauthorized practice of nursing, both felonies. I.G.
Ex. 3; I.G. Ex. 4.

On February 9, 2009, Petitioner signed a “Plea and Cooperation Agreement” (Plea
Agreement) in which she agreed to plead guilty to the offense of criminal trespass in the
second degree, a misdemeanor. I.G. Ex. 7, at 1. In exchange for her plea, Petitioner
received the agreement of the New York Medicaid Fraud Control Unit not to proceed on
the greater charges from the indictment. I.G. Ex. 2; LG. Ex. 7, at 3. Petitioner agreed
that her sentence would be limited to a conditional discharge and to pay criminal
restitution in the amount to $9,180 to the New York State Medicaid Fraud Restitution
Fund over a period of three years. I.G. Ex. 7, at 3. On February 9, 2010, Petitioner was
convicted pursuant to her guilty plea of one count of criminal trespass in the second
degree in the Supreme Court of New York, Kings County. I.G. Ex. 5. Petitioner pled
guilty to the following offense as read on the record by the judge:

[O]n or about May 9, 2006 to on or about August 21, 2006, in
the County of Kings, State of New York, you did enter and
remain unlawfully in the dwellings of Medicaid Recipients
Elijah Wallace and Michael Marinoy, resulting in $9,180 in
damages to the New York State Medicaid program.

1.G. Ex. 6, at 7. Petitioner was sentenced to conditional discharge of one year and
ordered to pay restitution of $9,180 to the New York State Medicaid Fraud Restitution
Fund, consistent with her Plea Agreement. I.G. Ex. 5; LG. Ex. 7, at 3.

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.

The statute requires that the Secretary exclude from participation in Medicare or
Medicaid any individual or entity: (1) convicted of a criminal offense, whether a felony
or a misdemeanor; (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.

Petitioner does not dispute that she was convicted, within the meaning of section 1128(i)
of the Act (42 U.S.C. § 1320a-7(i)), of a criminal offense. Pursuant to section 1128(i) of
the Act, an individual is “convicted” of a criminal offense when: a judgment of
conviction has been entered by a federal, state, or local court whether or not an appeal is
pending or the record has been expunged; there has been a finding of guilt in a federal,
state, or local court; a plea of guilty or no contest has been accepted in a federal, state, or
local court; or an accused individual enters a first offender program, deferred
adjudication program, or other arrangement where a judgment of conviction has been
withheld. Petitioner was clearly convicted within the meaning of section 1128(i) of the
Act, when her guilty plea was accepted, and a judgment was entered finding her guilty of
criminal trespass in the second degree.” I.G. Exs. 5, 8.

Petitioner disputes that she was convicted of an offense related to the delivery of an item
or service under the New York State Medicaid program. P. Brief at 4. However,
Petitioner does not dispute the following facts: she admitted by her guilty plea to
entering and remaining unlawfully in the dwellings of Medicaid recipients; she admitted
by her guilty plea that she caused $9,180 in damages to the New York State Medicaid
program; she agreed to pay restitution to the New York State Medicaid Fraud Restitution
Fund; and she was prosecuted by the New York Medicaid Fraud Control Unit (P. Ex. 7,
at 5). Petitioner does not dispute that at the time of her trespass in the dwellings of the
Medicaid recipients that she was an employee of Holistic Home Care Agency and that
she was present in that capacity.’ Petitioner presents no evidence to establish a genuine
dispute as to the material issue of fact of whether her presence in the dwelling of the
Medicaid recipients was for the purpose of delivering an item or service.

In determining whether a conviction is program-related within the meaning of section
1128(a)(1) of the Act, I may look beyond both the language of the statute under which
she was convicted and the precise wording of her plea. An offense is related to the
delivery of an item or service under Medicare of a state health care program, if there is “a
nexus or common-sense connection” between the conduct giving rise to the offense and
the delivery of the item or service. Lyle Kai, R.Ph., DAB No. 1979 (2005); Berton
Siegel, D.O. DAB No. 1467 (1994). I conclude, based upon the undisputed and admitted
facts, that there is a nexus or common sense connection between the Petitioner’s criminal
offense and the delivery of an item or service under Medicare or Medicaid. Timothy
Wayne Hensley, DAB No. 2044 (2006); Neil Hirsch, M.D., DAB No. 1550 (1995);
Chander Kachoria, R.Ph., DAB No. 1380 (1993). Accordingly, I conclude that the
offense of which Petitioner was convicted was related to the delivery of an item or
service under the New York Medicaid program, and the elements necessary for exclusion
pursuant to section 1128(a) of the Act are satisfied.

> Petitioner was convicted of a misdemeanor (I.G. Ex. 2, at 1), but that has no impact
upon exclusion pursuant to section 1128(a)(1) of the Act.

> Petitioner expresses concern that the I.G. alleges that Petitioner held herself out to be a
licensed professional nurse but there is no evidence to support that allegation. P. Brief at
4. Whether or not Petitioner represented to someone that she was a licensed professional
nurse, is not a fact material to my decision in this case.
Petitioner argues that she should not be excluded without a showing that she is
untrustworthy. Petitioner argues a number of factors to show that she should not be
considered untrustworthy, including: her offense does not establish her
untrustworthiness; her sentence involved no custody or supervision; her Certificate of
Relief from Disabilities issued by the judge who convicted and sentenced her (P. Ex. 1)*;
her removal from the New York Medicaid disqualified provider list (P. Ex. 2); and since
October 2007, Petitioner has been working as a registered nurse and she is a valued staff
member (P. Ex. 3). However, section 1128(a)(1) of the Act permits no consideration of
whether or not one is trustworthy. Congress requires that the Secretary exclude from
Medicare anyone convicted of a criminal offense, whether a felony or a misdemeanor,
that is related to the delivery of an item or service under Medicare or a state health care
program.

There is a basis for Petitioner’s exclusion, and her exclusion is mandated by section
1128(a)(1) of the Act.

4. Pursuant to section 1128(c)(3)(B) of the Act, five years is the
minimum period of exclusion pursuant to section 1128(a) of the Act.

5. Petitioner’s exclusion for five years is not unreasonable as a matter
of law.

Five years is the minimum authorized period for a mandatory exclusion pursuant to
section 1128(a). Act § 1128(c)(3)(B). I have found there is a basis for Petitioner’s
exclusion pursuant to section 1128(a) of the Act, and the minimum period of exclusion is
five years and that period is not unreasonable as a matter of law.

* Petitioner does not argue that the certificate bars her exclusion or that it should be
considered when determining the length of her exclusion. However, had she made such
arguments I would find the rationale in Bhupendra Patel, M.D., DAB No. 1370 (1992)
and Janet Wallace, L.P.N., DAB No. 1326 (1992) persuasive and I would reject the
arguments.
III. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all federal health care programs for the minimum statutory period of five
years effective February 20, 2011.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Washington Christian Village
(CCN: 14-5000),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket Nos. C-10-456 and C-10-602
Decision No. CR2403

Date: July 27, 2011

DECISION

In this case, I consider a long term care facility’s responsibilities when a physician
prescribes for its residents questionable combinations and dosages of antipsychotic drugs.

Petitioner, Washington Christian Village (Petitioner or facility), is a long term care
facility located in Washington, Illinois, that is certified to participate in the Medicare
program. Petitioner concedes that, based on surveys completed December 17, 2009 and
February 2, 2010, it was not in substantial compliance with Medicare program
requirements. Petitioner nevertheless challenges the Centers for Medicare and Medicaid
Services’ (CMS’s) determination that it was not in substantial compliance with one of the
regulations cited, 42 C.F.R. § 483.25(1), which directs the facility to keep its residents
free from unnecessary drugs.

