Department of Health

and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tob

acco Products,

Complainant

Vv.

Paul’s Supermarket, Inc.

Respondent.

Docket No. C-13-1313

FDA Docket No. F

DA-2013-H-1117

Decision No. CR3011

Date: Novem|

INITIAL DECISION AND

The Center for Tobacco Products (CTP) fi

ber 26, 2013

DEFAULT JUDGMENT

led an Administrative Complaint

(Complaint) against Respondent, Paul’s Supermarket, Inc., that alleges facts and

legal authority sufficient to justify the imp

osition of a civil money penalty of $500.

Respondent did not answer the Complaint, nor did Respondent request an

extension of time within which to file an a
judgment against Respondent and assess a

nswer. Therefore, I enter a default
civil money penalty of $500.

CTP began this case by serving the Complaint on Respondent and filing a copy of

the Complaint with the Food and Drug Ad.

ministration’s (FDA) Division of

Dockets Management. The Complaint alleges that Respondent impermissibly and
repeatedly sold cigarettes to minors, thereby violating the Federal Food, Drug, and
Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations,

Cigarettes and Smokeless Tobacco, 21 C.F.R. Part 1140 (2012). CTP seeks a civil

money penalty of $500.
On September 26, 2013, CTP served the Complaint on Respondent by United
Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent should
pay the proposed penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it requested an extension. Pursuant to 21 C.F.R. § 17.11(a), 1am required to
“assume the facts alleged in the [C]omplaint to be true” and, if those facts
establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Paul’s Supermarket, an establishment that sells tobacco
products and is located at 1002 South Aurora Street, Eldon, Missouri
65026. Complaint § 3.

e On July 21, 2011, an FDA-commissioned inspector observed a violation of
21 C.F.R. § 1140.14(a) at Respondent’s establishment when “a person
younger than 18 years of age was able to purchase a package of Marlboro
Gold Pack cigarettes . . . at approximately 12:01 PM CT.” Complaint § 12.

e¢ On October 27, 2011, CTP issued a Warning Letter to Respondent
regarding the inspector’s observations from July 21, 2011. The letter
explained that the observations constituted a violation of a regulation found
at 21 C.F.R. § 1140.14(a), and that the named violation was not necessarily
intended to be an exhaustive list of all violations at the establishment. The
Warning Letter went on to state that if Respondent failed to correct the
violation, regulatory action by the FDA or a civil money penalty action
could occur and that Respondent is responsible for complying with the law.
Complaint § 12.

e Tom Burditt, Respondent’s Store Manager, replied to the Warning Letter
by telephone on November 4, 2011. “Mr. Burditt stated that it is
Respondent's policy to check the identification of any person under age 27
who is attempting to buy tobacco products[;] . .. Respondent would retrain
all regular employees and . . . all seasonal employees would be required to
receive retraining before being allowed to work[;] . . . [and] any employee
who is found to have sold to a minor will be subject to dismissal and . . .
any employee who fails to card someone who appears to be under 27 will
be subject to disciplinary action.” Complaint § 13.

e On February 25, 2012, FDA-commissioned inspectors documented an
additional violation of 21 C.F.R. Part 1140 at Respondent’s establishment.
The inspectors documented a violation of 21 C.F.R. § 1140.14(a) when “a
person younger than 18 years of age was able to purchase a package of
L&M cigarettes . . . at approximately 8:24 AM CT.” Complaint 4 10.

e CTP filed a civil money penalty action against Respondent on June 20,
2012, CRD Docket Number C-12-853. The civil money penalty action
concluded when the Administrative Law Judge closed the case after the
Respondent paid CTP an agreed-upon penalty. Complaint {§ 10, 11.

e On March 29, 2013, FDA-commissioned inspectors documented another
violation of 21 C.F.R. § 1140.14(a) at Respondent’s establishment when “a
person younger than 18 years of age was able to purchase a package of Pall
Mall Red cigarettes . . . at approximately 2:19 PM CT.” Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if distributed or offered for sale in any state in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R

§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed.
Reg. 13,229 (Mar. 10, 2010). The regulations prohibit the sale of cigarettes to any
person younger than 18 years of age. 21 C.F.R. § 1140.14(a).

Taking the above alleged facts as true, Respondent had three violations of
regulations contained in 21 C.F.R. Part 1140 within a twenty-one month period.
Specifically, Respondent had a violation on July 21, 2011, a violation on February
25, 2012, and a violation on March 29, 2013. Respondent’s actions on each
occasion violated the prohibition against selling cigarettes to persons younger than
18 years of age. 21 C.F.R. § 1140.14(a). Therefore, Respondent’s actions
constitute violations of law that merit a civil money penalty.
The regulations require me to impose a civil money penalty in the amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $500 for a third violation within a twenty-one month
period, 21 C.F.R. § 17.2, and CTP has requested a fine in that amount. Therefore,
I find that a civil money penalty of $500 is warranted and so order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Benson I. Ejindu d/b/a Joy Medical Supply,
(PTAN: 6686720001),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-850
Decision No. CR3009

Date: November 27, 2013

DECISION

I grant the motion of the Centers for Medicare & Medicaid Services (CMS) for summary
disposition and sustain the revocation of Petitioner Benson I. Ejindu d/b/a Joy Medical
Supply’s enrollment and billing privileges as a supplier in the Medicare program.

I. Background

Prior to the revocation at issue in this case, Petitioner was enrolled in the Medicare
program as a supplier of durable medical equipment, prosthetics, orthotics and supplies
(DMEPOS).' Ina letter dated February 20, 2013, National Supplier Clearinghouse
(NSC), the CMS contractor, informed Petitioner that his billing number was revoked
retroactively to February 7, 2013. CMS Exhibit (Ex.) 1. The letter stated that on January
31, 2013 and February 7, 2013, an NSC site inspector attempted to conduct a site visit of
Petitioner’s business location, but was unsuccessful because the facility was closed
during the posted hours of operation, in violation of 42 C.F.R. §§ 424.57(c) and
424.535(a)(5)(ii). CMS Ex. 1. On February 28, 2013, Petitioner requested

' A “supplier” is a “physician or other practitioner, or an entity other than a provider, that
furnishes health care services under Medicare.” 42 C.F.R. § 400.202.
reconsideration. CMS Ex. 2. The Medicare hearing officer issued an unfavorable
reconsideration decision on April 24, 2013. CMS Ex. 3. Petitioner timely filed a request
for hearing (RFH) before an Administrative Law Judge (ALJ) by letter dated May 15,
2013, and I issued an Acknowledgment and Initial Docketing Order (Order).

Pursuant to the Order, on June 26, 2013, CMS filed a Motion for Summary Judgment and
Brief in Support Thereof (CMS Motion). CMS proffered six exhibits in support of its
Motion (CMS Exs. 1-6). On July 11, 2013, Petitioner filed his response to the CMS
Motion (P. Response) and proffered three exhibits in support of his response (P. Exs.
1-3). In the absence of objection from either party, I admit all the proffered exhibits into
the record.

Il. Controlling Statutes and Regulations

Pursuant to section 1834(j)(1)(A) of the Social Security Act, a DMEPOS supplier may
not be reimbursed for items provided to an eligible Medicare beneficiary unless the
supplier has a supplier number issued by the Secretary of the U.S. Department of Health
& Human Services. To receive a supplier number, a DMEPOS supplier must meet and
maintain each of the supplier enrollments standards set forth in 42 C.F.R. § 424.57(c)(1)-
(30). Among other things, a DMEPOS supplier must maintain a physical facility on an
appropriate site which is in a location that is accessible to the public, staffed during
posted hours of operation, and maintained with a visible sign and posted hours of
operation. 42 C.F.R. § 424.57(c)(7). Also, a DMEPOS supplier must permit CMS or its
agent to conduct on-site inspections to determine supplier compliance with each of the
enrollment standards. 42 C.F.R. § 424.57(c)(8). CMS will revoke a currently-enrolled
Medicare supplier’s billing privileges if CMS or its agent determines that the supplier is
not in compliance with any supplier enrollment standard. 42 C.F.R. § 424.57(d); see
also 1866I1CPayday.com, DAB No. 2289, at 13 (2009) (‘[F]ailure to comply with even
one supplier standard is a sufficient basis for revoking a supplier's billing privileges.”).

In addition, if an on-site visit reveals that a supplier is no longer operational, or
otherwise fails to meet one of the supplier standards, CMS may revoke the supplier’s
Medicare billing privileges. 42 C.F.R. § 424.535(a)(5)(ii). A provider or supplier is
operational if it “has a qualified physical practice location, is open to the public for the
purpose of providing health care related services, is prepared to submit valid Medicare
claims, and is properly staffed, equipped, and stocked . . . to furnish these items or
services.” 42 C.F.R. § 424.502. The effective date of revocation is the date CMS
determines the supplier was no longer operational. 42 C.F.R. § 424.535(g).
Ill. Issues, Findings of Facts and Conclusions of Law
A. Issue

The issue before me in this case is whether CMS or its contractor had a basis to revoke
Petitioner’s enrollment as a supplier in the Medicare program.

