Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Charlotte Harbor Healthcare
(CCN: 10-5859),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-09-612
Decision No. CR2284

Date: November 30, 2010

DECISION

In this appeal Petitioner, Charlotte Harbor Healthcare, contests a determination by the
Centers for Medicare and Medicaid Services (CMS) that it was not in substantial
compliance with participation requirements in the Medicare and Medicaid programs.
Below, I sustain CMS’s determination that Petitioner was not in substantial compliance
with participation requirements. I sustain also the remedies imposed by CMS: a civil
money penalty (CMP) of $8,000 per day for one day of immediate jeopardy on May 28,
2009; a $5,050 per day CMP from May 29, 2009 through June 18, 2009; a $500 per day
CMP from June 19, 2009 through July 18, 2009; and a denial of payment for new
admissions (DPNA) from June 14, 2009 through July 18, 2009. CMS Exhibits (CMS
Exs.) 2, 31; CMS Post-Hearing Brief (CMS Br.) at 2-3.

I. Background
Petitioner is located in Port Charlotte, Florida, and is authorized to participate in

Medicare as a skilled nursing facility and in the Florida Medicaid program as a nursing
facility. The Florida Agency for Health Care Administration (state agency) surveyed
Petitioner from May 27 through 28, 2009. Surveyors found Petitioner out of substantial
compliance with the following participation requirements: 42 C.F.R. §§ 483.10 and
483.75(1)(4), at a scope and severity level (ss)' K (F Tag 164);” 42 C.F.R. § 483.15(h)(1),
ss L (F Tag 252); and 42 C.F.R. § 483.75, ss L (F Tag 490). By letter dated June 12,
2009, CMS notified Petitioner of the remedies imposed: termination of Petitioner’s
provider agreement, if Petitioner did not remove immediate jeopardy by June 20, 2009; a
per-day CMP of $8,000 for the period of immediate jeopardy effective May 28, 2009;
and a DPNA effective June 14, 2009, if Petitioner was still out of substantial compliance
on that date. CMS Exhibit (Ex.) 2, at 1-3. Petitioner was notified that it might also lose
its authority to conduct a nurse aide training and competency evaluation program
(NATCEP).* CMS Ex. 2, at 3.

By letter dated July 17, 2009, CMS notified Petitioner that a revisit survey on June 19,
2009, found that immediate jeopardy had been removed but that Petitioner still remained
out of substantial compliance. CMS notified Petitioner that the $8,000 CMP was in
effect from May 28, 2009 through June 18, 2009, and that a $500 CMP was in effect
from June 19, 2009, until Petitioner attained substantial compliance with participation
requirements. The DPNA was noted to have become effective as of June 14, 2009. CMS
Ex. 31.

Petitioner achieved substantial compliance on July 19, 2009. CMS Br. at 2. In its brief,
CMS noted that based on the surveyor’s testimony at the hearing (Transcript (Tr.) at 309,
311), it was reducing the immediate jeopardy CMP to $5,050 per day effective May 29,
2009. Thus, the remedies imposed are: an $8,000 CMP for one day, May 28, 2009; a
$5,050 per day CMP effective May 29 through June 18, 2009; and a $500 per day CMP
effective June 19 through July 18, 2009. The total CMP comes to $129,050. Jd. at 2-3.

' CMS and a state use scope and severity levels when selecting remedies. The scope and
severity level is designated by an alpha character, A through L, which CMS or the state
agency selects from the scope and severity matrix published in section 7400E of the State
Operations Manual (SOM). The matrix, based on 42 C.F.R. § 488.408, specifies which
remedies are required and optional at each level, based upon the frequency of the
deficiency, i.e., whether a deficiency is isolated, part of a pattern, or widespread. Scope
and severity levels J, K, and L are deficiencies that constitute immediate jeopardy to
resident health and safety. 42 C.F.R. § 488.301.

> An F Tag designation refers to the section of the SOM, Appendix PP, which gives
guidance to state agency surveyors regarding specific regulatory requirements and the
investigation of compliance with those requirements. The statement of deficiencies
(SOD) sets out deficiencies by F Tag.

> The parties did not present evidence with regard to the possible NATCEP, and I do not
address it here.
Petitioner requested a hearing by letter dated July 24, 2009. I held a hearing in Sarasota,
Florida, from February 8 through 11, 2010. A 963-page transcript of the hearing was
prepared. Testifying at the hearing were: Carol Brown Herbert, R.N., a surveyor for the
state agency (Surveyor Herbert); Donna Houk, R.N., a surveyor for the state agency
(Surveyor Houk); Patricia Kaczmarek, R.N., a surveyor for the state agency (Surveyor
Kaczmarek); Odel Ruano, M.D., a physician certified in internal medicine and
Petitioner’s medical director (Dr. Ruano); Harold D. Williams, a field office manager for
the state agency (Surveyor Williams); Gary Furdell, a fire protection specialist surveyor
or the state agency (Surveyor Furdell); Manish Kapadia, M.D. (Dr. Kapadia), a
physician board certified in internal medicine, pulmonary medicine, critical care
medicine and sleep medicine, who testified for Petitioner; Patricia Ann Feeney, R.N. (RN
Feeney); David Pitney, a certified indoor environmentalist (Mr. Pitney); Karl Wolf,
Petitioner’s Director of Mechanical Engineering (Mr. Wolf); Stephen French, an
environmental consultant with a specialty in mold and water damage (Mr. French);
Steven Lipson, an industrial hygienist and director of technical services for Air Quality
Consulting Incorporated (Mr. Lipson); Mary Rose, R.N., Petitioner’s Director of Nursing
(DON Rose); Thomas Bell, Petitioner’s Administrator (Administrator Bell); and James F.
Hill, who was employed in Petitioner’s building maintenance department at the relevant
time (Mr. Hill).

I admitted CMS Exs. 1-67 and Petitioner’s Exhibits (P. Exs.) 1-29. The parties submitted
briefs (CMS and P. Br.) and response briefs (CMS and P. Response).

II. Issues
The issues before me are:

1. Whether Petitioner was in substantial compliance with Medicare and Medicaid
participation requirements; and

2. Whether the remedies proposed are reasonable.
III. Controlling Statutes and Regulations
Sections 1819 and 1919 of the Social Security Act (Act) and the regulations at 42 C.F.R.
Part 483 govern Petitioner’s participation in Medicare and Medicaid. Sections 1819 and
1919 of the Act authorize the Secretary to impose remedies, including CMPs, against
long-term care facilities for failure to comply substantially with participation

requirements.

The regulations define the term “substantial compliance” to mean:
[A] level of compliance with the requirements of participation such that any
identified deficiencies pose no greater risk to resident health or safety than the
potential for causing minimal harm.

42 C.F.R. § 488.301.

The Secretary has delegated to CMS and the states the authority to impose remedies
against long-term care facilities not complying substantially with federal participation
requirements. State survey agencies, on behalf of CMS, may survey facilities
participating in Medicare and Medicaid to ascertain whether the facilities are complying
with participation requirements. 42 C.F.R. § 488.10-28. The regulations contain special
survey conditions for long-term care facilities. 42 C.F.R. § 488.300-335. Under Part
488, a state or CMS may impose a CMP against a long-term care facility if a state survey
agency ascertains that the facility is not complying substantially with participation
requirements. 42 C.F.R. §§ 488.406, 488.408, and 488.430. The CMP may begin to
accrue as early as the date that the facility was first substantially out of compliance and
may continue to accrue until the date the facility achieves substantial compliance or until
CMS terminates the facility’s provider agreement. 42 C.F.R. § 488.440.

The regulations specify that, if a CMP is imposed against a facility on a per-day basis, it
must fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The
upper range of CMP, from $3,050 per day to $10,000 per day, is reserved for deficiencies
that constitute immediate jeopardy to a facility’s residents and, in some circumstances,
for repeated deficiencies. 42 C.F.R. § 488.438(a)(1)(i), (d)(2). The lower range of CMP,
from $50 per day to $3,000 per day, is reserved for deficiencies that do not constitute
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).

“Immediate jeopardy” is defined as:

[A] situation in which the provider’s noncompliance with one or more
requirements of participation has caused, or is likely to cause, serious injury, harm,
impairment, or death to a resident.

42 CFR. § 488.301.

A facility may challenge the scope and severity cited by CMS only if a successful
challenge would affect the range of CMP amounts that CMS imposed or would affect the
facility’s nurse aide training program. 42 C.F.R. § 498.3(b)(14), (d)(10)(i). CMS’s
determination as to the scope and severity of noncompliance “must be upheld unless it is
clearly erroneous.” 42 C.F.R. § 498.60(c)(2). This includes CMS’s finding of immediate
jeopardy. Woodstock Care Center, DAB No. 1726, at 9 (2000), aff’d, Woodstock Care
Center v. U.S. Dept. of Health and Human Servs., 363. F.3d 583 (6th Cir. 2003).

The Departmental Appeals Board (Board) has long held that the net effect of these
regulations is that a provider has no right to challenge the scope and severity assigned to
a noncompliance finding, except where that finding was the basis for an immediate
jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester
Pavilion, DAB No. 1750 (2000). Since the scope and severity of Petitioner’s alleged
noncompliance is cited and sanctioned at a level of immediate jeopardy between May 28
and June 18, 2009, the scope and severity of that alleged noncompliance is properly
before me.

When a penalty is imposed and appealed, CMS has the burden of coming forward with
evidence related to disputed findings that is sufficient, together with undisputed findings
and relevant legal authority, to establish a prima facie case of noncompliance with a
regulatory requirement. If CMS makes this prima facie showing, then a petitioner must
carry its ultimate burden of persuasion by showing, by a preponderance of the evidence
on the record as a whole, that it was in substantial compliance during the relevant period.
CMS makes its prima facie showing if the evidence it relies on is sufficient to support a
decision in its favor absent an effective rebuttal. A petitioner can overcome CMS’s
prima facie showing by rebutting the evidence upon which that case rests or by proving
facts that affirmatively show substantial compliance. An effective rebuttal of CMS’s
prima facie case would mean that the petitioner had shown that the facts on which it its
case depended were supported by a preponderance of the evidence. Evergreene Nursing
Care Center, DAB No. 2069, at 7 (2007).*

IV. Discussion

I make numbered findings of fact and conclusions of law (Findings) to support my
decision. I set them forth below as separate headings in bold and italic type and discuss
each in detail.

