Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Silverbrook Manor
(CCN: 23-5361 ),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-540
Decision No. CR2428
Date: September 14, 2011
DECISION
I sustain the determination of the Centers for Medicare and Medicaid Services (CMS)
that Petitioner, Silverbrook Manor, attained compliance with Medicare participation
requirements on December 22, 2009. Consequently, I sustain all of the remedies that
CMS imposed against Petitioner.
I. Background
Petitioner is a skilled nursing facility in Niles, Michigan that 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.
This case originated with determinations by CMS: that Petitioner failed to comply
substantially with Medicare participation requirements; and to impose remedies against
Petitioner. The remedies that CMS determined to impose consisted of civil money

penalties (including a civil money penalty of $4,550 for one day of immediate jeopardy
level noncompliance) and a denial of payment for new Medicare admissions. Petitioner
disputed these findings, and the case was assigned to an administrative law judge for a
hearing and a decision.

The case was eventually transferred to me. By the time that I received the case, the
issues had been narrowed to a single issue, that being the date when Petitioner attained
compliance with participation requirements. Petitioner did not contest that it had failed to
comply with participation requirements, nor did it contest the reasonableness of CMS’s
remedy determinations. However, Petitioner argued that it came back into compliance
with participation requirements by no later than November 25, 2009 rather than on
December 22, 2009, the date that CMS had determined that Petitioner attained
compliance.

On October 27, 2010, I issued a decision granting summary judgment in favor of CMS.
Petitioner appealed my decision to the Departmental Appeals Board (Board), and, on
June 17, 2011, a Board appellate panel remanded the case back to me, ordering that I
hold a hearing on the issue of when Petitioner attained compliance. Shortly thereafter,
the parties advised me that they were waiving an in-person hearing and that they agreed
to resubmit the case for my decision based on the written record.

CMS filed 56 exhibits that I received as CMS Exhibit (Ex.) 1 - CMS Ex. 56 in
connection with my original decision in this case. After the remand order, CMS filed
seven additional exhibits that it identified as CMS Ex. 57 — CMS Ex. 63. Petitioner filed
one exhibit that I received as P. Ex. 1 in connection with my original decision. It has
now filed an additional exhibit that it identifies as P. Ex. 2. I receive into the record CMS
Ex. 1 — CMS Ex. 63 and P. Ex. 1 — P. Ex. 2.

IL. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The sole issue in this case is the date when Petitioner attained compliance with Medicare
participation requirements.

B. Findings of Fact and Conclusions of Law

Petitioner was found to be noncompliant with 11 Medicare participation requirements at a
survey that was completed on November 5, 2009 (November 5 Survey). As I have
discussed, Petitioner does not contest these findings of noncompliance. It asserts that it
corrected its noncompliance by November 25, 2009. Petitioner relies on evidence that its
staff attended reeducation sessions (in-service training) after November 5 and that its
management instituted audits of staff performance to assure that the staff was complying
with management’s care directives. For several reasons, this evidence is inadequate to
prove that Petitioner rectified its noncompliance earlier than December 22, 2009.
e The fact that staff members received compliance training is not, in and of
itself, sufficient to prove that they completely corrected their deficient
performance. Presumably, all of the staff members had been trained prior to
the November 5 Survey, and, yet, that training was by itself inadequate to
assure compliance. Consequently, retraining the staff — while a necessary
element of compliance — would not alone assure that the staff was doing as
of November 25 what they had previously failed to do.

e Notall of the staff members were retrained as of November 25, 2009.
Several staff members did not receive retraining until weeks afterward.

e Petitioner sought to assure that its staff complied with participation
requirements by instituting audits of their performance. Those audits were,
for the most part, conducted after November 25, 2009, and continued well
into December of that year. The audits that Petitioner conducted did not
constitute detailed review of the performance by staff members. Thus, the
audits conducted by Petitioner of its staff do not prove that the staff members
were complying with participation requirements on dates between November
25 and December 22, 2009.

e The audits revealed several instances of continued staff noncompliance that
occurred after November 25, 2009.

e At the December 22, 2009 resurvey of Petitioner’s facility, a surveyor
observed a member of Petitioner’s staff continuing to fail to comply with a
Medicare participation requirement.

The burden rests entirely on a facility to prove that it has attained compliance by a
particular date. Texan Nursing & Rehab. of Amarillo, LLC, DAB No. 2323 (2010).

What a facility must prove is that it successfully implemented all of the corrective actions
that are necessary to attain compliance. Simply asserting that compliance was achieved
by a particular date is insufficient to satisfy this burden. Nor is documentation that staff
attended in-service training sessions, or that other forms of training were provided to staff,
necessarily proof of compliance, where the noncompliance consisted of staff failures to
provide nursing care to residents that is consistent with regulatory requirements.
Oceanside Nursing & Rehab. Ctr., DAB No. 2382 (2011).

In this case, Petitioner relies on evidence that it retrained its staff members after the
November 5 Survey. As I have discussed, proof of retraining is not by itself sufficient to
prove that compliance has been attained. Moreover, the evidence offered by Petitioner
does not show that retraining of its staff was completed by November 25, 2009. For

example, one of the deficiencies that was identified at the November 5 Survey was a
failure by Petitioner’s staff, in contravention of the requirements of 42 C.F.R.

§ 483.10(b)(11), to consult with a treating physician concerning a significant change in a
resident’s condition. CMS Ex. | at 1-4. In its plan of correction, Petitioner contended
that it would reeducate its staff by no later than November 25, 2009, regarding the need
for the staff to obtain physician orders for residents with significant changes in their
conditions. CMS Ex. 57 at 2. However, Petitioner’s records show that staff members
were receiving this reeducation as late as December 14, 2009, about three weeks after the
promised reeducation completion date. P. Ex. 1 at 2-3, 19-21, 67-68, 70.

Similarly, Petitioner was found at the November 5 Survey not to be complying
substantially with the requirements of 42 C.F.R. § 483.13, which prohibits abuse and
neglect of facility residents. CMS Ex. | at 4-7. Reeducation of staff was one of the
corrective actions that Petitioner promised to address this noncompliance. Petitioner’s
own records show that this reeducation was not completed until December 18, 2009 (a
total of 22 staff members received retraining between November 25 and December 18).
CMS Ex. 58.

Petitioner also relies on evidence that it instituted audits of its staff members to assure
that they were implementing management’s directives and good nursing practice in
providing care to residents. These audits were not begun until November 25, 2009. P.
Ex. | at 6-8. Thus, even if audits conducted after November 25 showed that staff
members were complying with participation requirements, they could not establish
compliance by November 25. Furthermore, the documentation of these audits offered by
Petitioner does not provide convincing proof that Petitioner’s staff members actually
were complying with regulatory requirements.

For example, Petitioner compiled an audit form that it entitled “Notification of Physician
Audit.” P. Ex. | at 6-8. This form was created, apparently, to measure the compliance of
Petitioner’s staff with the requirements of 42 C.F.R. § 483.10(b)(11). That regulation
requires a facility’s staff to consult immediately with a resident’s treating physician in the
event of a significant change in the resident’s condition. As I have discussed, Petitioner
was found to have been noncompliant with this regulation at the November 5 Survey.

The regulation requires more than mere notification of a physician. It requires
consultation, meaning that staff members must assess any significant change of a
resident’s condition, must report their observations and judgments to the physician, must
engage in a dialogue with the physician about what, if any, changes to a resident’s
treatment regime are dictated by the resident’s changed condition, and must obtain
whatever new or additional treatment orders that the physician believes to be necessary.
Furthermore, that consultation must be immediate, which is to say, contemporaneous with
the discovery of a significant change in the resident’s condition.
It is impossible to determine, from the “Notification of Physician Audit” offered by
Petitioner, whether Petitioner’s staff was complying completely with these requirements
after November 25, 2009. The document consists of a series of entries that describe
concerns or issues that were identified by members of Petitioner’s staff that record
whether a resident’s physician was “notified” by the staff and that describe whatever
orders were issued by the physician. What the document fails to describe is what
assessments were made by the staff, what recommendations the staff made, and the
content of discussions between the staff and the physician. In other words, the audit form
documents “notification,” but it says nothing of substance about consultation.
Furthermore, the document fails altogether to describe the temporal relationship between
the discovery of changes in the resident’s condition and whatever consultation took place.
One cannot ascertain whether notification or consultation occurred immediately, as is
required by the regulation.

Furthermore, some of the audits conducted by Petitioner of its staff members show that
the staff members continued to fail to comply with Medicare participation requirements
after November 25, 2009. For example, at the November 5 Survey, Petitioner was found
to be noncompliant with the requirements of 42 C.F.R. § 483.15(e)(1). CMS Ex. | at 7-9.
This regulation assures a resident of a skilled nursing facility of the right to reside and to
receive services with reasonable accommodation of the resident’s needs and preferences.
Petitioner’s noncompliance with the regulation lay in its staff’s inattentiveness to
residents’ requests for assistance. The surveyors found that residents’ requests for aid —
communicated via call lights situated outside of the residents’ rooms — were not being
answered timely.

Petitioner developed an audit form (“Call Lights Audit”) to document staff’s
responsiveness to residents’ requests for aid. P. Ex. 1 at 46-59. This form does not
establish that Petitioner’s staff attained compliance by November 25, 2009. To the
contrary, it documents continued noncompliance by the staff.

