Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Aaron C. Pruitt, D.C.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.

Docket No. C-13-74

ALJ Ruling No. 2013-7

Date: April 19, 2013

DISMISSAL

Petitioner, Aaron C. Pruitt, D.C., is an Ohio-based chiropractor who challenges the
effective date for his enrollment in the Medicare program.

For the reasons discussed below, I dismiss as untimely Petitioner’s hearing request.'

Petitioner is not entitled to a hearing because he did not file
a timely hearing request and no good cause justifies
extending the time for filing.

The regulations governing these proceedings mandate that an affected party, who would
be entitled to a hearing under 42 C.F.R. Part 498, must file his request for hearing in
writing within 60 days of the day he receives notice of the determination that he wishes to
appeal, unless the appeal period is extended. 42 C.F.R. § 498.40(a)(2). Receipt of the

' The Centers for Medicare and Medicaid Services (CMS) has submitted a motion/brief
(CMS Br.) and 13 exhibits (CMS Exs. 1-13). Petitioner has submitted a letter and several
unmarked documents.
notice is “presumed to be 5 days after the date on the notice unless there is a showing that
it was, in fact, received earlier or later.” 42 C.F.R. §§ 498.40(a)(2), 498.22(b)(3).

On motion of a party, or on his/her own motion, an administrative law judge may dismiss
a hearing request that was not timely filed, if the time for filing was not extended. 42
CFR. § 498.70(c).

Here, Petitioner, Aaron C. Pruitt, D.C., applied for enrollment in the Medicare Part B
program. The Medicare contractor, CGS Administrators, LLC, approved his application,
effective April 8, 2012. Petitioner Pruitt sought reconsideration, challenging the effective
late. In a reconsidered determination dated August 17, 2012, the contractor hearing
officer denied his request. The contractor’s letter included notice of Petitioner’s appeal
ights, advising: “You must file your appeal within 60 calendar days after the date of
eceipt of this decision... .” CMS Ex. 10 at 2. The letter then told him to submit his
appeal to this office, and provided the address of the Civil Remedies Division of the
Departmental Appeals Board, or, alternatively, to file his appeal electronically at the
Departmental Appeals Board electronic filing system website. The letter also referred
im to 42 C.F.R. Part 498 for an explanation of his appeal rights. CMS Ex. 10 at 3.

qT
re

Assuming five days for delivery of the notice letter, Petitioner’s hearing request should
ave been filed no later than October 22, 2012 (October 21 was a Sunday). Petitioner
filed his appeal by electronic filing on October 30, 2012, after that regulatory filing
deadline had passed. Petitioner did not seek an extension of time for filing his appeal.
He did not suggest good cause justified his late filing.

In an order dated April 12, 2013, I directed Petitioner to show cause why this matter
should not be dismissed as untimely. I also directed CMS to explain its position on
whether the appeal should be dismissed as untimely filed. Order to Show Cause (April
12, 2013).

CMS responded by noting that the appeal was not timely and should be dismissed, unless
Petitioner can show that he received the notice letter later than August 31, 2012, or
otherwise shows good cause for late filing (which he has not shown). Petitioner did not
respond to the order.
Because Petitioner did not file his hearing request within 60 days of receiving the
contractor’s notice letter, and no good cause justifies my extending the time for filing, I
dismiss Petitioner’s hearing request. 42 C.F.R. § 498.70(c).”

/s/
Carolyn Cozad Hughes
Administrative Law Judge

> In any event, Petitioner would not likely have prevailed on the merits of this case. The
Medicare contractor received his enrollment application on May 7, 2012, and, based on
that application, granted him the earliest possible effective date. 42 C.F.R.

§§ 424.520(d); 424.521(a)(1). Petitioner’s earlier submissions were not acceptable
applications.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Rhonda Stinnett, R.N.,
(O.1. File No. H-12-4-1237-9),
Petitioner,

v.

The Inspector General.
Docket No. C-13-49
Decision No. CR2761

Date: April 18, 2013

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner pro se Rhonda
Stinnett, R.N., from participation in Medicare, Medicaid, and all other federal health care
programs until she regains her license as a registered nurse in the State of Arizona. The
1.G.’s Motion and determination are based on section 1128(b)(4)(B) of the Social
Security Act (Act), 42 U.S.C. § 1320a-7(b)(4)(B).

The undisputed material facts of this case demonstrate that the I.G. is authorized to
impose the exclusion against Petitioner, and that the length of that period of exclusion is
not unreasonable. Accordingly, I grant the I.G.’s Motion for Summary Disposition.

I. Procedural Background

Petitioner pro se Rhonda Stinnett earned her R.N. degree in 1992, and was first licensed
as a registered nurse that year in Virginia. LG. Exs. 5, 6.
In May 2011 she began working as a registered nurse in Arizona, under terms of the
Nurse Licensure Compact, an agreement among several states that permits a nurse
licensed in one state to practice in any other state party to the Compact. I.G. Ex. 3.
Petitioner’s work history in Arizona was marked by short periods of employment often
terminated under circumstances suggesting disagreement or dissatisfaction with
assignments, supervisors, and co-workers. I.G. Ex. 2, at 1-3.

On December 21, 2011, the Arizona State Board of Nursing (ASBN) received a
complaint from Petitioner’s most recent employer alleging “bizarre” and “harassing”
behavior by Petitioner in dealing with patients and co-workers, behavior alleged to have
included “verbal accusations,” failure to “complete patient homecare visits,” and failure
to “complete patient care documentation.” The ASBN opened an investigation and
interviewed two employees of that employer who described Petitioner as displaying
“paranoia, obsessive thoughts, and hostility toward staff... and false accusations about
patient complaints.” I.G. Ex 2, at 1-2.

How and when Petitioner learned of the ASBN investigation does not appear in ASBN
records, but those records do show that Petitioner requested to surrender voluntarily her
license privilege to practice as a registered nurse on April 19, 2012. I.G. Ex. 2, at 3.

The ASBN determined that Petitioner had violated the Arizona Nurse Practice Act and
granted her request to surrender her multistate license privilege voluntarily. On May 17,
2012, Petitioner signed a consent order to surrender her multistate licensure privilege in
Arizona, including a cease and desist order, which she filed with the ASBN on May 23,
2012. I.G. Ex. 2, at 1, 5-6.

On June 14, 2012, Virginia’s Department of Health Professions, Virginia Board of
Nursing (VBN) mandatorily suspended Petitioner’s Virginia nursing license in response
to the ASBN’s findings and Petitioner’s voluntary surrender of her multistate license
privilege in Arizona. I.G. Ex. 4, at 1.

On August 31, 2012, the IG. sent a notice-of-exclusion letter to Petitioner, relying on the
terms of section 1128(b)(4) of the Act, 42 U.S.C. § 1320a-7(b)(4). LG. Ex. 1. Acting
pro se, Petitioner sought review of the I.G.’s determination in a request for hearing in a
letter dated September 26, 2012.

I attempted to convene a prehearing conference by telephone on November 14, 2012,
pursuant to 42 C.F.R. § 1005.6, in order to discuss procedures for addressing the issues
presented by this case. Petitioner failed to provide a telephone number at which she
could be contacted for the conference. Under those circumstances I issued an Order on
November 14, 2012 noting Petitioner’s unavailability, setting out information intended to
assist her in presenting her appeal, and establishing a schedule for the submission of
documents and briefs. That schedule was modified by my Order of January 18, 2013.
The record in this case closed for purposes of 42 C.F.R. § 1005.20(c) on March 28, 2013.

The evidentiary record on which I decide the issues before me contains six exhibits. The
1.G. proffered six exhibits marked I.G. Exhibits 1-6 (I.G. Exs. 1-6). Petitioner proffered
no exhibits in support of her position.' In the absence of objection, I have admitted all
six exhibits proffered by the LG.

II. Issues

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

a. Whether the LG. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to
section 1128(b)(4)(B) of the Act; and

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

I decide these issues in favor of the I.G.’s position. Section 1128(b)(4)(B) of the Act
supports Petitioner’s exclusion from all federal health care programs, for her license as a
registered nurse in Arizona was surrendered while a formal disciplinary proceeding
against her was pending before the state authority, and that proceeding concerned her
professional competence and professional performance. The length of this proposed
period of exclusion is reasonable as a matter of law.

Ill. Controlling Statutes and Regulations

Section 1128(b)(4)(B) of the Act, 42 U.S.C. § 1320a-7(b)(4)(B), authorizes the exclusion
from participation in Medicare, Medicaid, and all other federal health care programs of
any individual or entity “who surrendered [a license to provide health care] while a
formal disciplinary proceeding was pending before [a State licensing authority] and the
proceeding concerned the individual’s or entity’s professional competence, professional
performance, or financial integrity.” The terms of section 1128(b)( 4)(B) are restated in
similar regulatory language at 42 C.F.R. § 1001.501(a)(2).

' Petitioner’s request for hearing enclosed a letter to her dated September 10, 2012 from
the VBN. By the explicit terms of paragraph 7 of my Order of November 14, 2012, that
letter is not part of the evidentiary record. But even if it were, its relevance would be far
from clear, and it is plainly related to a different complaint against Petitioner (“Case
Number: 145055”), and not the one on which this action is based (“Case # 145046”).
LG. Ex. 4, at 1.
An exclusion based on section 1128(b)(4)(B) of the Act is discretionary. If the .G.
exercises his discretion to proceed with the sanction, then the mandatory minimum period
of exclusion to be imposed under section 1128(b)(4)(B) of the Act “shall not be less than
the period during which the individual’s or entity’s license to provide health care is
revoked, suspended, or surrendered ....” Act, section 1128(c)(3)(E), 42 U.S.C.

§ 1320a7(c)(3)(E). Regulatory language at 42 C.F.R. § 1001.501(b)(1) affirms the
statutory provision.

Although an exclusion based on section 1128(b)(4)(B) of the Act is discretionary, the
1.G.’s decision to exercise his discretion and proceed with the sanction is not subject to
review. Donna Rogers, DAB No.2381 (2011); Keith Michael Everman, D.C., DAB No.
1880 (2003); Sheldon Stein, M.D., DAB No.1301 (1992); 42 C.F.R. § 1005.4(c)(5).

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

1. Petitioner was licensed as a registered nurse by the Commonwealth of Virginia
in 1992, and in 2011 she began working as a registered nurse in the State of
Arizona, under terms of the Nurse Licensure Compact. LG. Ex. 2, at 1.

2. In December 2011 the ASBN opened a formal investigation into Petitioner’s
professional conduct. LG. Ex. 2, at 1-3.

3. The ASBN investigation was concerned with Petitioner’s professional
competence and professional performance. I.G. Ex. 2, at 1-5.