For the reasons discussed below, I find that the facility was not in substantial compliance
with 42 C.F.R. § 483.25(1) and find the penalty imposed reasonable.
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 Act and 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 surveys completed on December 17, 2009 and February 2, 2010, CMS
determined that the facility was not in substantial compliance with several Medicare
requirements and imposed penalties of $300 per day for 47 days (December 17, 2009 —
February 1, 2010) and $100 per day for 27 days (February 2-28, 2010). CMS Ex. 2 at 2.
By stipulation dated July 7, 2010, the parties limited the scope of this appeal to the
deficiencies cited under 42 C.F.R. § 483.25(1) (tag F329) during the December survey.
Petitioner concedes the other deficiencies cited during that survey and the February 2,
2010 revisit.' CMS agrees that it based the $300 per day civil money penalty (CMP)
solely on the deficiencies cited under section 483.25(1). Stipulation to Limit Scope of
Hearing (July 7, 2010).

The parties agree that this matter may be decided based on the written record, without
need for an in-person hearing. CMS Closing (Cl.) Brief (Br.) at 1; P. Cl. Br. at 1; 42
CFR. § 498.66.

' Based on the December survey, CMS found that the facility was not in substantial
compliance with 42 C.F.R. §§ 483.25 (tag F309 — quality of care) and 483.25(h) (tag
F323 — accidents and supervision), as well as section 483.25(1). CMS Ex. 6. Based on
the February 2 survey, CMS found that the facility’s substantial noncompliance
continued, with the most serious deficiencies cited under 42 C.F.R. § 483.25. CMS Ex.
2. During this time, CMS also found that the facility was not in substantial compliance
with Life Safety Code (LSC) requirements, based on a LSC survey completed December
23, 2009. CMS Ex. 1. CMS subsequently determined that the facility corrected its LSC
deficiencies as of January 29, and it appears that CMS imposed no penalties for LSC
deficiencies. CMS Ex. 2.
I admit into evidence CMS Exhibits (CMS Exs.) 1-22 and Petitioner’s Exhibits (P. Exs.)
1-27. The parties have filed opening briefs (CMS Br.; P. Br.) and closing briefs (CMS
Cl. Br.; P. Cl. Br.).

IL. Issues
By agreement of the parties, the issues before me are:

e From December 17, 2009 through February 1, 2010, was the facility in substantial
compliance with 42 C.F.R. § 483.25(1)?

e Ifthe facility was not then in substantial compliance with 42 C.F.R. § 483.25(l), is
the penalty imposed — $300 per day — reasonable?

II. Discussion

Statutory and regulatory requirements. Under the Act and the “quality of care”
regulation, each resident must receive and the facility must provide the necessary care
and services to allow a resident to attain or maintain the highest practicable physical,
mental, and psychosocial well-being, in accordance with the resident’s comprehensive
assessment and plan of care. Act § 1819(b); 42 C.F.R. § 483.25. The Act also explicitly
establishes the right of facility residents to be free from chemical restraints imposed for
the purpose of discipline or convenience rather than for the treatment of medical
symptoms. Act § 1819(c)(1)(A)(ii). To that end, each resident’s drug regime must be
free from unnecessary drugs. Unnecessary drugs include drugs used in excessive doses,
drugs used for an excessive duration, drugs that are not adequately monitored, drugs used
without adequate indications for their use, and drugs whose adverse consequences
indicate that they should be reduced or discontinued. 42 C.F.R. § 483.25(1)(1).

Special rules apply to the use of antipsychotic drugs. Based on the resident’s
comprehensive assessment, the facility must ensure that a resident who has not used
antipsychotic drugs is not given them unless necessary “to treat a specific condition as
diagnosed and documented in the clinical record.” Unless contraindicated, the facility
should also attempt to discontinue antipsychotics by gradually reducing the doses and
implementing behavior interventions. 42 C.F.R. § 483.25(1)(2).

Responding to comments, the drafters of the regulation explained that an “unnecessary
drug” is “reserved for drug therapy circumstances” that CMS guidelines establish “are a
potential threat to the resident’s health and safety, and for which the facility is unable to
justify why using a drug under such circumstances is in the best interest of the resident.”
The facility “can certainly rely on physician justification of the risk-benefit of the drug
use,” but it cannot simply claim that “the doctor ordered it.” Requiring only a
physician’s order to justify a questionable drug “would render the regulation, and the
statutory underpinnings for it, meaningless.” 56 Fed. Reg. 48826, 48851-52 (Sept. 26,
1991).

In its State Operations Manual (SOM), CMS has issued guidelines listing drug therapies
that potentially threaten resident health and safety; if the facility administers these drugs,
it must justify that use as in the best interest of the resident. CMS Ex. 13 at 27.

This case centers around the drugs ordered and administered to two facility residents,
identified as Resident 21 (R21) and Resident 17 (R17).

R21 was a 78-year-old woman who, because of her worsening dementia, transferred to
the facility from an assisted living center on November 2, 2009. In addition to dementia,
she suffered from diabetes, gastric esophageal disease, and fibromyalgia. CMS Ex. 18 at
1, 2, 19, 37. Nurses described her as “very anxious” and “nervous,” and she exhibited
significant behavior problems. She did not sleep the night following her admission, but
stayed up, claiming that the “authorities were looking for her.” CMS Ex. 8 at 14.
Thereafter, the nurses’ notes alternately describe her as “restless” and “very pleasant
[and] cooperative,” although, problematically, she repeatedly tried to transfer and walk
by herself. CMS Ex. 8 at 15.

At the time of her admission, R21 was prescribed the antipsychotic drug, Haldol
(haloperidol), but Mark D. Canty, M.D., the facility’s medical director who became
R21’s attending physician, discontinued that drug on the day of her admission. CMS Ex.
8 at 13; P. Ex. 1 at 2. He prescribed Zoloft (sertraline), 100 mg, twice a day for
depression.” CMS Ex. 18 at 19, 40. On November 5, Dr. Canty prescribed Seroquel
(quetiapine), 25 mg. twice a day, for “dementia/agitation.” CMS Ex. 18 at 19.

Thereafter, R21’s restlessness and agitation continued. CMS Ex. 8 at 16. By November
10, she was regularly walking with the assistance of a merry walker.*? She would refuse
to rest, even when visibly fatigued, and fell several times. CMS Ex. 8 at 17-23. She
sometimes refused to eat or take her medications. CMS Ex. 8 at 24.

? The parties describe the prescription as 100 mg. once a day, citing page 40 of CMS
Exhibit 18 — a December 8, 2009 hospital transfer record that lists R21’s medications.
That document says “Zoloft 100 mg twice a day.”

* A merry walker is an assistive device designed to enable individuals with impaired
balance to ambulate. The device envelops the individual in a frame with a base wider
than the area occupied by the individual’s legs. See Lake Park Nursing and Rehab. Ctr.,
DAB CR1341 at 6 n.4 (2005), aff'd DAB No. 2035 (2006).
By December 5, R21’s daughter was so concerned about her mother’s apparent decline
that she asked staff to withhold the Seroquel until her doctor “returned.” CMS Ex. 8 at
24. Staff contacted Dr. Canty, who ordered the drug held until December 7. P. Ex. 5.

On December 7, test results showed that R21 had critically high sodium levels. CMS Ex.
8 at 27. High sodium levels can cause seizures, confusion, irritability, and coma. CMS

Ex. 8 at 29. Dr. Canty directed staff to send
8 at 25. She was admitted to the hospital wit!
decreased food intake, and high sodium (hyp'

er to the hospital for evaluation. CMS Ex.
h complaints of an altered mental status,
ermatremia). CMS Ex. 18 at 37. Initially,

the hospital planned to withhold all of her medications “until she is more awake and

responsive.” CMS Ex. 18 at 38. Thereafter,
twice a day, Zoloft, 100 mg. twice a day, an

the physician prescribed Seroquel, 25 mg.
Haldol, 1 mg. as needed. CMS Ex. 8 at 31-

32.

When R21 returned to the facility on December 10, the nurse’s note describes her as
“lethargic” and “disoriented.” CMS Ex. 18 at 26. Her physician continued her on
Seroquel, 25 mg. twice a day, for “dementia [with] agitation.” CMS Ex. 18 at 35. On
December 11, he discontinued the Zoloft and prescribed Zyprexa (olanzapine), 5 mg.
twice a day, for depression. CMS Ex. 18 at 26, 36.