The form, which covers dates beginning on November 23, 2009 and continuing through
December 15, 2009, records numerous occasions during which staff members either
failed to assure that a resident’s call light button was within reach of the resident, or
where staff members failed to answer a resident’s call light promptly. On December 11,
the staff was documented as not responding timely to a resident’s call light. P. Ex. 1 at
56. And, on December 15, the staff was documented as not assuring that a resident’s call
light button was within reach of the resident. Jd. at 54.

Indeed, at least one member of Petitioner’s staff was continuing to fail to respond
promptly to residents’ call lights as of the December 22, 2009 resurvey of Petitioner’s
facility. One of Petitioner’s certified nursing assistants (CNA “E”) had been repeatedly
retrained by Petitioner’s management concerning the need to respond promptly to
residents’ call lights. P. Ex. 1 at 51, 58. But, on December 22, 2009, a surveyor watched
CNA E walk past a resident’s blinking call light without responding to it. Attachment 2
to CMS Final Brief of October 13, 2010.

Petitioner offers the affidavit of Mary Stokes, RN, to support its argument that it
corrected all of its deficiencies prior to December 22, 2009. P. Ex. 2 at 4-5. Ms. Stokes
identifies herself as a clinical consultant who was responsible for providing monitoring
and guidance to Petitioner relating to clinical compliance. She avers that she visited
Petitioner’s facility on December 16, 2009. According to Ms. Stokes:

I did not observe nor was I made aware of any situations that indicated
noncompliance with any federal requirements after November 25, 2009 and
through my visit on December 16, 2009.

P. Ex. 2 at 5.

I do not find Ms. Stokes’ testimony to be persuasive because it is belied by the evidence —
contained in Petitioner’s own records — which I have discussed. Nothing in Ms. Stokes’
affidavit explains the failures by all members of Petitioner’s staff to complete reeducation
by November 25, 2009, nor does it explain the incidents of noncompliance that were
documented by Petitioner between November 25 and December 22, 2009.

Petitioner argues also that it “completed” its plan of correction by November 25, 2009. I
am not certain exactly what Petitioner means by its use of that word. What is clear,
owever, is that Petitioner did not complete all of its remedial actions prior to December
22, 2009. As I have discussed, reeducation of staff continued through the month of
December, and there were still incidents of noncompliance being discovered as late as the
December 22, 2009 resurvey of Petitioner.

CMS imposed remedies consisting of civil money penalties based on Petitioner’s
noncompliance beginning October 29 and running through December 21, 2009, and a
denial of payment for new Medicare admissions from December 6 through December 21,
2009. As I have discussed, Petitioner did not challenge the civil money penalty amount,
nor did it contend that CMS lacked authority to impose denial of payment as a remedy
assuming that Petitioner was noncompliant with participation requirements. I find the
remedies to be reasonable inasmuch as Petitioner did not prove that it attained
compliance with all Medicare participation requirements prior to December 22, 2009.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Bruce C. Barker, M.D.,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-562
Decision No. CR2427

Date: September 13, 2011

DECISION DISMISSING REQUEST FOR HEARING

Pursuant to 42 C.F.R. § 498.70(b), I dismiss the hearing request of Petitioner,
Bruce C. Barker, M.D. Petitioner has no right to a hearing.

I. Background

Petitioner is a physician in the State of California. He filed an application with
Palmetto GBA (Palmetto), a Medicare contractor, to reenroll as a participating
provider in Part B of the Medicare program. Palmetto informed Petitioner that his
application for reenrollment was denied because Petitioner failed to supply
Palmetto with requested information. Petitioner then filed a document with
Palmetto that he apparently intended to be a corrective action plan (CAP).
Palmetto notified Petitioner that the CAP was inadequate because it had failed to
include certain requested documents.

Petitioner then supplied additional documents to Palmetto. Palmetto elected to
treat this submission as a request for reconsideration of an initial determination.
After reviewing the submission, Palmetto informed Petitioner that it was denying
the request.
Petitioner then requested a hearing, and the case was assigned to me for a hearing
and a decision. The Centers for Medicare and Medicaid Services (CMS) moved to
dismiss the hearing request. With its motion, CMS filed 12 proposed exhibits that
it designated as CMS Exhibit (Ex.) 1 - CMS Ex. 12. Petitioner opposed the
motion. With his opposition, Petitioner filed three proposed exhibits that he
designated as P. Ex. 1 — P. Ex. 3. I receive all of the parties’ proposed exhibits
into the record.

II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue is whether Petitioner has a right to a hearing.
B. Findings of Fact and Conclusions of Law

find that Petitioner has no right to a hearing because Palmetto and CMS rejected
is application for reenrollment. A party whose application is rejected has no right
to a hearing.

The facts of this case are essentially undisputed. As I have discussed, Petitioner
filed an application for reenrollment as a provider in the Medicare program.
Section 3 of the application form required Petitioner to state whether he had ever
ad a final adverse action (including a criminal conviction in a court of law or an
adverse decision by a State agency concerning his license to practice medicine)
imposed against him. Petitioner answered that question affirmatively. CMS Ex.
2.' However, Petitioner failed to supply required information concerning the
nature of the action and its date, the forum that imposed the adverse action against
im, and the final resolution of any adverse action. Rather than supplying a
complete statement of the action or actions taken against him, Petitioner submitted
a printout from the Medical Board of California, which showed that he had pled
guilty in the United States District Court for the Northern District of California to
the felony of perjury and that sentencing was to have taken place on May 9, 2008.
CMS Ex. 3. The form submitted by Petitioner also showed that his license to
practice medicine in California had been suspended for one year but that it had
been reinstated. Jd.

What was missing from the information supplied by Petitioner was a complete
record of the disposition of the felony charge against him and of the proceeding in
California that led to suspension of his license to practice medicine in that State.

‘Petitioner appears to have first checked a box denying an adverse action and then
corrected his error. CMS Ex. 2.
Petitioner did not disclose the events that resulted in his being charged with
perjury nor did he provide any rationale for the Medical Board of California’s
adverse action against Petitioner’s license and its subsequent determination to
reinstate that license.

On December 20, 2010, Palmetto wrote to Petitioner requesting that he provide
additional information within 30 days on any final adverse actions or convictions
that may have been imposed against him. CMS Ex. 5 at 1. Palmetto specifically
informed Petitioner that:

Consistent with Federal Regulation 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 days of the postmark of
this letter. . . Failure to respond to this request could result in the
closure of your application as well as revocation of your existing
billing number (if applicable). Once closed, you need to complete
and submit a new . . . application and include all supporting
documentation to resume the enrollment process.

Id.

Petitioner did not reply to Palmetto’s December 20, 2010 letter. On January 24,
2011, Palmetto notified Petitioner that his application was “denied” for failure to
furnish the requested information within 30 days. CMS Ex. 6.

On February 1, 2011, Petitioner submitted to Palmetto a document, which he
referred to as a “CAP reconsideration.” CMS Ex. 7 at 1. This document
contained a summary of the adverse actions taken against Petitioner but failed
again to provide detailed information about the nature of the actions. Jd. at 4-5.
On March 19, Palmetto advised Petitioner that he had again failed to provide
copies of the adverse actions taken against him. CMS Ex. 9. Petitioner
responded on April 18, 2011 by submitting additional documents. CMS Ex. 10.
On this occasion, Petitioner provided documentation of the adverse action taken
against him by the Medical Board of California. He did not provide the official
record of the criminal charges to which had pled guilty. Jd.

Palmetto elected to treat Petitioner’s February 1, 2011 filing and the
supplemental documentation filed by Petitioner as a reconsideration request, and,
on May 3, 2011, it denied the request. CMS Ex. 11 and CMS Ex. 12.

Regulations governing the provider application and enrollment process
distinguish between a rejection of an application and a denial of an application.
An application may be rejected by CMS, or one of its contractors, if it lacks
necessary information, if CMS or the contractor then requests that the missing
information be supplied, and if the applicant fails to supply it within 30 days of
the request. 42 C.F.R. § 424.525(a)(1), (2). A rejection of an application is not a
determination that may be appealed. 42 C.F.R. § 424.525(d). Consequently,
where an application is rejected, the applicant has no right to an administrative
hearing, and any hearing request that he or she files should be dismissed. 42
C.F.R. § 498.70(b).

By contrast, an application may be denied by CMS, or one of its contractors, if
the applicant is not in compliance with applicable Medicare enrollment
requirements and has not submitted an acceptable CAP, or if the applicant is
subject to any of the adverse actions, or falls into any of the other categories
described, at 42 C.F.R. § 424.530(a). For example, CMS or a contractor may
deny an application if an applicant has, within the ten years preceding the
application, been found guilty of a felony that CMS determines to be detrimental
to the best interest of the Medicare program or to the beneficiaries of that
program. 42 C.F.R. § 424.530(a)(3). As another example, CMS or a contractor
may deny an application where the applicant has been placed under a Medicare
payment suspension. 42 C.F.R. § 424.530(a)(7). A denial of an application is an
appealable determination, and an applicant who is dissatisfied with the denial
determination and a reconsideration determination may have a right to a hearing
before an administrative law judge.

A rejection is plainly distinguishable from a denial. There is no overlap between
a rejection and a denial, no gray area that enables one to characterize an action
by CMS or a contractor as being equally a rejection and a denial or
interchangeably a rejection and a denial. CMS or a contractor rejects an
application because the applicant has failed to provide all of the information
necessary to enable CMS or the contractor to make an informed determination as
to whether the applicant qualifies to participate. CMS or a contractor denies an
application because the information that has been provided discloses something
about the applicant that makes his or her participation in Medicare detrimental to
the best interests of the program.

Here, Palmetto plainly rejected Petitioner’s application. Petitioner failed to
provide all of the information that Palmetto needed to make an informed
determination about whether Petitioner qualified for participation. Petitioner
acknowledged in his application that he had been convicted of perjury and that
disciplinary action had been taken against his license. He did not, however,
provide complete information about these adverse actions, and, consequently,
Palmetto had insufficient information to determine whether to accept or deny
Petitioner’s application. Moreover, Petitioner failed to supply, within 30 days,
the information that Palmetto requested of him. Under the circumstances,
rejection was the only action that Palmetto could have taken that was consistent
with regulatory requirements.

Petitioner argues that he is entitled to a hearing because Palmetto called its
action a “denial” of Petitioner’s application. Moreover, Palmetto allowed
Petitioner to file a CAP, and it reconsidered its initial action, something that
would only have been appropriate had it denied — and not rejected — Petitioner’s
application.

Although it is true that Palmetto characterized its action as a denial of
Petitioner’s application, that does not change the reality that it rejected, and did
not deny, the application. The fact that Palmetto erroneously labeled its action a
denial and not a rejection does not change the legal character of Palmetto’s
action, nor does it confer rights on Petitioner that Petitioner is not entitled to.
Put simply, labeling a rejection as a denial does not make it a denial. Incorrectly
labeling a rejection as a denial does not confer rights that do not exist under the
regulations.

Nor may Palmetto create hearing rights that do not exist under the regulations.
Nothing in the regulations permits a contractor to grant hearing rights where
there are no such rights.

Furthermore, the fact that Petitioner may have belatedly supplied information to
Palmetto that might have enabled Palmetto to determine whether to deny
Petitioner’s application does not create rights that otherwise do not exist.
Petitioner had no right to file a CAP because an applicant whose application is
rejected does not have such a right. Therefore, it is unnecessary that I decide
whether the information Petitioner supplied would have justified a denial of his
application.

Petitioner argues that his failure to submit the information requested by Palmetto
within 30 days of the request is not due to any fault on his part. He avers that he
was out of town and not available to respond to the information request within
the 30 day period. CMS or its contractor may extend the 30 day period at their
discretion, if they decide that the applicant is working with them in good faith to
supply requested information. 42 C.F.R. § 424.525(b). However, neither CMS
nor a contractor is required to grant an extension. Thus, a decision not to grant
an extension is a non-reviewable act of discretion.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Cc

Civil Remedies Division
Shahriar Haji-Momenian, M.D.,
Petitioner
v.
‘enters for Medicare and Medicaid Services.
Docket No. C-11-535
Decision No. CR2426

Date: September 12, 2011

DECISION

Based upon the written record of this case, including the materials submitted by both the

Centers for Medicare an

id Medicaid Services (CMS) and Petitioner, Shahriar Haji-

Momenian, M.D., I conclude that the undisputed evidence establishes that CMS properly
enrolled Petitioner as a provider in the Medicare program effective August 28, 2010.

I. Background

Petitioner filed a hearing request and challenged the effective date of his enrollment in

the Medicare program.
1, 2010, an earlier date tl
eligible for enrollment.

CMS subsequently filed

Petitioner alleges that he should have been enrolled effective July
han when CMS’s contractor determined that Petitioner was
The case was assigned to me for a hearing and a decision.

a pre-hearing brief (CMS Br.) and moved for summary

disposition. Petitioner opposed CMS’s motion and filed a letter in response (P.
Response). CMS filed five proposed exhibits, which it designated CMS Exhibit (Ex.) 1 —
CMS Ex. 5. Petitioner did not file any exhibits. I receive CMS’s proposed exhibits into

the record of this case.

Neither party proffered

irect testimony of any proposed witnesses or indicated that they

would call witnesses at a hearing. Thus, I decide 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 Medicare enrollment.

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

I. CMS correctly determined the effective date of Petitioner’s Medicare
enrollment.

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 June 14, 2010, Petitioner filed an
enrollment application with Highmark Medicare Services (Highmark), a Medicare
contractor operating on CMS’s behalf. CMS Ex. 1. On July 1, 2010, Highmark informed
Petitioner that it was returning Petitioner’s application because the CMS-855R form
submitted was not signed by an authorized/delegated official of Petitioner’s group
practice. Jd. Highmark advised Petitioner that he could complete the CMS-855B
application to update the group’s file and listed the authorized/delegated officials
currently on file and eligible to sign the CMS-855R for Petitioner’s group practice. Jd.
Highmark instructed Petitioner to make sure to address this issue, when he resubmitted
his application. Jd. Highmark also stated that Petitioner must complete the CMS 855-R
application with the proper original signature, before it could begin processing the
application. Jd. On September 27, 2010, Highmark received a completed CMS-855R
application from Petitioner which was signed by an authorized official for Petitioner’s
group practice. On December 29, 2010, Highmark notified Petitioner that his application
was approved, and he was enrolled in Medicare with an “effective date” of August 28,
2010.' CMS Ex. 5. Petitioner was dissatisfied with this determination and requested
reconsideration. On April 26, 2011, Highmark advised Petitioner that his effective
billing date remained August 28, 2010, 30 days prior to the date Petitioner initially
applied for enrollment. CMS Ex. 2.

The undisputed facts establish that the earliest date when CMS could have approved
Petitioner’s application for enrollment was the date of his resubmitted application,
September 27, 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).

Instead, Petitioner argues that “the extremely cumbersome and difficult” enrollment
application submitted on June 14, 2010 “was unintentionally inaccurate.” P. Response.
Petitioner states that a “former billing vendor made several attempts to correct the
inaccurate information which did take several months.” Jd. Petitioner does not dispute
the fact that Highmark “received all of the correct information in September 2010”
instead he disputes “the fact that Highmark is not recognizing the many attempts between
June 2010 and September 2010 to get them this data.” Jd. Petitioner also argues that
“requests for information from Highmark did not come directly to me nor were these
requests made to my administrative staff . . . requests were sent to our billing vendor . . .”
Id. Petitioner contends that, if he is “going to be held responsible for the effective date, I
would think that Highmark would have a responsibility to give me the opportunity to
respond to the requests for data or in the very least monitor the billing vendor’s actions.”
Id.

Petitioner has not shown any basis in fact or in law that would support an earlier effective
enrollment date than that which CMS established. Even if true, Petitioner’s complaints,
such as his issues with the communication between Highmark and Petitioner’s billing
vendor, provide no legal ground for me to grant Petitioner an earlier effective date.
Petitioner has conceded that his initial application submitted on June 14, 2010 was
inaccurate. Petitioner argues that the errors in that application were due to the fault of
other non-government personal than himself. The fact that human error -- whether by
Petitioner or someone acting on his behalf -- caused the first application to be non-
processible provides no basis to change the effective date of Petitioner's Medicare
participation. The earliest date that Highmark or CMS could have accepted Petitioner's
application was the date that he submitted one that was materially accurate, September
27, 2010.

Petitioner points to no source of authority for me to grant him an exemption from

‘Tt appears that Highmark may have intended to assure that Petitioner could claim
reimbursement for services provided up to 30 days prior to the date of his September 27,
2010 application, consistent with 42 C.F.R. § 424.521.
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 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 27, 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 28, 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

Social Security Administration,
Office of the Inspector General,

Petitioner
v.

Lynn Roth,
Respondent.
Docket No. C-11-363
Decision No. CR2425

Date: September 9, 2011

DECISION

The Inspector General (IG) for the Social Security Administration (SSA) charges that
Respondent, Lynn Roth, violated section 1129 of the Social Security Act (Act), because
he failed to report his mother’s death and continued withdrawing her social security
benefits from the joint account into which SSA had deposited them. The IG proposes
imposing against Respondent Roth, an assessment in lieu of damages of $45,289, and a
civil money penalty (CMP) of $20,000.

For the reasons set forth below, I agree that Respondent Roth deliberately failed to report
his mother’s death to SSA. SSA continued depositing benefits into a bank account
jointly held by Respondent and his mother, and, knowing that he was not entitled to those
funds, Respondent nevertheless continued to withdraw them. As he concedes, he is
therefore liable for the $45,289 assessment in lieu of damages. I also find $20,000 a
reasonable penalty.
Background

Here, the parties agree that, following his mother’s death, Respondent Roth took SSA
money to which he was not entitled, and he must therefore pay the $45,289 assessment in
lieu of damages. Respondent Roth disputes the imposition of the $20,000 CMP. Order
Scheduling Submission of Briefs and Documents (Order) at 1, 9 2 (Apr. 13, 2011).

The parties also agree that an in-person hearing is not necessary, and the case may be
decided based on their written submissions. Order at 2,2. The parties have submitted
their briefs (IG Br.; Resp. Br.). The IG submitted 17 exhibits (IG Exs. 1-17), and
Respondent submitted 2 exhibits (Resp. Exs. 1-2).' In the absence of any objections, I
admit into evidence IG Exs. 1-17 and Resp. Exs. 1 and 2.

Issues

The issues before me are: 1) is there a basis for imposing a CMP and, 2) if so, is the
proposed penalty — $20,000 — reasonable?

Discussion

A, The IG has a basis for imposing a CMP because Respondent Roth knowingly
withheld a material fact — his mother’s death — from SSA, and, knowing that he
was not entitled to them, he converted her benefits to his own use.”

Section 1129(a)(1) of the Act subjects to penalty any person who: 1) knowingly
misrepresents a material fact for SSA’s use in determining a right to Social Security
benefits or the amount of those benefits; or 2) makes such a statement with “knowing
disregard of the truth.” Amendments to the statute, effective November 28, 2006,
expanded its scope, subjecting to penalty any person who knowingly omits or otherwise
withholds a fact, which he knows or should know is material to SSA’s determining
eligibility for benefits or benefit amounts. PUB. L. 108-203 (Mar. 2, 2004). A fact that
may be used “in evaluating whether an individual is entitled to benefits under Title II” of
the Act is considered “material.” Act § 1129(a)(2).

Similarly, Social Security regulations authorize the IG to impose a penalty against any
person who “[h]as made . . . a statement or representation of a material fact” that is used
to determine “any initial or continuing right to or amount of . .. monthly insurance

' Respondent marked his exhibits Exs. A and B. To conform to Civil Remedies Division
procedures, we have re-marked them Resp. Exs. | and 2.

* My findings of facts/conclusions of law are set forth, in italics and bold, in the
discussion captions of this decision.
benefits under title II of the Social Security Act” where the person “knew, or should have
known, that the statement or representation was false or misleading,” made the statement
“with knowing disregard of the truth,” or where the person omitted, “or otherwise
withheld disclosure of, a material fact for use in determining any initial or continuing
right to... benefits or payments, which the person knew or should have known was
material for such use and that such omission or withholding was false or misleading.” 20
CFR. § 498.102(a).

The IG may also impose a penalty and assessment against any representative payee “who
receives a payment under title II . . . for the use and benefit of another individual and who
converts such payment, or any part thereof, to a use that such representative payee knew
or should have known was other than for the use and benefit of such other individual.”
20 C.F.R. § 498.102(b).

For the most part, the facts here are not in dispute. Respondent Roth’s mother, Ruby
Roth, received Social Security Widow’s benefits, pursuant to title II of the Act. On
October 4, 2004, Respondent Roth became her representative payee. 1.G. Ex. 1. At the
time, Mrs. Roth’s monthly benefit was $1,121.° As representative payee, Respondent
Roth was required to ensure that the benefits were spent for his mother’s needs only, and
he had to account for how he spent the money. I.G. Ex. 1.

SSA paid the benefits directly into a bank account jointly held by Respondent and his
mother.

Mrs. Roth died on November 27, 2006. I see no evidence Respondent Roth notified the
agency of her death. In a letter dated March 24, 2011, Respondent’s counsel suggests
that both Respondent Roth and the funeral director notified the local SSA office that Mrs.
Roth had died but offers no evidence, such as copies of letters, written declarations, or
contemporaneous notes, to support the claim. In any event, it soon became obvious to
Respondent Roth that SSA thought that his mother was still living. Not only did the
benefits continue, but SSA sent him a series of letters asking him to verify that he was
spending the money to meet her needs.

As representative payee, Respondent Roth was required to report periodically to SSA
how he spent the benefits. In one report, dated March 23, 2007, he said that, between
November 1, 2005 and October 31, 2006, he spent none of his mother’s benefit funds on
his mother’s personal needs, and he saved none of the funds. IG Ex. 2 at 3-4. Ina letter
dated July 16, 2007, SSA noted that it would “normally expect that a higher amount [than
$0] would be spent” and asked for an explanation. IG Ex. 2 at 5. He responded on

In 2009, the benefit increased to $1,323 per month.
August 1, 2007, that his mother’s personal needs were met from pension funds that she
received. IG Ex. 2 at 2.

The following year, Respondent Roth submitted no accounting report for the period
November 1, 2006 through October 31, 2007. Ina letter dated July 1, 2008, SSA
threatened that it would stop direct deposits and require him to pick up his mother’s
checks at the Social Security office, at which time he could also complete the required
report. IG Ex. 3. He apparently did not respond.

Nor did Respondent Roth file an accounting report for the period November 1, 2007
through October 31, 2008. By letter dated July 20, 2009, SSA asked that he submit the
necessary information. IG Ex. 4. He did not respond, and, on September 20, 2009, SSA
sent another letter threatening to stop direct deposit and require him to pick up his
mother’s checks at the SSA offices. IG Ex. 5.

SSA eventually learned that Mrs. Roth had died, although the record is silent as to how it
found out. By letter dated November 11, 2009, it notified Respondent Roth that, as of
November 2006, his mother was not entitled to benefits, and SSA had paid $45,290 more
than it should have. IG Ex. 6.

Based on these facts, SSA plainly has a basis for imposing a CMP. Respondent Roth
does not deny that he knowingly and repeatedly withheld material facts. He did not tell
SSA that his mother had died and then withheld any accounting of the way he spent her
benefits. In fact, he took the money for himself.

B. The IG proposes a reasonable penalty, $20,000.

The statute authorizes imposition of a CMP of “not more than $5,000 for each . . . receipt
of... benefits or payments while withholding disclosure of [a material] fact.” Act §
1129(a)(1); 20 C.F.R. §§ 498.103(a), 498.104.

Respondent Roth accepted monthly benefits payments for 36 months after his mother

died. Potentially, the IG could have imposed a $5,000 penalty for each of those months.
Thus, given the sheer number of his omissions, the proposed penalty falls well below the
statutory maximum ($5,000 x 36 = $180,000).

I now apply the regulatory criteria to assess the appropriateness of the penalty. Iam
specifically authorized to affirm, deny, increase, or reduce the penalties proposed by the
IG. 20 C.F.R. § 498.220. In determining the appropriateness of the penalty, I must
consider: 1) the nature of the statements and representations and the circumstances under
which they occurred; 2) the degree of culpability of the person committing the offense; 3)
the history of prior offenses of the person committing the offense; 4) the financial

condition of the person committing the offense; and 5) such other matters as justice may
require. 20 C.F.R. § 498.106.

I note that Respondent Roth has no history of prior offenses.

I find that his conduct in all of this was exceptionally egregious and that he is fully
culpable. For three years, he took substantial amounts of money to which he knew he
was not entitled, and he deliberately evaded SSA’s requests that he account for it. He
apparently has avoided criminal prosecution, which is remarkable. SSA may justifiably
impose significant penalties for such conduct to preserve the already-fragile integrity of
its retirement system. Without regard to the other factors, Respondent Roth’s conduct
would have justified the maximum penalty.

However, I must also consider the respondent’s financial condition. Respondent Roth
claims that his financial situation is grim, although he has provided little evidence to
support his claims. Nevertheless, the IG has accepted, as do I, that he has not worked
since 2006, and that his income is low — $985 per month. He pays $285 per month in
rent, which includes utilities. He has no significant assets. IG Ex. 17 at 2; Resp. Ex. 2.
He claims that his health is poor and that his living expenses, including food and rent,
total $800 per month. Because of his limited income and assets, the IG reduced his
penalty, and, for the same reason, I am not inclined to increase the amount.

Nevertheless, given the seriousness of his offenses, I find that $20,000 is the lowest CMP
that is reasonable.

C. [have no authority to waive the penalty and assessment.

In his brief, Respondent argues, for the first time, that his assessment and penalty should
be waived because of his inability to pay. An individual may ask that an overpayment be
waived, if he is without fault in causing the overpayment. Act § 204(b); 20 C.F.R.

§ 404.502a. Here, Respondent Roth was obviously at fault. In any event, the process for
requesting a waiver is described in 20 C.F.R. § 404.506 and is separate from these
proceedings, which are governed by 20 C.F.R. Part 498. My jurisdiction here is limited
to determining whether the IG had a basis for imposing a CMP and determining whether
the penalty imposed is reasonable. See 20 C.F.R. §§ 498.202, 498.204, 498.220.
Questions of waiver are therefore not properly before me.
Conclusion

Respondent Roth violated section 1129 of the Act when he did not tell SSA that his
mother had died and continued to receive her title II benefits, converting them to his own
use. I consider reasonable the imposition of a $20,000 CMP.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Peter L. Gambacorta, M.D.,
(NPI: 1700089596),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-541
Decision No. CR2424
Date: September 7, 2011
DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services
(CMS) to establish an effective date of Medicare participation of January 20, 2011
for Petitioner, Peter L. Gambacorta, M.D.
I. Background
Petitioner is a physician. He applied to participate in the Medicare program and
was accepted with an effective date of January 20, 2011. Petitioner contested the
effective date of his participation, arguing that he should be assigned an earlier
date. Petitioner’s argument was denied on reconsideration, and he requested a
hearing. The case was assigned to me for a hearing and a decision.
CMS filed a brief and 19 proposed exhibits that it identified as CMS Exhibit (Ex.)
1—CMS Ex. 19. Petitioner filed a brief and two proposed exhibits that it
identified as P. Ex. A and P. Ex. B. I receive the parties’ proposed exhibits into

the record.

One of Petitioner’s two exhibits, P. Ex. A, consists of the affidavit of Rochelle
Perrington. CMS would be entitled to cross examine this witness, if it moved to
do so. However, CMS did not request cross examination. Consequently, I find no
basis to convene an in-person hearing, and I decide the case based on the parties’
written submissions.

II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue in this case is whether CMS properly assigned Petitioner an effective
date of participation of January 20, 2011.

B. Findings of Fact and Conclusions of Law

There are no significant facts in this case that are in dispute. Petitioner filed a
series of applications to participate in Medicare, beginning with an application that
he filed on March 22, 2010. National Government Services (NGS), the contractor
that was responsible for processing these applications, found each of them to be
deficient and returned them to Petitioner. Finally, Petitioner filed an application
on January 20, 2011 that NGS determined to be acceptable, and NGS thereupon
assigned Petitioner an effective Medicare participation date of January 20, 2011.

Petitioner asserts that NGS and CMS erred in not accepting one or more of the
applications that were found to be deficient. He argues that these applications
were substantively correct and that they provided NGS and CMS with all of the
information required by law and that was necessary to process Petitioner’s
application. Petitioner argues that his various applications were improperly
rejected for bureaucratic and narrow technical reasons that are not supported by
law or by regulations.

I disagree with Petitioner’s assertion. As I discuss in more detail below, Petitioner
was given a choice by NGS to submit his application in one of two formats. He
could have submitted a written application using a standardized form supplied by
CMS and the contractor. Or, he could have submitted an application electronically
using an internet format developed by CMS. What Petitioner opted to do was to
submit his application in neither a format that was the approved written
application form nor the approved internet format. NGS and CMS were within
their rights not to process these applications.

To participate in Medicare, a provider such as Petitioner must enroll in the
program. 42 C.F.R. § 424.505. A provider may be enrolled only if he or she
completes an acceptable application to participate in Medicare. That application
must be submitted on “the applicable enrollment application” form containing all
of the information required by CMS. 42 C.F.R. § 424.510(a), (d).

Thus, CMS has the authority to control both the format and the content of
applications for provider participation. That authority entitles CMS to insist that
applicants for provider status strictly conform to its requirements for participation.
There is an important reason why CMS has the authority to insist on strict
conformity with its requirements. I take notice that, annually, CMS and its
contractors receive many thousands of applications for provider participation. The
sheer volume of paperwork that must be processed each year dictates that there
must be nothing in an application that departs, even slightly, in format or in
content from that which CMS and the contractors require.

CMS and NGS give providers, including Petitioner, two options for filing
applications for provider enrollment. A prospective provider may submit his or
her application in writing using the appropriate form generated by CMS. CMS
Ex. 4 at 1. Alternatively, a prospective provider may file an application for
enrollment electronically, using the internet-based Provider Enrollment, Chain and
Ownership System (PECOS). Jd. Neither CMS nor NGS affords prospective
providers other options in terms of format. To have his or her application
processed, a prospective provider must use one of the two options that are offered
by CMS and NGS. CMS Ex. | at 1. A contractor such as NGS must immediately
return an application to a prospective provider if: the application is not on the
correct written form; or, if the application is internet based, it has not been
downloaded from CMS’s web site. CMS Ex. 3 at 1-2.

At issue here are four applications that Petitioner submitted for provider
enrollment. These, and the reasons why they were not processed by the
contractor, are as follows.

e Application received on March 22, 2010 (CMS Ex. 7). NGS determined
that it was unable to process this application because, in that application,
Petitioner requested an effective date of participation of August 1, 2010.
The contractor, as a matter of policy, does not process applications that
request participation dates more than 30 days after the date of the
application. On April 28, 2010, NGS advised Petitioner that it was unable
to process the application because he requested an effective participation
date that was more than 30 days after the application date. CMS Ex. 8.

e Application received on July 6, 2010 (CMS Ex. 9). Petitioner submitted
this application in writing. The format of the application did not consist of
the approved CMS form, nor was it a web based application using the
PECOS format. Rather, it was submitted in the form of a document that
Petitioner had, apparently, downloaded from a CMS site on the internet and
that Petitioner then utilized as a written application. /d. On August 25,
2010, NGS advised Petitioner that it had closed the application because it
was not submitted in the proper format. CMS Ex. 10 at 1. NGS’s notice to
Petitioner specifically advised him that he could resubmit his application
using either the PECOS format or the appropriate CMS form, available at
the CMS web site. Jd.

e Application received on August 25, 2010 (CMS Ex. 11). Again, Petitioner
submitted this application in writing. The document contains pages that
Petitioner appears to have downloaded from the PECOS. In effect,
Petitioner printed the electronic PECOS form and then filled it out
manually and submitted it as a written document. Jd. On October 22,
2010, NGS advised Petitioner that it was closing this application because
sections were not in an approved format. CMS Ex. 12.

e Application received on November 2, 2010. Petitioner also appears to have
submitted this application in writing. On December 17, 2010, NGS closed
this application because, as with prior applications, it was not submitted on
CMS’s approved written format, nor was it submitted electronically on the
PECOS format. CMS Ex. 14.

As I have discussed above, Petitioner finally submitted an acceptable application
on January 20, 2011 and was given that date as an effective enrollment date.

CMS does not contend that any of these four applications was substantively
inaccurate. Each of them (with the exception of the March 22, 2010 application)
was found to be deficient by NGS because it was not submitted using one of the
two formats approved by CMS, either on CMS’s written application form or
electronically on the PECOS web format.

Petitioner does not deny that the forms were not submitted precisely in the formats
demanded by CMS. He avers that the applications were “all submitted using
Medicare’s paper enrollment process.” P. Ex. A at 2. These forms were,
according to Petitioner, obtained directly from NGS’s website. Jd. However,
Petitioner implicitly concedes that the forms were not CMS’s officially approved
written forms. Rather, they were printouts from the PECOS format that Petitioner
filled out manually and filed by mail.

As I have discussed, CMS has the authority to determine what forms or formats
are acceptable to it and its contractors. That authority is plainly delegated to CMS
by regulation, and CMS has re-delegated that authority to its contractors.
Consequently, NGS’s determination to reject the written applications submitted by
Petitioner is within the scope of CMS’s regulatory authority.
Petitioner argues that CMS is exalting form over substance. He asserts — without
any contradiction by CMS - that the information that he provided to NGS was all
that NGS demanded of him. So, he contends, the only reason for finding his
applications to be deficient was that the applications were not on precisely the
forms or in the electronic format that NGS found to be acceptable.

I do not agree with Petitioner’s assertion that CMS and NGS are exalting form
over substance. As I have explained, CMS and its contractors are inundated with
provider applications and must establish rules to govern the volume of
documentation that they receive. Requiring prospective providers to use a specific
format may be a rigid requirement, but it is one that is authorized by regulation.
For that reason, I may not overturn CMS’s determination of effective date even if
the information that CMS ultimately accepted from Petitioner is not substantively
different from that which Petitioner put in his deficient applications.

Printing out the PECOS forms, filling them out manually, and mailing them did
not conform to NGS’s or CMS’s protocol. The PECOS forms are not a substitute
for the written forms utilized by CMS. Rather, they are an electronic alternative to
those forms that may only be utilized if they are completed online. Allowing
Petitoner (or any other prospective provider) to effectively devise his own system
for filing a participation application would hinder the process designed by CMS
and its contractors for processing applications in volume. Consequently, this
deviation is significant, even if it provided the contractor with the identical
substantive information that was ultimately accepted by it.

Petitioner also argues that CMS is without legal authority to require a prospective
provider to utilize the precise application formats that are at issue here. I disagree.
That authority plainly is stated at 42 C.F.R. § 424.510(a). It is not necessary as a
matter of law that there be a regulation that describes the precise form that a
prospective provider must use to complete an application. All that is required is
that the regulation delegate to CMS the authority to establish the forms for
application.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Garden View Care Center of Dougherty Ferry
(CCN: 26-5808),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-10-374
Decision No. CR2423
Date: September 7, 2011
DECISION

Petitioner Garden View Care Center of Dougherty Ferry challenges the decision of the
Centers for Medicare & Medicaid Services (CMS) that it was not in substantial
compliance with program participation requirements from December 18, 2009 through
January 3, 2010. Petitioner also challenges CMS’s imposition of a denial of payment for
new admissions (DPNA) for that period, as well as a two-year prohibition, commencing
December 18, 2009, on its conducting a nurse aide training and/or competency evaluation
program (NATCEP). CMS found Petitioner back in substantial compliance as of January
4, 2010. I find Petitioner remained out of substantial compliance from December 18,
2009 through January 3, 2010, and that the remedies imposed are required by law.
I. Background
Petitioner is a nursing home located in Valley Park, Missouri. Petitioner was surveyed by

the Missouri Department of Health and Senior Services (state agency) on September 18,
2009, and found out of substantial compliance with participation requirements, including
the participation requirement at 42 C.F.R. § 483.25(h) (Tag F323'). CMS Exhibit (CMS
Ex.) 4. The state agency conducted a revisit survey on November 25, 2009, and found
Petitioner still out of substantial compliance with participation requirements, again
including the participation requirement at Tag F323. CMS Exs. 1, 2. The most serious
deficiency at either survey constituted no actual harm but had the potential for more than
minimal harm not amounting to immediate jeopardy. April 1, 2010 Joint Stipulations of
Facts (April Jt. Stips. at 1-2). By letter dated November 25, 2009, CMS notified
Petitioner that in accordance with 42 C.F.R. § 488.417(b) (which requires CMS or a state
to impose a DPNA when a facility is not in substantial compliance three months after the
last date of a survey identifying noncompliance) a DPNA would be imposed on
December 18, 2009, if Petitioner was still out of substantial compliance with participation
requirements on that date. CMS also noted that federal law prohibits approval of a
NATCEP where a facility has been subject toa DPNA. Petitioner’s Exhibit (P. Ex.) 6.
By letter dated January 6, 2010, CMS removed the DPNA, following a second revisit
survey concluding January 4, 2010, which found Petitioner in substantial compliance as
of January 4, 2010.” P. Ex. 9.

Petitioner requested a hearing by letter dated January 22, 2010. The case was assigned to
me for hearing and decision on January 29, 2010. I held a hearing in the case in St.
Louis, Missouri, on December 14, 2010. A 135-page transcript of the hearing (Tr.) was
prepared. Testifying were: Emma Jeanne Harper, a licensed clinical social worker and a
surveyor with the state agency (Surveyor Harper); Julie Louise Boyd, Petitioner’s
Director of Nursing (DON Boyd); and Genelle Lynn Gutmann, Petitioner’s
Administrator (Administrator Gutmann). At hearing, I admitted CMS Exs. 1-4 and P.
Exs. 1-23. The parties submitted post-hearing briefs (CMS and P. Br.) and replies (CMS
and P. Reply).

IL. Stipulations

The April Jt. Stips. state, in pertinent part, that:

1. Petitioner submitted a plan of correction (PoC) to the November 25, 2009
survey on December 18, 2009, with a completion date of all measures to
address the alleged deficiencies of December 17, 2009.

' The “Tag” designation is used in the State Operations Manual (SOM), Appendix PP —
Guidance to Surveyors for Long Term Care Facilities, and in a statement of deficiencies
(SOD or CMS 2567), to denote a regulatory provision.

> There were only two days the surveyors were at the facility on the second revisit,
December 31, 2009, and January 4, 2010. No surveyors were at the facility on January 1
through 3, 2010, or during the period December 17 through 30, 2009.

2. The state agency notified Petitioner on December 23, 2009, that the PoC was
not acceptable and required modification.

3. The modification was to copy a paragraph from page one of the PoC and to
place the identical paragraph on page two.?

4. A modified PoC was received by the state agency on December 23, 2009, and
it was approved as modified.

5. Both Petitioner’s December 18 and 23, 2009 PoCs indicated that Petitioner was
in substantial compliance with participation requirements by December 17,
2009.

Petitioner stipulated also that it does not dispute the underlying findings and conclusions
contained within the September18 and November 25, 2009 SODs.

III. Issues
The general issues are:

1. Whether Petitioner was out of substantial compliance with participation
requirements; and

2. Whether the remedies imposed are reasonable.

A second joint stipulation dated July 1, 2010, states that the parties agree that the sole
factual issue in dispute:

is the date on which [Petitioner] achieved substantial compliance with Tag F323.
[Petitioner] contends that it achieved substantial compliance with Tag F323 on or
before December 17, 2009. CMS contends that substantial compliance with Tag
F323 was not achieved until January 4, 2010. The parties stipulate that
[Petitioner] was in substantial compliance with all additional program
requirements on or before December 17, 2009.

> The paragraph states: “All residents that require assistive devices have been evaluated
to determine the least restrictive device to assist the resident to achieve or maintain
his/her highest level of physical, mental, or psychosocial functioning. In addition, the
DON or nurse designee will assess all wheelchairs in use for the presence of belts or
other devices. If a belt or device is found on a wheelchair, the DON or nurse designee
will check the resident’s medical record for assessment related to the device/belt/restraint.
If none is found, the DON or nurse will contact physical therapy for an assessment.”
At hearing, the parties agreed that the sole basis for the finding that Petitioner remained
out of substantial compliance with participation requirements through January 3, 2010,
was CMS’s allegation that incident tracking logs were unavailable on the first day of the
second revisit (December 31, 2009). 4 Tr at 12-13; CMS Br. at 2; P. Br. at 4-5.

IV. Applicable Law

Sections 1819 and 1919 of the Social Security Act (Act) and the regulations at 42 C.F.R.
Part 483 govern Petitioner’s participation in Medicare and Medicaid. Sections 1819 and
1919 of the Act provide the Secretary of Health and Human Services (Secretary) with
authority to impose remedies, including a DPNA, against long-term care facilities for
failure to comply with participation requirements.

Regulations define the term “substantial compliance” to mean:

[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 CFR. § 488.301.

The Secretary has delegated to CMS and the states the authority to impose remedies
against long-term care facilities not complying substantially with federal participation
requirements. The applicable regulations at 42 C.F.R. Part 488 provide that state survey
agencies, on behalf of CMS, may survey facilities participating in Medicare and
Medicaid to ascertain whether the facilities are complying with participation
requirements. 42 C.F.R. §§ 488.10-488.28. The regulations contain special survey
conditions for long-term care facilities. 42 C.F.R. §§ 488.300-488.335. Under Part 488,
CMS is authorized to impose a DPNA for a facility’s noncompliance. 42 C.F.R. §§
488.406(a)(2), 488.408, 488.417, and 488.418.

Sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Act prohibit approval of a NATCEP if
within the last two years the facility has been subject to, among other things, an extended
or partial extended survey; imposition of a CMP of not less than $5000; or imposition of
a DPNA.

+ Petitioner asserts that it did not waive a determination with respect to other issues raised
in its hearing request and pre-hearing brief (set forth at pages 9 through 14 of its hearing
request and pages 24 through 29 of its pre-hearing brief). The issues raised were
incorporated but not discussed in Petitioner’s brief. P. Br. at 20. With regard to any of
the issues not addressed below, the issues raised are generally beyond the scope of this
hearing process and the authority of an Administrative Law Judge to resolve in the
hearing process.
A facility may challenge the scope and severity that CMS cites only if a successful
challenge would affect the range of civil money penalty amounts that CMS imposed or
would affect the facility’s NATCEP. 42 C.F.R. § 498.3(b)(14), (d)(10)(i). CMS’s
determination as to the scope and severity of noncompliance “must be upheld unless it is
clearly erroneous.” 42 C.F.R. § 498.60(c)(2). This includes CMS’s finding of immediate
jeopardy. Woodstock Care Center, DAB No. 1726, at 9 (2000), aff’d, Woodstock Care
Center v. U.S. Department of Health and Human Services, 363 F.3d 583 (6th Cir. 2003).

The Departmental Appeals Board (Board) has long held that the net effect of these
regulations is that a provider has no right to challenge the scope and severity assigned to
a noncompliance finding except in the situation where that finding is the basis for an
immediate jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002);
Koester Pavilion, DAB No. 1750 (2000).

V. Analysis

My findings of fact and conclusions of law are set forth in bold and italics and are
followed by my analysis.°

1. Petitioner was out of substantial compliance with the participation
requirement at 42 C.F.R. § 483.25(h) (Tag F323) from December 18, 2009 through
January 3, 2010.

The participation requirement at 42 C.F.R. § 483.25 requires that:

Each resident must receive and the facility must provide the necessary care and

services to attain or maintain the highest practicable physical, mental, and

psychosocial well-being, in accordance with the comprehensive assessment and
plan of care.

The subsection at 483.25(h) requires that:

(h) Accidents. The facility must ensure that —

* [have 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.
(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.

The regulation at 42 C.F.R. § 488.454(a)(1) provides that alternate remedies, such as a
DPNA, continue until the facility has achieved substantial compliance. The achievement
of substantial compliance is determined by CMS or a state agency based upon a revisit or
after an examination of credible written evidence that it can verify without an on-site
visit. Section 488.454(e) states that if a facility can supply documentation acceptable to
CMS or a state that it was in substantial compliance and was capable of remaining in
substantial compliance on a date preceding that of a revisit, the remedies terminate on the
date CMS or a state can verify as the date that substantial compliance was achieved and
the facility demonstrated it could achieve substantial compliance, if necessary. Section
488.417(d) states that where a facility does not have repeated instances of substandard
quality of care, payments to a facility resume prospectively on the date that the facility
achieves substantial compliance, as indicated by a revisit or written credible evidence
acceptable to CMS (under Medicare) or a state (under Medicaid).

In the case of Foxwood Springs Living Center, DAB No. 2294 (2009), the Board held
that CMS has the discretion to determine that a facility’s written evidence is not credible
and that a revisit may be necessary to verify that a facility has returned to substantial
compliance. The Board noted, however, that the regulations tie the cessation of payments
to the actual date the facility achieves substantial compliance, not necessarily to the date
of the revisit, and that a facility is entitled to submit evidence to establish that it was in
compliance prior to the date of a revisit survey. Foxwood Springs Living Center, DAB
No. 2294, at 9-10.

In this case, the SOD dated September 18, 2009 alleges at Tag F323 that Petitioner failed
to assess and provide interventions to reduce resident falls for three sampled residents
and one resident selected for a closed record review, and also failed to transfer one
expanded-sample resident in a safe manner. CMS Ex. 4, at 1. Following the first revisit
survey, the SOD dated November 25, 2009 alleges at Tag F323 that Petitioner failed to
thoroughly investigate the circumstances for one of six sampled residents’ falls in a
manner which would allow Petitioner to implement adequate interventions to prevent
accidental injury. CMS Ex. 1, at 5. Petitioner has stipulated that it does not dispute the
September 18 and November 25, 2009 SOD findings that it was out of substantial
compliance with Tag F323 through December 17, 2009. April Jt. Stips. In sum, the
September and November SODS assert, and Petitioner agrees, that Petitioner failed to
investigate, assess, and intervene to reduce resident falls.

In support of its argument that Petitioner remained out of substantial compliance with
Tag F323 through January 4, 2010, CMS asserts, relying on the testimony of Surveyor
Harper,° that Petitioner had ongoing problems with the way it investigated incidents of
potential and actual harm as part of its process to predict and prevent other possible
accidents. Tr. at 28. The surveyors came to this conclusion after entering the facility for
a second revisit survey on December 31, 2009. Surveyor Harper testified that when the
survey team entered the facility she was apprised that as part of Petitioner’s
implementation of its PoC for incident tracking, Petitioner utilized an incident tracking
log. Petitioner did not dispute that Surveyor Harper was told this. Tr. at 38, 52, 55, 68;
see Tr. at 83. The surveyors asked for the incident tracking log because it was used by
the facility as a form of “shorthand” for how the facility kept track of incidents involving
issues raised in the SODs and as a way to communicate to the surveyors which residents
they might review.’ Tr. at 29, 38, 55. However, CMS asserts that it was not provided a
complete version of the incident tracking log until mid-afternoon on December 31, 2009,
shortly before the surveyors left the facility.

CMS notes that Petitioner’s initial PoC for Tag F323 from the September survey
indicated that an inservice on incident tracking was to be completed by November 11,
2009, and that incident tracking was to be “totally effective” by December 1, 2009. CMS
Ex. 4, at 1-2. Petitioner’s PoC from the November revisit survey alleged that corrections
would be accomplished no later than December 17, 2009. CMS Ex. 2, at 4-8. Part of this
PoC was that the Director of Nursing (DON) or nursing supervisor was to contact each
shift’s charge nurse to review incident reports, among other things, and for them then to
make certain charge nurses reported incidents and followed up on incident and
investigative forms. CMS Ex. 2, at 6. CMS argues, however, that as of the second revisit
on December 31, 2009, Petitioner was unprepared to show its compliance. Despite
Petitioner’s adoption, as part of its PoC, of a policy to implement an annual incident
inservice on tracking to make certain incidents were being reported and followed up on
incident and investigative forms, during the second revisit survey Petitioner was unable

° Petitioner argues that Surveyor Harper provided evasive and contradictory testimony
with respect to the reasons CMS determined Petitioner was not in substantial compliance
as of December 17, 2009. I find, as discussed below, that Surveyor Harper’s testimony
was neither evasive nor contradictory.

’ Petitioner notes that Surveyor Harper testified that although there were other ways to
obtain a list of residents to review she requested the incident tracking log to “avoid”
spending time going through the records to find residents who had incidents. She also
noted that the list could have been “hand scribbled.” Petitioner argues from this that the
surveyors only wanted the list to save themselves time and implies that the surveyors did
not need the incident tracking log. P. Br. at 6. As noted above, although there were other
ways Petitioner might have provided a list of incidents to the surveyors, Petitioner
informed the surveyors that the way Petitioner was implementing its PoC was via the
incident tracking log. It was thus reasonable and necessary for the surveyors to ask for
that log.
to provide an up-to-date list of incidents. CMS argues that it took most of a day to
complete a list and that Petitioner was adding incidents over 30 days old during the
process. Tr. at 70-71.

CMS asserts specifically that Petitioner provided three one-page versions of its incident
report tracking log at various times on December 31, 2009. CMS Ex. 3, at 32-34. Each
page of the log lists the date, resident name, wing, room number, incident time and type
of accident or injury, and notes whether the doctor and family were notified, whether the
resident needed first aid, whether the resident’s vital signs were assessed, and whether the
resident went to the hospital. The first page was provided at approximately 9:30 to 10:00
a.m., the second around noon, and the third at approximately 2:00 or 2:30 p.m. on
December 31, 2009. Tr. at 32-34; 106; P. Br. at 8. The first page (CMS Ex. 3, at 33)
provided to the surveyors documented incidents from November 25 through December
12, 2009; the second page, CMS Ex. 3, at 32, documented incidents from November 25,
2009 through December 10, 2009, and the third page, CMS Ex. 3, at 34, documented
incidents from December 11 through 29, 2009. Surveyor Harper testified that she
considered the list inaccurate because she did not receive a complete list until 2:30 in the
afternoon. She also testified that she was able to determine substantial compliance on
January 4, 2010, because she had enough information from which to pick a useful
sample. Tr. at 66. My review of the three pages supports CMS’s assertions, and shows
that the second page provided contains at least eight names that were not on the first page
provided to the surveyors for dates between December | through 10, 2009, and the third
page provided contains two names on December 11, 2009, that were not contained on the
first or second page provided to the surveyors. CMS Ex. 3, at 32-34.

CMS argues that until the surveyors received the third page about 2:30 p.m. on December
31, 2009, the surveyors were unable to ascertain that it was Petitioner’s complete and up-
to-date incident tracking log. CMS Ex. 3, at 34; Tr. at 31-33. That this up-to-date
tracking log was not available, according to Surveyor Harper, showed that Petitioner’s
system of incident tracking was “not fully realized” and “fragmented” and left her
without confidence that Petitioner’s incident tracking system “was in good shape.” Tr. at
38, 42, 55. In sum, CMS argues that this evidence shows that staff was not making
certain that reported incidents were being followed up on via incident and investigative
forms and strongly suggests that the annual inservice on incident reporting and tracking
was ineffective. CMS Ex. 2, at 6; CMS Ex. 4, at 2.

CMS argues that while Petitioner seeks to frame the issue narrowly as to whether an
incident tracking log must be updated contemporaneous to an incident and immediately
provided to the surveyor upon request, the relevant issue is whether Petitioner’s inability
to provide the incident tracking log, or any other evidence of incident tracking, shows
that Petitioner was out of compliance with the participation requirement. During the
December 31, 2009 revisit, the surveyors were looking for a system of tracking resident
incidents and injuries that provided the facility the ability to analyze information
concerning incidents and to use that information to inform plans of care and other
actions. This focus was not unreasonable or unwarranted and should have been
anticipated given the regulatory requirement that a facility must take all reasonable steps
to mitigate foreseeable risks of harm, here in conformance with Petitioner’s PoC. CMS
stresses that it was Petitioner’s own representation to the surveyors that Petitioner
complied via use of the incident tracking log. But on December 31, 2009, Petitioner was
unprepared to show its compliance because the log was incomplete, at a certain level
inaccurate, and thus unreliable for the purpose it was intended to serve.

Based on DON Boyd’s testimony, Petitioner asserts that its incident tracking logs are
only used at its quality assurance (QA) meetings, which occur every three months. Tr. at
75-76, 95. Administrator Gutmann testified that the incident tracking logs are updated
only three to four days prior to a QA meeting. And she testified that the next scheduled
QA meeting after December 31, 2009 was not until January 12, 2010. Tr. at 112. Based
on this, Petitioner’s argument appears to be that Petitioner thus did not expect the
incident tracking log would be updated as of December 31, 2009.

Petitioner asserts further that its incident tracking log is generated from information
contained in individual incident reports completed by charge nurses following an incident
or accident. The process for completing an incident report involves conducting an
investigation and 72-hour follow-up of the incident or accident, a similar follow-up with
the resident, and having the DON review the ensuing incident report. The incident report
is then sent to a resident’s physician for review, input, signature, and return to the facility,
typically by U.S. mail. Upon receipt, Petitioner’s office manager enters the report in the
computer and makes it part of the incident tracking log. There is thus a lag time between
the occurrence of the incident and information from the incident report being input into
the incident tracking log. Tr. at 77-78, 81. The incident report also contains information
not included in the incident tracking log, but there is no information contained in the
incident tracking log that is not contained within the incident report itself. Tr. at 79; P.
Br. at 8.

Petitioner disputes that it failed to provide the surveyors with the incident tracking log
timely. Petitioner acknowledges that it provided the surveyors with the incident tracking
log in three separate installments, but asserts that this was because Petitioner’s office
manager was not in the facility when the surveyors arrived on December 31, 2009, and
the office manager’s computer password was needed to gain access to the incident
tracking log system. Once the office manager arrived, Petitioner was able to provide the
surveyors with the first of the three installments. The office manager then entered data
during the rest of the day with respect to the additional incidents, which resulted in the
creation of two additional pages of the incident tracking log. P. Br. at 8.

Petitioner argues that CMS provided inconsistent and contradictory reasons for finding it
noncompliant with regard to the incident tracking log until January 4, 2010. First,
10

Surveyor Harper testified that Petitioner was not in substantial compliance because
Petitioner could not provide the complete log until the afternoon of December 31. Later,

iowever, Surveyor Harper testified that “It was because it (the log) was different each
time. It contained different information. It wasn’t because it wasn’t updated it was
because it was inaccurate. And that inaccuracy is what made me concerned that the
system was not in place.” Tr. at 61. Petitioner disputes that the three lists were
inaccurate. Other than the fact the respective lists contained different names, Surveyor
Harper could provide no example of an inaccuracy.

Petitioner notes that the PoC for the September survey makes no reference to incident
tracking or to an incident tracking log, other than stating that incident tracking is being
implemented. And the December 23, 2009 PoC for the November survey does not
mention the facility’s obligation to keep or immediately update an incident tracking log.
Petitioner notes that the surveyors’ review of the care afforded residents included in the
completed incident tracking log did not identify a single provision from the PoCs that
was not corrected as of December 17, 2010. Tr. at 67. Petitioner argues that the real
issue in the case, which CMS rebutted above, is whether an incident tracking log must be
updated contemporaneous to an incident and provided immediately to the surveyor upon
request. Petitioner argues that these requirements are not practical or supported by law.*
Petitioner argues that even if Petitioner was required to maintain such a log and provide it
to the surveyors, requiring it to be updated contemporaneous to a particular incident is
not practical. There is, claims Petitioner, a necessary lag time between the occurrence of
the incident and information about the incident being put into the log.

Despite this, Petitioner argues that it did provide the surveyors with an updated copy of
the incident tracking log in an expedited manner. Although there was some delay in
generating the initial incident tracking log, the surveyors had a completed incident

* In this regard, Petitioner argues that facilities are not legally mandated to keep and
maintain incident tracking logs, even for QA programs. Petitioner notes that CMS and
the states are legally prohibited from requesting QA documents. Act, section
1819(b)(1)(B) (42 U.S.C. § 1395i-3(b)(1)(B); 42 C.F.R. § 483.75(0)(3). Thus, the failure
of the facility to provide an up-to-date incident log maintained solely for QA purposes
cannot be used as the basis to cite a deficiency or determine a compliance date.

Petitioner argues from this that the surveyors should not have requested documents from
its QA process or sanctioned Petitioner as a result of it. The QA process, however, is not
relevant to the issue here. The evidence does not show that the surveyors requested a QA
document. Instead, it was Petitioner who stated that the incident tracking log was part of
its PoC compliance.
11

tracking log by 2:30 on December 31, 2009. And it is true that the surveyors were able to
conduct some investigations that morning even without the incident tracking log.”

Petitioner also argues that DON Boyd was able to monitor accident trends based on the
information she received from staff nurses, her review of incident reports, her stand-up
management meetings, and her weekly risk assessment meetings. DON Boyd termed
herself a “workaholic” and on call “24/7” and indicated that just because an incident
wasn’t on a tracking form that did not mean the facility was not aware of it. Tr. at 84-88.

Petitioner stresses that CMS based its noncompliance finding upon the alleged
unavailability of a list that it asked for only to save itself time. Petitioner argues that if
the surveyors did not need the list to conduct a review, basing compliance on the
immediate unavailability of the list “defies common sense and is inconsistent with the
law.” P. Br. at 17.

l accept Petitioner’s representations that it completed and reviewed incident reports. And
l accept Petitioner’s representations with regard to the process by which it completed and
used the incident tracking logs for its QA process. I accept Petitioner’s representation
that DON Boyd monitored accident trends via the review of incident reports, and stand-
up and weekly meetings. However, I also accept Surveyor Harper’s testimony that when
the surveyors entered the facility on December 31, 2009, to revisit compliance with Tag
F323, the surveyors were told that Petitioner utilized the incident tracking log as part of
its PoC for incident tracking.

Once a facility has been found out of substantial compliance it is the facility’s
responsibility to demonstrate that it has returned to substantial compliance, either by
documentation or during a revisit survey. Part of Petitioner’s obligation in this situation
was to show the surveyors, as those surveyors entered the facility to determine
compliance with a regulatory citation with which Petitioner had twice been found
noncompliant, that Petitioner had an actual program in place to report and keep track of
accidents and incidents. The surveyors’ purpose and obligation was to ascertain that
Petitioner had the ability to analyze information concerning incidents and to use that
analysis to inform their plans of care. This focus should have been anticipated by
Petitioner given its representations in the PoC, considering that the regulation requires it
to take all reasonable steps to mitigate foreseeable risks of harm. Petitioner, however,
was unable to demonstrate to the surveyors that it had an adequate tracking system in
place on December 31, 2009.

° Petitioner argues also that it is contrary to CMS policy to target only those residents
who had an incident, citing the SOM. P. Br. at 17. Petitioner did not explain, however,
how the citation it cited supported the proposition it alleged.
12

With regard to the adequacy of Petitioner’s incident tracking system, contrary to
Petitioner’s accusation that Surveyor Harper’s testimony was both evasive and
inconsistent, I found her testimony with regard to the system to be generally frank,
consistent, and persuasive. Surveyor Harper testified that when Petitioner needed most of
a day to provide the surveyors with a complete incident tracking form, she concluded that
they were not complying with their PoC as their tracking system was not “fully realized.”
That suggested to her that Petitioner was not looking at repeated incidents during a short
period of time or analyzing information that an incident tracking log would allow a
reviewer to see readily. She did not enter the facility assuming that Petitioner tracked
incidents via the incident tracking log; instead, as noted, that is how she was told
Petitioner was tracking incidents. Tr. at 38. Surveyor Harper testified that use of such a
master log has an advantage over individual incident reports because it allows the
reviewer to spot trends. Tr. at 39. Without a master log it is difficult (although not
impossible) to do so, and Surveyor Harper was not led to believe Petitioner had another
system in place to do this. Although DON Boyd testified that it was sufficient for
Petitioner to determine a trend via incident reports and weekly meetings, I find persuasive
Surveyor Harper’s testimony with regard to the need for a master log, given that
Petitioner’s prior method of tracking led to two surveys of noncompliance with Tag
F323.'° And, according to Surveyor Harper, using the master log allows a facility to see
if care to a resident can be tailored specifically to that resident on the basis of a particular
trend. Tr. at 40.

Petitioner admits that it was out of compliance with Tag F323 with regard to resident
falls in the previous two surveys. Failure to comply with this regulation with regard to
falls obviously could lead to serious harm to Petitioner’s residents. It was thus
reasonable for CMS to request a PoC regarding those falls in order to ensure Petitioner’s
compliance with the participation requirement. Petitioner informed the surveyors that it
used incident tracking logs to demonstrate that compliance. My review of the incident
tracking logs found them inaccurate, in that they were incomplete and unavailable to the
surveyors entering the facility on December 31. In fact, Petitioner had to try three times
before it was able to provide an accurate accounting to the surveyors.

Petitioner asserts that CMS did not indicate any concern with respect to the incidents
not recorded in the incident tracking log, or any lag time with respect to the occurrence of
an incident and its inclusion in the log, during either the September or November surveys.
It asserts it has used the same incident log tracking system for years, and the first time
CMS relayed it had any issue with it was during the January 4, 2010 revisit. P. Br. at 18.
Petitioner’s criticism misses the point. Petitioner had been found noncompliant over two
surveys with Tag F323. CMS was in the facility on December 31 to survey its
compliance with that Tag because Petitioner’s systems had failed and CMS was in the
facility to determine how Petitioner was correcting that failure.

13

Petitioner’s argument that CMS violated its own policy and federal law when it found
Petitioner out of substantial compliance on December 17, 2009 is also unavailing.
Petitioner asserts that CMS’s policy provides that compliance is to be certified as of the
date of a revisit or the date confirmed by acceptable evidence, whichever is sooner. Here,
according to Petitioner, that would be December 17, 2009. As I find Petitioner out of
substantial compliance as of that date, Petitioner’s argument is moot.

Petitioner also argues that finding Petitioner did not achieve substantial compliance until
January 4, 2010 violates federal law, which mandates that providers be afforded an
opportunity to present evidence establishing substantial compliance prior to the date of
the applicable revisit, citing Foxwood Springs Living Center, DAB No. 2294, at 6-9 and
42 C.F.R. §§ 488.417 and 488.454. Petitioner asserts that Surveyor Harper conceded that
Petitioner complied with its PoC, agreeing that she could not point to a single provision
of the PoC from the November 25, 2009 survey with which Petitioner had not complied
as of December 17, 2009. Tr. at 67. Therefore, asserts Petitioner, the evidence
establishes compliance on December 17, 2009. I disagree. When noncompliance is
found a remedy remains in effect until the date of a revisit, although a facility is entitled
to submit evidence to establish it was in compliance prior to the date of the revisit survey.
While Surveyor Harper conceded that after she received the sample she found Petitioner
in compliance with its PoC on January 4, 2010, she did not have a complete incident
tracking log on December 31, 2009, and Petitioner did not provide a completed log upon
entry in order for the surveyors to ascertain Petitioner’s compliance. Thus, since
Petitioner did not have the necessary documentation on December 31, 2009, in an area of
noncompliance demonstrated during two prior surveys, Petitioner’s argument is not
persuasive with regard to its compliance prior to that date.

2. The DPNA and two-year prohibition on Petitioner conducting a NATCEP
are mandatory remedies, and CMS does not have the discretion to not impose them.

The regulation at 42 C.F.R. § 488.417(b)(1) provides that CMS or a state must impose a
DPNA when a facility is not in substantial compliance three months after the last day of a
survey identifying noncompliance. Petitioner was first found out of substantial
compliance following a survey concluding on September 18, 2009, and Petitioner does
not contest that noncompliance. Thus, if Petitioner was still out of substantial
compliance with participation requirements on December 18, 2009, CMS had to impose a
DPNA. I have sustained CMS’s determination that Petitioner did not return to substantial
compliance until January 4, 2010. Thus, CMS was required by regulation to impose the
DPNA on December 18, 2009.

Although Petitioner was not conducting a NATCEP as of December 18, 2009, Petitioner
asserts that the ability to conduct a NATCEP is still important to Petitioner because it
allows Petitioner options to train staff under its philosophy, reduces staff turnover, and
provides continuity of care to Petitioner’s residents. P. Br. at 19. Petitioner’s argument

14

is unavailing. The Act prohibits approval of a NATCEP for two years where a facility
has been subject toa DPNA. Act, section 1819(f)(2)(B).

VI. Conclusion

For the reasons discussed above, I find that Petitioner was out of substantial compliance
with Medicare participation requirements through January 4, 2010. Further, I find the
remedies imposed, a DPNA from December 18, 2009 through January 3, 2010, and a
two-year prohibition on Petitioner’s conducting a NATCEP commencing December 18,
2009, are required by law.

/s/
Richard J. Smith
Administrative Law Judge