* Petitioner disputes this allocation of the burden of proof and asserts that CMS should
be required to prove its case by a preponderance of the evidence. It asserts that the
Administrative Procedure Act (APA) has been held to apply to these proceedings, and it
is contrary to the APA that a regulated entity be required to “prove its innocence” to
avoid a CMP (citing Crestview Parke Care Center v. Thompson, 373 F. 3d 743 (6th Cir.
2004)). I note Petitioner’s objection for the record. P. Br. at 1-2.
1. Petitioner failed to comply substantially with the participation requirements
at 42 C.F.R. §§ 483.10(e) and 483.75())(4) (F Tag 164, ss K), and CMS’s
determination that the noncompliance constitutes immediate jeopardy is not
clearly erroneous.

42 C.F.R. § 483.10(e) requires that a “resident has the right to a dignified existence, self-
determination, and communication with and access to persons and services outside the
facility. A facility must protect and promote the rights of each resident... .” The
subsection at 483.10(e) recites specifically that:

The resident has the right to personal privacy and confidentiality of his or her
personal and clinical records. (1) Personal privacy includes accommodations,
medical treatment, written and telephone communications, personal care, visits,
and meetings of family and resident groups, but this does not require the facility to
provide a private room for each resident; (2) Except as provided in paragraph
(e)(3) of this section, the resident may approve or refuse the release of personal
and clinical records to any individual outside the facility; (3) The resident’s right
to refuse release of personal and clinical records does not apply when-(i) The
resident is transferred to another health care institution; or (ii) Record release is
required by law.

42 C.F.R. § 483.75(1)(4) requires that “[t]he facility must keep confidential all
information contained in the residents records, regardless of the form or storage method
of the records, except when release is required by — (i) Transfer to another health care
institution; (ii) Law; (iii) Third party payment contract; or (iv) The resident.”

The SOD asserts that, based on surveyor observation during the survey and interviews
with staff, residents and/or their legal representatives, and review of resident records, the
surveyors determined that Petitioner failed to maintain the residents’ right to personal
privacy by:

... failure to notify 8 of 26 sampled residents who currently reside in the facility
or their legal representative . . . and obtain consent to install Digital Video
Recorded Cameras in resident rooms. This breach of resident privacy is likely to
cause psychosocial harm to the resident once the resident or their legal
representative has knowledge the resident’s actions are being secretly watched and
recorded.

CMS Ex. 1, at 3. This noncompliance was found to constitute immediate jeopardy. Id. at
1.

Administrator Bell did not dispute that he had video surveillance cameras installed in
three resident rooms in November 2007, following reports of thefts in the facility. Tr. at
837-38. Nor did Bell dispute that Petitioner did not obtain permission to install the
cameras from the residents of those rooms or their families. Tr. at 838. The cameras
were located above residents’ beds. Tr. at 38-39; 129. The monitor for the cameras was
in Bell’s office. On the first day of the survey, May 27, 2009, the surveyors went to
Bell’s office to observe the monitor. The door to his office was open, and no one was in
the office. They observed the monitor was located on the wall by the door to the corridor
and could be viewed by anyone entering the office. CMS Ex. 1, at 4; Tr. at 40. The
monitor was split into four sections, one for each camera. CMS Ex. 1, at 4; Tr. at 41.
Surveyor Herbert testified that a:

. .. resident was in bed. The resident had some sort of coverings . . . across her
chest, bandages of some sort, did not have a gown on. . . [t]here was a sheet . . . It
wasn’t pulled up over the bandages . . . starting at the waist.

Tr. at 41; see CMS Ex. 4, at 7. Surveyor Houk observed the monitor the next day. She
testified that the door to Administrator Bell’s office was open, and the monitor was
visible when she stepped into the room. She saw a resident sitting in a wheelchair next to
the resident’s bed. Tr. at 128; CMS Ex. 4, at 1; CMS Ex. 1, at 5.

The surveyors interviewed affected residents and/or family members who informed them
that they were not aware that cameras were being utilized. CMS Ex. 1, at 6-7; CMS Ex.
4, at 5,9, 27,29. Resident 2 told Surveyor Herbert, “I don’t want anybody watching me
when | am taking off my clothes.” CMS Ex. 4, at 9; Tr. at 48. Resident 1 told Surveyor
Herbert “[t]hey wouldn’t have done it if I had known about it.” CMS Ex. 4, at 9.
Resident 3’s family member told Surveyor Furdell that he wanted the camera removed
immediately. CMS Ex. 4, at 29.

Surveyor Houk testified that placing video cameras in resident rooms without a resident’s
knowledge and consent was likely to result in serious psychological and emotional harm.
She testified:

I think that if, okay, I had to put myself in that position as a resident before I really
realized how serious this was. Because if I were laying there and found out later
that somebody had watched what everybody had done with me, I would have been
extremely upset. And to me that’s harm, a psychological harm. So, these
residents or their families would also have been very upset had they realized
without their knowledge their loved one was being monitored with a camera.

Tr. at 138. Surveyor Houk testified that her opinion was based upon her knowledge as a
registered nurse of the kinds of care that residents receive in bed, which includes body
baths, incontinent care, wound care, and undressing and changing clothes. Tr. at 138-39.
Surveyor Kaczmarek testified that as a registered nurse:
I would be devastated if that was a family member and no one had contacted me
that there was surveillance going on during the care . . . [t]he administration of any
type of care at bedside, bed bath, pericare, mouth care.

Tr. at 165.

Petitioner concedes that it should not have installed the cameras without residents’
consent but asserts that the cameras were disconnected on May 28, 2009, and that there
was no evidence that they were, or would be, reconnected. Moreover, Petitioner asserts
that there was no evidence of actual harm as a result of the cameras and no harm at all
after the cameras were disconnected. Further, as of May 28, 2009, when it disconnected
the cameras, Petitioner asserts it was in substantial compliance, and no penalty should be
imposed. P. Br. at 4; P. Response at 1-2.

Petitioner has not shown that CMS’s determination of noncompliance at the immediate
jeopardy level is clearly erroneous. Petitioner concedes that it should not have installed
the cameras without consent. Moreover, CMS has shown that projecting images of
residents during personal care, where anyone entering Administrator Bell’s office could
see images of that care, is likely to constitute serious psychological harm to residents
and/or their family members.

With regard to the length of the immediate jeopardy noncompliance under this section of
the regulations, CMS notes that because Surveyor Williams testified that he had no
knowledge that anyone would reconnect the cameras after the survey team left, nor could
he say it was likely the cameras would be reconnected, CMS was reducing the CMP after
May 28, 2009, from $8,000 to $5,050. CMS. Br. at 2-3, 54. I infer from this that the
reduction in CMP for dates after May 28 is because CMS found Petitioner was in
substantial compliance with this particular participation requirement after that date.
However, Petitioner was out of substantial compliance with the participation requirement
on May 28, as on that date the cameras were still on. A higher amount of CMP for that
date is warranted given the noncompliance. I discuss the reasonableness of the CMP
below.

2. Petitioner failed to comply substantially with the participation requirement at
42 C.F.R. § 483.15(h)(1) (F Tag 252), and CMS’s determination that the
noncompliance constitutes immediate jeopardy is not clearly erroneous.

This section of the regulations is under the quality of life participation requirements,
which requires generally that “[a] facility must care for its residents in a manner and in an
environment that promotes maintenance or enhancement of each resident’s quality of
life.” The subsection at 483.15(h)(1) requires that the facility must provide “[a] safe,
clean, comfortable, and homelike environment, allowing the resident to use his or her
personal belongings to the extent possible.”
The SOD alleges that based on surveyor observations during the survey, staff interview
and record review, Petitioner:

. .. failed to ensure the resident environment remains free of hazards to the extent
possible, which includes environmental hazards that are likely to cause serious and
immediate harm resulting in Immediate Jeopardy to residents exposed to bio-
growth/molds, especially to residents with diseases of the respiratory system.

This is evidenced by mold in mechanical rooms A, B, C, and D.

The pervasive presence of mold and accumulations of dust and dirt on multiple
surfaces in resident rooms, Heating, Ventilating, and Air Conditioning (HVAC),
and common areas is likely to adversely impact the health of residents, and places
all residents in immediate jeopardy.

Review of Pharmacy Diagnosis and Medication lists provided by the facility
reveal that 77 (including Residents #1, #4, #5, #6, #8, #9, #10, #13, #14, #15, #18,
and #23) of 170 residents are at elevated risk levels due to respiratory diagnoses,
and have a physician’s order for routine or as needed medications used to treat
residents with the following medical conditions: Shortness of Breath/Wheezing,
Chronic Obstructive Pulmonary Disease (COPD), Asthma, Respiratory Distress,
and Hypoxemia (insufficient oxygenation of the blood).

Observation and review of the Roster/Sample Matrix provided by the facility
revealed that 34 residents have a physician’s order for routine or as needed
Oxygen. According to the Centers for Disease Control (CDC)’s website,

. .. residents with chronic respiratory disease such as chronic obstructive
pulmonary disorder, asthma may experience difficulty breathing when exposed to
mold. The CDC also states that people with allergies may be more sensitive to
molds and immunocompromised persons and persons with chronic lung diseases
like COPD are at an increased risk for opportunistic infections and may develop
fungal infections in their lungs.

Observations of common areas such as corridors, the beauty shop, and the
classroom demonstrate the residents have free access to areas with thriving mold
and mildew. According to the CDC website . . . “If HVAC systems are not
properly cleaned and disinfected to prevent the dissemination of mold and other
debris throughout a building, bioaerosols of mold and other microorganisms might
exist and can cause a variety of adverse health effects to the building’s occupants.”

Mold from the Heating, Ventilating, and Air Conditioning systems spreads mold
throughout the facility exposing all building occupants. The Centers for Disease
Control web site indicates that people with allergies or immune suppression or

underlying lung disease are more susceptible to fungal infections. These people
10

may experience symptoms such as nasal stuffiness, eye irritation, wheezing, or
skin irritation and severe reactions would include fever and shortness or breath.
Immunocompromised persons and persons with chronic lung diseases like COPD
... are at increased risk for opportunistic infections and may develop fungal
infections in their lungs. FEMA’s website . . . states, “The potential for health
problems occurs when people inhale large quantities of the airborne mold spores.
For some people, however, a relatively small number of mold spores can cause
health problems. Infants, children, immune-compromised patients, pregnant
women, individuals with existing respiratory conditions, and the elderly are at
higher risks for adverse health effects from mold.”

CMS Ex. 1, at 8-10.

Below, I find that CMS presented a prima facie case that Petitioner has failed to rebut. I
also find that CMS’s determination of immediate jeopardy is not clearly erroneous.

A, Mold is recognized as an indoor air pollutant, and controlling water
and moisture in buildings is the key to preventing mold.

