Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

)
In the Case of: )
) Date: August 21, 2008
Heritage Park Rehabilitation & Nursing )
Center (CCN: 45-5599), )
) Docket No. C-06-366
Petitioner, ) Decision No. CR1820
)
v. )
)
Centers for Medicare & Medicaid )
Services. )
a )
DECISION

Petitioner, Heritage Park Rehabilitation & Nursing Center, violated 42 C.F.R.

§ 483.25(h)(2),' as alleged by the Centers for Medicare & Medicaid Services (CMS)
based upon the survey of Petitioner’s facility completed January 7, 2006. A per instance
civil money penalty (PICMP) of $6300 is reasonable.

I. Background

Petitioner, located in Austin, Texas, is authorized to participate in the Medicare program
as a skilled nursing facility (SNF) and the Texas Medicaid program as a nursing facility
(NF). On January 7, 2006, the Texas Department of Aging and Disability Services (the
state agency) completed a survey of Petitioner’s facility and found that it was not in
substantial compliance with Medicare participation requirements. CMS notified
Petitioner by letter dated February 7, 2006, that it concurred with the findings of the state
agency and that it was imposing a PICMP of $6300 based upon a violation of 42 C.F.R.
§ 483.25(h)(2), a denial of payment for new admissions (DPNA) effective February 22,
2006, and termination of Petitioner’s provider agreement effective July 7, 2006, if
Petitioner did not return to substantial compliance before that date. CMS Exhibit (CMS

' References are to the Code of Federal Regulations (C.F.R.) in effect at the time
of the survey.
2

Ex.) 1, at 1-3. CMS notified Petitioner by letter dated March 8, 2006, that during a revisit
survey the state agency found that Petitioner had returned to substantial compliance, and
the DPNA and termination remedies were rescinded. CMS Ex. 1, at 4-5; Tr. 58. On
April 5, 2006, Petitioner timely requested a hearing by an administrative law judge (ALJ).
The case was assigned to me for hearing and decision on April 25, 2006. A Notice of
Case Assignment and Prehearing Case Development Order (Prehearing Order) was issued
at my direction on April 25, 2006.

On December 12 and 13, 2006, a hearing was held in Austin, Texas. CMS offered and I
admitted CMS Exs. 1, 2 (except pages 1-9 and 22-27), 3 (except pages 6-15), 4, 5, 6
(except pages 1, 3-7, 9, 16), 7 (except pages 1-11), 8 (except pages 1-11, 13-14, 17-19,
21, 25, 30, 32-34, 36-41), and 9-21. Tr. 29-30. Petitioner offered Petitioner’s exhibits (P.
Exs.) 1-9, 11-13, 15-16, and 18 (P. Exs. 10, 14 and 17 were withdrawn prior to the
hearing). Tr. 32, 194. IL admitted P. Exs. 1-3, 4 (except the bottom entry on page 2, dated
January 11, 2006), 5-9, 11-13, 15 (for the limited purpose discussed at Tr. 42-46), 16, and
18. Tr. 47-48, 197-98. CMS elicited testimony from surveyors Cathy Whitis, Licensed
Vocational Nurse (LVN), and Jenny Rebecca Martinez, Registered Nurse (RN).
Petitioner elicited testimony from Blaise Faxique, Director of Nurses (DON), Travis
Wheat, Vice President of Operations for Regency Nursing and Rehabilitation, and
Michael Gutierrez, M.D. The parties submitted post-hearing briefs and post-hearing reply
briefs.

II. Discussion
A. Findings of Fact

The following findings of fact are based on exhibits admitted, the transcript, and the
parties’ joint stipulations. Citations to exhibit numbers related to each finding of fact may
be found in the analysis section of this decision, if not indicated here.

1. Resident 9, a 65-year-old male at the time of the survey, had a medical history of a
cerebrovascular accident (CVA) with right-sided hemiparesis (partial paralysis of
one side), senile dementia and psychosis, hypertension, hypercholesterolmenia
(high cholesterol), peptic ulcer disease, gout, depression, and a seizure disorder.
Joint Stipulation and Joint Statement of Issues Presented for Hearing, dated August
1, 2006. (Jt. Stip.) § 8; CMS Ex. 13, at 32-33; P. Exs. 3, 5.

2. Resident 9 had a history of being evaluated as alert and oriented in three spheres --
person, place, and time. Jt. Stip. 9 9; Tr. 103; P. Ex. 4.

3. Resident 9 was assessed as moderately impaired in cognitive skills with poor
decision-making. Tr. 15; CMS Ex. 13, at 7, 14.
Resident 9 was considered responsible for making his own health care decisions.
Tr. 20; CMS Ex. 13, at 14.

Resident 9 was restricted to wheelchair mobility. Tr. 15; CMS Ex. 13, at 16, 21;
Petitioner’s Brief (P. Br.) at 3.

On November 30, 2005, Resident 9 left the facility unsupervised; he was assessed
as an elopement risk and was moved to the second floor of the facility as a result,
and his location was monitored until January 1, 2006, when that intervention was
discontinued because he made no more attempts to leave. Tr. 15-16; P. Ex. 4, at 1;
CMS Ex. 13, at 1, 25, 29; P. Br. at 3.

Resident 9 was allowed to sit on the front porch of the facility on a regular basis.
CMS Ex. 3, at 2; P. Ex. 4, at 1; Tr. 236.

On January 3, 2006, between 8:00 p.m. and 9:45 p.m., Resident 9 left the facility
through the front door without signing out or notifying staff of his departure. Tr.
13; CMS Ex. 3, at 2; CMS Ex.13, at 40; P. Ex. 6; P. Br. at 3.

Resident 9 left the facility property in the company of a non-family member, who
was referred to as Linda. Tr. 13; P. Exs. 7, 8, 9; P. Br. at 3.

On January 3, 2006, at 9:45 p.m., staff noted Resident 9 was missing and began
searching the facility and neighborhood for him. CMS Ex. 3, at 2; CMS Ex.13, at
40.

On January 4, 2006, between 7:00 a.m. and 7:30 a.m., Resident 9 was found, by a
passerby at a street corner about three to four blocks from the facility, sitting in his
wheelchair. Tr. 17-18; CMS Ex. 3, at 1; CMS Ex.13, at 40; P. Br. at 3.

When Resident 9 was discovered on January 4, 2006, he was wearing a T-shirt and
boxer shorts, no socks or shoes, he was wet with urine, his skin was cold to touch,
and he was shivering. Tr. 17-18; CMS Ex. 3, at 1; CMS Ex.13, at 40, 59.

On January 4, 2006, Resident 9 was transported to the hospital, evaluated, and
treated for hypothermia as his temperature was 94.4 degrees Fahrenheit orally. Tr.
18; CMS Ex. 13, at 32; P. Br. at 3.

During the evening on January 3, 2006, Resident 9 did not receive medication for
which he had a physician’s order. CMS Ex. 3, at 4; CMS Ex. 13, at 3-5; Tr. 86.
B. Conclusions of Law
1. Petitioner’s request for hearing was timely and I have jurisdiction.

2. Petitioner violated 42 C.F.R. § 483.25(h)(2) with respect to Resident 9.

3. Resident 9 suffered actual harm.

4. Petitioner was not in substantial compliance with program participation
requirements based upon the regulatory violation and actual harm suffered by a
resident.

5. The determination that immediate jeopardy was posed does not impact the amount

of the PICMP and is not in issue before me.
6. A PICMP of $6300 is reasonable.

C. Issues
The issues in this case are:

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

Whether the remedy imposed is reasonable.
D. Applicable Law

Petitioner is a long-term care facility participating in the federal Medicare program as a
SNF and in the state Medicaid program as a NF. The statutory and regulatory
requirements for participation by a long-term care facility are found at sections 1819 and
1919 of the Social Security Act (Act) and at 42 C.F.R. Part 483. Sections 1819 and 1919
of the Act vest the Secretary of Health and Human Services (Secretary) with authority to
impose enforcement remedies against a long-term care facility for failure to comply
substantially with federal participation requirements.

Pursuant to the Act, the Secretary has delegated to CMS and the states the authority to
impose remedies against a long-term care facility that is not complying substantially with
federal participation requirements. “Substantial compliance means a level of compliance
with the requirements of participation such that any identified deficiencies pose no greater
risk to resident health or safety than the potential for causing minimal harm.” 42 C.F.R.

§ 488.301 (emphasis in original). A deficiency is a violation of a participation
5

requirement established by the Secretary through his regulations at 42 C.F.R. Part 483.
Facilities that participate in Medicare may be surveyed on behalf of CMS by state survey
agencies in order to determine whether the facilities are complying with federal
participation requirements. 42 C.F.R. §§ 488.10-488.28, 488.300-488.335. Pursuant to
42 C.F.R. Part 488, CMS may impose a per instance or per day CMP against a long-term
care facility when a state survey agency concludes that the facility is not complying
substantially with federal participation requirements. 42 C.F.R. §§ 488.406; 488.408;
488.430. The regulations in 42 C.F.R. Part 488 also give CMS a number of other
remedies that can be imposed if a facility is not in compliance with Medicare
requirements. 42 C.F.R. §§ 488.406; 488.408; 488.430.

The regulations specify that a CMP that is imposed against a facility on a per day basis
will fall into one of two ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper
range of CMP, of from $3050 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 $3000 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). Pursuant to 42 C.F.R. § 488.301, “(i)mmediate jeopardy means a
situation in which the provider’s noncompliance with one or more requirements of
participation has caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident.” (emphasis in original).

