Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
ManorCare at Palos Heights — West, ) Date: September 24, 2008

(CCN: 14-5893), )
)
Petitioner, )
)

-Vv.- ) Docket No. C-07-626

) Decision No. CR1847
Centers for Medicare & Medicaid )
Services. )
)

DECISION

In this case, we revisit the question of a long term care facility’s responsibilities when it
receives irregular medication orders.

Petitioner, ManorCare at Palos Heights-West (Petitioner or facility), is a long term care
facility located in Palos Heights, Illinois, that is certified to participate in the Medicare
program as a provider of services. Petitioner challenges the Centers for Medicare &
Medicaid Services’ (CMS’s) determination that, based on a survey completed May 29,
2007, it was not in substantial compliance with program participation requirements.

I conclude that the facility was not in substantial compliance with requirements governing
unnecessary drugs (42 C.F.R. § 483.25(1)(1)); medication errors (42 C.F.R.

§ 483.25(m)(2)) and drug regimen review (42 C.F.R. § 483.60(c)), and that its
deficiencies posed immediate jeopardy to resident health and safety. I also affirm the
civil money penalties (CMPs) imposed, $3050 per day for one day of immediate
jeopardy, and $50 per day for 27 days of noncompliance that was not immediate jeopardy
($4400 total), which are the minimum amounts authorized by the statute and regulations.
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, section 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 C.F.R. § 488.301.

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance with program
participation requirements. Act, section 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, section 1819(g)(2)(A);
42 C.F.R. §§ 488.20(a); 488.308.

Here, following an extended complaint investigation survey, completed May 29, 2007,
CMS determined that the facility was not in substantial compliance with Medicare
participation requirements, and that its deficiencies posed immediate jeopardy to resident
ealth and safety. Based on these determinations, CMS imposed against the facility
CMPs of $3050 per day for one day of immediate jeopardy, and $50 per day for 27 days
of substantial noncompliance that was not immediate jeopardy ($4400 total). CMS
Exhibits (Exs.) 1-4.

Petitioner requested a hearing and the case was assigned to me. I held a hearing in
Chicago, Illinois on April 8, 2008. Mr. Nicholas J. Lynn and Mr. Mark J. Silberman
appeared on behalf of Petitioner, and Mr. John E. Bizot appeared on behalf of CMS.
During the hearing, I admitted into evidence CMS Exs. 1-54, and P. Exs. 1-24. Tr. 4-5,
72. With its reply brief (CMS Reply), CMS offered an additional exhibit as rebuttal
evidence, CMS Ex. 55. Petitioner has belatedly objected to the admission of this
document.’ My pre-hearing order allows a party to supplement its exchanges based on a

' CMS submitted the proposed document in a filing dated June 18, 2008.
Petitioner did not file an objection until August 21, 2008. The regulations afford a party
“20 days from the date of mailing . . . to submit any rebuttal statement or additional
evidence.” 42 C.F.R. § 498.17(b); see also Pre-hearing Order at 8 (4 22) (August 7,
2007) (time limit to answer motions is 20 days from date of receipt). So Petitioner’s

(continued...)
3

showing of good cause and the absence of prejudice to the opposing party. However, I
find it unnecessary to determine good cause/prejudice with respect to CMS Ex. 55, since
the document is not necessary to my resolution of the case. I therefore decline to admit
CMS Ex. 55.

The parties have also filed opening briefs (Br.), closing briefs (Cl. Br.) and reply briefs
(Reply).

II. Issues
This case presents the following questions:

. whether, from May 24 through June 20, 2007, the facility was in substantial
compliance with the program participation requirements, specifically 42 C.F.R.
§ 483.25(1)(1) (unnecessary drugs), 42 C.F.R. § 483.25(m)(2) (medication errors),
and 42 C.F.R. § 483.60(c) (pharmacy services — drug regimen reviews);

. if the facility was not in substantial compliance on May 24, 2007, did its
deficiencies pose immediate jeopardy to resident health and safety?

Because CMS has imposed the statutory and regulatory minimum per day CMP amounts,
the penalty is reasonable as a matter of law. See, e.g., Hermina Traeye Memorial Nursing
Home, DAB No. 1810, at 16 (2002).

III. Discussion

A, The facility was not in substantial compliance with 42 C.F.R.
§§ 483.25()(1), 483.25(m)(2) and 483.60(c).”

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, section

'(...continued)
objections are not timely. For the reasons stated, I nevertheless decline to admit CMS Ex.
55.

> My findings of fact and conclusions of law are set forth, in italics and bold, in
the discussion captions.
4

1819(b); 42 C.F.R. § 483.25. To this 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 used in the presence of adverse
consequences indicating that their dose should be reduced or discontinued. 42 C.F.R.

§ 483.25(1)(1). The regulation specifically requires that the facility “ensure” that its
residents are free of any significant medication errors. 42 C.F.R. § 483.25(m)(2).

In the regulation’s preamble, the drafters explained how medication errors are judged.
The surveyors consider three factors: 1) drug category (did the error involve a drug that
could result in serious consequences for the resident); 2) resident condition (was the
resident compromised in such a way that he/she could not easily recover from the error);
and 3) frequency of error (is there any evidence that the error occurred more than once).
The drafters then offered an example of a significant medication error: three times in one
week staff administer twice the correct dosage of digoxin, a potentially toxic drug, to a
resident who already had a slow pulse rate that the drug would further lower.

56 Fed. Reg. 48826, 48853 (September 26, 1991).

The facility also must employ or obtain the services of a licensed pharmacist who, among
other responsibilities, must review the drug regimen of each resident at least monthly, and
“must report any irregularities to the attending physician and the director of nursing, and
these reports must be acted upon.” 42 C.F.R. § 483.60(c).

In this case, Resident 1 (R1) was a 68-year-old woman, admitted to the facility on
January 15, 2007, transferring from an acute-care hospital. CMS Ex. 27. She was a small
woman, weighing only 102 pounds. CMS Ex. 37, at 1. R1 had a history of multiple
cerebrovascular accidents, and suffered from a multitude of impairments, including
dementia, an anxiety disorder, chronic obstructive pulmonary disease, anemia, and
hypertension. CMS Exs. 24; 27; 29, at 3; 30. She had swallowing difficulties. CMS Ex.
29, at 2; CMS Ex. 34, at 3. On the other hand, a January 19, 2007 psychology assessment
found that R1 was able to perform simple calculations; her general knowledge was
accurate; her immediate memory was intact; her thought processes were logical and
organized; and her judgment was only minimally impaired; she had no hallucinations or
delusions. She was, however, depressed and in need of close supervision. CMS Ex. 41.

While hospitalized, her medication orders included Risperidone (Risperdal) 0.5 mg BID
(twice a day). CMS Ex. 43, at 3; CMS Ex. 53; CMS Ex. 54. Buta very serious error
occurred on her discharge/transfer medication reconciliation form: the transcribing nurse

> Risperidone is sold under the trade name Risperdal in the United States.
5

omitted a decimal point, writing “Risperdal 5 mg BID.” CMS Ex. 43, at 1; P. Ex. 10.
Apparently, no one at the facility looked beyond the transfer order; at least, no one
noticed the error. R1’s January 15 medication order form called for “Risperdal 5 mg PO
[orally] BID.” CMS Ex. 43, at 1; P. Ex. 10. At some point (his signature is not dated)
R's physician, not recognizing the error in transcription, signed off on the orders. CMS
Ex. 32, at 1; P. Ex. 13.4

At the time of her admission to the facility, no recorded diagnosis supported the order for
Risperdal. See, e.g., CMS Ex. 36. Uncorrected, this omission would have violated 42
C.F.R. § 483.25(D(1), which considers “unnecessary” any drugs “used without adequate
indications for their use.” The facility allegedly remedied this omission with a physician
telephone order, dated January 17, which indicates that the Risperdal was prescribed for
anxiety, and Ativan was prescribed for psychosis. CMS Ex. 33, at 2; P. Ex. 3. But there
are two major problems with this “correction.” First, the individual who wrote in the
diagnoses apparently made a transcription error, reversing the medication/diagnoses.
Risperdal is not an approved treatment for anxiety; it is prescribed to treat psychosis.
Ativan is a treatment for anxiety. Tr. 106-107; 132; CMS Ex. 36, at 3. More serious, the
“correction” came too late. When the facility’s consulting pharmacist reviewed R1's drug
regimen she had no idea what, if any, diagnosis justified the administration of Risperdal.
She nevertheless failed to question the order, claiming that the facility’s request for a
psych evaluation provided the necessary “indications for [its] use.” Tr. 154.

On January 25, facility staff conducted the required assessment, in which they noted that
R1 was taking three psychotropic medications: Zoloft, Risperdal, and Ativan, putting her
at risk for adverse side effects. The assessment directed that her care plan require staff
monitoring and physician notification of any adverse affects from these drugs. CMS Ex.
29 at 3, 21-22.