4. While the ASBN proceeding against her was pending, Petitioner requested that
she be allowed to surrender her license privilege to practice nursing in Arizona.
LG. Ex. 2, at 3.

5. Petitioner signed a consent order to voluntary surrender her multistate licensure
privilege in Arizona, including a cease and desist order, filed with the ASBN
on May 23, 2013, which terminated the ASBN’s proceeding against Petitioner.
LG. Ex. 2, at 1, 5-6.

6. The VBN mandatorily suspended Petitioner’s Virginia nursing license on June
14, 2012, based on the voluntary surrender of her multistate licensure privilege
in Arizona. I.G. Ex. 4, at 1.

7. Because Petitioner surrendered her multistate licensure privilege in Arizona
while a formal disciplinary proceeding concerning her professional
competence and professional performance was pending against her before the
ASBN, a basis exists for the I.G.’s exercise of authority to exclude Petitioner
from participation in Medicare, Medicaid, and all other federal health care
programs. Act § 1128(b)(4)(B).

8. The LG.’s exclusion of Petitioner until such time as she regains her ability to
practice as a registered nurse in the State of Arizona is not unreasonable. Act
§ 1128(c)(3)(E); 42 C.F.R. § 1001.501(b)(1).

9. There are no disputed issues of material fact and summary disposition is
appropriate in this matter. Marvin L. Gibbs, Jr., M.D., DAB No. 2279 (2009);
Michael J. Rosen, M.D., DAB No. 2096 (2007); Thelma Walley, DAB No.
1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The exclusion of an individual based on section 1128(b)(4)(B) of the Act, 42 U.S.C.

§ 1320a-7(b)(4)(B) is a derivative action, and depends upon proof of three essential
elements. First, the I.G. must prove that the individual to be excluded has surrendered
her or his license to provide health care to a State licensing authority. Second, the LG.
must prove that the license was surrendered while a formal disciplinary proceeding
against the individual was pending before the State authority. Third, the I.G. must prove
that the pending proceeding concerned the individual’s professional competence,
professional performance, or financial integrity. Linda R. Ghaffari, DAB CR2268
(2010); Jane Espejo Norton, M.D., DAB CR1627 (2007); James Latimer, M.D., DAB
CR1578 (2007); Julia Maria Nash, DAB CR1277 (2005); Maureen Felker, DAB
CR1110 (2003); April Ann May, P.A., DAB CR1089 (2003); Djuana Matthews Beruk,
D.D.S., DAB CR950 (2002).

The L.G. has made the first showing. This record shows that Petitioner was authorized to
practice as a registered nurse in Arizona by terms of the Nurse Licensure Compact and
her license in Virginia. The evidence demonstrates that she requested to surrender her
Arizona license privilege on April 19, 2012, and that her surrender of that license became
effective May 23, 2012. LG. Ex. 2. The first essential element is established in this
record.”

The I.G. has made the second showing as well. The ASBN proceeding began in
December 2011. I.G. Ex. 2, at 1-2. Petitioner took steps to surrender her license in April

> The VBN action shown in I.G. Ex. 4 might very well provide an alternate basis for
Petitioner’s exclusion. Because the VBN suspended Petitioner’s Virginia license based
on ASBN’s proceeding, the terms of section 1128(b)(4)(A) of the Act, 42 U.S.C.

§ 1320a-7(b)(4)(A), might be argued to authorize this exclusion. The I.G. has not made
that argument.
2012. The surrender of her license became final with the entry of the ASBN’s final
Order on May 23, 2012. I.G. Ex. 2, at 5-6. That sequence of events demonstrates the
Petitioner surrendered her license while the ASBN proceeding was pending against her,
and thus proves the second essential element.

The third essential element — the nexus between the ASBN proceeding and Petitioner’s
professional performance and professional competence — has been established. The
record of the ASBN proceeding makes reference to Petitioner’s violation of three explicit
nursing standards, violations Petitioner admitted by executing the license-surrender
document on May 23, 2012. I.G. Ex. 2, at 3-5. The first violation was of ARIZ. REV.
STAT. § 32-1601(18)(d), a statute dealing with conduct or practice by a nurse “that is or
might be harmful or dangerous to the health of a patient and the public.” The second and
third violations were of provisions in the Arizona Administrative Code, ARIZ. ADMIN.
CODE §§ R4-19-403(1) and R4-403(31), dealing respectively with a nurse’s “pattern of
failure to maintain minimum standards of acceptable and prevailing nursing practice” and
with a nurse’s practicing in any other manner “that gives the Board reasonable cause to
believe the health of a patient or the public may be harmed.” Thus, the I.G. has proven
all three essential elements, and Petitioner’s exclusion pursuant to section 1128(b)(4)(B)
of the Act is authorized.

In resisting the I.G.’s action, Petitioner has denied any misconduct whatsoever while
employed as a nurse in Arizona. Her description of events would show her to be the
victim of malicious and unfounded accusations motivated by the animus of her employers
and coworkers. But her denials and descriptions are attacks on the allegations that led to
her voluntary surrender of her nurse’s license, and they are made too late to aid
Petitioner’s cause here. I cannot consider them, for such collateral attacks on the
soundness or fairness of the ASBN proceeding are explicitly barred in appeals based on
section 1128(b)(4). Gibbs, DAB No. 2279; Roy Cosby Stark, DAB No. 1746 (2000);
George Iturralde, M.D., DAB No. 1374 (1992); Leonard R. Friedman, M.D., DAB No.
1281 (1991); 42 C.F.R. § 1001.2007(d). Petitioner’s claims that she did not understand
this consequence of her license surrender, or that she was misled about it, are also beyond
my consideration: they are no defense to the exclusion. Erica L. Pedersen, DAB CR1700
(2007); Stella Remedies Lively, DAB CR1369 (2005); Steven Caplan, R.Ph., DAB
CR1112 (2003); aff'd sub nom. Steven Caplan v. Thompson, CIV No. 04-00251 (D. Haw.
Dec. 17, 2004).

Because the I.G. has established a basis for the exclusion of Petitioner pursuant to section
1128(b)(4)(B) of the Act, her exclusion until such time as she regains her ability to
practice as a licensed registered nurse in the State of Arizona is required by section
1128(c)(3)(E) of the Act, 42 U.S.C. § 1320a7(c)(3)(E) and 42 C.F.R. § 1001.501(b)(1).
That period is reasonable as a matter of law, based as it is on that statute and regulation.
Petitioner’s request that I limit the period and effect of her exclusion is explicitly beyond
my authority. 42 C.F.R. §§ 1005.4(c)(5) and (6).
I note once more that Petitioner appears here pro se. Because of that I have taken
additional care in reading her submissions, guided by the Board’s reminders that pro se
litigants should be offered “‘some extra measure of consideration” in developing their
records and their cases. Louis Mathews, DAB No. 1574 (1996); Edward J. Petrus, Jr.,
M.D., et al., DAB No. 1264 (1991). [have searched Petitioner’s submissions for any
arguments or contentions that might raise a valid, relevant defense to the proposed
exclusion, but have found nothing that could be so construed.

Summary disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). Resolution
of a case by summary disposition is particularly fitting when settled law can be applied to
undisputed material facts. Gibbs, DAB No. 2279; Rosen, DAB No. 2096. The material
facts in this case are undisputed and unambiguous. They support summary disposition as
a matter of settled law, and this Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Rhonda Stinnett, R.N., from
participation in Medicare, Medicaid, and all other federal health care programs pursuant
to the terms of section 1128(b)(4)(B) of the Act, 42 U.S.C. § 1320a-7(b)(4)(B) until such
time as she regains her license as a registered nurse in the State of Arizona, is
SUSTAINED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Rachell Home Health Services Corp.,
(NPI: 1770727133),
Petitioner,
Vv.
Centers for Medicare & Medicaid Services.
Docket No. C-13-82
Decision No. CR2760

Date: April 17, 2013

DECISION

Petitioner, Rachell Home Health Services Corp., is a home health agency (HHA) that,
until recently, participated in the Medicare program as a provider of services. The
Centers for Medicare & Medicaid Services (CMS) has revoked its Medicare provider
number, and Petitioner appeals. The parties have filed cross-motions for summary
judgment.

The uncontroverted facts establish that the HHA was not operational at the address it
provided to the Medicare contractor. The contractor therefore properly revoked
Petitioner’s provider number. I grant CMS’s motion for summary judgment and deny
Petitioner’s. I have no authority to review the Medicare contractor’s rejection of the
Petitioner’s corrective action plan.

Background

Until its Medicare provider number was revoked on May 11, 2012, Petitioner participated
in the Medicare program as an HHA in Miami, Florida.
In a letter dated July 8, 2012, the Medicare contractor, Palmetto GBA, notified Petitioner
that its provider number was revoked effective May 11, 2012, pursuant to 42 C.F.R.

§ 424.535(a)(5)(i), because the contractor’s site investigator found the HHA’s premises
vacant. CMS Ex. 4.

In a letter dated July 30, 2012, Petitioner declared that it was “up and running” at a new
address, admitted that its staff had not submitted to the contractor the required change-of-
address information, and asked the contractor to accept its corrective action plan (CAP).
CMS Ex. 1. The contractor treated this letter as a request for reconsideration. In a
reconsideration determination dated September 26, 2012, CMS affirmed the revocation.
CMS Ex. 5. Petitioner now appeals that determination.

The parties have filed cross-motions for summary judgment. CMS has filed its motion
for summary judgment and memorandum in support, with five exhibits (CMS Exs. 1- 5).
Petitioner has submitted a response and counter-motion for summary judgment (P. MSJ),
a pre-hearing brief (P. Br.), and eight exhibits (P. Exs. 1-8).

Discussion

1. The undisputed evidence establishes that, based on a May 11, 2012
on-site review, the HHA was no longer operational, so CMS
properly revoked its Medicare enrollment pursuant to 42 C.F.R.

§ 424.535(a)(5). 1

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. 1866/CPayday.com, L.L.C.,
DAB No. 2289, at 2-3 (2009); Illinois Knights Templar Home, DAB No. 2274, at 3-4
(2009), and cases cited therein.

To maintain Medicare billing privileges, a provider must resubmit and recertify the
accuracy of its enrollment information every 5 years. 42 C.F.R. § 424.515. The
information submitted must be complete and accurate. 42 C.F.R. § 424.515(a)(2). CMS
may perform an on-site inspection to verify that the information provided is accurate and
to determine the provider’s compliance with Medicare enrollment requirements. 42
C.F.R. § 424.515(c). If, upon on-site review, CMS determines that the provider is no
longer operational to furnish Medicare-covered items and services, it may revoke
Medicare billing privileges. 42 C.F.R. § 424.535(a)(5)(i).