The Act and regulations make a hearing before an ALJ available to a long-term care
facility against which CMS has determined to impose a CMP. Act § 1128A(c)(2); 42
C.F.R. §§ 488.408(g); 498.3(b)(13). The hearing before an ALJ is a de novo proceeding.
Anesthesiologists Affiliated, et al, DAB CR65 (1990), aff’d, 941 F.2d 678 (8" Cir. 1991);
Emerald Oaks, DAB No. 1800, at 11 (2001); Beechwood Sanitarium, DAB No. 1906
(2004); Cal Turner Extended Care, DAB No. 2030 (2006); The Residence at Salem
Woods, DAB No. 2052 (2006). A facility has a right to appeal a “certification of
noncompliance leading to an enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also
42 C.F.R. §§ 488.330(e) and 498.3. However, the choice of remedies by CMS or the
factors CMS considered when choosing remedies are not subject to review. 42 C.F.R.

§ 488.408(g)(2). A facility may only challenge the scope and severity level of
noncompliance found by CMS ifa successful challenge would affect the range of the
CMP that could be collected by CMS or impact upon the facility’s Nurse Aid Training
and Competency Evaluation Program. 42 C.F.R. §§ 498.3(b)(14) and (d)(10)(i). CMS’s
determination as to the level 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, 38 (2000), aff'd, Woodstock
Care Center v. Thompson, 363 F.3d 583 (6" Cir. 2003). The Departmental Appeals
6

Board (the Board) has long held that the net effect of the regulations is that a provider has
no right to challenge the scope and severity level assigned to a noncompliance finding,
except in the situation where that finding was the basis for an immediate jeopardy
determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB
No. 1750 (2000). Review of a CMP by an ALJ is governed by 42 C.F.R. § 488.438(e).

When a penalty is proposed and appealed, CMS must make a prima facie case that the
facility has failed to comply substantially with federal participation requirements. “Prima
facie” means that the evidence is “(s)ufficient to establish a fact or raise a presumption
unless disproved or rebutted. Black’s Law Dictionary 1228 (8" ed. 2004); see also
Hillman Rehabilitation Center, DAB No. 1611, at 8 (1997), aff'd Hillman Rehabilitation
Center v. U.S. Dept. of Health and Human Services, No. 98-3789 (GEB), slip op. at 25
(D.N.J. May 13, 1999). To prevail, a long-term care facility must overcome CMS’s
showing by a preponderance of the evidence. Batavia Nursing and Convalescent Center,
DAB No. 1904 (2004); Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004),
aff'd, Batavia Nursing & Convalescent Ctr. v. Thompson, 143 Fed.Appx. 664 (6th Cir.
2005); Emerald Oaks, DAB No. 1800 (2001); Cross Creek Health Care Center, DAB
No. 1665 (1998); Hillman Rehabilitation Center, DAB No. 1611.

E. Analysis
1. Petitioner violated 42 C.F.R. § 483.25(h)(2) (Tag F324)*
Section 483.25 of Title 42 C.F.R. requires that:
Each resident must receive and the facility must provide the necessary care
and services to attain or maintain the highest practicable physical, mental,

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

? This is a “Tag” designation as used in the State Operations Manual (SOM),
Appendix PP — Guidance to Surveyors for Long Term Care Facilities. The “Tag” refers
to the specific regulatory provision allegedly violated and CMS’s guidance to surveyors.
Although the SOM does not have the force and effect of law, the provisions of the Act
and regulations if interpreted clearly do have such force and effect. State of Indiana by
the Indiana Department of Public Welfare v. Sullivan, 934 F.2d 853 (7" Cir. 1991);
Northwest Tissue Center v. Shalala, | F.3d 522 (7" Cir. 1993). Thus, while the Secretary
may not seek to enforce the provisions of the SOM, he may seek to enforce the provisions
of the Act or regulations as interpreted by the SOM.
7

One specific requirement is that a facility must ensure “[e]ach resident receives adequate
supervision and assistance devices to prevent accidents.” 42 C.F.R. § 483.25(h)(2). The
regulation requires that a facility provide both “assistance devices” and “adequate
supervision” to prevent accidents. In Woodstock Care Center, the Board considered
whether the facility knew or reasonably should have anticipated the risk of the kind of
events that occurred and whether any reasonable means were available to prevent them
without violating the residents’ rights. Woodstock Care Center, DAB No. 1726, at 26-27.
The Board in Woodstock noted that, while a facility is permitted the flexibility to choose
the methods it uses to prevent accidents, the chosen methods must constitute an
“adequate” level of supervision and use of assistance devices given all the circumstances.
What is “adequate” takes into consideration the resident’s ability to protect himself or
herself from harm. See Woodstock Care Center at 28-35; see also Windsor Health Care
Center, DAB No. 1902, at 5, aff'd, Windsor Health Center v. Leavitt, 127 Fed. Appx.
843, No. 04-3018 slip op., 2005 WL 858069 (6th Cir. 2005 ) (“[a] facility is permitted the
flexibility to choose the methods it uses to prevent accidents, but the chosen methods
must constitute an ‘adequate’ level of supervision under all the circumstances.”). An
“accident” is “an unexpected, unintended event that can cause a resident bodily injury,”
excluding “adverse outcomes associated as a direct consequence of treatment or care
(e.g., drug side effects or reactions).” SOM, App. P, Guidance to Surveyors, Tag F324,
Woodstock Care Center, DAB No. 1726, at 4.

The surveyors allege in the Statement of Deficiencies dated January 7, 2006, that
Petitioner violated 42 C.F.R. § 483.25(h)(2) because Petitioner failed to monitor resident
access to the front door, which resulted in the elopement’ of Resident 9. The surveyors
allege that Resident 9 suffered hypothermia as a result of being outside the facility and
unsupervised. CMS Ex. 2, at 10.

The pertinent facts are set forth in detail in my Findings of Fact and are not restated here.
There is no dispute that Resident 9 left Petitioner’s facility on January 3, 2006, without
staff knowledge. Petitioner cannot dispute that Resident 9 was not subject to staff
supervision from approximately 8:30 p.m. on January 3, 2006, until he returned from the
hospital on January 5, 2006. Tr. 209. Furthermore, Resident 9 suffered from
hypothermia and had to be hospitalized and treated. Thus, Resident 9 suffered actual
harm.

* The term as used by the surveyors refers to Resident 9’s unsupervised,
unplanned, or unintended departure from the facility property. Elopement as used in this
decision means a departure from facility property that Petitioner’s staff and the resident’s
care planning team did not supervise, plan, or intend. Whether the resident planned or
intended to depart is not controlling.
8

Petitioner argues that CMS failed to show a prima facie violation of 42 C.F.R.

§ 483.25(h)(2) because there was no accident and, if there was an accident, it was not
foreseeable. P. Br. at 9-11; P. Reply at 9; Tr. 176-77. Petitioner reasons that the chain of
events involving Resident 9 was not an accident because Resident 9 chose to leave the
facility voluntarily with his girlfriend, and he had the right to do so. Further, according to
Petitioner, Resident 9 and his girlfriend decided that he should be dropped off three to
four blocks from the facility to avoid detection. P. Br. at 9,n.2; P. Reply at9. An
accident is an unexpected or unintended event that can cause, but need not necessarily
cause, injury or harm to a resident. I have no difficulty concluding that there was an
accident based upon the facts of this case. The regulations that govern Petitioner’s
participation in Medicare and Medicaid oblige Petitioner to ensure that a resident is
properly assessed and a comprehensive care plan developed with professional quality care
and services delivered by qualified staff in a safe environment that preserves a resident’s
rights and quality of life. 42 C.F.R. §§ 483.10, 483.12, 483.15, 483.20, 483.25, 483.70.
Petitioner does not, and cannot, argue that Resident 9’s unsupervised departure on
January 3, 2006 was planned or intended as part of his plan of care or as part of
Petitioner’s delivery of professional quality services. Both Petitioner and CMS recognize
that Resident 9 has the right to come and go from the facility. However, as part of
Petitioner’s plan to exercise supervision over Resident 9, Petitioner expected Resident 9
to notify staff when he wanted to leave the facility. CMS Ex. 13, at 25. Resident 9’s
unsupervised departure was clearly both unplanned and unintended by Petitioner. There
are many potential injuries or harms associated with the unplanned and unsupervised
departure, exacerbated by Resident 9’s assessed poor judgment and decision-making,
including his failure to adequately dress for the weather conditions and failure to receive
or have a supply of his ordered medication to take at the ordered time and dose. I find no
requirement in the regulation or the prior decisions of the Board or ALJs that indicates
Petitioner needs to be able to foresee a specific injury or harm that might befall an
unsupervised resident, only that the unexpected or unintended event could cause bodily
injury.

Petitioner’s argument that it could not foresee Resident 9’s elopement is also problematic
for Petitioner. There is no dispute that on November 30, 2005, Resident 9 left the front
porch of the facility and rolled his wheelchair onto the parking lot where his further
progress was prevented by a speed bump. The attempted elopement was observed by
facility staff, and Resident 9 was wheeled back into the facility. CMS Ex. 13, at 1; P. Ex.
4, at 1-2. Petitioner then created a care plan to address the problem of Resident 9 leaving
the facility without first signing out on pass, with the goals of continued safety for the
next 90 days and no reports of elopement for the next 90 days. The care plan listed four
9

interventions: (1) explain to resident the risks* of leaving home without notifying staff;
(2) redirect the resident as needed; (3) encourage the resident to notify staff when he
wants to leave the facility; and (4) monitor the resident’s whereabouts every hour. CMS
Ex. 13, at 25. The development of the plan with specific interventions is good evidence
that Petitioner foresaw the risk that Resident 9 would attempt to leave the facility
unsupervised again. The plan apparently worked, as Resident 9 did sign-out on pass with
his wife at least twice while the plan was in effect, and there is no evidence of any
unsupervised departures. CMS Ex. 13, at 28; P. Ex. 12. Although the care plan indicated
by its terms that it was to be in effect for 90 days, there is no dispute that Petitioner’s staff
discontinued hourly monitoring on January 1, 2006, a month after initiation, due to the
fact that Resident 9 had made no attempts to leave the facility. CMS Ex. 13, at 25.
Discontinuing the hourly checks based solely on the fact that Resident 9 made no further
attempts is a significant error by Petitioner.