On December 12, R21 was admitted to hospice care. CMS Ex. 18 at 27; P. Ex. 20. Her
problematic behaviors continued, however, and she suffered additional falls. CMS Ex.
18 at 27-30.

R17 was a 96-year-old woman, originally admitted to the facility in December 2007 and
readmitted on November 4, 2009, apparently following a hospital stay. Her diagnoses
included pelvic fractures and dementia with physically aggressive behaviors. CMS Ex.
16 at 9, 19, 26. According to her care plan, she was easily agitated with staff and
exhibited behaviors such as crying and anger following her son’s visits. CMS Ex. 16 at
26. In September 2009, Dr. Canty prescribed Seroquel, 12.5 mg. twice a day, which he
later increased to 25 mg. twice a day. P. Exs. 10, 12. At the time of her readmission, he
renewed the prescription for Seroquel, 25 mg. twice a day, and added Zyprexa, 2.5 mg.
daily. CMS Ex. 16 at 19. Nurses’ notes document multiple episodes of aggressive and
other problematic behaviors, including throwing items, cursing, elopement, biting, and
scratching. CMS Ex. 16 at 15-16. In one instance, she fell off the edge of her bed while
attempting to slap a nurse aide. CMS Ex. 16 at 16.
A. The facility was not in substantial compliance with 42
C.F.R. § 483.25()) because it did not adequately justify its
use of questionable combinations and dosages of
antipsychotic drugs.*

As a threshold matter, I reject Petitioner’s suggestion that CMS must prove that the
facility administered unnecessary drugs. The statute and regulations explicitly place the
burden on the facility to show that only necessary drugs are administered to its residents.

I also emphasize that I see no indication that Dr. Canty was anything other than a
conscientious physician trying to manage his challenging patients. Whether the drugs he
prescribed were appropriate or even beneficial is not the issue. As explained below,
CMS properly identified the drugs he prescribed as potentially very dangerous, so the
facility had an independent responsibility to question him about their risks and benefits
and, ultimately, to justify their use as in the resident’s best interests. That justification
ad to be documented in the resident’s clinical record. In these proceedings, Dr. Canty
explains his reasons for ordering the drugs he ordered. But such after-the-fact
justifications do not satisfy the facility’s obligations to ensure that its residents are free
from unnecessary drugs.

Seroquel (quetiapine) and Zyprexa (olanzapine) are antipsychotic medications. Neither is
approved for the treatment of patients with dementia-related psychoses, and their labels
warn that administering the drugs to elderly people “who have lost touch with reality
(psychosis) due to confusion and memory loss (dementia) can raise the risk of death.”°
See Zyprexa Prescribing Information, http://www.Zyprexa.com; see also
http://www.Seroquelxr.com.° Not surprisingly, the SOM includes these drugs among its
list of medications “that have the potential to cause clinically significant adverse

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

* The United States Food and Drug Administration (FDA) mandates that pharmaceutical
companies include within a drug’s package insert information about its adverse effects.
The “black box warning” is the strongest warning required by the FDA, and its use
indicates that the drug carries significant — even life threatening — adverse effects. Dr.
Canty concedes that he was aware of the black box warning for Seroquel, although he
does not mention the similar warning for Zyprexa. P. Ex. 24 at 8 (Canty Decl. ¥ 29).

° Petitioner complains that CMS “introduced new evidence” because, in its closing brief,
it cited to the drug manufacturers’ websites. Although the sites contain additional
information, CMS refers only to the manufacturers’ instructions and FDA approvals,
undisputed facts that underpin the issues in this case. I do not consider the references
“new evidence,” and, even if CMS had not cited the websites, I could have done it on my
own. Judges regularly and appropriately cite to such public information.

consequences, that may have limited indications for use, require specific monitoring, and
. .. warrant careful consideration of relative risks and benefits.” The SOM does not
preclude use of the listed drugs but emphasizes that facilities must use them cautiously.
CMS Ex. 13 at 27.

Not all conditions justify the use of antipsychotic medications, and the SOM lists
situations for which antipsychotic medications are not indicated: wandering; poor self
care; restlessness; impaired memory; mild anxiety; insomnia; unsociability; inattention or
indifference to surroundings; fidgeting; nervousness; uncooperativeness; and certain
verbal expressions or behaviors that do not represent a danger to the resident or others.
CMS Ex. 13 at 43.

Petitioner challenges CMS’s reliance on the SOM, citing Foxwood Springs Living
Center, DAB No. 2294 (2009), a case in which the Departmental Appeals Board held that
CMS’s questionable interpretation of a SOM provision did not alter the regulatory
provisions that govern how and when a facility can establish that it has corrected its
deficiencies. As the Foxwood panel observed, the SOM provides state survey agencies
with CMS’s interpretive guidelines, standards of practice, and internal policies. I agree
with Petitioner that the SOM does not have the same effect as the statute or regulations
(by which I am bound) and that a manual provision does not alter the plain meaning of a
regulation. However, I do not agree that manual provisions have no effect. As explained
above, the regulations’ drafters explicitly directed CMS to provide necessary guidance by
identifying drugs that potentially threaten resident health and safety. 56 Fed. Reg. at
48,851-52. Because these SOM provisions “reasonably interpret the Act and
regulations,” they are entitled to considerable deference. See, e.g., Heartland Manor at
Carriage Town, DAB No. 1664 at 19 (1998). Indeed, even assuming that an
Administrative Law Judge is authorized to disregard the SOM’s listing of problematic
drugs, I could not do so here where the evidence (including the black box warnings) of
the drugs’ dangers is so substantial and the evidence challenging the SOM’s drug
provisions is so weak.

In challenging the SOM provisions, Petitioner has submitted two articles. The first is a
short report describing a study funded by the drug’s manufacturer, which concludes that
Seroquel (prescribed by itself, not in combination with another second generation
atypical antipsychotic — see discussion below) “can effectively control agitation in elderly
patients with Alzheimer’s disease without increasing risk of stroke or other
cerbrovascular events.” P. Ex. 21 at 1.” I agree with CMS that the funding of this study

7 CMS questions the relevance of the study to R17 and R21, neither of whom suffered
from Alzheimer’s disease. The report is confusing as to the study’s application to
demented individuals not suffering from Alzheimer’s. The above quote suggests that it
applies solely to Alzheimer’s sufferers, but the study purportedly included patients with
vascular dementia as well. P. Ex. 21 at 1.
raises questions about objectivity, and I see no evidence that the study’s conclusions are
widely accepted within the scientific community. In any event, even the study’s senior
investigator discouraged the use of Seroquel to treat agitation. He pointed out that no
medication has FDA approval for treating agitation associated with dementia and
cautioned that “pharmacological interventions should be the last choice in treating
agitation — not the first choice.” P. Ex. 21 at 1, 2. If anything, these words of caution
support the SOM provisions requiring facilities to justify their use of the drug.

In the second article, which is from an on-line publication called Pharmacotherapy and
was posted in the year 2000, researchers from the University of Texas reviewed studies
evaluating the efficacy and safety of antipsychotics administered to patients with
“dementia of Alzheimer’s type” associated with psychotic symptoms. The article points
out that problems associated with the use of antipsychotics (among other classes of
drugs) led Congress, in the Omnibus Budget Reconciliation Act of 1987 (Public Law
100-203), to restrict their use. The article also notes that data is lacking on the safety and
efficacy of atypical antipsychotics on elderly patients with dementia and concludes that
“{s]election of alternative antipsychotics should be based on research data as they become
available, clinical experience, and side effect profiles. All antipsychotics should be given
at the lowest effective dosage to ensure minimal side effects and optimal outcomes.” P.
Ex. 22 at 10. Again, this article recognizes problems associated with antipsychotic drugs,
as well as the absence of reliable research data for guidance. It thus does not undercut —
in fact, it effectively supports — the SOM provisions requiring facilities to justify their
use.

Inadequate justification. CMS charges that the facility violated 42 C.F.R. § 483.25(1)(2)
when it administered Seroquel and Zyprexa to R17 and R21 because it did not document
in their clinical records specific, diagnosed conditions that justify the use of the

antipsychotic drugs.