B. Findings of Facts and Conclusions of Law

CMS is entitled to summary disposition because the undisputed facts
establish that Petitioner was not operational in violation of 42 C.F.R.
§ 424.57(c)(7).

Summary disposition is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
48 (1986). The Departmental Appeals Board (Board) has stated that, “[w]hile the Federal
Rules of Civil Procedure (FRCP) are not binding in this administrative appeal, we are
guided by those rules and by judicial decisions on summary judgment... .” Senior
Rehabilitation and Skilled Nursing Center, DAB No. 2300, at 3 (2010) (internal citation
omitted). The party moving for summary judgment carries the initial burden of showing
that there are no genuine issues of material fact and that it is entitled to judgment as a
matter of law. Jd. If the moving party carries its burden, then the non-moving party must
come forward with specific facts showing that there is a genuine issue for trial. Jd.

Furthermore, in determining whether there are genuine issues of material fact, I must
view the evidence in the light most favorable to the non-moving party, drawing all
reasonable inferences in that party’s favor. Jd. (citing United States v. Diebold, Inc., 369
U.S. 654, 655 (1962)). Finally, the Board has instructed that for purposes of summary
judgment, an ALJ must not engage in assessing credibility or evaluating the weight of
conflicting evidence. Holy Cross Village at Notre Dame, DAB No. 2291, at 5 (2009).

I find that summary disposition is appropriate in this case because there are no material
facts in dispute, and because this case turns entirely on questions of law. I conclude that
CMS’s position is correct as a matter of law.

In this case, the material and dispositive facts are not in dispute. Petitioner was a
DMEPOS supplier that participated in the Medicare program. Petitioner’s posted hours
of operation were explicitly Monday through Friday, 10:00 a.m. through 4:00 p.m. CMS
Ex. 4. On January 31, 2013, at approximately 10:15 a.m., an NSC site inspector
attempted to inspect Petitioner’s facility, but no one responded to her knocking although
a light inside the office was on. Id. at 3, 9; CMS Ex. 5. On February 11, 2013, at
approximately 11:02 a.m., an NSC site inspector made another attempt to inspect
Petitioner’s facility, but again no one responded to the inspector’s knock. CMS Ex. 4 at
3, 9; CMS Ex. 6.

Petitioner argues that he was present in the facility during the two investigator visits. P.
Response at 1. Further, Petitioner provides evidence in support of his assertion in the
form of cellular telephone records from the dates at issue. P. Exs. 1, 2. Petitioner
explains that he locks the door when he makes telephone calls when he is alone in the
shop. P. Response at 2.

For the purposes of summary judgment, I accept Petitioner’s assertions as true, but even
if true they are unavailing. The regulations require suppliers to maintain facilities that are
“accessible and staffed during posted hours of operation.” 42 C.F.R.

§ 424.57(c)(7)(i)(C). In this context, “accessible” takes on a common-sense meaning: it
means an unlocked door that swings open when a visitor to the facility pushes or pulls it,
or that is opened by the occupant in response to a knock or bell, allowing the visitor to
enter the facility. If the door to the facility is locked, then the common-sense question is
whether the facility door is promptly unlocked in immediate response to a knock or a bell
or a buzzer. The result-driven criterion for a facility’s being “accessible” seems
obviously to be the access available to the potential customer. And thus, if the facility is
not accessible when entry is attempted during posted hours of operation, then it is not in
conformance with the supplier regulation. 42 C.F.R. § 424.57(c)(7)(i)(C). In the present
case, even assuming that Petitioner was in the back office on a telephone call, if he did
not hear the inspector knock, then he would not have heard a customer knock either. The
facts of this case show that on two visits, the facility was for all practical purposes closed
to anyone who sought entry, and was just as inaccessible at those times as it would have
been if Petitioner had been completely absent from the premises.

The undisputed facts establish the Petitioner’s facility was not open and accessible on
January 31, 2013 and on February 11, 2013, at the times of the attempted site visits.
Based on the undisputed facts set out above, Petitioner failed to meet these standards.

Thus, for the reasons stated above, I find that CMS had a basis to revoke Petitioner’s
supplier number for failure to comply with the DMEPOS supplier requirements.
IV. Conclusion

Because the undisputed facts establish that Petitioner did not meet all the standards
required by 42 C.F.R. § 424.57(c), I grant CMS’s motion for summary disposition and
sustain the revocation of Petitioner’s supplier number.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Anne Marie Lucas,
(OI File No.: H-13-40092-9),
Petitioner,
v.
The Inspector General.
Docket No. C-13-882
Decision No. CR3005

Date: November 21, 2013

DECISION

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

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

I. Procedural Background

Petitioner Anne Marie Lucas was first licensed to practice as a registered nurse in the
State of Kentucky in 1993. In December 2010 she acknowledged that she had developed
chemical dependencies and reached an agreement with the Kentucky Board of Nursing
(KBN) to address those dependencies by participation in a program known as the
Kentucky Alternative Recovery Effort for Nurses (KARE). Sadly, Petitioner’s efforts to
comply with KARE program requirements were unsuccessful. By its Notice of May 5,
2011, the KBN terminated Petitioner’s participation in the KARE program. By that same
Notice the KBN denied for two years the reinstatement of Petitioner’s license, that
license having lapsed during her period in the KARE program.

On May 31, 2013 the LG. sent a notice-of-exclusion letter to Petitioner, relying on the
terms of section 1128(b)(4) of the Act, 42 U.S.C. § 1320a-7(b)(4). LG. Ex. 1. Acting
pro se Petitioner sought review of the I.G.’s determination in a request for hearing in a
letter dated June 11, 2013.

I attempted to convene a prehearing conference by telephone on August 13, 2013,
pursuant to 42 C.F.R. § 1005.6, in order to discuss procedures and a schedule for
addressing the issues presented by this case. That effort was not successful, and in order
to avoid further delays in the progress of this case toward hearing I set out those
procedures and a schedule in my Order of August 13, 2013. The record in this case
closed for purposes of 42 C.F.R. § 1005.20(c) on November 19, 2013.

The evidentiary record on which I decide the issues before me contains three exhibits.
The L.G. proffered three exhibits marked I.G. Exhibits 1 through 3 (I.G. Exs. 1-3).
Petitioner proffered no exhibits of her own. I have admitted all proffered exhibits.

IL. Issues

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

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

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

I decide these issues in favor of the I.G.’s position. Section 1128(b)(4)(A) of the Act
supports Petitioner’s exclusion from all federal health care programs, for her license to
practice as a registered nurse was suspended by the KBN, the State licensing authority,
for reasons bearing on her professional competence and professional performance. The
length of this proposed period of exclusion is reasonable as a matter of law.

III. Controlling Statutes and Regulations

Section 1128(b)(4)(A) of the Act, 42 U.S.C. § 1320a-7(b)(4)(A), authorizes the exclusion
from participation in Medicare, Medicaid, and all other federal health care programs of
any individual or entity “whose license to provide health care has been revoked or
suspended by any State licensing authority, or who otherwise lost such a license or the
right to apply for or renew such a license, for reasons bearing on the individual’s or
entity’s professional competence, professional performance, or financial integrity.”

The terms of sections 1128(b)(4)(A) are restated in similar regulatory language at
42 CFR. § 1001.501(a)(1).

An exclusion based on section 1128(b)(4)(A) of the Act is discretionary. If the I.G.
exercises his discretion to proceed with the sanction, then the mandatory minimum period
of exclusion to be imposed under section 1128(b)(4)(A) of the Act “shall not be less than
the period during which the individual’s or entity’s license to provide health care is
revoked, suspended, or surrendered... .” Act § 1128(c)(3)(E), 42 U.S.C. § 1320a-
7(c)(3)(E). Regulatory language at 42 C.F.R. § 1001.501(b)(1) affirms the statutory
provision.

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

The KBN is Kentucky’s licensing authority for registered nurses. KY. REV. STAT.
§§ 314.099 and 314.121. The KARE program is established at KY. REV. STAT.

§ 314.171.

IV. Findings and Conclusions

I find and conclude as follows:

1. As a consequence of her chemical dependencies, Petitioner entered the KBN’s
KARE treatment program in December 2010. I.G. Exs. 2, 3.

2. Petitioner’s participation in the KARE treatment program was unsuccessful.
1G. Ex. 3.

3. During the period of her participation in the KARE treatment program,
Petitioner’s license to practice as a registered nurse lapsed. I.G. Ex. 2.

4. On May 5, 2011 the KBN notified Petitioner that her license to practice as a
registered nurse in the State of Kentucky was denied reinstatement. I.G. Exs.
2, 3.
5. The KBN took action against Petitioner’s license for reasons bearing on her
professional competence and professional performance. I.G. Exs. 2, 3.