On November 30, 2005, Petitioner foresaw a risk that Resident 9 would leave the facility
unsupervised. Petitioner adopted four interventions to address the risk, including hourly
checks. The facts that (1) Resident 9 did sign-out twice, and (2) there were no attempts to
leave unsupervised after the interventions were implemented, are good evidence that the
interventions adopted were effective. A month after implementing the interventions,
Petitioner discontinued the hourly checks, arguably the most restrictive intervention.
Two days after discontinuing the hourly checks Resident 9 eloped. Petitioner has
presented no evidence that, before discontinuing hourly checks on the resident’s location,
the care planning team assessed the effectiveness of the intervention and found it no
longer effective or assessed Resident 9 and determined that changes in his medical
condition, personal situation, or functioning had improved since November 30, 2005,
when the care planning team determined that the intervention was necessary. Thus, if it
was foreseeable on November 30, 2005 that Resident 9 would attempt to elope again, was
it not also foreseeable that if Petitioner removed the hourly checks then Resident 9 would
attempt to elope (depart without signing out and without supervision)? The question is
answered by the fact that Resident 9 did elope just two days after the hourly checks were
discontinued. The fact that Resident 9 had signed-out and not eloped during the 30 days,
is evidence of the effectiveness of the interventions adopted, not evidence that Resident 9
had experienced a change that reduced the risk of elopement. I conclude that it was
foreseeable, absent evidence to the contrary, that discontinuing the hourly checks posed
the same risk for elopement as the care planning team foresaw on November 30, 2005.

* The specific risks envisioned by the care planning team are, unfortunately, not
listed and the evidence does not show what risks staff listed for the resident. However, it
is significant that the care planning team foresaw some risks associated with unsupervised
departures.
10

I conclude that CMS has made a prima facie showing of a violation of 42 C.F.R.
§ 483.25(h)(2).

Petitioner argues in its defense that it was not reasonably foreseeable that Resident 9’s
departure with Linda would pose any risk for harm to Resident 9 because Resident 9 was
known to have previously left the facility on pass with Linda. P. Br. at 9; Tr. 203-04. Of
course, Petitioner did not know that Resident 9 left with Linda on January 3, 2006, as
Petitioner had discontinued hourly monitoring, and Resident 9 did not sign-out when he
left with Linda. Resident 9 left with Linda without his medication and without proper
clothing. Petitioner has not shown that either the medication or clothing were
unnecessary, or that their absence posed no risk for harm to the resident. Petitioner lost
supervision of the resident and therefore could not ensure he received professional quality
services. Additionally, Petitioner could not supervise the resident’s departure to ensure
that he left with proper clothing, proper medicine, and that he would be in the protection
of a specific person or persons. Petitioner should not be held accountable for Linda’s
conduct. However, if Petitioner had supervised Resident 9's departure with Linda, she
may have been deterred from dropping the resident the next morning three to four blocks
from the facility, in his underwear, soaked with urine, with no shoes or socks, and trapped
in his wheelchair in cold conditions.* As I have already concluded, it was not necessary
for Petitioner to foresee the specific injury or harm Resident 9 suffered, only that his
unsupervised departure created the risk for harm.

Petitioner also argues that the only deficiency was Resident 9’s failure to properly sign-
out. P. Br. at 10, 13. Petitioner’s characterization is not correct. The deficiency is that
Resident 9 left Petitioner’s facility without Petitioner’s knowledge, and without Petitioner
ensuring the resident had proper supervision to avoid accidents. The evidence shows that

* [recognize that if Resident 9 was with Linda, as Petitioner alleges, there is a
substantial question based upon the state in which Resident 9 was discovered as to
whether Linda was a safe person for Resident 9 to be with or whether she had the ability
to provide a safe environment. CMS does not agree that the evidence is sufficient to
show Resident 9 was actually with Linda. The surveyors made no allegation that it was
unsafe for Resident 9 to be out with Linda. Accordingly, I find no reason to attempt to
decide what Petitioner’s responsibility was to assess whether it was safe for Resident 9 to
go out on pass with Linda. Petitioner’s assertion that Resident 9 had the right to do what
he wanted would need to be considered in the context of Texas elder abuse laws and
Petitioner’s responsibilities under those laws. Petitioner acknowledges that it could have
infringed Resident 9’s rights if it believed he was in danger. P. Br. at 13,n.3. The
evidence shows that Petitioner recognized that leaving without signing out (elopement)
was unsafe. However, Petitioner does not indicate how it would assess whether Resident
9 leaving the facility with Linda was safe.
11

Petitioner previously assessed Resident 9 and foresaw the risk for unsupervised departure
and the risk for injury. However, Petitioner discontinued the hourly checks of Resident 9
without an adequate assessment of the effectiveness of that intervention, even though the

evidence shows that with that intervention in place Resident 9's elopement was prevented,
e signed-out as required, and a degree of supervision of the resident was maintained.

Petitioner argues that it had a number of interventions in place to prevent elopements. P.
Ex. 14-16; P. Reply at 6-7. It is not disputed that Petitioner had a number of interventions
in place. The fact that those interventions were not effective to prevent Resident 9 from
departing unsupervised is indisputable. Two of the interventions required observation of
the front door, during business hours by a receptionist and after business hours by nurses
at the nurses station located near the front door. Another intervention was a security code
ey pad needed to unlock the front door. Surveyor Whitis testified that the surveyors
observed that facility staff was not monitoring the front door particularly after 5:00 p.m.,
ut she agreed that before that time administrative staff could generally observe the front
door from the front office. Tr. 77. She testified that the surveyors observed that
frequently no one was at the front desk. Tr. 77. Surveyor Whitis concluded that
Petitioner had no means for identifying residents who had the potential to wander off or
elope, and a number of staff were interviewed who did not know which residents could be
outside unsupervised. Tr. 77-80. Surveyor Whitis further testified that it was known that
several residents had access to the code to the front door and would let other residents
out. Based on the foregoing, the surveyors concluded during the survey that Petitioner’s
failure to ensure regular supervision of the front door posed a risk for elopement by
Resident 9 and other residents at risk for elopement. Tr. 87. I find that the surveyors’
observations are unrebutted. Furthermore, Petitioner asserts that on January 3, 2006,
Resident 9 was sitting on the front porch when Linda pulled up and assisted Resident 9
and his wheelchair into her vehicle and drove off. However, Petitioner could not locate
any witness to confirm that scenario, which gives credibility to the surveyors’ observation
that staff was not supervising access to or departure from either the facility or the front
porch.

Petitioner argues that Resident 9 had the right to receive visitors, leave the facility, or
discharge himself if he so chose. Thus, staff would not have prevented Resident 9 from
leaving the facility on January 3, 2006, if staff was aware that the resident was leaving.
P. Br. at 11-14. Whether staff could have prevented the resident from leaving is not the
issue. If staff had known that Resident 9 was leaving, staff could have ascertained where
the resident was going, how long he was to be gone, who he was with, and thus ensured
12

the resident went with proper clothing and medicine.° Staff supervision of the departure
would have avoided the need to search the facility, to contact the police, and would likely
have avoided Linda dropping the resident blocks away in his underwear and wet with
urine.

Petitioner attempts to use residents’ rights to shield it from responsibility for its loss of
supervision of Resident 9. P. Br. at 11; P. Reply at 10-12. Two points are significant.
First, when Petitioner sought to participate in the program, it was clearly on notice of its
obligation to respect resident rights under the regulations (42 C.F.R. § 483.10) and the
need to provide supervision to protect its residents against accidental injury (42 C.F.R.

§ 483.25(h)(2)). Petitioner is obliged to do the balancing required. Section 483.25(h)(2)
does not provide that residents must be protected from accidents “except when protection
would infringe a right.” Similarly, section 483.10 does not contain a specific exception
for a situation where there is a risk for harm due to accidents.’ Second, but most
significant, I infer from the fact that Petitioner implemented the intervention of checking
Resident 9’s location hourly on November 30, 2005, that Petitioner resolved any
perceived conflict between Resident 9’s rights and the need to protect him from
accidental injury, in favor of the latter. Petitioner attaches great significance to the fact
that Resident 9 was able to manage his own care and that his physician did not impose
any restrictions upon his ability to leave the facility with a companion. P. Reply at 5.
The fact that Petitioner attempts to avoid is that Resident 9’s physician had determined at
some time that Resident 9 needed skilled care in a long-term care facility. Thus, while
Resident 9 might manage his care, he was incapable of providing all his own care.
Further, the fact that his physician had not imposed restrictions upon Resident 9’s sitting
on the front porch or going on pass is no defense for Petitioner. The regulation imposes
upon Petitioner, not the physician, the obligation to protect its residents from foreseeable
risks of accidental injury or harm.

° Staff might also have been able to assess whether Linda could properly care for
Resident 9 and provide a safe environment or whether she was a danger. I do not attempt
to resolve whether staff could prevent a departure if staff determined that Linda was
unsafe or what Petitioner’s responsibilities might have been in that regard under Texas
elder abuse laws. I have no evidence that the incident was ever reported or treated by
Petitioner or the state as an incident of elder abuse.