This is certainly the case for R17, whose clinical record includes drug orders without
accompanying diagnoses. In his declaration, Dr. Canty says that, on September 5, 2009,
he ordered Seroquel, 12.5 mg. twice a day and that his order is in the record as Petitioner
Exhibit 10. He now explains that he ordered Seroquel due to R17’s “increased
agitation/behaviors.” P. Ex. 24 at 6 (Canty Decl. 6). But his order includes neither a
diagnosis nor any other justification for the drug, and nothing in this record suggests that
the facility questioned him about that omission. P. Ex. 10.

At the time of R17’s November 4 readmission to the facility, Dr. Canty prescribed
Seroquel, 25 mg. twice a day, and Zyprexa, 2.5 mg. daily. CMS Ex. 16 at 19. Again,
these orders include no justification, and, again, nothing in the record suggests that the
facility brought this to the doctor’s attention.
Petitioner has submitted an old order for Zyprexa, dated April 11, 2008, which includes
the diagnosis “dementia with physically aggressive behaviors.” CMS Ex. 16 at 9, 19; P.
Ex. 7. But that order can hardly justify administering the drug more than a year and a
half later, particularly since Dr. Canty discontinued the April 11, 2008 order on March
11, 2009. P. Ex. 9.

The facility thus regularly administered antipsychotic drugs to R17 without ensuring and
documenting in her clinical record that the drugs were necessary to treat a specific
condition. It was therefore not in substantial compliance with 42 C.F.R. § 483.25(1).

Petitioner has come forward with a partial justification for administering one of the drugs
to R17 —an order dated September 18, 2009, which increases the dosage of Seroquel
from 12.5 mg. to 25 mg. twice a day “[because] of continued abusive behavior to staff.”
P. Ex. 12. This “justification” does not change my finding. First, it does not explain the
purposes of the September 5 and November 4 drug orders. Second, it is highly
questionable whether it is ever appropriate to administer antipsychotic medications based
solely on a resident’s behavior toward staff. According to Surveyor Beverly A. Asbury,
R.N., elderly patients with dementia are often combative with care givers, but caregivers

should possess the skills and training necessary to manage
these behaviors. So long as the patient is not combative with
other residents or a danger to herself, there is then no
justification for the use of antipsychotic medications.

See CMS Ex. 21 at 2 (Asbury Dele. § 9); see also CMS Ex. 13 at 43 (noting use of
antipsychotics not indicated to treat uncooperativeness). Petitioner, however, suggests
that R17’s behaviors could have caused injury to herself or other residents. P. Br. at 10.
But the facility did not justify the antipsychotics by claiming that they were necessary to
protect R17 or any other resident from injury. Moreover, no evidence shows that she
ever attacked any other resident, and her care plan did not identify as problems potential
injury to herself or aggression toward other residents. CMS Ex. 16 at 26.

From the record before me, I cannot determine whether administering antipsychotic drugs
to R17 could have been justified, but I need not answer that question to resolve this case.
At a minimum, the facility should have brought to Dr. Canty’s attention that he had not
justified the drugs he ordered on September 5 and November 4, and, with respect to the
September 18 order, they should have questioned whether it was appropriate to prescribe
an antipsychotic based solely on R17’s behavior toward staff. These failures, not the
underlying question of whether the drugs could ultimately be justified, put the
10

facility out of substantial compliance.®

CMS also finds inadequate the facility’s documented reason for prescribing antipsychotic
drugs to R21. Dr. Canty prescribed Zyprexa for R21’s depression. CMS Ex. 18 at 36.
However, Zyprexa is not approved for treatment of depression. CMS Ex. 20 at 3
(McDorman Decl. § 14). According to the 2007 Drug Information Handbook for
Nursing, which is apparently still in use by CMS and the state survey agencies, Zyprexa
is moderately to highly sedating, so it should be used “with caution” in treating disorders
featuring depression. CMS Ex. 14 at 1. Because of these considerations, the facility was
obliged to get the physician’s written justification, explaining why the drug’s benefits
outweighed the risks to R21. The record includes no evidence that anyone at the facility
even considered this contraindication, much less brought it to Dr. Canty’s attention.

Similarly, according to the physician’s orders, R21 took Seroquel for dementia with
agitation. CMS Ex. 18 at 35. A nurse’s note says that R21 is on Seroquel “for agitation.”
CMS Ex. 8 at 18. Prescribing Seroquel for this purpose is also questionable, and I see no
evidence that facility staff asked Dr. Canty to document why the advantages of her taking
this drug for this purpose outweighed the risks.

Duplicate therapy. The SOM defines “duplicate therapy” as “multiple medications of the
same pharmacological class/category” or any medication therapy that “substantially
duplicates a particular effect of another medication that the individual is taking.” CMS
Ex. 13 at 4. Seroquel and Zyprexa are both second generation atypical antipsychotic
drugs, so administering both would be considered duplicate therapy. CMS Ex. 13 at 39
(SOM); CMS Ex. 18 at 33; CMS Ex. 22 at 3.

Duplicate therapy is generally not indicated, unless current
clinical standards of practice and documented clinical
rationale confirm the benefits of multiple medications from
the same class or with similar therapeutic effects.

CMS Ex. 13 at 20. Consistent with these provisions of the SOM, the 2007 Drug
Information Handbook for Nursing warns that “co-administration of two or more
antipsychotics does not have any pharmacological basis or clinical advantages and

* Conspicuously missing from this case is any reference to the facility’s licensed
pharmacist. The facility must employ or obtain the services of a licensed pharmacist
who, among other duties, reviews at least monthly each resident’s drug regimen and
reports any irregularities to the attending physician and director of nursing, who must
“act upon” the pharmacist’s report. 42 C.F.R. § 483.60(b), (c). It seems that CMS cited
no deficiencies under section 483.60, but, assuming that the facility retained the services
of a pharmacist who approved the residents’ drug regimens, I would have expected to
hear from him/her. CMS Exs. 2, 6.

11

increases the potential for side effects.” CMS Ex. 14 at 3; accord P. Ex. 22 at 10
(pointing out that “minimal data exist to support the superiority of combinations regimens
over monotherapy” and warning that “complex drug regimens increase the risk of adverse
reactions and drug interactions”).

Petitioner makes much of the fact that the appendix to the 2009 Drug Information
Handbook for Nursing omitted language addressing duplicate therapy, from which
Petitioner infers that such warnings “are no longer consistent with current best practices
in administration of antipsychotic medication.” P. Br. at 12. I draw no such inference.
If, in fact, practice standards regarding duplicate therapies have changed, some medical
literature should highlight that fact. But Petitioner has come forward with no such
evidence showing that standards of practice have changed in this regard, and the SOM
still mandates a justification for duplicate therapy.

Again, I do not resolve the question of whether duplicate therapy could have been
justified in the cases of R17 and R21. However, the practice is highly controversial, and,
as the SOM provides, “documentation is necessary to clarify the rationale for and benefits
of duplicate therapy and the approach to monitoring for benefits and adverse
consequences,” and that documentation should be available in the resident’s clinical
record. CMS Ex. 13 at 20. Because the facility did not provide that documentation, it
was not in substantial compliance with 42 C.F.R. § 483.25(1).

Dosages. The SOM directs facilities to administer the “lowest possible [dosage] to
achieve the desired therapeutic effects,” when the drugs are used for long-term treatment.
CMS Ex. 13 at 43. These instructions are consistent with acceptable standards of medical
practice. P. Ex. 22 at 10 (declaring that “all antipsychotics should be given at the lowest
effective dose”). The SOM also lists dosages, which the facility may exceed “if it
provides evidence to show why the higher doses were necessary to maintain or improve
the resident’s function and quality of life.” CMS Ex. 13 at 27.