In its brief, CMS cites extensively to publications from respected health organizations
showing that mold? is recognized as a significant indoor air pollutant. CMS Br. at 8-13.
It cites to the World Health Organization Guidelines (WHO Guidelines) for indoor air
quality, which concludes that indoor air quality is compromised by dampness and mold in
indoor environments.° The WHO Guidelines note the most important health effects are
increased prevalences of respiratory symptoms, allergies and asthma as well as
perturbation of the immunological system. Exposure may also increase the risk of rare
conditions such as hypersensitivity pneumonitis, allergic alveolitis, chronic rhinosinusitis,
and allergic fungal sinusitis. CMS Exs. 34, 35.

CMS asserts that controlling water and moisture is the key to mold prevention. CMS Br.
at 11. The WHO Guidelines note that most moisture enters a building through the
building envelope or occupants’ activities. Persistent dampness and microbial growth on
interior surfaces and in building structures should be avoided or minimized, as they may
lead to adverse health effects. Indicators of dampness and microbial growth include
condensation on surfaces or in structures, visible mold, perceived moldy odor and a
history of water damage, leakage or penetration. Thorough inspection and, if necessary,
appropriate measurements, can be used to confirm indoor moisture and microbial growth.

* During the hearing, I asked Petitioner’s witness, Mr. Lipson, about the difference
between mold and mildew. He stated that all mildews are molds, although not all molds
are mildew. Mildew refers specifically to slimy molds. Tr. at 779.

° The WHO Guidelines use an alternative spelling for mold — “mould.”
11

No quantitative health-based guideline values or thresholds can be recommended for
acceptable levels of contamination with microorganisms. It is recommended that
dampness and mold related problems be prevented and remediated when they occur
because of the increased risk of hazardous exposure to microbes and chemicals. Well-
designed, constructed, and maintained building envelopes are critical to the prevention
and control of excess moisture and microbial growth as they prevent thermal bridges and
entry of liquid or vapor phase water. Moisture management requires proper control of
temperatures and ventilation to avoid excess humidity, condensation on surfaces and
excess moisture in materials. Ventilation should be distributed throughout spaces and
stagnant air zones should be avoided. CMS Ex. 34, at 16-17.

The National Academy of Sciences Institute of Medicine (Institute) recommends that:

The most effective way to manage mold in a building is to eliminate or limit the
conditions that foster its establishment and growth. Every organism has strategies
for locating a hospitable environment, obtaining water and nutrients, and
reproducing. Intervention in one or more of those strategies can improve the
resistance of the environment against microbial contamination.

CMS Ex. 53, at 283.’
B. Surveyor Furdell is qualified to testify as an expert.

CMS asserts that Petitioner failed to do all it could to prevent the growth of mold in the
facility. In explaining why Petitioner failed to do all it could, CMS refers principally to
the testimony of Surveyor Furdell. Petitioner argues vehemently that Surveyor Furdell
was not qualified to identify mold by visual inspection, which is the only way he
identified mold during the survey. Petitioner asserts that, while Furdell testified he had
attended some classes on “mold problems,” had attended yearly talks given by an
industrial hygienist to state agency staff, and had seen pictures of mold in a Petri dish,
this did not qualify him to identify mold. Petitioner argues that Furdell does not have a
university degree, is not an industrial hygienist or certified in air quality inspection, has
no certifications in mold or mold remediation or engineering, has never been a contractor
or built a commercial building, and did not review or conduct tests with regard to mold or
air intrusion at Petitioner’s facility. P. Br. at 6-7. And, Petitioner asserts that at hearing

7 CMS also notes that the Institute found that serious respiratory infections resulting
from exposure to a variety of fungi are common in people who undergo high dose
chemotherapy, are recipients of solid organ transplants, or are otherwise immune-
compromised. CMS notes that individuals in poor health tend to reside inside and thus
come in contact with fungi in an indoor environment. However, the Institute states that it
is less clear in these situations that the fungal exposure is related to the presence of
moisture and I make no findings based on this. CMS Br. at 10; CMS Ex. 53, at 248.
12

Furdell’s testimony was impeached with prior inconsistent testimony given under oath
during a November 20, 2009 deposition, in that Furdell stated then that he could not
identify mold by visual inspection but then testified at hearing he could. P. Br. at 7-10; P.
Ex. 28, at 38-39; Tr. at 473-74. Petitioner argues that Furdell attempted to explain this
allegedly contradictory testimony by claiming he spoke with an industrial hygienist at the
state agency who told him he could identify mold based on his training and experience.
From this, Petitioner asserts that Surveyor Furdell’s testimony is unreliable. P. Br. at 7-
11.

During the November 20, 2009 deposition, and the allegedly impeaching exchange,
Surveyor Furdell testified in response to Petitioner’s questions:

Q. Okay. Do you have - - is photo 14 a photo of what you describe on Exhibit B
as mold — “B wing mold on HVAC”? Is that what I’m looking at on photo 14?

A. Photo 14 would be the base of the HVAC unit in B wing mechanical room.
And all those black/green spots and films/growths that are on the equipment is
what led me to request that the facility follow the agency protocol by getting a
environment hygienist to test.

Q. But you wrote it down as mold?

A. I wrote in my notes what the potential for what I saw was. I can’t tell you
what mold is.

Q. Okay. And in C wing you also say “mold on HVAC.” And is that depicted on
photo 7?

A. Inside the air handler of C wing is photo 7. Photo 7 is a picture of the wall
inside that HVAC unit with growth that has been there long enough to start
peeling and falling off untouched.

Q. That peeling stuff you believe to be growth?

A. I don’t.

Q. Or do you have any opinion as to what that stuff that looks like it’s peeling is?
Is that some kind of liner or is that some kind of growth on - -

A. I can’t answer that. I just know that if that is a liner or something, it has a film
or bio-growth or microbial matter attached to it. What strain or genus I don’t
know.

Q. And photo 8 says “fan and fan motor for HVAC unit,” but it does not say what
wing. Can you tell me today what - -

A. Well, can I tell you absolutely for sure? No. But the only one that’s not listed
is D.

So you believe that to be D?

I believe it is.

And I understand you’re - -

I believe it is, but I can’t guarantee that that’s the fact.

Okay.

My answer is based on their - - it’s not the only one listed.

POPOPO
13

Q. But to be clear, when you use the word “mold” in your notes, you are not
making a statement that you determined in fact that what you saw was mold; is
that correct?

A. That is correct?

P. Ex. 28, at 38-39. During the hearing, Surveyor Furdell testified

Q. Okay. Do you recall your deposition being taken on November 20" of last
year?

A. Yes.

Q. Do you recall telling me that you were not able to identify mold? And if you
need to be refreshed, I would ask you to look at Petitioner Exhibit 28, pages 48
and 49, or pages 38 and 39.

. I’m sorry, exhibit?

28, page 38, line 14 and 15.

I’m sorry?

Page 38, line 14 and 15, I can’t tell you what mold is.

That’s correct.

. Okay, and on page 39, the question was, to be clear, when you use the word
mold i in your notes you are not making a statement but you determined in fact that
what you saw was mold, is that correct. Answer, that is correct.

A. That is correct. That was my understanding at the time.

Q. Okay, so since November you’ve learned that you can tell what mold is by
looking at it?

A. Yes, by a industrial hygienist that is a consultant to the Agency for Health Care
Administration. As a result of our deposition, I called and asked some questions
and I was told by a certified industrial hygienist that I can, in fact, identify
something as being mold based on my training and experience. However, I cannot
identify what species, genus or, what species or genus the mold may be. However,
I can say with, I can say that it is in fact mold.

Q. Okay, so at the time your deposition was taken you agreed you could not
identify it, but somebody told you that in fact you were able to identify mold
without testing.
A. Yes, ma’am. You made me believe you could not —
Q. Okay, so you lied on your deposition?

A. No I did not.

QPOrO>

Petitioner’s argument that this statement shows that Surveyor Furdell could not identify
mold by visual inspection is overbroad. The gist of Furdell’s testimony is that while he
could not identify the type of mold at Petitioner’s facility by species or genus, he could
identify that the substance he saw was in fact mold. Asserting at his deposition that he

could not “guarantee” what he saw was mold is not the same as stating he could not

14

identify mold by visual inspection — he believed it was, but he could not “guarantee that
that’s the fact.”

Petitioner argues also that Surveyor Furdell’s testimony about his conversation with this
industrial hygienist constitutes impermissible hearsay and is unreliable. First of all, it is
plain that the conversation between Furdell and the industrial hygienist was not intended
to prove anything at all about the existence of mold in Petitioner’s facility, but was
instead offered to explain the alleged changes in the surveyor’s testimony about his
capacity to identify mold. It simply did not constitute hearsay testimony. Petitioner did
not have the opportunity to cross-examine this unknown witness, and Petitioner
complains of having been surprised by the change in Furdell’s testimony. But the
surveyor’s explanation more than satisfies the classic response to cross-examination
about an allegedly-inconsistent statement, and Petitioner was not entitled to call and
question the industrial hygienist. However, as I note above, Petitioner’s argument is
largely beside the point, since the gist of Furdell’s testimony in these two exchanges is
that he could not guarantee what he saw was mold — not that mold could not be identified
by visual inspection. Below, Petitioner’s own witnesses testify that mold can be
identified (and then remediated) by visual inspection without testing it first.

Petitioner notes that I accepted Surveyor Furdell as an expert. I found at hearing that
there was a reliable body of scientific, technical, and specialized knowledge on the
subject of mold control that, despite differences of opinion, would assist me in
understanding the evidence at hearing. I found Furdell qualified as an expert by his
knowledge, skill, experience, training, and education to testify about the general question
of mold identification, remediation, and related topics, including moisture incursions and
the maintenance of an air conditioning system in the context of mold remediation and
prevention. Tr. at 347-48; see Tr. at 327-33, 340-46. His testimony with regard to the
mold issues is consistent with my finding. Tr. at 327-410, 470-532.

C. Petitioner failed to prevent the growth of mold in the facility.

To control mold, it is necessary to control the amount of moisture in a building.
Surveyor Furdell testified that mold needs three things to grow: food, temperature, and
moisture. Building materials can be, and often are, sources of food for mold, and mold
grows between 40 and 100 degrees Fahrenheit. Nursing facility temperatures are
between 71 to 81 degrees Fahrenheit. Thus, the only thing a nursing facility can do to
prevent mold is to control moisture. Tr. at 331.