7 However, section 483.10(n) does provide that the right to self-administer drugs is
limited by whether an interdisciplinary team has determined that it is safe for a resident to
do so.
13

I conclude that Petitioner has failed to show that it provided adequate supervision to
prevent accidental injury to Resident 9. Accordingly, Petitioner violated 42 C.F.R.

§ 483.25(h)(2). The declaration of immediate jeopardy is not subject to review as it does
not impact the enforcement remedy proposed by CMS.

2. A PICMP of $6300 is reasonable.

If a facility is not in substantial compliance with program requirements, CMS has the
authority to impose one or more of the enforcement remedies listed in 42 C.F.R.

§ 488.406, including a PICMP. CMS is authorized to impose a PICMP from $1000 to
$10,000. The PICMP CMS proposes in this case is slightly above the middle of the range
authorized by the regulation. The range of the PICMP that may be imposed is not
affected by CMS’s declaration that there was immediate jeopardy. Thus, whether there
was immediate jeopardy is not subject to review.

Pursuant to 42 C.F.R. § 488.438(e), because I have found there is a basis for imposition
of a CMP, my authority on review of the reasonableness of the CMP is limited: (1) I may
not set the penalty at or reduce it to zero; (2) I may not review either CMS’s or the state
agency’s decision to use a CMP as an enforcement remedy; and (3) I may only consider
the factors specified at 42 C.F.R. § 488.438(f). In determining whether the amount of the
CMP is reasonable, the following factors specified at 42 C.F.R. § 488.438(f) must be
considered: (1) the facility’s history of noncompliance, including repeated deficiencies;
(2) the facility’s financial condition; (3) the seriousness of the deficiencies as set forth at
42 C.F.R. § 488.404; and (4) the facility’s degree of culpability.

I have received no evidence of prior noncompliance, and Petitioner has not offered any
evidence showing an inability to pay. Where either party fails to take advantage of its
opportunity to submit evidence of a facility’s financial condition, that opportunity is
waived. Community Nursing Home, DAB No. 1807, at 15-16 (2002); Emerald Oaks,
DAB No. 1800.

I find Petitioner’s failure to provide supervision to Resident 9 to be a serious failure on
the part of Petitioner. A central reason for housing a resident in a long-term care facility
is to provide the resident with care, including supervision, which the resident is unable to
provide for himself or herself, or that the resident’s family is unable to provide at home.
Resident 9 did not receive the supervision he required, and he suffered actual harm as a
result. I conclude that Petitioner was culpable for the violation of 42 C.F.R.

§ 483.25(h)(2).

I further conclude that the $6300 PICMP is reasonable.
14

Ill. Conclusion

For the foregoing reasons, I conclude that Petitioner violated 42 C.F.R. § 483.25(h)(2)
with respect to Resident 9 on January 3, 2006, and that violation caused the resident
actual harm. Therefore, Petitioner was not in substantial compliance with program
participation requirements, and there is a basis for the imposition of an enforcement
remedy. I further conclude that a PICMP of $6300 is reasonable.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Family Practice Medical Center, ) Date: July 16, 2008

)
Petitioner, )
)

-V.- ) Docket No. C-08-226

) Decision No. CR1819
Centers for Medicare & Medicaid )
Services. )
)

Decision Dismissing Request for Hearing

The Centers for Medicare & Medicaid Services (CMS) moved to dismiss Petitioner
Family Practice Medical Center’s (Petitioner) December 13, 2007 hearing request for
untimeliness.' CMS filed a motion on March 17, 2008, seeking dismissal of Petitioner’s
earing request, accompanied by a memorandum of law (CMS Br.) and 10 proposed
exhibits. I have admitted these into evidence as CMS Exhibits 1-10 (CMS Exs. 1-10),
without objection. On May 6, 2008, Mr. Thomas Pliura, filed an appearance on
Petitioner’s behalf, after the deadline to respond to CMS’s motion to dismiss had passed.
Nonetheless, I allowed counsel until May 30, to file a response. Petitioner submitted a
rief (P. Br.) on May 30, 2008, accompanied by a 10-page exhibit, which I have admitted
into the record as Petitioner Exhibit 1 (P. Ex. 1), without objection.

I. Background of the case

Petitioner is a physician office laboratory in Georgetown, Illinois, participating in the
Medicare and Medicaid programs. As a result of a survey completed on September 13,
2007, CMS notified Petitioner by letter dated September 25, 2007, that, based on findings
of condition-level deficiencies that constituted immediate jeopardy, it was imposing the
following remedies:

. Suspension of the laboratory’s Clinical Laboratory Improvement
Amendments (CLIA) certificate effective October 6, 2007, which would

' CMS alleged other reasons as a basis for dismissal, but in view of my finding
that the request for hearing was untimely filed, it is unnecessary to discuss those
additional reasons.
2

remain in effect until either the immediate jeopardy was removed, ora
decision was rendered by an administrative law judge (ALJ), if a hearing
were to be requested.

. Cancellation of the laboratory’s approval to receive Medicare payments for
services effective October 6, 2007, which would continue until removal of
the condition-level noncompliance.

. Revocation of the laboratory’s CLIA certificate 60 days after receipt of
CMS’s September 25, 2007 notice letter, if compliance with CLIA
requirements had not been attained, and a request for hearing before an ALJ
had not been filed.

CMS Ex. 4.

CMS further informed Petitioner that if it disagreed with that determination, a hearing
was available before an ALJ, and that the procedures governing this process are set out at
42 C.F.R. § 493.1844 and 42 C.F.R. Part 498. CMS Ex. 4, at 4. Petitioner was also
advised that a written request for a hearing had to be filed no later than 60 days from the
date of receipt of CMS’s notice letter. CMS Ex. 4, at 4. CMS sent the notice via FedEx
Express, and it was received by Petitioner on September 27, 2007. CMS Ex. 5.

After consideration of the written arguments and documentary evidence submitted by the
parties, I grant CMS’s motion to dismiss as to the remedies imposed in the September 25,
2007 notice. In doing so, I find that the hearing request was untimely filed and the time
for filing a request for hearing has not been extended as Petitioner has not shown good
cause for its failure to file a timely hearing request.

II. Issues
The issues in this case are:
. Whether Petitioner filed a timely request for hearing; and,

. Whether Petitioner has shown good cause for extending the time to file a
request for hearing.

Ill. Applicable law and regulations

In cases involving CMS, a party is entitled to a hearing only if that party files its request
within the time limits established by 42 C.F.R. § 498.40(a)(2), unless the period for filing
is extended. In order to be entitled to a hearing, a party must file its request within 60 days
from receipt of a notice of a determination by CMS to impose a remedy. 42 C.F.R.

§ 498.40(a)(2). The date of receipt of a notice is presumed to be five days after the date
3

on the notice, unless there is a showing of actual receipt on an earlier or later date. 42
C.F.R. § 498.22(b)(3). An ALJ may extend the time within which a hearing request may
be filed based on a showing of good cause to justify an extension of time. 42 C.F.R.

§ 498.40(c)(2). An ALJ may dismiss a request for hearing which is not timely filed. 42
C.F.R. § 498.70(c).

IV. Findings and Discussion

I make findings of fact and conclusions of law (Findings) to support my decision to
dismiss Petitioner’s request for hearing. Each Finding is noted below in boldface italics,
followed by a discussion of each Finding.

A, Petitioner did not file a timely request for hearing.

CMS sent Petitioner the notice letter by FedEx Express on September 26, 2007. Petitioner
does not dispute that it received CMS’s notice on September 27, 2007. P. Br. at 1. It was
not until December 13, 2007, 77 days after Petitioner’s receipt of CMS’s determination,
that Petitioner filed a request for a hearing before an ALJ. See P. Br. at 2.

Section 498.40(a)(2) of 42 C.F.R. expressly provides that:

[an] affected party or its legal representative or other authorized official must file
the request in writing within 60 days from receipt of the notice of initial,
reconsidered, or revised determination unless that period is extended... .

The filing of Petitioner’s request was clearly beyond the 60 days stipulated in the
regulations. Also, 42 C.F.R. § 498.22(b)(3) provides that the receipt of the notice of an
initial determination “will be presumed to be 5 days after the date on the notice unless
there is a showing that it was, in fact, received earlier or later.” The five-day presumption
set forth at 42 C.F.R. § 498.22(b)(3) is of no consideration here, not only because
Petitioner received CMS’s notice two days after its issuance, but also because Petitioner
was 17 days late in filing its hearing request.

Petitioner contends that a letter from CMS addressing its “allegation of compliance,” dated
November 20, 2007, constitutes a “reconsidered or revised determination.” Consequently,
argues Petitioner, the time to file a request for hearing was no longer 60 days from the date
of the September 25, 2007 notice of remedies, but rather, 60 days from CMS’s issuance of
the November 20, 2007 “reconsidered or revised determination.” I find Petitioner’s
reasoning to be misguided.

> Although Petitioner asserts having been informed of the “Notice of CLIA
sanctions” on or around September 25, 2007, delivery of the notice occurred on
September 27, 2007. CMS. Exs. 4, 5.
The applicable regulatory provision at 42 C.F.R. § 498.22 provides for the manner and
timing of a petition for reconsideration. Thus, when Petitioner submitted an allegation of
compliance to CMS it knew or should have known that it was not petitioning a
reconsideration determination. Instead, Petitioner was responding to CMS’s directive as
to how the facility would be able to obtain rescission of the proposed sanctions by
submitting an allegation of compliance. In this regard, CMS advised Petitioner that:
“Tyour] allegation of compliance is a statement, or documentation, that is made by a
representative of a laboratory who has a history of having maintained a commitment to
compliance and of taking corrective action when required; is realistic in terms of its being
possible to accomplish the required corrective action by the alleged correction date; and
indicates that the problem has been resolved.” CMS Ex. 4, at 3. In fact, the November 20,
2007 letter made reference to the allegation of compliance being incomplete, not to a
request for reconsideration. CMS Ex. 7, at 2. Additionally, in that same letter Petitioner
was advised that its appeal rights were set forth in the September 25, 2007 notice letter.
CMS Ex. 7, at 2. The November 20 letter was sent to Petitioner “via overnight mail.”
Had Petitioner paid more attention to its content, it would not have waited until December
13, 2007, to file the request for hearing. Moreover, as CMS points out in its brief, a
request for reconsideration is available to a prospective supplier or provider. It is not
available to Petitioner as an entity already participating in the Medicare program. CMS
Br. at 2; 42 C.F.R. § 498.22(a).