According to both the SOM and the facility’s own documents, the daily dosage threshold
for Zyprexa (olanzapine), when used to manage behavioral symptoms related to
dementia, is 7.5 mg. See CMS Ex. 13 at 43; CMS Ex. 18 at 33; see also CMS Ex. 22 at 3
(listing the “usual” dose ranges for Zyprexa at 2.5 to 10 mg./day). The 2009 Drug
Information Handbook for Nursing recommends a low starting dose of 2.5-5 mg. per day,
increasing as clinically indicated and tolerated. CMS Ex. 8 at 38.” Yet, on December 11,
when Dr. Canty first ordered Zyprexa for R21, his order totaled 10 mg. daily, well above
the recommended daily dosage threshold. And, in addition to administering the highest

’In defending the ordered dosage, Petitioner cites to the wrong category of patients. For
the non-elderly with agitations associated with bipolar disorder or schizophrenia, an
initial dosage of up to 10 mg. per day can be appropriate. CMS Ex. 8 at 38. Obviously,
neither R17 nor R21 fell within that category.
12

dosage of Zyprexa, the facility was also giving her a duplicate drug, Seroquel.
Prescribing this dosage, particularly in combination with a similar medication, should
ave raised eyebrows within the facility, but I see no indication that the facility
questioned the order, or otherwise justified its administration. Again, whether or not
these dosages could have been justified, the facility’s failure to ensure that they were
necessary put it out of substantial compliance with the regulation.

Petitioner argues that this result precludes physicians from ever prescribing medications
in excess of recommended dosages. P. Cl. Br. at 6. To the contrary, a physician may
prescribe an unorthodox drug, combination of drugs, or dosages of drugs, but the facility
must ensure that he does so knowingly. The facility cannot know if a prescription results
from the physician’s “reasoned medical judgment” or from the physician’s ignorance.
Moreover, under Petitioner’s theory, so long as the facility receives a valid physician’s
order, it need inquire no further, a result that renders the regulation meaningless, since
obviously the facility can administer no drugs (or other medical treatments) without a
valid physician’s order.

Finally, although Dr. Canty seems to have made adjustments in his drug orders over time,
I see no evidence of systematic facility efforts to reduce the drug dosages. R17’s care
plan does not even mention making an effort to reduce the dosages of the two
antipsychotic drugs. CMS Ex. 16 at 26. R21’s care plan says to “gradually decrease
doses of medications [Seroquel and Zoloft] as ordered by MD,” but the facility does not
appear to have acted on that plan. CMS Ex. 18 at 44.

Petitioner claims “ample justification” for administering antipsychotic medications but
offers none, except the physician order and the physician’s after-the-fact declaration that
is orders were justified. Because it has not shown that it justified, as in the residents’
best interests, administering to R17 and R21 a questionable dosage and combination of
powerful antipsychotic drugs, it was not in substantial compliance with 42 C.F.R. §
483.25(I).

B. The facility was not in substantial compliance with 42
C.F.R. § 483.25()) because, having administered the drugs,
it did not adequately monitor the affected residents 1) for
side effects and other adverse consequences of the drugs; or
2) to determine the effectiveness or feasibility of reducing
dosages.

Monitoring. Without question, a facility must monitor, for side effects and other adverse
consequences, any resident taking antipsychotic drugs. It must also monitor the
resident’s behaviors to determine the drug’s effectiveness and the feasibility of reducing
the dosages. 42 C.F.R. § 483.25(1)(1). Careful monitoring would have been especially
important for R21. Not only was she taking high dosages and unorthodox drug
13

combinations, she also exhibited symptoms consistent with side effects associated with
antipsychotic drugs like Seroquel and Zyprexa — loss of appetite, lethargy, restlessness, '°
and uncontrolled muscle movements.'! CMS Ex. 13 at 44-45; CMS Ex. 20 at 2
(McDorman Decl. §j 10); CMS Ex. 22 at 3-7.

Consistent with the regulatory requirements the care plans for both R17 and R21 directed
staff to monitor behaviors and document their observations. Specifically, R17’s care plan
directed staff to “document in behavior tracking and report any mood or behaviors to
[social services] or [doctor]’” and to “assess for effectiveness to medication with MD
notification of behaviors or side effects or ineffective regimen.” CMS Ex. 16 at 26.
R21’s care plan required staff to review her medication for effectiveness and side effects
and to report concerns to her physician. All staff were to monitor her behaviors on a
tracking form and to attempt non-prescription interventions “per mood behavior
tracking.” They were also to observe her for mental status changes attributable to the
meds and to notify her physician if the medication did not produce the desired results.
CMS Ex. 18 at 44.

The facility had in place a “monthly flow record,” on which staff were supposed to
document behavioral symptoms and medication side effects. See CMS Ex. 18 at 32-33.
The record contains no evidence that staff used these flow records or any other system to
document R17’s symptoms and behaviors. With respect to R21, the flow sheets seem to
have been in place, but, for the entire month of December, the document contains just one
entry, which was made on the December 7 night shift, reporting “movement sided
effects” (motor restlessness, pelvic thrusting, increased agitation, and loss of independent
mobility). CMS Ex. 18 at 32. This document is troublesome for two reasons. First, we
know that R21 exhibited significant behaviors throughout this period, and the absence of
entries shows that facility staff were not consistently monitoring and documenting as
required by the regulation and her own care plan. Second, these behaviors occurred when
R21’s Seroquel had been discontinued. According to the authors of “Side Effects of
Antipsychotic Drugs,” published in Postgraduate Medicine, tardive dyskinesia (TD) is

” Akathisia refers to a “distressing feeling of internal restlessness that may appear as
constant motion, the inability to sit still, fidgeting, pacing or rocking.” CMS Ex. 13 at 4.
It is among the neurological side effects of antipsychotic medications that can occur at
any time from the first few days of treatment to years later. CMS Ex. 13 at 4.

" Tardive dyskinesia (TD) refers to abnormal, recurrent, involuntary movements that may
be irreversible and typically present as lateral movements of the tongue or jaw, tongue
thrusting, chewing, frequent blinking, brow arching, grimacing, and lip smacking. The
trunk or other parts of the body may also be affected. CMS Ex. 13 at 6. When symptoms
of tardive dyskinesia present, the physician should consider lowering or discontinuing the
antipsychotic drug, although such change may exacerbate the symptoms, at least
temporarily.
14

most likely first observed when the dose is lowered or stopped, because antipsychotic
drugs may suppress TD movements. CMS Ex. 22 at 8. Thus, that the hip thrusting
appeared after R21stopped taking Seroquel may have been significant.

Finally, this lack of systematic monitoring defeats Petitioner’s claim that the residents
benefitted from these medications. No reliable evidence suggests that their symptoms
were alleviated.'? Nursing notes indicate that R17’s combative behavior continued.
CMS Ex. 16 at 16. R21was still restless, still wandered through the facility, and still
suffered falls. CMS Ex. 18 at 27-30. This suggests that the drugs were not effective and
that the residents were exposed to their risks without obtaining the desired benefits. In
any event, the absence of careful monitoring makes it impossible to tell where they
benefitted or suffered as a result of the medications.

C. The penalties imposed are reasonable.

I next consider whether the CMPs are reasonable by applying 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.

In reaching a decision on the reasonableness of the CMP, 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 above factors. I am neither bound to defer to CMS’s factual assertions, nor
free to make a wholly independent choice of remedies without regard for CMS’s
discretion. Barn Hill Care 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).

CMS imposed a penalty of $300 per day, which is at the low end of the penalty range for
per-day CMPs ($50-$3,000). 42 C.F.R. §§ 488.408(d), 488.438(a)(1).

The facility has a history of substantial noncompliance, and this is not the first time that it
has been found noncompliant with 42 C.F.R. § 483.25(1). Based on its last annual
survey, completed in February 2009, the facility was not in substantial compliance with
42 C.F.R. § 483.25(1) at scope and severity level D (isolated instance that caused no

” Indeed, these symptoms can be side effects of the medications.
15

actual harm with the potential for more than minimal harm). During both surveys, the
facility was not in substantial compliance with 42 C.F.R. § 483.25(h) (tag F323). In
February 2009, the deficiency was cited at scope and severity level G (actual harm that is
not immediate jeopardy), and, during this survey, it was cited at scope and severity level
E (a pattern of noncompliance that causes no actual harm with the potential for more than
minimal harm). In February 2009, the facility was also not in substantial compliance
with 42 C.F.R. § 483.35(i) (tag F371 — dietary services, sanitary conditions) at scope and
severity level D. CMS Ex. 3 at 1.