6. Because the KBN denied the reinstatement of Petitioner’s lapsed license to
practice as a registered nurse in the State of Kentucky for reasons bearing on
her professional competence and professional performance, a basis exists for
the I.G.’s exercise of authority to exclude Petitioner from participation in
Medicare, Medicaid, and all other federal health care programs. Act
§ 1128(b)(4)(A).

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

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

V. Discussion

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

§ 1320a-7(b)(4), is a derivative action, based on an action previously taken by a court,
licensing board, or other agency. In this case the LG. relies on the actions of the KBN
and invokes section 1128(b)(4)(A) of the Act.

There are two essential elements necessary to support an exclusion based on section
1128(b)(4)(A). First, the I.G. must prove that the license to provide health care of the
individual to be excluded, or the right to apply for or renew such a license, has been lost,
revoked or suspended by a state licensing authority. Second, the I.G. must prove that the
license was revoked or suspended for reasons bearing on the individual’s professional
competence, professional performance, or financial integrity. Leonard R. Friedman,
M.D., DAB No. 1281 (1991); Thomas I. DeVol, Ph.D., DAB CR1652 (2007); Sherry J.
Cross, DAB CR1575 (2007); Michele R. Rodney, DAB CR1332 (2005); Edmund B.
Eisnaugle, D.O., DAB CR1010 (2003); Marcos U. Ramos, M.D., DAB CR788 (2001);
Allison Purtell, M.D., DAB CR781 (2001).

The first element required to be shown by section 1128(b)(4)(A) is established by
uncontroverted evidence that Petitioner’s license had lapsed and was denied
reinstatement by the KBN on May 5, 2011. Petitioner does not deny the KBN action or
its effect. The I.G. has made the first required showing.
The nexus between the KBN proceeding and Petitioner’s professional performance and
professional competence — the second essential element of the I.G.’s 1128(b)(4)(A)
theory — has not been contested in Petitioner’s letters and briefing, but in any case the
1.G. has proven it. The record of the KBN proceedings between December 2010 and
May 2011 shows that Petitioner’s admission to the KARE program was predicated on her
admission that her chemical and alcohol dependencies classified her as “‘a person whose
ability to practice nursing according to acceptable and prevailing standards of care is or
may be impaired by reason of alcohol or drug abuse.” 201 Ky. ADMIN. REGS. 20:450.

With the proof of that nexus accomplished, the I.G. has proven all of the elements
essential to his theory, and Petitioner’s exclusion pursuant to sections 1128(b)(4)(A) of
the Act is authorized.

Petitioner is candid in admitting her failure to complete the KARE program, and the
factors she points to as the reasons she failed are understandable. She also makes a point
that suggests very strongly that she is hopeful of regaining her license and is motivated to
do so:

If I understand the exclusion correctly it is in a sense urging me to take
the steps necessary to regain my nursing license. In order to take the
steps necessary, I will need to earn enough money to begin this process.

Petitioner Answer Brief at 1.

Very few petitioners in cases based on section 1128(b)(4) are so perceptive: in most such
cases, the incentive to regain a license inherent in the exclusion process under 1128(b)(4)
is ignored or overlooked. And the incentive can be a real one to a motivated professional
interested in returning to a licensed field of practice, as this Petitioner appears to be. But
the obstacle in this situation is simply the mandatory nature of the period of exclusion:

by law the period of exclusion “shall not be less than the period during which the
individual’s or entity’s license to provide health care is revoked, suspended, or
surrendered ....” Act § 1128(c)(3)(E), 42 U.S.C. § 1320a-7(c)(3)(E).

The two-year denial of reinstatement order by the KBN has presumably now expired. If
Petitioner is able to satisfy the KBN that she is now ready for reinstatement, and if the
KBN agrees to renew her license, then she may ask the I.G. to end her exclusion pursuant
to the terms of 42 C.F.R. § 1001 Subpart F. However, regardless of the difficulties her
exclusion may present to Petitioner’s finding employment, it is simply not subject to any
exception or alteration that I can effect. It must remain in place until she regains her
license to practice as a registered nurse in Kentucky.
Because the I.G. has established a basis for the exclusion of Petitioner pursuant to section
1128(b)(4)(A) of the Act, her exclusion until such time as she regains her license to
practice as a registered nurse in the State of Kentucky is required by section
1128(c)(3)(E) of the Act, 42 U.S.C. § 1320a7(c)(3)(E) and 42 C.F.R. § 1001.501(b)(1).
That period is reasonable as a matter of law, based as it is on that statute and regulation.
Its effect is that desired by Congress in 1987, when it enacted section 1128(b)(4) as part
of the Medicare and Medicaid Patient and Program Protection Act of 1987, Pub. L. No.
100-93. Any suspension of the period of Petitioner’s exclusion is explicitly beyond my
authority. 42 C.F.R. §§ 1005.4(c)(5) and (6).

Petitioner appears here pro se. Because of that I have been guided by the Departmental
Appeals Board’s reminders that pro se litigants should be offered “some extra measure of
consideration” in developing their records and their cases. Louis Mathews, DAB No.
1574 (1996); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991). I have searched
all of Petitioner’s pleadings for any arguments or contentions that might raise a valid,
relevant defense to the I.G.’s Motion, but have found nothing that could be so construed.

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

VI. Conclusion

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

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Pamela Antonetty
d/b/a Bodega 24,

Respondent.

Docket No. C-13-1159
FDA Docket No. FDA-2013-H-0952

Decision No. CR3001

Date: November 21, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Pamela Antonetty d/b/a Bodega 24, that alleges
facts and legal authority sufficient to justify the imposition of a civil money
penalty of $10,000. Respondent failed to answer the Complaint, despite the fact
that I granted her two extensions of time within which to do so. Therefore, I enter
a default judgment against Respondent and assess a civil money penalty of
$10,000.

CTP began this case by serving the Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent impermissibly sold
cigarettes to minors, failed to verify that cigarette purchasers were 18 years of age
or older, and sold individual cigarettes, thereby violating the Federal Food, Drug,
and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations,
Cigarettes and Smokeless Tobacco, 21 C.F.R. Part 1140 (2012). CTP seeks a civil
money penalty of $10,000.

On August 19, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent should
pay the proposed penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty.

On September 16, 2013, Respondent requested an extension of time within which
to file an answer. In a September 24, 2013 Order, I granted Respondent until
September 30, 2013, to file an answer and informed her that no further extension
would be granted. Yet, on October 1, 2013, Respondent again requested an
extension of time within which to file an answer, arguing that she sought to settle
this matter with CTP but would not be able to do so before the deadline for filing
an answer. In an October 24, 2013 Order, I again granted Respondent additional
time within which to file an answer and ordered Respondent to file her answer no
later than October 31, 2013. I specifically warned Respondent that I would not
grant further extensions under any circumstances and that if she failed to file an
answer by October 31, 2013, I would issue a default judgment in this case.

Respondent has not filed an answer within the ample time I have provided her.
Pursuant to 21 C.F.R. § 17.11(a), 1am required to “assume the facts alleged in the
[C]omplaint to be true” and, if those facts establish liability under the Act, issue a
default judgment and impose a civil money penalty. Accordingly, I must
determine whether the allegations in the Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Bodega 24, an establishment that sells tobacco products
and is located at 154 High Street, Holyoke, Massachusetts 01040.
Complaint §[ 3.

e On April 27, 2011, an FDA-commissioned inspector observed two
violations of 21 C.F.R. Part 1140 at Respondent’s establishment. The
inspector observed a violation of 21 C.F.R. § 1140.14(a) due to a “[s]ale of
cigarettes or smokeless tobacco to a person younger than 18 years of age . .
- [L.]” The inspector also observed a violation of 21 C.F.R. § 1140.14(b)(1)
due to Respondent’s “[fJailure to verify[,] by means of photographic
identification[] containing the bearer's date of birth, that no person
purchasing cigarettes or smokeless tobacco is younger than 18 years of age
....” Complaint § 12.

e On July 14, 2011, CTP issued a Warning Letter to Respondent regarding
the inspector’s observations from April 27, 2011. The letter explained that
the observations constituted violations of regulations found at 21 C.F.R.

§ 1140.14(a) and (b)(1), and that the named violations were not necessarily
intended to be an exhaustive list of all violations at the establishment. The
Warning Letter went on to state that if Respondent failed to correct the
violations, regulatory action by the FDA or a civil money penalty action
could occur and that Respondent is responsible for complying with the law.
Complaint § 12.

e Pamela Antonetty, Respondent’s owner, replied to the Warning Letter on
July 27, 2011. “Ms. Antonetty stated that any employee working behind
the counter would be thoroughly trained on how to properly read
identifications . . . . [and she] would require . . . employees to request
photographic identification from any person under 27 years of age who
purchased tobacco products.” Complaint § 13.

e During a two-part inspection conducted on February 25, 2012, and
February 27, 2012, FDA-commissioned inspectors documented three
additional violations of 21 C.F.R. Part 1140 at Respondent’s establishment.
The inspectors documented a violation of 21 C.F.R. § 1140.14(a) on
February 25, 2012, when “a person younger than 18 years of age was able
to purchase a package of Marlboro 100's cigarettes . . . at approximately
12:48 PM ET[.]” The inspectors documented a violation of 21 C.F.R.