B. Petitioner is not entitled to an extension of time to file a request for hearing.

Petitioner has not filed a request for an extension of time for filing its request for hearing
pursuant to 42 C.F.R. § 498.40(c)(1). As stated earlier, it is Petitioner’s contention that he
has filed a timely request for hearing. Thus, there is no need to further address the issue as
to whether Petitioner has established good cause for filing a late hearing request.

V. Conclusion

Based on the applicable law and undisputed facts, I conclude that Petitioner’s hearing
request as to the survey completed September 13, 2007, was untimely filed, and good
cause does not exist to extend the time for filing. CMS’s motion to dismiss is granted.

/s/
José A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Life Care Center of Bardstown, Date: July 16, 2008

(CCN: 18-5149),

Docket No. C-07-468
Decision No. CR1818

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

Life Care Center of Bardstown, (Petitioner or facility), was in substantial compliance with
Medicare and Medicaid participation requirements based on the survey of Petitioner’s
facility completed on April 3, 2007. Therefore, there is no basis for the Centers for
Medicare & Medicaid Services (CMS) to impose remedies against Petitioner.

I. Background

Petitioner, located in Bardstown, Kentucky, is authorized to participate in Medicare as a
skilled nursing facility (SNF) and the Kentucky Medicaid program as a nursing facility
(NF). On April 3, 2007, the Division of Health Care Facilities and Services for the State
of Kentucky (the state agency) completed a survey of Petitioner’s facility, the results of
which are reported in a Statement of Deficiencies (SOD) bearing that date. The state
agency determined that Petitioner was not in substantial compliance with Medicare and
Medicaid participation requirements at the immediate jeopardy level and recommended
that CMS impose remedies. CMS notified Petitioner by letter dated April 20, 2007, that it
concurred with the state agency findings and recommendations, and that it intended to
impose the following remedies: a CMP of $4,050 per day effective January 3, 2007, until
Petitioner returned to substantial compliance; a denial of payments for new admissions
(DPNA) effective as soon as notification requirements can be met; and termination of the
facility’s provider agreement effective April 26, 2007, if substantial compliance was not
achieved before that date. On April 23, 2007, the state agency completed a revisit survey
at Petitioner’s facility and determined that immediate jeopardy had been abated as of
2

March 28, 2007, but that isolated deficiencies continued, and therefore, Petitioner
remained out of substantial compliance with participation requirements. By letter dated
May 1, 2007, CMS notified Petitioner that the remedies imposed by its letter of April 20,
2007 would continue, but that the CMP would accrue at a lower rate of $100 per day
effective March 28, 2007, until substantial compliance is achieved.

The state agency conducted a second revisit at Petitioner’s facility on May 11, 2007, and
determined that the facility achieved substantial compliance as of April 10, 2007.

By letter dated May 25, 2007, Petitioner timely requested a hearing and denied all
allegations of non-compliance. The case was assigned to me for hearing and decision on
June 12, 2007.

conducted an in-person hearing in Louisville, Kentucky on February 19-20, 2008.
CMS offered exhibits (CMS Exs.) | through 26, which were admitted. Petitioner offered
exhibits (P. Exs.) 1 through 35, which I admitted into evidence.

CMS elicited testimony from Donna Wherry (Resident 1's granddaughter); Belinda Sue
Beard ( state surveyor); and Betty Jo Branham, Registered Nurse (R.N.) (state survey
nurse consultant/inspector). Petitioner elicited testimony from Misty Morgenson, R.N.
(facility director of nursing); Natalie Suffoletta, Licensed Practical Nurse (L.P.N.)
(facility nurse); and Susan Lincoln, R.N. (facility nurse consultant).

Both parties submitted a post hearing brief (CMS Br. and P. Br., respectively), and
response brief (CMS Reply and P. Reply, respectively) and each party received a copy of
the hearing transcript (Tr.).

Based on the applicable law and regulations, the documentary evidence, and the
testimony taken at the hearing, the preponderance of the evidence shows that Petitioner
was in substantial compliance with applicable federal participation requirements
governing nursing homes and, therefore, no enforcement remedy may be imposed.

II. Discussion

A. Issues

The issues in this case are:

Whether there is a basis for the imposition of enforcement
remedies; and, if so,

Whether the remedies imposed are reasonable.
B. Applicable Law

Petitioner is a long-term care facility participating in the federal Medicare program as a
SNF and in the state Medicaid program as a NF. The statutory and regulatory
requirements for participation by a long-term care facility are found at sections 1819 and
1919 of the Social Security Act (Act) and at 42 C.F.R. Part 483. Sections 1819 and 1919
of the Act vest the Secretary with authority to impose CMPs against a long-term care
facility for failure to comply substantially with federal participation requirements.

Facilities that participate in Medicare may be surveyed on behalf of CMS by state survey
agencies in order to determine whether the facilities are complying with federal
participation requirements. 42 C.F.R. §§ 488.10-488.28, 488.300-488.335. Pursuant to
42 C.F.R. Part 488, CMS may impose a per instance CMP (PICMP) or per day CMP
against a long-term care facility when a state survey agency concludes that the facility is
not complying substantially with federal participation requirements. 42 C.F.R.

§§ 488.406; 488.408; 488.430. The regulations in 42 C.F.R. Part 488 also give CMS a
number of other remedies that can be imposed if a facility is not in compliance with
Medicare requirements. Jd.

The regulations specify that a CMP that is imposed against a facility on a per day basis
will fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The
upper range of CMP, of from $3050 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 $3000 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). There is only a single range of $1000 to $10,000 for a PICMP that
applies whether or not immediate jeopardy is present. 42 C.F.R. §§ 488.408(d)(1)(iv),
488.438(a)(2).

The Act and regulations make a hearing before an ALJ available to a long-term care
facility against which CMS has determined to impose a CMP. Act, section 1128A(c)(2);
42 C.F.R. §§ 488.408(g), 498.3(b)(13). The hearing before an ALJ is a de novo
proceeding. Anesthesiologists Affiliated, et. al, DAB CR65 (1990), aff'd, 941 F.2d 678
(8th Cir. 1991); Emerald Oaks, DAB No. 1800, at 11 (2001); Beechwood Sanitarium,
DAB No. 1906 (2004); Cal Turner Extended Care Pavilion, DAB No. 2030 (2006); The
Residence at Salem Woods, DAB No. 2052 (2006). A facility has a right to appeal a
“certification of noncompliance leading to an enforcement remedy.” 42 C.F.R.

§ 488.408(g)(1); see also, 42 C.F.R. §§ 488.330(e), 498.3. However, the choice of
remedies by CMS or the factors CMS considered when choosing remedies are not subject
to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the scope and
4

severity level of noncompliance found by CMS ifa successful challenge would affect the
amount of the CMP that could be collected by CMS or impact upon the facility’s nurse
aide training program. 42 C.F.R. §§ 498.3(b)(14), (d)(10)(i). CMS’s determination as to
the level 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, 39 (2000), aff'd, Woodstock Care Center v. U.S. Dept. of
Health and Human Services, 363 F.3d 583 (6th Cir. 2003). The Departmental Appeals
Board (the Board) has long held that the net effect of the regulations is that a provider has
no right to challenge the scope and severity level assigned to a noncompliance finding,
except in the situation where that finding was the basis for an immediate jeopardy
determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB
No. 1750 (2000). Review of a CMP by an ALJ is governed by 42 C.F.R. § 488.438(e).

The Board has addressed the allocation of the burden of persuasion and the burden of
production or going forward with the evidence in past cases, in the absence of specific
statutory or regulatory provisions. Application of the Board’s analysis and approach is
not disputed in this case and is appropriate. When a penalty is proposed and appealed,
CMS must make a prima facie case that the facility has failed to comply substantially
with federal participation requirements. “Prima facie” means generally that the evidence
is “(s)ufficient to establish a fact or raise a presumption unless disproved or rebutted.
Black’s Law Dictionary 1228 (8th ed. 2004). In Hillman Rehabilitation Center, DAB No.
1611, at 8 (1997), aff'd, Hillman Rehabilitation Center v. HHS, No. 98-3789 (GEB)
(D.N.J. May 13, 1999), the Board described the elements of the CMS prima facie case in
general terms as follows:

HCFA [now known as CMS] must identify the legal criteria
to which it seeks to hold a provider. Moreover, to the extent
that a provider challenges HCFA’s findings, HCFA must
come forward with evidence of the basis for its determination,
including the factual findings on which HCFA is relying and,
if HCFA has determined that a condition of participation was
not met, HCFA’s evaluation that the deficiencies found meet
the regulatory standard for a condition-level deficiency.

