Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Meadowwood Nursing Center,
(CCN: 34-5307),
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-18
Decision No. CR2829

Date: June 17, 2013

DECISION

Petitioner, Meadowwood Nursing Center (Petitioner or facility), is a long-term care
facility located in Gastonia, North Carolina, that participates in the Medicare program.
Based on a complaint investigation, recertification, and revisit survey, the Centers for
Medicare and Medicaid Services (CMS) determined that Petitioner was not in substantial
compliance with Medicare participation requirements. CMS imposed against Petitioner a
civil money penalty (CMP) of $3,550 per day, effective March 7 through July 7, 2011.

For the reasons set forth below, I sustain CMS’s determinations. I find that Petitioner
was not in substantial compliance with the requirements for participation at 42 C.F.R.

§ 483.25(h) (Tag F323, relating to accident prevention and adequate supervision) and that
the penalty CMS imposed is reasonable.

I. Background

The Social Security Act (Act) sets forth requirements for skilled nursing facility
participation in the Medicare program. The Act authorizes the Secretary of the U.S.
Department of Health and Human Services (Secretary) to promulgate regulations
implementing those statutory provisions. Act § 1819 (42 U.S.C. § 1395i-3). The
Secretary’s regulations are found at 42 C.F.R. part 483. To participate in the program, a
facility must maintain substantial compliance with program requirements.

To be in substantial compliance, a facility’s deficiencies may pose no greater risk to
resident health and safety than “the potential for causing minimal harm.” 42 C.F.R. §
488.301. CMS has the burden of coming forward with evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v.
Thompson, 129 F. App’x 181 (6" Cir. 2005); Emerald Oaks, DAB No. 1800 (2001);
Cross Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehab. Ctr., DAB No.
1611 (1997), aff'd, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999 WL
34813783 (D.N.J. May 13, 1999).

The Secretary contracts with state agencies to conduct periodic surveys to determine
whether skilled nursing facilities are in substantial compliance. Act § 1864(a) (42 U.S.C.
§ 1395aa(a)); 42 C.F.R. §§ 488.10, 488.20. The Act and regulations require that facilities
be surveyed on average every 12 months, and more often if necessary, to ensure that
identified deficiencies are corrected. Act § 1819(g)(2)(A) (42 U.S.C. § 1395i-
3(g)(2)(A)); 42 C.F.R. §§ 488.20(a), 488.308.

Petitioner is a 50-bed skilled nursing facility. Surveyors from the North Carolina State
Survey Agency (state agency) conducted a complaint investigation, recertification, and
revisit survey of Petitioner concluding on July 8, 2011. Based on their findings, CMS
determined that the facility was not in substantial compliance with the participation
requirement at 42 C.F.R. § 483.25(h) (Tag F323), concerning accident prevention and
adequate supervision, and that the noncompliance constituted immediate jeopardy and
substandard quality of care to residents’ health and safety from March 7 through July 8,
2011. Based on its immediate jeopardy determination, by letter dated August 9, 2011,
CMS imposed a CMP in the amount of $3,550 per day effective March 7 through July 7,
2011.

On October 3, 2011, Petitioner requested a hearing. The case was assigned to me for
hearing and decision. On October 12, 2011, I issued an acknowledgment and initial
prehearing order establishing a briefing schedule. In accordance with the schedule, the
parties filed prehearing exchanges, including prehearing briefs (CMS Prehearing Br. and
P. Prehearing Br., respectively), exhibit and witness lists, and proposed exhibits.
I held a prehearing conference, by telephone, on March 5, 2012. During the conference, I
admitted into the record the exhibits the parties exchanged (CMS exhibits (CMS Exs.)) 1-
36and Petitioner’s exhibits (P. Exs.) 1-29, including P. Ex. 12A).

I held a hearing by videoconference on May 23, 2012, for purposes of cross-examination
of witnesses as the parties previously exchanged written direct testimony. The parties
and their witnesses convened in Charlotte, North Carolina, while I presided in
Washington, D.C. Testifying for CMS were state agency surveyors Carol S. Hermann,
R.N., M.S.N., and Van P. Grinwis, R.N. (the team leader for the July 8 survey).
Testifying for Petitioner were Annette O’Brien, R.N., who Petitioner retained as an
expert “to provide some background to the Administrative Law Judge regarding the
appropriate use of side rails on patient beds as assistance devices” (P. Ex. 29, at 2); Paula
Evans Kizer, L.P.N.; Richard Doster, Petitioner’s Director of Maintenance; Wendell
Phillips, Vice President of Operations for Petitioner’s management services company and
Petitioner’s interim Administrator immediately before and during the July 8 survey at
issue; and Marjorie Massey, R.N., Petitioner’s Director of Nursing (DON) since June 6,
2011. At hearing I admitted P. Exs. 37 and 38. Tr. 7-8.

Both parties submitted post-hearing briefs (CMS Br. and P. Br., respectively) and
response briefs (CMS Response and P. Response, respectively).

IL. Issues

The issues stated in my March 5, 2012 Order, as agreed to by the parties, are:
1) Whether Petitioner failed to comply substantially with the requirements of
42 C.F.R. § 483.25(h) (Tag F323, relating to accident prevention and adequate

supervision with regard to side rails');

2) With regard to this alleged noncompliance, whether CMS’s assessment of
immediate jeopardy was clearly erroneous; and

3) Whether the penalty that CMS imposed, $3,550 per day for 123 days of
immediate jeopardy noncompliance from March 7 through July 7, 2011 ($436,650
total) is reasonable.

' Luse the terms “side rails” and “bed rails” interchangeably in this decision.
III. Findings of Fact and Conclusions of Law

A. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25(h)
because it did not address foreseeable risks of harm from accidents involving
entrapment in bed side rails.

Program requirements. Subsection 483.25(h) is part of the quality of care regulation,
which states that “[e]ach 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.” Subsection 483.25(h) imposes specific obligations upon a facility related to
accident hazards and accidents, as follows: The facility must ensure that —

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

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

The Departmental Appeals Board (the Board) has held that subsection 483.25(h)(1)
requires that a facility address foreseeable risks of harm from accidents “by identifying
and removing hazards, where possible, or where the hazard is unavoidable because of
other resident needs, managing the hazard by reducing the risk of accident to the extent
possible.” Maine Veterans’ Home - Scarborough, DAB No. 1975, at 10 (2005)
(explaining the inherent standard of care in section 483.25(h)(1)). The Board has held
that subsection 483.25(h)(2) requires that a facility take “‘all reasonable steps to ensure
that a resident receives supervision and assistance devices that meet his or her assessed
needs and mitigate foreseeable risks of harm from accidents.” Briarwood Nursing Ctr.,
DAB No. 2115, at 11 (2007), citing Woodstock Care Ctr., DAB No. 1726 (2000) (facility
must take “all reasonable precautions against residents’ accidents”), aff'd, Woodstock
Care Ctr. v. Thompson, 363 F.3d 583, 589 (6m Cir. 2003).

The potential dangers of side rail use are well known and include entrapment. The
dangers impose on facilities the duty to address and assess their risk. See, e.g.,
Laurelwood Care Ctr., DAB No. 2229, at 9 (2009). The Food and Drug
Administration’s March 10, 2006 Guidance for Industry and FDA Staff Hospital Bed
System Dimensional and Assessment Guidance to Reduce Entrapment (2006 FDA
guidance) describes an “entrapment” as “an event in which a patient/resident is caught,
trapped or entangled in the space in or about the bed rail, mattress, or hospital bed
frame.” The FDA guidance notes that “[p]atient entrapments may result in deaths and
serious injuries.” CMS Ex. 28, at 6. The FDA states that “[t]he population most
vulnerable to entrapment are elderly patients and residents, especially those who are frail,
confused, restless, or who have uncontrolled body movement.” CMS Ex. 28, at 6. Asa
result of the potential safety risks presented by side rails, the FDA states: ““We suggest
that facilities and manufacturers determine the level of risk for entrapment and take steps
to mitigate the risk. Evaluating the dimensional limits of the gaps in hospital beds is one
component of an overall assessment and mitigation strategy to reduce entrapment.” Jd. at
5. The FDA recommends a dimensional limit of less than 4.75 inches for the area
between rails and also between the rail and the mattress. Jd. at 18-20. See also Good
Samaritan, DAB No. 1844 (2002) (upholding an ALJ who construed an FDA safety alert
to apply to a gap more than 4.5 inches into which bodies, heads, or necks could fit.)

The state operations manual (SOM), which provides Agency guidance on the Secretary’s
regulations, addresses side rails and notes that these assistive devices can be therapeutic,
beneficial, and can assist with transfer and positioning. P. Ex. 19, at 15-16. The SOM
states, however, that while side rails can assist with transfer and positioning, they can
increase safety risk, and it references FDA’s August 23, 1995 FDA Safety Alert:
Entrapment Hazards with Hospital Bed Side Rails (1995 FDA Safety Alert). P. Ex. 19,
at 16; CMS Ex. 27; see also CMS Ex. 28.” The SOM notes that those most at risk for
entrapment are the frail or elderly who have conditions such as agitation, delirium,
confusion, pain, uncontrolled body movement, hypoxia, fecal impaction, etc., that may
cause them to move about the bed or try to exit the bed. The SOM notes that entrapment
may occur when a resident is caught between a mattress and side rail, and in the side rail
itself. The SOM notes that “[t]echnical issues, such as proper sizing of mattresses, fit and
integrity of bed rails or other design elements . . . can also affect the risk of resident
entrapment.” P. Ex. 19, at 16.

1. Petitioner was placed on notice of a foreseeable risk of harm when
Resident 2’s neck became entrapped in her bed’s side rails.

In a statement of deficiencies (SOD) from July 8, 2011, CMS cited Petitioner for failure
to position mattresses and side rails in such a way as to maintain safety for two residents
(Residents 2 and 8). CMS Ex. 4, at 1. The SOD does not specify which subsection(s) of
the regulation Petitioner was in violation of — i.e., 42 C.F.R. § 438.25(h)(1) or (2) — nor
does CMS so specify in its briefs. Instead, in its response brief, CMS encapsulates its
argument by stating that Petitioner “knew or should have known of the risks posed by
[side] rails, but failed to protect residents from those risks.” CMS Response at 2.

CMS asserts that Petitioner’s noncompliance began on March 7, 2011, when Petitioner’s
staff found Resident 2 in bed with one of her side rails resting on her neck. Surveyors
first cited this incident as noncompliance at the July 2011 survey, during which the
surveyors also cited Petitioner for noncompliance after observing a gap of approximately
eight inches between the side rail and the mattress on Resident 8’s bed, indicating to them
an ongoing danger with respect to side rails. CMS Ex. 4, at 1-14.