In this case, on April 5, 2012, Rachell Home Health submitted to CMS its revalidation
application, listing its practice location as 3271 NW 7" Street, Miami, Florida. CMS Ex.

' My findings of fact/conclusions of law are set forth, in italics and bold, in the
discussion captions of this decision.
3 at 7,27. On May 11, 2012, an inspector visited that location and found the premises
vacant. CMS Ex. 2. Petitioner concedes that it was no longer operational at that location,
but claims that it moved and, in error, neglected to notify CMS of its new address. P.
MSJ at 3; P. Br. at 1; P. Ex. 1; CMS Ex. 1.

Because it was not operational at the practice location given in its revalidation
application, CMS properly revoked Rachell Home Health’s Medicare enrollment. 42
CFR. § 424.535(a)(5).

2. Rachell Home Health was not entitled to an opportunity to correct its deficiency
before its billing privileges were revoked, and I have no authority to review
CMS’s denial of its corrective action plan.

On July 30, 2012, Petitioner submitted a new enrollment application to CMS. That
application lists a different practice location: 8180 NW 36" Street, Suite 308, Doral,
Florida. P. Ex. 8 at 20.? In an accompanying memorandum, the HHA’s administrator
asked the Medicare contractor to accept the application as its “corrective action plan”
(CAP). P. Ex. 1; CMS Ex. 1. Petitioner complains that, although the Medicare
contractor offered it the opportunity “to correct the alleged deficiency by providing a
CAP,” it did not then conduct an on-site investigation at the new location. P. MSJ at 3.

But Petitioner was not even entitled to submit a CAP. Section 424.535(a)(1) grants all
providers and suppliers the opportunity to correct their deficiencies prior to losing their
billing privileges except for those whose privileges were revoked under sections
424.535(a)(2) (conduct); 424.535(a)(3) (felony convictions); or, as here, 424.535(a)(5).
42 CFR. § 424.535(a)(1).

Moreover, even if Petitioner had been so entitled, CMS’s (or its contractor’s) decision to
reject the CAP is not an initial determination subject to review in this forum. 42 C.F.R.
§ 498.3(b); 405.874(e); Conchita Jackson, M.D., DAB No. 2495, at 6-7 (2013).

* This enrollment application is not without problems. Like Petitioner’s original
revalidation application, it is dated April 5, 2012. It is unsigned, although the “date
signed” box is filled in: “7/30/12.” P. Ex. 8 at 49.
Conclusion

Because the undisputed facts establish that Petitioner was not operational at the address it
provided, CMS may properly revoke its provider number. I therefore grant CMS’s
motion for summary judgment, deny Petitioner’s motion, and sustain the revocation.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.
A.M.A. LLC d/b/a City Food Mart,
Respondent.

Docket No. C-13-492
FDA Docket No. FDA-2013-H-0246

Decision No. CR2758

Date: April 17, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, A.M.A. LLC d/b/a City Food Mart, alleging
facts and legal authority sufficient to justify the imposition of a civil money
penalty of $500. Respondent did not timely answer the Complaint, nor did
Respondent request an extension of time within which to file an Answer.
Therefore, I enter a default judgment against Respondent and assess a civil money
penalty of $500.

CTP began this case by serving the Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent impermissibly sold
tobacco products to a minor and failed to verify the photo identification of a
purchaser of cigarettes or smokeless tobacco, thereby violating the Federal Food,
Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing
regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. Part 1140 (2012). CTP
seeks a civil money penalty of $500.

On March 6, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent should
pay the proposed penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), lam
required to “assume the facts alleged in the [C]omplaint to be true” and, if those
facts establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns City Food Mart, an establishment that sells tobacco
products and is located at 442 Burnside Avenue, East Hartford, CT 06108.
Complaint 3.

e On May 23, 2012, an FDA-commissioned inspector observed violations at
Respondent’s establishment of 21 C.F.R. § 1140.14(a), a regulation
prohibiting the sale of cigarettes or smokeless tobacco to a person younger
than 18 years of age, and 21 C.F.R. § 1140.14(b)(1), a regulation requiring
retailers to verify the age of a purchaser of cigarettes of smokeless tobacco
by means of photo identification containing the purchaser’s date of birth.
Complaint ¥ 10.

e On July 19, 2012, CTP issued a Warning Letter to Respondent regarding
the inspector’s observations from May 23, 2012. The letter explained that
the observations constituted violations of regulations found at 21 C.F.R.
§§ 1140.14(a) and 1140.14(b)(1), and that the named violations were not
necessarily intended to be an exhaustive list of all violations at the
establishment. The Warning Letter went on to state that failure to correct
the violations could result in the imposition of a civil money penalty or
other regulatory action by the FDA and that Respondent is responsible for
complying with the law. Jd.
e FDA received no response to the Warning Letter from Respondent, though

United Parcel Service records demonstrate that

an individual named “Scott”

received the Warning Letter on July 20, 2012. Complaint § 11.

e FDA commissioned inspectors observed two subsequent violations at
Respondent’s establishment on November 2, 2012, at approximately 9:42
AMET. Violations resulted from “a person younger than 18 years of age

. . purchas[ing] a package of Newport Box 100s cigarettes.” The purchase
itself violated 21 C.F.R. § 1140.14(a), and an additional violation of 21
C.F.R. § 1140.14(b)(1) occurred when Respondent failed to verify the age
of the purchaser by means of photographic identification containing the

purchaser’s date of birth. Complaint 1.

e On November 12, 2012, CTP issued a Notice of

Compliance Check

Inspection to City Food Mart due to the violations on November 2, 2012, at

approximately 9:42 AM ET. The Notice stated

that the violations described

were not necessarily the only violations reported. Complaint § 2.

These facts establish that Respondent is liable under the Act. The Act prohibits

misbranding of a tobacco product. 21 U.S.C. § 331(k).

A tobacco product is

misbranded if distributed or offered for sale in any state in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R

§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed.

Reg. 13,229 (Mar. 10, 2010). Regulations prohibit the

sale of cigarettes or

smokeless tobacco to any person younger than 18 years of age. 21 C.F.R.

§ 1140.14(a). Regulations also require retailers to verify, by means of photo
identification containing the purchaser’s date of birth, that no purchaser of
cigarettes or smokeless tobacco is younger than 18 years of age. 21 C.F.R.

§ 1140.14(b)(1).

Taking the above alleged facts as true, Respondent had four violations of
regulations contained in 21 C.F.R. Part 1140 within a six month period.
Specifically, Respondent had two violations on May 23, 2012, and two violations
on November 2, 2012. Respondent’s actions twice violated regulations

prohibiting the sale of cigarettes or smokeless tobacco

to persons younger than 18

years of age. 21 C.F.R. § 1140.14(a). Respondent’s actions also twice violated
the requirement that retailers verify, by means of photo identification containing
the purchaser’s date of birth, that no purchaser of cigarettes or smokeless tobacco
is younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1). Therefore,
Respondent’s actions constitute violations of law for which a civil money penalty

is merited.
The regulations require the imposition of a civil money penalty in the amount that
is either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $2,000 for the fourth violation within a six month
period. 21 C.F.R. § 17.2. CTP, however, has requested a fine in the amount of

$500. Therefore, I find that a civil money penalty of $500 is warranted and so
order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Perry County Nursing Center,
(CCN: 25-5159),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-12-152
Decision No. CR2757

Date: April 17, 2013

DECISION

Petitioner, Perry County Nursing Center (Petitioner or facility), is a long-term care
facility, located in Richton, Mississippi, that participates in the Medicare program. After
receiving reports of irregularities concerning narcotics and other drugs, surveyors from
the Mississippi State Department of Health (state agency) completed a facility survey on
August 17, 2011, and two revisit surveys on September 8 and November 9, 2011. Based
on their findings, the Centers for Medicare and Medicaid Services (CMS) determined that
the facility was not in substantial compliance with Medicare requirements and that its
deficiencies posed immediate jeopardy to resident health and safety. CMS has imposed
against the facility civil money penalties (CMPs) of $3,550 per day for 130 days of
immediate jeopardy (April 30 through September 6, 2011) and $150 per day for 40 days
of substantial noncompliance that was not immediate jeopardy (September 7 through
October 16, 2011). Petitioner appeals.

For the reasons set forth below, I find that the facility was not in substantial compliance
with Medicare requirements, that its deficiencies posed immediate jeopardy to resident
health and safety, and that the penalties imposed are 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 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, responding to complaints of missing narcotics and other drugs, the state agency
surveyed the facility from August 3 through 17, 2011. CMS Ex. 4. Based on the survey
findings, CMS determined that the facility was not in substantial noncompliance with
Medicare program requirements and that its noncompliance with three of those
requirements posed immediate jeopardy to resident health and safety:

© 42 C.F.R. § 483.20(k)(3)(i) (Tag F281), which requires that facilities maintain
professional standards of quality;

© 42 C.F.R. §§ 483.60(a) & (b) (Tag F425), which sets requirements for
pharmaceutical services;

e 42C.F.R. § 483.75(0) (Tag F520), which mandates that the facility have in place
an active quality assurance committee.

CMS Ex. 4 at 1, 8-34, 38-45. CMS also found that the facility was not in substantial
compliance with two other requirements:

© 42 CFR. §§ 483.13(c)(1)(ii)-(iii), (c)(2)-(4) (Tag F225), which precludes the
facility from employing staff with a history of mistreating residents and mandates
that facilities investigate allegations of mistreatment, neglect, or abuse; and

© 42 C.F.R. § 483.75(1)(1) (Tag F514), which requires that the facility maintain
clinical records in accordance with professional standards. CMS Ex. 4 at 2-8, 34-
38.
Surveyors returned to the facility and completed a follow-up survey on September 8,
2011. Based on that survey, CMS determined that the facility’s deficiencies no longer
posed immediate jeopardy, but, citing the same five regulatory requirements, it
determined that the facility remained out of substantial compliance. CMS Ex. 5.
Thereafter, based on a November 2011 revisit, CMS determined that the facility returned
to substantial compliance on October 17, 2011. CMS Ex. 7.

CMS has imposed against the facility CMPs of $3,550 per day for 130 days of immediate
jeopardy (April 30 through September 6, 2011) and $150 per day for 40 days of
substantial noncompliance that was not immediate jeopardy (September 7 through
October 16, 2011), for a total penalty of $467,500. CMS Ex. 8; Transcript (Tr.) 6.