Throughout R1's stay, the facility nurses administered to her 5 mg of Risperdal twice
daily. CMS Ex. 40, at 2. No one questioned the order or the dosage.

On January 26, R1 suffered cardiac arrest, and was sent to the emergency room. CMS
Ex. 23; CMS Ex. 34, at 8-9; P. Ex. 16. She died in the hospital on February 4, 2007.
CMS Ex. 26.

* It appears that the same nurse also mis-transcribed R1's 0.5 mg order for Ativan,
writing 5.0 mg instead. CMS Ex. 43, at 1, 3. However, someone apparently caught that
error, because her admission order for Ativan was corrected; someone wrote in a decimal
point and, in bold, a zero prior to the decimal point: “Ativan 0.5 mg PO.” CMS Ex. 32, at
1.
6

1. RI's drug regime was not free from unnecessary
drugs because she repeatedly received excessive doses
of the powerful antipsychotic drug, Risperdal.

Risperdal is a powerful antipsychotic medication used to treat schizophrenia and acute
manic or mixed episodes associated with bipolar disorder. CMS Ex. 20, at 1-2; CMS Ex.
47, at 1. Although physicians are apparently not precluded from prescribing the drug for
dementia-related psychosis (as occurred here), it has not been approved for that purpose,
and administering the drug to elderly patients with dementia-related psychosis presents
significant risks. CMS Ex. 47, at 1. Risperdal’s package insert includes the following
black box warning:*

IWARNING: INCREASED MORTALITY IN ELDERLY PATIENTS WITH
IDEMENTIA-RELATED PSYCHOSIS

Elderly patients with dementia-related psychosis treated with atypical
antipsychotic drugs are at an increased risk of death compared to
placebo ... Although the causes of death were varied, most of the deaths
appeared to be either cardiovascular (e.g., heart failure, sudden death)
or infectious (e.g., pneumonia) in nature. RISPERDAL® (risperidone) is
not approved for the treatment of patients with Dementia-Related
Psychosis. [See Warnings and Precautions (5.1)]

CMS Ex. 47, at 5; see also CMS Ex. 20, at 2; CMS Ex. 48, at 5; P. Ex. 18, at 1, 2; Tr.
116, 165-166, 169-170.

This warning puts physicians, pharmacists, and other health care workers on notice that
great care must be exercised where, as here, Risperdal is prescribed for an elderly,
demented patient.° At a minimum, these responsible parties should ensure that the

* The United States Food and Drug Administration 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.

® T reject as frivolous Petitioner’s argument that this 68-year old woman who
suffered from dementia and had a significant history of strokes was not “elderly.” See
CMS Ex. 45, at 4; CMS Ex. 48, at 12 (defining “geriatric” as individuals over age 65).
(continued...)
7

dosages administered are not excessive, and should carefully monitor the resident for any
adverse effects.

Here, comparing R1's hospital orders with her transfer order leads to the inescapable
inference that an undetected transcription error — the omitted decimal point — resulted in
facility staff administering to R1 ten times more Risperdal than she should have received.
Petitioner nevertheless suggests that the twice daily 5 mg dosage of Risperdal was
appropriately ordered by R1's physician, for his own, unarticulated, reasons. Petitioner’s
position is both poorly supported, and, as discussed in section 2 below, marginally
relevant. It is poorly supported because the evidence (and common sense)
overwhelmingly establish that the administered dosage was neither appropriate nor
intended by R1's physician. Ten milligrams of Risperdal per day to treat psychotic
dementia in a small elderly resident is unquestionably grossly excessive and dangerous.
CMS Ex. 52, at 4 (Guay Decl. § 11). A sudden ten-fold increase in dosage is also
contrary to fundamental principles of medication administration and places the resident at
increased risk. CMS Ex. 52, at 8-9 (Guay Decl. ] 21, 22); Tr. 121-122.

The pharmacological literature emphasizes special considerations in administering
Risperdal to the elderly and debilitated. CMS Exs. 20, 45, 46, 47, 48. “In all cases, the
lowest effective dosage should be determined for each patient.” CMS Ex. 20, at 1.
Dosages for this population are set as follows: initially 0.5 mg twice per day, to be
increased in increments of no more than 0.5 mg once or twice per day, as tolerated.
Increases above 1.5 mg twice per day should occur at no more than weekly intervals. In
some patients, slower titration may be needed. CMS Ex. 20, at 1, 2; CMS Ex. 45, at 8;
CMS Ex. 47, at 6.

Federal OBRA’ guidelines for nursing homes recommend that the dosage not exceed 2
mg per day given in 1—2 divided doses. If higher doses are necessary to maintain or

*(...continued)
Moreover, nothing in this record suggests that facility staff had any questions as to
whether R1 fell into this risk category, and if they had any doubts about who would be
considered “elderly” for purposes of evaluating risks, it was incumbent upon them to
resolve those doubts. For her part, Pharmacist Garcia showed that she considered the
facility residents to be elderly when, after reviewing the drug regimens, including R1's,
she reported that “[e]ach month the charts are reviewed for medications which are
considered to be inappropriate for the elderly ....” CMS Ex. 13, at 2.

7 Federal Nursing Home Reform Act (from the Omnibus Budget Reconciliation
Act of 1987).
8

improve the resident’s functional status, “the use of a higher dose must be documented
per OBRA guidelines.” CMS Ex. 20, at 2; see CMS Ex. 46, at 6; CMS Ex 52, at 3 (Guay
Decl.§ 8); Tr. 141-142.

Finally, the smaller a person is, the smaller the dose necessary to achieve the desired
result. Tr. 128. At 102 pounds, R1 was very small.

Thus, the overwhelming medical evidence does not support the proposition that a 10 mg
daily dose of Risperdal is an appropriate dosage for a small, elderly woman being treated
for dementia-related psychosis.

In fact, the only suggestion in this record that a 10 mg per day dosage would be
appropriate came from the facility’s consultant pharmacist, Heidi Garcia, who testified
that she noted no irregularities in R1's drug regimen because that dosage fell within the
manufacturer’s recommendations and the recommended dosage range as set forth in the
Lexi-Comp Geriatric Dosage Handbook 2004-2005 (4 mg to 16 mg). P. Ex. 17, at 1,2
(Garcia Decl. f§ 3, 5, 6, 7); CMS Ex. 45; see Tr. 168 (CMS Ex. 45 is from the Lexi-Comp
Geriatric Dosage Handbook). In fact, that publication reiterates the initial twice daily 0.5
mg dosage with slow titration of no more than 0.5 mg twice daily. CMS Ex. 45, at 8; Tr.
168-169.

None of the other medical references in this record approve administering such high
doses of the antipsychotic medication to geriatric patients treated for dementia-related
psychosis. At most, a chart included in an appendix to a pharmacological drugs
handbook lists maximum adult dosages at 4-16 mg. CMS Ex. 19, at 3; but see CMS Ex.
19, at 2 (listing the daily oral dosage at 2 mg).

If it is ever appropriate, the dosage range Pharmacist Garcia cites refers to treatment of
schizophrenia in adults. CMS Ex. 47, at 5. As Dr. David Guay explained, these large
doses might be appropriate for a young adult schizophrenic.* Tr. 110. For reasons that
are not fully understood, patients suffering from schizophrenia have increased tolerance
for antipsychotic medications. But the drug’s manufacturer notes that, even though
“Te]fficacy has been demonstrated in a range of 4-16 mg/day,” doses above 6 mg per day
are not demonstrated to be more efficacious than the lower doses, and “are generally not
recommended.” CMS Ex. 47, at 5. And for geriatric patients, defined as those over 65,

* Dr. Guay, CMS’s expert witness, has a doctorate in pharmacology and has
practiced for more than 30 years. CMS Ex. 50. He testified that he has never seen a dose
this high. Tr. 139.
9

doses exceeding 3 mg per day are not recommended. CMS Ex. 45, at 4; CMS Ex. 48, at
12.

Because elderly patients are more likely to have decreased
renal function, caution should be taken in dose selection and
titration. ... In schizophrenic patients, doses exceeding 3 mg
per day are not recommended. In patients with behavioural
disturbances due to severe dementia the optimal dose is 0.5
mg. b.i.d. (1.0 mg per day)...

CMS Ex. 48, at 12.

Notwithstanding the overwhelming pharmacological evidence, Petitioner maintains that
the dosage was intended because R1's physician signed the questionable order. CMS Ex.
32. I note first that on January 14, 2007 — the day before R1's admission to the facility —
Dr. Razzaque signed a medication order calling for 0.5 mg. Risperdal. CMS Ex. 53. A
January 15 hospital medication sheet calls for 0.5 mg Risperdal. CMS Ex. 54, at 4. It
would indeed have been strange for a physician intentionally to have so suddenly
increased the dosage ten-fold without any apparent reason or explanation.