Nor was the facility in substantial compliance during its two earlier annual surveys. In
February 2008, it was not in substantial compliance with one requirement, 42 C.F.R. §
483.20(k)(3)(i) (tag F281 — comprehensive care plans — services must meet professional
standards). In January 2007, it was not in substantial compliance with five requirements,
which included an E level deficiency under section 483.25(h).

The facility’s history, by itself, more than justifies the relatively modest CMP of $300 per
day.

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

With respect to the remaining factors, I consider the deficiencies cited significant. It
seems that the facility took no independent steps to ensure that its residents were free
from unnecessary drugs. So long as a physician ordered the drugs, the facility
administered them. Of particular concern was staff’s failure to monitor, in any
systematic way, the effects or effectiveness of the drugs, for which it must be held
culpable.

For these reasons, I conclude that a $300 per day penalty is reasonable.
IV. Conclusion
From December 17, 2009 through February 1, 2010, the facility was not in substantial

compliance with 42 C.F.R. § 483.25(1), and the penalty imposed ($300 per day) is
reasonable.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Family Medical Center
(CLIA: 24D0405950)
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-129
Decision No. CR2402

Date: July 27, 2011

DECISION

I sustain the Centers for Medicare and Medicaid Services’ (CMS) determination to
revoke the certificate of registration issued to Petitioner, Family Medical Center, to
engage in the testing of human specimens pursuant to the Clinical Laboratory
Improvement Amendments of 1988 (CLIA)! 42 US.C. § 263a et seq. Pursuant to 42
C.F.R. §§ 493.1840(e) and 493.1844(d)(2), Petitioner’s CLIA certificate is revoked for at
least one year effective the date of this decision.”

' Codified at 42 U.S.C. §§ 263a, 1302, 1395x(e). “CLIA” when used in this decision
refers to both statutory and regulatory provisions governing the program, unless
otherwise indicated.

> [note that 42 C.F.R. § 493.1840(d)(2) provides that the revocation of a CLIA
certificate becomes effective on the date that the Administrative Law Judge (ALJ)
upholds the decision, unless the lab’s deficiencies pose immediate jeopardy. In this case,
although CMS found that Petitioner’s deficiencies posed immediate jeopardy, CMS
notified Petitioner that the effective date of the sanctions would be the date of the ALJ
decision. CMS Ex. 3, at 3; CMS Ex. 5, at 3.
I. Background

Petitioner is a Minnesota laboratory certified under CLIA to perform testing in the
subspecialty of routine chemistry, including tests such as whole blood glucose and
hemoglobin Alc testing. CMS Ex. 1, at 2. To maintain this certification, a laboratory
such as Petitioner must periodically undergo proficiency testing, (PT) in which the
laboratory’s reported results are reviewed and assessed for acceptable accuracy. See 42
C.F.R. §§ 493.801 - 493.959. Petitioner enrolled in a CLIA certified proficiency testing
program administered by the College of American Pathologists (CAP).

On February 2, 2010, the CAP sent Petitioner several specimens for proficiency testing.
The specimens included a sample labeled ““WBG-01” (the PT sample) that was to be
subjected to a whole blood glucose test, and Petitioner was required to report its results to
the CAP. Petitioner’s staff twice tested the PT sample, mistakenly performing a
hemoglobin Alc test rather than a whole blood glucose test and each time received an
error code. On February 3, 2010, Petitioner sent the PT sample to another laboratory,
Quest Diagnostics (Quest or reference lab), and requested hemoglobin Alc testing. P.
Br. at 2; P. Ex. 1, at 2; CMS Ex. 2, at 1, 3, 5. Quest notified CMS by letter dated
February 5, 2010, that it received the PT sample from Petitioner who requested that Quest
conduct a hemoglobin Alc analysis on the PT sample. CMS Ex. 2. Quest further
reported to CMS that the requisition form identified the name of the patient as “CAP,
SURVEY.” CMS Ex. 2, at 1, 3.

Based on the information from Quest, on April 13, 2010, CMS conducted a complaint
survey and found that Petitioner was not in compliance with several applicable CLIA
conditions of participation. CMS Ex. 1. CMS notified Petitioner that Petitioner
improperly referred proficiency testing samples to another laboratory for testing and was
therefore not in substantial compliance with two CLIA conditions: 42 C.F.R. §§ 493.801
(enrollment and testing of samples), and 493.1403 (laboratories performing moderate
complexity testing; laboratory director). For this reason, CMS revoked Petitioner’s CLIA
certificate and cancelled the laboratory’s approval to receive Medicare payments for its
services. CMS Exs. 3, 5.

By letter dated December 1, 2010, Petitioner requested an ALJ hearing and on December
9, 2010, an Acknowledgement and Initial Docketing Order (Order) was issued at my
direction. In accordance with the procedural schedule set out in my Order, CMS filed a
motion for summary judgment and Petitioner filed an opposition. With its motion and
brief (CMS Br.), CMS submitted five exhibits (CMS Exs. 1-5). With its response brief
(P. Br.), Petitioner submitted one exhibit (P. Ex. 1).
IL. Issue

The issue in this case is whether the undisputed facts establish that Petitioner violated
CLIA and its implementing regulations by “intentionally referring” PT samples to
another laboratory.

III. Controlling Statutes and Regulations

In order to ensure the accuracy and reliability of laboratory tests, and thus the health and
safety of those tested, CLIA creates a federal certification process for laboratories that
perform clinical diagnostic tests on human specimens. Public L. No. 100-578 (codified
as amended at 42 U.S.C. § 263a et seq. (1988)); see H.R. Rep. No. 100-899, at 8,
reprinted in 1988 U.S.C.C.A.N. 3828, 3829. To be certified, a laboratory must meet the
conditions of certification set out in the statute and regulations. 42 U.S.C. §
263(a)(f)(1)(E); 42 C.F.R. Part 493. A condition represents a major division of
laboratory services or required environmental protections. Each condition is broken
down into more detailed standards that laboratories must meet to be compliant with the
overall condition. White Lake Family Medicine., P.C., DAB No. 1951, at 2-3 (2004);
RNA Laboratories, DAB No. 1820, at 3 (2002).

A laboratory that holds a CLIA certificate may perform moderate and high complexity
tests but must participate in the PT program outlined in 42 C.F.R. Part 493, Subpart H.
Under its provisions, each laboratory must enroll in an approved PT program that meets
specific criteria set out at Subpart I of Part 493. 42 C.F.R. § 493.801. A laboratory
performing moderate complexity testing “must successfully participate” in an approved
PT program for each “specialty, subspecialty, and analyte or test in which [it] is certified
under CLIA.” 42 C.F.R. § 493.803(a).

A laboratory must treat and analyze PT samples in the same manner as patient samples.
42 CFR. § 493.801(b); 42 C.F.R. § 493.61(b)(1); 42 U.S.C. § 263a(d)(1)(E). The PT
samples must be integrated with the laboratory’s regular patient workload, and the same
personnel who routinely do the testing must perform the tests, using the laboratory’s
routine testing method. 42 C.F.R. § 493.801(b)(1). The laboratory director and the
individual who performs the testing must attest to the integration of PT samples. PT
samples must be tested the same number of times as routine patient samples. 42 C.F.R.
§ 493.801(b)(2). Records documenting each step taken in the testing of PT samples are
required. 42 C.F.R. § 493.801(b)(5).

A laboratory may not engage in inter-laboratory communications pertaining to PT results
until after the due date by which the laboratory must report its results to the PT program.
42 C.F.R. § 493.801(b)(3). It must not refer PT samples, or portions of PT samples, to
another laboratory for any analysis that it is certified to perform in its own laboratory.