Hillman, DAB No. 1611, at 8. Thus, CMS has the initial burden of coming forward with
sufficient evidence to show that its decision to terminate is legally sufficient under the
statute and regulations. To make a prima facie case that its decision was legally
sufficient, CMS must: (1) identify the statute, regulation or other legal criteria to which it
seeks to hold the provider; (2) come forward with evidence upon which it relies for its
factual conclusions that are disputed by the Petitioner; and (3) show how the deficiencies
it found amount to noncompliance that warrants an enforcement remedy.
5

In Evergreene Nursing Care Center, DAB No. 2069 (2007), the Board explained as
follows:

CMS has the burden of coming forward with evidence related
to disputed findings that is sufficient (together with any
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
the SNF 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. See Hillman Rehabilitation Center, DAB No.
1611 (1997), aff'd, Hillman Rehabilitation Ctr. v. HHS, No.
98-3789 (GEB) (D.N.J. May 13, 1999); Batavia Nursing and
Convalescent Inn, DAB No. 1911 (2004), aff'd, Batavia
Nursing and Convalesent Center v. Thompson, No. 04-3687
(6th Cir. 2005); Guardian Health Care Center, DAB No.
1943 (2004); Fairfax Nursing Home, Inc., DAB No. 1794
(2001), aff'd, Fairfax Nursing Home v. Dep't of Health &
Human Srvcs., 300 F.3d 835 (7th Cir. 2002), cert. denied, 537
U.S. 1111, 123 S. Ct. 901 (2003).

CMS makes a prima facie showing of noncompliance if the evidence CMS relies on is
sufficient to support a decision in its favor absent an effective rebuttal. Hillman
Rehabilitation Center, DAB No. 1663, at 8 (1998), aff'd, Hillman Rehabilitation Ctr. v.
HHS, No. 98-3789 (GEB) (D. N.J. May 13, 1999). A facility can overcome CMS’s prima
facie case either by rebutting the evidence upon which that case rests, or by proving facts
that affirmatively show substantial compliance. Tri-County Extended Care Center, DAB
No. 1936 (2004). “An effective rebuttal of CMS’s prima facie case would mean that at
the close of the evidence the provider had shown that the facts on which its case depended
(that is, for which it had the burden of proof) were supported by a preponderance of the
evidence.” Id. at 4 (quoting Western Care Management Corp., DAB No. 1921 (2004)).

C. Findings and Analysis

Below in boldface type are my numbered conclusions followed by the pertinent findings
of fact and analysis.
6

Based upon the survey that ended on April 3, 2007, state agency surveyors cited
Petitioner with three immediate jeopardy deficiencies (scope and severity level of “J”) of
42 C.F.R. §§ 483.10(b)(11) (Tag F 157)', 483.25 (Tag F 309), and 483.75 (Tag F 490).
The state agency also cited Petitioner for violations of 42 C.F.R. §§ 483.20(d)(3),
483.10(k)(2) (Tag F 280) at (scope and severity of “D”) a level of deficiency that presents
no actual harm but has the potential for more than minimal harm that does not amount to
immediate jeopardy. Petitioner does not challenge allegations of noncompliance with
Tag F 280, and therefore I will not address it in this decision, or the corresponding CMP
that CMS determined to impose as a result of the deficiency.

Based on the applicable law and regulations, the documentary evidence, and the
testimony taken at the hearing, the preponderance of the evidence shows that Petitioner
was in substantial compliance with federal participation requirements governing nursing
homes and, therefore, no enforcement remedy may be imposed. I note here that I base my
decision on a preponderance of all the evidence; although I took under advisement
Petitioner’s challenge to CMS’s prima facie case, I here accept that prima facie case to
have been sufficiently developed to require discussion of all the evidence, and in
particular, to require discussion of the persuasive evidence developed by Petitioner. And
I add here this emphatic reminder: my evaluation of a// the evidence, and my specific
assignment of weight and credibility to a// components of that evidence, are informed by
my observation of the witnesses as they testified, by their expressed and implied
opportunities to observe the events and phenomena they described, their observed care,
candor, and completeness in testifying, their training and experience in the subjects on
which they gave testimony, and the presence or absence of any interests on their parts that
might color or affect the testimony they gave. In short, my evaluation of the entire body
of evidence before me is derived from my role as the trial judge in this case, and for it I
claim all the deference that such a role historically and legally commands on appellate
review.

1. Petitioner established by a preponderance of the evidence that it was
in compliance with 42 C.F.R. § 483.10(b)(11) (Tag F 157).

The regulations at 42 C.F.R. § 483.10(b)(11) provide that:

' State surveyors use “Tag” designations that refer to the part of the State
Operations Manual (SOM), Appendix P, “Survey Protocol for Long Term Care
Facilities,” “Guidance to Surveyors” that pertain to the specific regulatory provision
allegedly violated.
7

Notification of Changes. (i) A facility must immediately inform the resident;
consult with the resident’s physician; and if known, notify the resident’s legal
representative or an interested family member when there is—

(A) An accident involving the resident which results in injury and has the
potential for requiring physician intervention;

(B) A significant change in the residents physical, mental, or
psychosocial status (i.e., a deterioration in health, mental, or
psychosocial status in either life-threatening conditions or clinical
complications);

(C) A need to alter treatment significantly (i.e. a need to discontinue an
existing form of treatment due to adverse consequenses, or to
commence a new form of treatment); or

(D) A decision to transfer or discharge the resident from the facility as
specified in § 483.12(a)

Most of CMS’s deficiency allegations from the April 4, 2007 survey stem from events
that occurred on January 2-3, 2007 involving Resident 1. I find, for purposes of this
discussion, that the evidence is sufficient to establish a prima facie case of a violation of
42 C.F.R. § 483.10(b)(11), but that Petitioner proved by a preponderance of the evidence
that it was in substantial compliance with applicable regulations.

Resident 1 was an 87-year-old woman who was admitted to Petitioner’s facility on July
30, 2006 following hospitalization during which it was determined that she was unable to
continue to live alone due to Alzheimer’s Disease and deteriorating cognitive ability. P.
Ex. 7. She suffered from, among other things, a history of heart problems, stroke,
fractures from falls at home, diabetes, hypothyroidism, urinary tract infection,
constipation, significant pain, and was generally not oriented to person, time, or place. P.
Exs. 6-9; Tr. 46-52.

While there are some specific details in which Petitioner and CMS disagree, the basic
facts of what occurred on January 2-3, 2007 are as follows. In the early evening of
January 2, Resident | received a visit from her granddaughter, Donna Wherry. During
the course of the visit, at approximately 8:30 p.m., Resident 1 “threw up” a large volume
of vomitus or emesis while in her bed. The nurse on call, L.P.N. Natalie Suffoletta,
facility staff, and Ms. Wherry cleaned up the emesis, replaced the soiled sheets and bed
covers, and changed Resident 1's clothes. Sometime thereafter, Ms. Wherry left the
facility and went home. At about 1:00 a.m. in the morning of January 3, Nurse Suffoletta
observed a small amount of emesis on Resident 1's night clothes. At approximately 4:00
a.m., Nurse Suffoletta and two CNAs were conducting bed checks when they discovered
that Resident 1 was unresponsive to verbal stimuli, and her vital signs were unstable.
Nurse Suffoletta attempted to contact the on-call physician by telephone but was unable
8

to reach him. Nurse Suffoletta contacted the facility’s Director of Nursing (DON) and
received an order to have Resident | sent to the hospital emergency room. An emergency
response ambulance arrived a few minutes later and transported Resident | to the
hospital. At some point during the early morning, Nurse Suffoletta also placed a call to
Resident 1's granddaughter, Ms. Wherry. At approximately 8:10 a.m. staff at the hospital
emergency room informed Nurse Suffoletta that Resident | had died. Tr. 32-45, 215-221;
CMS Ex. 17, at 30-31.

The April 3, 2007 SOD alleges that Petitioner failed to ensure the physician was notified
of Resident 1's significant change in condition and/or need to alter treatment, in violation
of 42 C.F.R. § 483.10(b)(11) (Tag F 157). Specifically, CMS alleges that Resident 1's
condition changed significantly when she vomited repeatedly during the evening and
early morning hours of January 2-3, 2007, and that Petitioner’s staff failed to notify
Resident 1's physician as required by the regulations and facility policy, thus placing her
in immediate jeopardy. CMS Br. 5-7.

The issue with respect to this deficiency allegation seems to turn on the interpretation of
“significant change” as that phrase appears in the regulations at 42 C.F.R.

§ 483.10(b)(1 1).

Petitioner maintains that the standard of care or criteria to apply in order to determine ifa
“significant change” has occurred is the facility policy which it has taken directly from
the American Medical Directors Association (AMDA) guidelines. CMS does not
challenge the applicability or validity of the policy or guideline. CMS Br. 6-7.

Where a patient presents with vomiting or emesis, Petitioner’s policy and the AMDA
guidelines require immediate physician notification when:

1. The emesis is bloody or coffee ground like in appearance; or

2. There are repeat episodes of vomiting (i.e. greater than 1 episode within
24 hours); or

3. The emesis is accompanied by abdominal pain and changes in vital
signs.

P. Ex. 29, at 20; P. Ex. 30, at 2.

According to the same standards, a “one time” or “single” episode of vomiting may be
reported the next office day. Id.
9

CMS argues that Resident 1 vomited repeatedly during the evening and early morning
hours of January 2-3, and that these instances indicate repeat episodes of vomiting.
Therefore, according to CMS, Petitioner’s staff should have contacted the physician well
before 4:00 a.m. on January 3, to report a significant change in Resident 1's condition.
CMS Br. 5-6.

Indeed, CMS contends that Resident 1 vomited as many as four times. It points to the
following evidence:

(1) Nurses notes taken by L.P.N. Suffoletta indicate that on January 2, at
approximately 8:30 p.m., Resident 1 vomited in large quantity. CMS Ex.
17, at 30.

(2) Ms. Wherry testified that a short time later she heard a sound in her
grandmother’s voice and Resident | vomited again. Tr. 38.