Moreover, Surveyor Annette Hodge interviewed R1's physician, Dr. Razzaque, on May
24, at noon. He told her that the change from 0.5 to 5.0 mg had been a “goof-up” and that
he had not realized that 5 mg BID was excessive. He noted that he had not initially
ordered the drug, but had simply continued the order of a prior physician. Dr. Razzaque
conceded his lack of knowledge about proper dosage levels for psychotropic medications.
Tr. at 54; CMS Ex. 7, at 7.”

Dr. Razzaque did not testify, and Petitioner has presented no evidence refuting the
proposition that the January 15 medication order, including the physician signature, was
an unintentional “goof-up.”'” Moreover, as discussed below, even if R1's physician had

° Dr. Razzaque’s comments well illustrate the wisdom of requiring facility (and
pharmacist) oversight of all medications administered to facility residents.

'° Petitioner listed Dr. Razzaque as a witness, but did not submit his written
declaration, as called for by my pre-hearing order. Petitioner notes that Dr. Razzaque is
embroiled in litigation related to this incident and would not willingly cooperate. Had
Petitioner considered Dr. Razzaque’s testimony necessary for the full presentation of its
case, it could have asked that he be subpoened to testify at the hearing. 42 C.F.R.

(continued...)
10

deliberately ordered the excessive dosage, the regulations compel the facility to identify
such an aberrant order, and bring it to the physician’s attention.

2. Neither the facility’s licensed pharmacist nor anyone
else reported any drug irregularities as required by
the regulations.

This matter is not about whether the physician erred; it is about the facility’s
responsibility to question any apparent irregularity that could result in a resident’s
receiving unnecessary drugs. The culpability of others is wholly irrelevant to the question
of whether the facility met its responsibilities under the regulations. See Rosewood Care
Center of Peoria, DAB No. 1912, at 8-9 (2004). To comply with the regulations, the
facility must ensure that its residents are free of drug errors and, in this regard, the facility
is responsible for the performance of its pharmacist. 42 C.F.R. § 483.20(k)(3)(i) (“the
services provided or arranged by the facility must . . . [m]eet professional standards of
quality.”); see Emerald Oaks, DAB No. 1800, at 7 n.3 (2001)); see also Tr. 129 (In the
face of what appears to be a valid physician order that is nevertheless unusual, the
pharmacist should contact the physician to ensure that the order reflects what the
physician wanted.)

Petitioner nevertheless suggests that physician orders are sacrosanct and may not be
questioned by anyone other than another physician. Quoting Aristotle, Petitioner argues
“a physician ought to be judged by the physician... .” P. Cl. Brat 10. But42 C.F.R.

§ 483.60(c) mandates that a facility pharmacist question every “irregular” medication
order and that the facility then take action based on the pharmacist’s concerns. The
consulting pharmacist well understood that her role included reviewing charts for
medications “considered to be inappropriate for the elderly” because she indicated in her
January 2007 consultation report that she had done so. CMS Ex. 13, at 2.

In her testimony, however, Pharmacist Garcia emphasized that the January 15 order,
signed by the physician “was a valid order.” When directly asked whether she had any
responsibility beyond verifying the existence of a physician’s order, she was evasive:

I’m afraid, I see the way the questions are going. And
everybody’s like trying to like, and I’m afraid I’m going to
say the wrong thing. And I’m — my words are going to be
twisted against me.

‘°C. .continued)
§ 498.58. However, Petitioner did not ask that Dr. Razzaque be subpoened.
11

Tr. 153.

When asked whether a prescription for 10 mg of Risperdal daily should have raised a red
flag, she replied, (not inconsistent with Dr. Guay’s opinion) that it depends on the
patient’s individual diagnosis. Tr. 154. But she admitted that when she reviewed R1's
drug regimen, she did not know why the Risperdal had been prescribed. Tr. 154. So all
she knew was that R1 was being given a very large dose of Risperdal, but she did not
know why. She nevertheless justified her approval of the dosages because someone had
asked for a “psych consult.” Tr. 154. But Pharmacist Garcia should not have approved

any drug in the absence of an acceptable indication for its use. T
future evaluation might justify a drug is insufficient to satisfy the

e possibility that a
requirement of 42

C.F.R. § 483.25(1(1) that no drug be administered without an adequate indication for its

use. And, of course, R1's diagnosis — dementia-related psychosis
justified the dosages. Unfortunately, Pharmacist Garcia apparent!

diagnosis in time to halt the multiple instances of drug over-dosing.

Pharmacist Garcia testified that, had she known of R1's hospital

would have requested clarification of the 5.0 mg dosage. Tr. 162.
the hospital orders is an open question. In her declaration she cla
“RI's medications and all medication-related documentation avai
when she was transferred to ManorCare.” P. Ex. 17, at 1 (Garcia
suggests that she looked at more than the one-page transfer order

— would not have
y did not learn of the

osage (0.5 mg), she
-163. Whether she saw
imed to have reviewed
able from the Hospital
Decl. ¥ 4). This
containing the

erroneous order. But her direct testimony does not specify what documentation she

reviewed, and, in her responses to cross-examination questions, s

reviewing the one-page transfer order. Referring to the hospital’s
ey were “avai

CMS Ex. 43, at 2-4, CMS counsel asked whether tl
of her review. She replied “I don’t know,” and in response to the
replied “I didn’t see it, and I don’t know if it was available to me.

According to Surveyor Hodge, the facility obtaine
transfer order, on the day of R1's admission. CMS
see CMS Ex. 43, at 2-4. No one from the facility c

those hospita.

allenged that

e would only admit to
medication orders,
able” to her at the time
follow-up question,

” Tr. 162.

orders, along with the

Ex. 51, at 3 (Hodge Decl. ¥ 9); Tr. 56;

testimony, so I accept it.

See, e.g., P. Ex. 17 (Garcia Decl.); P. Ex. 22 (Tomer Decl.); P. Ex. 23 (Barnas statement);
P. Ex. 24 (Saggese Decl.). Either the facility shared the hospital orders with Pharmacist
Garcia and she neglected to review them properly; or she reviewed them but failed to

recognize the extreme increase in dosages; or the fa
orders with Pharmacist Garcia. Under any one of t
pharmacist failed in their responsibilities.

ese scenarios.

cility failed to share those critical

, the facility and/or its
12

Finally, a pharmacist is not the only medical professional responsible for monitoring the
appropriateness of medications administered. Nurses are trained in pharmacology, and
are required to clarify any order that seems improper. As Dr. Guay testified,

Thus, if a nurse is the least bit unclear about the dose of a
medication to be administered, (s)he should clarify the dose to
be given using all necessary means, including referral to
appropriate medication reference materials, seeking assistance
from supervisory nursing staff, and contacting the resident’s
attending physician. I consider it a deviation from one of the
most basic standards of medication administration for a nurse
to administer a medication without verifying the correct
dosage.

CMS Ex. 52, at 5 (Guay Decl. § 15); see Tr. 131-132. Here, at least six to eight nurses
did not recognize their obligations. Tr. 131, 137.

3. Notwithstanding the recognized need for careful
monitoring and reporting of adverse effects from her
psychotropic medications, facility staff failed to
respond to R1's significant symptoms.

In addition to an increased risk of death from cardiac arrest, use of Risperdal presents a
multitude of other potential adverse reactions. Among the most common reactions are
somnolence (sleepiness), fatigue, and anxiety. CMS Ex. 47, at 7. The State Operations
Manual warns that using antipsychotic medications without monitoring for adverse
consequences may be considered use of unnecessary medications. Falls and lethargy are
among the symptoms that require such monitoring. CMS Ex. 46, at 7-8.

As noted above, the facility recognized the risks. R1's assessment says that her care plan
must require monitoring and physician notification of any adverse affects from her
psychotropic medications (Zoloft, Risperdal, and Ativan). CMS Ex. 29, at 3, 22. Her
care plan — which, unfortunately was not initiated until ten days after the excessive dosing
began (January 25) — recognized the risk for adverse effects related to Zoloft, Risperdal,
and Ativan and required staff to monitor and report signs of adverse reactions such as a
decline in mental status, lethargy, and complaints of dizziness. They were supposed to
monitor R1's interaction with others for appropriateness, as well as her mood and
behaviors. They were also supposed to evaluate the effectiveness and side effects of the
medications for possible decrease/elimination of the drugs. CMS Ex. 44, at 19.
13

During her stay at the facility, Rl exhibited alternating symptoms of lethargy and
agitation. CMS Ex. 34, at 4, 6. Nursing staff described her to Surveyor Hodge as moving
“from being very lethargic to very agitated,” “sleeping all the time,” “always lethargic,”
and often “out of it.” CMS Ex. 7, at 3,4. She experienced multiple falls throughout her
stay at the facility. CMS Ex. 34, at 2, 7. But I see no evidence that anyone even
considered whether these symptoms were related to her medications.