Moisture can enter a building in many ways. Surveyor Furdell testified that moisture can
enter by water intrusion (such as roof leaks, unsealed wall penetrations like window sills,
or any opening that would allow water to wick or travel through building materials). Tr.
at 332. Another way for moisture to enter a building “would be for a heating, ventilating
and air conditioning system to not function as it’s designed, and therefore not evaporate
15

the water from the air, which we would call humidity, but it’s water latent vapor or air.
And as it goes through the heating, ventilation and air conditioning system, part of the
process of cooling the air to resupply it to the building is that it is evaporated.” Tr. at
332. A third way moisture can enter a building is:

. .. if the atmospheric pressure inside the building does not match the atmospheric
pressure outside the building, where the atmospheric pressure is actually higher on
the outside, or to say that the pressure inside the building would be negative, less
pressure than the outside. Then water latent vapor can pass through the walls and
enter into the facility, because the pressure outside is greater than the pressure
inside.

Tr. at 333.

Surveyor Furdell testified that he saw indications of water intrusion at the facility by
window ledges, discolorations on wallcoverings at the ceiling level, and a roof leak. Tr.
at 350-51. He noted high humidity levels in the facility and explained that the “heating,
ventilating and air conditioning system was inconsistent.” Tr. at 387. He testified that if
the system was working correctly “[i]t is designed to reduce the humidity level in the air
to an acceptable level.” Tr. at 388.

Surveyor Furdell also testified that he found negative air pressure inside the building. He
testified that a rough way to determine whether there is negative air pressure in a building
is for an observer to open the door to the outside a tiny bit. If the air pressure inside the
building is negative, the observer will feel the hot air coming in. If the air pressure is
neutral, the observer will feel nothing and will note no air flow in either direction. And,
if the air pressure in the building is positive, the observer will feel the cooled controlled-
temperature air leaving the building. Tr. at 389. Furdell stated that the engineering
company Petitioner retained after the survey to report on the performance of Petitioner’s
HVAC system agreed with his conclusion that there was negative pressure and that the
pressure in the building was supposed to be neutral. Tr. at 390, 529.

Entech Consulting Engineers (Entech) is the company retained by Petitioner to observe
and report on Petitioner’s HVAC system. Entech representatives made a site visit on
June 5-6, 2009. The visit confirmed Surveyor Furdell’s testimony with regard to
negative air pressure and his testimony that the facility was originally designed for a
neutral pressure relationship to the outside. It noted that the negative pressure was
allowing moisture to enter the building and confirmed the presence of mold. It also noted
that humidity levels in the building were between 54 to 80% where levels in buildings are
generally in the range of 50 to 60%. It suggested twelve corrective actions that the
facility could take to remedy its problems. CMS Ex. 65; see CMS Ex. 54.

16

Surveyor Furdell testified that the construction of the building, the exterior finish
insulating system (EFIS), combined with the negative air pressure created by the
facility’s HVAC system, allowed moisture into the facility. Tr. at 391. Furdell testified
that the vinyl wallcovering used at the facility acted as a vapor barrier, such that the
moisture passing in because of the negative pressure stopped at the back of the paper and
caused mold to grow on the food source — glue or drywall. Tr. at 359. Although
Petitioner asserts, and I accept, that the building construction and viny! wallcovering
were perfectly appropriate and “to code” (P. Response at 5), those facts are not the end of
the inquiry, or really even its starting-point. The important question is not whether
Petitioner should have used these materials. Instead, the critical fact is that negative
pressure and moisture, when these materials are employed, is conducive to the growth of
mold, and the fundamental issue is how Petitioner dealt with the problem created by
those materials and their reaction to mold and moisture.

The survey team noted water and moisture problems in the facility. Surveyor Furdell
documented standing water on the floor in four mechanical rooms. In one mechanical
room, the reheat coil was halfway open and leaking. CMS Ex. 4, at 31. Furdell
documented that the air conditioning supply vents in the kitchen were “condensating and
dripping.” CMS Ex. 4, at 35. Surveyor Herbert noted that an air conditioning vent in
Room 320 was moist. CMS Ex. 5, at 8. The survey team noted musty odors in the
facility. Tr. at 53 (Surveyor Herbert), 137 (Surveyor Houk), 166 (Surveyor Kaczmarek),
385 (Surveyor Furdell).

The survey team observed mold throughout the facility. Surveyor Furdell found mold in
and on the HVAC system. He toured the four mechanical rooms on each wing of the
facility (A, B, C, and D). Furdell testified that he saw mold on the air handler units,
inside the air handler units, on the motor and on the shroud that covers the units. Tr. at
353-55, 369-70; CMS Ex. 66, at 8.5 He saw mold on the fan and fan motor for the
HVAC unit. Tr. at 370-71; CMS Ex. 66, at 9. He saw mold on the air conditioning duct
in the B wing mechanical room. Tr. at 371-72; CMS Ex. 66, at 11. He saw mold on the
fan motor in the B wing mechanical room and testified that page 12 of CMS Exhibit 66
depicted:

* CMS Ex. 66 is an 18-page exhibit. The first page is an e-mail dated September 18,
2009, to Surveyor Williams and Surveyor Houk from Surveyor Furdell. Pages 2 through
18 of CMS Ex. 66 are pictures taken by Furdell regarding what he testified about as areas
of mold within the facility. The e-mail refers to the pictures described in the e-mail as
pictures 1 through 17. However, CMS Ex. 66 identifies pictures 1 through 17 as CMS
Ex. 66, pages 2 through 18, and Furdell’s e-mail as CMS Ex. 66, page 1. When I refer to
the pictures, I refer to them as they are identified in CMS Ex. 66, as pages 2 through 18,
not pictures | through 17.
17

...aclose up of the same discolorations and growth that we are describing in our
2567 as mold. And the significance of this is that we’re at a point in the air
handler in this air chamber where air, this is the last place air is prior to going
through the duct and to the supply vents throughout the facility.

Tr. at 372. He saw mold on the base of the HVAC unit in the B wing mechanical room.
He testified that water had formed on the outside metal of the unit and was dripping
down. And the water was so prevalent that there were areas of rust, which indicated to
him that the problem had been ongoing for some time. Tr. at 373; CMS Ex. 66, at 13.

He saw mold on the fan motor unit in the A wing mechanical room. Tr. at 373-74; CMS
Ex. 66, at 14. Surveyor Furdell saw mold and wet floors on the HVAC unit in the B wing
mechanical room. Tr. at 375-76; CMS Ex. 66, at 15. Furdell saw mold on the AC supply
duct in the C wing mechanical room. Tr. at 378-79; CMS Ex. 66, at 16. Furdell saw
mold on the access door to the B wing air handler. Tr. at 380-81; CMS Ex. 66, at 17.
Furdell testified that CMS Ex. 66, at 18, was another picture of the B wing air handler
showing mold on the unit and on the white insulation covering the piping. Tr. at 381-83.

Surveyor Furdell also testified that he took a picture of the hot water coil valve and
actuator in the C wing mechanical room, which showed stalactite looking, pale yellow or
champagne color drips. CMS Ex. 6, at 7; Tr. at 366-68. He testified that a “functional
heat actuator would not look like this. This is all the products of leaking. And once they
don’t function anymore they tend to leak, and these are all by products of that. I mean
it’s nonfunctional. It doesn’t work anymore, and these, it’s just falling apart. It’s
disintegrating.” Tr. at 368.

Surveyor Furdell also observed mold in 15 resident rooms, including on a window ledge,
in the shower area, on shower area wallpaper, by an air conditioner, on shower grout,
behind the tile behind the shower seat, behind a vinyl wallcovering border, on a wall
expansion joint in the shower room, in a closet, at the top of a wall, on carpet, and behind
vinyl cove molding. CMS Ex. 1, at 13-14; CMS Ex. 4, at 33-34. Surveyor Herbert
testified she saw what she thought was mold in Resident 15’s room and told Furdell. Tr.
at 71. Surveyor Houck testified that she thought she saw mold in two HVAC rooms, on
wallpaper in one resident room and on a windowsill in another. Tr. at 131. Facility staff
were with her but did not state that what she was seeing was not mold. Tr. at 131-32.

Surveyor Furdell took photographs of mold in four resident bathrooms. CMS Ex. 66, at
4,5, 6, 10; Tr. at 362-66, 383-84. He found mold in the beauty shop on the window
ledge, on the wall at the floor and vinyl cove molding, on the air conditioning vent, on the
ceiling, and in all four light lenses in the ceiling. Approximately 25 residents a week
receive services in the beauty shop. CMS Ex. 4, at 33; Tr. at 73, 484. Furdell testified
that he observed mold on the ceiling tiles in the classroom and on the ceiling by the air
conditioning vent. There was a musty odor in the room. Residents sometimes use the
classroom. CMS Ex. 4, at 35; Tr. at 484-85. Furdell testified that he took pictures of
18

mold behind vinyl cove base molding by the C wing nurse’s station. He testified further
that it was near where the staff puts carts and medical supplies, so he did not pull the
vinyl! wallcovering back, because he wanted to avoid further exposure to possible mold
spores. CMS Ex. 66, at 1, 2, 3; Tr. at 356-57; 360-62. Furdell also testified that he
observed mold in the corridors by the crown molding and where two vinyl wallcoverings
overlapped. Tr. at 479-80. In answer to a question as to why noting the mold by the
crown molding might not have been identified in the survey report or his notes, Furdell
testified:

[i]f we were to take . . . like a crime scene look at something . .. where we would
have identification and, of ever[y] . . . single thing that there was, but we don’t
have a total, we sample everything and we sample evidence and show what we
have... could I have taken 2,400 pictures during that survey? Sure. Could I have
made 50 more pages of notes? Yes, I believe I could. However, we took and
found evidence and looked at the data that we needed to look at to make the
determinations we made.

Tr. at 480-81. Surveyor Furdell testified that during the survey a wet and moldy wall was
being remediated in a mechanical room. Tr. at 385-86. When Surveyor Williams toured
the building he noted mold behind the wallpaper behind one of the nursing stations. Tr.
at 303.”

The surveyors were not the only ones who noted mold issues at the facility. Brian Stout,
Petitioner’s head of maintenance at the time of the survey,'° told Surveyor Williams that
after the surveyors left the building on May 28, 2009, staff were cleaning “like a chicken
with [its] head cut off.” Surveyor Williams understood this to mean that Petitioner’s staff
was “cleaning very vigorously.” Mr. Stout told Williams that he and Mr. Hill cleaned all
the air handlers on the A, B, C, and D units and also cleaned the condensing units. He
described the air handlers to Williams as “mold city.” CMS Ex. 33, at 4; Tr. at 296-97.

° The surveyors also noted dusty conditions in 35 resident rooms, and on air conditioner
and humidifier vents. CMS Ex. 1, at 14-15; CMS Ex. 5, at 4-5, 8, 12-13. Dust isa
common allergen and also contributes to indoor air pollution. CMS Ex. 35, at 3; CMS
Exs. 51, 52.