§ 1140.14(b)(1) at the same time when “the minor's identification was not
verified before the sale ....” Finally, the inspectors documented a
violation of 21 C.F.R. § 1140.14(d) during the course of the two-part
inspection because the establishment “[sold] individual cigarettes.”!
Complaint § 10.

' Section 1140.14(d) prohibits retailers from “break/ing] or otherwise open[ing]
any cigarette or smokeless tobacco package to sell or distribute individual
cigarettes . . . [.]” (emphasis added). Although CTP does not allege each of the
elements of a violation of 21 C.F.R. § 1140.14(d), because Respondent did not
answer the complaint, I will infer that each element of the violation was present.
e CTP initiated a civil money penalty action, C-12-946, against Respondent
on July 11, 2012, that concluded when the Administrative Law Judge
issued a default judgment against Respondent on August 31, 2012.
Respondent subsequently paid the $2,000 civil money penalty on
November 14, 2012. Complaint ff 10-11.

e¢ On October 31, 2012, FDA-commissioned inspectors documented two
more violations of 21 C.F.R. Part 1140 at Respondent’s establishment. The
inspectors documented a violation of 21 C.F.R. § 1140.14(a) when “a
person younger than 18 years of age was able to purchase a package of
Marlboro cigarettes . . . at approximately 2:21 PM ET[.]” The inspectors
documented a violation of 21 C.F.R. § 1140.14(b)(1) when “the minor's
identification was not verified before the sale... .” Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if distributed or offered for sale in any state in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R

§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed.
Reg. 13,229 (Mar. 10, 2010). The regulations prohibit the sale of cigarettes to any
person younger than 18 years of age. 21 C.F.R. § 1140.14(a). The regulations
also require retailers to verify, by means of photo identification containing a
purchaser’s date of birth, that no cigarette purchasers are younger than 18 years of
age. 21 C.F.R. § 1140.14(b)(1). Finally, the regulations prohibit retailers from
opening packages of cigarettes in order to sell individual cigarettes. 21 C.F.R.

§ 1140.14(d).

Taking the above alleged facts as true, Respondent had seven violations of
regulations contained in 21 C.F.R. Part 1140 within an eighteen-month period.
Specifically, Respondent had two violations on April 27, 2011, two violations on
February 25, 2012, one violation during the course of a two-part inspection on
February 25, 2012, and February 27, 2012, and two violations on October 31,
2012. Respondent’s actions on April 27, 2011, February 25, 2012, and on October
31, 2012, violated the prohibition against selling cigarettes to persons younger
than 18 years of age. 21 C.F.R. § 1140.14(a). Respondent’s actions on April 27,
2011, February 25, 2012, and on October 31, 2012, also violated the requirement
that retailers verify, by means of photo identification containing a purchaser’s date
of birth, that no cigarette purchasers are younger than 18 years of age. 21 C.F.R.
§ 1140.14(b)(1). Finally, Respondent’s actions during a two-part inspection
conducted on February 25, 2012, and February 27, 2012, also violated the
prohibition against opening a package of cigarettes in order to sell individual
cigarettes. 21 C.F.R. § 1140.14(d). Therefore, Respondent’s actions constitute
violations of law that merit a civil money penalty.

The regulations require me to impose a civil money penalty in an amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $10,000 for a seventh violation within an eighteen-
month period, 21 C.F.R. § 17.2, and CTP has requested a fine of that amount.
Therefore, I find that a civil money penalty of $10,000 is warranted and so order
one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Vista Health Care Center,
(CCN: 55-5723),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-12-175
Decision No. CR3000
Date: November 20, 2013
DECISION
I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose a per-instance civil money penalty (PICMP) of $10,000 against Vista Health Care
Center (Petitioner or facility). In addition, the state agency was required to withdraw
approval from Petitioner to conduct a nurse aid training and competency evaluation
program (NATCEP).
I. Background
Petitioner is a skilled nursing facility (SNF) located in Southern California. On August
16, 2011, the California Department of Public Health (CDPH) conducted a complaint
survey. CDPH determined that Petitioner was not in substantial compliance with the
Medicare participation requirement found at 42 C.F.R. § 483.25(h) at a level constituting
immediate jeopardy.
By letter dated October 11, 2011, CMS notified Petitioner that it agreed with the CDPH
finding that Petitioner provided substandard quality of care and imposed a PICMP in the

amount of $10,000 for noncompliance with 42 C.F.R. § 483.25(h), tag F323 (Accidents)
at an immediate jeopardy level. Further, CMS notified Petitioner that CMS was
imposing a denial of payment for new admission (DPNA), effective October 26, 2011,
and would terminate Petitioner’s program participation by February 16, 2012, if
Petitioner had not returned to substantial compliance before that date. CMS Exhibit (Ex.)
19. A revisit survey was conducted on October 20, 2011. Petitioner was found to have
returned to substantial compliance during the revisit survey. Consequently the DPNA
and termination did not go into effect. CMS Ex. 20, at 2. The PICMP and the loss of
Petitioner’s NATCEP remain before me.

By letter dated December 6, 2011, Petitioner requested a hearing. An Acknowledgment
and Docketing Order was issued on December 8, 2011. I convened a video
teleconference hearing from San Diego, California on January 7, 2013. During the
hearing, CMS Exs. 1-21 and Petitioner’s (P.) Exs. 1-33 were admitted into evidence.
Following the conclusion of the hearing, the parties agreed to submit one round of
briefing. CMS submitted its brief (CMS Br.) on April 24, 2013. Petitioner also
submitted its brief (P. Br.) on April 24, 2013.

II. Applicable Law

The statutory and regulatory requirements for participation of a SNF in Medicare are at
section 1819 of the Social Security Act (Act) and 42 C.F.R. pt. 483. Section 1819(h)(2)
of the Act authorizes the Secretary of Health and Human Services (Secretary) to impose
enforcement remedies against a SNF for failure to comply substantially with the federal
participation requirements established by sections 1819(b), (c), and (d) of the Act.’ The
Act requires that the Secretary terminate the Medicare participation of any SNF that does
not return to substantial compliance with participation requirements within six months of
being found not to be in substantial compliance. Act § 1819(h)(2)(C). The Act also
requires that the Secretary deny payment of Medicare benefits for any beneficiary
admitted to a SNF, if the SNF fails to return to substantial compliance with program
participation requirements within three months of being found not to be in substantial
compliance — commonly referred to as the mandatory or statutory denial of payments for
new admissions (DPNA). Act § 1819(h)(2)(D). The Act grants the Secretary
discretionary authority to terminate a noncompliant SNF’s participation in Medicare,
even if there has been less than 180 days of noncompliance. The Act also grants the
Secretary authority to impose other enforcement remedies, including a discretionary
DPNA, CMPs, appointment of temporary management, and other remedies such as a
directed plan of correction. Act § 1819(h)(2)(B).

' Participation of a NF in Medicaid is governed by section 1919 of the Act. Section
1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply
with their participation requirements established by sections 1919(b), (c), and (d) of the
Act.
The Secretary has delegated to CMS and the states the authority to impose remedies
against a long-term care facility that is not complying substantially with federal
participation requirements. “Substantial compliance means a level of compliance with
the requirements of participation such that any identified deficiencies pose no greater risk
to resident health or safety than the potential for causing minimal harm.” 42 C.F.R.

§ 488.301 (emphasis in original). A deficiency is a violation of a participation
requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary’s
regulations at 42 C.F.R. pt. 483, subpt. B. Noncompliance refers to any deficiency that
causes a facility not to be in substantial compliance. 42 C.F.R. § 488.301. State survey
agencies survey facilities that participate in Medicare on behalf of CMS to determine
whether the facilities are complying with federal participation requirements. 42 C.F.R.
§§ 488.10-.28, 488.300-.335. The regulations specify the enforcement remedies that
CMS may impose if a facility is not in substantial compliance with Medicare
requirements. 42 C.F.R. § 488.406.

CMS is authorized to impose a CMP for the number of days of noncompliance — a per
day CMP - or for each instance of noncompliance — a PICMP. 42 C.F.R. § 488.430. The
regulations specify that a CMP that is imposed against a facility on a per day basis will
fall into one of two ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range
of CMPs, $3,050 per day to $10,000 per day, is reserved for deficiencies that pose
immediate jeopardy to a facility’s residents and, in some circumstances, for repeated
deficiencies. 42 C.F.R. § 488.438(a)(1)(i), (d)(2). “dmmediate jeopardy means a
situation in which the provider’s noncompliance with one or more requirements of
participation has caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident.” 42 C.F.R. § 488.301 (emphasis in original). The lower range of CMPs,
$50 per day to $3,000 per day, is reserved for deficiencies that do not pose immediate
jeopardy, but either cause actual harm to residents, or cause no actual harm but have the
potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii). The only
range for a PICMP is $1,000 to $10,000. 42 C.F.R. §§ 488.408, 488(a)(2).