Petitioner argues that such symptoms could have been caused by R1I's underlying
condition, and that CMS has not proven a relationship between her medications and her
symptoms. This misses the point. Since she had been on psychotropic medications since
before her admission, the cause of her symptoms was not readily apparent. It was
incumbent upon facility staff to recognize that her symptoms could have been related to
her medications, to monitor them, and to consult her physician about that potential
relationship. See Tr. 124-125. But they failed to do so.

4. R1's discharge and death did not correct the facility’s
deficiencies with respect to unnecessary drugs,
medication errors, and pharmacy services.

Petitioner points out that R1 left the facility on January 26, 2007, and argues that, since
CMS has not presented evidence of facility deficiencies for any period thereafter, notably
from May 24 through June 20, 2007, it has not demonstrated the facility’s substantial
noncompliance for the period in question. P. Cl. Br. at 5.

While I agree that CMS could have imposed a penalty from the date facility staff
administered the first excessive dose of Risperdal (January 15, 2007) through the date the
facility demonstrated substantial compliance (June 20, 2007), I do not agree that CMS’s
determination to impose penalties for only part of this period (beginning on the first day
of the survey) means that it may not impose any penalties at all.

Petitioner’s argument disregards the well-settled principle that once a facility has been
found to be out of substantial compliance (as Petitioner was here), it remains so until it
affirmatively demonstrates that it has achieved substantial compliance once again.
Premier Living and Rehab Center, DAB No. 2146, at 23 (2008); Lake City Extended
Care Center, DAB No. 1658, at 12-15 (1998). Substantial compliance means not only
that the specific cited instances of substandard care were corrected, and that no other
instances have occurred, but also that the facility has implemented a plan of correction
designed to ensure that no such incidents occur in the future. No findings that the facility
violated the standard of care between these dates are required in order to find the facility
out of substantial compliance, nor can evidence of other incidents in which the facility
met the standard of care change the fact that it was out of substantial compliance. Barn
14

Hill Care Center, DAB No. 1848, at 10, 14 (2002), Lake City, DAB No. 1658, at 15
(1998); see also Hermina Traeye Memorial Nursing Home, DAB No. 1810, at 17-18
(2002) (“The burden is on the facility to prove that it has resumed complying with
program requirements, not on CMS to prove that deficiencies continued to exist after they
were discovered.”); Asbury Center at Johnson City, DAB No. 1815, at 19-20 (2002)
(“[A] facility’s return to substantial compliance must usually be established through a
resurvey, and in a situation involving inadequate supervision requiring such a resurvey
appears wise.”); Cross Creek Care Center, DAB No. 1665 (1998).

Petitioner has not established that an effective plan of correction was implemented any
earlier than CMS has found. In fact, until the time of the survey, facility staff did not
even seem to have been aware of its drug-related deficiencies.

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

I next consider whether CMS’s immediate jeopardy finding was “clearly erroneous.”

Immediate jeopardy exists if the facility’s noncompliance has caused or is likely to cause
“serious injury, harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s
determination as to the level of a facility’s noncompliance (which would include an
immediate jeopardy finding) must be upheld unless it is “clearly erroneous.” 42 C.F.R.

§ 498.60(c).

Petitioner here misapprehends the standard for review of an immediate jeopardy finding.
Relying on the Administrative Law Judge decision in Daughters of Miriam, DAB
CR1357 (2005), Petitioner argues that CMS has failed to meet its burden of coming
forward with evidence sufficient to establish that the facility’s noncompliance posed
immediate jeopardy to resident health and safety. P. Cl Br at 7-9.

The Departmental Appeals Board reversed the ALJ decision in Daughters of Miriam.
Daughters of Miriam, DAB No. 2067 (2007). The Board noted that the language of the
regulation —- CMS’s determination as to the level of noncompliance must be upheld unless
it is “clearly erroneous” — requires that the ALJ and the Board presume that CMS’s
determination is correct unless the facility demonstrates that the determination is clearly
erroneous. To hold otherwise “would effectively eviscerate the review limitation in [42
C.F.R. §] 489.60(c)(2).” Daughters of Miriam, DAB No. 2067, at 7; see also Liberty
Commons Nursing and Rehab Center - Johnston, DAB No. 2031 (2006), aff'd, Liberty
Commons Nursing and Rehab Center - Johnston v. Leavitt, No. 07-1329, 2008 WL
2787675 (4th Cir. July 18, 2008).

15

The facility is thus charged with rebutting that presumption “with evidence and argument
showing that the harm or threatened harm did not meet any reasonable definition of
‘serious.’” Daughters of Miriam, DAB No. 2067, at 9. As the Board has observed
repeatedly, the “clearly erroneous” standard imposes on facilities a “heavy burden” to
show no immediate jeopardy. Determinations of immediate jeopardy are sustained if
CMS presents evidence “from which ‘[o]ne could reasonably conclude’ that immediate
jeopardy exists.” Barbourville Nursing Home, DAB No. 1962, at 11 (2005) (quoting
Florence Park Care Center, DAB No. 1931, at 27-28 (2004) (citing Koester Pavilion,
DAB No. 1750 (2000))).

Here, R1 died from heart failure, and elderly individuals suffering from dementia-related
psychosis who are treated with Risperdal face an increased likelihood of death from heart
failure. Tr. 114, 132-133; CMS Ex. 26, at 2; CMS Ex. 47, at 5. Nevertheless, I agree that
this relationship does not establish that R1's death was caused by her over-medication.
But I need not make that connection in order to sustain CMS’s immediate jeopardy
finding. So long as the facility’s noncompliance “is likely to cause serious injury, harm
or] impairment,” its deficiencies pose immediate jeopardy.

Petitioner argues that the odds of dying or suffering irreversible harm from an overdose of
Risperdal are relatively small so CMS has not established a “likelihood” of harm. In
Daughters of Miriam, the Board addressed the “likelihood” standard in the context of
medication errors. The Board found the administration of contraindicated medication to
among the deficiencies likely to have a direct, immediate, and serious adverse effect
on a resident’s health. DAB No. 2067, at 10. As here, Petitioner there argued that the
probability that residents could have been seriously harmed by their medications belied
the immediate jeopardy finding. But the Board rejected this argument, noting the
Petitioner had not provided evidence needed to undertake “such a complex and exacting
medical inquiry.” DAB No. 2067, at 11. Further, the Board noted that the problem was
not limited to these individuals, but to the “weakness of Petitioner’s system for protecting
its residents demonstrated by the series of errors that occurred in providing care to [a
single resident].”. DAB No. 2067, at 11 (quoting Liberty Commons Nursing and Rehab
Center — Johnston, DAB No. 2031, at 18-19 (2006), aff'd, Liberty Commons Nursing and
Rehab Center - Johnston v. Leavitt, No. 07-1329, 2008 WL 2787675 (4th Cir. July 18,
2008)).

I note also that R1 suffered from swallowing difficulties. CMS Ex. 29, at 2; CMS Ex. 34,
at 3. Excessive dosages of Risperdal can also cause extra pyramidal symptoms within the
swallowing mechanism (the muscles of deglutition) increasing the risk of aspiration. A
10 mg daily dose would increase that risk “dramatically.” Tr. 133.
16

On multiple occasions, facility nurses administered to a vulnerable resident massively
excessive doses of a potentially dangerous medication. The warnings of potentially dire
consequences went unheeded. The consulting pharmacist posed no questions about it,
even though she had no idea why the drug had been prescribed. Neither the pharmacist
nor any staff member questioned the dosage. Although the resident showed symptoms
that are associated with the medication’s side effects, no one even considered whether
those symptoms were related to the medication.

In light of these significant facts, I do not find “clearly erroneous” CMS’s immediate
jeopardy determination.

IV. Conclusion

For all of the reasons discussed above, I uphold CMS’s determination that Petitioner was
not in substantial compliance with program participation requirements and I find that the
deficiency posed immediate jeopardy to resident health and safety.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Life Care Center of Gwinnett, ) Date: September 24, 2008

(CCN: 11-5347), )
)
Petitioner, )
)

-Vv.- ) Docket No. C-08-110

) Decision No. CR1846
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose remedies against Petitioner, Life Care Center of Gwinnett, a skilled nursing
facility doing business in Lawrenceville, Georgia, consisting of civil money penalties of:

+ $5,000 for each day of a period that began on August 25 and which continued
through September 4, 2007; and

+ $500 for each day of a period that began on September 5 and which continued
through September 18, 2007.