Mr. Stout resigned from the facility under threat of termination on June 8, 2009.
Surveyor Williams testified that Mr. Stout had been paid a sum of money and had agreed
not to talk to anyone about the survey findings and work done after the survey to address
mold problems in the facility. Tr. 291, 294, 296. Administrator Bell testified that Mr.
Stout’s severance pay was contingent on his agreeing not to disparage the facility. Tr. at
891-93. Whether Mr. Stout received compensation at the time of his termination in
exchange for not discussing the survey is not relevant to my decision.
19

Surveyor Williams testified that Mr. Hill, who was employed in Petitioner’s maintenance
department at the time of the survey (and later transferred to housekeeping), told the
surveyors that he and Mr. Stout immediately began to clean the air handlers after they
left. Williams testified that Mr. Hill informed him that Administrator Bell asked them to
remove and replace the insulation in the air handlers, but they informed him they did not
have time. They worked in the HVAC unit rooms, the AC unit, the classroom and other
areas for a week, with long hours. Tr. at 288; CMS Ex. 33, at 3. Mr. Hill stated that
Petitioner was trying to get as much cleaned up as possible before the air testing was
done. CMS Ex. 33, at 3; Tr. at 288-89, 406. Mr. Hill said that they cleaned the coils in
the AC unit three different times, that there was something like mud coming from the
HVAC systems, and that he and Mr. Stout wore protective gear and respirators while
cleaning. CMS Ex. 33, at 3; Tr. at 289. Mr. Hill stated that Petitioner brought in two
extra men to remove wallpaper, replace ceiling tile, and repaint areas in the B hallway
right after the survey. They worked non-stop, sometimes until 10:00 p.m. CMS Ex. 33,
at 3; Tr. at 290. Mr. Hill told Williams that he thought the air testing at the facility was
done on June 6. Jd.

Surveyor Williams testified that Jason Hatt, the maintenance director who replaced Mr.
Stout, told Williams that the C wing was the primary area of concern and the first area
targeted for remediation, although Petitioner planned to remediate the entire building.
CMS Ex. 33, at 6; Tr. at 301-02.

During the revisit survey on June 19, 2009, Surveyor Furdell testified that Petitioner had
hired a full time HVAC mechanic to help resolve the issues that the engineering firm
identified and to maintain the systems once Petitioner achieved compliance. The
maintenance crew described the repairs and stated that they followed the state agency’s
infection control risk assessment (ICRA) protocol for mold remediation and to rectify
problems they found. Two- and three-man crews worked 12 to 15 hours a day to
remediate. Tr. at 393-97.

D. Petitioner’s witnesses corroborate that there were mold and moisture
problems at the facility.

CMS asserts that Petitioner’s witnesses corroborate the presence of mold and moisture
problems at the facility. While Petitioner’s witnesses may disagree with CMS as to the
seriousness or pervasiveness of the mold within the facility, Mr. Pitney, Mr. French, and
Mr. Lipson all testified that there were mold and moisture problems at the facility that
required remediation.

Petitioner hired Mr. Pitney to perform mold remediation. On his first visit, he toured the
facility with Mr. French and Administrator Bell “to kind of review the total facility very

quickly.” Tr. at 565,572. On direct examination, Mr. Pitney testified that he did not see
“pervasive mold,” instead describing “minor” spots of mold from different causes and
20

testifying that he did not see dust or dirt or mold growth inside wall cavities or smell an
odor associated with a pervasive mold problem. Tr. at 565-67, 569. He did not explain
his understanding of what the word “pervasive” meant. He testified that the mold he saw
was caused by different sources, some from moisture coming through the exterior wall,
some from air conditioner condensation. Tr. at 567. He testified that he did not do
remediation on his first walkthrough but came back later to do the remediation. On
cross-examination, he testified that, when he came back for the first time, he came with a
crew of six and stayed two days. They came back two or three more times, as they found
more areas that needed remediation. For those times, he brought four to six people, and
they stayed about two days. He did not give a report after the remediation.'' Tr. at 572-
74. His employees used respirators and gloves, because “mold will break down your
immune system. Minor repeated exposure, the longer you’re exposed to it the less
resistance you have to it.”'* Tr. at 574. He also testified that, in remediating the mold,

ie used containment procedures — Petitioner itself set up containment barriers at the
allways leading to the area they would be working in, and Mr. Pitney’s crew set up
individual containment at each doorway of the room they worked in. Tr. at 574-75. He
testified that he did not remediate HVAC systems, because a specialist certified to do that
work was needed. Tr. at 577. He also reviewed CMS Exhibit 66, which includes
pictures of the HVAC system that Surveyor Furdell took. Mr. Pitney testified that, if the
black and discolored areas in the photo were in fact mold, he would be concerned,
because mold can cause health problems to at risk individuals. Tr. at 580-84. He also
testified that if the air handler was full of mold his concern would be greater. Tr. at 584.
Mr. Pitney also testified that if he actually looked at the air handler, he could “give you a
pretty reasonable answer” on whether the substance shown in the photo was mold, but
that to positively identify it laboratory analysis is necessary. Tr. at 586.

Mr. French testified that he is an environmental consultant with a specialty in mold and
water damage. He does not do remediation but instead assesses problems in buildings
with regard to water in liquid or vapor form, control of which is the single most important
thing that can be done to prevent mold. Tr. at 684, 709-10. Administrator Bell, who
wanted him to come to the facility immediately, initially contacted him, but he did not
visit the facility until a day or two later, on a Saturday morning at the end of May. I take
notice that the last Saturday in May 2009 was May 30. Mr. Pitney accompanied him. Tr.

"CMS estimates that at the least Mr. Pitney and his crew spent 272 man hours doing
mold remediation at Petitioner’s facility. CMS Br. at 32 n.27.

© On re-direct he qualified his statement, testifying that it would not be reasonable to
compare the amount of mold his workers come in contact with to the amount of mold a
person living in an area that might have a spot of mold on the wall is exposed to. He was
not asked about exposure to mold from the HVAC system. Tr. at 587-88.
21

at 685-86. It was a cursory inspection. Tr. at 690. Mr. French did not find “significant
great problems” but found instead “little things that needed to be addressed.” Tr. at 686.
He did not find “pervasive” mold (asserting that of the 3100 projects he has worked on,
ona scale of one to ten, he would rate Petitioner’s facility about a one to a one point
five). Tr. at 687. He did not amplify his understanding of the word “pervasive.” Tr. at
690. He found only one significant problem, an area by a nurse’s station which was
being repaired when he returned on the next Monday to begin his inspection. Tr. at 690,
692.

Mr. French submitted a report to Petitioner on June 11, 2009, suggesting remedial
measures. In it, he noted that “[a] visual inspection is the single most important step in
identifying a possible mold problem” with regard to microbial assessment and
identification and identifying sources of water intrusion. P. Ex. 64, at 4; see Tr. at 721."°
With regard to Petitioner’s facility, the schedule he suggested for remediating resident
rooms was:

a. Perimeter walls
i. Remove and replace drywall 3 feet from the floor on perimeter wall
ii. Remove and replace cove molding
b. Interior Walls
i. Remove wallpaper on affected walls only and paint using paint approved
by AHCA Office of Plans and Construction
ii. Remove and replace cove base molding on affected walls only.
c. Remove and replace all stained ceiling tile

For resident bathrooms, he suggested:

i. Remove all wallpaper

ii. Remove and replace drywall 3 feet from the floor on perimeter wall

iii. Remove and replace only damaged drywall on interior bathroom walls

iv. Remove and replace tile and green board in showers to existing tile line
for affected shower areas only.

CMS Ex. 64, at 7; see Tr. at 723-26. Although Mr. French later testified that he “rolled
some of our recommendations back” there is no documentary evidence that he did so and
Mr. French did not explain what he meant by rolling back his recommendations other
than asserting the severity of the situation was less than it first appeared. Tr. at 732.

© Tn his direct testimony, in answer to a question as to whether he could determine by
visual inspection of an air handler whether a substance was dirt or mold, he testified that
he could not determine what it was without laboratory analysis. Tr. at 700; see Tr. at
713. This answer appears to contradict both his testimony on cross-examination and in
his report that visual inspection is the most important step in identifying mold.
22

Mr. French took air quality samples and testified that he only found significant problems
near the nurse’s station, where cabinetry and drywall had been removed and spores inside
the wall had been released. Tr. at 692-93. Otherwise, he testified he found the air to be
within acceptable ranges and at low levels, and he testified that he did not think there was
a problem with the HVAC system air handlers. Tr. at 692-95. He looked at the photos
taken by Surveyor Furdell in CMS Exhibit 66 but did not find anything to concern him.
Tr. at 697-703. Mr. French testified with respect to the air handlers that whatever was
there “gets distributed quickly and doesn’t reproduce itself fast enough to create an
issue.” And, although it could cause an air quality problem, he did not find evidence of a
problem. Tr. at 701-02.

On cross-examination, Mr. French testified that he took samples to test, and the results of
the tests were given to Administrator Bell. Tr. at 706. He took samples from all wings of
Petitioner’s facility and also tested air inside the HVAC rooms and inside the handler
itself. Reports of those tests were generated. He did not recall the exact numbers found,
nor does he recall the type of mold found. He remembered only that the results varied
from sample to sample. The first test was taken on the Monday after his initial visit, and
others were taken over the two month period he was there. He re-tested areas and saw a
decrease in the number of spores. However, Petitioner did not introduce any test reports
with regard to tests Mr. French (or anyone else) may have taken inside the handler
itself.'* Tr. at 706-09. Mr. French also admitted that he had no training or expertise to
say whether particular mold problems are likely to result in adverse health consequences
or individuals with respiratory conditions or who are immune compromised. Tr. at 728.

Mr. Lipson is an industrial hygienist retained by Petitioner in July 2009 to doa
walkthrough and inspection of the facility, and to review reports, procedures, and
protocols. He reviewed Mr. French’s work and the test results prior to visiting the

acility on July 20, 2009. Tr. at 734-39. He did a walkthrough of the facility,
interviewed a few people, and wrote a letter. Tr. at 758. Mr. Lipson determined that
Petitioner had “minor issues that were abated.” He did not see issues caused by the four
major air handlers. Tr. at 739-40. In looking at CMS Exhibit 66, he said the conditions
depicted would likely shorten the life of the air handling unit, and noted it would be good
to remove any indoor related mold growth. Tr. at 741-47. He also stated that he would
ave to survey the whole facility to determine whether mold in the mechanical room

“Air Quality Environmental, Inc., prepared a laboratory analysis report on June 7, 2009.
It indicated that testing on the A wing hallway showed total spore counts in two resident
rooms varied from 371 in one room to 11,766 in another. CMS Ex. 62, at 7. Testing on
the D hallway and two resident rooms showed that total spore counts varied from 53 in
the hallway to 1,696 in a resident room. CMS Ex. 62, at 8. The report indicates that
HVAC pans in the B wing and C wing were tested, but not the air handler units. CMS
Ex. 62, at 13, 15. Petitioner submitted a laboratory report from 2005. P. Ex. 7. The total
spore count in resident rooms was higher in 2009 than it was in 2005. CMS Br. at 37.
23

could become airborne to determine whether there could be an effect on residents, but it
was not likely that what he saw in the pictures would cause a general air quality problem.
Tr. at 747-48.