Petitioner was notified that it was ineligible to conduct a NATCEP. Pursuant to sections
819(b)(5) and 1919(b)(5) of the Act, SNFs and NFs may only use nurse aides who have
completed a training and competency evaluation program. Pursuant to sections
819(f)(2) and 1919(f)(2) of the Act, the Secretary was tasked to develop requirements
for approval of NATCEPs and the process for review of those programs. Sections
819(e) and 1919(e) of the Act impose upon the states the requirement to specify what
NATCEPs they will approve that meet the requirements that the Secretary established
and a process for reviewing and re-approving those programs using criteria the Secretary
set. The Secretary promulgated regulations at 42 C.F.R. pt. 483, subpt. D. Pursuant to 42
C.F.R. § 483.151(b)(2) and (f), a state may not approve and must withdraw any prior
approval of a NATCEP offered by a skilled nursing or nursing facility that has been:

(1) subject to an extended or partial extended survey under sections 1819(g)(2)(B)(i) or
1919(g)(2)(B)(i) of the Act; (2) assessed a CMP of not less than $5,000; or (3) subject to

termination of its participation agreement, a DPNA, or the appointment of temporary
management. Extended and partial extended surveys are triggered by a finding of
“substandard quality of care” during a standard or abbreviated standard survey and
involve evaluating additional participation requirements. “Substandard quality of care” is
identified by the situation where surveyors identify one or more deficiencies related to
participation requirements established by 42 C.F.R. § 483.13 (Resident Behavior and
Facility Practices), § 483.15 (Quality of Life), or § 483.25 (Quality of Care) that are
found to constitute either immediate jeopardy, a pattern of or widespread actual harm that
does not amount to immediate jeopardy, or a widespread potential for more than minimal
harm that does not amount to immediate jeopardy and there is no actual harm. 42 C.F.R.
§ 488.301.

The Act and regulations make a hearing before an Administrative Law Judge (ALJ)
available to a long-term care facility against which CMS has determined to impose an
enforcement remedy. Act §§ 1128A(c)(2), 1866(h); 42 C.F.R. §§ 488.408(g),
498.3(b)(13). The hearing before an ALJ is a de novo proceeding. The Residence at
Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care, DAB No. 2030 (2006);
Beechwood Sanitarium, DAB No. 1906 (2004); Emerald Oaks, DAB No. 1800, at 11
(2001); Anesthesiologists Affiliated, DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir.
1991). A facility has a right to appeal a “certification of noncompliance leading to an
enforcement remedy.” 42 C.F.R. § § 488.408(g)(1), 488.330(e), 498.3. However, the
choice of remedies, or the factors CMS considered when choosing remedies, are not
subject to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the scope
and severity level of noncompliance determined by CMS, if a successful challenge would
affect the range of the CMP that may be imposed or impact the facility’s authority to
conduct a NATCEP. 42 C.F.R. § 498.3(b)(14), (d)(10)(i).. The CMS determination as to
the level of noncompliance, including the finding of immediate jeopardy, “must be
upheld unless it is clearly erroneous.” 42 C.F.R. § 498.60(c)(2); Woodstock Care Center,
DAB No. 1726, at 9, 38 (2000), aff'd, 363 F.3d 583 (6th Cir. 2003). The Departmental
Appeals Board (the Board) has long held that the net effect of the regulations is that a
provider has no right to challenge the scope and severity level assigned to a
noncompliance finding, except in the situation where that finding was the basis for an
immediate jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002);
Koester Pavilion, DAB No. 1750 (2000). ALJ review of a CMP is subject to 42 C.F.R.

§ 488.438(e).”

> Although recognizing that the “prevailing interpretation of the regulations” precludes
its challenging the immediate jeopardy determination where a PICMP has been imposed,
Petitioner argues forcefully that it should be permitted to challenge the immediate
jeopardy finding and thus the scope and severity assigned to the deficiency. P. Br. at 13-
17. Insofar as Petitioner asserts that it has a constitutional due process right to do so, I
am without the authority to hear those arguments. However, its due process argument is
preserved for appeal. Where Petitioner argues that it should be allowed to address the
The hearing before an ALJ is a de novo proceeding, i.e., “a fresh look by a neutral
decision-maker at the legal and factual basis for the deficiency findings underlying the
remedies.” Life Care Center of Bardstown, DAB No. 2479, at 32 (2012) (citation
omitted). The standard of proof, or quantum of evidence required, is a preponderance of
the evidence. CMS has the burden of coming forward with the evidence and making a
prima facie showing of a basis for imposition of an enforcement remedy. Petitioner bears
the burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Center, DAB No. 1904 (2004), aff’d, 129 F. App’x 181 (6th Cir. 2005);
Emerald Oaks, DAB No. 1800; Cross Creek Health Care Center, DAB No. 1665 (1998);
Hillman Rehab. Center, DAB No. 1611 (1997)(remand), DAB No. 1663 (1998) (aft.
remand), aff'd, Hillman Rehab. Center v. United States, No. 98-3789 (GEB), 1999 WL
34813783 (D.N.J. May 13, 1999).

III. Issues

1. Whether there is a basis for the imposition of an enforcement
remedy; and

2. Whether the PICMP imposed is reasonable.
IV. Discussion®

1. Petitioner failed to comply substantially with the participation
requirement at 42 C.F.R. § 483.25(h) (Tag F-323).

On August 4, 2011, Resident 1, a 75-year old woman, fell to the floor when two hospice
certified nurse assistants (HCNAs)* attempted to transfer her from a shower gurney to her

immediate jeopardy determination in challenging the reasonableness of the PICMP, as
noted above, my review of the CMP is governed by 42 C.F.R. § 488.438(e) and it is
under that standard that I evaluate the reasonableness of the PICMP.

> Thave reviewed the entire record, including all the exhibits and testimony. Because

the Federal Rules of Evidence do not control the admission of evidence in proceedings of
this kind (see 42 C.F.R. § 498.61), I may admit evidence and determine later, upon a
review of the record as a whole, what weight, if any, I should accord that evidence or
testimony. To the extent that any contention, evidence, or testimony is not explicitly
addressed or mentioned, it is not because I have not considered the contentions. Rather,
it is because I find that the contentions are not supported by the weight of the evidence or
by credible evidence or testimony.

+ The HCNAs are provided to Petitioner from Apreva Hospice Services (Apreva) by a
contractual agreement. P. Ex. 3. Pursuant to the agreement between Petitioner and
6

bed using Petitioner’s Viking M lift. Tr. at 27-28, 105-107; CMS Ex. 1, at 1; CMS Ex. 6,
at 1; CMS Ex. 9, at 1-2; CMS Ex. 10, at 1-4. The Viking M lift, product number
2040005, is manufactured by Liko, a wholly owned subsidiary of Hill-Rom, Inc.> CMS
Ex. 10, at 1; CMS Ex. 11; CMS Ex. 21, at 11, 19. Asa result of the fall, Resident 1, who
was receiving hospice care in Petitioner’s facility, suffered a broken left hip. Tr. at 27;

CMS Exs. 6, 9.

According to the HCNAs who were attempting to transfer Resident 1 in the Viking M
lift, the upper left half of the sling “snapped” off the sling bar during the transfer, causing
the fall. P. Ex. 2, at 2; Tr. at 30-31, 106-07.

Petitioner’s Director of Rehabilitation, John Clewis, and Petitioner’s DON, Diana
Klarenbach, examined the sling and sling bar hooks immediately after Resident 1’s fall
and found them to be intact with no damage. They also did not find any indication that
the lift had failed in any way. Tr. at 30-31, 106-07; P. Ex. 2, at 2; CMS Ex. 10, at 2.
Immediately after the examination, the sling used with Resident 1 was sealed in a bag and
retained. Petitioner submitted a report of an “unusual occurrence” to CDPH.

During a complaint survey the following day on August 5, 2011, Ward Wagenseller, who
is a surveyor, registered nurse, and a Health Facilities Evaluator Nurse (HFEN) at CDPH,
examined the Viking M lift and found the sling intact and initially thought the entire lift
was intact. Tr. at 29. Mr. Wagenseller was told that the lift was still being used and took
photographs of the Viking M lift. Tr. at 33; CMS Ex. 11. Sometime after leaving on
August 5, 2011, Mr. Wagenseller located the lift’s operator manual on the Internet,
consulted it, and found that safety clips were part of the lift according to the
manufacturer’s instructions. He was able to determine while looking at the photographs
of Petitioner’s lift that the safety clips at the end of the lift crossbar were missing. Mr.
Wagenseller could see a “pinhole deeply positioned at the end of each of the hooks” on
the lift crossbar that indicated that a clip-type device should be used in that pinhole “to
restrain the sling from inadvertently escaping the clip.” Tr. at 38, 39. Mr. Wagenseller
and Lisa Mosel, a HFEN supervisor from CDPH, returned to the facility on August 16,
2011 to determine if the Viking M lift was being used on residents without the safety
clips required by the manufacturer.