I. Background

Petitioner participates in the Medicare program. Its participation in Medicare is governed
by sections 1819 and 1866 of the Social Security Act (Act) and by implementing
regulations at 42 C.F.R. Parts 483 and 488. Its right to a hearing in this case is governed
by regulations at 42 C.F.R. Part 498.
2

A Medicare compliance survey was conducted of Petitioner’s facility on September 5,
2007 (September survey). The surveyors found that Petitioner failed to comply with
Medicare participation requirements. Principally, they found that Petitioner was
noncompliant with the requirements of 42 C.F.R. § 483.13(c), which mandate that a
skilled nursing facility develop and implement policies and procedures that protect
residents from mistreatment, neglect, and abuse. The surveyors concluded that
Petitioner’s noncompliance was so egregious as to comprise immediate jeopardy for the
residents. The term “immediate jeopardy” is defined at 42 C.F.R. § 488.301 as
noncompliance that has caused or is likely to cause serious injury, harm, impairment, or
death to a resident.

CMS accepted the surveyors’ findings and determined to impose the remedies that I
describe in this decision’s opening paragraph. Petitioner requested a hearing and the case
was assigned to me for a hearing and a decision. The parties completed pre-hearing
exchanges of proposed exhibits and briefs. I scheduled an in-person hearing. However,
in advance of the hearing the parties agreed that it could be held by telephone. I
conducted a telephone hearing on August 1, 2008.

At the hearing, I received into evidence from CMS exhibits that are identified as CMS
Exhibit (Ex.) 1-CMS Ex. 12. I received into evidence from Petitioner exhibits that are
identified as P. Ex. 1- P. Ex. 31. Each party filed a post-hearing brief.
II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner failed to comply substantially with the requirements of 42
C.F.R. § 483.13(c);'

2. CMS’s determination of immediate jeopardy level noncompliance is
clearly erroneous; and

' The report of the September survey cites an additional non-immediate jeopardy
level deficiency finding, Petitioner’s alleged failure to comply with the requirements of
42 C.F.R. § 483.75(D)(1), which governs a facility’s maintenance of clinical records. The
allegation is based on Petitioner’s alleged failure to document accurately events that are
the basis for the immediate jeopardy level deficiency allegation. It is unnecessary that I
address this additional deficiency in order to decide this case and, so, I do not.
3

3. CMS’s remedy determinations are reasonable.
B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each Finding below as a separate heading.

1. Petitioner failed to comply substantially with the requirements of 42
C.F.R. § 483.13(c).

The evidence in this case overwhelmingly supports my conclusion that Petitioner
neglected the needs of a resident who is identified as Resident # 1 in the September
survey report. The resident was an elderly individual who had been diagnosed with
several serious medical conditions including: hemiplegia/hemiparesis as the consequence
of a stroke; dysphagia; Parkinson’s disease; and Alzheimer’s disease. CMS Ex. 3, at 1.
The resident’s mental functioning was severely limited. /d. The resident had a history of
suffering transient ischemic attacks (so-called “mini-strokes”). P. Ex. 11, at 9,10. She
required extensive assistance from Petitioner’s staff for locomotion, dressing, and bed
mobility, and she was totally dependent on Petitioner’s staff for eating, toilet use,
personal hygiene, and bathing. /d. The resident’s medications included Coumadin, an
anticoagulent. I take notice that Coumadin may greatly increase the risk of bleeding
from a traumatic injury in any individual but especially one who is as frail and debilitated
and at risk for falls as was Resident # 1. See P. Ex. 31, at 3. Petitioner’s staff assessed
the resident as being at risk for bleeding and bruising as a consquence of her receiving
Coumadin. CMS Ex. 3, at 25.

CMS’s allegations of noncompliance center around events that occurred on the morning
of August 25, 2007. Between 7:30 and 8:00 a.m. on that date a nursing assistant took
Resident # 1 to the bathroom. There is a dispute about what happened while the resident
was in the bathroom, but this much is certain: either the resident fell to the floor or
suffered an altered state of consciousness and was lowered to the floor by the nursing
assistant. CMS Ex. 10, at9, 13. Neither this nursing assistant nor a second nursing
assistant whom she asked to help raise the resident from the bathroom floor and put her
back into her wheelchair told anyone else about the event. CMS Ex. 10, at 13; see id. at
52

2

* The nursing assistant who was with Resident # 1 when the incident occurred
gave at least one false statement about her involvement. On August 29, the assistant
related her version of the events, omitting any reference to the incident in the bathroom,
and stating only that she had taken the resident to the bathroom where the resident had
4

After the incident, at about 9:00 a.m., the nursing assistant who had been with the resident
when the incident occurred wheeled the resident into the facility’s activity room and
placed her in front of the television set. /d. at 20. This nursing assistant later saw
Resident # | at the entrance of the activity room, crying, with her left palm pressed
against the left side of her face. She brought the resident to a licensed professional nurse.
Id. at 15. However, she did not report the incident in the bathroom. At about 10:30 a.m.,
the licensed professional nurse sought the assistance of a registered nurse. Jd. at 19. The
registered nurse observed a walnut-sized bruise on the left side of the resident’s forehead.
Id. At this time the resident appeared to be neurologically unaffected. Neither the
licensed professional nurse, nor the registered nurse was aware of the incident that had
occurred in the bathroom and, evidently, they assessed Resident # 1 as having suffered a
minor injury. As a precaution, the registered nurse notified the resident’s physician and
family and, at about noon on the 25", the resident was transported to a local hospital.
CMS Ex. 7, at 7.°

The resident’s condition deteriorated. At the hospital, Resident # 1 was diagnosed to be
suffering from a subarachnoid hemorrhage, a closed injury to her head. CMS Ex. 3, at 7,
9. Her condition continued to deteriorate and she was transferred to hospice care.
Subsequently, the resident died.

The evidence that I have discussed provides strong prima facie support for a finding that
Petitioner neglected the needs of Resident # 1. The incident that occurred in the
bathroom on August 25, 2007 was a potentially life-threatening event for the resident.
This resident had a history of stroke and transient ischemic attacks. Any alteration in the
resident’s state of consciousness — whether or not the resident actually fell — demanded
immediate notification of the facility’s professional staff, notification of the resident’s
family, and consultation with the resident’s treating physician. And, if the resident in fact
fell in addition to suffering a change in her state of consciousness, that raised the
additional red flag of the possibility of bruising and bleeding related to the resident’s
intake of Coumadin. Petitioner’s professional staff was aware of the risks that Resident
# 1 faced inasmuch as they had assessed her to be at risk for bruising and bleeding as a
consequence of her use of Coumadin. Furthermore, the professional staff was aware of
the resident’s history of, and propensity for, stroke.

been combative but had a bowel movement. CMS Ex. 10, at 17. She also averred that
she didn’t know what had happened to Resident # 1. Jd.

> There is no allegation that Petitioner’s nursing staff neglected Resident # 1’s
needs after the resident had been brought to their attention on the morning of August 25.
5

It is, apparent, however, that the nursing assistant who was with Resident # | in the
bathroom on August 25, 2007, and the second nursing assistant, as well, did not recognize
the ominous implications of the resident’s altered state of consciousness on that date.
While these employees had been trained in the need to report falls, there is no evidence
that either of them had been counseled prior to the incident that this resident presented
unusually high risk factors.

The failure of the two nursing assistants who provided primary and secondary assistance
to Resident # 1 to report the incident of August 25 put the resident at grave risk for
serious injury. Their failure to report immediately the incident was obvious neglect of the
resident’s needs. So also was the failure of the nursing assistant who was present at the
time of the incident on the 25" to honestly describe what had happened when she finally
rought the resident to the attention of the licensed professional nurse. I have no doubt
that, had this nursing assistant been more forthcoming, Petitioner’s professional staff
would have responded to the situation with a much greater degree of urgency.

Petitioner doesn’t dispute what happened on August 25 so much as it attempts to argue
that those events should not be a basis for a finding of noncompliance. I find Petitioner’s
arguments to be unpersuasive.

As a threshold matter, I note that the issue here is not whether whatever happened in the
athroom on August 25, 2007 caused the resident’s injuries. Rather, it is whether the
events that occurred in the bathroom imposed obligations on Petitioner’s staff that the
staff failed to discharge. Given the resident’s history, all of the staff — professional and
non-professional alike — should have reacted instantly and urgently to the incident on
August 25, 2007. That is so irrespective of the event’s ultimate consequences.

Petitioner’s essential argument is that it should not be held accountable for the
misfeasance and malfeasance of its staff because this conduct was not condoned by
Petitioner’s policies governing resident care or by Petitioner’s management and because
Petitioner had diligently trained its staff to implement its patient care policies. Petitioner
asserts that, to find Petitioner responsible for its employees’ actions in the context of this
case, would essentially be a finding of per se liability, contrary to the intent of the Act and
the regulations. According to Petitioner, the acts and omissions of the two nursing
assistants on August 25, 2007 were beyond Petitioner’s ability to control and, therefore, it
should be held blameless for them.
6

First, Petitioner’s argument fails because I do not find that Petitioner had provided its
assistants with all of the training necessary to assure that Resident # 1 was protected
adequately. Petitioner’s falls reporting policy is a general policy that covers falls. It
does not teach nursing assistants and other non-professional members of the staff to look
for the sometimes subtle signs that suggest a potentially grave change in condition ina
resident like Resident # 1. Training the non-professional staff to implement Petitioner’s
falls policy without training the staff to recognize the unique risk factors presented by
Resident # 1 simply was inadequate to protect the resident sufficiently.