42 U.S.C. § 263(a)(i); 42 C.F.R. § 493.801(b)(4). Ifa laboratory intentionally refers a PT
sample to another laboratory for analysis, CMS must revoke its license for at least one
year. 42 U.S.C. § 263a(i)(4); 42 C.F.R. § 493.1840(b); accord Wade Pediatrics v.
Department of Health and Human Services, 567 F.3d 1202, 1204 (10th Cir. 2009);
Lackawanna Medical Group Lab., DAB No. 1870 (2003).

The statute gives the Secretary of Health and Human Services broad enforcement
authority, which the Secretary has delegated to CMS. CMS or its designee conducts
periodic inspections to determine a laboratory’s compliance with CLIA requirements.
42 C.F.R. § 493.1777. CMS may suspend, limit, or revoke the CLIA certificate of a
laboratory that is out of compliance with one or more CLIA conditions and may also
impose alternative sanctions (directed plan of correction, state monitoring, civil money
penalty). 42 C.F.R. § 493.1806.

IV. Findings and Conclusions
I find the following facts are undisputed:

1. On February 2, 2010, Petitioner received several PT samples, including a sample
labeled “WBG-01,” the PT sample that was to be subjected to a whole blood
glucose test. P. Br. at 2; P. Ex. 1, at 1.

2. Petitioner was at that time certified to perform testing in the subspecialty of
routine chemistry, including both whole blood glucose and hemoglobin A1c tests.
CMS. Ex. 1, at 2.

3. Petitioner’s employees mistakenly performed a hemoglobin A 1c test rather than a
whole blood glucose test on the PT sample on two occasions, each time resulting
in an error code. P. Br. at 2; P. Ex. 1, at 1.

4. When a patient sample receives multiple error codes, Petitioner’s policy is to send
it to a reference laboratory for analysis. It is Petitioner’s policy to treat PT
samples in the same manner as patient samples. P. Ex. 1, at 2; P. Br. at 2.

5. After receiving two error codes, Petitioner’s Lab Coordinator sent the PT sample
to Quest and requested it perform a hemoglobin Alc test. P. Ex. 1, at2(“...1
sent the PT sample to Quest Laboratory to be analyzed on or about February 3,
2010.”); P. Br. at 2 (“[O]n February 3, 2010, after obtaining the second error code
result, Ms. Strahl sent the PT sample to [Quest] to be tested.”); CMS Ex. 1, at 2;
CMS Ex. 2.

6. A laboratory must not intentionally send PT samples, or portions of samples, to
another laboratory for analysis that it is certified to perform in its own laboratory.
42 CFR. § 493.801(b)(4).
7. Petitioner intended to send and did send the PT sample to another laboratory to
perform a hemoglobin Alc test analysis, which Petitioner is certified to perform,
in violation of 42 U.S.C. § 263a(i)(4); 42 C.F.R. §§ 493.801(b)(4) and
493.1804(b).

8. CMS must revoke for at least a year Petitioner’s CLIA certification because it
“intentionally referred” a PT sample to another laboratory “for analysis.”
42 U.S.C. § 263a; Victor Valley Community Hospital/Clinical Laboratory and
Tomasz Pawlowski, M.D., DAB No. 2340, 3-4 (2010).

9. There are no disputed issues of material fact and summary disposition is therefore
appropriate in this matter. Brightview Care Center, DAB No. 2132 (2007);
Residence at Kensington Place, DAB No. 1963 (2005); Community Hospital of
Long Beach, DAB No. 1928 (2004); Lebanon Nursing and Rehabilitation Center,
DAB No. 1918 (2004).

V. Discussion

Pursuant to 42 C.F.R. § 1844(f) it is presumed that Petitioner has a right to a hearing in
this case. See Garden City Medical Clinic, DAB No. 1763 (2001), citing 42 U.S.C. §
263a(i)(1) and 42 C.F.R. § 493.1844(a). However, summary judgment is appropriate if a
case presents no genuine issue of material fact, and the moving party is entitled to
judgment as a matter of law. I/linois Knights Templar Home, DAB No. 2274, at 3-4
(2009) (including cases cited therein); White Lake Family Medicine., P.C., DAB No.
1951, at 10-12 (2004). The moving party may show the absence of a genuine factual
dispute by presenting evidence so one-sided that it must prevail as a matter of law or by
showing that the non-moving party has presented no evidence “sufficient to establish the
existence of an element essential to [that party’s] case, and on which [that party] will bear
the burden of proof at trial.” Livingston Care Center. v. Department of Health & Human
Services, 388 F.3d 168, 173 (6th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986)). To avoid summary judgment, the non-moving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab. Center, DAB
No. 1918 (2004). The rule may be stated succinctly thus:

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

In examining the evidence for purposes of determining the appropriateness of summary
judgment, I must draw all reasonable inferences in the light most favorable to the non-
moving party. Brightview Care Center, DAB No. 2132, at 2, 9; Livingston Care Center,
388 F.3d at 172; Guardian Health Care Center, DAB No. 1943, at 8 (2004); but see
Brightview, DAB No. 2132, at 10 (holding entry of summary judgment upheld where
inferences and views of non-moving party are not reasonable). Moreover, drawing
factual inferences in the light most favorable to the non-moving party does not require
that I accept the non-moving party’s legal conclusions. Cf: Guardian Health Care
Center, DAB No. 1943, at 11 (“A dispute over the conclusion to be drawn from applying
relevant legal criteria to undisputed facts does not preclude summary judgment if the
record is sufficiently developed and there is only one reasonable conclusion that can be
drawn from those facts.”); Wade Pediatrics, DAB No. 2153, at 18 (2008), aff'd, Wade
Pediatrics v. Department of Health and Human Services, 567 F.3d at 1204; White Lake
Family Medicine., P.C., DAB No 1951, at 14 (“[A] dispute between the parties as to the
correct conclusion to draw from undisputed facts is not an impediment to the entry of
summary judgment.”).

For purposes of resolving this motion for summary judgment, I accept as true Petitioner’s
version of the facts. On February 2, 2010, Petitioner received its PT samples from the
College of American Pathologists (CAP), including one PT sample marked “WBG-01.”
P. Br. at 2; P. Ex. 1, at 1. The PT sample marked “WBG-01” was to be subjected to a
whole blood glucose test, but an unnamed lab technologist mistakenly performed a
hemoglobin Alc test on the sample which produced an error code rather than a test result.
Id. The unnamed lab technologist brought the sample to another employee, Lab
Coordinator Roberta Strahl. Jd. Without checking the label to determine the appropriate
test, Ms. Strahl conducted a second hemoglobin Alc test on the PT sample rather than the
whole blood glucose test, and she also received an error code instead of a result. Jd.

After receiving the second error code, on February 3, 2010, Ms. Strahl sent the PT
sample to their reference lab, Quest, for additional testing. When Ms. Strahl “sent the PT
sample to Quest, [she] believed [she] was complying with [Petitioner’s] policy and with
the CLIA requirement that PT samples be treated in the same way as patient samples are
treated and did not realize that [her] action was not in compliance with [Petitioner’s]
policy or CLIA.” P. Ex. 1, at 2; P. Br. at 2.

On February 4, 2010, when reviewing the PT samples, Ms. Strahl noticed that the PT
sample for whole blood glucose testing was not among the other PT samples. At that
point, Ms. Strahl recognized that she likely sent the whole blood glucose sample to the
reference lab. Further, she realized that the reason for the error code was that Petitioner
had performed the wrong test on the PT sample and therefore she should not have sent
the PT sample to the reference lab. Ms. Strahl opined that the PT sample “likely would
have yielded normal results had it simply been subjected to the proper test, and therefore
required no additional analysis [by the reference lab].” P. Ex. 1, at 2; P. Br. at 2-3. She
immediately contacted the reference lab and asked them to return the PT sample. Quest
explained that it could not return the PT Sample because it was a survey sample. Jd. In
Petitioner’s report to the American Proficiency Institute of its February 2010 PT survey,
Petitioner reported no result for the WBG-01 PT sample. Jd.