When Mr. Wagenseller and Ms. Mosel returned to the facility, they were told that the
Viking M lift was being used by Petitioner on 25 residents between one to three times

Apreva, Petitioner was responsible for maintaining “adequate facilities and equipment.”
P. Ex. 3, at 3. Diana Klarenbach, Petitioner’s Director of Nursing (DON) testified that
the term “equipment” includes the Viking M lift. Tr. at 115.

> The Viking M lift was used often because it had a scale attached and residents can be
weighted easily. Tr. at 32.
daily, 25 to 75 uses per day. Tr. at 42,78. No one at the facility, not even the
maintenance personnel, had an owner’s manual for the Viking M lift at the time of the
August 5, 2011 complaint survey. Tr. at 36, 45-46. The maintenance personnel
performed no maintenance on the lift except for calibrating the scale. There was no
maintenance log for the lift. Tr. at 46. Ms. Mosel testified that Brian Pauleson, the
maintenance supervisor, did not have the manufacturer’s instructions until one week
before the August 16, 2011 return visit and was unaware that the lift required
maintenance beyond the need to calibrate the scale. Tr. at 79. The surveyors were told
that the Viking M lift was purchased in 2007 and had been used continuously since that
time. The Viking M lift was even being used on the date of the return visit. Upon
examining the Viking M lift on August 16, 2013, Ms. Mosel testified that there were no
safety clips on the lift. Tr. at 77.

Mr. Wagenseller testified that he talked with Harriet Nakyeyune, one of the HCNAs
present at the time of Resident 1’s fall. Ms. Nakeyune told Mr. Wagenseller that at the
time of Resident 1’s fall she noticed that the Viking M lift did not have safety latches®
and that other Viking M lifts in other facilities in which she had worked did have safety
latches. Tr. at 64-65. Ms. Nakeyune told Mr. Wagenseller that during Resident 1’s
transfer, Ms. Nakeyune was providing some degree of support to Resident 1’s body, thus
relieving the tension on the lift straps and causing the straps to slip out of the hooks, in
turn causing the fall. Tr. at 63-64; CMS Ex. 10, at 14. According to the service
representative from Hill-Rom with whom Mr. Wagenseller talked, the function of the
safety latches was to prevent any such release of tension on the straps from allowing the
sling to slip out and over the hooks. Tr. at 64.

On August 16, 2011 at 11:30 a.m., Mr. Wagenseller called Hill-Rom’s customer service
number. Mr. Wagenseller testified that “[w]hen I asked the product technician if they
would ever recommend or saw any cause or reason to operate the device without safety
latches at the end of the crossbar, he said he wouldn’t ever use the device without safety
latches. The sling could become loose from the bar and the patient could fall. They...
indicated that the user’s guide instructs the user to check the safety latch operation before
each use.” Tr. at 47. Mr. Wagenseller and Ms. Mosel “called” immediate jeopardy on
August 16, 2011. Immediate jeopardy was abated 15 minutes after it was called when
Petitioner removed the Viking M lift from service.

The general quality of care regulation, 42 C.F.R. § 483.25, requires that a facility ensure
each resident receives necessary care and services to attain or maintain the resident’s
highest practicable physical, mental, and psychosocial well-being, in accordance with the
resident’s comprehensive assessment and plan of care. The quality of care regulations

° At various times during the hearing the term “safety clips” and “safety latches” were
used interchangeably. I do so here as well.
impose specific obligations upon a facility related to accident hazards and accidents. The
applicable regulatory provision states:

The facility must ensure that —

(1) The resident environment remains as free of accident
hazards as is possible; and

(2) Each resident receives adequate supervision and
assistance devices to prevent accidents

42 C.F.R. § 483.25(h). CMS instructs its surveyors that the intent of 42 C.F.R.

§ 483.25(h)(1) and (2) is “to ensure the facility provides an environment that is free from
accident hazards over which the facility has control and provides supervision and
assistive devices to each resident to prevent avoidable accidents.” The facility is
expected to: identify, evaluate, and analyze hazards and risks; implement interventions to
reduce hazards and risks; and monitor the effectiveness of interventions and modify them
when necessary. State Operations Manual (SOM), CMS Pub. 100-07, app. PP, Guidance
to Surveyors Long Term Care Facilities, F323 (Rev. 27; eff. Aug. 17, 2007).”

The Board has provided interpretative guidance for adjudicating alleged violations
of 42 C.F.R. § 483.25(h)(1):

The standard in section 483.25(h)(1) itself -- that a facility
“ensure that the environment is as free of accident hazards as
possible” in order to meet the quality of care goal in section
483.25 -- places a continuum of affirmative duties on a facility.
A facility must determine whether any condition exists in the
environment that could endanger a resident’s safety. If so, the
facility must remove that condition if possible, and, when not
possible, it must take action to protect residents from the
danger posed by that condition. [Footnote omitted.] If a
facility has identified and planned for a hazard and then failed
to follow its own plan, that may be sufficient to show a lack of

7 The SOM does not have the force and effect of law. However, the provisions of the Act
and regulations interpreted by the SOM clearly do have such force and effect. Indiana
Department of Public Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991); Northwest
Tissue Center v. Shalala, | F.3d 522 (7th Cir. 1993). Thus, while the Secretary may not
seek to enforce the provisions of the SOM, she may seek to enforce the provisions of the
Act or regulations as interpreted by the SOM.
compliance with [the] regulatory requirement. In other cases,
an ALJ may need to consider the actions the facility took to
identify, remove, or protect residents from the hazard. Where
a facility alleges (or shows) that it did not know that a
hazard existed, the facility cannot prevail if it could have
reasonably foreseen that an endangering condition existed
either generally or for a particular resident or residents.

Maine Veterans’ Home — Scarborough, DAB No. 1975, at 6-7 (2005) (emphasis added).

The Board has also explained the requirements of 42 C.F.R. § 483.25(h)(2) in numerous
decisions. Golden Living Center — Riverchase, DAB No. 2314, at 6-7 (2010); Eastwood
Convalescent Center, DAB No. 2088 (2007); Century Care of Crystal Coast, DAB No.
2076 (2007), aff'd, 281 F. App’x 180 (4th Cir. 2008); Liberty Commons Nursing and
Rehabilitation - Alamance, DAB No. 2070 (2007); Golden Age Skilled Nursing &
Rehabilitation Center, DAB No. 2026 (2006); Estes Nursing Facility Civic Center, DAB
No. 2000 (2005); Northeastern Ohio Alzheimer’s Research Center, DAB No. 1935
(2004); Woodstock Care Center, DAB No. 1726 (2000), aff’d, Woodstock Care Center v.
Thompson, 363 F.3d 583 (6th Cir. 2003). The regulation does not make a facility strictly
liable for accidents that occur, but it does require that a facility take all reasonable steps
to ensure that a resident receives supervision and assistance devices that meet his or her
assessed needs and mitigates foreseeable risks of harm from accidents. Woodstock Care
Center v. Thompson, 363 F.3d at 589 (noting a SNF must take “all reasonable precautions
against residents’ accidents”). A facility is permitted the flexibility to choose the
methods of supervision it uses to prevent accidents, but the chosen methods must be
adequate under the circumstances. Whether supervision is “adequate” depends in part
upon the ability of the resident to protect himself or herself from harm. Jd. Based on the
regulation and the cases in this area, CMS meets its burden to show a prima facie case if
the evidence demonstrates that the facility failed to provide adequate supervision and
assistance devices to prevent accidents, given what was reasonably foreseeable. Alden
Town Manor Rehabilitation & HCC, DAB No. 2054, at 5-6, 7-12 (2006). An “accident”
is an unexpected, unintended event that can cause a resident bodily injury, excluding
adverse outcomes associated as a direct consequence of treatment or care (e.g., drug side
effects or reactions). SOM, app. PP, Tag F323; Woodstock Care Center, DAB No. 1726,
at 4.

The regulation gives Petitioner notice of the criteria or elements it must meet to comply
with the program participation requirement established by the regulation. 5 U.S.C.

§§ 551(4), 552(a)(1). Therefore, in order to make a prima facie showing of
noncompliance, CMS must show that: (1) Petitioner violated the regulation by not
complying with one or more of the requirements or elements of the regulation, which is a
deficiency; and (2) the deficiency amounted to “noncompliance,” i.e., that Petitioner was
not in substantial compliance because the deficiency posed a risk for more than minimal
harm.