As Petitioner concedes, this resident manifested several unique risk factors. These
included her history of stroke and transient ischemic attack and her intake of Coumadin.
These factors both singly and in combination should have put the entire staff of
Petitioner’s facility, and not just the professional staff, on notice, that any alteration in the
resident’s consciousness — whether or not such alteration produced immediate apparent
injury — was a very dangerous sign that could under no circumstances be ignored.
Petitioner’s falls policy provides that: “when a resident has a fall, the charge nurse will
e notified immediately.” P. Ex. 23, at 7. But, in this case, the only eye witness to the
event, the nursing assistant who was with Resident # 1 during the incident, claimed that
the resident did not fall. If, in fact that was true, then the nursing assistant may have
concluded that her non-reporting of the incident was literally consistent with the facility
policy. Obviously, however, and as I have discussed, the incident mandated immediate
reporting and in fact much more whether or not the resident fell.

Thus, training the non-professional staff to report falls or injuries was, in the context of
Resident # 1’s problems, simply inadequate to protect the resident completely. The
nursing assistant who was with the resident in the bathroom on August 25, 2007 asserted
subsequently that the reason she did not immediately report the incident to the
professional staff was that she didn’t comprehend such an event to be even potentially
serious. Had she been alerted to the extreme dangers associated with such an event in the
case of Resident # 1, it is at least possible that she would have treated it with greater
urgency than she did.

Second, Petitioner’s argument fails because it would render the protections of the Act and
regulations meaningless. Essentially, Petitioner would immunize itself from any staff
errors that deviate from its policies. Taken to its logical end, Petitioner’s argument would
exempt a skilled nursing facility from compliance with Medicare participation
requirements except in those situations where a failure to provide care as is required by
applicable regulations can be attributed directly to a failure by the facility’s management
to design and implement policies for operating the facility.
7

However, that is not what neither the Act or the regulations contemplate. Petitioner’s
argument notwithstanding, the Act and regulations recognize that a facility cannot be
separated under the law from the individual acts of its staff.

The Act and regulations make a facility responsible for all of its staff's actions because it
is those actions which comprise the care that residents receive. Emerald Oaks, DAB No.
1800, at 7, n.3 (2001); Barn Hill Care Center, DAB No. 1848 (2002).* The care rendered
by any skilled nursing facility to its residents depends on the performance of the facility’s
individual staff members. When a staff member provides care to a resident that care is an
individual act. Indeed, all care provided to a facility’s residents is the product of a
myriad of acts by individual staff members. Staff members assess the resident’s
condition, they plan the resident’s care, and they implement care planning decisions.
Separating actions by the staff from the facility simply makes no sense given that the
facility would not exist and it would not provide care to residents but for the individual
actions of its staff.

Petitioner attempts to distinguish Emerald Oaks from the facts of this case by arguing
that, in Emerald Oaks, the staff member who failed to respond to a resident’s change in
condition, thereby neglecting the resident’s care, was a nurse — a medical professional —
and not nursing assistants, as is the case here. I find that distinction to be meaningless.
Every member of a facility’s staff must be trained to recognize the signs and symptoms
that denote a significant change in a resident’s condition and to take the necessary
measures when such a change is apparent. As I discuss above, the two nursing assistants
who were involved with Resident # 1 during and after the August 25, 2007 event should
have been trained to understand that a transient alteration of consciousness by this
resident was a danger sign that mandated immediate and urgent notification of
professional staff.

2. Petitioner did not prove that CMS’s determination of an immediate
jeopardy level deficiency was clearly erroneous.

Even as the overwhelming evidence supports a finding of noncompliance so also does it
support a finding of immediate jeopardy level noncompliance. The undisputed facts show
that Resident # 1 was at great risk for bruising and bleeding from any traumatic event.
They show also that this resident’s medical history placed her at great risk for stroke. The
altered state of consciousness and/or fall experienced by Resident # 1 on August 25, 2007

+ The regulations recognize that there are certain responsibilities that are unique to
a facility’s management and, consequently, they establish specific participation
requirements that management must meet. 42 C.F.R. § 483.75.
8

was thus a potentially life threatening event. The probabilities were extremely high that
the resident would suffer severe harm or death if that event was not immediately reported.
The failure to do so put the resident in a state of jeopardy.

Petitioner has offered no evidence to show that a finding of immediate jeopardy, given its
noncompliance, is clearly erroneous. Consequently, I sustain CMS’s determination.

Petitioner argues that one may not reasonably extrapolate immediate jeopardy from an
isolated episode of staff neglect (although it does not concede that there was neglect here)
because an isolated episode is not sufficient basis to conclude a systemic failure on the
part of Petitioner to protect its residents from neglect. But a systemic failure, while it is
certainly a potential ground for finding immediate jeopardy, is not the only permissible
ground for such a finding. An individual — even an isolated — incident of neglect may be
sufficient to establish immediate jeopardy where it creates the conditions that meet the
regulatory definition of the term.

Furthermore, and as I have discussed, there was a systemic gap in Petitioner’s policies
that may have contributed to the failure to report the incident involving Resident # 1.
Petitioner’s staff was trained to report fal//s. But, there is no evidence to show that the
non-professional staff, including the nursing assistants, were trained to recognize
incidents that did not comprise falls but which, in the context of specific residents’
conditions could denote grave underlying problems, required reporting as well.

3. CMS’s remedy determinations are reasonable.

At issue here are two civil money penalty amounts which CMS determined to impose
over two periods of time. As a remedy for Petitioner’s immediate jeopardy
noncompliance, CMS determined to impose civil money penalties of $5,000 per day for
each day of a period that began on August 25 and which continued through September 4,
2007. CMS determined also that Petitioner remained out of compliance, albeit at a level
of noncompliance that was less than immediate jeopardy, from September 5 through
September 18, 2007 and it determined to impose civil money penalties of $500 per day
throughout this period.

Petitioner has not challenged the duration of CMS’s findings of noncompliance.
Therefore, my evaluation of the remedies in this case starts with a finding that Petitioner
was noncompliant at the immediate jeopardy level from August 25 through September 4,
2007 and remained noncompliant, albeit at a level that was less than immediate jeopardy,
from September 5 through September 18, 2007.
9

There are regulatory criteria which govern civil money penalty amounts. Penalties
ranging from $3,050 to $10,000 per day may be imposed for noncompliance that is at the
immediate jeopardy level. 42 C.F.R. § 488.438(a)(1)(i). Penalties ranging from $50 to
$3,000 per day may be imposed for non-immediate jeopardy level noncompliance. 42
C.F.R. § 488.438(a)(1)(ii).

Where a penalty amount may fall within a given range depends on evidence relating to
several regulatory factors. These are set forth at 42 C.F.R. §§ 488.438(f)(1)-(4) and
488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)). The factors include:
the seriousness of a facility’s noncompliance; its culpability; its compliance history; and
its financial condition.

I find that the penalty amounts in this case are amply supported by evidence relating to
the seriousness of the noncompliance. The failure by Petitioner’s staff to report the
incident involving Resident # 1 on August 25, 2007 surely jeopardized that resident’s life.
As [have discussed above, a fall by the resident and/or an altered state of her
consciousness were red flags that should have prompted Petitioner’s staff into taking
immediate and urgent action on the resident’s behalf. The failure by Petitioner’s nursing
assistants to notify Petitioner’s nursing staff of the incident not only caused the resident to
be ignored for at least two hours after the incident occurred but, it almost certainly caused
the nursing staff to treat the resident’s apparent injuries less urgently than they would
have had they known about the incident. The evidence establishes that, although the
resident’s bruise and complaints were finally brought to the nursing staff’s attention some
time after 10:00 a.m. on the 25", the resident was not finally transported to a hospital until
about noon on that date. CMS Ex. 7, at 7. It is reasonable to infer that Petitioner’s
nursing staff would have acted more expeditiously had they known the likely cause of the
resident’s complaints and bruising or had they known that the resident had suffered an
altered state of consciousness at about 8:00 a.m. on that date.