> The 2006 FDA Guidance represents the FDA’s “current thinking on this topic.” CMS
Ex. 28, at 4.
At the time of her entrapment, Resident 2 was a 74-year-old woman with multiple
impairments. CMS Ex. 11. Her diagnoses included stroke with left-sided paralysis,
aphasia, anxiety disorder, depression, and schizophrenia. CMS Ex. 11, at 58-59, 115,
118, 120; P. Ex. 8; P. Ex. 12, at 17-18; P. Ex. 12A. Resident 2’s minimum data set
(MDS) from December 2010 indicates she had short and long-term memory problems
and severe cognitive impairment. CMS Ex. 11, at 48. Resident 2 needed extensive staff
assistance for bed mobility and transfers. CMS Ex. 11, at 55. She had a physician order
for side rails as an enabling device, which Petitioner’s staff re-evaluated. CMS Ex. 11, at
123; P. Ex. 10, at 2. Resident 2 used the side rails to move about in bed as an aid in
turning and positioning. CMS Ex. 11, at 115; P. Ex. 10, at 2.

Shortly after 11:00 p.m. on March 7, 2011, a certified nursing assistant (CNA)
performing rounds found Resident 2 with her head under her side rail. LPN Faile
documented in nursing notes that:

At approximately 11:10 p.m. last night this nurse was informed that resident had
somehow gotten [her] head under [the] left bedrail & it was resting on [the]
resident’s neck on [the right] side of [her] neck [with] substantial pressure. No
apparent injury found upon physical assessment. R.P. notified via phone call but
unable to leave message [due to] DSS office being closed. Passed along to
oncoming nurse to contact DSS office when opens [at] 8 a.m. also [nurse
practitioner] notified... .

CMS Ex. 11, at 32. By “substantial pressure” LPN Faile meant the actual weight of the
side rail itself. CMS Ex. 4, at 4-5; CMS Ex. 11, at 14. Mr. Phillips testified that the rail
weighed perhaps five or six pounds. P. Ex. 25, at 3.

The record does not clearly reflect how long the rail was resting on Resident 2’s neck.
The CNA who found Resident 2 started her shift at 11:00 p.m. and discovered Resident 2

entrapped at approximately 11:10 p.m. CMS
CMS Ex. 34, at 5-6. The facility did not pres

Resident 2’s impairments, which included ap

Ex. 4, at 4-5; CMS Ex. 11, at 32;
ent any evidence to specifically show when

Resident 2 may have been last observed prior to the entrapment incident. Due to

asia, short and long-term memory

problems, and severe cognitive impairment, Resident 2 was not able to explain how her
neck became entrapped under the side rail and how long the rail rested on her neck. Tr.
44. Similarly, she was unable to verbalize whether she sustained any physical pain or
mental trauma from the incident.

During the survey, Mr. Doster gave Surveyor Hermann manufacturer’s information
related to the bed Resident 2 used. CMS Ex. 26, at 4. The manufacturer cautioned that
when the head of the bed was in the semi-fowler position, i.e., raised approximately 30 to
45 degrees, there could be a gap that posed an entrapment risk unless the bed rails were in
the “MID” position. MID is one of three positions the rail could be in, the others being
an upper and a lower position. In the MID position, as the head of the bed raises up, the
rail remains below the top of the mattress so there is very little gap, in which to get
entrapped. CMS Ex. 26, at 3, 4; CMS Ex. 4, at 2; Tr. 69-70. Surveyor Hermann testified
that she understood the head of the bed was raised 20 to 30 degrees on the night in
question and the side rail was “all the way up.” Tr. 70.

Surveyor Hermann interviewed LPN Faile during the survey. CMS Ex. 11, at 11, 14, 25;
CMS Ex. 34, at 4-5. LPN Faile stated he released the side rail to remove it from Resident
2’s neck but did not find her in respiratory distress or see bruising on her neck. LPN
Faile faxed a note to the resident’s physician but did not send the resident to the hospital
for further assessment. On March 8, 2011, Mr. Doster removed Resident 2’s side rails
and placed a mat on the floor at her bedside. The facility also used a personal alarm as a
fall intervention for Resident 2. CMS Ex. 4, at 4; CMS Ex. 11, at 32; CMS Ex. 34, at 4-
5; P. Ex. 18, at 1.

Petitioner admits that Resident 2 somehow maneuvered her head and neck under the side
rail of her bed. However, Petitioner asserts that the positioning of Resident 2’s side rail
met all FDA standards and fell into a category of accident the FDA recognizes cannot be
explained. Petitioner asserts that Resident 2 was not injured. Resident 2 was reassessed
and her side rail was removed. Petitioner also made numerous revisions to its side rail
assessment and use policies and practices as a routine quality assurance response to
Resident 2’s accident. Petitioner also asserts that it purchased additional equipment to
protect resident safety. P. Br. at 1-2, 5-12, 15, 20-23; P. Ex. 5.

Petitioner’s counsel attempts to downplay the significance of Resident 2’s entrapment by
reciting and illustrating principles of “simple geometry.” P. Br. at 13 n.9; 14.11.
Petitioner’s counsel uses his own mathematical calculations to propose that the gap in
Resident 2’s side rails was within the 2006 FDA guidelines (where the gap between the
side rail and mattress should be less than 4.75 inches) and that Resident 2’s accident was
somehow a “freak” accident where the resident maneuvered her head against a gap in the
rail. P. Br. at 12-15. Counsel’s geometric estimations are unavailing with regard to the
issue before me. The fact remains that the gap was large enough, possibly in conjunction
with the flexibility of the mattress, for Resident 2 to become entrapped, effectively
placing Petitioner on notice of a foreseeable risk of harm for entrapments. See CMS Ex.
28, at 20.

It is undisputed that Resident 2’s bed was raised somewhere approximating 30 degrees,
and her side rails were fully raised. Considering Resident 2’s head actually became
entrapped shows that there was a very serious concern for the facility, despite its inability
to conclusively determine what that problem was. Tr. 39; CMS Ex. 4, at 5; see Good
Samaritan, DAB No. 1844 (2002) (upholding an ALJ’s finding that a side rail and
mattress combination was not compatible when two residents were found entrapped in

large gaps). Although, Petitioner disputes whether it was at fault for the entrapment of
Resident 2, I find that once it occurred, Petitioner was on specific notice of a foreseeable
risk of harm starting March 7, 2011.

2. Petitioner took some reasonable steps to eliminate the foreseeable risk
of accidents involving bed side rail entrapment.

On March 8, 2011, Petitioner’s then DON, Glenda Pulliam, emailed Petitioner’s then
Administrator, Nichola Johnson, to request that Petitioner conduct a safety audit on all
residents using side rails. Ms. Pulliam also asked Ms. Johnson to look into other safety
options “due to the high risk of injury related to using full side rails.” DON Pulliam was
prompted to do this because of the incident report she received regarding Resident 2, and
she noted that Petitioner had already removed side rails from Resident 2’s bed and
outfitted her with an alarm.’ P. Ex. 6.

Petitioner conducted two side rail audits. A side rail audit on March 8, 2011 found
broken, bent and improperly fitting side rails. CMS Ex. 24, at 1. However, a March 10,
2011 “Audit” note stated that no gaps of more than 4” were found. P. Ex. 7. A side rail
audit on April 1, 2011 found “large” spaces at the heads of beds when the beds were in
the up position for several residents. CMS Ex. 24, at 2. Mr. Doster testified that during
the audits he measured the gaps and spaces between mattresses and side rails and started
removing full side rails. Tr. 166-67.

Mr. Doster testified that the facility no longer uses full side rails. He reported checking
side rails every week to determine if there was damage, as well as checking for damage
to other items in resident rooms, such as furniture. At the time of survey, he replaced a
broken side rail at least once a month, sometimes more often. Most rails were bent, but
on a “handful” of occasions over the three years he has worked at the facility a latch,
spring, or some other part of the rail was broken. Mr. Doster kept a maintenance book at
the nurses’ station where the nurses wrote down anything needing his attention, which he
checked several times a day. With regard to side rails, he kept a supply of side rails on
hand so he could change a side rail immediately if it broke. He would not note when he
fixed or replaced a side rail. The only place broken side rails would be documented was
in the maintenance book where the nurses wrote down problems that needed repair and
which Mr. Doster checked daily. P. Ex. 28; Tr. 164, 168-69.

As part of its review of Resident 2’s accident, in May 2011, Petitioner asserts it adopted a
new assessment tool. P. Br. at 9; P. Ex. 4; P. Ex 26, at 3.

> Administrator Long testified that DON Pulliam and Administrator Johnson were not
available during the survey to discuss the changes to the side rail assessment and policies
and procedures they implemented following Resident 2’s entrapment. P. Ex. 24, at 2.
3. Petitioner did not reasonably address all foreseeable risks of
accidents involving bed side rail entrapment because Petitioner did
not correct a gap between the mattress and the side rail in Resident
8’s bed.

Despite some credible evidence that Petitioner took some steps to address the foreseeable
risk of resident entrapment in bed side rails, other compelling evidence proves it did not
take all reasonable steps as the standard of care required.

At the prehearing conference, Petitioner objected to the admission of CMS Ex. 23,
arguing that a risk management consultant prepared the document for Petitioner’s quality
assurance committee and that I should strike it from the record. Petitioner later followed-
up with a motion to strike, to which CMS responded, with attached exhibits 37 and 38
(the supplemental declarations of surveyors Carol S. Hermann, R.N., M.S.N., and Van P.
Grinwis, R.N., who were under the impression that a facility administrator created the
document). At hearing, I ruled that it was undisputed that the surveyors did not
improperly obtain the document nor compel its disclosure. The document was not
specifically marked as prepared for the facility’s quality assessment and assurance
committee, and Petitioner asserts that the committee never considered the document.
Accordingly, I ruled that there was no sufficient showing that CMS Ex. 23 was prepared
in good faith pursuant to 42 C.F.R. § 483.75(0)(4), and therefore it should remain in the
record.

The May 6, 201 1document, titled “Community Performance Improvement Plan,” did not
note anywhere who prepared it. The document noted for “Restraints/Side Rails” that side
rails throughout the facility were not properly assessed. CMS Ex. 23, at 1. Under
“Accidents/Hazards” it noted that two’ residents were found between side rails, but no
interventions were in place to minimize injury. Jd. at 2-3. A side rail was removed from
one bed without a mat on the floor to minimize injury. /d. Further, it noted entrapment
zones were not assessed on a regular basis and recommended that the maintenance
director measure the entrapment zones. Id. at 2, 4.

For corrective action the document recommended to: order new side rail assessment flow
sheets; update every resident’s side rail assessment; remove inappropriate side rails and
put other interventions in place to minimize injury; implement safety interventions such
as ¥%4 rails, alarms and mats; and review new admission records at the next nurse’s
meeting. Jd. at 1. The “Timeline/Responsible Person” for these actions was noted as
“Open” and that “equipment will be purchase[d] immediately following any negative
outcomes.” The “Administrator/DON/MDS coordinator” were responsible for
implementation. Jd.

* CMS only cited the entrapment of Resident 2 prior to July 2011. The record is unclear
who the second resident was or what transpired.
10

Then, in July 2011, a surveyor was still able to expose a lack of facility vigilance in
recognizing and addressing a dangerous gap in a resident’s bed with side rails. The FDA
recommends a dimensional limit of less than 4.75 inches for the area between the inside
surface of the bed rail and the compressed mattress. CMS Ex. 28, at 20; see also Good
Samaritan, DAB No. 1844 (upholding an ALJ who construed an FDA safety alert to
apply to a gap more than 4.5 inches into which bodies, heads, or necks could fit).
However, it is undisputed that staff repeatedly observed Resident 8 in her bed with a gap
larger than 4.5 inches.

As of the July survey, Resident 8 was a 72-year-old woman. Her diagnoses included
dementia and obesity. P. Ex. 14, at 14-15. Resident 8 was 62 inches tall and weighed
274.3 pounds in July 2011. P. Ex. 21. Her MDS revealed she had impaired mobility in
both of her lower extremities, but she was able to feed herself with set-up help only.
CMS Ex. 13, at 3; P. Ex. 14, at 11. Her April 19, 2011 side rail assessment indicated side
rails were ordered to serve as an enabler to promote independence in position and bed
mobility, noted Resident 8 expressed a desire to have side rails, and noted that Resident 8
expressed a desire to have the side rails raised while she was in bed. CMS Ex. 13, at 12.

Surveyor Grinwis observed Resident 8 on three separate occasions on July 5, 2011, from
just before noon until almost 5:30 p.m. Surveyor Grinwis testified that:

The resident was on her back with her head and shoulders positioned in the middle
of the mattress. Both full side rails were up. The left side rail fit flush with the
bed frame. However, the right side rail was splayed outward at the head of the bed
with the mattress shifted against that portion of the side rails. This left the bed
frame on the left side exposed, leaving a gap of approximately 8 inches between
the mattress and the head of the left side rail. I measured by placing my hand in
the space created between the mattress and bedrail. My hand fit into the gap
fingertip to wrist. Then I measured my hand fingertip to wrist on a ruler which
was 8”. I observed the resident again at 3:15 p.m., and the resident, side rails and
mattress were all in the same positions. I observed the resident next at 5:27 p.m.,
when she was eating her supper without assistance. The head of the bed was up,
as well as both side rails. The gap at the head of the bed remained.

CMS Ex. 33, at 4; CMS Ex. 13, at 3-4; see Tr. 79-80. The gap remained until Surveyor
Grinwis called it to the attention of Mr. Doster and other staff. Surveyor Grinwis
testified that her concern was that staff did not recognize that the gap was a problem. Tr.
82, 87-88, 114, 116-18.

Mr. Doster testified that during the survey he knew he saw Resident 8’s side rail
“separated from the mattress by five or six inches because the spring that holds the side
rail tight to the bed had become disengaged. [He] saw that the rail was still attached to
11

the bed in a vertical position, but was pulled away from the mattress.” P. Ex. 28, at 2-3.
Mr. Doster reportedly repositioned and re-latched the rail to fix the situation. P. Ex. 25,
at 7; Tr. 172-73.

Mr. Phillips testified that he was present when the survey team observed Resident 8 in
bed. He asserts that one of the side rails was pulled away from the mattress perhaps five
or six inches, which is slightly more than the maximum gap (4.75 inches) recommended
by the FDA guidance (CMS Ex. 28, at 10, 20). Mr. Phillips reasoned, however, that
because Resident 8 was obese, the FDA recommendations would not cover her because
obese individuals are unlikely to suffer entrapment. Mr. Phillips notes the rails were
spring-loaded, and it appeared here that the latching mechanism was unlatched. He
admits the side rail should have been closer to the mattress but states that given Resident
8’s size there is no realistic way she could have been entrapped. Moreover, Resident 8
could move by herself enough that had she become wedged against the side rail she could
have extricated herself. P. Ex. 25, at 7; Tr. 172-73, 180-82.

DON Massey testified that because Resident 8 was obese and had various ailments
requiring staff assistance with bed mobility, it was not even theoretically possible for her
to become entrapped in a six or eight inch gap between the mattress and side rail. P. Ex.
26, at 6. In addition, on cross-examination she testified that conducting side-rail audits
was on her list of things to do, since she started her employment on June 6, 2011, but “we
just didn’t get there before the State came.” Tr. 194, cf P. Ex. 26, at 5 (direct testimony
stating that she was continuing to reassess side-rail use after arriving in June); P. Ex. 26,
at 1.

It is not disputed that when Surveyor Grinwis observed Resident 8 on three separate
occasions on July 5, 2011, there was a large gap between the side rails and her bed.
Surveyor Grinwis credibly testified that she measured the gap to be eight inches. CMS
Ex. 33, at 4. During cross-examination, she agreed with Petitioner’s counsel that her

and was about eight inches and discussed measuring a gap of six to eight inches. Tr. 79-
80. Petitioner’s witnesses estimated the gap between the side rail and the bed as
somewhat less, about five to six inches. Even if the gap was only five to six inches,
owever, that such a large gap could persist over three separate observations without
facility staff noting it and ensuring its correction indicates Petitioner’s continued
noncompliance with the requirements of 42 C.F.R. § 483.25(h).

Petitioner asserts that Resident 8 could not have maneuvered herself into a dangerous
situation due to her large size and immobility and was thus not at risk of any harm. P. Br.
17, 23-24; Tr. 80, 90-91, 94-96, 117, 191; P. Ex. 26, at 6. However, I find Petitioner’s
assertion conflicts with Resident 8’s side rail assessment, which indicated that although
Resident 8 demonstrated poor bed mobility moving to a sitting position on the side of her
bed, Resident 8 did have some independent bed mobility. Further, the assessment
indicated that her side rails “serve as an enabler to promote independence in position &

12

bed mobility” (CMS Ex. 13, at 12), and Mr. Phillip’s testimony indicates she had some
bed mobility too.

Petitioner further argues that Resident 8 was obese, and therefore she was excepted from
the 2006 FDA Guidance, which Petitioner’s expert did acknowledge as at least an
informative tool for side rail manufacturers and nursing home users.° P. Br. at 8; Tr. 147.
Contrary to Petitioner’s argument and its expert witness’ testimony (P. Ex. 29, at 6-7,
13), bariatric (obesity) beds, not bariatric patients, were excluded from FDA’s
recommendations because FDA did not use anthropometric data for individuals in
bariatric beds when determining the recommended dimensional limits of entrapment
zones. CMS Ex. 28, at 11. There is no evidence that Resident 8 was in a bariatric bed
and, in fact, Surveyor Grinwis testified that Resident 8 was in what appeared to be a
normal, not a bariatric, bed. Tr. 80.

Even if I were to find Resident 8 was in a bariatric bed, however, the 2006 FDA guidance
suggests that it is up to the facility utilizing such a bed to identify and address areas of
potential entrapment through a comprehensive bed safety program. CMS Ex. 28, at 5,
10. Given that Petitioner offered no testimony regarding Resident 8’s actual head
measurement, it does not appear such an assessment was done as part of a bed safety
program. Further, evidence that staff did not heed the danger because they believed
Resident 8’s head, neck, or body could not fit into a gap more than 4.75 inches did not
surface at the time of the survey, but it instead arose as a post hoc rationalization. This
does not persuade me that the facility was vigilant with regard to recognizing a
foreseeable risk of entrapment.

Petitioner also argues that there is no evidence that Resident 8’s side rail was broken or
had been misused. Instead Petitioner notes that, as soon as the surveyor pointed it out,
Mr. Doster re-latched the side rail. Petitioner argues that unlatched side rails are not
uncommon in nursing facilities. Br. at 21; P. Response at 5.

The failure to note and correct the problem with the gap between the side rail and the
mattress on Resident 8’s bed, and to ensure her safety until the gap was remediated,

> Petitioner references statements in the 2006 FDA guidance that its analysis and
recommendations are nonbinding, that side rail accidents are very rare, and that not all
patients are at risk for entrapment. Petitioner asserts that the surveyors testified that they
were generally aware of this guidance and that the guidance was referred to in the SOM
but argues that I cut off questioning regarding their understanding, so it is not clear
whether the FDA guidance is incorporated into section 483.25(h). P. Br. at 8; Tr. 46-48.
I note that | interrupted Petitioner’s line of questioning because the witness testified that
she did not recall the language of the FDA guidance specific to nursing homes, and I
reminded counsel that CMS was ultimately responsible for arguing the standard of care.
Tr. 48.

13

shows Petitioner was not yet fixing a foreseeable problem absent a negative outcome and
substantiates Petitioner’s noncompliance with the regulation. Petitioner’s description of
the gap in Resident 8’s bed, caused by the unlatched side rail, as “an unusual but not
unheard of malfunction” is troubling (P. Br. at 21), especially considering Petitioner did
not recognize the foreseeable hazardous condition on Resident 8’s bed until Surveyor
Grinwis called it to staff’s attention after they entered her room several times that day to
provide her care. Tr. 89-91. If the facility was aware of latch malfunctions that caused
dangerous gaps in beds, it should have reasonably replaced that equipment before any
resident entrapment might occur, or at least it should have identified and remedied a
dangerous gap between a side rail and mattress immediately upon sight.

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

CMS asserts that Petitioner’s deficiency constituted immediate jeopardy (at a level “J” —
isolated occurrence) to resident health and safety from March 7 through July 7, 2011.
Petitioner argues that if I were to find noncompliance, that noncompliance does not
constitute immediate jeopardy.

Immediate jeopardy exists if a facility’s noncompliance has caused, or is likely to cause,
serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301. The
regulation does not require that a resident actually be harmed. Lakeport Skilled Nursing
Ctr., DAB No. 2435, at 8 (2012). I must uphold CMS’s determination as to the level of a
facility’s substantial noncompliance (which includes an immediate jeopardy finding)
unless it is “clearly erroneous.” 42 C.F.R. § 498.60(c). The Board directs that the
“clearly erroneous” standard imposes on facilities a heavy burden to show no immediate
jeopardy and has sustained determinations of immediate jeopardy where CMS presented
evidence “from which ‘[o]ne could reasonably conclude’ that immediate jeopardy
exists.” See, e.g., Barbourville Nursing Home, DAB No. 1962, at 11 (2005), citing
Florence Park Care Ctr., DAB No. 1931, at 27-28 (2004), citing Koester Pavilion, DAB
No. 1750 (2000).

Here, CMS’s finding of immediate jeopardy is not “clearly erroneous.” Resident 2 was
found with her head actually entrapped in side rails, and Petitioner states it was never
able to conclusively determine why it happened. As of April 1, large gaps were still
being found in resident beds. During the July survey, an approximate eight-inch gap was
discovered in Resident 8’s bed and was not corrected until Surveyor Grinwis pointed out
the situation to Petitioner’s staff. Therefore, the facility was not taking all reasonable
steps to prevent the foreseeable risk of resident entrapments in the side rails of beds.