Petitioner timely requested a hearing. The parties filed pre-hearing briefs (CMS Br.; P.
Br), and Petitioner filed a motion for summary judgment and memorandum in support (P.
MSJ). I denied Petitioner’s motion, and, on May 14, 2012, convened a video hearing
from the offices of the Departmental Appeals Board in Washington, D.C. Counsel for
the parties and the witness convened in Jackson, Mississippi. Ms. Leah A. Epstein
appeared on behalf of CMS. Ms. Juliet Bowan Mitchell and Mr. Phillip J. Chapman
appeared on behalf of Petitioner. Following the hearing, the parties filed their post-
earing briefs (CMS Post-hrg. Br.; P. Post-hrg. Br.), and CMS filed a reply brief (CMS

Reply).

I have admitted into evidence CMS Exhibits (Exs.) 1-69 and P. Exs. 1-32, including P.
Ex. 29A. Summary of Prehearing Conference and Order Establishing Procedures for
Hearing (Summary and Order) at 3 (April 6, 2012); Tr. 7, 8.

IL. Issues

I consider first the issue Petitioner raised in its motion for summary judgment, which it
reiterates in its closing brief: Petitioner argues that, in August 2011, the state agency
“was without legal authority” to survey the facility and is therefore not authorized to
impose any penalties, notwithstanding the survey findings.

On the merits, this case presents the following issues:

1. From April 30 through October 16, 2011, was the facility in substantial
compliance with Medicare program requirements?

2. If the facility was not in substantial compliance with program requirements
from April 30 through September 6, 2011, did its deficiencies then pose immediate
jeopardy to resident health and safety?

and
3. Are the penalties imposed — $ 3,550 per day for 130 days of immediate
jeopardy (April 30 through September 6, 2011) and $150 per day for 40 days of
substantial noncompliance that was not immediate jeopardy — reasonable? (totals:
$461,500 + $6,000 = $467,500)

Summary and Order at 3; Tr. 6.
IIL. Discussion

A, By statute and regulation, CMS and the state agency have broad authority to
survey facilities in order to determine compliance with Medicare program
requirements, and I have no authority to review their exercise of that authority.

The facility here has a troubled history, particularly with respect to its pharmaceutical
services. See CMS Exs. 1-4. In January 2010, state surveyors found substantial
noncompliance with the regulation governing pharmaceutical services (42 C.F.R. §§
483.60(a) and (b)). Among other problems, they found that facility staff had
“misappropriated” the residents’ narcotic medications. CMS Ex. 1. The facility
promised to correct the cited deficiencies. The state agency accepted the facility’s plan
of corrections, and, following a revisit survey in April 2010, determined that the facility
had returned to substantial compliance. By notice dated April 13, 2010, the state agency
so advised the facility. CMS Ex. 2; P. Ex. 3.

Federal regulations allow CMS to reopen an initial or reconsidered determination within
12 months of the date of the notice of the initial determination. 42 C.F.R. § 498.30.
Petitioner charges that, by conducting the August 2011 survey, the state agency (and
CMS) have impermissibly “reopened” the January 2010 survey. The bases for
Petitioner’s claim seem to be notice letters sent by the state agency following the August
survey. The state agency sent the facility a series of confusing letters that seem to
characterize its survey as a “reopening” of the January 2010 action. A letter dated
August 9, 2011, refers to “‘a partially extended complaint survey . . . to the complaint
survey of January 6, 2010....” P. Ex. 1. Additional letters, dated August 12 and 19,
2011, contain similar language; they say that the “complaint investigation . . . that was
conducted on 1/05 — 06/10 with a revisit date of 04/09/11 was re-opened.” P. Ex. 4 at 2;
P. Ex. 5 at 2.

l agree that the language in the state agency’s letters was sloppy and potentially
misleading. But the letters’ misstatements do not create an impermissible re-opening of
the January 2010 survey and do not invalidate the surveys before me. Nor has Petitioner
established that it has been prejudiced in any way by the faulty language.
First, CMS corrected the state agency’s errors in its notice letter of August 24, 2011.

That letter contains none of the state’s offending language; it characterizes the purpose of
the August 17 complaint investigation survey as “‘to determine if your facility was in
compliance with the [f]ederal requirements for nursing homes participating in the
Medicare and Medicaid programs.” CMS Ex. 9 at 1; see 42 C.F.R. § 498.20(a)(1)
(providing that CMS mails notice of an initial determination to the affected party).

Second, and most critical, neither the state agency nor CMS actually reopened the earlier
survey. In January 2010, CMS made determinations based on the January 2010 survey
findings, and those determinations remain untouched. No additional penalties have been
imposed for the period encompassed by the January 2010 survey. As CMS’s letter
advises the facility, the cited deficiencies and the penalties imposed began on April 30,
2011, well after the period covered by the January 2010 survey. CMS Ex. 9 at 1.

Moreover, state agencies (and CMS) have broad authority to survey facilities, and any
determination to do so is not an initial determination that is subject to review in this
forum. 42 C.F.R. § 498.3(b); 42 C.F.R. § 498.5(b). In addition to conducting the
mandatory annual survey, the agencies may survey a facility “as frequently as necessary”
in order to:

(1) determine whether a facility complies with participation requirements; and
(2) confirm that the facility has corrected deficiencies previously cited.

42 C.F.R. § 488.308(c). Inasmuch as facilities must, at all times, maintain substantial
compliance with program requirements, they can hardly claim that they are prejudiced by
the state agency’s decision to survey them.

Petitioner nevertheless cites section 1819(g)(2)(B) of the Social Security Act for the
proposition that the August 17, 2011 survey was not authorized by statute. P. MSJ at 6.
That section provides that any skilled nursing facility found to have provided substandard
quality of care “shall be subject to an extended survey.” Petitioner asserts that no
substandard-quality-of-care deficiencies were cited here, so the survey could not have
been authorized under section 1819(g)(2)(B). Petitioner, however, disregards the next
sentence in that section, which says: “Any other facility may, at the Secretary’s or State’s
discretion, be subject to such an extended survey (or partial extended survey).” (emphasis
added).

And other provisions of the statute enhance this survey authority: 1) section
1819(g)(3)(D) says that the Secretary can survey a facility and make independent and
binding determinations if she “has reason to question” its compliance; and 2) section
1819(g)(4) mandates that the state agency investigate complaints. See also 42 C.F.R.
§488.308 (authorizing the state agency to survey facilities “as frequently as necessary” to
determine compliance with participation requirements and to confirm that deficiencies
have been corrected).

CMS may thus appropriately look at the facility’s prior deficiencies and plan of
correction to see: 1) did the facility implement the promised corrections; 2) did the
corrections effectively resolve the problem; and 3) has the facility maintained substantial
compliance as required. CMS’s consideration of these factors does not mean that it has
reopened the earlier survey.

The state agency and CMS have acted well within the bounds of their statutory and
regulatory authority.

B. The facility was not in substantial compliance with 42 C.F.R. § 483.20(k)(3)()
(professional standards of quality), because its staff: 1) did not administer
medications — including narcotics — as ordered by physicians; 2) did not
document why they failed to follow physician orders; 3) did not document and
report when residents refused their prescribed medications; and 4) did not count
narcotics and/or accurately record the narcotic counts."

Program requirements. The services provided or arranged by the facility must meet
professional standards of quality. 42 C.F.R. § 483.20(k)(3)(i).

Failures to follow physician orders and to document/report medication refusals. In
CMS’s view, professional standards of quality — and thus 42 C.F.R. § 483.20(K)(3)(i) —
dictate that staff administer medications according to physician orders. When a nurse
does not administer a medication as ordered, he/she must document the reason. Ifa
resident refuses a prescribed medication, staff must not only document that refusal, but
must also inform the resident’s physician that the resident refused. CMS Ex. 10 at 2,9
(Baker Decl. f§ 9, 30); CMS Exs. 11, 36, 38.

CMS cites multiple examples of the facility’s failure to administer medications, notably
narcotics, as ordered and its failure to document and report a resident’s refusal to take
prescribed medications:

Resident 1 (R1) R1 was a 76-year-old woman, admitted to the facility on May 31, 2011,
whose diagnoses included chronic and acute bronchitis, congestive heart failure,
dysphagia, cardiomegaly, atrial fibrillation, depression, and other impairments. CMS Ex.
12 at 1,3. She had difficulty walking and complained of significant pain (6 on a scale of
1-10). CMS Ex. 12 at 1; CMS Ex. 10 at 3 (Baker Decl. ¥ 13). On June 15, 2011, her

' My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion
captions of this decision.
physician prescribed 7.5 mg. of Lortab every four hours for pain. Lortab combines the
powerful narcotic hydrocodone with acetaminophen. CMS Ex. 12 at 1. It is a controlled
substance and may be habit forming. CMS Ex. 10 at 3 (Baker Decl. § 12).

R1’s medication administration record (MAR) shows that, in July 2011, nursing staff
failed eleven times to administer her Lortab as ordered:

e July 5 — failed to administer 5:00 a.m. dose;

e July 7 — failed to administer 1:00 a.m. dose;

e July 8 — failed to administer 1:00 a.m. dose;

e July 13 — failed to administer 1:00 a.m. dose;

e July 14 — failed to administer 1:00 a.m. dose;

e July 15 — failed to administer 9:00 a.m., 1:00 p.m., 5:00 p.m., and 9:00 p.m. doses;

e July 20 — failed to administer 5:00 a.m. dose;

e July 23 — failed to administer 1:00 a.m. dose.
CMS Ex. 13 at 1.
In five of these instances, nursing staff documented a reason for not giving the drug. At
9:00 a.m. on July 15, the responsible nurse entered “X” on the MAR, indicating that R1
was not in the facility at the time. CMS Ex. 13 at 1. At 1:00, 5:00, and 9:00 p.m. that
day, the nurse entered the letter “M” on the MAR, to indicate that she failed to administer
Lortab because the facility had run out of the drug. CMS Ex. 13 at 1, 2.” A note
indicates that R1 refused her 5:00 a.m. dose on July 20. CMS Ex. 13 at 2.
This leaves six missed doses unaccounted for. Facility policy dictated that staff should
document when medication is given or refused and should indicate in nurses’ notes the
reason a medication was not given as ordered. CMS Ex. 13 at 2. Contrary to facility

policy and standard nursing practice, the responsible nurse in all six instances, Licensed
Practical Nurse (LPN) Paula Malone, did not document why she failed to administer the

> As discussed below, it seems that prescribed medications were often unavailable.
Although the facility maintained an “emergency box,” from which staff sometimes
requisitioned medications, including Lortab (See CMS Ex. 15), standard nursing practice
limits the use of such emergency drugs.
narcotic. CMS Ex. 13 at 1; CMS Ex. 10 at 3-4 (Baker Decl. § 14). When surveyors
brought this to the facility’s attention during the August survey, LPN Malone wrote a
statement claiming that R1 had refused to take the scheduled medications at those times
(5:00 a.m. on July 5 and 1:00 a.m. on July 7, 8, 13, 14, 23). CMS Ex. 14. I find such
after-the-fact and potentially self-serving statements inherently unreliable, particularly
where the person making the statement does not testify.