(3) At approximately 1:00 a.m. on January 3, a small amount of emesis was
observed on Resident 1's night clothes. CMS Ex. 17, at 31.

(4) In an interview with surveyors on February 27, 2007, a CNA who was
working on January 3, at approximately 4:00 a.m. observed a small amount
of vomit on Resident 1's right shoulder. CMS Ex. 3, at 6.

Petitioner argues that Resident 1 vomited only once, and that any other emesis that may
have followed shortly thereafter or any “spit up” constitute one episode of emesis. Thus,
according to Petitioner, Petitioner’s staff was not required to contact Resident 1's
physician immediately under the facility policy and applicable regulations. P. Br. 21-22.

I find on balance, that Petitioner established by a preponderance of the evidence that it
was in compliance with 42 C.F.R. § 483.10(b)(11). Ido not conclude, as CMS urges, that
each of the incidents (1)-(4) (above) represents multiple episodes of emesis. I find as a
matter of fact that there was one intermittent episode of emesis, extended over a limited
time.

The record shows, and there is no dispute between the parties, that Resident 1 vomited a
large quantity of emesis at approximately 8:30 p.m. on January 2. CMS Ex. 17, at 30.
Clearly, this represents the beginning or the onset of an incident or episode of emesis.
However, the other incidents — the second and the third — are much less clear.

The second incident refers to the incident in which Resident 1's granddaughter Ms.
Wherry testified that a short time after Resident 1 vomited the first time, she heard a
sound in her grandmother’s voice and Resident | vomited again. The record is not

10

entirely clear, but it seems that Ms. Wherry’s reference to the two vomiting incidents is
actually a reference to the first vomiting incident that occurred at approximately 8:30 p.m.
I reach this conclusion because the nurse’s notes from that evening indicate that the
granddaughter came out of Resident 1's room reporting emesis, and a small amount was
noted on bed covers. The head of Resident 1's bed was raised and she began vomiting
profusely. CMS Ex. 17, at 30. Thus the record indicates that Resident | vomited, paused
for a very short time, then vomited again in large quantity. This is consistent with Nurse
Suffoletta’s testimony. She testified in part that:

I was outside the hall - - I was in the hallway, but outside [Resident 1's]
room passing meds, and her granddaughter came and told me that [Resident
1] had thrown up and it was a very small amount. When I went in there, she
had a very large amount that she had threw up.

Tr. 215-216.

It is not uncommon that when one vomits, there is an initial release followed by a more
significant release shortly thereafter. Although there are two releases, given the short
period of time between the two, I consider this to be one episode of vomiting or emesis.
This is consistent with the common understanding of the word “episode,” which
Merriam-Webster’s Dictionary defines as, “an event that is distinctive and separate
although part of a /arger series.” Merriam-Webster’s Collegiate Dictionary (10th ed.
2001).

T also conclude that the third incident, when a small amount of emesis was observed on
Resident 1's night clothes at 1:00 a.m. does not amount to a separate episode of emesis at
all. It can be fairly characterized only as uncertain of time or nature, but the most likely
explanation of it is that it was the final, much-less-serious, manifestation of the episode
that had begun earlier in the evening.

Nurse Suffoletta testified that what she observed was a very small “golf ball size” amount
of emesis, which she characterized as more of a burp or something coughed up. Tr. 193,
219; CMS Ex. 17, at 31. Nurse Suffoletta did not believe that Resident 1 had vomited
again, and there were no reports from the CNAs that Resident 1 had vomited again or that
her condition had worsened between the hours of 8:00 p.m. and 4:00 a.m. Tr. 192, 220.
Thus, I find that Nurse Suffoletta reasonably — and for purposes of this decision,
correctly — concluded both that Resident 1 had not vomited at 1:00 a.m., and that she
was not required to notify the physician immediately.

CMS further argues that changes in Resident 1's condition should have prompted
Petitioner’s staff to immediately notify the physician. CMS Br. 11. CMS offered the
testimony of Ms. Wherry who indicated that she observed that her grandmother’s
11

demeanor had changed negatively, that her body had become cold and rigid, and that her
legs were discolored. Tr. 33-38.

While I have no intention here of disregarding Ms. Wherry’s observations, I reject CMS’s
argument based on them. Ms. Wherry was by all accounts a very attentive relative, who
visited her grandmother on a daily basis. Tr. 28-29, 165. However, while Ms. Wherry
certainly seemed to know her grandmother well, she is not a trained health care
professional, and thus her observations are that of a lay person. The nurses notes do not
indicate that the LPN or CNAs observed any significant change in Resident 1's condition
until 4:00 a.m. More importantly, the facility policy requires immediate notification
when a resident experiences an episode of emesis and a change in vital signs (i.e. body
temperature, blood pressure, pulse, respiration rate, etc.). Nurse Suffoletta testified that
she checked Resident 1's vital signs twice between 8:00 p.m. and 2:00 a.m., and found
them to be stable. Tr. 217, 227. CMS complains that Nurse Suffoletta failed to document
Resident 1's vital signs and criticized Petitioner for utilizing a “documentation by
exception” system. CMS Br. 11, 14-15. However, CMS never disputed whether Nurse
Suffoletta or its staff actually took Resident 1's vital signs and did not dispute that
“documentation by exception” is a common practice. CMS Br. 11, 14-15; Tr. 261. I find
as a matter of fact that Nurse Suffoleta did take those unrecorded but normal vital signs,
and I base my finding on my assessment of Nurse Suffoleta’s credibility. That
assessment takes into account her demeanor and candor while testifying, the consistency
of her testimony with all other written and oral evidence, her own experience and
training, and the absence of any impeaching evidence whatsoever on the point.

The record shows that Petitioner thereafter acted in accordance with applicable
regulations and facility policy. At 4:00 a.m. on the early morning of January 3, facility
staff discovered that Resident 1's vital signs had become unstable. Petitioner’s staff
recorded Resident I's vital signs as: pulse 43, blood pressure 125/23, respiration 12, and
temperature 94.9. These unstable vital signs and Resident 1's prior 8:30 p.m. episode of
emesis triggered Petitioner’s responsibility to contact the physician immediately.
Petitioner’s staff called both the attending and on-call physicians as required, but was
unable to reach either of them. Petitioner staff was eventually able to reach the DON, and
Resident 1 was subsequently transported to the hospital.

Therefore, I find that Petitioner established by a preponderance of the evidence that it was
in compliance with 42 C.F.R. § 483.10(b)(11).

2. Petitioner established by a preponderance of the evidence that it was
in compliance with 42 C.F.R. § 483.25 (Tag F 309).

This quality of care regulation provides that, “each resident must receive and the facility
must provide the necessary care and services to attain or maintain the highest practicable
12

physical, mental, and psychosocial well being, in accordance with the comprehensive
assessment and plan of care.” 42 C.F.R. § 483.25

CMS’s allegations of noncompliance under Tag F 309 are essentially based on the same
set of facts and circumstances involving Resident 1. CMS contends that Petitioner failed
to provide the necessary care and services for Resident 1 when she experienced a
significant change in condition. Specifically, CMS alleges that Petitioner failed to assess
Resident 1's change in condition, failed to monitor her oxygen saturation, and failed to
monitor her vital signs according to the physician’s orders, and that these failures placed
Resident | in immediate jeopardy. CMS Ex. 3, at 15.

Petitioner has established that Resident 1 received the necessary care and services in
accordance with the regulations. CMS has not demonstrated under this deficiency that
Petitioner failed to act based on a particular facility policy or standard of care. Nor has
there been any allegation or evidence that Petitioner’s care plans, or assessments failed to
meet Resident I's needs. As I have found and concluded above, Petitioner’s staff acted in
a manner consistent with professional standards of care quality, and there was no failure
on the part of Petitioner to properly monitor or assess Resident 1. Therefore, I find that
Petitioner was in compliance with 42 C.F.R. § 483.25.

3. Petitioner established by a preponderance of the evidence that it was
in compliance with the requirements of 42 C.F.R. § 483.75 (Tag F 490).

The regulation at 42. C.F.R. § 483.75 addresses standards of administration, and provides
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 of each patient.

Again CMS relies on substantially the same facts underlying its claim that the facility did
not comply with the notification of changes (Tag F 157) regulation. CMS alleged that
this participation requirement was not met because the administrator or executive director
failed to: take necessary steps to prevent deficient practices, including investigating
contributing events, involving residents who experience a significant change in condition;
and ensure all staff where trained properly regarding procedures to effectuate the facilities
physician notification policy. I find that Petitioner established that it was in compliance
with applicable regulations.

The administration deficiency is a derivative deficiency based on findings of other
deficiencies. Cross Creek Health Care Center, DAB No. 1665, at 19 (1998).
13

The gravamen of this deficiency is a facility’s failure to have a protocol or procedure in
place, not merely the failure of the facility’s staff to follow the protocol in a specific
instance. CMS has not established that systemic breakdowns on the part of the
administration caused deficient facility practice. It might very well be that proof of a
series of staff lapses in following the protocol could prove administration ignorance of, or
a systemic disregard of, the protocol, which in turn could be seen as an administrative
failure to maintain the protocol in an effective and meaningful manner. CMS has not
established such proof. Its case, instead, has been refuted as to the predicate issue of the
staffs response to Resident 1's episode of vomiting; the failure of the predicate case
dooms the derivative citation based on the charged administrative deficiency. Therefore,
I find that Petitioner established by a preponderance of all the evidence, that it was in
substantial compliance with the requirements of 42. C.F.R. § 483.75.

4. CMP’s of $4,050 and $100 per day respectively, are unreasonable
based on the facts of this case as there are no violations and therefore
no basis for the imposition of CMP’s.