Petitioner argues that civil money penalties — any penalties — are pointless in this case
because the poor judgment of the nursing assistants who failed to report the incident
involving Resident # 1 may not be attributed reasonably to Petitioner. As I discuss above,
at Finding 1, I reject Petitioner’s assertion that a facility is not liable for the individual
acts of noncompliance of its employees. Furthermore, the deficiency in this case was not
just caused by individuals failing to follow facility policies but by policies that did not
provide adequate training to non-professional staff to recognize and report potentially
life-threatening events. But, beyond that, it is evident that civil money penalties in a case
like this have a legitimate remedial intent. Moreover, the likelihood that remedies would
be imposed here had a beneficial effect on Petitioner.
10

It is obvious that, whatever training or supervision Petitioner may have given to the
nursing assistants who were involved, it was inadequate to prevent their mis- and
malfeasance on August 25, 2007. The probability that CMS would impose remedies
against Petitioner for continuing noncompliance spurred Petitioner into providing
additional training and education to its staff concerning the issues of neglect, abuse, and
the need for prompt and accurate reporting of incidents that put residents at risk. That
training was not planned prior to the September survey. It occurred as a consequence of
it and the likelihood that remedies would be imposed. CMS Ex. 2.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Suzanne W. Asplen, ) Date: September 23, 2008

)
Petitioner, )
)

-Vv.- ) Docket No. C-08-572

) Decision No. CR1845
United States Department of Health and )
Human Services. )
)

DECISION

Petitioner, Suzanne W. Asplen, an employee of the United States Department of Health
and Human Services (DHHS), seeks review of her employer’s determination that she was
overpaid for the pay periods ending June 9, 2007 through April 12, 2008. After
considering the entire record, I find that Petitioner was overpaid $2,316.40 and that
DHHS is entitled to recover these funds.

Background

Petitioner’s payroll office advised her in a letter dated May 10, 2008, that she had been
overpaid $2,316.40 because “of a Personnel change(s).” On June 9, Petitioner requested
a hearing to challenge the amount of the debt. The hearing request was forwarded to this
office, and received on June 23, 2008.

Petitioner’s request was neither timely nor sufficient to satisfy statutory and regulatory
requirements. See 5 U.S.C. § 5514(a)(2); 45 C.F.R. § 33.6. In an order dated July 17,
2008, I found good cause to accept her request as timely, and granted her ten days in
which to submit an amended hearing request satisfying the requirements of the regulation.
Pursuant to this order and subsequent extensions of time, Petitioner submitted an
amended request, asking for a paper hearing concerning the amount of the overpayment
“because I have been unable to replicate the amount of the debt using all materials and

2

resources available to me.” She also complained about a possible tax loss for calendar
year 2007.

DHHS responded in an August 14, 2008 submission which explained the method by
which deductions were calculated.

Petitioner indicated that she was not satisfied by her employer’s response and requested
additional time to prepare a response, which I granted. She submitted her reply on
September 2, 2008.

Findings and Conclusions

I do not find that Petitioner’s hearing request was baseless nor that it resulted from an
intent to delay creditor agency collection activity. See 45 C.F.R. § 33.6(d)(2)(ii).

The parties agree that Petitioner was overpaid when she was given a within-grade
increase to which she was not entitled. In her amended hearing request, Petitioner does
not challenge the gross amount of the overpayment. She complains that she is unable to
“verify that the net amount that was deducted from my pay for the overpayment is
correct.” Amended Petition at 1 (August 1, 2008). She also complains that she might
have incurred an additional loss because the overpayment might have affected the amount
of an Economic Stimulus Payment from the Internal Revenue Service (IRS), and she
feared that she would not receive an amended W-2 form which would enable her to file
an amended return. Jd.

DHHS has submitted a detailed analysis explaining the deductions taken from Petitioner’s
gross income, and explaining the “slight difference” between its calculations and
Petitioner’s. Petitioner did not include one pay period, and did not account for the split
pay in the pay period ending June 9, 2007. During that pay period, she received pay for
40 hours at a GS 14/5 pay level and 40 hours at a GS 13/8 pay level. Agency Submission
at 2-3 (August 14, 2008).

With respect to her concerns about the tax consequences of the overpayment, DHHS
explains that, pursuant to IRS regulations, her overpayment is considered income for the
year received so she will not receive an amended W-2 form; however, she will receive a
certificate for the total debt paid for the current year, which can be filed with her current
taxes. Of course, I have no authority to second-guess the IRS rules in this regard.

Talso find it questionable whether I have the authority to micro-review the specific
deductions taken. Assuming I have such authority, the burden is on Petitioner here to
show that the debt is invalid or that the amount is incorrect. Petitioner has done neither.
3

She raises multiple questions, but points to no specific error in DHHS’s calculations and
provides no support for the proposition that DHHS has made an error in its calculations. I
find that DHHS’s August 14, 2008 submission adequately explains the bases for the
agency’s calculations.

Petitioner has not rebutted DHHS’s determination of an overpayment debt of $2,316.40.
The debt is valid and owed to DHHS.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Manor of Wayne Skilled Nursing and ) Date: September 15, 2008

Rehabilitation, )
(CNN: 23-5627), )
)
Petitioner, )
)

-Vv.- ) Docket No. C-07-568

) Decision No. CR1841
Centers for Medicare & Medicaid )
Services, )
)
Respondent. )
)

DECISION

I find that summary judgment is appropriate in this case. There is no genuine issue of
material fact that would preclude entitlement to judgment as a matter of law for the
Centers for Medicare & Medicaid Services (CMS) as CMS prevails against Petitioner,
Manor of Wayne Skilled Nursing and Rehabilitation, on the merits. The regulations
provide that the earliest date Petitioner could qualify for participation in the Medicare
program is the date that surveys of the facility, which establish the facility meets all
federal participation requirements, are completed. Part of the federal participation
requirements is the requisite Medicare Life Safety Code (LSC) survey. That survey did
not take place until April 12, 2007, and Petitioner was not in compliance with the LSC
requirements until May 9, 2007. Therefore, the CMS determination that May 9, 2007 is
the effective date for Petitioner’s participation is affirmed.
I. BACKGROUND

Petitioner is a skilled nursing facility located in Wayne, Michigan. Petitioner applied to
be a provider of services under the Medicare program in May 2006. On June 7, 2006, the
City of Wayne Fire Department conducted an inspection of the facility using the 2000
edition of the Life Safety Code, which is the same edition used by CMS. An initial state
licensure survey was conducted and completed by the Michigan Department of
Community Health (MDCH) on November 9, 2006. On December 19, 2006, MDCH
issued a notice of licensure/certification action which indicated Petitioner was licensed by
the state for 99 beds, effective November 9, 2006. CMS Ex. 13, at 2. The facility was in
substantial compliance with state licensure requirements and was instructed by the state
licensing officer that it could admit five to six residents. CMS Ex. 8. The admission ofa
sufficient number of residents, usually five, is required prior to conducting an initial
federal certification survey. CMS Ex. 33.

The initial federal health survey was conducted by MDCH on December 7, 2006, which
found Petitioner to be in substantial compliance with the applicable federal healt!
requirements. P. Ex. 4. By e-mail dated January 3, 2007, MDCH issued a Notice of

Licensure/Certification Action, which stated that Petitioner was in substantial compliance
with federal health requirements effective December 7, 2006. CMS Ex. 14.

Under normal circumstances a LSC survey usually takes place withins 30 to 60 days
following the initial health survey. CMS Ex. 33. However, in this case the LSC survey
did not occur until four months after the initial health survey. CMS Ex. 19. The initial
federal LSC survey was conducted on April 12, 2007. That survey identified seven
deficiencies for which petitioner was cited. One of the deficiencies cited involved
Petitioner’s failure to close doors to resident rooms during fire drills. CMS Ex. 19. A
revisit LSC survey was conducted on May 9, 2007, which found that the facility was in
substantial compliance with the federal LSC requirements as of that date. CMS Exs. 24,
25. By letter dated June 5, 2007, CMS notified Petitioner that it had accepted the facility
into the Medicare program with an effective date of participation of May 9, 2007. CMS
Ex. 26.

By letter dated June 6, 2007, Petitioner requested that CMS reconsider the determination
of Petitioner’s effective date and change the effective date from May 9, 2007 to
November 9, 2006. CMS Ex. 27. The facility argued that the earlier date was appropriate
cause it had received its Notice of Licensure/Certification dated December 19, 2006,
which Indicated that Petitioner was licensed as of November 9, 2006. CMS Ex. 27. CMS

3

denied Petitioner's reconsideration request, citing the fact that the licensure survey which
took place on November 9, 2006 was based only on state licensure requirements.
Petitioner, by letter dated June 26, 2007, requested a hearing before an administrative law
judge.

This case was docketed and assigned to me for hearing and decision on August 6, 2007.
On December 20, 2007, CMS filed a Motion for Summary Judgment, accompanied by 33
exhibits (CMS Exs. | - 33). On January 21, 2008, Petitioner filed its response to CMS’s
motion, accompanied by seven exhibits (P. Exs. 1 - 7). CMS then filed a motion for leave
to file a reply, along with a reply brief, on February 4, 2008. I hereby accept CMS’s reply
brief into the record.

II. ISSUES
The issues presented in this case are:
1. Whether summary judgment is appropriate in this case; and

2. Whether Petitioner should have been certified to participate in the
Medicare program on May 9, 2007, or as of an earlier date?