Facility Administrator Woodall issued a written warning to LPN Malone for violating the
company policies and procedures, which required staff to document medication refusals.
CMS Ex. 40.

Nor did LPN Malone properly document that she disposed of the controlled substance.
CMS Ex. 13 at 1-2. Facility policy required her to flush the refused medication in the
presence of a witness, who then was supposed to sign the back of the MAR, but no
evidence indicates that she did so. CMS Ex. 36 at 3.

Facility nurses did not consistently administer the correct doses to R1. In orders dated
July 15, 2011, her physician directed staff to administer 1/2 5 mg. tablets of Lortab at
1:00 a.m. and 5:00 a.m. that day only; thereafter, staff were to administer a 5 mg. tablet
every four hours “until Lortab 7.5 mg. tablets are available.” CMS Ex. 12 at 5. But staff
did not then record on R1’s MAR the order for the 5 mg. doses, and those doses were not
administered as ordered. CMS Ex. 13; CMS Ex. 29 at 1.

Ironically, after July 15, nurses requisitioned 5 mg. Lortab tablets from the facility’s
emergency box, ostensibly for R1, even though her physician’s order no longer
authorized them to administer any combinations of the 5 mg. tablets. On July 16, a nurse
took out 3 tablets; on July 26, a nurse took out 2 tablets; and three times on July 27,
nurses took a total of 3 % tablets (in increments of | tablet, 1 tablet, and 1 _ tablets).
CMS Ex. 15. In an employee statement dated August 3, 2011, LPN Belinda Beasley
wrote that, on July 27, she gave R1 1/4 tablets of Lortab, totaling 7.5 mg. She wrote that
she broke a tablet in half, gave half to the resident and discarded the other half. CMS Ex.
30 at 3.

Resident 3 (R3) R3 was a 58-year-old man suffering from end stage renal disease,
pneumonia, cellulitis, dysphagia, and other ailments. CMS Ex. 16 at 1. Among R3’s
medications, his physician prescribed the sedative Ambien, every night, for insomnia.
CMS Ex. 16 at 1; CMS Ex. 17 at 1. Ambien is a controlled substance that is potentially
habit-forming.

* The Emergency Box Requisition form confirms that LPN Beasley is the nurse who
signed out 1’ Lortab tablets on July 27. CMS Ex. 15.
Under standard nursing practices, nurses must transcribe physician orders carefully and
accurately. They must add all medication orders, including temporary changes in orders,
to the resident’s medication administration record (MAR). CMS Ex. 10 at 8 (Baker
Decl. 26). Staff made a mistake when they entered the Ambien order into the facility’s
computerized physician orders, erroneously indicating that the drug should be withheld
on Sundays. CMS Ex. 10 at 5 (Baker Decl. § 17); CMS Ex. 19 at 1.4 The MARs for June
and July, however, correctly reflected that the drug should be administered every day.
CMS Ex. 10 at 5 (Baker Decl. 417); CMS Ex. 17 at 1. Nevertheless, according to the
MARs for those months, staff did not administer the Ambien on Sundays in June and July
(June 5, 12, 19, and 26; July 3, 10, 17, 24, and 31). The entry block for Sundays is
blocked off with asterisks, indicating that the doses were withheld. CMS Ex. 10 at 5
(Baker Decl. 18); CMS Ex. 16 at 1; CMS Ex. 17 at 1.

In a medication error report, dated August 8, 2011, Director of Nursing (DON) Chad
Tisdale acknowledged the error regarding the twelve Sunday dosages and promised to
conduct daily audits of MARs and narcotics records to prevent future errors. CMS Ex.
20. The facility’s administrator, Linda Woodall, issued written warnings to three LPNs,
including LPN Malone, who were identified as failing to administer Ambien as ordered
on those Sundays in June and July, violating company policies. The warning reports also
indicate that DON Tisdale “inserviced” the employees on medication administration and
documentation. LPN Malone was also apparently suspended. CMS Exs. 21, 22, 23.

Without providing any explanation, staff also failed to administer the drug on June 30 (a
Thursday), July 4 (a Monday), and July 30 (a Saturday), for a total of thirteen missed
doses in June and July 2011. CMS Ex. 16 at 1, 2: CMS Ex. 17 at 1.

Resident 5 (R5) R5’s physician ordered Restoril (Tamezepam) and Trazadone (Desyrel)
daily to treat her insomnia. CMS Ex. 25 at 1. On July 25, 2011, staff did not administer
the ordered doses nor document any reason for not doing so. CMS Ex. 24 at 1.

Petitioner argues that the Restoril, at least, was administered, because R5’s Individual
Resident’s Narcotics Record (IRNR), a narcotics control sheet maintained by the facility
to track its narcotics (discussed below), shows that LPN Kitchens removed the drug from
its locked storage on July 25. P. Ex. 18. Petitioner concedes, as it must, that no
documentation (or any other evidence) establishes that the nurse subsequently
administered the drug to the resident. The facility nevertheless excuses this as a simple
documentation error, not a failure to administer the medication. P. Ex. 18; P. Post-hrg.

* The notation “QD” means “every day”; the notation “X” means “except.” Hence
“QDXSUN” means “every day except Sunday.” CMS Ex. 10 at 5 (Baker Decl. § 17).
10

Br. at 10. But, without any evidence to show that the narcotic was administered, I must
assume that it was not.

Resident 7 (R7) R7 was a 76-year-old woman suffering from Alzheimer’s disease and
anxiety. She had osteoarthritis and experienced difficulty walking. Her physician
prescribed Lortab, four times daily, for pain. CMS Ex. 26.

On August 5, 2011, the nurse responsible for her medications did not administer R7’s
midnight dose and did not document why she failed to do so. CMS Exs. 26, 27. A
nurse’s note entered at 9:45 that morning indicates that the resident complained that she
had not been given the medication and said that that she had been in significant pain
(“hurt awfully bad”). CMS Ex. 27.

Identifying the nurse responsible is not easy. CMS suggests that it was LPN Malone
(“LPN #4”), the same nurse who failed to administer medications to R1. CMS Post-hrg.
Br. at 6; CMS Reply at 5. LPN Malone signed R7’s MAR and indicated her initial as a
lower case cursive “m.” Inasmuch as just she and one other nurse (“KB”) signed the
form, and the nurse responsible for R7’s medications on August 5 entered and circled on
the form initials that appear to be an “m” or double “m,” CMS’s presumption seems
reasonable.° CMS Ex. 26.

Petitioner, however, identifies LPN Marquita Murdoch (LPN # 5) as the responsible
nurse, and I find this more likely. P. Post-hrg. Br. at 11. She not only has the correct
initials, but the facility held her responsible. When Surveyor Baker brought the
medication error to the DON’s attention, the DON contacted LPN Murdock, who said
that she did not administer the medication because R7 was sleeping. LPN Murdock
eventually entered that explanation into the nurse’s notes, dating the entry August 5 at
10:55 p.m. The date and time reflect (roughly) the date and time the medication should
have been administered, not the date and time LPN Murdock made the entry. Tr. 35-36;
P. Ex. 19.’ LPN Murdock explained that it had been the first night she’d worked at the
facility “in a while” and “she had a lot going on.” See CMS Ex. 27 at 1.

*CMS notes that the facility has a significant and troubling history of “drug diversion.”
In December 2009, for example, 2,445 Lortab tablets were not accounted for. Among
other irregularities, Lortab was signed out on the narcotics sheet more than 161 times
without any corresponding indication on the residents’ MARs that the medications had
been administered. CMS Ex. 4 at 3-5.

° By circling her initials, she indicated that she did not administer the medication.
’ The note immediately following this one is dated August 6 at 10:00 a.m. It is signed by

DON Tisdale and says that the physician and responsible party were “made aware” that
the Lortab was not administered. I find it highly unlikely that DON Tisdale wrote this
11

Inconsistently, a medication error report, dated August 10, 2011 and signed by DON
Tisdale and LPN Murdock, says that the resident “refused her 12 midnight Lortab.” It
also says that “no adverse effects noted,” apparently disregarding the resident’s
complaints. P. Ex. 20.

LPN Murdock did not testify and her inconsistent explanations for failing to administer
the medication as ordered, as well as her (and DON Tisdale’s) disregard for R1’s
complaints of pain, render her excuses not credible. I do not believe Petitioner’s claim
that R7 “was unable to be aroused.” P. Post-hrg. Br. at 11.* I find it far more likely that
LPN Murdoch did not even remember why she failed to administer the medication as
ordered.

R7 also told Surveyor Baker that “she hurt awfully bad” that night and that she wanted to
be awakened for her pain medication. Tr. 37; CMS Ex. 28.

Resident 17 (R17) was an 86-year-old woman recovering from a fractured hip. Her
physician ordered one Percocet 10/325 mg. tablet every four hours for pain, as needed;
and two Percocet 10/325 tablets every four hours for severe pain, as needed. CMS Ex. 31
at 4; CMS Ex. 32 at 1, 3.° But the facility did not obtain that strength Percocet for her.
Her medication label shows that she was administered Percocet 7.5/325 mg. tablets.

CMS Ex. 33.

This discrepancy between the physician order and the medication label suggests that
facility staff deviated from standard nursing practices in two respects. First, obtaining the
wrong medication dosage obviously compromises the facility’s ability to follow the
physician’s medication orders. Second, standard nursing practice and the facility’s own
policies require that nurses check the medication label for accuracy, including the
medication name and strength. CMS Ex. 35 at 1; CMS Ex. 36 at 1; CMS Ex. 10 at 8, 12
(Baker Decl. fj 27, 39). Prior to administering a medication, the nurse must compare
the physician order, the MAR, and the medication label. If she finds inconsistencies or
ambiguities, she must contact the physician for clarification. CMS Ex. 10 at 8 (Baker

note prior to the time of the survey, since it was plainly written after LPN Murdoch wrote
her note.

* Petitioner even suggests that LPN Murdoch was correct to disregard the physician order.
It claims that administering the medication “is potentially more harmful than not giving
it” because Lortab “may cause over-sedation in the elderly. ...” P. Post-hrg. Br. at 13. If
facility nurses truly saw over-sedation as a problem (which I do not believe they did),
they were required to report their concerns to the resident’s physician.

°’ Percocet contains oxycodone and acetaminophen. Percocet 10/325 means that each
tablet contains 10 mg. oxycodone (generally the highest dose prescribed) and 325 mg.
acetaminophen.
12

Decl. 27); see also Premier Living and Rehab Ctr., DAB CR1602 at 7 (2007), aff’d
DAB No. 2146 (2008). The record does not establish, and Petitioner does not assert, that
staff took any of these steps. See P. Post-hrg. Br. at 14 (in which Petitioner does not deny
the errors but argues that they were not significant).