The remedy determinations made by CMS in this case are premised on the findings of
noncompliance made during the survey period. I have found that Petitioner was in
compliance with applicable participation requirements. Consequently, there is no basis
for CMS to impose remedies against Petitioner.

III. Conclusion

For all of the reasons set out above, I find and conclude that Petitioner was in substantial
compliance with participation requirements at issue in this case, and therefore, no
enforcement remedy may be imposed by CMS.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Social Security Administration, Office  )
of the Inspector General, )
) Date: July 14, 2008

Petitioner, )

) Docket No. C-08-146

-Vv.- ) Decision No. CR1816
)
Lisa Marie Odle, )
)
Respondent. )
)

DECISION

This matter is before me on a motion to dismiss filed by the Social Security
Administration, Office of the Inspector General (SSA-OIG or Petitioner). SSA-OIG filed
a motion to dismiss (Motion) dated February 8, 2008, accompanied by five exhibits,
seeking dismissal of Lisa Marie Odle’s (Respondent) November 26, 2007 hearing
request. Respondent filed a response (R. Response) to SSA-OIG’s Motion on March 5,
2008, accompanied by no exhibits. By a motion received March 12, 2008, SSA-OIG
requested leave to file a reply to Respondent’s Response to SSA-OIG’s motion to
dismiss. On March 14, 2008, I granted Petitioner’s motion. On March 20, 2008, SSA-
OIG filed a reply to Respondent’s response to the motion to dismiss, accompanied by one
exhibit. On or about May 1, 2008, I notified Petitioner that the exhibits attached to its
motion to dismiss must be labeled to conform with Civil Remedies Division Procedures.
On May 8, 2008, SSA-OIG resubmitted its Motion to Dismiss and relabeled its five
exhibits that were attached to its motion and one exhibit that was attached to its Reply as
OIG Exhibits (Ex.) 1-6. I gave Respondent until May 15, 2008, to file leave to file a sur-
reply and I closed the record on May 15, 2008, when no request for leave was submitted.
OIG Exs. 1-6 are admitted. For the reasons discussed below, I grant SSA-OIG’s Motion
and dismiss Respondent’s request for hearing.
I. Background

On September 21, 2007, the Social Security Administration Inspector General notified
Respondent that it was proposing imposition of a civil money penalty (CMP) of $50,000
and an assessment in lieu of damages of $32,968 against Respondent pursuant to section
1129 of the Social Security Act (Act) (42 U.S.C. § 1320a-8). SSA-OIG’s proposal of a
CMP and assessment in lieu of damages was based on the determination that Respondent
was not using SSA children’s insurance benefits for two minors in her care solely for the
children’s present needs. The letter also informed Respondent that an SSA-OIG
investigation indicated that although Respondent received $16,484 of benefits on the
minors’ behalf from March 2004 to January 2005, the minors left Respondent’s care in
September 2003 and Respondent did not notify SSA of this fact. OIG Ex. 2, at 1.

SSA-OIG further informed Respondent that if she disagreed with this determination, she
may request a hearing before an administrative law judge (ALJ) and that the procedures
governing this process are set out in 20 C.F.R. §§ 498.109 and 498.202. OIG Ex. 2.
SSA-OIG informed Respondent “[i]f you desire such a hearing, you must file a written
request within 60 days of the date of receipt of this letter.” Jd. SSA-OIG sent the notice
by Federal Express Overnight. Jd.

Respondent requested a hearing by letter dated November 26, 2007, pursuant to 20 C.F.R.
§ 498.202 contending that she did not intentionally defraud or abuse the Social Security
System and that she cared for the two minors as her own.

After consideration of the written arguments and documentary evidence submitted by
SSA-OIG, I grant SSA-OIG’s motion to dismiss. In doing so, I find that the hearing
request was untimely filed and the time for filing a request for hearing cannot be
extended, as Respondent has not shown good cause for her failure to file a timely hearing
request.

II. Issues
A. Whether Respondent filed a timely request for hearing; and if not

B. Whether Respondent has shown good cause for extending the time to file a
request for hearing.
Ill. Applicable Law and Regulations

In cases involving SSA, a party is entitled to a hearing only if that party files its request
within the time limits established by 20 C.F.R. § 498.109, unless the period for filing is
extended. In order to be entitled to a hearing, a party must file its request within 60 days
from receipt of a notice of a determination by SSA-OIG to impose a remedy. An ALJ
may extend the time within which a hearing request may be filed based on a showing of
good cause to justify an extension of time. 20 C.F.R. § 498.202(c)(2). An ALJ must
dismiss a request for hearing which is not timely filed. 20 C.F.R. § 498.202(f)(1).

IV. Findings and Discussion

I make findings of fact and conclusions of law (Findings) to support my decision to
dismiss the request for hearing. Each finding is noted below in bold, italic face, followed
by a discussion of each Finding.

A, SSA-OIG notified Respondent of its action on September 21, 2007.

SSA-OIG sent Respondent the notice of proposed penalty and assessment (Notice) by
Federal Express Overnight on September 21, 2007. OIG Ex. 2. This notice constituted
agency action from which Respondent’s right to appeal arose. 20 C.F.R. § 498.109(b).

B. Respondent received SSA-OIG’s notice letter by September 24, 2007.

There is a regulatory presumption that the affected party has received the notice of
penalty and assessment five days after it is mailed unless there is a “reasonable showing
to the contrary.” 20 C.F.R. § 498.202(e). Respondent signed that she received notice
from SSA-OIG on September 24, 2007. OIG Ex. 3. Respondent did not address in her
hearing request any delay in receiving the Notice. Also, Respondent did not address in
her Response any delay in receiving the Notice. Respondent did assert during the January
8, 2008 prehearing conference that the SSA-OIG notice letter sat undiscovered for two
weeks in a doorway of her house which she did not regularly use. However, the fact that
Respondent signed for the Federal Express package on September 24, 2007 counters her
assertion. The signature is very similar to the signature on Respondent’s hearing request.
OIG Ex. 4. Therefore, I find that Respondent received SSA-OIG’s notice of penalty and
assessment by September 24, 2007.
4

C. Respondent’s hearing request was filed on November 29, 2007.

Respondent’s hearing request is dated November 26, 2007, and was received by the Civil
Remedies Division on November 30, 2007. SSA-OIG has provided documentation that
shows that despite the hearing request being dated November 26, 2007, it was not mailed
until November 29, 2007. OIG Ex. 5. Pursuant to 20 C.F.R. § 498.211(4), documents are
considered filed when they are mailed. Thus, I find that Respondent’s hearing request
was filed on November 29, 2007.

D. Respondent’s hearing request was filed more than 60 days after receipt of
SSA-OIG’s notice letter, and was therefore untimely.

Section 498.202(c) of 20 C.F.R. expressly provides that:
The request for a hearing must be:

(1) In writing and signed by the respondent or by the respondent’s
attorney; and

(2) Filed within 60 days after the notice, provided in accordance with
§ 498.109, is received by the respondent or upon a showing of good
cause, the time permitted by an ALJ.

The latest date by which Respondent could have filed a timely hearing request consistent
with 20 C.F.R. § 498.202(c)(2) was November 23, 2007, 60 days after September 24,
2007. Respondent’s hearing request was submitted on November 29, 2007. The filing of
Respondent’s request was clearly beyond the 60 days stipulated in the regulations.
Therefore, Respondent’s hearing request was untimely.

E. Respondent has not shown good cause for its untimely hearing request.

The term “good cause” is not specifically defined by the regulations. The Departmental
Appeals Board (DAB or Board), has not found it necessary to decide the exact scope of
the term “good cause” under 20 C.F.R. Part 498. See SSA v. Parham, DAB CR1600
(2007). Good cause has been interpreted by the Board in other types of cases as
circumstances beyond the ability of the party litigant to control. SSA v. Parham, DAB
CR1600 (2007); Hillcrest Healthcare, L.L.C., DAB No. 1879 (2003); Hospicio San
Martin, DAB No. 1554 (1996). In Parham, the Board agreed with the ALJ that an
attorney’s failure to effectively represent a party litigant cannot be considered as good
cause. Parham at 4.
5

At the January 8, 2008, telephone prehearing conference, Respondent asserted that there
was a delay in receiving the SSA-OIG notice letter. As discussed above, the facts prove
otherwise. Respondent signed that she received the package containing SSA-OIG’s
notice letter on September 24, 2007. Respondent also maintains in her Response that she
ad difficulty securing counsel to represent her in this matter. R. Response at 1.
Respondent argues that numerous calls in an effort to retain an attorney were not returned
and that when she did find an attorney, James Rinck, he ultimately decided that he could
not represent her. R. Response at 1. Respondent contends that her problems in finding
counsel contributed to her untimely filing.

find that Respondent has not demonstrated good cause for her untimely hearing request.
Respondent has not shown that she filed the hearing request after the 60-day requirement
due to circumstances beyond her control. Representation by an attorney is not required to
appeal penalties and assessments imposed by the SSA. Respondent admitted that she
eventually submitted a written hearing request and that she was never represented by Mr.
Rinck, or any other attorney. R. Response at 1. The ability to appeal has always been in
the control of the Respondent. The procedures for requesting a hearing are clearly given
in the notice letter and the assistance of an attorney is not required to understand these
procedures. Furthermore, Respondent never requested to extend the time for filing a
earing request. Therefore, I have nothing before me that could be interpreted as an
explanation of good cause for failure to submit a timely hearing request.

V. Conclusion

Based on the applicable law and undisputed facts, I conclude that Respondent’s hearing
request was untimely filed, and good cause does not exist to extend the time for filing.
SSA-OIG’s motion to dismiss is granted.

/s/
José A. Anglada
Administrative Law Judge