Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Pinecrest Nursing and Rehabilitation Center
(CCN: 67-5289),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-861
Decision No. CR2417
Date: August 17, 2011
DECISION
I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
impose remedies against Petitioner, Pinecrest Nursing and Rehabilitation Center,
consisting of civil money penalties of $6,150 per day for each day of a period beginning
May 11, 2010 and running through May 14, 2010, and civil money penalties of $150 per
day for each day of a period beginning May 15, 2010 and running through June 1, 2010.!
I. Background
Petitioner is a skilled nursing facility that is located in Tyler, Texas. It participates in the
Medicare program. Its participation in Medicare is governed by sections 1819 and 1866
of the Social Security Act and by implementing regulations at 42 C.F.R. Parts 483 and

488.

CMS determined to impose against Petitioner the remedies that I recite in this decision’s
opening paragraph. These remedy determinations were based on noncompliance findings

' CMS imposed other remedies against Petitioner, including loss of authority to conduct
nurse aide training and certification. Petitioner did not challenge these remedies, and, so,
I do not address them in this decision.
that were made at a survey of Petitioner’s facility that was completed on May 14, 2010
(May Survey). Petitioner appealed CMS’s determinations, and the case was assigned to
me for a hearing and a decision.

The parties agreed that the case could be decided based on their exchanges of written
evidence. CMS filed 14 proposed exhibits (Ex.) that it identified as CMS Ex. 1 - CMS
Ex. 14. Petitioner filed 19 proposed exhibits that it identified as P. Ex. 1 — P. Ex. 19.
The parties each filed opening and final briefs. I receive all of the parties’ proposed
exhibits into evidence.

IL. Issues, Findings of Fact, and Conclusions of Law
A. Issues
The issues in this case are whether:

1. Petitioner failed to comply substantially with Medicare participation
requirements;

2. CMS’s determinations of immediate jeopardy level noncompliance are
clearly erroneous; and

3. CMS’s remedy determinations are reasonable.
B. Findings of Fact and Conclusions of Law

The surveyors who conducted the May Survey concluded that Petitioner failed to comply
substantially with numerous Medicare participation requirements. These noncompliance
findings included six deficiencies that were determined to be so egregious as to constitute
immediate jeopardy level noncompliance. The term “immediate jeopardy” is defined at
42 C.F.R. § 488.301 to mean noncompliance that causes, or is likely to cause, serious
injury, harm, impairment, or death to one or more residents of a skilled nursing facility.

The parties agreed that this case could be decided based only on the findings of
immediate jeopardy level noncompliance. In this decision, I conclude that Petitioner’s
noncompliance at the immediate jeopardy level with three Medicare participation
requirements is sufficient to justify all of the remedies that CMS determined to impose
against it. These requirements are at: 42 C.F.R. § 483.13(c), which directs a facility to
develop and implement written policies and procedures that prohibit mistreatment,
neglect, and abuse of residents; 42 C.F.R. § 483.25(h), which requires a facility to ensure
that its residents’ environment remains as free from accident hazards as is possible and to
ensure also that each of its residents receives adequate supervision and assistance devices

to prevent accidents; and 42 C.F.R. § 483.75, which requires a facility to be managed
efficiently and effectively.

I find it unnecessary to address the other determinations of immediate jeopardy level
noncompliance because the determinations that I do address amply support CMS’s
remedy determinations. Also, these additional determinations are, for the most part,
based on the same facts as are the basis for the three noncompliance determinations that I
address.

I make the following findings of fact and conclusions of law (Findings).

1. Petitioner failed to comply substantially with the requirements of 42
CF.R. §§ 483.13(c), 483.25(h), and 483.75.

CMS presented overwhelming evidence that Petitioner failed to comply substantially
with these three participation requirements. In summary, this evidence proves that:

e Petitioner neglected the needs of its residents. In particular, Petitioner failed to
take necessary action to prevent two of its residents who were known elopement
risks from eloping the facility. Its indifference to these residents’ needs was such
that, not only did it allow them to elope, it failed to report or adequately
investigate the circumstances of elopement.

e Petitioner failed to provide necessary protection to its elopement prone residents,
despite having knowledge that these residents were not only elopement risks but
that they actively sought to elope the premises.

e Petitioner’s management violated Petitioner’s own policy by failing to ensure that
elopements were quickly and thoroughly investigated and reported to appropriate
authorities. The consequence was that Petitioner’s staff was under no suasion to
ascertain how these residents were able to elope and why Petitioner’s security
measures failed to protect the residents.

The evidence supporting these conclusions relates essentially to two residents, who are
identified in the May Survey as Residents #s 8 and 14. The evidence establishes a gross
inattention by the facility to the need to protect these residents from their propensities to
elope and a wholesale failure on the part of the facility’s staff to recognize the dangers
and risks that these residents were exposed to. Moreover, it shows indifference on the
part of the staff to understanding the very obvious security deficiencies in Petitioner’s
facility. Petitioner’s staff and management were manifestly incurious as to the facility’s
security vulnerabilities and to the reasons why residents were able to elope successfully
and stay away from the premises for relatively lengthy periods of time. At bottom,

Petitioner was indifferent to the dangers of elopement and the potential consequences to
the facility’s residents’ health and safety.

Resident # 8 was, at the time of the survey, an elderly individual who had been admitted
to the facility about a month previously. Her impairments included Alzheimer’s disease
with dementia, anxiety, lack of coordination, and muscular wasting and disuse atrophy.
CMS Ex. | at 14-15; CMS Ex. 5 at 37. The resident showed confusion as to time and
place, and her cognitive skills and ability to make decisions were impaired. CMS Ex. 5
at 3-12. The resident was ambulatory but required support. Jd. at 19.

Almost from the moment of her arrival at the facility, Resident # 8 was recognized to be a
igh risk for elopement. CMS Ex. 5 at 24. She exhibited wandering behavior and was
determined to be aggressive and resistant to care. Id. at 5-6, 24. She was issued a
Wanderguard bracelet on the orders of her physician. Jd. at 37.

I take notice that a Wanderguard is a device that is supposed to sound an audible alarm,
when a person wearing it approaches a doorway that has been rigged to respond to the
device. It is utilized in nursing facilities as a means of augmenting supervision of
elopement prone residents. It is not, however, a substitute for supervision. A
Wanderguard will not prevent a resident from eloping, if the staff fails to respond to an
alarm that it triggers.

Resident # 8 began attempting to elope Petitioner’s facility within days of her arrival
there. On May 1, 2010, the resident walked through a facility fire door and was retrieved
by facility staff. CMS Ex. 5 at 45. There is no evidence that the staff reviewed facility
security measures in the wake of that attempt, nor is there evidence that the staff
intensified supervision of Resident # 8.7

The resident made a second elopement attempt on May 4, 2010. CMS Ex. 5 at 59. Aside
from entering a cryptic comment about the attempt in the resident’s record, the staff made
no documentation of this second attempt. See id. Thus, the staff failed to investigate the
circumstances of the attempt and failed to draw any conclusions from it. Nor did
management or staff review the facility security measures or intensify supervision of the
resident after this second elopement attempt.

Just a few days later, on May 8, 2010, Resident # 8 walked through the same fire door, as
she had escaped through on May 1, and eloped Petitioner’s premises. CMS Ex. 5 at 13,
43; CMS Ex. 8 at 5. Her Wanderguard sounded the alarm, but no staff member
responded immediately. CMS Ex. 8 at 13-14. Only after the alarm had sounded for
about a minute did a staff member respond to the alarm. /d. By then, the resident had

* Petitioner’s staff had not written a plan of care for the resident.
vanished. The staff could not find Resident # 8. After an absence of about 30-45
minutes, she was returned to the facility by an unidentified individual who found the
resident walking along a road in a housing development about four tenths of a mile from
the facility. CMS Ex. 8 at 5, 13-143

As with the previous elopement incidents involving Resident # 8, there is no evidence
that Petitioner revisited its resident security procedures in the wake of the May 1
elopement. Moreover, Petitioner violated its own elopement policy in that its staff failed
to report the resident’s May 1 elopement to appropriate authorities. CMS Ex. 8 at 21.
The facility did not conduct a complete investigation of the May 1 elopement. As for the
May 8 elopement, its staff did not interview the individual who found Resident # 8
outside of the facility and who returned her to the premises. CMS Ex. 5 at 13; CMS Ex.
8 at 12-13.

Resident # 14 was admitted to Petitioner’s facility on June 18, 2009. The resident, a
relatively young individual, suffered from multiple problems that included: short and
long-term memory loss and impaired decision making as a consequence of a brain injury;
mood disturbances that were not easily altered; and frequent (at least daily) episodes of
abusive, socially inappropriate, and disruptive behavior problems. CMS Ex. 6 at 4, 9.
The resident suffered from a lack of coordination. Jd. at 9. The resident was assessed by
Petitioner’s staff as being a high risk for elopement. Jd. at 88.

On April 1, 2010, Resident # 14 eloped Petitioner’s premises. She disappeared from the
facility, after being left during a smoking break without one-on-one supervision. CMS
Ex. 6 at 80. She was absent from the facility for about an hour before returning. CMS
Ex. 8 at 21. Petitioner’s management and staff did not conduct an investigation of the
elopement, nor did Petitioner — as was required by its own policies — report the elopement
to appropriate authorities. /d. Thus, Petitioner failed to do an assessment of the
circumstances of the elopement and failed to reassess its security procedures.*

The evidence I have just discussed describes an obvious disinterest on the part of
Petitioner’s management and staff to find out why the facility’s security was being

* The resident made a fourth attempt to elope Petitioner’s premises on May 11, 2010. On
this occasion, she walked through an alarmed door and was apprehended shortly
afterward by Petitioner’s staff. CMS Ex. 13 at 5.