In this case, the elements required of the CMS prima facie case to establish non-
compliance with 42 C.F.R. § 483.25(h) are: (1) an accident hazard existed within the
resident’s environment; (2) Petitioner failed to eliminate or mitigate the accident hazard
to the extent possible; and (3) Petitioner failed to ensure a resident received supervision
and assistive devices necessary to prevent accidents. For noncompliance,* CMS must
also establish that the violation of 42 C.F.R. § 483.25(h) posed a risk for more than
minimal harm. The regulations do not require that CMS show that an accident was
foreseeable or that an accident actually occurred. The regulation establishes
impossibility as a possible defense, i.e., Petitioner did all that was reasonably possible to
mitigate or eliminate the risk but an accident occurred despite the steps taken. Board
decisions also recognize a possible defense by providing that a facility is only responsible
to eliminate or mitigate reasonably foreseeable risks for accidental injury. Maine
Veterans’ Home — Scarborough, DAB No. 1975, at 6-7.

At the hearing, Surveyor Wagenseller testified concerning: his discovery of the failure of
Petitioner to use the Viking M lift with the safety clips; his discovery that no one at the
facility had the manufacturer’s instructions for the Viking M lift; the lack of maintenance
performed on the Viking M lift other than calibrating the scale; and that no safety clips
were on the Viking M lift on the day of the return visit, August 16, 2011. Surveyor
Wagenseller also testified to his conversation with Ms. Nakyeyune, a HCNA present at
the time of Resident 1’s fall. Further, Surveyor Wagenseller testified to the conversation
e had with the service representative from Hill-Rom about the function of safety clips
and the conversation he had with the product technician from Hill-Rom’s customer
service department and the manufacturer’s user’s guide instructions.

CMS provided a transcript of an oral deposition of Dennis Detmer as CMS Ex. 21. Mr.
Detmer is a Technical Product Manager at Hill-Rom, the parent company of Liko, the
manufacturer of the Viking M lift. Mr. Detmer is considered an expert regarding lifts at
Hill-Rom. CMS Ex. 21, at 24-25. Mr. Detmer confirmed that, per the instruction guide,
all sling bars for the Viking M lift come with safety latches and that the safety latch
function should be checked each day prior to use. CMS Ex. 21, at 33, 40-41; CMS Ex.
16, at 12. The lift instruction guide states that the standard care and maintenance of the
lift includes checking the safety latch function daily to ensure the safety of those being
lifted. CMS Ex. 21, 40-41; CMS Ex. 16, at 12. Mr. Detmer was asked:

® Noncompliance is “any deficiency that causes a facility to not be in substantial
compliance,” which is “a level of compliance . . . such that any indentified deficiencies
pose no greater risk to resident health or safety than the potential for causing minimal
harm.” 42 C.F.R. § 488.301.
Q: Would a Viking M lift that does not have safety latches be considered safe for
use in a nursing home or hospital?

A: It would not be considered safe for use in any facility, or any, in lifting point.
[sic]

Q: And why do you say that?

A: Without the safety latch in place there’s a possibility that the loop on the sling
could become disengaged, which would then put the patient at risk.

Q: And by risk, what do you mean?
A: Ina position that could possibly lead to a fall.

CMS Ex. 21, at 43-44. At another point in his deposition, Mr. Deter stated that
“(without the safety latch there it’s very possible for the loop to come out of the hook
and then you could cause an accident.” CMS Ex. 21, at 48 (emphasis added).

CMS argues that the absence of safety latches from Petitioner’s Viking M lift renders the
lift unsafe. It is undisputed that the Viking M lift did not have safety latches at the time
of Resident 1’s fall or at any time since it was purchased. Tr. at 38, 48, 64-65, 93, 102;
CMS Ex. 1, at 3-5; CMS Ex. 11. The manufacturer’s instructions require safety latches
for the safe use of the lift. Tr. at 47; CMS Ex. 11, at 4-5; CMS Ex. 16; CMS Ex. 21, at
43-44. Petitioner did not have an instruction manual for the Viking M lift at the time of
the accident. No one at Petitioner’s facility testified that the facility had the instruction
manual for the Viking M lift at any time since the lift was purchased in 2007. It is also
undisputed that Petitioner did not have required annual inspections of the lift from the
manufacturer or daily inspections by the user of the safety latch function prior to each
use. Tr. at 36, 45-46, 79, 110-13; CMS Ex. 21, at 12. CMS argues that a facility has a
duty to properly use and maintain equipment that could be the cause of falls, such as a
lift. CMS asserts that the lack of safety latches on the lift and the resulting unsafe
conditions for transferring all the residents — and not just Resident 1’s fall — support the
citation of the deficiency at issue. The foreseeability of Resident 1’s accident is plainly
established by the instruction manual’s warning to use safety clips and to check the
function of the safety clips each day prior to use.

CMS has presented sufficient evidence to establish noncompliance, absent effective
rebuttal. Operating a significant piece of equipment, like a lift, without access to the
manufacturer’s instructions and without safety clips designed to prevent the sling from
becoming loose from the sling bar — lapses that could and did result in a resident’s fall
— was quite simply waiting for the accident that eventually happened. Petitioner did not
check the safety clips daily as instructed by the manufacturer, did not perform
maintenance on the lift, and did not have annual maintenance performed by a
manufacturer’s representative. Use of the Viking M lift without safety clips posed a risk
for an accident that could result in a fall.” Falls in any population, and particularly in a
nursing home filled with elderly fragile individuals, poses a risk of more than minimal
harm.

Petitioner presented only one witness, Diana Klarenbach, Petitioner’s DON. She testified
that: she herself had never actually used a lift but had observed a lift being used; she
never saw or knew about safety clips or latches for this lift; and that she believed that the
clips had no function once a resident is lifted because of the effect of gravity. Tr. at 106.
Ms. Klarenbach admitted that safety clips were missing from the Viking M lift. Tr. at
110-111. Ms. Klarenbach admitted that without reference to the instruction manual she
would not know the function of safety clips for the Viking M lift. Tr. at 111-113; 103-
104. She admitted that the Viking M lift was used for approximately 25 residents, one to
three times per day. CMS Ex. 1, at 3, 5; Tr. 43, 78-79. In Ms. Klarenbach’s opinion,
caregivers shouldn’t provide upward support during the use of the lift. Tr. at 125.

I place little reliance on Ms. Klarenbach’s opinion since she never actually used a lift
herself and had no knowledge that safety clips were required by the manufacturer for safe
use of the lift.

Petitioner puts forth two main arguments. First, Petitioner argues that it used the Viking
M lift for approximately seven years without any previous resident falls. Petitioner
asserts that since Resident 1’s fall was the only fall that happened as a result of using the
Viking M lift, the failure to use the safely clips could not have been significant. The fact
the Petitioner’s residents had never previously fallen as a result of using the Viking M lift
without safety clips is simply fortuitous and not a persuasive argument. CMS aptly
draws an analogy to driving in a car without seatbelts. Merely because the car was never
in an accident does not make it safe to drive in a car without seatbelts.

Second, Petitioner argues that the HCNAs involved in Resident 1’s fall were employees
of Apreva and were not Petitioner’s employees. Petitioner asserts that it should not be
held responsible for the training of HCNAs. The issue, however, is not who employed
the HCNAs involved in this fall but whether Petitioner was routinely using a Viking M

° While the “accident” itself in this case is not a basis for finding Petitioner was not in
substantial compliance, the occurrence of the accident identifies the accident hazard, and
the facts and circumstances of the accident are evidence of noncompliance. Lake Park
Nursing & Rehab. Center, DAB No. 2035, at 8 (2006) (citing St. Catherine’s Care
Center of Findlay, Inc., DAB No. 1964 (2005)).

lift that was not safe to use.'° The testimony clearly shows that the Viking M lift was not
intact and did not have required safety clips. Safety clips are safety equipment intended
by the manufacturer to ensure safe transfer of patients and residents.

Petitioner makes several other arguments, none of which I find persuasive. Petitioner
asserts that the presence of safety latches on the Viking M lift was irrelevant to the
operation of the lift because once the resident was lifted, the resident’s weight prevents
the sling from disengaging from the sling bar. CMS Ex. 21, at 55-56; Tr. at 103.
Petitioner claims that Resident 1 suffered a fall towards the end of the lifting operation,
after Resident 1 had been in the lift for a few minutes. P. Ex. 5, at 6. Tr. at 61-62.
Again, Petitioner misses the basis of the deficiency: it is not just Resident1’s fall that is
the basis of the deficiency but the absence of safety latches from Petitioner’s Viking M
lift that rendered the lift unsafe for every resident that used it each time it was used. It is
well established that a violation of a deficiency can exist in the absence of any accident
resulting in an injury or other harm to a resident. Buena Vista Care Center, DAB No.
2498, at 6 (2013).