The evidence in the record clearly suggests that entrapments are likely to lead to serious
injury or death to a resident. For example, the 2006 FDA guidance reports:
14

FDA received approximately 691 entrapment reports over a period of 21
years from January 1, 1985 to January 1, 2006 [footnote omitted]. In these
reports, 413 people died, 120 were injured, and 158 were near-miss events
with no serious injury as a result of intervention. These entrapment events
have occurred in openings within the bed rails, between the bed rails and
mattresses, under bed rails, between split rails, and between the bed rails
and head or foot boards. The population most vulnerable to entrapment are
elderly patients and residents, especially those who are frail, confused
restless, or who have uncontrolled body movement. Entrapments have
occurred in a variety of patient care settings, including hospitals, nursing
homes, and private homes. Long-term care facilities reported the majority
of entrapments.

CMS Ex. 28, at 6-7. Ms. Herman referenced the 2006 FDA guidance and also credibly
opined that Resident 2’s entrapment could have seriously injured or killed her. CMS Ex.
34, at 6. Petitioner’s witness Mr. Phillips, a licensed nursing home administrator, also
acknowledged that entrapment could cause a loss of breathing. P. Ex. 25, at 3. Surveyor
Grinwis also credibly testified that, considering facility staff did not notice the gap in
Resident 8’s bed, it constituted an act that was likely to cause a serious injury, such as
Resident 8’s head getting caught in the gap between the bed rail and the bed mattress.
CMS Ex. 33, at 4-5; Tr. 86-88.

On December 3, 2012, Petitioner filed a motion to supplement the record with P. Ex. 30,
an October 11, 2012 memorandum of the Consumer Product Safety Commission on the
topic of adult bed rail death and injury data from January 2003 through September 2012,
which was released to the public after the hearing. Petitioner asserts the memorandum
shows that only 25 deaths of nursing facility residents were associated with portable bed
rails during the ten-year period, and thus mishaps involving side rails are “very unlikely
to cause serious injury or death.” CMS objected to its admission given that the briefing
in this case concluded several months earlier and also because the memorandum should
not be viewed as stating the risk of injury due to side rails is so minimal that Petitioner
should be viewed as in compliance with 42 C.F.R. § 483.25(h). In accordance with my
prehearing order, I only allow parties to supplement their evidentiary exchanges with
good cause, and I do not find good cause here because Petitioner proposed the exhibit
after the hearing and post-hearing briefing periods concluded. Accordingly, I deny the
motion. Even if I were I to admit this document, I do not see it benefiting Petitioner’s
position in this case because: (1) the reported fatalities for all injury locations is 155
based on 160 reported incidents related to adult portable bed rails, and (2) with specific
regard to side rail entrapment incidents, 143 out of 145 reported incidents resulted in
fatalities.

15

C. The CMP that CMS imposed is reasonable in amount and duration.

With regard to the amount of the CMP, I examine whether a CMP is reasonable by
applying the factors listed in 42 C.F.R. § 488.438(f): 1) the facility’s history of
noncompliance; 2) the facility’s financial condition; 3) the factors specified in 42 C.F.R.
§ 488.404; and 4) the facility’s degree of culpability, which includes neglect,
indifference, or disregard for resident care, comfort, or safety. The absence of culpability
is not a mitigating factor. The factors listed in 42 C.F.R. § 488.404 include: 1) the scope
and severity of the deficiency; 2) the relationship of the deficiency to other deficiencies
resulting in noncompliance; and 3) the facility’s prior history of noncompliance in
general and specifically with reference to the cited deficiencies.

The regulations specify that a CMP that is imposed against a facility on a per day basis
will fall into one of two ranges of penalties. 42 C.F.R. §§ 488.408; 488.438. The upper
range of a CMP, $3,050 per day to $10,000 per day, is reserved for deficiencies that pose
immediate jeopardy to a facility’s residents and, in some circumstances, for repeated
deficiencies. 42 C.F.R. § 488.438(a)(1)(i); 488.438(d)(2). The lower range of CMP, $50
to $3,000 per day, is reserved for deficiencies that do not pose immediate jeopardy, but
either cause actual harm to residents, or cause no actual harm but have the potential for
causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii). In assessing the
reasonableness of a CMP amount, an ALJ looks at the per day amount, rather than the
total accrued CMP. Kenton Healthcare, LLC, DAB No. 2186, at 28 (2008). The
regulations leave the decision regarding the choice of remedy to CMS, and the amount of
the remedy to CMS and the ALJ, requiring only that the regulatory factors at 42 C.F.R.
§§ 488.438(f) and 488.404 be considered when determining the amount of a CMP within
a particular range. 42 C.F.R. §§ 488.408; 488.408(g)(2); 498.3(d)(11); see also 42 C.F.R.
§ 488.438(e)(2); Alexandria Place, DAB No. 2245, at 27 (2009); Kenton Healthcare,
LLC, DAB No. 2186, at 28-29.

Unless a facility contends that a particular regulatory factor does not support the CMP
amount that CMS imposed, the ALJ must sustain it. Coguina Ctr., DAB No. 1860, at 32
(2002). CMS determined to impose a per day CMP in this case. I found immediate
jeopardy level noncompliance not to be clearly erroneous here. Thus, the minimum CMP
I am required to sustain is $3,050 per day. The $3,550 per day CMP CMS imposed is in
the very low range for immediate jeopardy level noncompliance.

In evaluating the regulatory factors, I find that Petitioner’s history of noncompliance fully
supports the relatively low CMP considering Petitioner had been cited under 42 C.F.R. §
483.25(h) (Tag F323) during the May 5, 2011 survey, and also cited under Tag F323
following a survey conducted in September 2008, which also found immediate jeopardy.
CMS Ex. 21, at 8, 9. Over the years, Petitioner has also been cited for numerous other
deficiencies. See CMS Ex. 21. Based on this regulatory factor alone, a CMP that is only
$500 higher than the minimum amount I am required by regulation to sustain is not
16

unreasonable. However, Petitioner’s deficiency is also serious (constituting immediate
jeopardy to its residents) and Petitioner is culpable for identifying risks but not
reasonably addressing those foreseeable risks of entrapment.

Petitioner asserted that its financial condition should be considered in mitigation of the
CMP, arguing that the CMP imposed is greater than its annual operating budget, despite
there being no showing or clear allegation that Petitioner or its staff committed any
regulatory violation. Specifically, Mr. Phillips testified (without the benefit of any
documentary evidence supporting his testimony) that the CMP imposed “represents about
the entire annual costs for payroll, benefits, food, supplies and medicine combined, and
would be devastating to the facility.” P. Ex. 25, at 2.

Petitioner bears the burden of proving that payment of the CMP would result in closure
of its facility or compromise in resident health and safety. Oceanside Nursing & Rehab.
Ctr., DAB No. 2382, at 22-23 (2011). Petitioner has not done so. Petitioner has not
submitted any sort of easily accessible financial information to support Mr. Phillips’
testimony, such as tax returns, balance sheets, income statements, or cash flow
statements. I find Mr. Phillips’ testimony lacks support and only assign it little weight.
Accordingly, I am unable to assess Petitioner’s actual financial condition based on Mr.
Phillips’ testimony alone. Considering Petitioner’s burden, I do not mitigate the CMP
imposed based on this factor.

The burden of persuasion regarding the duration of noncompliance is also Petitioner’s. In
the case of Owensboro Place & Rehab. Ctr., DAB No. 2397 (2011), the Board stated:

The burden of persuasion is on the facility. The Board has made it clear that the
facility bears the burden of showing that it returned to substantial compliance on a
date earlier than that determined by CMS and has rejected the idea that CMS must
establish a lack of substantial compliance during each day in which a remedy
remains in effect... .

Owensboro Place, DAB No. 2397, at 12-13 (citations omitted).

Here Petitioner was put on notice on March 7, 2011, when Resident 2 was found
entrapped, that it had a side rail issue that risked resident safety. Although Petitioner did
begin to address the problem, the noncompliance continued. As of April 2011 Petitioner
was still finding large gaps between side rails and resident beds. It appears that some of
Petitioner’s corrective actions may have been suspended pending “negative outcome[s].”
Then, in July 2011, a surveyor confirmed a lack of facility vigilance when Petitioner’s
staff did not recognize, until Surveyor Grinwis pointed it out, that there was an
approximate eight-inch gap between the unlatched side rail and Resident 8’s bed. CMS
found Petitioner back in substantial compliance after it submitted a credible allegation of
compliance regarding both Residents 2 and 8 and any other residents with side rails.
17

CMS Ex. 4, at 9-14. Petitioner has not met its burden to persuade me to find the facility
returned to substantial compliance at any point earlier than CMS’s determination.

IV. Conclusion

For the reasons set forth above, I sustain CMS’s determinations. I find that Petitioner
was not in substantial compliance with the participation requirement at 42 C.F.R.

§ 483.25(h) and that the CMP imposed, a $3,550 per day CMP effective March 7 through
July 7, 2011, is reasonable.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Jodi Lynn Gaeta,
Petitioner,
v.
The Inspector General.
Docket No. C-13-307
Decision No. CR2828

Date: June 17, 2013

DECISION

This matter is before me on review of the Inspector General’s (I.G.’s) determination to
exclude Petitioner pro se Jodi Lynn Gaeta from participation in Medicare, Medicaid, and
all other federal health care programs for a period of five years. The I.G.’s determination
to exclude Petitioner is based on section 1128(a)(3) of the Social Security Act (Act),

42 U.S.C. § 1320a-7(a)(3). The facts of this case require the imposition of a five-year
exclusion, and so I grant the I.G.’s Motion for Summary Disposition.

I. Procedural Background

Petitioner Jodi Lynn Gaeta is a licensed practical nurse, and in December 2009 she was
employed in that capacity at a nursing home in Crookston, Minnesota. On or about
December 17, 2009, she stole tablets of Lorcet, a medication containing the controlled
substance hydrocodone, from the supply of that medication belonging to one of the
nursing home’s residents. Local law enforcement authorities learned of the theft and on
January 8, 2010 charged Petitioner with violations of MINN. STAT. § 609.62.2(1)

and .3(2), and MINN. STAT. § 152.025.2(a)(1), both felonies related to controlled
substances. I.G. Exhibit (Ex.) 3.

Records reflecting the next steps in Petitioner’s prosecution are peculiarly unhelpful, and
are insufficient to explain how the two felony charges filed in January resulted in
proceedings in the District Court, Ninth Judicial District, County of Polk, Minnesota, on
April 12, 2010. The records do not indicate whether Petitioner reached some sort of plea
agreement with prosecuting authorities, whether there were any proceedings between
January and April 2010 in which she might have actually tendered and the District Court
might have accepted her guilty plea to one of the charges, or whether she went to trial and
was found guilty by jury verdict or bench decision.’ All that this unsatisfactory record
shows is that on April 12, 2010, the District Court stayed imposition of sentence for five
years, based on Petitioner’s apparent “conviction” of a violation of MINN. STAT.

§ 152.025.2(a)(1), a fifth-degree felony, and placed her on probation subject to
certain conditions and costs. I.G. Ex. 4. The District Court relied on MINN. STAT.
§ 609.135 as the authority by which it stayed the imposition of Petitioner’s
sentence.

The L.G. began the process of excluding Petitioner from participation in Medicare,
Medicaid, and all other federal health care programs, as required by section 1128(a) of
the Act, 42 U.S.C. § 1320a-7(a), on November 30, 2012. On that date the I.G. notified
Petitioner that she was being excluded pursuant to the terms of section 1128(a)(3) of the
Act for the mandatory minimum period of five years.

Acting pro se, Petitioner timely sought review of the I.G.’s action by letter dated January
17, 2013. I convened a telephonic prehearing conference on February 14, 2013, pursuant
to 42 C.F.R. § 1005.6, in order to discuss the issues presented by the case and procedures
for addressing those issues. By Order of February 14, 2013, I established a schedule for
the submission of documents and briefs. All briefing is now complete, and the record in
this case closed on May 21, 2013.

There are five exhibits in this case. The I.G. proffered five exhibits marked I.G. Exhibits
1 through 5 (I.G. Exs. 1-5), and they are admitted without objection. Petitioner has
proffered no exhibits of her own.

II. Issues

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

1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(3) of the Act; and

' See the last section of paragraph 7 of my Order of February 14, 2013.
2. Whether the length of the proposed period of exclusion is unreasonable.

I resolve both issues in favor of the I.G.’s position. Because her predicate conviction has
been established, there is a basis for Petitioner’s exclusion pursuant to section 1128(a)(3)
of the Act. A five-year term of exclusion is the minimum established by section

1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B) and is therefore not unreasonable.

III. Controlling Statutes and Regulations

Section 1128(a)(3) of the Act, 42 U.S.C. § 1320a-7(a)(3), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of “[a]ny individual or entity that has been convicted for an offense which
occurred after [August 21, 1996,] under Federal or State law, in connection with the
delivery of a health care item or service or with respect to any act or omission in a health
care program (other than those specifically described in [section 1128(a)(1)]) operated by
or financed in whole or in part by any Federal, State, or local government agency, of a
criminal offense consisting of a felony related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.” The terms of section 1128(a)(3)
are restated in similar language at 42 C.F.R. § 1001.101(c).

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal, State, or local court,”
Act § 1128(i)(1); “when there has been a finding of guilt against the individual .. . by a
Federal, State, or local court,” Act § 1128(i)(2); “when a plea of guilty . . . by the
individual . . . has been accepted by a Federal, State, or local court,” Act § 1128(i)(3); or
“when the individual . . . has entered into participation in a first offender, deferred
adjudication, or other arrangement or program where judgment of conviction has been
withheld.” Act § 1128(i)(4). These definitions are repeated at 42 C.F.R. § 1001.2.

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

IV. Findings and Conclusions

I find and conclude as follows:

1. The District Court, Ninth Judicial District, County of Polk, Minnesota, stayed the
imposition of sentence against Petitioner Jodi Lynn Gaeta on April 12, 2010 in
proceedings based on her alleged violation of, inter alia, MINN. STAT.

§ 152.025.2(a)(1), a fifth-degree felony. The felonious conduct on which the
proceedings against Petitioner were based occurred on or about December 17, 2009.
LG. Exs. 3, 4.

2. The stay of imposition of sentence described above in Finding 1 above constitutes a
“conviction” within the meaning of sections 1128(a)(3) and 1128(i) (4) of the Act, and
42 C.F.R. § 1001.2.

3. There is a nexus and a common-sense relationship between the felony offense of
which Petitioner was convicted, as noted above in Findings land 2 above, and theft or
embezzlement in connection with the delivery of a health care item or service. I.G. Exs.
3,4.

4. Petitioner’s conviction as noted above in Findings 1, 2, and 3 constitutes a basis for
the I.G.’s exclusion of Petitioner from participation in Medicare, Medicaid, and all other
federal health care programs. Act § 1128(a)(3); 42 U.S.C. § 1320a-7(a)(3).

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

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

V. Discussion

The four essential elements necessary to support an exclusion based on section
1128(a)(3) of the Act are: (1) the individual to be excluded must have been convicted of
a felony offense; (2) the felony offense must have been based on conduct relating to
fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct; (3) the felony offense must have been for conduct in connection with the
delivery of a health care item or service, or the felony offense must have been with
respect to any act or omission in a health care program operated by or financed in whole
or in part by any federal, state, or local government agency; and (4) the felonious conduct
must have occurred after August 21, 1996. Andrew D. Goddard, DAB No. 2032 (2006);
Kenneth M. Behr, DAB No. 1997 (2005); Erik D. DeSimone, R.Ph., DAB No. 1932
(2004); Jeremy Robinson, DAB No. 1905 (2004); Breton Lee Morgan, M.D., DAB
CR1913 (2009); Morganna Elizabeth Allen, DAB CR1479 (2006); Theresa A. Bass,
DAB CR1397 (2006); Michael Patrick Fryman, DAB CR1261 (2004); Golden G.
Higgwe, D.P.M., DAB CR1229 (2004); Thomas A. Oswald, R.Ph., DAB CR1216 (2004);
Katherine Marie Nielsen, DAB CR1181 (2004).

Petitioner does not contest the I.G’s proof of the four essential elements, and concedes
that she is in fact subject to exclusion. I note that I.G. Exs. 3 and 4 plainly set out the
date of Petitioner’s alleged offense, its classification as a felony, its gravamen as a theft
or embezzlement, and its nexus to the delivery of a health care item or service. And,
although Petitioner does not articulate the argument herself, I note that the disposition of
her case under the procedure established by MINN. STAT. § 609.135, the stay of
imposition of sentence and the potential reduction of her conviction to a misdemeanor,
does not invalidate her conviction for purposes of this exclusion. Instead, the established
law of this forum requires that the Act’s definitions of “conviction” be applied in these
circumstances. Ellen L. Morand, DAB No. 2436 (2012); Henry L. Gupton, DAB No.
2058 (2007), aff'd sub nom. Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008);
Marc Schneider, D.M.D., DAB No. 2007 (2005); Carolyn Westin, DAB No. 1381 (1993),
aff'd sub nom. Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994). The specific
definition of “conviction” noted in section 1128(i)(4) of the Act encompasses the
proceedings against Petitioner.

What she seeks in this appeal is in effect a shortening of the five-year length of her
exclusion, asking that it be made retroactive to begin concurrently with the date of her
conviction, April 12, 2010. The LG. did not complete the process of excluding Petitioner
until November 30, 2012, and Petitioner quite correctly points out that the IG. waited
over 31 months after her conviction to exclude her. When measured against the five-year
period of exclusion that the I.G. seeks to impose, the delay obviously amounts to a
significant de facto enhancement of that period. Whether that extension of her exclusion
until December 20, 2017 — an extension attributable solely to the I.G.’s unexplained
delay — is defensible in terms of the statute’s remedial goal, or fair in any sense at all, is
not a question I am authorized to ask or answer. Simply stated, the beginning date of
Petitioner's exclusion is established by operation of law as 20 days from the date of the
1.G.'s November 30, 2012 notice letter. Act § 1128(c)(1), 42 U.S.C. § 1320a-7(c)(1); 42
C.F.R. § 1001.2002(b). I have no authority to change that date. Randall Dean Hopp,
DAB No. 2166 (2008); Lisa Alice Gantt, DAB No. 2065 (2007); Kailash C. Singhvi,
M.D., DAB No. 2138 (2007).

The five-year period of exclusion proposed in this case is the minimum required by
section 1128(c)(3)(B) of the Act. As a matter of law it is not unreasonable, and neither
the Board nor I can reduce it. 42 C.F.R. § 1001.2007(a)(2); Mark K. Mileski, DAB
No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002).

I repeat that Petitioner appears here pro se. Because of that I have been guided by the
Board’s reminders that pro se litigants should be offered “some extra measure of
consideration” in developing their records and their cases. Louis Mathews, DAB No.
1574 (1996); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991). I have searched
all of Petitioner’s pleadings for any arguments or contentions that might raise a valid,
relevant defense to the I.G.’s Motion, but have found nothing that could be so construed.
Resolution of a case by summary disposition is particularly fitting when settled law can
be applied to undisputed material facts. Michael J. Rosen, M.D., DAB No. 2096; Thelma
Walley, DAB No. 1367. Summary disposition is authorized by the terms of 42 C.F.R.

§ 1005.4(b)(12). This forum looks to FED. R. CIV. P. 56 for guidance in applying that
regulation. Robert C. Greenwood, DAB No. 1423 (1993). The material facts in this case
are undisputed and unambiguous: they support summary disposition as a matter of
settled law. This Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Jodi Lynn Gaeta from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, pursuant to the terms of section 1128(a)(3) of the Act, is
SUSTAINED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Sandra Lou Halverson
(O.L. File No. H-12-41664-9),

Petitioner,
v.
The Inspector General.
Docket No. C-13-225
Decision No. CR2825

Date: June 13, 2013

DECISION

The Inspector General (1.G.) of the Department of Health and Human Services (HHS)
excluded Petitioner, Sandra Lou Halverson, from participating in Medicare, Medicaid,
and all other federal health care programs for five years pursuant to section 1128(a)(2) of
the Social Security Act, codified in the United States Code at 42 U.S.C. § 1320a-7(a)(2).
Petitioner requested a hearing to challenge her exclusion. For the reasons explained
below, I conclude that the I.G. has a basis for excluding Petitioner from program
participation and that the five-year exclusion is required by law. Therefore, | affirm the
1.G.’s exclusion of Petitioner.

I. Background and Procedural History

By letter dated October 31, 2012, the LG. notified Petitioner, a nurse aide, that she was
being excluded from participation in Medicare, Medicaid, and all other federal health
care programs for a period of five years pursuant to 42 U.S.C. § 1320a-7(a)(2). LG.
Exhibit (Ex.) 1. The I.G. advised Petitioner that her exclusion was based on her
conviction
in the State of Wisconsin, Circuit Court Branch 1, Pierce County, of a
criminal offense related to neglect or abuse of patients, in connection with
the delivery of a health care item or service, including any offense that the
Office of Inspector General (OIG) concludes entailed, or resulted in,
neglect or abuse of patients ....

LG. Ex. 1, at 1.

Petitioner timely filed her December 7, 2012 request for hearing (RFH) with HHS’s
Departmental Appeals Board, Civil Remedies Division (CRD). On January 16, 2013, I
held a telephonic prehearing conference. The prehearing conference is summarized in
my January 16, 2013 Order and Schedule for Filing Briefs and Documentary Evidence
(Order). Pursuant to the Order, the I.G. filed a brief (IG. Br.) on February 21, 2013,
along with nine proposed exhibits (I.G. Exs. 1-9). Petitioner subsequently filed a
response letter (P. Br.) on March 30, 2013, but did not submit any proposed exhibits.
The LG. filed a reply brief (I.G. Reply Br.) on April 19, 2013.

Petitioner did not object to any of the I.G.’s proposed exhibits. Therefore, I admit I.G.
Exs. 1-9 into the record. The I.G. has indicated that an in-person hearing is unnecessary.
1.G. Br. at 10. Petitioner did not request an in-person hearing in her response letter or
state that she intended to provide direct testimony from any witness. See P. Br. at 1
(unnumbered). Therefore, an in-person hearing is not required. I issue this decision
based on the written record.

II. Issue

Whether the I.G. has a basis for excluding Petitioner from participating in Medicare,
Medicaid, and all other federal health care programs pursuant to 42 U.S.C. § 1320a-
7(a)(2). 42 C.F.R. § 1001.2007(a)(1)-(2).

IIL. Findings of Fact, Conclusions of Law, and Analysis”

The Secretary of Health and Human Services must exclude from participation in all
federal health care programs “[a]ny individual or entity that has been convicted, under

' Petitioner sent her response to the I.G.’s counsel on March 30, 2013, but did not send a
copy to the CRD. The I.G.’s counsel received the letter on April 15, 2013, and forwarded
a copy of it by email to the CRD staff attorney assigned to this case. The staff attorney
incorporated the electronic copy of Petitioner’s response letter into the record file. The
1G. has not objected to Petitioner’s response; therefore, I accept it as timely filed.

> My findings of fact and conclusions of law are set forth in italics and bold font as
headings in this section of the decision.
Federal or State law, of a criminal offense relating to neglect or abuse of patients in
connection with the delivery of a health care item or service.” 42 U.S.C. § 1320a-7(a)(2).

A. The Circuit Court for Pierce County, Wisconsin, entered a guilty finding
against Petitioner for intentional abuse of patients with no harm in violation
of section 940.295(3)(a)(1) of the Wisconsin Statutes.

Petitioner is a registered nurse aide in Wisconsin. I.G. Exs. 5, 9. On October 14, 2011,
Petitioner was charged with one count of “Intentionally Abuse Patients - No Harm,” a
misdemeanor offense in violation of sections 940.295(3)(a)(1) and 940.295(3)(b)(5) of
the Wisconsin Statutes. IG. Ex. 4. According to the charging document, Petitioner was
“employed in an adult family home” and “intentionally abuse[d] a resident, under
circumstances not causing or likely to cause bodily harm... .” I.G. Ex. 4. On February
24, 2012, Petitioner pled guilty to the single offense charged, and the Circuit Court
entered a guilty finding against Petitioner for violating section 940.295(3)(a)(1).°_1.G.
Ex. 2; see RFH at 1 (acknowledging that Petitioner pled guilty). The court imposed a
fine of $265.60. I.G. Ex. 2.

B. Petitioner was convicted of a criminal offense for purposes of 42 U.S.C.
§ 1320a-7(a)(2).

Under 42 U.S.C. § 1320a-7(a)(2), an individual must be “convicted, under Federal or
State law, of a criminal offense” before the I.G. excludes him or her. The statute defines
the term “convicted” to include “when there has been a finding of guilt against the
individual or entity by a Federal, State, or local court” or “when a plea of guilty or nolo
contendere by the individual or entity has been accepted by a Federal, State, or local
court.” 42 U.S.C. § 1320a-7(i)(2); see 42 C.F.R. § 1001.2. Here, following Petitioner’s
guilty plea, the Circuit Court of Pierce County, Wisconsin, entered a finding of guilt
against Petitioner for intentionally abusing patients with no resulting harm. LG. Ex. 2.

Accordingly, Petitioner was “convicted” of a
statute because she pled guilty to an offense
finding of guilt against her.

criminal offense within the meaning of the
for which the state court then entered a

Petitioner now claims that she is not guilty o
guilty and the court entered a guilty finding.

the underlying offense to which she pled
P. Br. at 1. Rather, Petitioner asserts that

she did not have any money to continue contesting the criminal charge and, on the
recommendation of her lawyer, agreed to plead guilty to end the criminal proceeding. P.

Br. at 1; RFH at 1. Petitioner claims that the

prosecutor and court used her “as an

> Petitioner acknowledges in her RFH that she pled guilty to the criminal offense,
although the court record does not reflect a guilty plea. See RFH at 1; 1G. Ex. 2. The

court record only contains a finding of guilt.

Based on Petitioner’s representation, it is

reasonable to infer that the court entered its finding based on Petitioner’s guilty plea.
example” and “had to give me something to appease the [victim’s] parents.” RFH at 1.
Petitioner argues that the victim’s parents are wealthy and used their wealth to influence
the state criminal process against her. RFH at 2; P. Br. at 1.

By regulation, “the basis for the underlying conviction, civil judgment or determination is
not reviewable and the individual . . . may not collaterally attack it either on substantive
or procedural grounds in this appeal.” 42 C.F.R. § 1001.2007(d). Petitioner’s arguments
about her actual innocence, the motivating factors for her pleading guilty, and her theory
that the victim’s parents orchestrated the criminal charge against her all relate to the basis
for the underlying conviction, and are not reviewable by me in this case. Jd.
Accordingly, Petitioner’s arguments cannot serve as a basis to reverse the exclusion.

C. Petitioner must be excluded under 42 U.S.C. § 1320a-7(a)(2) because her
conviction was for an offense relating to the abuse of patients in connection
with the delivery of a health care item or service.

The I.G. must exclude an individual from participation in any federal health care program
if the individual was convicted of a criminal offense relating to neglect or abuse of
patients in connection with the delivery of a health care item or service. 42 U.S.C.

§ 1320a-7(a)(2). To support the exclusion, the I.G. must establish: (1) the individual was
convicted of a criminal offense; (2) the criminal offense was related to neglect or abuse
of patients; and (3) the criminal offense was done in connection with the delivery of a
health care item or service. As discussed above, the I.G. has shown that Petitioner was
convicted of a criminal offense.

Here, Petitioner was charged with and pled guilty to abusing a patient while employed in
an adult family home. LG. Exs. 2, 4. The title of the offense for which Petitioner was
convicted includes both “abuse” and “patient,” sufficient to satisfy the second element
needed for a mandatory exclusion under 42 U.S.C. § 1320a-7(a)(2). See I.G. Exs. 2, 4.
However, relying on the statutory title alone is not a preferred analytical tool to determine
whether the underlying acts leading to a conviction were related to the abuse of patients.
See, e.g., Dewayne Franzen, DAB No. 1165 (1990). Recognizing that principle, a review
of the record here shows that Petitioner’s underlying conduct was “abuse” of a “patient.”
Investigators determined that Petitioner locked “J.R.,” a developmentally-disabled adult,
in her room for long periods by placing a loud door alarm on J.R.’s bedroom door. The
alarm emitted a loud screeching sound when triggered, which investigators determined
would frighten J.R. into remaining in the room.’ I.G. Ex. 3, at 11. J.R. alleged that
Petitioner “had spanked her and locked her in her room against her will and did not allow

* Investigators also found a door alarm on a door leading outside of the house, but
determined that this alarm, unlike the bedroom door alarm, was a legitimate and
authorized safety feature. 1.G. Ex. 3, at 7.
her to leave.” I.G. Ex. 3, at 2. The Wisconsin Department of Health Services conducted
an investigation of Petitioner from August 15, 2011 through March 1, 2012. IG. Ex. 9,
at 1. The investigation focused on a report that Petitioner “intentionally spanked, hit and
pulled a resident’s hair and locked a resident in her room... .” LG. Ex. 9, at 1. The
investigation looked into the same acts that were involved in Petitioner’s criminal
conviction. I.G. Ex. 9, at 1. The Wisconsin Department of Health Services concluded
that “there is reasonable cause to believe the incident did occur and that your conduct
meets the definition of abuse in Wis[consin] Admin[istrative] Code § DHS 13.03.” LG.
Ex. 9, at 1. The Wisconsin Department of Health Services currently lists Petitioner on its
website as having a “‘Substantiated Finding of Caregiver Misconduct” based on the
circumstances of this case. I.G. Exs, 5, 9.

For purposes of the I.G.’s exclusion, the regulations define a “patient” as:

[A]ny individual who is receiving health care items or services, including
any item or service provided to meet his or her physical, mental, or
emotional needs or well-being (including a resident receiving care in a
facility as described in part 483 of this chapter), whether or not reimbursed
under Medicare, Medicaid and any other Federal health care program and
regardless of the location in which such item or service is provided.

42 C.F.R. § 1001.2. Here, J.R. lived in a home and received services through REM
Wisconsin, a company that provides in-home health and social care to those who are
developmentally disabled, emotionally disturbed, or have mental illnesses. See I.G. Exs.
7, 8. Therefore, J.R. was a “patient” at the time Petitioner committed the conduct
underlying her conviction.

Based on the offense to which Petitioner pled guilty, the investigation report, the findings
of the Wisconsin Department of Health Services, and the nature of Petitioner’s
employment, I conclude that the conduct resulting in Petitioner’s conviction was related
to the abuse of a patient.

The final element for a mandatory exclusion under 42 U.S.C. § 1320a-7(a)(2), requires
that the criminal conduct related to abuse of a patient must be “in connection with the
delivery of a health care item or service.” 42 U.S.C. § 1320a-7(a)(2). The regulation
implementing this mandatory exclusion provision explains that the delivery of a health
care item or service “includes the provision of any item or service to an individual to
meet his or her physical, mental or emotional needs or well-being, whether or not
reimbursed under Medicare, Medicaid or any Federal health care program.” 42 C.F.R.
§ 1001.102(b). The record before me shows that Petitioner, while working for REM
Wisconsin, provided services intended to meet the patient victim’s physical, mental, or
emotional needs. See I.G. Exs. 6, 7. Petitioner committed the abuse-related conduct that
resulted in her conviction during the time intended for the provision of health-related
services to J.R. Therefore, Petitioner’s conviction was for an offense related to abuse in
connection with the delivery of a health care item or service. The LG. has established the
necessary elements for exclusion under 42 U.S.C. § 1320a-7(a)(2).

D. Petitioner must be excluded for the statutory minimum of five years under
42 U.S.C. § 1320a-7(c)(3)(B).

Petitioner must be excluded for a minimum period of five years because, as discussed
above, there is a basis to exclude Petitioner pursuant to the mandatory exclusion
provision of the statute. 42 U.S.C. § 1320a-7(a)(2), (c)(3)(B). The five-year exclusion
imposed by the LG. is the required minimum exclusion period and cannot be reduced in
these proceedings. 42 C.F.R. § 1001.2007(a)(2).

IV. Conclusion

For the foregoing reasons, I affirm the I.G.’s determination to exclude Petitioner from
participating in Medicare, Medicaid, and all other federal health care programs for the
statutory five-year minimum period pursuant to 42 U.S.C. § 1320a-7(a)(2).

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Trudy J. Summers, R.N.,
Petitioner,
v.
The Inspector General.
Docket No. C-12-1290
Decision No. CR2824

Date: June 13, 2013

DECISION

This matter is before me on review of the Inspector General’s (I.G.’s) determination to
exclude Petitioner pro se Trudy J. Summers from participation in Medicare, Medicaid,
and all other federal health care programs for a period of five years. The I.G.’s
determination to exclude Petitioner is based on the terms of section 1128(a)(3) of the
Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(3). The facts of this case mandate the
imposition of a five-year exclusion, and so I grant the I.G.’s Motion for Summary
Disposition.

I. Procedural Background

Petitioner pro se Trudy J. Summers, R.N. is a registered nurse licensed in the State of
Wyoming. I.G. Exhibit (Ex.) 3. In 2008, she was employed as a nurse at the Veterans
Administration Medical Center (VAMC) in Cheyenne, Wyoming. While on duty at that
facility between August 1 and December 10, 2008, she diverted unused portions of
prepackaged morphine doses to her own use; part of this misconduct was made possible
by Petitioner’s misuse of other nurses’ personal identification codes in recording the
disposition of the drugs. I.G. Ex 4.
Her activities were discovered by federal authorities, but they were prosecuted by state
authorities in state court. I.G. Exs. 4,5. On February 22, 2010 Petitioner appeared with
counsel in the District Court for the First Judicial District of Laramie County, Wyoming
and pleaded guilty to one misdemeanor count of Acquiring a Controlled Substance by
Misrepresentation, in violation of WYO. STAT. ANN. § 35-7-1033(a)(iii), and one felony
count of Furnishing False Information on a Document Required to Be Kept, in violation
of WYO. STAT. ANN. § 35-7-1033(a)(iv). At that same appearance, the District Court
accepted Petitioner’s pleas to the two charges, found her guilty of both crimes, entered its
judgment of conviction, and imposed sentence. Petitioner was placed on five years’
supervised probation and was ordered to pay fines, fees, and assessments totaling $485.
LG. Exs. 4, 5, 6.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), the I.G.
began the process of excluding Petitioner from participation in Medicare, Medicaid, and
all other federal health care programs. On July 31, 2012, the I.G. notified Petitioner that
she was being excluded pursuant to the terms of section 1128(a)(3) of the Act for the
mandatory minimum period of five years. LG. Ex. 1.

Acting pro se, Petitioner timely sought review of the L.G.’s action by letter dated

August 14, 2012.' I convened a telephonic prehearing conference on November 5, 2012,
pursuant to 42 C.F.R. § 1005.6, in order to discuss the issues presented by the case and
procedures for addressing those issues. By Order of that date I established a schedule for
the submission of documents and briefs. That schedule has been modified twice, first by
my Order of December 31, 2012 and most recently by my Order of March 26, 2013. All
briefing is now complete, and the record in this case closed on April 30, 2013.

There are eight exhibits in this case. The I.G. proffered seven exhibits marked I.G.
Exhibits 1 through 7 (LG. Exs. 1-7), and they are admitted without objection. Petitioner
filed a document from the Wyoming State Board of Nursing dated February 4, 2013, but
that document was not marked as an exhibit in compliance with the Civil Remedies
Division Procedures (CRDP) § 9 and paragraphs 5(e) and 10 of my Orders of December
31, 2012 and November 5, 2012. Nevertheless, I have marked and admitted it as
Petitioner’s Exhibit 1 (P. Ex.1).

II. Issues

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

' This letter was filed electronically by Petitioner on September 16, 2012.
1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(3) of the Act; and

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

Both issues must be resolved in favor of the I.G.’s position. Because her predicate
conviction has been established, there is a basis for Petitioner’s exclusion pursuant to
section 1128(a)(3) of the Act. A five-year term of exclusion is the minimum established
by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B) and is therefore not
unreasonable.

III. Controlling Statutes and Regulations

Section 1128(a)(3) of the Act, 42 U.S.C. § 1320a-7(a)(3), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of “[a]ny individual or entity that has been convicted for an offense which
occurred after [August 21, 1996,] under Federal or State law, in connection with the
delivery of a health care item or service or with respect to any act or omission in a health
care program (other than those specifically described in [section 1128(a)](1)) operated by
or financed in whole or in part by any Federal, State, or local government agency, of a
criminal offense consisting of a felony related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.” The terms of section 1128(a)(3)
are restated in similar language at 42 C.F.R. § 1001.101(c).

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal, State, or local court,”
Act § 1128(i)(1); “when there has been a finding of guilt against the individual .. . by a
Federal, State, or local court,” Act § 1128(i)(2); “when a plea of guilty . . . by the
individual . . . has been accepted by a Federal, State, or local court,” Act § 1128(i)(3); or
“when the individual . . . has entered into participation in a first offender, deferred
adjudication, or other arrangement or program where judgment of conviction has been
withheld.” Act § 1128(i)(4). These definitions are repeated at 42 C.F.R. § 1001.2.

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

IV. Findings and Conclusions

I find and conclude as follows:
1. On her accepted pleas of guilty on February 22, 2010, in the District Court for the
First Judicial District of Laramie County, Wyoming, Petitioner Trudy J. Summers was
found guilty of one misdemeanor count of Acquiring a Controlled Substance by
Misrepresentation, in violation of WYO. STAT. ANN. § 35-7-1033(a)(iii), and one felony
count of Furnishing False Information on a Document Required to Be Kept, in violation
of WYO. STAT. ANN. § 35-7-1033(a)(iv). The felonious conduct to which Petitioner
pleaded guilty occurred on or about December 7, 2008. I.G. Exs. 4, 5, 6.

2. Judgment of conviction was entered against Petitioner and she was sentenced on her
guilty pleas in the District Court on that same day, February 22, 2010. I.G. Ex. 6.

3. The judgment of conviction, finding of guilt, and accepted pleas of guilty described
above in Findings | and 2 constitute a “conviction” within the meaning of sections
1128(a)(3) and 1128(i)(1), (2), and (3) of the Act, and 42 C.F.R. § 1001.2.

4. There is a nexus and a common-sense relationship between the felony offenses of
which Petitioner was convicted, as noted above in Findings 1, 2, and 3, and fraud in
connection with the delivery of a health care item or service. 1.G. Exs. 4, 5.

5. Petitioner’s conviction as noted above in Findings 1, 2, 3, and 4 constitutes a basis for
the I.G.’s exclusion of Petitioner from participation in Medicare, Medicaid, and all other
federal health care programs. Act § 1128(a)(3); 42 U.S.C. § 1320a-7(a)(3).

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

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

V. Discussion

The four essential elements necessary to support an exclusion based on section
1128(a)(3) of the Act are: (1) the individual to be excluded must have been convicted of
a felony offense; (2) the felony offense must have been based on conduct relating to
fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct; (3) the felony offense must have been for conduct in connection with the
delivery of a health care item or service, or the felony offense must have been with
respect to any act or omission in a health care program operated by or financed in whole
or in part by any federal, state, or local government agency; and (4) the felonious conduct
must have occurred after August 21, 1996. Andrew D. Goddard, DAB No. 2032 (2006);
Kenneth M. Behr, DAB No. 1997 (2005); Erik D. DeSimone, R.Ph., DAB No. 1932
(2004); Jeremy Robinson, DAB No. 1905 (2004); Breton Lee Morgan, M.D., DAB
CR1913 (2009); Morganna Elizabeth Allen, DAB CR1479 (2006); Theresa A. Bass,
DAB CR1397 (2006); Michael Patrick Fryman, DAB CR1261 (2004); Golden G.
Higgwe, D.P.M., DAB CR1229 (2004); Thomas A. Oswald, R.Ph., DAB CR1216 (2004);
Katherine Marie Nielsen, DAB CR1181 (2004).

All four essential elements appear plainly in the records of the state court. Petitioner’s
conviction is shown by LG. Exs. 5 and 6, and the crime proscribed by WYO. STAT. ANN.
§ 35-7-1033(a)(iv) is a felony under Wyoming law. The court records show that the
conduct on which her conviction was based occurred in 2008, well after the

1996 benchmark date. Her specific acts are fairly characterized as fraud, theft, or
embezzlement, inasmuch as while on duty as a nurse at the VAMC facility, she diverted
unused portions of morphine to her own use and misused other nurses’ personal
identification codes in recording the disposition of the drugs, thereby concealing her own
misconduct. The nexus of this misconduct to the delivery of a health care item or service
in the health care program operated and financed by the VAMC is obvious.

Petitioner does not contest the I.G’s proof of the four essential elements, and concedes
that she is in fact subject to exclusion. What she seeks in this appeal is a reduction in the
length of her exclusion, which as proposed by the I.G. is the five-year period established
by statute as the mandatory minimum required by section 1128(c)(3)(B) of the Act. Asa
matter of law the proposed five-year period is not unreasonable, and neither the Board
nor I can reduce it to anything less than five years. 42 C.F.R. § 1001.2007(a)(2); Mark K.
Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002).

Petitioner correctly points out that the I.G. waited 30 months after her conviction to begin
exclusion proceedings. When measured against the five-year period of exclusion that the
1.G. seeks to impose the delay is significant, although her nursing license remains
suspended. P. Ex. 1. But the beginning date of Petitioner's exclusion is established by
operation of law as 20 days from the date of the I.G.'s July 31, 2012 notice letter. Section
1128(c)(1) of the Act, 42 U.S.C. § 1320a-7(c)(1); 42 C.F.R. § 1001.2002(b). I have no
authority to change that date. Randall Dean Hopp, DAB No. 2166 (2008); Lisa Alice
Gantt, DAB No. 2065 (2007); Kailash C. Singhvi, M.D., DAB No. 2138 (2007).

I note once more that Petitioner appears here pro se. Because of that I have been guided
by the Board’s reminders that pro se litigants should be offered “some extra measure of
consideration” in developing their records and their cases. Louis Mathews, DAB

No. 1574 (1996); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991). Ihave
searched all of Petitioner’s pleadings for any arguments or contentions that might raise a
valid, relevant defense to the I.G.’s Motion, but have found nothing that could be so
construed.
Resolution of a case by summary disposition is particularly fitting when settled law can
be applied to undisputed material facts. Michael J. Rosen, M.D., DAB No. 2096; Thelma
Walley, DAB No. 1367. Summary disposition is authorized by the terms of 42 C.F.R.

§ 1005.4(b)(12). This forum looks to FED. R. CIV. P. 56 for guidance in applying that
regulation. Robert C. Greenwood, DAB No. 1423 (1993). The material facts in this case
are undisputed and unambiguous. They support summary disposition as a matter of
settled law, and this Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Trudy J. Summers, R.N. from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, pursuant to the terms of section 1128(a)(3) of the Act, is
SUSTAINED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Hanover Home Health Care, LLC,
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-13-264
Decision No. CR2823

Date: June 12, 2013

DECISION

The Centers for Medicare and Medicaid Services (CMS) denied the application of
Hanover Home Health Care, LLC, Petitioner, for enrollment in the Medicare program as
a home health agency (HHA). Petitioner appealed. For the reasons stated below, I affirm
the determination to deny Petitioner’s enrollment.

I. Background and Procedural History

On May 3, 2010, Petitioner submitted a Medicare enrollment application (CMS Form
855A) to CGS Administrators, LLC (CGS), a CMS contractor. CMS Exhibit (Ex.) 1. In
a June 29, 2010 letter, CGS informed Petitioner that it was recommending approval of
Petitioner’s application, but advised Petitioner that it could still take “6 to 9 months (or
longer) for [Petitioner] to obtain its billing number.” CMS Ex. 2. Apparently the
enrollment process lasted significantly longer than nine months. On June 7, 2012, CGS
sent a letter to Petitioner stating that “[i]n order to proceed with the enrollment process,
[CGS] must verify that the initial reserve operating funds that were calculated during the
review of [Petitioner’s] CMS-85[5]A application are still available.” CMS Ex. 4, at 1.
The capitalization amount that CMS determined would satisfy the initial reserve
operating funds requirement was $39,939.00. CMS Ex. 4, at 2. CGS included with the
letter an Information Request Attachment (Attachment). The Attachment listed the
documentation that Petitioner was required to submit to confirm the availability of
sufficient initial reserve operating funds. CMS Ex. 4, at 2. The Attachment also stated
that “[a]t least half of the [initial reserve operating] funds must be the HHA’s own funds;
the rest may be borrowed, including a line of credit, from an unrelated lender.” CMS Ex.
4, at 2. The June 7, 2012 letter advised that all required information confirming the
availability of funds must be received by July 6, 2012. CMS Ex. 4, at 1. According to
the letter, if Petitioner failed “to furnish adequate proof of capitalization by submitting
the requested information within 30 days from the date of this letter, [CGS’s] previous
approval recommendation will be revised and the State and the CMS Regional Office
will be notified that [Petitioner’s] enrollment in the Medicare program is now denied.”
CMS Ex. 4, at 1.

On July 3, 2012, Petitioner faxed CGS a letter from Essex Bank dated June 26, 2012,
approving a line of credit for Petitioner in the amount of $40,000. CMS Ex. 6;
Petitioner’s Request for Hearing (RFH), Supporting Documents at 9, 17-18. However,
Petitioner did not submit any information regarding non-borrowed funds. Petitioner did
not submit a current bank statement or an attestation that at least 50% of the initial
reserve operating funds were Petitioner’s own funds, as requested by CGS in the
Attachment to the June 7, 2012 letter. On July 19, 2012, CMS denied Petitioner’s
Medicare enrollment application based on Petitioner’s failure to meet the initial
capitalization requirements of 42 C.F.R. § 489.28(a). CMS Ex. 3.

On August 10, 2012, Petitioner requested reconsideration and submitted proof that
Petitioner met the initial reserve operating funds requirement. Petitioners Exhibits (P.
Exs.) 1, 3. On October 22, 2012, CMS issued an unfavorable reconsidered determination
stating that Petitioner had not submitted proper initial reserve operating funds
documentation in the 30-day time period provided. CMS Ex. 5.

Petitioner timely filed an RFH and supporting documents with the Departmental Appeals
Board, Civil Remedies Division. In response to my January 7, 2013 Acknowledgment
and Pre-hearing Order (Order), CMS filed a Motion for Summary Judgment and
supporting brief (CMS Br.) and six proposed exhibits. Petitioner also filed a Motion for
Summary Judgment (P. Br.) and four proposed exhibits. Because neither party objected
to any of the proposed exhibits, I admit CMS Exs. | through 6 and P. Exs. 1 through 4
into the record. Further, because neither party proposed any witnesses, I will issue this
decision based on the written record. See Order § 11.

II. Discussion

An HHA is a “provider” under the Medicare program. 42 C.F.R. § 400.202. In order to
be a “provider,” individuals and entities must enroll and meet certain criteria to receive
billing privileges. Jd. §§ 424.505, 424.510. One requirement is that an HHA have
sufficient “initial reserve operating funds.” Jd. § 424.510(d)(9). This means an HHA
must “have available sufficient funds . . . at the time of application submission and at all
times during the enrollment process up to the expiration of the 3-month period following
the conveyance of Medicare billing privileges ... .” Jd. § 489.28(a). CMS determines
the amount of initial reserve operating funds. Jd. § 489.28(b), (c). An HHA seeking
Medicare enrollment must be able to provide proof that it meets the initial reserve
operating funds requirement within 30 days of a request from CMS or one of its
contractors. Id. § 424.530(a)(8). The regulations indicate the type of documented proof
that is acceptable and, significantly, that 50 percent of the required initial reserve
operating funds must be non-borrowed funds. Jd. § 489.28(d). The remainder of the
initial reserve operating funds may be secured through borrowing or a line of credit from
an unrelated lender. Id. § 489.28(d),(e),(f).

A. Issue

Whether CMS has a legal basis to deny Petitioner’s enrollment as an HHA provider in
the Medicare program based on Petitioner’s failure to timely submit information
pertaining to its initial reserve operating funds. See id. § 424.530(a)(8).

B. Findings of Fact, Conclusions of Law, and Analysis’

I. Between June 7, 2012, and July 7, 2012, Petitioner only submitted to
CGS a letter indicating that Petitioner had a line of credit of $40,000,
as proof that it had initial reserve operating funds in the amount of
$39,939.00.

CGS stated in its June 7, 2012 letter that Petitioner must provide documented proof of
capitalization in the amount of $39,939.00 by July 6, 2013.” CMS Ex. 4. The
Attachment included with the June 7, 2012 letter from CGS specifies acceptable proof.
CMS Ex. 4, at 2. In response, Petitioner submitted a letter dated June 26, 2012, from
Essex Bank indicating that Petitioner received a $40,000 revolving line of credit. CMS
Ex. 6; RFH, Supporting Documents at 9. Petitioner submitted no further documentation
to CGS in advance of the July 7, 2012 deadline.

' My findings of fact and conclusions of law are set forth in italics and bold font.

> Petitioner must provide proof that it meets the initial reserve operating funds
requirement within 30 days of CGS’s letter. See 42 C.F.R. § 424.530(a)(8). Thirty days
from the June 7, 2012 letter requesting such proof was July 7, 2012, a Saturday. Thus,
CGS apparently required Petitioner to submit all documented proof within 29 days.
However, it is undisputed that Petitioner did not submit all required proof until August
10, 2012, well after the 30-day time period had expired. P. Exs. 1-3.
Petitioner’s owner states that on June 6, 2012, she spoke with a CGS representative who
told her that she needed additional funds. RFH, Supporting Documents at 1. Based on
that conversation, Petitioner’s owner set up two accounts at her bank, one of non-
borrowed personal savings in the amount of $20,000 and another line of credit in the
amount of $20,000. RFH, Supporting Documents at 1. However, Petitioner has provided
no proof that these accounts were in existence by July 7, 2012, or that Petitioner provided
proof of these accounts to CGS within 30 days of the request for such proof.>

2. CMS has a legal basis to deny Petitioner’s enrollment in the Medicare
program as an HHA because Petitioner was not able to provide
documented proof to CGS that it met the initial reserve operating
funds requirement within 30 days of CGS’s request for such proof.

Petitioner does not dispute the facts as recited above and Petitioner has not provided any
evidence showing that it provided proof that it met the initial reserve operating funds
requirement within 30 days of CGS’s June 7, 2012 request. Petitioner’s proof of a
$40,000 line of credit did not prove it was sufficiently capitalized. 42 C.F.R. § 489.28(d),
(e), (f). Petitioner did not provide a bank statement or an attestation that at least 50% of
Petitioner’s initial reserve operating funds were non-borrowed funds by July 7, 2012. Id.
§ 489.28(d). Petitioner may have met the initial reserve operating funds requirement on
August 10, 2012. P. Exs. 1-3. However, this documentation was not timely submitted
and does not show that Petitioner met the initial reserve operating fund requirement by
July 7, 2012. Therefore, Petitioner did not provide sufficient proof to satisfy the initial
reserve operating funds requirement within 30 days. Id. § 424.530(a)(8).

CMS may deny enrollment to an HHA that does not provide proof that it meets the initial
reserve funds requirement within the 30-day time period. Jd. § 424.530(a)(8); see also id.
§ 489.28(g)(1). I must sustain CMS’s denial determination if a legal basis exists for that
determination. See Letantia Bussell, DAB No. 2196, at 10, 13 (2008). Based on the
evidence of record, I conclude that CMS has established a legal basis for its
determination because Petitioner failed to submit the documented proof requested by a
CMS contractor within 30 days.* 42 C.F.R. § 424.530(a)(8).

> The only document that might be from the relevant period, dated June 30, 2012, does
not support Petitioner’s assertion concerning the funds in Petitioner’s bank account.
RFH, Supporting Documents at 15.

* A CGS employee apparently advised Petitioner to submit a corrective action plan
(CAP) by August 10, 2012. P. Br. at 1. This is consistent with the denial notice CGS
issued on July 11, 2012, and with the fact that Petitioner appears to have submitted proof
of corrective action by August 10, 2012. P. Exs. 1-3; RFH, Supporting Documents at 9.
In fact, Petitioner expressly refers to her request for reconsideration (P. Ex. 1) as a CAP
and that she filed evidence of her corrective action (P. Ex. 3). P. Br. at 1. However, it is
III. Conclusion

CMS provided evidence, which is undisputed, that Petitioner did not timely submit
sufficient documentation relating to its initial reserve operating funds. I conclude based
on the evidence of record that CMS had a legal basis to deny Petitioner’s enrollment
under 42 C.F.R. § 424.530(a)(8). Therefore, CMS’s denial of Petitioner’s enrollment in
the Medicare program is affirmed.

/s/
Scott Anderson
Administrative Law Judge

understandable why CMS interpreted Petitioner’s August 10, 2012 submission as a
request for reconsideration because Petitioner asks for reconsideration in the first
sentence of its letter. P. Ex. 1. My jurisdiction in this case is limited to reviewing CMS’s
determination on reconsideration to deny Petitioner’s enrollment application. See

42 C.F.R. §§ 405.809, 498.3(b)(17) 498.5(1). However, in the interest of justice, CMS
should review Petitioner’s August 10, 2012 submission to determine whether Petitioner’s
pro se reconsideration request should have been construed as a timely filed CAP.