+ An account of what happened during the elopement was given by the resident to a
surveyor during the May Survey. According to the resident, during her elopement, she
visited an Italian restaurant, a Marriott hotel, and a convenience store and was eventually
given a ride by a couple. CMS Ex. 6 at 18-19. In giving this account, the resident
contended that it was easy to defeat the Wanderguard, either by wrapping it with duct
tape or with metal foil. Id.
breached so easily by its residents and to develop measures that would tighten security.
How was it that two of Petitioner’s residents could simply walk out of the facility and be
away for extended periods? Why didn’t the staff react more quickly when Resident # 8
walked out of the facility on May 8, 2010? What extra measures were needed to make as
certain as possible that determined residents, like Resident # 8 and Resident # 14, could
not breach the facility’s security? These questions were obvious in light of the residents’
elopements, yet Petitioner’s management and staff made no attempt to answer them.
That is obvious neglect of the residents’ needs, a failure to exercise reasonable diligence
at supervising residents and protecting them against evident accident hazards, and,
moreover, a failure by Petitioner’s management to exercise control over the situation and
to identify and rectify serious security problems.

Petitioner argues that the elopements by Residents #s 8 and 14 were simply unavoidable
and unfortunate events for which Petitioner bears no responsibility. Essentially, it
contends that the elopements occurred in spite of Petitioner doing all that any facility
could reasonably be expected to do to care for and protect these residents. In the case of
Resident # 8, for example, Petitioner contends that its staff responded immediately to her
elopement on May 8, 2010 and was still in the process of searching the facility premises
when the resident was returned to the facility.

But, in fact, the staff did not respond immediately to the alarm that the resident triggered
when she exited the premises.* As I discuss above, there was about a one-minute delay
between the alarm’s sounding and any staff member responding to it. That was enough
time to enable the resident to vanish. Moreover, this resident was off premises for at least
a half hour, and Petitioner’s management and staff made no effort to notify the police or
other responsible authorities that there was an elderly and sick resident unaccounted for
and potentially out in the community.

Petitioner contends that it was diligent in addressing whatever problems were presented
by residents’ elopements. However, it offers no evidence that it modified any of its
security protocols in response to the elopements, nor does it offer evidence that it
assessed the needs of Resident # 8 or heightened security measures for this resident after
her several elopement attempts and her May 8, 2010 elopement. Petitioner offers only
evidence that its staff made amendments to Resident # 14’s care plan after she eloped on

* Petitioner cites the testimony of Ms. Joleann Beene as support for its contention that the
staff responded immediately to the alarm triggered by Resident # 8’s elopement. P. Ex. 1
at 5-6. I do not find Ms. Beene’s testimony to be persuasive. Ms. Beene was not an
eyewitness to any of the events that are at issue in this case, nor does she provide direct
care at Petitioner’s facility. Her assertion that the staff responded immediately disregards
the statement by the staff member who actually responded to the alarm that was triggered
by the resident’s elopement. That staff member (LVN “G’”) stated that he waited about a
minute after the alarm sounded before responding to it. CMS Ex. 8 at 13-14.
April 1, 2010. Principally, the staff was directed to monitor Resident # 14 at 15-minute
intervals. P. Ex. 8 at 1. Additionally, Petitioner’s staff intervened on several occasions
when the resident became aggressive or disruptive. Petitioner’s Final Brief at 9-10 (and
exhibits cited therein).

I do not find this to be persuasive evidence that Petitioner appropriately dealt with the
risks relating to possible elopements by its residents. As I have discussed, there is no
evidence that Petitioner modified the care that it gave to Resident # 8, despite evidence
that she was determined to elope the premises and, on one occasion, made good on her
determination. Increasing surveillance of Resident # 14 may have been better than
nothing, but it failed to get at the root of the problem at Petitioner’s facility, a security
system that was so porous as to allow residents to elope through unguarded exit doors. A
resident who is monitored at 15-minute intervals has ample time between checks to elope
if the facility’s security system is ineffective.

Petitioner has not offered any proof that its management and staff attempted to determine
and rectify the weaknesses in Petitioner’s security. There is no evidence, for example,
that Petitioner ever investigated how it was that residents were able to slip through exit
doors despite being monitored. Nor is there any evidence showing that Petitioner ever
investigated why Wanderguard-triggered alarms were not responded to instantly when a
resident breached the facility’s security. Finally, Petitioner has pointed to no analysis or
assessment of whether 15-minute monitoring was sufficient to assure that Resident # 14
was being adequately supervised.

Petitioner asserts that it was not under any obligation to report the elopement of Residents
#s 8 and 14. According to Petitioner, that obligation is triggered only when there are
circumstances that place the resident’s health, safety, and/or welfare at jeopardy, and
those circumstances are simply not present in the case of these residents’ elopements. I
categorically disagree with this contention. Petitioner’s management staff should have
reacted instantly to the discovery of these residents’ elopements by reporting them to
appropriate authorities. These residents are both extremely vulnerable individuals. Both
residents suffer from significant mental limitations. Resident # 8, for example, suffers
from Alzheimer’s dementia. Both residents have physical problems. Facility staff
concluded that Resident # 8 should not be permitted to walk unassisted. Both residents
exited Petitioner’s premises into a public area that contained roads and highways,
businesses, and residences. The risks to these residents were obvious, ranging from
exposure to the elements, the possibility of being struck by a vehicle, to events related to
the residents’ individual illnesses.

Much of Petitioner’s argument seems to be constructed with the benefit of hindsight. Its
reasoning appears to be that neither of the two residents suffered significant physical
harm during their elopements, and, thus, Petitioner was under no compulsion to report or
investigate the events. That is a kind of “no harm, no foul” analysis that avoids dealing
with the fact that these residents were under great risk throughout the time that they were
away from the premises unsupervised. That they suffered no harm is fortuitous, but it
offers no excuse for Petitioner’s failure to discharge its obligations.

2. CMS’s determination of immediate jeopardy is not clearly erroneous.

Petitioner’s assertion that there was no immediate jeopardy level noncompliance is
premised, essentially, on its argument that Resident # 8 and Resident # 14 experienced no
actual harm during, or as a consequence of, their elopements. However, the presence of
actual harm is not a prerequisite for a finding of immediate jeopardy. The likelihood of
serious injury, harm, impairment, or death is the standard. 42 C.F.R. § 488.301. And,
here, the likelihood that either of these residents would suffer harm from her elopement
was very high. As I have discussed, Resident # 8 and Resident # 14 each suffers from
physical and mental impairments that put them at great risk if let out in the community
unsupervised.

Moreover, Petitioner conceded the likely harm that would result from either of these
residents eloping, when it designated these residents as elopement risks. In doing so, the
staff concluded that these residents were not safe or trustworthy if unsupervised. That is
the whole point of designating a resident as an elopement risk and of subjecting the
resident to special security measures, such as putting a Wanderguard on that resident.

3. CMS’s remedy determinations are reasonable.

CMS determined to impose civil money penalties of $6,150 per day against Petitioner for
each day of the period that began on May 11, 2010 and that continued through May 14,
2010, premised on its determination that Petitioner manifested immediate jeopardy level
noncompliance throughout this period. It then imposed civil money penalties of $150 per
day against Petitioner for each day of the period that began on May 15, 2010 and that
continued through June 1, 2010, based on its determination that, although Petitioner had
abated immediate jeopardy by May 15, it remained substantially noncompliant through
June 1.

I find these determinations to be reasonable. The seriousness of Petitioner’s immediate
jeopardy noncompliance amply supports the penalty of $6,150 per day. Indeed,
Petitioner’s noncompliance was sufficiently egregious that I would have sustained the
penalty amount even if Petitioner had manifested only one of the three immediate
jeopardy level deficiencies that I find in this decision. The penalties of $150 per day are
minimal and are supported by Petitioner’s residual noncompliance.

Regulations prescribe that an immediate jeopardy level penalty must fall within a range
of from $3,050 to $10,000 per day. 42 C.F.R. § 488.438(a)(1)(i). There are regulatory
factors that govern where within this range an immediate jeopardy level penalty should
fall. These include: the seriousness of a facility’s noncompliance; its culpability; its
compliance history; and its financial condition. 42 C.F.R. §§ 488.438(f)(1) — (4);
488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)).

The penalties that CMS determined to impose fall at about the midpoint of the immediate
jeopardy range. CMS relies on the seriousness of Petitioner’s noncompliance as support
for the penalty amount. I agree with CMS that Petitioner’s noncompliance was very
serious. As I have discussed, Petitioner’s failure to provide adequate protection to its
residents put them at a great risk for serious injury or worse.

Petitioner’s noncompliance transcends its failure to protect Residents #s 8 and 14. The
failure by Petitioner’s management and staff to recognize that there were serious
problems with Petitioner’s security system, their failure to investigate the nature of the
problems, their failure to notify appropriate authorities, and, above all else, their failure to
develop ways to better protect the residents put not only Residents #s 8 and 14 at risk, but
all residents of Petitioner’s facility who were at risk of elopement. The seriousness of the
noncompliance is more than sufficient to justify the penalty amount.

Petitioner again argues that the noncompliance was not serious essentially because no one
suffered serious injury as a result of it. I have addressed this argument previously and
will not reiterate my analysis here. Petitioner also asserts that CMS failed to offer
evidence about any of the regulatory factors aside from the issue of seriousness. But, the
regulations do not require CMS to prove the existence of any particular factor to justify a
penalty amount. Evidence relating to any of these factors may justify a penalty.

Petitioner also argues that CMS failed to take into consideration Petitioner’s financial
condition. However, CMS is under no obligation to prove a negative. It does not have to
offer proof that a facility is financially capable of paying a civil money penalty. Ifa
facility wants to argue that its financial condition precludes payment of a civil money
penalty, it has that right to make that argument as an affirmative defense. But, that
burden rests on the facility exclusively.

As I have discussed, the $150 per day penalties that CMS imposed after immediate
jeopardy was abated are minimal, and Petitioner has not challenged this amount. Neither
as Petitioner challenged the duration of its noncompliance. It has not argued, for
example, that it affirmatively cured its noncompliance on a date that was earlier than
CMS determined to be dates of abatement and compliance.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Dynamic Visions Home Health Services
(CCN: 22-7502),

Petitioner
v.