On cross-examination, Mr. Lipson indicated that fungal and chronic moisture within an
occupied building can potentially be a serious health issue for individuals at risk and must
be diligently prevented. Tr. at 755-56. He agreed that there is no way to say that a safe
and permissible level of mold exists, even though there are no standards. Tr. at 756. He
testified on re-direct that there is also no way to determine an unsafe level of mold
spores. Tr. at 777. He further testified that it was his job to ensure that the remediation
being done at the facility accorded with standard practices within the field, because
improper remediation can cause more problems than it corrects. Tr. at 762. He
concluded by noting that in his opinion some of the remediation taking place was not
necessary, such as removing three feet of drywall throughout the facility. Tr. at 763. He
would not have done that until he had surveyed and evaluated wall cavity interiors and
taken samples to see if that needed to be done. Tr. at 764.

E. Petitioner did not take measures to prevent moisture and mold
problems prior to the survey.

CMS asserts that Petitioner knew that mold may have been in the facility for some time.
Mr. Hill testified that he told Administrator Bell prior to the survey that there was an
indoor air quality problem and mold. Tr. at 911-12. CMS asserts that what Petitioner
should have done, but did not do until after the survey, was to address the water and
moisture problems in the facility that, according to CMS, allowed the mold to grow.

CMS asserts that Petitioner does not dispute that the facility was designed to have neutral
air pressure, but had negative air pressure instead. Nor does Petitioner dispute the
conclusion reached by Surveyor Furdell and Entech that negative air pressure within the
facility contributed to moisture within the facility. Petitioner was not prevented or
impeded at any point from correcting the air-pressure problem. CMS notes that
Petitioner retained Entech in response to the survey report and asked it to observe and
report on the operation and condition of the HVAC systems as they related to the survey
findings. Entech conducted a site visit on June 5-6, 2009, and faxed a report to
Administrator Bell on June 17, 2009. Entech concluded:

The building was observed to be -0.011”w.c. negative in pressure relationship to
the outside. Review of the original design construction documents found the
building to be designed for a neutral pressure relationship to the outside. The
building’s negative pressure relationship is allowing moisture to enter the building
through infiltration through doors, windows, cracks, etc. The moisture is
condensing at locations whose temperature is below dewpoint throughout the
building. In our opinion, the number of locations is mild to moderate based on our
24

experience of buildings of the same age and condition which we have observed in
the past. In order to fully understand and correct the cause and to develop a
correction plan for the building negative pressure, a complete and in depth survey
of the entire HVAC systems should be completed by an independent testing and
balancing agency, such as Southern Independent Testing Agency, Inc. Once the
survey is completed we can issue a plan of correction to resolve the building
negative pressure. Once the corrections are implemented, the HVAC systems will
need to be balanced to provide a neutral to slight positive pressure relationship to
the outside. The report also listed locations where mold was observed during the
survey and listed possible remedial measures including more thorough
housekeeping, correction of the building pressurization, more frequent filter
changes, more thorough and frequent preventative maintenance programs for the
inside of the air handlers, and reconstruction of the condensate drain trap to
resolve standing water.

CMS Ex. 65, at 1-3.'° The Entech report also noted:

During our testing, we measured relative humidity levels at various locations
throughout the building and found readings between 54% to 80%. Generally,
humidity levels in the range of 50-60% are desired for both human comfort and
indoor air quality concerns. The building negative pressure is supporting an
increased humidity level in the building. The correction of the building negative
pressure should lower the humidity levels into the acceptable range.

Id. at 3. On June 18, 2009, Entech provided Petitioner with a list of twelve things that
should “be addressed as soon as possible and will have a significant impact on the air
balance in your Center.” CMS Ex. 54. According to CMS, these corrections would
impact ventilation, air balance, humidity, and moisture. CMS Br. at 40.

Mr. Wolfe began working for Petitioner on June 8, 2009. Tr. at 594. He was hired into a
new position to oversee the maintenance and upkeep of the air conditioning and
mechanical systems in the building. Tr. at 592,617. Mr. Wolfe worked with the
company attempting to balance the air flow in the building, adjusting belts and filters and
replacing drain lines, among other things. Tr. at 618-21. In answering a question about

'’ Petitioner retained Southern Independent Testing Agency, Inc., and testing took place
on June 6, 2009. Page 2 of CMS Exhibit 54 reflects testing in the A, B, and D units. It
was found that, although the design was for neutral air pressure, the actual air pressure
was negative. Jd.
25

whether he was going through this equipment in response to the mold issues, he testified,
“I would certainly expect so.”'® Tr. at 622-23.

Administrator Bell testified that he was not aware of pervasive mold prior to May 2009.
Tr. at 845. He believed that there were only “housekeeping issues.” Tr. at 852. I do not
find his statement credible. Bell understood that vinyl wallcovering can act as a moisture
barrier. Tr. at 878, 880. Bell knew that there were a large number of potential entry
points for water and that Petitioner needed to be diligent in addressing moisture
problems. Tr. at 860. He admitted that the facility had “wetted and stained materials.”
Tr. at 880. He admitted that Mr. Stout had identified “different areas that he considered
to be mold at different times, for many various reasons. Leaking sinks, leaking PTAC
unit.” Tr. at 881. He testified that he did not know the air handlers had to be cleaned for
black mold. He just understood that the cleaning was typical maintenance, and he
testified that Mr. Stout and Mr. Hill never “specifically” told him about the mold. Tr. at
880.

Administrator Bell testified that he knew, however, that his staff made repairs prior to the
survey for what they believed to be mold. Tr. at 881, 883. He testified specifically that:

I remember them saying they took out drywall because what they perceived to be
mold. Yes, ma’am. But I don’t know that it was mold and I know that they don’t
know it was mold. It was wetted building materials and beyond that, we had no
specific knowledge that it was mold.

Tr. at 883. When asked why he did not get it tested for mold, Administrator Bell
testified:

Let me tell you why we didn’t get it tested. Okay. My understanding is that
unless you’ve got some reason and something to compare your results to, that
testing is not even a good idea. When I first met with Steve French, he indicated
that testing before doing remediation isn’t advised. I think that the CDC
guidelines indicate that testing isn’t necessarily advised. The New York City
Department of Health has indicated that it’s not necessarily advised to do any
testing before remediation. And the reason is that the action that you take is
identical in either instance.

Tr. at 883-84. Administrator Bell also testified that appropriate protections needed to be
put in place for residents and those handling the material and also testified that taking

‘© CMS. Ex. 55 was created by a team that worked on different remediation efforts. It
delineates work assigned to Mr. Wolf, Mr. Hill, and Jason Hatt based on advice given to
Petitioner’s employees by consultants including Mr. French, Mr. Pitney, and Entech. Tr.
at 871-73.
26

care of mold, unless over a certain scope, is appropriately handled by maintenance staff.
Tr. at 884. However, Bell did not state when he came to this understanding of mold
issues, and his answer does not explain when he came to that understanding. Bell also
asserts that he did not know whether the areas cleaned by his staff were actually mold, as
there was no positive identification of mold in those areas. This answer conflicts,
iowever, with his statement that areas do not have to be tested for mold prior to
remediation. Tr. at 886.

Mr. Hill, who was hired by Petitioner to do building maintenance in 2007, testified that

e had informed Administrator Bell prior to the survey that Petitioner had an indoor air
quality and mold problem caused by moisture intrusion. He told Bell that the air
conditioning units needed major work because of mold and that fire retardant was coming
loose in fibers. Tr. at 913. I find Mr. Hill’s testimony to be entirely credible.

Administrator Bell did not act on staff recommendations prior to the survey. However,
Bell did take quick action following the survey to remediate any potential mold issues.
He directed his staff to immediately begin cleaning and repairing affected areas (the air
andlers were cleaned the first weekend after the survey).'’ Tr. at 866. Insulation inside
the air handlers was quickly replaced. Tr. at 897. He hired Mr. French and Mr. Pitney,
received reports from companies such as Entech, and followed their recommendations.
However, the actions that Bell took following the survey were actions he could and
should have taken prior to the survey, when staff brought the moisture and mold
problems at the facility to his attention.

F. Petitioner cared for residents at significant risk of complications from
mold exposure.

CMS asserts that Petitioner cared for many at risk residents, including many residents
with respiratory diagnoses, which included shortness of breath, wheezing, COPD,
asthma, pneumonia, respiratory distress, and hypoxemia. The SOD referred to 26
residents with such conditions. CMS Ex. 1, at 16.

Dr. Kapadia testified that he visited the facility in June of 2009. Tr. at 453, 461. He did
not physically examine any residents. Tr. at 453. Dr. Kapadia stated that patients with an
underlying condition, such as asthma or COPD, can be put at risk of an exacerbation of
their condition if they have a significant exposure to mold. Exposure to mold can also
exacerbate bronchitis and pneumonia. Tr. at 449, 455. Individuals can die from
exacerbations of asthma and COPD and may die from pneumonia. Tr. at 456. On direct

'7 CMS views Administrator Bell’s actions in setting his maintenance staff immediately
to cleaning the mold as evidence that he was trying to hide a mold problem prior to
testing. I do not take such a negative view. Once the mold was identified, it was
appropriate for Administrator Bell to try to remediate the situation as quickly as possible.
27

examination, Dr. Kapadia testified that he toured the facility and that, while he saw areas
of mold and mildew, his opinion was that the residents were not “at risk.” Tr. at 450-51.
He admitted on cross-examination, however, that he did not look at the medical and
nursing charts of the residents but was instead given a piece of paper by facility staff
which noted the resident’s age, gender, and medical history. Tr. at 454. On re-direct
exam he reiterated that he visited every room in the facility on his walk and saw no
residents in physical distress nor any indication that residents were suffering from mold
exposure. Tr. at 467.