Ill. FINDINGS OF FACT AND CONCLUSIONS OF LAW

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each Finding below in boldface italics as a separate heading and I discuss
each Finding in detail.

1. Summary judgment is appropriate under the circumstances of this case.

CMS moved for summary judgment on a single issue: whether, under the applicable
statutes and regulations, Petitioner can establish by a preponderance of the evidence that
the effective date of its Medicare certification should be before May 9, 2007, the date
CMS determined that Petitioner met all the requirements for Medicare participation.

Summary judgment is appropriate where the record presents no genuine dispute as to any
material fact and the undisputed facts clearly demonstrate that one party is entitled to
judgment as a matter of law. White Lake Family Medicine, P.C., DAB No. 1951 (2004);
Lebanon Nursing and Rehabilitation Center, DAB No. 1918 (2004). The movant, or
party seeking summary judgment, bears the initial burden of showing the basis for its
motion and identifying the portions of the record that it believes demonstrate the absence
of a genuine factual dispute. See Celotex Corp. V. Catrett, 477 U.S. 317, 323 (1986).
4

The nonmoving party “may not rest upon the mere allegations or denials of his pleading,
but... must set forth specific facts showing that there is a genuine issue for trial.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting First National Bank
of Arizona v. Cities Service Co., 391 U.S. 253, 259 (1968)).

Here the parties agree on the essential facts of when Petitioner was surveyed, by whom,
and for what purpose. Their difference lies in what legal significance, in light of the
applicable law and regulations, should be attributed to those facts. With no genuine
dispute as to any material fact, I find summary judgment is appropriate in this case.

2. The earliest date Petitioner could have been certified to participate in the Medicare
program was May 9, 2007.

Section 1866 of the Social Security Act (Act) authorizes the Secretary of Health and
Human Services to enter into agreements with providers of services that seek to
participate in the Medicare program. Regulations at 42 C.F.R. § 489 and corresponding
guidelines in the State Operations Manual (SOM) provide the requirements for
participation.

Under 42 C.F.R. § 489.13, a prospective provider must meet all applicable federal
requirements. CMS or a state survey agency conducts a survey in order to ascertain
whether a provider complies with these applicable federal requirements. 42 U.S.C.

§ 1395cc. The earliest date a provider may be found to qualify for participation in the
program is the date when surveys of the provider, including the LSC survey, are
completed, if on that date the provider meets all federal participation requirements. 42
C.F.R. § 489.13(b). If the provider does not meet all federal requirements on the date of
the survey, the effective date is the “date on which the provider meets all requirements.”
42 C.F.R. § 489.13(c)(2)(i). Section 2472C of the SOM leaves the timing of the LSC
survey to the discretion of the state survey agency. CMS Ex. 34, at 23. Although a state
survey agency may recommend a provider be certified to participate in the Medicare
program, the approving official making the final determination is CMS. 42 C.F.R.

§ 489.11(a).

Petitioner asserts that it is entitled to an earlier Medicare certification date of November
9, 2006, which is the date the facility was found to be in compliance with all the Medicare
health requirements, and not May 9, 2007.

Petitioner argues that a June 7, 2006 fire inspection conducted by the City of Wayne Fire
Department shows that the facility was in compliance with the LSC requirements as set
forth in the 2000 edition of the LSC code. Petitioner maintains that, since CMS uses the
same edition of the LSC in its federal surveys that was utilized by the City of Wayne,
5

CMS should find that the facility was in compliance with all of the federal requirements
on June 7, 2006. Petitioner argues that at the time of the state licensure survey on
November 9, 2006, it was therefore in compliance with all federal participation
requirements. Petitioner asserts that November 9, 2006, should be the effective date
because the MDCH issued a Notice of Licensure/Certification Action which indicated
that Petitioner was initially certified and in compliance with Medicare program
requirements. Furthermore, Petitioner asserts that the discrepancy of the date of
compliance with the LSC requirements for Medicare participation is a genuine issue of
material fact which would preclude granting the CMS motion for summary judgment.

Finally, Petitioner contends that it reasonably and justifiably relied on the MDCH’s
representation that the facility was in compliance with all Medicare program
requirements. It claims that the detrimental reliance thereon resulted in deprivation of
approximately $600,000 for services provided to residents of the facility over a period of
1,661 resident-days. Moreover, Petitioner argues that the four-month delay between the
health survey and LSC survey was unreasonable because the LSC survey typically takes
30 to 60 days following the initial health survey.

CMS argues that Petitioner has been assigned the earliest possible certification date the
law allows. CMS maintains that Medicare program participation is controlled by
requirements that are separate from state inspection and licensing requirements. In order
for a facility to participate in the Medicare program, the facility must be in compliance
with all federal requirements. According to CMS, the ultimate authority for determining
if the facility is in compliance with all federal requirements is CMS. CMS asserts that
this tribunal cannot address issues of detrimental reliance and equitable estoppel. Thus,
CMS maintains that I do not have the legal authority to grant the equitable relief to which
Petitioner claims entitlement.

For the reasons set forth below, I find the arguments advanced by CMS that the law does
not allow Medicare certification prior to the May 9, 2007 to be compelling and legally
correct.

Petitioner argues that the June 7, 2006 inspection, conducted by the City of Wayne Fire
Department, should serve as the initial LSC survey which demonstrated that the facility
was in compliance with the requirements contained in the 2000 edition of the LSC code.
This argument is without merit. CMS correctly argues that this June 2006 survey cannot
serve as the initial LSC survey for certification purposes because the facility was not fully
operational at that time. Petitioner began admitting patients only after the November 9,
2006 state licensure survey. Section 2008A of the SOM requires that new providers must
be in operation and providing services to patients when surveyed. Furthermore, the actual
federal LSC survey conducted on April 12, 2007, cited Petitioner with seven deficiencies.

6

CMS Br. at 11-13. One of these deficiencies related to closing doors to residents’ rooms
during fire drills. The City of Wayne fire inspection in June 2006 could not have
determined whether the facility was in compliance with this requirement because there
were no residents at the facility at that time.

It is clear that the regulations and case law establish that the approving official for
purposes of determining whether a long term care facility satisfies the Medicare
participation requirements is CMS, and not the local Fire Marshal. 42 C.F.R. 489.11(a);
and Ophthalmology Ltd. Eye Surgery Center, CR 658 (2000). The Fire Marshal’s June 7,
2006 inspection report was not submitted to CMS because it was not a part of the federal
certification process. Therefore, CMS is not required to accept the findings of the local
Fire Marshal as sufficient for federal certification purposes.

Petitioner’s argument as to the four-month delay for the LSC survey is also without merit.
The decision of a state agency as to when to conduct an initial survey of a prospective
supplier is not an initial determination by CMS and thus is not an issue which can be
appealed under the applicable regulations. See 42 C.F.R. § 498.3(d)(15). CMS cites
Appellate Board case law which indicates that a three-month delay between the initial
federal health survey and the initial LSC survey did not provide a basis for granting an
earlier effective participation date for a skilled nursing home facility. Forest Glen Skilled
Nursing & Rehab. Ctr., DAB 1887, at 15 (2003).

Finally, I address Petitioner’s argument that it reasonably and detrimentally relied upon
certain statements, representations, or assurances, whether verbal or written, that
Petitioner states that MDCH made with respect to the status of Petitioner's Medicare
certification compliance with LSC requirements. Petitioner's brief discusses what
purportedly transpired between Petitioner and MDCH personnel concerning the status of
Petitioner's Medicare certification. First, as a general matter, applicants are held to a
standard of responsibility for understanding what is required of them to be program
participants. See generally Cary Health and Rehabilitation Center, DAB No. 1771
(2001). Second, regardless of whether I find the argument of reasonable reliance
credible, I must agree with CMS that I do not have the legal authority to consider issues
of detrimental reliance nor do I have the power to grant a party equitable relief. See
Community Hospital of Long Beach, DAB 1118 (2003). Petitioner has identified issues
of detrimental reliance and equitable relief with sufficient clarity to preserve them for
review by an appellate body with jurisdiction over them should Petitioner decide to seek
further review of this decision.
7

The regulations and case law are clear as to when a provider will be found in substantial
compliance with all Medicare participation requirements. Therefore, for reasons
discussed above, I find and conclude that CMS has demonstrated that there are no
material facts in dispute as to the assignment of May 9, 2007 as the effective date of
Petitioner's certification as a skilled nursing home in the Medicare program. Petitioner
has failed to establish that there are any genuine issues of material fact which would
preclude CMS from judgment as a matter of law, sustaining the decision to certify
Petitioner effective May 9, 2007.

IV. CONCLUSION

I grant CMS's motion for summary judgment. CMS's decision assigning an effective date
of May 9, 2007 for Petitioner's certification as a skilled nursing home in the Medicare
program is affirmed.

/s/
Alfonso J. Montano
Administrative Law Judge