Centers for Medicare and Medicaid Services.
Docket No. C-10-727
Decision No. CR2414

Date: August 12, 2011

DECISION

Petitioner, Dynamic Visions Home Health Services, is a home health agency (HHA)
located in Boston, Massachusetts, that, until termination of its provider agreement on
May 21, 2010, participated in the Medicare program. Following a survey completed
April 13, 2010, the Centers for Medicare and Medicaid Services (CMS) terminated the
HHA’s program participation because Petitioner failed to maintain substantial
compliance with Medicare conditions of participation and did not correct its deficiencies
by the time of a May 6, 2010 revisit.

Petitioner here does not challenge its termination but complains that CMS has withheld
reimbursement for nursing and other services provided prior to its termination.

CMS has moved to dismiss Petitioner’s hearing request, arguing that reimbursement
issues are not reviewable in this forum. I agree and dismiss Petitioner’s hearing request
pursuant to 42 C.F.R. § 498.70(b).
Petitioner’s appeal must be dismissed because it raises no
issues reviewable in this forum.'

An HHA is a public agency or private organization that “is primarily engaged in
providing skilled nursing services and other therapeutic services” to patients in their
homes. Social Security Act (Act) § 1861(0). It may participate in the Medicare program
as a provider of services, if it meets that statutory definition and complies with certain
requirements called conditions of participation. Act §§ 1861(0), 1891; 42 C.F.R. §§ 484,
488.3. But if the provider fails to comply with the provisions of section 1861 of the Act,
or the relevant regulations, CMS, acting on behalf of the Secretary of Health and Human
Services, may terminate its provider agreement. Act § 1866(b)(2); 42 C.F.R. §
489.53(a)(1).

A “condition of participation” represents a broad category of home health services. Each
condition is contained in a single regulation, which is divided into subparts called
standards. 42 C.F.R. § 484. Compliance with a condition of participation is determined
by the manner and degree to which the provider satisfies the standards within the
condition. 42 C.F.R. § 488.26(b). If deficiencies are of such character as to
“substantially limit the provider’s . . . capacity to furnish adequate care or which
adversely affect the health and safety of patients,” the provider is not in compliance with
conditions of participation. 42 C.F.R. § 488.24(b). CMS may terminate program
participation, if the HHA fails to meet even one condition of participation. Act

§§ 1866(b)(2)(B), 1861(0)(6); 42 C.F.R. § 489.53(a)(3); Cmty. Home Health, DAB No.
2134 at 4 (2007).

To monitor compliance, CMS contracts with state agencies that periodically survey the
HHAs. 42 C.F.R. § 488.10.

Here, the Massachusetts Department of Public Health (State Agency) completed
Petitioner’s recertification survey on April 13, 2010. CMS Exhibit (Ex.) 1. Based on the
survey findings, CMS determined that Petitioner was not in substantial compliance with
three conditions of participation and that its deficiencies posed immediate jeopardy to
resident health and safety. CMS Ex. 3. CMS thereafter authorized a follow-up survey,
which the State Agency completed on May 6, 2010. CMS Ex. 2. Based on those survey
findings, CMS determined that Petitioner remained out of substantial compliance and had
not corrected the immediate jeopardy. CMS Ex. 4.

In notice letters dated April 22, 2010 and May 14, 2010, CMS advised Petitioner of these
determinations and the HHA’s appeal rights. The April letter told Petitioner that its
appeal should “identify the specific issues and finding of fact and conclusions of law with

' [make this one finding of fact/conclusion of law.
which you disagree” and “should also specify the basis for contending that the findings
and conclusions are incorrect.” CMS Ex. 3.

Petitioner filed what it characterized as a “letter of appeal [and] allegation of removal of
immediate jeopardy.” However, the letter did not specifically ask for a hearing or other
review; rather, Petitioner sought more time in which to achieve compliance. We,
nevertheless, have treated the document as a hearing request.

In an order dated July 27, 2010, I directed the parties to file pre-hearing exchanges, which
would include proposed exhibits, declarations of proposed witnesses, and pre-hearing
briefs. My order specified that a pre-hearing brief “must contain any argument that a
party intends to make,” and warned that I “may exclude an argument and evidence that
relates to such argument if a party fails to address it in its pre-hearing brief.”
Acknowledgment and Initial Pre-Hearing Order at 4, 4 7) (July 27, 2010).

In its pre-hearing brief, Petitioner did not challenge its termination; it did not claim that it
complied substantially with program requirements. Instead, Petitioner complained that it
had not been reimbursed properly by the Medicare program:

Here, all that Dynamic Visions is asking for is the proper and
reasonable remuneration of the nurse and nurse’s aide and
home health workers[’] pay for the TIME periods when
Dynamic Visions was properly licensed, yet which have not
been paid to Dynamic Visions as they should be.

P. Br. at 2.

I held a pre-hearing conference on March 22, 2011, during which Petitioner confirmed
that its appeal is limited to challenging CMS’s alleged failure to reimburse it for services
provided prior to its termination. See Order Following Prehearing Conference (Mar. 23,
2011).

CMS now moves to dismiss Petitioner’s hearing request, arguing that Petitioner has no
right to a hearing in this forum on this issue.

The limits of my jurisdiction are set forth in regulations that govern these proceedings:
42 C.F.R. Part 498. The regulations limit my review to actions that are “initial
determinations.” 42 C.F.R. § 498.3(a). The regulations specify which actions are “initial
determinations,” and that list includes the termination of a provider agreement (which
Petitioner has not appealed). 42 C.F.R. § 498.3(b); see 42 C.F.R. § 489.53(e).
Reimbursement complaints, however, are not initial determinations and therefore not
reviewable under Part 498.
Because Petitioner has no right to a hearing on the issues it raises, I am authorized to
dismiss its hearing request. 42 C.F.R. § 498.70(b).

Petitioner’s response to CMS’s motion to dismiss lacks coherence, so I am not able to
determine the precise nature of Petitioner’s complaints. However, in support of its claims
for reimbursement, it appears to raise some additional issues: the state survey was
defective; and the HHA was given inadequate time to correct its deficiencies. Even if
Petitioner had properly preserved these issues (which it did not), it would not be entitled
to a hearing.

First, the Departmental Appeals Board has repeatedly rejected, as irrelevant, attacks on
survey performance. Comprehensive Prof’l Home Visits, DAB No. 1934 at 13 (2004);
Beechwood Sanitarium, DAB No. 1906 at 44 (2004) (holding that “the appeals process is
not intended to review the conduct of the survey, but rather to evaluate the evidence of
compliance regardless of the procedures by which the evidence was collected”).

Second, with respect to the allegedly inadequate opportunity to correct, Petitioner was not
entitled to such an opportunity. Indeed, where, as here, the HHA’s deficiencies pose
immediate jeopardy to patient health and safety, CMS, acting on behalf of the Secretary
of Health and Human Services, must “take immediate action” to remove the immediate
jeopardy or to terminate an HHA’s provider agreement. Act § 1891(e)(1). CMS may not
allow a deficient provider the opportunity to correct where, as here, the deficiencies are
condition level, jeopardize patient health and safety, or “are of such character as to
seriously limit the provider’s capacity to render adequate care.” 42 C.F.R. § 488.28.

Petitioner has not raised an issue that | am empowered to review. Therefore, as
authorized by 42 C.F.R. § 498.70(b), I dismiss its request for hearing.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Ravinder P. Singh, M.D.,
(NPI No.: 1972560605),
Petitioner
v.
Centers for Medicare and Medicaid Services.

Docket No. C-11-357
Decision No. CR2413

Date: August 11, 2011

DECISION

The Centers for Medicare and Medicaid Services (CMS) has denied the Medicare
enrollment application filed by Petitioner, Ravinder P. Singh, M.D. Petitioner appeals,
and CMS has moved for summary judgment.

For the reasons discussed below, I grant CMS’s motion.
I. Background

Petitioner is a physician practicing in California who seeks to reactivate her enrollment in
the Medicare Part B program. CMS Exhibit (Ex.) 1. The Medicare contractor, Palmetto
GBA, denied her December 17, 2010 enrollment application because it determined that
the application was not complete, and Petitioner did not provide the missing information
within 30 days of Palmetto’s request for it. CMS Exs. 6, 7. Petitioner requested
reconsideration, and, in a determination dated March 8, 2011, Palmetto upheld the denial.
CMS Exs. 8, 10. Petitioner responded to the reconsideration in a letter dated March 17,
2011, which Palmetto treated as a request for hearing. CMS Ex. 11.!

In an order dated March 28, 2011, I directed the parties to submit their evidence and
briefs “addressing all issues of law and fact.” CMS complied with that order, but
Petitioner did not. In a notice dated June 21, 2011, I directed Petitioner to show cause in
writing why her request should not be dismissed as abandoned pursuant to 42 C.F.R. §
498.69(b)(2). Petitioner did not respond to this tribunal but sent a letter, dated June 29,
2011, to CMS counsel, which counsel forwarded to us. In that letter, Petitioner said (for
the first time) that she would like a hearing and that she had submitted “everything
[CMS] requested.” She offered no explanation for failing to comply with my March 28
order.

CMS has submitted its motion for summary judgment and pre-hearing brief, along with
11 exhibits (CMS Exs. 1-11).

II. Discussion

CMS is entitled to summary judgment because the
undisputed facts establish that Petitioner did not timely
complete her December 17, 2010 enrollment application.
42 CF.R. § 424.530(a).”

Summary judgment is appropriate if a case presents no genuine issue of material fact.
“To defeat an adequately supported summary judgment motion, the non-moving party
may not rely on the denials in its pleadings or briefs, but must furnish evidence of a
dispute concerning a material fact... .” Livingston Care Ctr., DAB No. 1871 (2003).
The moving party may show the absence of a genuine factual dispute by showing that the
non-moving party has presented no evidence “sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of

‘Whether Petitioner’s March 17 correspondence represented a valid hearing request is
questionable. These proceedings are governed by 42 C.F.R. Part 498. 42 C.F.R. §
424.545. Part 498 provides that an affected party may file a request for a hearing. 42
C.F.R. § 498.40(a). The request must identify the specific issues, and the findings of fact
and conclusions of law with which the affected party disagrees. It must also specify the
basis for contending that the findings and conclusions are incorrect. 42 C.F.R. §
498.40(b). Petitioner did not request a hearing in her March 17 submission. She
identified no issues or findings; rather, she submitted some of the information missing
from her initial application. Nevertheless, she arguably corrected these defects during
these proceedings, and CMS does not challenge the validity of her hearing request.