Dr. Kapadia testified on cross-examination that he agreed that the World Health
Organization, the Centers for Disease Control, and the National Institute of Health all
consider indoor dampness and mold to be a serious health risk, depending on how serious
it is and how long and substantial the exposure. Tr. at 457-58. He agreed that the
immuno-compromised elderly, or elderly persons with chronic lung problems, are more
at risk from mold exposure and dampness. Tr. at 458. Dr. Kapadia testified that if there
is a serious and immediate risk, any facility should be diligent in addressing mold
problems. Tr. at 459. To determine if a risk is serious and immediate, Dr. Kapadia
agreed that he would pay attention to who was living in the facility and whether there
were a lot of residents living in the facility with respiratory conditions or who had
compromised immune systems. Tr. at 459-60.

Dr. Ruano, Petitioner’s medical director and the treating physician for Residents 1, 4, 5,
6, 8, 9, 10, 13, 14, 15, 18, and 23, admitted that the majority of Petitioner’s residents are
immuno-compromised at any given point in time. Tr. at 229, 247. On direct
examination, Dr. Ruano testified that if there were air quality or mold problems in the
facility, he would have expected to see adverse affects on his population of residents. Tr.
at 234. On cross-examination, he agreed that mold, dust, and insect parts could adversely
affect residents and that asthma and COPD are serious medical problems. He noted that
mold can exacerbate asthma and COPD, medical conditions that he agreed could lead to
death, and that exposure to mold can lead to fungal infection in the lungs. Tr. at 237-40,
245, 274.

Dr. Ruano testified that he would suspect that a patient had a mold allergy if the patient
had nasal secretions, post-nasal drip, or shortness of breath lasting more than two weeks,
because, in such a case, he would not think the cause was viral and would look at other
possible causes, including environmental causes. Tr. at 264-65. Dr. Ruano also testified
that he would be concerned if mold was being transmitted through air conditioning units.
Tr. at 271. He never spoke to Mr. Hill or Mr. Stout about mold problems in the facility.
Tr. at 270. He testified that he did not think the mold in the facility was significant,
because “I should have noted that at least one of the residents will not improve with the
antibacterial medicines that I treated them when they have their respiratory problems
exacerbated.” Tr. at. 274.
28

Dr. Ruano testified about the conditions of residents he treated that did not suffer
exacerbation of their respiratory disease at the facility, but he did not testify with regard
to the two residents, Residents 5 and 23, noted by CMS in its briefing to have possible
exacerbations of their disease. Tr. at 230-234. Nor did Petitioner refer to either of these
residents in its briefing, although their examples were included in the SOD and
referenced later in DON Rose’s testimony. CMS Ex. 1, at 18, 22. CMS asserts that
Resident 5 and Resident 23 both had exacerbations of their respiratory conditions, but
there is no evidence that Petitioner’s staff assessed them for mold exposure. P. Br. at 45.

Resident 5 was admitted to Petitioner’s facility on October 26, 2010. P. Ex. 15, at 1. Her
diagnoses included COPD. Jd. at 2. Nurse’s notes dated March 13, 2009, show that
Resident 5 was experiencing wheezing and chest congestion. Jd. at 3. On March 17,
2009, Dr. Ruano ordered Robitussin for her. Jd. at 4, 8. On April 11, 2009, over three
weeks later, Dr. Ruano diagnosed Resident 5 as having acute bronchitis and cough and
ordered medication including an antibiotic and a prednisone taper. Jd. at 10-11. Nurse’s
notes show that on May 13, 2009, Resident 5 was still experiencing wheezing. Jd. at 12.
DON Rose, testified that Resident 5’s nebulizer treatment was changed from routine to as
needed on April 2, and that the only time it was used again was on May 13. However,
DON Rose did not discuss the other medications prescribed by Dr. Ruano. Tr. at 805-06.
DON Rose also admitted that the diagnosis of bronchitis was a new diagnosis for this
resident. Tr. at 827. DON Rose testified that Resident 5’s “issues” resolved while at the
facility but does not explain how, when, or in response to what. Tr. at 831.

Resident 23 was admitted to Petitioner’s facility on January 29, 2009. P. Ex. 23, at 1.

She had no respiratory diagnoses. Id. at 1-2; see Tr. at 824-25. Dr. Ruano diagnosed
Resident 23 as having acute bronchitis on February 17, 2009. He ordered an antibiotic,
Robitussin, Mucinex, and nebulizer treatments. Jd. at 6. As of May 2, 2009, Resident 23
still required Robitussin and nebulizer treatment. Jd. at 18. DON Rose testified that
Resident 23’s condition improved enough that she was no longer using oxygen at two
liters per minute, and the nebulizer order was changed to PRN. However, the February
18, 2009 order referred to was a clarification of oxygen orders from February 16, 2009, to
“as needed.” Tr. at 815-16; P. Ex. 23, at 14, 16. The orders for the nebulizer were also
changed to “as needed.” Tr. at 816.

As CMS has noted, there is no evidence that anyone on Petitioner’s staff assessed
Residents 5 and 23 (or any other resident) to determine whether their new problems had
anything to do with moisture and mold problems at the facility. DON Rose testified that
no one in the maintenance department told her there was an on-going mold problem at
the facility until the survey. Tr. at 830. As CMS has noted, insofar as she remained
unaware of a mold risk, there is no way she or anyone at the facility could have
thoroughly assessed the residents with reference to a risk of which they were unaware.

29

G. Petitioner’s noncompliance constitutes immediate jeopardy.

Petitioner does not dispute that a reasonable suspicion of mold in a nursing facility
warrants inspection and cleaning, and that if mold is found, its prompt removal is
required. It does not dispute that the existence of a substantial air quality problem has a
potential to affect residents and employees. Petitioner argues, however, that the
surveyors, especially Surveyor Furdell, did not act responsibly or conduct an objective
evaluation of the issues. Petitioner argues that CMS did not show that the presence of
mold was definitive; did not show that the mold was pervasive; and did not show that
there was a likelihood that this pervasive mold would cause serious and immediate harm.
P. Br. at 4-5. Petitioner also asserts that Surveyor Furdell took no air quality samples for
testing, and, thus, CMS cannot establish that suspected mold in the facility was a danger
to residents through possible inhalation. P. Br. at 12.

CMS has put forward a prima facie case that Petitioner was noncompliant with this
participation requirement, and Petitioner did not prove by a preponderance of the
evidence that it was in compliance. First, although the substances identified by Surveyor
Furdell and others (including Petitioner’s employees) as mold were not analyzed in a
laboratory, there is a consensus, even among Petitioner’s witnesses, and including
Administrator Bell himself, that visual inspection can detect the likely presence of mold.
That substances identified by Furdell were mold was later confirmed by laboratory
analysis. However, laboratory analysis was not necessary to make CMS’s prima facie
case that there was mold at the facility. Given the evidence in the record, if Petitioner
expected to prevail on the question of the exact nature of the widespread mold-like
substances, Petitioner was obliged to submit evidence showing that the substances found
from resident rooms to HVAC air handlers were not mold. Petitioner failed to provide
this evidence. And there is no evidence that Petitioner addressed moisture problems in
the facility conducive to the growth of mold, such as the negative air pressure in the
building, until after the survey raised concerns about mold.'®

Second, the areas of mold that the surveyors identified fit within a definition of the word
“pervasive.” The dictionary definition of pervasive is “having the quality or tendency to
pervade or permeate,” and the definition of pervade is “to spread through; be present
throughout; permeate.” The American Heritage Dictionary of the English Language,
New College Edition, Houghton Mifflin Co. (1976). Surveyors found mold throughout

'* Petitioner notes that Surveyor Furdell surveyed the facility in January and February
2009, but did not cite it for deficiencies regarding mold, casting doubt that there were
prior mold and mildew problems that Administrator Bell should have investigated. P. Br.
at 28, 29. However, whether Petitioner was cited for mold problems in other surveys is
irrelevant. Mr. Hill’s testimony and statements made by Mr. Stout show that
Administrator Bell was aware of problems at the facility related to mold and moisture
prior to the survey.

30

the facility, including resident bedrooms, resident bathrooms, the beauty shop, hallways,
near a nurse’s station, and in HVAC rooms.

With regard to the issue of immediate jeopardy, CMS’s determination is not clearly
erroneous. 42 C.F.R. § 498.60(c)(2) states that CMS’s finding regarding the level of
noncompliance “must be upheld unless it is clearly erroneous.” In Daughters of Miriam
Center, DAB No. 2067 (2007), the Board found that CMS did not have the burden to
make a prima facie showing that immediate jeopardy existed. CMS’s determination of
immediate jeopardy is presumed to be correct, and it is a petitioner’s heavy burden to
show that CMS’s determination was clearly erroneous. The Board stated:

. .. immediate jeopardy exists in either of the following two general
circumstances. First, immediate jeopardy exists if the SNF’s noncompliance has
caused death or “serious” harm to one or more residents. (For discussion
purposes, we use the word “harm” as shorthand for the regulatory terms “injury,
harm, or impairment.”). Second, immediate jeopardy exists if the SNF’s
noncompliance is or was “likely to cause” death or serious harm.

Daughters of Miriam Center, DAB No. 2067, at 8. The facility has the burden to rebut
the presumption by showing that the harm or threatened harm did not meet any
reasonable definition of serious. The Board defined the term “likely” to be:

... “likely” is ordinarily or commonly used to describe an outcome or result that is
“probable” or “reasonably to be expected” though “less than certain.” Webster’s
New World Dictionary (2 College Ed.); see also The American Heritage
Dictionary of the English Language (4" ed.); Black’s Law Dictionary (5" ed.)
(defining “likely” to mean “probable”). Also the term “likely” — and its synonym
“probable” — suggest a greater degree of probability that a particular event will
occur than the terms “possible” or “potential.” See Webster’s New World
Dictionary (2" College Ed.) (definition of “probable”); Black’s Law Dictionary
(5" ed.) (defining “probable” as “having more evidence for than against,” and
defining “possible” as “capable of existing” and “free to happen or not”). In this
regard, we have emphasized that a “mere risk” of serious harm is not equivalent to

a likelihood of such harm. Innsbruck Healthcare Center, DAB No. 1948 (2004).

Daughters of Miriam Center, DAB No. 2067, at 10. In Innsbruck Healthcare Center, the
Board stated that immediate jeopardy also exists where serious injury or harm is the
likely consequence of a deficiency, even when no actual harm has occurred. Heritage
Healthcare & Rehab. Center, DAB CR2116 (2010).