Petitioner claims that it followed manufacturer’s safety instructions. In fact, Petitioner
claims that instruction manual does not mention safety latches. P. Br. at 13. Petitioner is
mistaken. On page 9 of the owner’s manual there is a diagram of the Viking M lift with
parts of the lift labeled. The diagram labels the fourth part as “4. Sling bar with safety
latches.” P. Ex. 32, at 9. The owner’s manual also clearly states, “to ensure trouble free
operation, certain components should be checked each day the lift system is used. . .
check safety latch function.” P. Ex. 32, at 20. The fact that the owner’s manual does not
specify that checking the safety latch function is a safety function is irrelevant. It is clear
that Petitioner did not follow the owner’s manual. In fact, prior to the complaint survey,
Petitioner did not even have a copy of the owner’s manual. It is also clear that the part
missing from Petitioner’s Viking M lift is called a “safety latch” which would imply to a
reasonable reader some safety-related function in the part in question.

Petitioner argues that if I conclude that Petitioner was not in substantial compliance with
program participation requirements, the deficiency did not pose immediate

jeopardy. P. Br. at 13-15. Whether the declaration of immediate jeopardy was clearly
erroneous is not an issue in this case as neither the PICMP nor the loss of NATCEP
authority would be affected by a decision that the declaration of immediate jeopardy was
clearly erroneous. 42 C.F.R. § 498.3(b)(14), (d)(10)(i); Fort Madison Health Center,

'° As mentioned previously, according to the agreement between Petitioner and Apreva,
Petitioner was responsible for maintaining “adequate facilities and equipment” and the
term “equipment” includes the Viking M lift. P. Ex. 3, at 3; Tr. at 115.
DAB No. 2403, at 12-13 (2011) (recognizing that substantive review of an immediate
jeopardy determination is not available if CMS proposes only a PICMP).

The evidence clearly shows that Petitioner used the Viking M lift daily for many
residents, up to 75 uses per day, for several years. Petitioner used this lift without the
benefit of safety latches, without following manufacturer’s instructions and guidelines,
and without performing necessary maintenance or performing any inspections. Petitioner
was not even aware that safety latches should be on the sling bar. Using the lift in an
unsafe manner put any resident being lifted at risk of an accident at any time. The unsafe
conditions at Petitioner’s facility caused serious injury and harm to Resident 1 and was
likely to cause serious injury, harm, impairment or death to the approximately 24 other
residents who used the Viking M lift daily. Consequently, I conclude that Petitioner was
not in compliance with the regulation at 42 C.F.R. § 483.25(h) posing a risk of more than
minimal harm.

2. The proposed enforcement remedy of a $10,000 PICMP is
reasonable.

3. Petitioner’s ineligibility to conduct a NATCEP is mandatory.

I have concluded that Petitioner was not in substantial compliance with program
participation requirements due to a violation of 42 C.F.R. § 483.25(h) that posed a risk
for more than minimal harm. Ifa facility is not in substantial compliance with program
requirements, CMS has the authority to impose one or more of the enforcement remedies
listed in 42 C.F.R. § 488.406, including a CMP. CMS may impose a per-day CMP for
the number of days that the facility is not in compliance or a PICMP for each instance
that a facility is not in substantial compliance, regardless of whether the deficiencies pose
immediate jeopardy. 42 C.F.R. § 488.430(a). Here, CMS proposes to impose a PICMP
of $10,000 for the instance of noncompliance on August 4, 2011. Petitioner’s
noncompliance provides a basis for the imposition of an enforcement remedy. The CMP
that CMS proposes is the maximum permissible in the range of authorized PICMPs.

42 CFR. §§ 488.408, 488.438.

When I conclude, as I have in this case, that there is a basis for the imposition of an
enforcement remedy and the remedy proposed is a CMP, my authority to review the
reasonableness of the CMP is limited by 42 C.F.R. § 488.438(e). The limitations include:
(1) I may not set the CMP at zero or reduce it to zero; (2) I may not review the exercise
of discretion by CMS in selecting to impose a CMP; and (3) I may only consider the
factors specified by 42 C.F.R. § 488.438(f) when determining the reasonableness of the
CMP amount. In determining whether the amount of a CMP is reasonable, the following
factors specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history
of noncompliance, including repeated deficiencies; (2) the facility’s financial condition;
(3) the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404(b), the same
factors CMS and/or the state were to consider when setting the CMP amount; and (4) the
facility’s degree of culpability, including but not limited to the facility’s neglect,
indifference, or disregard for resident care, comfort, and safety. The absence of
culpability is not a mitigating factor. The factors that CMS and the state were required to
consider when setting the CMP amount and that I am required to consider when assessing
the reasonableness of the amount are set forth in 42 C.F.R. § 488.404(b): (1) whether the
deficiencies caused no actual harm but had the potential for minimal harm, no actual
harm with the potential for more than minimal harm, but not immediate jeopardy, actual
harm that is not immediate jeopardy, or immediate jeopardy to resident health and safety;
and (2) whether the deficiencies are isolated, constitute a pattern, or are widespread. My
review of the reasonableness of the CMP is de novo and based upon the evidence in the
record before me. I am not bound to defer to the CMS determination of the reasonable
amount of the CMP to impose but my authority is limited by regulation as already
explained. I am to determine whether the amount of any CMP proposed is within
reasonable bounds considering the purpose of the Act and regulations. Emerald Oaks,
DAB No. 1800, at 10; CarePlex of Silver Spring, DAB No. 1683, at 14-16 (1999);
Capitol Hill Cmty. Rehab. & Specialty Care Center, DAB No. 1629 (1997).

The evidence documents that Petitioner was cited for a violation the same regulatory
deficiency at a D level in two successive prior cycles, May 2009 and May 2010. CMS
Ex. 18, at

With respect to its financial condition, it was Petitioner’s responsibility to produce
evidence showing that it cannot pay the CMP. Petitioner was free to call any witnesses to
testify to its financial condition or to submit any documentary evidence regarding its
financial condition. However, Petitioner provided no evidence, either before or at the
hearing, to show that its financial condition hinders it from paying the proposed CMP.

The seriousness of the deficiency was high and had the potential of causing at least
minimum harm to Resident 1. It is undisputed that Resident 1’s fall resulted in her
broken hip. Petitioner never took any steps to identify or mitigate an accident hazard. It
never attempted to obtain a manufacturer’s instruction manual before the August 5, 2011
survey. It never performed necessary maintenance of the Viking M lift. It used an unsafe
lift to transfer many residents on a daily basis for multiple transfers per day for an
extended period of time. Petitioner, therefore, demonstrated a very high level of
culpability for the serious harm that Resident 1 suffered and the serious harm that could
have occurred to any of its other residents using this lift. Petitioner never availed itself of
the basic steps of obtaining and reading the instruction manual, and of performing needed
maintenance or inspections. Petitioner ignored the obvious accident hazard posed by its
failure to use safety latches, which it could have easily remedied. The regulation defines
“culpability” as “neglect, indifference, or disregard for resident care, comfort, and
safety.” 42 C.F.R. § 488.438(f)(4). Petitioner is culpable because it failed to use the
safety clips that the manufacturer clearly required for the safe transfer of residents.
Petitioner not only ignored the safety manual’s instruction to check the function of the
safety clips each day but it did not even have a copy of the safety manual. I conclude that
Petitioner’s failure to use safety clips reflects a high level of neglect, indifference, or
disregard for its residents’ safety.

It is not disputed that Resident | suffered a broken left hip as a result of the fall she
sustained when she was being transferred using the Viking M lift. When a facility’s
deficient conduct results in actual harm to a resident, the seriousness of its
noncompliance is arguably severe. Here, Petitioner did not follow manufacturer’s
instructions to ensure the safe use of a lift that is used up to 75 times each day. There
was a potential that residents would suffer more than minimal harm during each of those
75 daily uses.

Given the history of noncompliance, the seriousness of the deficiency, and the culpability
of the facility, the CMP is reasonable. CMS imposed a penalty of a $10,000 per-instance
CMP, which although at the higher range for a per-instance CMP ($1,000-$10,000), is
modest considering what CMS might have imposed considering the evidence of multiple
uses over a period of years of an unsafe lift. See Plum City Care Center, DAB No. 2272,
at 18-19 (2009) (observing that even a $10,000 per-instance CMP can be “‘a modest
penalty” when compared to what CMS might have imposed.)

Petitioner was notified in this case that it was ineligible to be approved to conduct a
NATCEP for two years. I have concluded that a CMP of more than $5,000 is reasonable.
Thus, Petitioner is ineligible to conduct a NATCEP for two years as a matter of law. 42
C.F.R. § 483.151(b)(2) and (f).

V. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance
with program participation requirements; that a $10,000 PICMP is reasonable; and that
Petitioner was ineligible to be approved to conduct a NATCEP for two years.

/s/
Richard J. Smith
Administrative Law Judge