Petitioner argues that no standard of nursing practice requires nurses to follow physician
orders for administering medication. P. Post-hrg. Br. at 2 et seq. This position is
unsupported and unsupportable. As Surveyor Baker accurately testified, the practice of
following physicians’ orders is “one of the most basic and important rules of nursing.”
CMS Ex. 10 at 2 (Baker Decl. § 9). Indeed, the facility’s own written policies reflect
CMS’s view. Consistent with standard nursing practice, the facility’s policy dictates that
all physician orders be “implemented timely and carried out in a professional manner by
the nursing staff.” Staff are also required to “assure” that all physician orders “are
transcribed properly and implemented.” CMS Ex. 11. “Absent evidence to the contrary,
it is ‘reasonable to presume’ that a facility’s care policies reflect professional standards of
quality.” Dumas Nursing and Rehabilitation, L.P., DAB No. 2347 at 9 (2010), quoting
Sheridan Nursing Care Center, DAB No. 2178 at 32 (2008); Agape Rehabilitation of
Rock Hill, DAB No. 2411 at 7 (2011).

Because they failed to follow the physician’s medication orders, nursing staff did not
meet professional standards of quality, putting the facility out of substantial compliance
with 42 C.F.R. § 483.20(k)(3)(i).

CMS also maintains that the facility did not meet professional standards of quality,
because staff regularly failed to document the reasons for not administering prescribed
medications and because staff did not report to the physician a resident’s refusal to take
prescribed medications. Surveyor Baker testified that, according to standard nursing
practices, a nurse administering medication must document the patient’s refusal and the
reasons for that refusal. He/she must communicate the refusal to the attending physician
and the patient’s representative. CMS Ex. 10 at 9 (Baker Decl. § 30). This comports
with the facility’s own policy, which instructs:

If a medication is refused, or for some reason not given,
notify the attending physician, record the incident on the
resident’s chart, or mark “R” on the resident’s MAR, and sign
out the ungiven medication on the back of the MAR for each
time the resident refuses the medication(s).

CMS Ex. 36 at 3; CMS Ex. 38 (facility policy dictating that a resident’s refusal of
treatment must be “consistently documented in the resident’s record” and should include
“Tt]he date and time the physician and responsible party [were] notified as well as the
physician’s response.”).
13

Because its nursing staff did not consistently document the reasons they failed to
administer prescribed medications and did not consistently inform physicians when
residents refused to take prescribed medications, the facility did not meet professional
standards of quality and was not in substantial compliance with 42 C.F.R. §
483.20(k)(3)(i).

Failure to track narcotics and other controlled substances. Standards of nursing practice
and the facility’s policies (not to mention federal and state law) also require that nurses
carefully track narcotics and other controlled substances. CMS Ex. 10 at 13 (Baker Decl.
441); CMS Ex. 37; see Premier, DAB No. 1602 at 7. Surveyors cited significant
deficiencies with respect to the facility’s shortcomings in tracking its narcotics, which I
include in my discussion of the facility’s substantial noncompliance with the regulation
governing pharmaceutical services.'° As that discussion shows, facility staff did not
adequately account for its controlled substances, which again means that the facility
failed to meet professional standards of quality and was not in substantial compliance
with 42 C.F.R. § 483.20(k)(3)(i).

C. CMS may cite a deficiency under 42 C.F.R. § 483.20(k)(3)(i), whenever facility
staff fail to meet professional standards of quality; the regulation makes no
exception for breaches of professional standards that involve medication errors.

Petitioner has presented little evidence and few arguments challenging CMS’s factual
findings with respect to staff practices. Instead, it: 1) accuses CMS of inventing
standards, even though, as discussed above, those standards are contained within the
facility’s own policies and procedures; and 2) argues that, because the relevant
professional standards of quality relate to medications, CMS may cite a deficiency under
42 C.F.R. § 483.20(k)(3)(i) only if it also cites a deficiency under 42 C.F.R. §
483.25(m)(1), which specifically addresses medication errors. P. Post-hrg. Br. at 3 et seq.

I have already rejected Petitioner’s claim that CMS “invented” the professional standards
of quality.

I find equally unpersuasive Petitioner’s argument that CMS may not cite deficiencies
under section 483.20(k)(3)(i), because it did not also cite deficiencies under section
483.25(m)(1). In support of its argument, Petitioner points to a couple of interpretive
guidelines that are included in the State Operations Manual (SOM). The SOM includes

' As with many of the deficiencies cited in this case, the underlying facts support
noncompliance findings under both sections 483.20(k)(3)(i) and 483.60(a) and (b). Asa
second example: CMS cited a deficiency under section 483.20(k)(3)(i), because the
facility’s pharmaceutical services did not assure accurate dispensing and administering of
all drugs. CMS could also have cited the facility under 42 C.F.R. § 483.60(a).
14

useful guidance as to CMS’s interpretations of applicable law, but its provisions do not
constitute enforceable, substantive rules. Beverly Health and Rehabilitation Services v.
Thompson, 223 F. Supp. 2d at 99-106 (D.D.C. 2002); Oakwood Community Ctr., DAB
No. 2214 at 16 (2008); Aase Haugen Homes, Inc., DAB No. 2013 at 15 (2006). The
regulations, on the other hand, constitute enforceable rules, and

Iam bound to follow them. Section 483.20(k)(3)(i) makes no exception for breaches of
professional standards that involve medication errors. See Premier Living and Rehab
Ctr., DAB No. 2146 at 18 (2008). Thus, Petitioner’s argument fails based on the plain
language of the regulation.

Moreover, nothing in the language of the interpretive guidelines precludes CMS from
citing a medication error under section 483.20(k)(3)(i). In Premier Living and Rehab
Ctr., CMS cited deficiencies under two regulations: 42 C.F.R. § 483.20(k)(3)(i) and 42
C.F.R. § 483.25(m). From this, Petitioner argues that CMS can cite a medication-related
deficiency under section 483.20(k)(3)(i) only if it also cites a deficiency under section
483.25(m). Petitioner misreads the SOM and the Departmental Appeals Board’s
reasoning in Premier Living and Rehab Ctr.

An interpretive guideline under section 483.20(k)(3)(i) suggests that surveyors consider:
“Are there errors in the techniques of medication administration? (Cite actual medication
errors at 483.25(m).)” P. Ex. 30 at 2; Premier Living and Rehab Ctr., DAB No. 2146 at
16. Elsewhere, the SOM instructs surveyors to cite under 42 C.F.R. § 483.20(k)(3)
“errors in the technique of medication administration” as well as failures to carry out
physician orders. P. Ex. 30 at 2. In Premier Living, the Board gave two reasons for
rejecting the facility’s contention that this language means that surveyors should not cite
actual medication errors under the professional standards regulation. First, even if it
agreed that the citation “required error in medication techniques, as opposed to an error in
the medication administered” (which it did not), the Board found that the facility staff’s
techniques were, in fact, sub-par.'' Second, the Board emphasized that it did not agree
that the language in the guidelines bars surveyors from citing breaches of professional
standards relating to medication errors. “Instead, we read the guidelines as merely
recommending that surveyors cite the medication error regulation when applicable.”
Premier Living and Rehab Ctr., DAB No. 2146 at 16.

The Board also said:

We do not read the guidance to mean that deficiencies in
professional standards that cause actual harm should only be

" The Board referred to staff practices in “measuring, handling, tracking, and
safeguarding” narcotics as examples of deficient techniques. Here, the evidence also
establishes deficiencies in measuring, handling, tracking, and safeguarding narcotics.
15

cited under the other relevant regulatory provisions, but rather
that where a deficit in professional standards is bad enough to
actually impact the outcome for a particular resident, it should
appropriately also be cited under the particular substantive
provision relating to the provision of that kind of care to the
resident.

Premier Living and Rehab Ctr., DAB No. 2416 at 18. Petitioner seems to think that this
language mandates a deficiency citation under the quality-of-care regulation (483.25(m))
in order to sustain a deficiency under the professional standards regulation. Of course, it
does not. It just recommends that surveyors also consider citing deficiencies under any
relevant substantive provision, if they find significant problems with professional
standards.”

D. The facility was not in substantial compliance with 42 C.F.R. §§ 483.60(a) and
(b) because: 1) it maintained inadequate supplies of medications; 2) it misused
its emergency drug supplies; and 3) it did not adequately account for its
controlled substances.

Program requirements. The facility must provide routine and emergency drugs to its
residents. Its pharmaceutical services (including procedures that assure the accurate
acquiring, receiving, dispensing, and administering of all drugs and biologicals) must
meet the needs of each resident. 42 C.F.R. § 483.60(a). To this end, the facility must
employ or obtain the services of a licensed pharmacist who: 1) consults “on all aspects”
of providing pharmacy services in the facility; 2) establishes a system of records showing
the receipt and disposition of all controlled drugs “in sufficient detail to enable an
accurate reconciliation”; and 3) determines that drug records are in order and that an
account of all controlled drugs is maintained and reconciled periodically. 42 C.F.R. §
483.60(b)

The facility had in place written policies designed to assure compliance with these
requirements. CMS Exs. 34 - 38. However, as the following discussion shows, its staff
repeatedly failed to follow those policies, resulting in the facility’s noncompliance with
42 C.F.R. § 483.60(a) and (b).'*

” Tn fact, the surveyors arguably did so here. They found significant problems with
professional standards, and also found noncompliance with one of the more “substantive”
regulations: that governing pharmaceutical services.

CMS cites multiple additional examples of the facility’s failure to account for its
narcotics. See, e.g., CMS Exs. 55, 57, 58 (showing discrepancies in the number of
Fentanyl patches destroyed). Because the examples I have addressed are sufficient to
justify the penalties imposed, I need not address all of these. Claiborne-Hughes Health
16

Inadequate supplies of medications. I have already discussed many of the medication
irregularities that affected facility residents. As that discussion shows, on some
occasions, staff failed to administer prescribed medications because the facility did not
have them:

e The facility did not obtain the correct dosage of Percocet for R17. CMS Ex. 31 at
4; CMS Ex. 32 at 1, 4; CMS Ex. 33.

e On three occasions on July 15, 2011 (1:00, 5:00, and 9:00 p.m.), nurses failed to
administer Lortab as prescribed to R1 because the facility had run out of the drug.
CMS Ex. 13 at 1, 2.

¢ On July 16, 26, and 27, 2011, staff administered the wrong dosages of Lortab to
R1 because they did not have the correct dosages. They requisitioned these tablets
from the facility’s emergency box (see discussion, below). CMS Ex. 15; CMS Ex.
30 at 3.

As CMS points out, the facility should not have been without R1’s prescribed medication
because staff knew or should have known when her supply would run out. On June 30,
2011, the facility received 60 Lortabs for her, a ten-day supply.'* CMS Ex. 29. Yet, for
reasons that the facility has not explained, no one reordered the medication until July 15,
five days after her supply would have been exhausted. CMS Ex. 29. On July 15, the
facility received another ten-day supply, but did not re-order until July 26, after again
having exhausted her supply. CMS Ex. 29; CMS Ex. 42 at 2.

Standard nursing practice dictates that nurses ensure an adequate supply of prescribed
medications. They should check supplies regularly and reorder before a prescribed
medication runs out. CMS Ex. 10 at 12 (Baker Decl. § 38). Because it did not timely
reorder prescribed medications, the facility did not acquire, receive, dispense and
administer necessary drugs and was not in substantial compliance with 42 C.F.R. §
483.60(a); see Universal Healthcare/King, DAB No. 2215 at 4-6 (2008).

Misuse of “emergency” drugs. As the above-discussion also shows, when the facility
ran out of a prescription drug, nursing staff dipped into the facility’s Emergency Drug
Kit. But standard nursing practice and the facility’s own policy dictate that those drugs

Ctr., No. 09-3239 at 11 (6th Cir. 2010); Carrington Place of Muscatine, DAB No. 2321
at 20-21 (2010).

“ Her prescription called for one tablet every four hours, or six tablets per day. CMS Ex.
12 at 1.
“should only be used for stat and/or emergency orders from the attending physician or

Medical Director.”” CMS Ex. 34; CMS Ex.

0 at 12 (Baker Decl. § 38).

Accounting for controlled substances. Nurses must track the facility’s controlled

substances, and the facility had in place writ
they did so. CMS cites multiple instances o
which meant that the facility was not proper!

ten policies and procedures to assure that
f the staff’s failing to follow those policies,
y tracking its narcotics:

First, facility policy directed staff to check medication labels for accuracy at the time of

delivery. CMS Ex. 35 at 1. If the drugs had

been ordered by means of a “Medication

Order Form,” the nurse was supposed to write in and sign, on the original of that form,
the quantity received. The original form was then returned to the pharmacy. CMS Ex.
35 at 2. The nurse receiving the drug order was required to verify that the “count
received” was correct and to add that count to the IRNR. CMS Ex. 37 at 1.

Here, the facility provided no evidence, to the surveyor or to this tribunal, establishing
that its nurses followed these directives. CMS Ex. 10 at 12 (Baker Decl. § 39). In fact,
based on the inconsistencies between R17’s physician order for Percocet (10/325 mg) and
the medication label (7.5/325), we know that staff accepted medications, whose labels did
not reflect the drugs ordered. CMS Ex. 31 at 4; CMS Ex. 32 at 1, 3; CMS Ex. 33.

Nor has the facility explained a significant and disturbing discrepancy in R1’s narcotics
count. The pharmacy delivery sheet shows that, on July 27, 2011, the facility received —
and staff signed for — 120 Lortab tablets. CMS Ex. 44 at 1; CMS Ex. 46 at 1 (see label).
An additional 60 tablets were signed for by LPN Malone at 3:00 a.m. on July 28, 2011,
for a total of 180 tablets. CMS Ex. 44 at 2. Yet, beginning July 27, R1’s IRNR shows a
maximum of only 60 tablets on hand for her. CMS Ex. 46 at 1. Petitioner has not
accounted for the 120 missing tablets. | consider this a very significant problem,
particularly in light of the facility’s well-documented history of drug diversions.

Second, according to facility policy, which again comports with standards of nursing
practice, “[c]ontrolled medications are to be signed out in the narcotic book at the time
they are to be administered.” CMS Ex. 37 at 1; CMS Ex. 10 at 15 (Baker Decl. § 47).
CMS alleges that facility staff took narcotics out of the emergency kit far in advance of
dispensing them. According to the Emergency Box Requisitions form, on July 15, 2011,
a nurse signed out three 5 mg. Lortab tablets for R1. She wrote in the time as 1:00 a.m.
and 5:00 a.m. CMS Ex. 15. On July 16, at an unspecified time, another nurse signed out
three 5 mg. tablets of Lortab for RI. CMS Ex. 15. Thus, even though her physician
prescribed 7.5 mg. every four hours, these nurses signed out twice as much of the
medication as needed at any given time.

Petitioner denies that the nurses signed out the medications in advance, but claims,
without support, that the drugs “were simply documented at one time on one line each.”
18

P. Post-hrg. Br. at 17. As CMS points out, if true, nurses were still violating standards of
practice and facility policy, because they did not sign out the narcotics until hours after
they removed them.

In order to account for its controlled medications, as required by the regulation, the
facility directed its staff to sign out narcotics at the time they were administered. Here,
staff were either taking the narcotics without timely signing for them, or they were
signing them out hours before they were to be administered. Under either scenario, staff
deviated from the system the facility had in place, which puts the facility out of
substantial compliance with 42 C.F.R. § 483.60(a) and (b).

Third, as Surveyor Baker explained, after administering a narcotic, the facility’s nursing
staff should count the number of pills or measure the amount of liquid medication
remaining. In this way, staff can immediately identify missing doses and other
irregularities. If, instead of counting (or measuring), staff make a paper calculation, i.e.,
they subtract the dose administered from the number previously recorded, they risk
repeating or even compounding an existing error. CMS Ex. 10 at 13 (Baker Decl. {§ 42,
43). CMS Ex. 37 at | (policy mandating that administering nurse “check for the accuracy
of the remaining count.”)

CMS points to the IRNR for R17 as an example of staff’s failure to count Percocet tablets
as required. CMS Ex. 33. R17’s IRNR is messy and filled with errors. On at least three
occasions, someone has, without dating or initialing the change, visibly altered the
original entry for remaining medications: the April 30 8:00 p.m. entry has been tampered
with; the May 3 11:30 p.m. entry has been changed from 38 to 39; the May 7 8:00 p.m.
entry was changed from 33 to 34.'° In two instances, the amount given has been crossed
out and another amount written in, again without dating or initialing the change. In any
event, the numbers recorded, whether original or altered, do not add up.

e The record indicates that, on April 30 at 8 p.m., R17 had 44 tablets on hand. The
nurse, S. Darby, administered two tablets, leaving 42, according to the record,
although the “42” is one of the altered entries.

e The next entry is May | at 8:30 a.m. It indicates 43 (not 42) tablets on hand. LPN
Beasley administered one tablet and wrote that 41 tablets remained.

e But the next entry, dated May | at 9:00 p.m., indicates 42 (not 41) tablets on hand.
The nurse administered two tablets, with 40 remaining.

'’ The May 3 and May 7 changes might have been from 39 to 38 and 34 to 33,
respectively, but in both cases the next nurse entering an amount recorded the numbers
39 and 34.
19

e Thereafter, each “amount-on-hand” entry indicates that one tablet was
administered, and the “amount remaining” is decreased by one.

CMS Ex. 33. According to CMS, these entries indicate that staff were not physically
counting the tablets each time they administered a dosage. Instead, they subtracted the
“amount given” from the “amount on hand.” CMS Post-hrg Br. at 8. Petitioner, on the
other hand, claims that, on May 1 at 8:30 a.m., LPN Beasley “simply entered the
incorrect count of 43 for ‘amount on hand’” but then correctly recorded the amount
remaining as 41.'° Thereafter, according to Petitioner, all the other nurses recorded the
correct amounts. P. Post-hrg. Br. at 15. But if that were so, the entry dated May | at 9
p.m. would have shown 41 tablets on hand, two administered, and 39 remaining. Instead,
the entry lists 42 tablets on hand, two administered and 40 remaining. Petitioner denies
that the nurse administered two tablets and claims that she administered only one. This is
inconsistent with the record entries. Not only does the nurse report that two fewer tablets
remain after she has administered the medication, she marks under “amount given” two
parallel lines, not one. CMS Ex. 33.

In her declaration, the facility administrator, Linda Woodall, also declares that “the LPN
in question entered the incorrect count for amount on hand column but the correct count
of 42 for amount remaining.” P. Ex. 27 at 6 (Woodall Decl. 416). Inasmuch as LPN
Beasley entered “41” as the amount remaining, this testimony is confusing and does not
accurately describe the entries on the IRNR form.

Citing the September 8, 2011 statement of deficiencies and its own plan of corrections,
Petitioner claims that its position was “verified by audit conducted on 8/5/11 during the
survey and validated by the [s]tate.” (emphasis in original) P. Post-hrg. Br. at 15; P. Ex.
27 at 7 (Woodall Decl. 416) (claiming that “on August 5, 2011, DON Chad Tisdale
conducted a 100% audit on all narcotics for [R17] to ensure all medications were
accounted for and counts accurate. No additional discrepancies were noted as a result of
these audits.”). Petitioner offers absolutely no reliable evidence of the audit findings.
Petitioner provides no audit report and no declaration from DON Tisdale. It seems that
no one independently counted the number of Percocet tablets remaining. Indeed, the
statement of deficiencies, upon which Petitioner relies, indicates that this so-called
“audit” was extremely limited. DON Tisdale told surveyors that he could not verify that

‘ST note that, if, in fact, LPN Beasley’s May 1 “‘amount on hand” entry was correct, and
43 tablets (not 42) remained after April 30 at 8:00 p.m., the subsequent numbers would
make more sense. LPN Beasley would have started with 43 tablets, administered one,
and 42 would remain, as reflected in the next entry (May | at 9:00 p.m.). Then, at 9 p.m.
on May 1, two are administered and 40 remain. Of course, that would mean an earlier,
unexplained error.
20

the Percocet administration was wrong, because he did not have the medication card for
review. He could only compare the narcotic sheet to the MAR. CMS Ex. 6 at 19.

The multiple unexplained irregularities surrounding R17’s Percocet establish that facility
staff were not carefully tracking her narcotic medication, which puts the facility out of
substantial compliance with 42 C.F.R. § 483.20(k)(3)(i)."”

The record does not contain R17’s MAR for May 2011, so I could not compare its entries
to the IRNR. I note that R17’s MAR for April is in the record, but staff did not record
most of the Percocet administered to R17 in April. According to the MAR, LPN Malone
administered one tablet on April 28 and someone else administered two tablets on April
30. CMS Ex. 32 at 1,3. The MAR does not reflect the multiple other occasions the
narcotic was given. Compare CMS Ex. 32 with CMS Ex. 33.

As an over-arching response to all of these tracking errors, Petitioner argues that they are
not deficiencies because they are “mere documentation errors.” I am not aware of any
method by which a facility can track its narcotics that does not involve careful
documentation. The regulation requires it. 42 C.F.R. §§ 483.60(b)(2) and (3). As its
policies demonstrate, this facility relied on documentation as the primary method by
which it tracked its narcotics. See, e.g., CMS Ex. 37. Its staff’s repeated documentation
errors, which Petitioner does not even seriously dispute, confirm that it was not keeping
adequate track of its narcotics and was therefore not in substantial compliance.

E. CMS’s determination that, from April 30 through September 6, 2011, the
Sfacility’s deficiencies posed immediate jeopardy to resident health and safety is
not clearly erroneous.

Immediate jeopardy exists if a 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)(2). The Departmental Appeals Board has observed repeatedly that the “clearly
erroneous” standard imposes on facilities a “heavy burden” to show no immediate
jeopardy, and has sustained determinations of immediate jeopardy where CMS presented
evidence “from which ‘[o]ne could reasonably conclude’ that immediate jeopardy

The deficiencies cited under 42 C.F.R. §§ 483.20(k)(3)(1) and 483.60(a) and (b) more
than justify the penalties imposed. Claiborne-Hughes Health Ctr., No. 09-3239 at 11
(6th Cir. 2010); Carrington Place of Muscatine, DAB No. 2321 at 20-21 (2010). I
therefore decline to address the deficiency cited under 42 C.F.R. § 483.75(o), although I
recognize that the facility’s long-standing and serious deficiencies regarding its
pharmaceutical services raises questions about the effectiveness of its quality assurance
committee.
21

exists.” Barbourville Nursing Home, DAB No. 1962 at 27-28 (2005), citing Koester
Pavilion, DAB No. 1750 (2000); Daughters of Miriam Center, DAB No. 2067 at 7, 9
(2007).

Petitioner attempts to isolate each individual error, declare that error “insignificant,” and
then move on to the next purportedly “insignificant” error. But, as the evidence
discussed above establishes, the facility’s pharmaceutical problems were systemic.
Multiple staff members repeatedly disregarded standard practices and the facility’s own
policies. Taken as a whole, these errors establish that the facility was not ensuring that its
pharmaceutical services met resident needs. If the facility cannot account for its
residents’ narcotics, those drugs will not be available when the resident needs them (as
appened here). If the facility cannot assure that the correct medication — particularly
powerful narcotic medications — are administered according to physician orders, its
deficiencies are likely to cause serious harm. Indeed, the record contains at least one
documented instance of actual harm — the pain suffered by R7 on the night of August 5.
Where, as here, the evidence establishes a systemic problem of staff failing to follow
physician orders, the Board has found “ample reason” to conclude that a nurse’s
medication errors would likely cause death or serious harm to residents. Agape
Rehabilitation of Rock Hill, DAB No. 2411 at 19-20, citing Daughters of Miriam Ctr.,
DAB No. 2067 at 12.

Petitioner complains that CMS erroneously began the period of immediate jeopardy on
April 30, 2011. The evidence, however, establishes that the facility’s significant
problems with administering and accounting for medications began at least that early and
were ongoing. On April 25, 2011, staff accepted the wrong Percocet dosage for R17.
CMS Ex. 32 at 1; CMS Ex. 33. Their errors in tracking her narcotics began on April 30
or possibly even before then. CMS Ex. 33. Throughout June and July, staff failed to
administer R3’s Ambien as ordered (CMS Ex. 16 at 1); 120 Lortab tablets went missing
in July (CMS Exs. 44, 46); and, throughout July and August, nurses repeatedly failed to
administer medications as prescribed."®

Finally, aside from arguing, generally, that its deficiencies did not pose immediate
jeopardy, Petitioner has not specifically challenged CMS’s determination that the

'* Aside from arguing the findings of substantial noncompliance and immediate jeopardy,
and, thus the imposition of any penalty, Petitioner has not challenged the amounts of the
penalties imposed. In any event, at $150 and $3,550 per day, the CMPs are at the very
low ends of the penalty ranges for substantial non-compliance ($50-$3,000) and
immediate jeopardy ($3,050-$10,000). 42 C.F.R. §§ 488.408(d) and (e). In light of the
facility’s dismal history, particularly with respect to its medication errors and
pharmaceutical services, the amounts are more than justified. See 42 C.F.R. §
488.438(f); CMS Exs. 1, 3.
22

immediate jeopardy ended effective September 7, which, in any event, seems consistent
with the rules governing duration. 42 C.F.R. § 488.454(a).

IV. Conclusion

From April 30, through October 16, 2011, the facility was not in substantial compliance
with Medicare program requirements, notably 42 C.F.R. § 483.20(k)(3)(i) (professional
standards of quality) and 42 C.F.R. §§ 483.60(a) and (b) (pharmaceutical services). From
April 30 through September 6, 2011, those deficiencies posed immediate jeopardy to
resident health and safety. The penalties imposed, which are at the very low end of the
penalty ranges, are reasonable.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health

and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,

Complainant

Vv.

Smoke & More, Inc.,

Respondent.

Docket No.

C-13-351

FDA Docket No. FDA-2013-H-0121

Decision No. CR2756

Date: Apri

INITIAL DECISION AND

The Center for Tobacco Products (CTP) fi

17, 2013

DEFAULT JUDGMENT

led an administrative complaint against

Respondent, Smoke & More, Inc., that alleges facts and legal authority sufficient
to justify the imposition of a civil money penalty of $500. Respondent did not
timely answer the complaint, nor did Respondent request an extension of time

within which to file an answer. Therefore,
Respondent and assess a civil money penal

I enter a default judgment against
ty of $500.

CTP began this case by serving a complaint on Respondent and filing a copy of
the complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The complaint alleges that Respondent maintained a self-

service display in a facility that permits mi

nors to enter and sold cigarettes in a

package containing fewer than twenty cigarettes, thereby violating the Federal
Food, Drug, and Cosmetic Act (Act), codified at 21 U.S.C. §§ 301-399d, and its
implementing regulations found at 21 C.F.R. Part 1140. The complaint further
alleges that Respondent impermissibly received in interstate commerce and

delivered or proffered for delivery “clove” cigarettes, also in violation of the Act.
CTP seeks a civil monetary penalty of $500 for these violations.

On March 7, 2013, CTP served the complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the complaint and
accompanying cover letter, CTP explained that, within 30 days, Respondent
should pay the penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that, if it failed to take one of
these actions within 30 days, the Administrative Law Judge could issue an initial
decision ordering Respondent to pay the full amount of the proposed penalty,
pursuant to 21 C.F.R. § 17.11.

Respondent has not filed an answer within the time provided by regulation or
timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), 1am required to
“assume the facts alleged in the complaint to be true, and, if such facts establish
liability under [the Act],” issue a default judgment and impose a civil monetary
penalty. Accordingly, I must determine whether the allegations in the complaint
establish violations of the Act.

Specifically, CTP alleges that:

e Respondent owns Smoke & More, an establishment that sells tobacco
products and is located at 808 72™ Street East, Tacoma, Washington 98404.
Complaint § 2.

e¢ On March 22, 2012, an FDA-commissioned inspector observed that
Respondent had a self-service display in a non-exempt establishment.
Complaint § 11.

e “[O]n May 31, 2012, CTP issued a Warning Letter to Smoke & More.”
Complaint § 11. The letter informed Respondent of the violation the FDA-
commissioned inspector had observed on March 22, 2012, and that the
failure to correct violations could result in the imposition of a civil money
penalty or other regulatory action. Complaint § 11. Moreover, CTP
informed Respondent that the warning letter was not intended to provide an
exhaustive list of violations and that Respondent maintained the
responsibility to ensure that it complied with the law. Complaint § 11.

e Pursuant to a two-part inspection conducted on August 11, and 23, 2012,
FDA-commissioned inspectors noted two violations: (1) “[s]elling a
cigarette package that contains fewer than 20 cigarettes”; and (2)
“[rJeceiving in interstate commerce and delivering or proffering for
delivery ‘clove’ flavored cigarettes.” Complaint § 1.a.-b.

Taking these facts as true, I must find pursuant to 21 C.F.R. § 17.11(a) that
Respondent is liable under the Act. The Act prohibits misbranding of a tobacco
product. 21 U.S.C. § 331(k). A tobacco product is misbranded if sold or
distributed in violation of regulations issued under section 906(d) of the Act,
codified at 21 U.S.C. § 387f(d). 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R §
1140.1(b). Those regulations generally prohibit the use of self-service displays
and other “‘impersonal’ modes of sale” and require that a retailer sell tobacco
products “only in a direct, face-to-face exchange between the retailer and the
consumer.” 21 C.F.R. § 1140.16(c). The regulations also generally prohibit the
sale of “any cigarette package that contains fewer than 20 cigarettes.” 21 C.F.R. §
1140.16(b). The Act further prohibits “[t]he receipt in interstate commerce of any
. .. tobacco product . . . that is adulterated or misbranded, and the delivery or
proffered delivery thereof for pay or otherwise.” 21 U.S.C. § 331(c). A tobacco
product is deemed “adulterated” if it fails to meet entirely the “tobacco product
standard established under section 387g.” 21 U.S.C. § 387b(5). That section, in
turn, prohibits cigarettes from containing, “as a constituent . . . or additive, an
artificial or natural flavor . . . or an herb or spice, including... clove... .” 21
U.S.C. § 387g(a)(1)(A).

Here, Respondent first misbranded a tobacco product when it maintained a self-
service display, in violation of 21 C.F.R. § 1140.16(c). Respondent also
misbranded a tobacco product when it sold packages of fewer than 20 cigarettes,
in violation of 21 C.F.R. § 1140.16(b). Finally, Respondent violated 21 U.S.C. §
331(c) and § 387g(a)(1)(A) when it received in interstate commerce and delivered
or proffered for delivery “clove” cigarettes. Respondent’s actions constitute
violations of law for which a civil money penalty is merited. See 21 U.S.C. §
333f(9)(A).

The regulations require the imposition of a civil money penalty in the amount that
is either the maximum provided for by law or the amount sought in the complaint,
whichever is smaller. 21 C.F.R. § 17.11(a). Respondent has committed its second
regulatory violation within a 12-month period, the maximum penalty for which is
$250. 21 C.F.R. § 17.2. Respondent has also committed an additional statutory
violation for which it may be fined up to $15,000. 21 U.S.C. § 333f(9)(A). CTP,
through its Complaint, requested a civil money penalty in the amount of $250 for
the two regulatory violations and $250 for the separate statutory violation.
Therefore, I impose a civil money penalty in the amount of $500.

/s/
Steven T. Kessel
Administrative Law Judge