> [make this one finding of fact/conclusion of law.
proof at trial.” Livingston Care Ctr. v. Dep’t of Health and Human Servs., 388 F.3d 168,
173 (6th Cir. 2004). To avoid summary judgment, the non-moving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986). See
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab. Ctr., DAB No.
1918 (2004).

To receive Medicare payments for services furnished to program beneficiaries, a
Medicare provider or supplier must be enrolled in the Medicare program. 42 C.F.R. §
424.505. CMS may deny enrollment if the provider/supplier is not in compliance with
Medicare enrollment requirements and has not submitted a corrective action plan. 42
C.F.R. § 424.530(a)(1). Among those requirements, a prospective provider must submit
an enrollment application that includes “[c]omplete, accurate, and truthful responses to
all information requested within each section as applicable to the provider or supplier
type.” 42 C.F.R. § 424.510(d)(2)(i).

If information or documentation is missing, and the applicant fails to provide it within 30
calendar days of the contractor’s request, CMS may reject the application. 42 C.F.R. §
424.525(a)

In this case, CMS has come forward with evidence showing that Petitioner did not file a
complete and valid enrollment application, nor did she timely supplement that
application. CMS is entitled to summary judgment because Petitioner has neither argued
nor tendered evidence of specific facts establishing that a dispute exists over any of these
dispositive facts.

Specifically, the evidence shows that, on December 17, 2010, Petitioner mailed an
application seeking re-enrollment in the Medicare Part B program. CMS Ex. 1. Ina
letter dated January 20, 2011, the Medicare contractor, Palmetto, advised Petitioner that
her application lacked necessary information and directed her to submit verification that
she is a United States citizen, a legal resident, or otherwise legally authorized to work in
the United States. The letter said that all requested information “must be returned”
within 30 calendar days and specified the due date as February 21, 2011. CMS Ex. 6 at
1,3. The letter warned Petitioner that:

[c]onsistent with the Federal Regulations found in 42 C.F.R.
§ 424.525[,] we may reject your application or[,] in
accordance with regulations found in 42 C.F.R. §
424.530(a)(1), we may deny your application if you do not
furnish complete information within 30 calendar days of the
postmark date of this letter.

CMS Ex. 6 at 1.
Petitioner does not claim to have submitted a complete application prior to the February
21, 2011 deadline but says only that she “sent all the information.” The evidence before
me shows that she first submitted her naturalization certificate on March 17, 2011, almost
a full month after it was due. The contractor therefore properly denied her December 17,
2010 enrollment application pursuant to 42 C.F.R. § 424.525(a)(1).

III. Conclusion

Because the undisputed evidence shows that Petitioner did not submit necessary
documentation within 30 days of the Medicare contractor’s request for it, I grant CMS’s
motion for summary judgment and sustain the denial of Petitioner’s December 17, 2010
enrollment application.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Yuanhui Zhang,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-492
Decision No. CR2411

Date: August 9, 2011

DECISION

Based upon the written record of this case, including the materials submitted by both the
Centers for Medicare and Medicaid Services (CMS) and Petitioner Yuanhui Zhang, M.D.
(Petitioner), I conclude that the undisputed evidence establishes that CMS properly
enrolled Petitioner as a provider in the Medicare program effective September 28, 2010.

I. Background

Petitioner filed a hearing request and challenged the effective date of his enrollment in
the Medicare program. Petitioner appears to allege that he should have been enrolled as
of an earlier date than September 28, 2010, the date when CMS’s contractor determined
that Petitioner was eligible for enrollment. The case was assigned to me for a hearing
and a decision.

CMS subsequently filed a pre-hearing brief (CMS Br.) and moved for summary
disposition. Petitioner opposed CMS’s motion.’ CMS filed four proposed exhibits,

' Prior to receiving the CMS Pre-Hearing Brief and Memorandum in Support of Its
Motion for Summary Judgment, filed on July 7, 2011, Petitioner filed a letter (P. Br.) and
proposed exhibits. On July 17, 2011, Petitioner indicated that he did not have any further
materials or information to submit. Therefore, I am treating Petitioner’s letter and
proposed exhibits received by my office on July 6, 2011 as Petitioner’s opposition to the
CMS Pre-Hearing Brief.
2

which it designated CMS Ex. 1 — CMS Ex. 4. Petitioner filed three proposed exhibits,
which I have designated P. Ex. 1 — P. Ex. 3. I receive all of the parties’ proposed exhibits
into the record of this case.

Neither party proffered direct testimony of any proposed witnesses and both parties
indicated that they would not call witnesses at a hearing. Thus, I am deciding this case
based on the written record.

II. Issue, Finding of Fact, and Conclusion of Law
A. Issue
The issue in this case is whether:

1. CMS’s contractor and CMS properly determined Petitioner’s effective
date of enrollment to be September 28, 2010.

B. Finding of Fact and Conclusion of Law
I make the following finding of fact and conclusion of law (Finding).

I. CMS correctly determined that the effective date of Petitioner’s
enrollment is September 28, 2010.

The effective date of a physician’s enrollment in Medicare is governed by regulations at
42 C.F.R. § 424.520(d). The effective date of enrollment for a physician may only be the
later of two dates: the date when the physician filed an application for enrollment that
was subsequently approved by a Medicare contractor charged with reviewing the
application on behalf of CMS; or the date when the physician first began providing
services at a new practice location. Jd. The regulations do not empower CMS or me to
grant a provider an earlier effective date, nor may I waive the regulations’ criteria.

The undisputed facts of this case are as follows. On September 28, 2010, Petitioner filed
an enrollment application with Wisconsin Physicians Service Insurance Corporation
(WPS), a Medicare contractor operating on CMS’s behalf. CMS Ex. 2 at 2; P. Br. On
November 8, 2010, WPS informed Petitioner that he was enrolled in Medicare with an
“effective billing date” of August 29, 2010.” CMS Ex. 4 at 1. Petitioner was dissatisfied
with this determination and requested reconsideration. On May 11, 2011, WPS advised
Petitioner that his effective billing date remained August 29, 2010, 30 days prior to the
date Petitioner initially applied for enrollment. CMS Ex. 2.

*Tt appears that WPS may have intended to assure that Petitioner could claim
reimbursement for services provided up to 30 days prior to the date of his application,
consistent with 42 C.F.R. § 424.521.
The undisputed facts establish that the earliest date when CMS could have approved
Petitioner’s application for enrollment was the date of his application, September 28,
2010. 42 C.F.R. § 424.520(d). Petitioner does not assert that there are any facts that
would entitle him to an earlier enrollment date pursuant to the requirements of 42 C.F.R.
§ 424.520(d). He does not contend that he filed an application on any date prior to
September 28, 2010.

Instead, Petitioner argues that there was a delay in the submission of his Medicare
enrollment application to WPS due to several factors including poor service provided by
his billing company, multiple conferences that consumed Petitioner’s professional time in
August of 2010, and the fact that Petitioner was unaware of the need to reapply for
Medicare enrollment and billing privileges when changing practice venues. P. Br.
Petitioner’s arguments are equitable in nature and do not show as a matter of fact that
Petitioner filed an application on an earlier date than CMS determined or that the
contractor or CMS incorrectly applied the regulatory criteria. Even if true, Petitioner’s
complaints, such as his issues with his billing company’s service, provide no ground for
me to grant Petitioner an earlier effective date of enrollment.

Petitioner points to no source of authority for me to grant him an exemption from
regulatory compliance. Moreover, I have no authority to declare statutes or regulations
invalid or ultra vires. 1866/CPayday.com, L.L.C., DAB No. 2289, at 14 (2009) (“An
ALJ is bound by applicable laws and regulations and may not invalidate either a law or
regulation on any ground.”). Thus, I have no authority to address Petitioner’s arguments
or to change Petitioner’s Medicare enrollment date based upon equitable considerations.
Nor do I have authority to consider a challenge to the way in which this Department
implements regulations.

Petitioner submitted an application that was subsequently approved by the contractor on
September 28, 2010 and CMS’s determination of Petitioner’s effective date of Medicare
enrollment was entirely consistent with regulatory requirements. I have no authority to
order CMS to make payment for claims prior to August 29, 2010 that were provided
outside of the 30-day retroactive billing period provided by regulation.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Myrna Baptista,
Petitioner,
v.
The Inspector General.
Docket No. C-11-380
Decision No. CR2410

Date: August 8, 2011

DECISION

This matter is before me on the Inspector General's (I.G.'s) Motion for Summary
Disposition affirming the I.G.'s determination to exclude Petitioner Myrna
Baptista from participation in Medicare, Medicaid, and all other federal health
care programs for a period of five years. The I.G.'s Motion and determination are
based on section 1128(a)(2) of the Social Security Act (Act), 42 U.S.C. § 1320a-
7(a)(2), and arise from Petitioner’s state court conviction of an offense relating to
patient neglect or abuse. As I shall explain below, the undisputed facts in this case
require the imposition of the five-year exclusion. For that reason, I grant the I.G.'s
Motion for Summary Disposition.

I. Procedural Background

In June 2009, Petitioner Myrna Baptista was the owner and operator of a facility
known in Hawaii as an Adult Residential Care Home (ARCH). On June 25, 2009,
she left two of her patient-residents alone and unsupervised in a closed
automobile. One of the men was 76 years old and developmentally disabled and
the other was 50 years of age and schizophrenic. Both were Medicaid
beneficiaries whose care at Petitioner’s facility was funded by that program.
Passersby observed the situation and reported it to authorities, who conducted an
investigation. I.G. Exs. 3, 4.

On April 14, 2010, Petitioner appeared with counsel in the Family Court, Circuit
Court of the Third Circuit, Hawaii. She appeared there to plead guilty to two
misdemeanor charges of Endangering the Welfare of an Incompetent Person, in
violation of HAW. REV. STAT. § 709-905, set out in a Complaint filed in the
Family Court on October 1, 2009. I.G. Ex. 5; P. Exs. 1, 3. The charges were
based on the incident of June 25, 2009, and her plea was the result of an agreement
negotiated with prosecuting authorities. As part of that agreement, Petitioner
moved for the deferred acceptance of her plea, a procedure available to some
defendants under Hawaii state law. P. Ex. 2. There are no citations in any of the
Family Court records before me to the specific Hawaii statute establishing this
procedure, but Petitioner’s briefing identifies that statute as HAW. REV. STAT.
§ 853.

Petitioner’s motion was granted, and all further proceedings in her case were
deferred for one year from April 14, 2010. During the period of deferral,
Petitioner was placed under the supervision of the Family Court’s Adult Probation
Division. The Order Granting Motion for Deferred Acceptance of Guilty Plea
included the special conditions that Petitioner pay $110.00 to the crime victim
compensation fund, and pay a fine in the amount of $500.00. I.G. Ex. 2; P. Ex. 3.

Section 1128(a)(2) of the Act dictates the mandatory exclusion, for a term of not
less than five years, of “[a]ny individual or entity that has been convicted, under
Federal or State law, of a criminal offense relating to neglect or abuse of patients
in connection with the delivery of a health care item or service.” The I.G. notified
Petitioner of her exclusion for the mandatory minimum period of five years on
February 28, 2011.

Acting through counsel, Petitioner timely sought review of the I.G.’s action on
March 30, 2011. I convened a telephonic prehearing conference on April 27,
2011, pursuant to 42 C.F.R. § 1005.6, in order to discuss the issues presented by
the case and the procedures best suited for addressing them. The parties agreed
that the case likely could be decided on written submissions, and I established a
schedule for the submission of documents and briefs. The details of the
conference and the schedule established in it are set out in my Order of April 28,
2011. All briefing is now complete, and for purposes of 42 C.F.R. § 1005.20(c)
the record closed August 4, 2011.

There are eight exhibits in this case. The I.G. has proffered I.G.’s Exhibits (1.G.
Exs.) 1-5; Petitioner has not objected to these exhibits, and they are admitted.
Petitioner has proffered Petitioner’s Exhibits (P. Exs.) 1-3, to which no objection
has been made by the LG. They, too, are admitted.
IL. Issues

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

1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to
section 1128(a)(2) of the Act; and

2. Whether the proposed five-year period of exclusion is unreasonable.

Both issues must be resolved in favor of the I.G.’s position. Section 1128(a)(2) of the
Act mandates Petitioner’s exclusion since her predicate conviction has been established.
A five-year period of exclusion is the minimum period established by section
1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B), and is therefore reasonable as a
matter of law.

Ill. Controlling Statutes and Regulations

Section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
“individual or entity that has been convicted, under Federal or State law, of a criminal
offense relating to neglect or abuse of patients in connection with the delivery of a health
care item or service.” The terms of section 1128(a)(2) are restated in regulatory language
at 42 C.F.R. § 1001.101(b). This statutory provision makes no distinction between felony
convictions and misdemeanor convictions as predicates for mandatory exclusion.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... bya... State... court, regardless
of whether . . . the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; “when there has been a finding of guilt
against the individual... bya... State... court,” section 1128(i)(2) of the Act; “when a
plea of guilty . . . by the individual . . . has been accepted by a... State. . . court,”
section 1128(i)(3) of the Act; or “when the individual . . . has entered into participation in
a... deferred adjudication ... program where judgment of conviction has been
withheld,” section 1128(i)(4) of the Act. 42 U.S.C. §§ 1320a-7(i)(1)-(4). These
definitions are repeated at 42 C.F.R. § 1001.2.

In pertinent part, HAW. REV. STAT. § 853 provides:
Deferred acceptance of guilty plea or nolo contendere plea;
discharge and dismissal, expungement of records.

(a) Upon proper motion as provided by this chapter:

(1) When a defendant voluntarily pleads guilty or nolo
contendere, prior to commencement of trial, to a felony, misdemeanor, or
petty misdemeanor;

(2) It appears to the court that the defendant is not likely
again to engage in a criminal course of conduct; and

(3) The ends of justice and the welfare of society do not
require that the defendant shall presently suffer the penalty imposed by law,
the court, without accepting the plea of nolo contendere or entering a
judgment of guilt and with the consent of the defendant and after
considering the recommendations, if any, of the prosecutor, may defer
further proceedings.

(b) The proceedings may be deferred upon any of the conditions
specified by section 706-624. As a further condition, the court shall impose
a compensation fee pursuant to section 351-62.6 upon every defendant who
has entered a plea of guilty or nolo contendere to a petty misdemeanor,
misdemeanor, or felony; provided that the court shall waive the imposition
of a compensation fee, if it finds that the defendant is unable to pay the
compensation fee. The court may defer the proceedings for a period of
time as the court shall direct but in no case to exceed the maximum
sentence allowable; provided that, if the defendant has entered a plea of
guilty or nolo contendere to a petty misdemeanor, the court may defer the
proceedings for a period not to exceed one year. The defendant may be
subject to bail or recognizance at the court's discretion during the period
during which the proceedings are deferred.

(c) Upon the defendant's completion of the period designated by the
court and in compliance with the terms and conditions established, the court
shall discharge the defendant and dismiss the charge against the defendant.

(d) Discharge of the defendant and dismissal of the charge against the
defendant under this section shall be without adjudication of guilt, shall
eliminate any civil admission of guilt, and is not a conviction.
(e) Upon discharge of the defendant and dismissal of the charge against
the defendant under this section, the defendant may apply for expungement
not less than one year following discharge, pursuant to section 831-3.2.

An exclusion based on section 1128(a)(2) is mandatory and the I.G. must impose it for a
minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(B). The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory
provision.

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

1. On April 14, 2010 in the Family Court, Circuit Court of the Third Circuit, Hawaii,
Petitioner pleaded guilty to two counts of the misdemeanor criminal offense of
Endangering the Welfare of an Incompetent Person, in violation of HAW. REV. STAT.
§ 709-905. I.G. Exs. 2, 5; P. Exs. 1, 2, 3.

2. The pleas described above in Finding 1 constitute a “conviction” within the meanings
of sections 1128(a)(2) and 1128(i)(3) and (4) of the Act, and 42 C.F.R. § 1001.2.

3. There is a nexus and a common-sense relationship between the criminal offenses of
which Petitioner was convicted, as noted above in Finding 1, and the neglect or abuse of
a patient in connection with the delivery of a health care item or service. I.G. Exs. 3, 4,
5; P. Ex. 1.

4. Petitioner’s conviction of a criminal offense relating to neglect or abuse of a patient in
connection with the delivery of a health care item or service constitutes a basis for the
1.G.’s exclusion of Petitioner from participation in Medicare, Medicaid, and all other
federal health care programs. Section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2).

5. The five-year period of Petitioner’s exclusion is the mandatory minimum period
provided by law, and is therefore not unreasonable. Section 1128(c)(3)(B) of the Act; 42
C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

6. There are no disputed issues of material fact and summary disposition is therefore
appropriate in this matter. 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 essential elements necessary to support an exclusion based on section 1128(a)(2) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; (2) the conviction must have been related to the neglect or abuse of patients; and,
(3) the patient neglect or abuse to which an excluded individual's conviction related must
have occurred in connection with the delivery of a health care item or service. Bruce
Lindberg, D.C., DAB No. 1280 (1991); Neitra Maddox, DAB CR1218 (2004); Maureen
T. Kehoe, DAB CR673 (2000); Gabriel S. Orzame, M.D., DAB CR587 (1999); Ann M.
MacDonald, DAB CR519 (1998); Anthony A. Tommasiello, DAB CR282 (1993).!

The parties’ pleadings do not debate the second and third elements. Petitioner does not
explicitly contest that the two crimes to which she pleaded guilty were related to the
abuse or neglect of the two impaired men she left unattended in her vehicle, or that the
incident occurred while they were in her care as Medicaid patients. I note, however, that
both these elements are established by the investigation that led to the charges filed on
October 1, 2009, and by the language of the charges themselves. I.G. Exs. 3, 4, 5; P.
Ex.1.

The parties’ arguments in this case focus on the first element. Petitioner asserts that the
specific provisions of the Hawaii statute under which she tendered her guilty pleas — and
the Hawaii courts’ construction of that statute — do not support the I.G.’s determination
to treat them as predicate “convictions” under the federal exclusionary statute.” The I.G.
relies on a body of precedent in this forum to argue that Petitioner has been convicted for
purposes of this federal litigation, and that the deferred acceptance of her guilty pleas
cannot operate to invalidate them as predicate “convictions” under federal law.

' The Departmental Appeals Board (Board) has from time to time characterized the first
essential element as having two discrete parts: the first part requiring a “conviction,” and
the second part requiring that the “conviction” have been “of a criminal offense.”
Narendra M. Patel, M.D., DAB No. 1736 (2000); Janet Wallace, L.P.N., DAB No. 1326
(1992).

> There is an evidentiary gap in Petitioner’s position, however. In all her pleadings, she
invites the assumption that her year-long probationary period was successfully completed
on or about April 14, 2011, and that the Family Court eventually entered the order
contemplated by HAW. REV. STAT. § 853(c): “the court shall discharge the defendant
and dismiss the charge against the defendant.” No order of discharge and dismissal
appears in the evidence before me, neither side having proffered it or explained its
absence. When the dates of the I.G.’s February 28, 2011 notice-of-exclusion letter and
Petitioner’s March 30, 2011 hearing request are juxtaposed with the date that her
probation presumably ended, the gap is particularly difficult to understand. But for
purposes of this decision, I assume arguendo that such an order of discharge and
dismissal was actually entered, and that it entitled Petitioner to all the forms of relief set
out at HAW. REV. STAT. § 853(d) and (e).

Petitioner’s argument emphasizes that the Family Court deferred the acceptance of her
guilty pleas, and asserts that the deferral of the acceptance of the pleas had the
fundamental effect of rendering their tender on April 14, 2010, and the plea agreement by
which they were tendered, of no legal effect whatsoever. Petitioner correctly notes that
no judgment of conviction was ever entered against her, and just as correctly points out
that no finding of guilt was ever made by the Family Court. Those valid arguments place
her situation beyond the reach of the definitions of “conviction” set out at sections
1128(i)(1) and 1128(i)(2) of the Act. But Petitioner goes on to assert that because the
Hawaii statute has been interpreted by Hawaii courts to mean that she has neither been
convicted nor been the subject of a deferred adjudication, she cannot be treated as
“convicted” within the terms of sections 1128(i)(3) or 1128(i)(4).

This issue has been debated in this forum and before the Board for nearly two decades,
and the resolution of the issue has never varied.» The Administrative Law Judges (ALJs)
of this forum and appellate panels of the Board have frequently addressed petitioners’
arguments that they should not be regarded here as “convicted” because they are not
considered “convicted” under state law. The Board panels and ALJs of this forum have
consistently rejected those arguments for the reason that federal law — specifically
section 1128(i) of the Act — and not state laws, govern the meaning of “convicted” in
applying the terms of the Social Security Act. Henry L. Gupton, DAB No. 2058, at 5-6
(2007); see also Henry L. Gupton, DAB Ruling No. 2007-1 (2007). Indeed, the matter
seems settled beyond the need for further discussion, given “how well established the
principle is that the term ‘conviction’ under the Act extends to diverted, deferred and
expunged convictions regardless of whether state law treats such actions as a conviction .
.. The plain language [of section 1128(i)] provides that a person is ‘convicted’ for
purposes of an exclusion whenever [that person] has . . . entered into any program
deferring or withholding judgment.” Henry L. Gupton, DAB 2058, at 8, 9-10.

While the Board’s views and analyses have been consistent and definitive over time and
with reference to a variety of state laws, the Board has not had occasion to address HAW.
REV. STAT. § 853 specifically. That is not the case with the ALJs of this forum: in four
decisions spanning a dozen years they have applied the Board’s teachings on the matter
and held that Hawaii’s procedure for the deferred acceptance of a guilty or nolo
contendere plea constituted a “conviction” as defined at sections 1128(i)(3), 1128(i)(4),

> The Gupton panel measured this protracted discussion from Carolyn Westin, DAB No.
1381 (1993), aff'd sub nom Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994). This is
what the Westin panel wrote: “Congress has defined for the ALJ and this Board what
‘convicted’ means for purposes of section 1128 and that definition is binding on us.
Moreover, it is clear from the legislative history of this provision that Congress adopted
such broad definitions to ensure that exclusions from federally funded health programs
would not hinge on state criminal justice policies.” Westin, at 6.
or both. Khristiane Nicholas Lagua Caraang a.k.a. Khristianeni Lagua Caraang a.k.a.
Khristian Caraang, DAB CR1898 (2009); Estelita M. Cardoza, DAB CR1256 (2004);
Steven Caplan, R.Ph., DAB CR1112 (2003); and Donald J. Purcell, I, M.D., DAB
CR572 (1999). Neither the facts of this case nor Petitioner’s arguments give me cause to
differ with the reasoning of — or the results reached by — the ALJs in those cases. I
adopt the reasoning of the ALJs in those cases, and having done so, find and conclude
that Petitioner has been “convicted” within the meaning of sections 1128(i)(3) and
1128(i)(4) of the Act. The first essential element in this section 1128(a)(2) exclusion is
present.

Because the I.G. has established a basis for Petitioner’s exclusion pursuant to section
1128(a)(2), her exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of
the Act. 42 U.S.C. § 1320a-7(c)(3)(B). That period is reasonable as a matter of law.

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. Marvin L. Gibbs, Jr., M.D., DAB No. 2279 (2009); Michael J.
Rosen, M.D., DAB No. 2096 (2007). 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 out above, the I.G.’s Motion for Summary Disposition is GRANTED.
The I.G.’s exclusion of Petitioner Myrna Baptista from participation in Medicare,
Medicaid, and all other federal health care programs for a period of five years, pursuant
to the terms of section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2), is thereby
sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Liberty Health & Rehab of Indianola, LLC,
(CCN: 25-5185),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-870
Decision No. CR2409
Date: August 5, 2011
DECISION
I sustain the determination of the Centers for Medicare and Medicaid Services
(CMS) to impose civil money penalties of $5,000 per day against Petitioner,
Liberty Health & Rehab of Indianola, for each day of a period that began on April
18, 2010 and that continued through May 4, 2010. !
I. Background
Petitioner is a skilled nursing facility in the State of Mississippi. It participates in
the Medicare program, and its participation is subject to the requirements of

sections 1819 and 1866 of the Social Security Act (Act), as well as implementing
regulations at 42 C.F.R. Parts 483 and 488.

‘CMS initially determined to impose the $5,000 per day penalty beginning April
21,2010. It amended its remedy determination in its pre-hearing exchange to
assert the April 18 beginning date. CMS Br. at 2. I find that Petitioner received
ample notice of CMS’s amended determination.
CMS determined to impose the remedies that I cite in the opening paragraph of
this decision, based on its finding that Petitioner failed to comply with three
Medicare participation requirements. These are the requirements that are set forth
at 42 C.F.R. §§ 483.13(c), 483.25(h), and 483.75. CMS’s noncompliance and
remedy determinations are premised on the outcome of a compliance survey of
Petitioner’s facility that was completed on May 5, 2010 (May Survey). The
surveyors found, and CMS agreed, that Petitioner’s noncompliance was so
egregious as to comprise immediate jeopardy for residents of Petitioner’s facility.
The term “immediate jeopardy” is defined at 42 C.F.R. § 488.301 to mean
noncompliance that causes, or is likely to cause, serious injury, impairment, harm,
or death to a facility resident or residents.

Petitioner requested a hearing, and the case was assigned to me for a hearing and a
decision. The parties completed pre-hearing exchanges of briefs (CMS Br. and P.
Br.) and proposed exhibits, including the written direct testimony of their
proposed witnesses. They then agreed to waive an in-person hearing and to
submit the case for my decision based on their pre-hearing exchanges. I allowed
the parties an additional round of briefs (CMS Final Br. and P. Final Br.).
CMS filed 22 proposed exhibits (Ex), which it identified as CMS Ex. 1 — CMS Ex.
22. Petitioner filed 15 proposed exhibits, which it identified as P. Ex. 1 — P. Ex.
15. I receive all of these exhibits into evidence.
II. Issues, Findings of Fact, and Conclusions of Law

A. Issues

The issues in this case are whether:

1. Petitioner failed to comply substantially with Medicare
participation requirements;

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

3. CMS’s remedy determination is reasonable.
B. Findings of Fact and Conclusions of Law

I make the following findings of fact and conclusions of law (Findings).
1. Petitioner failed to comply substantially with Medicare
participation requirements.

This case addresses the level of supervision that Petitioner’s staff gave to residents
who the staff had identified as prone to eloping the facility premises. The staff
knew that several of the residents — especially the resident who is identified as
Resident # 1 — were elopement risks. The staff chose to supply each of these
residents with a device known as a Wanderguard. A Wanderguard is a bracelet
that is designed to provide a secure perimeter for the resident who wears the
device. Ifa resident wearing a functioning Wanderguard approaches an exit door,
the door locks, thereby preventing the resident’s elopement. The device also
causes an alarm to sound if the resident approaches an opened facility door,
thereby alerting the staff to the possibility of a resident elopement. CMS Ex. 8 at
32.

A Wanderguard does not relieve a facility staff from their obligation to supervise
elopement-prone residents. Rather, the device — in the best of circumstances —
serves as a method for augmenting supervision, helping to secure a facility’s doors
or giving the staff an audible warning of a resident’s attempt to elope the premises.
The staff has the duty to assure that all of a facility’s residents’ Wanderguards are
maintained properly and function correctly. And, should a resident’s
Wanderguard not function correctly, the staff is responsible for promptly replacing
or repairing the device or, alternatively, for implementing enhanced supervision to
assure that the resident does not elope.

The evidence unequivocally establishes that several of Petitioner’s residents’
Wanderguards failed to function beginning around April 18, 2010. What
Petitioner did — or did not do — to protect these residents in the ensuing days is at
the center of this case.

CMS alleges that Petitioner failed to comply with three specific regulatory
requirements. 42 C.F.R. § 483.13(c) requires a facility to develop and implement
policies and procedures that, among other things, protect a resident against
neglect. 42 C.F.R. § 483.25(h) requires a facility to provide residents with
adequate assistance devices and supervision to prevent accidents and to render its
premises free from accident hazards. 42 C.F.R. § 483.75 requires that a facility be
administered in a way that enables its resources to be utilized effectively and
efficiently.

The weight of the evidence establishes that Petitioner did not comply substantially
with all three of these regulations. Although Petitioner had developed policies to
protect its residents against the risks of elopement, it failed to implement those
policies in the cases of the four residents whose Wanderguards failed to function
beginning on April 18, 2010. Furthermore, it failed to protect those residents from
obvious risks and hazards by not providing them with adequate supervision or
other protection to account for the failure of the residents’ Wanderguards. These
failures ultimately point to a failure by Petitioner’s management to coordinate
effectively a response to an obvious problem, one that was known to Petitioner’s
staff, but which was not acted on in an organized fashion.

Specifically, Petitioner failed in the following ways to address the needs of its
elopement prone residents:

e Petitioner’s staff depended on Wanderguards to augment their surveillance
of these residents, all of whom were elopement prone individuals.
However, the staff did not effectively implement increased surveillance of
the residents, when their Wanderguards ceased functioning.

e The staff did not implement a coordinated response to the failure of
residents’ Wanderguards. At least one member of the staff was not
informed of the problem. The staff did not devise nor did it implement a
plan to assure that facility doors were guarded during the period when the
Wanderguards were not working.

e The staff did not implement measures that they had developed previously to
monitor elopement prone residents. The staff was supposed to monitor
Resident # 1 at 15 minute intervals in the event that her Wanderguard
failed. However, on April 21, 2010, in the hours leading up to the
resident’s elopement of the premises, the staff monitored the resident only
at 30 minute intervals.

Resident # 1 was identified by Petitioner’s staff as a wanderer and also voiced a
desire to go home. Resident # 1 wandered nearly constantly and was oblivious to
risks to her personal safety. CMS Ex. 4 at 17-19. The resident had a history of
eloping Petitioner’s premises. On April 4, 2010, the resident was found outside of
the facility in Petitioner’s parking lot. CMS Ex. 4 at 46.

The resident was not only prone to eloping but was beset with a number of
conditions that placed her at great risk for injury, or worse, if she eloped. Resident
# 1 suffered from, among things, dementia and episodes of syncope (sudden loss
of consciousness). CMS Ex. 4 at 1, 15, 63; CMS Ex. 22. She suffered from visual
and hearing impairments. She was wheelchair bound, and she had fallen in the
past. CMS Ex. 4 at 9. On April 12, 2010, the resident experienced an apparent
episode of syncope in which she stopped breathing. CMS Ex. 4 at 46. The
resident was hospitalized on that date and was readmitted to Petitioner’s facility on
April 16, 2010.
Petitioner’s staff understood the dangers that Resident # 1 would encounter, if she
eloped. The resident’s care plan directed that the resident wear a Wanderguard.
But, it also suggested that this was a resident who needed virtually constant
observation. CMS Ex. 4 at 25. Thus, facility staff understood that, with Resident
# 1, a Wanderguard was no substitute for close observation of the resident to
prevent her from eloping.

On or about April 19, 2010, Resident # 1’s Wanderguard ceased working.” CMS
Ex. 8 at 3; CMS Ex. 21 at 913. The resident remained unprotected by a
Wanderguard on the 20th and 21st of April. Additionally, on or about April 18,
2010, the Wanderguards for three other residents, identified as Residents #s 2 and
3, and Resident J.P., also ceased working. CMS Ex. 8 at 13, 15; CMS Ex. 13 at 1;
CMS Ex. 21 at §22. Petitioner’s staff was aware that the residents’ Wanderguards
were not functioning but was unable immediately to find replacements for them.
CMS Ex. 8 at 20; CMS Ex. 21 at 23; see P. Ex. 14.

Petitioner’s staff — in obvious recognition of Resident # 1’s propensity to wander
and elope — had directed in early April that the resident be monitored at 15 minute
intervals when she was not wearing her Wanderguard. CMS Ex. 4 at 34. The
staff did not intensify the monitoring of Resident # 1 after her Wanderguard
ceased functioning. See CMS Ex. 4 at 25. There is no record of the staff planning
enhanced supervision of the resident, nor is there any evidence that the staf
assessed Resident # 1 on or after April 19 for what additional security measures
might be needed as a consequence of the resident not having a functioning
Wanderguard. See id. Nor is there evidence showing that the staff assessed the
other residents whose Wanderguards had ceased functioning or that they
implemented enhanced security measures to address those residents’ needs.
Petitioner’s staff did not place observers by the doors to Petitioner’s facility to
assure that residents without functioning Wanderguards did not pass through them
undetected. CMS Ex. 8 at 20-21.

The evidence establishes that, in violation of her plan of care, Resident # 1 was not
monitored consistently at 15 minute intervals. Facility records establish that the
resident was monitored at 30 minute, and not 15 minute, intervals from 7:00 a.m.
until 3:00 p.m. on April 21, 2010. CMS Ex. 4 at 68-69. Staff commenced
monitoring this resident at 15 minute intervals at 4:00 p.m. on April 21, only after
the resident eloped the facility earlier that afternoon. CMS Ex. 4 at 70-75.

* It may have ceased working as early as April 17. Petitioner’s staff did not make
entries for the 3 p.m. to 11 p.m. shifts on those dates confirming whether the
Wander guard was working at those times. CMS Ex. 4 at 39.
The evidence also establishes a lack of coordination among Petitioner’s staff
concerning the monitoring of Resident # 1. The charge nurse for the 3 p.m. to 11
p.m. shift on April 21, 2010 denied being aware that Resident # 1 did not have a
functioning Wanderguard on that date. CMS Ex. 8 at 7. Had the nurse known of
the resident’s situation, she might have kept the resident in her presence during her
shift. Id.

Petitioner’s staff observed Resident # 1 in a hallway close to the facility’s nurse’s
station at 3:30 p.m. on April 21. CMS Ex. 7 at 2. At 3:55 p.m. on that same date,
a visitor to the facility advised a staff member that Resident # 1 was seen in her
wheelchair propelling herself along the edge of a highway that fronts Petitioner’s
facility. Petitioner’s staff retrieved the resident. CMS Ex. 4 at 51.°

The failures of Petitioner’s staff to increase surveillance of its elopement prone
residents after their Wanderguards failed (and, in the case of Resident # 1, to
monitor her at 15-minute intervals) is a failure to provide these residents with the
protection and security that they needed. The fact that these residents all wore
Wanderguards meant that the staff had concluded that something was needed to
protect them beyond the monitoring and supervision that the staff had planned for
the residents. When the Wanderguards failed, it meant that an element of the
protection that the staff had put into place was no longer present. The staff should
have recognized that and should have implemented compensatory measures to
substitute for the inoperative Wanderguards. They failed to do so.

Petitioner argues in its defense that it placed Resident # 1 on 15 minute monitoring
when her Wanderguard failed. P. Final Br. at 4. This measure, according to
Petitioner, was a “more stringent intervention than . . . [its] policy required.” Id.
But, in fact, the staff did not monitor the resident at 15 minute intervals prior to
her elopement. On the afternoon that she eloped, the resident was being
monitored at 30 minute intervals, as is established by Petitioner’s records. CMS
Ex. 4 at 68-69. The staff learned at 3:55 p.m. on April 21 that the resident had
eloped, 25 minutes after she was last observed by Petitioner’s staff.

Furthermore, even monitoring at 15 minute intervals was an inadequate measure
given that the doors to Petitioner’s facility were unmonitored.* It does not take

> Had the staff been observing the resident at 15 minute intervals, as her care plan
directed them to do, they would have made an observation of the resident at 3:45
p.m., or discovered her elopement if she eloped between 3:30 and 3:45.

* According to the Administrator, there were six exit doors, but the Logbook
Report, which documents the door monitors for the Wanderguard system,
indicated there were eight exit doors. CMS Ex. 8; P. Ex. 11.
much imagination to foresee what can occur during a period of 15 minutes of not
monitoring a constantly wandering resident like Resident # 1.

Petitioner contends that it protected Residents #s 2 and 3 and Resident J.P.
adequately. It asserts that it implemented its Elopement Risk Reduction Plan for
these residents when their Wanderguards ceased working, and this intervention
prevented the residents from eloping. The Elopement Risk Reduction Plan
requires Petitioner’s staff to, among other things, complete a visual check of
elopement prone residents at 30 minute intervals and to sign off on the resident’s
ADL (activities of daily living) Flow Sheet (or Observation Monitoring Form) at
the end of each shift. P. Ex. 1. As alleged proof that this policy was carried out,
Petitioner submitted flow sheets for two of the three residents. P. Ex. 12; P. Ex.
13. However, these sheets only record observations for two dates, April 21 and
22, 2010. Petitioner supplied no evidence showing that the residents were
monitored on April 18, or on the dates between April 18 and April 21. Id.
Moreover, these observations, even for the dates in question, do not cover a
complete 24-hour cycle, but only portions of that cycle.

Petitioner’s arguments concerning the three residents other than Resident # 1
reduce to a sort of “no harm, no foul” argument. Petitioner notes that none of
these residents eloped. It reasons that they must have been protected adequately
because they did not elope. That conclusion simply does not follow from the facts
that show that Petitioner failed to implement heightened surveillance of these
residents after their Wanderguards failed. That none of these residents eloped is
merely fortuitous.

Petitioner argues that its Wanderguard system is:

not the only intervention implemented or capable of being
implemented by . . . [Petitioner] to protect its residents. It is just one
of the redundancies of protection . . . [Petitioner] relied on as a
whole. Without extra bracelets between April 18 and April 22,...
[Petitioner] effectively implemented alternative measures.

P. Final Br. at 10. However, Petitioner has not offered persuasive evidence that it,
in fact, did implement effective alternative measures to protect its residents. As I
have discussed, evidence of monitoring of Residents #s 2 and 3 and Resident J.P.
is incomplete and does not prove consistent monitoring of these residents.
Petitioner alleges that it monitored Resident # 1 at 15 minute intervals, but, in fact,
the evidence shows that the resident was monitored only once every 30 minutes up
until her elopement on April 21. None of the four residents were assessed for any
special protective measures that might be needed. Not all of Petitioner’s
professional staff was informed of the circumstances involving the non-
functioning Wanderguards. And, Petitioner did not monitor its doors.

Petitioner argues that, with respect to Resident # 1, it had in place policies and
procedures, “which specifically addressed or encompassed elopement and resident
assessment and care... .” P. Final Br. at 12. While these policies may have been
necessary, the fact that Petitioner developed and promulgated them does not mean
that it protected the residents adequately. What is missing from Petitioner’s proof
is evidence that it effectively implemented its policies. As I have discussed, the
weight of the evidence shows that the policies were not implemented in the case of
the four residents whose care is at issue, at least not to the extent that they assured
the enhanced monitoring and supervision that these residents needed when their
Wanderguards failed.

Petitioner argues that, in fact, Resident # 1’s Wanderguard worked until 7 a.m. on
the morning of April 21, 2010. P. Final Br. at 13. CMS’s evidence that the
resident’s Wanderguard failed as early as the 19" of April is in large measure
based on the fact that the nursing staff that checked the functioning of the
Wanderguard circled their initials on the resident’s Medication Administration
Record (MAR) in the column reserved for certifying Wanderguard performance.
Vickie Lewis, R.N., a surveyor who participated in the May survey, testified that
in nursing parlance circled initials on a MAR means that the resident did not
receive the medication or device that had been prescribed to him or her. Her
conclusion is that the circled initials on Resident # 1’s MAR meant that her
Wanderguard did not function on the dates and times at issue. CMS Ex. 21 at 413.

Petitioner argues that Ms. Lewis’ testimony, and CMS’s contention, is: “nothing
more than supposition by CMS, with nothing to support the inference.” P. Final
Br. at 13. I disagree. Ms. Lewis is qualified to testify about common nursing
practice. Furthermore, Petitioner has not offered testimony that directly
contradicts Ms. Lewis’ conclusions. No employee of Petitioner, including any of
the individuals who initialed the MAR, has come forward and asserted that her
circled initials mean anything other than that which Ms. Lewis infers that they
mean.

Moreover, Petitioner is not relieved of liability, even if Resident # 1’s
Wanderguard functioned until April 21, 2010, as Petitioner contends. As I have
found, Petitioner’s staff was supposed to observe the resident at 15 minute
intervals in the event of a Wanderguard failure. However, Petitioner’s staff only
observed Resident # 1 at 30 minute intervals on April 21, after the point in time
that Petitioner alleges that the resident’s Wanderguard failed, and right up until the
time that she eloped.
Petitioner contends that it adequately supervised those residents whose
Wanderguards failed. P. Final Br. at 18. It asserts, relying on the testimony of
one of its staff (Tenise Worship), that Petitioner’s staff implemented immediately
observations of these residents at 15 minute intervals, when the Wanderguard
failures were discovered. P. Ex. 15 at 2. This assertion is simply not supported by
Petitioner’s own documentation. As I have discussed, Resident # 1 was monitored
at 30 minute intervals — and not at 15 minute intervals as Petitioner contends —
until her elopement from the facility on April 21, 2010. As for the other three
residents, the facility documentation that Petitioner relies on shows only
monitoring at 30 minute intervals, and this documentation is incomplete. See P.
Ex. 12; P. Ex. 13.

Petitioner also contends that Residents #s 2 and 3 and Resident J.P. were not
deemed to be “true elopement risks.” P. Final Br. at 19. But, in fact, Petitioner’s
staff had determined that these residents were sufficiently at risk for elopement so
as to necessitate wearing Wanderguards.

As respects Resident # 1, Petitioner argues that CMS is seeking to enforce a strict
liability standard against it, premising its allegations of noncompliance only on the
fact that the resident eloped on April 21, 2010. P. Final Br. at 19-20. I do not find
this argument to be persuasive. Petitioner’s noncompliance is not premised on the
fact that the resident eloped but on its failure to protect the resident against the
possibility of elopement.

Petitioner argues that one may not infer that its facility was improperly managed
solely from the other two deficiencies that I have found to have existed
(noncompliance with 42 C.F.R. §§ 483.13(c) and 483.25(h)). Lagree with
Petitioner’s general premise that a facility’s noncompliance with a particular
regulation does not mean, necessarily, that there were management deficiencies at
the facility. But, here, there is evidence of poor coordination of staff. As I have
discussed, not all critical personnel were aware that Resident # 1’s Wanderguard
was not functioning on April 21, 2010. Furthermore, the evidence shows that
enhanced observation was not implemented for the four residents whose
Wanderguards failed. The across-the-board failure to implement enhanced
observation is evidence from which I infer a lack of coordination of efforts and
poor communication from management to Petitioner’s staff.

2. CMS’s determination of immediate jeopardy was not clearly
erroneous.

Petitioner argues that, if it was noncompliant with participation requirements, its
noncompliance was not so egregious as to pose immediate jeopardy for its
residents. I disagree. At a minimum, the failure to provide adequately for the
10

needs of Resident # 1 was a clear instance of immediate jeopardy level
noncompliance.

As I have discussed, Resident # 1 was a frail, demented, and severely handicapped
individual. The resident was confused, wandered without apparent purpose, and
had both hearing and visual impairments. In the weeks prior to April 21, 2010, the
resident had experienced an apparent episode of syncope that caused her to stop
breathing and that necessitated her hospitalization. Resident # 1 was at risk for
severe injury or death at any time that she was not under the direct supervision of
Petitioner’s staff.

The resident’s April 21, 2010 elopement ended at the edge of a busy four lane
highway that is adjacent to Petitioner’s facility.> Exposed as she was, there was
likelihood that the resident would suffer serious injury or death. Furthermore, the
failure to protect Resident # 1 and other Wanderguard-wearing residents
established a systemic problem at Petitioner’s facility consisting of a failure to
implement policies and procedures intended to protect these residents from harm.
The risks that Resident # 1 was exposed to show what might have happened to any
of these residents had they eloped.

Petitioner argues that, if immediate jeopardy existed, Petitioner corrected it
immediately upon discovering that Resident # 1 had eloped. Petitioner contends
that the evidence shows that it “shad in place an adequate collective of policies and
procedures which were sufficient to prevent neglect and that residents were being
monitored (including 1-on-1 supervision for . . . [Resident # 1]) in accordance with
these policies and procedures.” P. Final Br. at 26.

I do not find this argument to be persuasive. As I have discussed, the policies and
procedures that Petitioner had in place prior to the Wanderguard failures at its
facility, and prior to Resident # 1’s elopement, were inadequate to protect
residents, not because the policies were on their face, inadequate, but because the
policies were not effectively implemented. Thus, the possibility that the facility
had in place an “adequate collective of policies and procedures” does not prove
that it rectified its noncompliance with the discovery of Resident # 1’s elopement
and implementation of subsequent measures that were designed uniquely to
provide special protection to that resident.

* A surveyor observed the site at which Resident # 1 was found and counted a
traffic flow of 144 vehicles, including a dozen 18-wheel trucks, during a five
minute period at the same time of day as the time of the resident’s elopement.
CMS Ex. 8 at 19; CMS Ex. 21 at 419.
11

To prove abatement of immediate jeopardy prior to the date that CMS determined
that abatement occurred, May 4, 2010, Petitioner must prove that it effectively
implemented all of the corrective actions that it pledged to undertake. Petitioner
has not done so. Petitioner conducted in-service training of its staff after April 21,
2010 and conducted an elopement drill. But, the evidence offered concerning the
in-service training does not establish that all of Petitioner’s professional staff
received training before May 4. See P. Ex. 6; CMS Ex. 17 at 1-3.

What is lacking from Petitioner’s evidence — including its evidence relating to in-
service training and documentation of various drills and notifications to staff about
elopement issues — is proof that Petitioner actually implemented a plan, prior to
May 4, 2010, that assured that each of its elopement prone residents would receive
the enhanced supervision that he or she required in the event of a Wanderguard
failure. I am not satisfied from the evidence presented by Petitioner that the staff
would, for example, coordinate observations of residents, or that they would guard
doorways at the facility.

3. Civil money penalties of $5,000 per day are reasonable.

Civil money penalties for immediate jeopardy level noncompliance must fall
within a range of from $3,050 to $10,000 per day. 42 C.F.R. § 488.438(a)(1)(i).
Regulatory factors establishing the criteria for deciding where within this range an
immediate jeopardy level penalty amount should fall are set forth at 42 C.F.R.

§§ 488.438(f)(1) — (4) and 488.404 (incorporated by reference into 42 C.F.R. §
488.438(f)(3)). These factors include: the seriousness of the noncompliance; a
facility’s culpability for its noncompliance; the facility’s noncompliance history;
and the facility’s financial condition.

The $5,000 per day civil money penalty that CMS determined to impose falls
below the mid-point of the immediate jeopardy level penalty range. CMS
contends that there are three bases of support for this penalty amount: the
seriousness of Petitioner’s noncompliance; its culpability; and its noncompliance
history. CMS Final Br. at 33.

The evidence amply supports penalties of $5,000 per day. The noncompliance in
this case was quite serious. The seriousness of the noncompliance is made evident
by the elopement of Resident # 1. Only good fortune prevented this resident from
being seriously or even fatally injured.

Moreover, Petitioner is culpable for its noncompliance. As I have stated, there
was poor coordination of Petitioner’s staff and a failure by the staff to implement
Petitioner’s directives concerning elopement-prone residents when several
residents’ Wanderguards failed. Most notably, the staff failed to provide these
12

residents with enhanced supervision even though staff knew that these residents
were at a heightened risk for elopement and consequent injury or death. Finally,
CMS established that Petitioner has a history of noncompliance with the
requirements of 42 C.F.R. § 483.25(h). Petitioner was previously found
noncompliant with this requirement at a survey of its facility completed in 2008.
CMS Ex. 19 at 1.

The remedy determination made by CMS addresses the three immediate jeopardy
level deficiencies that I have discussed in this decision. All three of these
deficiencies involve essentially the same facts and evidence. Any one of them is
sufficiently egregious to justify penalties of $5,000 per day. Consequently, I
would sustain the remedy in this case, even if the evidence had established that
Petitioner had failed to comply with only one of the three regulations that are at
issue in this case.

Petitioner argues that the penalty amount is unreasonable, asserting that it took
reasonable measures to protect its residents from harm. The evidence in this case
proves otherwise. As I have discussed, Petitioner had plans and policies that were
designed to protect residents. But, those plans were not implemented to protect
those residents whose Wanderguards failed. There was an obvious and glaring
weakness in the system Petitioner had in place because it clearly did not give these
residents the enhanced supervision and protection that they needed.

Petitioner argues also that its past noncompliance was relatively non-serious. I
agree that the facility has no recent history of immediate jeopardy level
noncompliance. See CMS Ex. 19. Notwithstanding, Petitioner has a history of
relatively serious failure to comply with the requirements of 42 C.F.R.

§ 483.25(h). Furthermore, I would sustain a remedy of $5,000 per day, based
solely on the seriousness of Petitioner’s noncompliance. The dangers that were
created for Resident # 1 and other elopement prone residents by Petitioner’s
deficiencies are, in and of themselves, sufficient to justify the penalty amount.

/s/
Steven T. Kessel
Administrative Law Judge