Both parties agree that Petitioner referred the PT sample to Quest. The parties’
arguments, however, center on whether the referral was “intentional.” Petitioner argues
that the referral was not “intentional” in the respect that its Lab Coordinator did not
intend to violate the regulation. Rather, argues Petitioner, its goal was quite the opposite:
according to Petitioner, its Lab Coordinator referred the PT sample to the reference lab
with the specific intent to comply with Petitioner’s policy and CLIA requirements to treat
PT samples in the same manner as it tests patient specimens. P. Br. at 8; P. Ex. 1, at 2.
Petitioner contends that the statute’s “intentionality” requirement includes both
“knowing” and “willful” components, and that although Petitioner may have knowingly
referred the PT sample to the reference lab, CMS has failed to proffer evidence that
Petitioner “‘willfully” referred the PT sample to Quest. Petitioner bases this argument
principally on the Merriam Webster definitions and synonyms for the term “willful.”* P.
Br. at 6-7. Petitioner provides several synonyms for the term and asserts that “[e]ach of
these terms connotes a mental state far beyond that encompassed by ‘knowing,’ and
indeed each suggests some degree of intent not to adhere to a rule or directive.” P. Br. at
7. Petitioner concludes that in order to willfully refer a PT sample to another laboratory,
it must have done so with “intent to circumvent or disobey CLIA’s proficiency testing
requirements.” Jd.

There are a number of cases that address the issue of “intentionality” in the context of this
statute. Most recently, the Departmental Appeals Board (Board) in Victor Valley
Community Hospital/Clinical Laboratory and Tomasz Pawlowski, M.D., DAB No. 2340
(2010), explained:

[T]he very fact that Victor Valley plainly marked the samples as PT makes
it clear that here, as in Wade, there was ‘was no mistake, accident,

> In Petitioner’s attempt to create a factual dispute as to the intent of Petitioner, it relies
on Vandalia Park DAB No. 1939 (2004). P. Br. at 5-6. Vandalia Park, however, has
nothing to do with the CLIA statute or regulations nor does it define the term “willful” in
any sense favorable to Petitioner. Vandalia Park only notes that under certain
circumstances, “willful” may sometimes require a finding of fact. The definition of
“intentional” in respect to the case before me is an application of law and not an issue of
disputed sentient fact.
negligence or recklessness’ about the referral of PT samples to [another
laboratory] for analysis. Victor Valley knew it was referring out PT
samples and willed, based on its requisition, that the PT samples be
subjected to analysis. The referral was thus made knowingly and willfully
and was intentional within the meaning of CLIA’s requirements.

Victor Valley, DAB No. 2340, at 8, citing Wade Pediatrics, DAB No. 2153 (2008), aff'd,
Wade Pediatrics v. Department of Health & Human Services, 567 F.3d 1202 (10th Cir.
2009).

Victor Valley is consistent with the Board’s previous position on the issue. The Board’s
decision in Wade Pediatrics noted that the CLIA regulations do not specifically define
“intentional” referral, but do define “intentional violation” in general to mean “knowing
and willful” noncompliance with any CLIA condition. Wade Pediatrics, DAB No. 2153
(2008); 42 C.F.R. § 493.2. Petitioner argues that it referred the PT sample to Quest with
the specific intent to follow the regulation to treat PT samples the same as other samples.
However, the laboratory in Wade also contended that its PT sample referral to another
laboratory for analysis was not made with intent to violate the law, but to improve its
testing standards. The Board found this argument did not demonstrate that the referral
was unintentional within the meaning of CLIA. The Tenth Circuit upheld the Board’s
decision and stated:

Even assuming Wade’s ultimate or end intent was to improve its work
product, as a means of effecting that intent Wade surely referred its
proficiency test results “knowingly and willfully” to [another laboratory].
Wade does not suggest, for example, that its technician negligently left the
lab’s proficiency testing samples at [the other laboratory] and [the other
laboratory] went ahead, without Wade’s knowledge, to analyze them.
Instead, it is undisputed that Wade’s technician took the lab’s proficiency
testing samples to [the other laboratory] with the express purpose of testing
them there-that is, with the express purpose of referring them for analysis.
There was no mistake, accident, negligence or recklessness about it. And
under the statute’s plain language, such a “knowing and willful” action is
sufficient to trigger liability, even if it was undertaken only in service of
some further and ultimate intent. Simply put, Wade is responsible for its
intended means, whatever its intended ends might have been.

567 F.3d at 1205 (emphasis in original).

Similarly in Lackawanna Medical Group Laboratory, DAB No. 1870 (2003), the Board
rejected the position that an intent to carry out a legal purpose in referring out a PT
sample does not establish that the referral is not “intentional” for purposes of section
493.801(b)(1). Jd. at 9-11.
Petitioner’s argument that when any sample receives multiple error codes it sends the
sample to a reference laboratory, and thus was simply intending to follow the rule to treat
PT samples like any other patient sample, is clearly invalidated by Wade, Lackawanna,
and Victor Valley. It is irrelevant whether Petitioner’s intended end was benign, or even
benevolent. Petitioner is responsible for its intended means of following its reference
policy by knowing and willfully sending the PT sample to its reference lab for analysis.
That action is sufficient to trigger liability.

Petitioner argues that the referral was accidental in the sense that it “accidentally”
performed the wrong test on the PT sample, thus creating a sequence of events leading to
the intentional referral to Quest. It is Petitioner’s position that but for the mistakenly-
conducted test, the referral would not have been initiated. P. Br. at 2. I recognize that the
“intent” requirement is not met by the simple act of sending PT samples to another
laboratory. As the Wade panel pointed out, for example, sending samples to another lab
for disposal after the end of the testing event would not constitute an improper referral.
Sending the samples to another lab by mistake, never intending that they be analyzed
would not constitute an improper referral. Wade, DAB No. 2153, at 13-15, 20. But in
this case, where Petitioner referred what it knew to be a PT sample to another laboratory
and requested that laboratory perform an analysis, that referral was not “accidental” or
“mistaken” under the CLIA statutes and regulations, and as those statutes and regulations
have been interpreted consistently in the case law of this forum. See Wade, DAB No.
2153, at 20, 21; Victor Valley, DAB No. 2340, at 8, 13-14. The law is very clear: unless
such a referral is accidental or the result of a mistake such as a misrouting of a sample or
something suggesting that the referral for analysis was not intended, then the referral is a
violation. The motive or purpose for the referral is immaterial, and in this case that
means that Petitioner’s efforts to establish a question of fact surrounding its motive in
making the referral to Quest do not create a genuine issue of material fact.

Petitioner does not dispute that it is certified under CLIA to perform testing in the
subspecialty of routine chemistry, including tests such as whole blood glucose and
hemoglobin Alc testing. Petitioner concedes that it received PT samples from the CAP
including a PT sample for a whole blood glucose test. Petitioner openly admits that it
intended to send the PT sample to another lab for analysis. Petitioner acknowledges that
it sent that PT sample to another lab and requested analysis. The undisputed facts clearly
illustrate that, without reference to or consideration of its motivation in doing so, this
deliberate action established that Petitioner “intentionally referred” the PT sample to
“another laboratory for analysis which it is certified to perform.” 42 U.S.C. § 263a(i)(4);
42 C.F.R. § 493.1840(b). In doing so, Petitioner violated the statute (42 U.S.C. §
263a(i)(4)) and regulations (42 C.F.R. § 493.801(b)(4)). Petitioner’s license must
therefore be revoked for at least one year. 42 U.S.C. § 263a(i)(4); 42 C.F.R. §
493.1840(b). Wade Pediatrics, DAB No. 2153; Lackawanna Medical Group Lab., DAB
No. 1870.

10

IV. Conclusion

Accepting as true all of Petitioner’s factual assertions, I find that Petitioner violated

42 U.S.C. § 263a(i)(4) and 42 C.F.R. § 493.801(b)(4), because it intentionally referred its
PT sample to another lab for analysis which it is certified to perform. I therefore grant
CMS’s motion for summary judgment, and uphold the revocation of Petitioner’s CLIA
certificate.

/s/

Richard J. Smith
Administrative Law Judge