Petitioner asserts that it showed that its noncompliance was not likely to cause serious
harm. Petitioner asserts that the WHO Guidelines discuss only increases of risk, not a
“likely to cause” risk. The Institute of Medicine materials simply refer to sufficient
31

association between mold in a damp indoor environment and cough, wheeze and asthma
symptoms in sensitized asthmatic people. Petitioner asserts that “association” is not the
same as “likely to cause.” P. Br. at 20-22. In speaking about these and other publications
relied on by CMS, Petitioner asserts with regard to CMS Exs. 34-53,

Most of these documents address, at some point, the effect mold can have on
people. In each and every one of the documents, the writings refer to the
proposition that mold “can” or “may” have any one of many different impacts on
people. At times, certain writings discuss mold creating an “increased risk” of
certain ailments. But, in none of these exhibits is it stated that mold is “likely to
cause” “serious harm.” . .. Some species of mold, but not all, can have infectious
or noninfectious health effects. It is not known whether concentrations of mold
toxins are high enough to cause human disease, and no health effects from
airborne exposure to mold related toxins are proven . . . [t]he surveyors in this case
decided to issue an immediate jeopardy citation, without knowing whether mold
was present, the species of mold that was present, and making the assumption that
mold toxins, of a species that could cause health issues, were circulating in the
facility.

P. Br. at 23-24.

Petitioner asserts that Drs. Kapadia and Ruano testified only that an exacerbation of
respiratory problems “can” lead to death. Petitioner argues that “can” is the same as
“capable of existing” and that is not the same as “likely” to lead to serious harm. P.
Response at 6.

I disagree with Petitioner’s restrictive and somewhat forced conclusion, and reject its
effort to define itself into compliance with standards so clearly related to residents’ health
and safety. An increase in risk or an exacerbation of respiratory problems that “can” lead
to death satisfies me that mold in a facility is likely to lead to serious harm in a
compromised population of individuals who suffer from respiratory problems or who
have compromised immune systems. I understand Petitioner’s argument that some types
of mold are more toxic than other types — but Petitioner misapprehends its burden if it
believes that it was CMS’s burden to test the substances it found. It has been Petitioner’s
burden to rebut CMS’s prima facie case with evidence that the substances found were not
mold or were otherwise not a risk to compromised individuals, and it has failed to do so.

In arguing that immediate jeopardy existed at the facility, CMS submitted evidence from
respected organizations that documented the risks of mold exposure to individuals who
are immune-compromised or have respiratory problems, risks that Drs. Kapadia and
Ruano did not dispute. CMS notes that Petitioner cared for many such at-risk
individuals, and gave specific examples of two residents who may have been harmed by
mold and were never evaluated for mold or environmentally-related problems. CMS
32

asserts that Petitioner was aware that, at the very least, it might have had mold problems
prior to the survey, but it did not investigate or address them until after the survey.
Petitioner never considered that mold could have played a part in the two residents’
illnesses. Petitioner did not evaluate the risk to compromised individuals until after the
survey. As CMS notes, caring for a compromised population requires a facility to be
vigilant in reducing moisture and preventing mold. Petitioner was not vigilant, and
because it was not, it was not in compliance with applicable standards.

3. Petitioner failed to comply substantially with the participation requirement at
42 C.F.R. § 483.75 (F Tag 490), and its noncompliance constitutes immediate
jeopardy.

The regulation at 42 C.F.R. § 483.75 requires that a facility must be administered in a
manner that enables it to use its resources effectively and efficiently to attain or maintain
the highest practicable physical, mental, and psychosocial well being.

As has been shown above, Petitioner’s administration put video cameras in resident
rooms without the consent of the residents or their responsible parties. Petitioner does
not deny doing so. Moreover, there is no evidence that Petitioner’s administration took
any measures to protect the privacy of the residents receiving care in those rooms. These
facts point to a particularly-close nexus between the gravamen of the citation and the
administration’s active role in causing it, and demonstrate the validity of the citation.

Petitioner’s administration was aware that the facility had a mold problem.
Administrator Bell knew, or should have known, that the resident population at the
facility was particularly vulnerable to mold. However, Administrator Bell failed to take
all reasonable steps to eliminate the mold and prevent it from recurring prior to the
survey. While the administration’s role in this situation is more passive than active, the
nexus is just as plain between the gravamen of the citation and the administration’s
failure to act.

Petitioner has not shown that CMS’s determination is clearly erroneous.
4. The remedies imposed for Petitioner’s noncompliance are reasonable.

CMS imposed CMPs and a DPNA from May 28, 2009 through July 18, 2009. I find the
remedies imposed to be reasonable.

The permissible range of immediate jeopardy level penalties is from $3,050 to $10,000
per day. 42 C.F.R. § 488.438(a)(1)(i). The permissible range of non-immediate jeopardy
level penalties is from $50 to $3,000 per day. 42 C.F.R. § 488.438(a)(1)(ii). There are
regulatory criteria for deciding what a reasonable penalty amount is that falls within
either of these two penalty ranges. These criteria include: the seriousness of a facility’s
33

noncompliance; its culpability; its compliance history; and its financial condition. 42
C.F.R. § 488.438(f)(1) — (4) (incorporating 42 C.F.R. § 488.404 by reference into 42
C.F.R. § 488.438(f)(3)).

Petitioner has not provided me with evidence regarding its financial condition, and CMS
has not alleged that Petitioner’s past compliance history was negative. I find that the
noncompliance is serious, in that Petitioner’s facility houses a compromised population
that is likely to be affected by mold in the facility. And, Petitioner installed video
cameras in resident rooms without the consent of those residents and in such a way that
intimate and potentially-embarrassing views of those residents and their activities could
be seen by persons having no business or reason to do so. That lapse was not only
serious, but Petitioner was culpable in committing it. Moreover, I find Petitioner
additionally culpable, because its maintenance staff raised moisture and mold as troubling
concerns prior to the survey but those concerns were not promptly or carefully addressed.

Because Petitioner’s noncompliance is serious, and I find Petitioner to be culpable, I
cannot find that the $8,000 CMP for one day of noncompliance on May 28, 2009, for all
three F Tags cited, is in any way unreasonable. Further, I find the CMP of $5,050 for the
period from May 29, 2009 through June 18, 2009, based on F Tags 252 and 490, to be
reasonable, as it is in the middle of the permissible range of CMP for immediate jeopardy
level CMPs. Finally, in the absence of any argument from Petitioner other than that the
“CMP should not have been levied at all” and was “excessive” (P. Response at 9), I
sustain the imposition of the $500 CMP from June 19, 2009 through July 18, 2009.

CMS’s June 12, 2009 notice letter announced that it was imposing a discretionary DPNA
effective June 14, 2009, if Petitioner was still out of compliance on that date. Petitioner
was out of compliance on that date, and the DPNA was imposed through July 18, 2009.
The regulation at 42 C.F.R. § 488.417 authorizes imposition of the discretionary DPNA.

V. Conclusion

For the foregoing reasons, I conclude that there is a basis for imposition of the CMPs of:
$8,000 per day for one day of immediate jeopardy on May 28, 2009; $5,050 per day for
immediate jeopardy from May 29, 2009 through June 18, 2009; and $500 per day from
June 19, 2009 through July 18, 2009. I also uphold CMS’s imposition of a discretionary
DPNA from June 14, 2009 through July 18, 2009.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Michele A. Wickham
(O.1. Number: 9-09-40373-9),

Petitioner
Vv.

The Inspector General.
Docket No. C-10-890
Decision No. CR2283

Date: November 19, 2010

DECISION

Petitioner, Michele A. Wickham, asks review of the Inspector General’s (I.G.’s)
determination to exclude her for five years from participation in the Medicare, Medicaid,
and all federal health care programs under section 1128(a)(1) of the Social Security Act
(Act). For the reasons discussed below, I find that the I.G. is authorized to exclude
Petitioner and that the statute mandates a minimum five-year exclusion.

Discussion

The sole issue before me is whether the I.G. has a basis for excluding Petitioner from
program participation. Because an exclusion under section 1128(a)(1) must be for a
minimum period of five years, the reasonableness of the length of the exclusion is not an
issue. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

The parties agree that an in-person hearing is not required and that the matter may be
resolved based on written submissions. I.G. Br. at 5; P. Br. at 2. The parties have
submitted briefs. The I.G. submitted eight exhibits (I.G. Exs. 1-8). In the absence of any
objections, I admit into evidence LG. Exs. 1-8.
Petitioner must be excluded for five years, because she was
convicted of a criminal offense related to the delivery of an
item or service under the Medicare or a state health
program, within the meaning of section 1128(a)(1) of the
Social Security Act.'

Petitioner worked as a nurse providing in-home care to a Medicaid-eligible patient. She
submitted time cards to her employer claiming to have provided services that she did not
provide. She also falsified nurses’ notes in the patient chart, indicating that she provided
services that she did not provide. I.G. Ex. 2. She was indicted on eight misdemeanor
counts of grand theft and altering or modifying medical records and, on June 18, 2009,
pled no contest in California State Court to one count of each. I.G. Exs. 3, 4. The court
accepted the plea, sentenced her to one year probation, and ordered her to pay $1,698 in
fines and restitution. I.G. Ex. 4.

Ina letter dated July 30, 2010, the I.G. advised Petitioner that, because she had been
convicted of a criminal offense related to the delivery of an item or service under the
Medicare or a state health care program, the I.G. was excluding her from participation in
Medicare, Medicaid, and all federal health care programs for a period of five years. CMS
Ex. 1. Section 1128(a)(1) of the Act authorizes such exclusion. LG. Ex. 1.

Section 1128(a)(1) of the Act requires that the Secretary of Health and Human Services
exclude an individual who has been convicted under federal or state law of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program.” 42 C.F.R. § 1001.101. Petitioner concedes that she was convicted of a
criminal offense and does not dispute that her crimes were related to the state Medicaid
program. She is therefore subject to a minimum five-year exclusion. Act

§ 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

Petitioner argues that she should nevertheless not be excluded, because: 1) she has been
punished enough; and 2) she has an otherwise clean record and plans to have her
conviction expunged. These are not bases for overturning a mandatory exclusion. Her
perception as to the degree of her punishment is simply irrelevant. The regulations
explicitly provide that “conviction” means that a judgment of conviction has been entered
“regardless of whether . . . the judgment of conviction . . . has been expunged.” 42
C.F.R. § 1001.2; Henry L. Gupton, DAB No. 2058 at 8 (2007).

' [make this one finding of fact/conclusion of law.

> The term “state health care program” includes a state’s Medicaid program. Section
1128(h)(1) of the Act; 42 C.F.R § 1001.2.
I therefore conclude that the LG. properly excluded Petitioner from participation in
Medicare, Medicaid and all federal health care programs, and I sustain the five-year
exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge