Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Liberty Nursing and Rehabilitation Center - )
Mecklenberg County, ) Date: January 24, 2007

)
Petitioner, )
)

“Ve ) Docket No. C-05-224

Centers for Medicare & Medicaid ) Decision No. CR1559
Services. )
)

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
impose a civil money penalty (CMP) against Petitioner, Liberty Nursing and
Rehabilitation Center-Mecklenberg County, for failure to comply substantially with
federal requirements governing participation of long term care facilities in Medicare and
state Medicaid programs. The CMP of $3,050 per day from November 30, 2004 through
January 12, 2005 is based on a finding of immediate jeopardy. After the immediate
jeopardy was removed, a CMP of $100 per day was imposed from January 13, 2005 until
February 9, 2005. For the reasons that follow, I uphold a CMP of $3,050 per day based
on a finding of immediate jeopardy and a CMP of $100 per day thereafter.

I. Background

This case came before me pursuant to a request for hearing filed by Petitioner on March
2, 2005.

On February 22, 2005, CMS informed Petitioner that it was imposing the following
remedies pursuant to a complaint investigation survey conducted on January 4, 2005,
followed by another complaint investigation survey completed on January 14, 2005, by
the North Carolina State Survey Agency (State survey agency):
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. CMP of $3,050 per day effective November 30, 2004 and continuing
through January 12, 2005;

. CMP of $100 per day beginning January 13, 2005 through February 9,
2005;

. Denial of payment for new admissions (DPNA) effective April 4, 2005;!
and

. Mandatory termination effective July 4, 2005.7

A hearing was held on April 25, 2006 in Charlotte, North Carolina. At the hearing, CMS
offered 29 proposed exhibits (Exs.), identified as CMS Exs. 1-8; 11-21; 23-25; 27; 28, at
2; 29-30; 37; 39; and 40. I received CMS’s exhibits into evidence without objection.
Petitioner offered 18 proposed exhibits, identified as P. Exs. 1-18. I received these
exhibits into evidence without objection.’

Subsequent to the hearing, the parties submitted post-hearing briefs (CMS Br. and P. Br.)
and reply briefs (CMS Reply and P. Reply).

Based on the testimony offered at the hearing, the documentary evidence, the arguments
of the parties, and the applicable law and regulations, | find that Petitioner was not in
substantial compliance on the dates determined by the State survey agency and CMS. I
further find that CMS was authorized to impose a CMP of $3,050 for noncompliance
from November 30, 2004 through January 12, 2005, and a $100 per day CMP thereafter
until February 9, 2005.*

' The facility returned to substantial compliance before the DPNA went into
effect.

? The facility returned to substantial compliance before the termination went into
effect.

* P. Ex. 18 had formerly been offered by CMS as CMS Ex. 26, but was
withdrawn.

* Petitioner filed a Motion for Partial Summary Judgment on July 22, 2005,
premised on the argument that CMS lacks authority to cite violations of the Long Term
Care Requirements of Participation based solely on the facility’s alleged errors in the
operation of a motor vehicle used to transport residents outside its premises. I denied that
II. | Applicable Law and Regulations

Petitioner is a long-term care facility under the Act and regulations promulgated by the
Secretary of Health and Human Services (Secretary). The statutory and regulatory
requirements for participation by a long-term care facility are found at sections 1819 and
919 of the Social Security Act (Act), and at 42 C.F.R. Part 483.

Sections 1819 and 1919 of the Act invest the Secretary with authority to impose remedies
of CMPs and denial of payment for new admissions against a long-term care facility for
failure to comply substantially with 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. The applicable regulations at 42 C.F.R. Part 488
provide that facilities which participate in Medicare may be surveyed on behalf of CMS
by state survey agencies in order to ascertain whether the facilities are complying with
participation requirements. 42 C.F.R. §§ 488.10-488.28. The regulations contain special
survey conditions for long-term care facilities. 42 C.F.R. §§ 488.300-488.335. Under
Part 488, a state or CMS may impose a CMP against a long-term care facility where 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 penalty
may start accruing as early as the date that the facility was first out of compliance until
the date substantial compliance is achieved or the provider agreement is terminated. 42
C.F.R. § 488.440.

The regulations specify that a CMP which is imposed against a facility will fall into one
of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of
CMPs, of 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), (d)(2). The lower range of CMPs, of
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.

§ 488.43 8(a)(1)(ii).

motion by Order dated September 8, 2005.
4

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.
“Immediate jeopardy” is defined to mean:

...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.

Id.

The Act and regulations make a hearing available before an administrative law judge
(ALJ) to a long-term facility against which CMS has determined to impose a CMP. But
the scope of such hearings is limited to whether an initial determination made by CMS is
correct. Act, section 1128A(c)(2); 42 C.F.R. §§ 488.408(g), 498.3(b)(12) and (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).

Ill. Issues
The issues in this matter are whether:

. the facility was complying substantially with federal participation
requirements on the dates CMS determined to impose a CMP;

. CMS’s determination of immediate jeopardy was clearly erroneous; and

. the amount of the penalty imposed by CMS is reasonable, if noncompliance
is established.
IV. Findings and Discussion

The findings of fact and conclusions of law noted below in italics are followed by a
discussion of each finding.

A. The facility was not in substantial compliance with federal participation
requirements from November 30, 2004 through February 9, 2005.

J. CMS established that Petitioner was not in compliance with the
Quality of Care requirements at Tag F323 because Petitioner failed to
ensure that the resident environment remained as free of accident
hazards as possible, as required by 42 C.F.R. § 483.25(h)(1).

Based on observation, record review, staff interview, and resident interview, the facility
failed to ensure that wheelchair residents were appropriately strapped in the facility’s van
during transport. This involved one of two facility vans that did not have the proper
straps to ensure residents were secured in their wheelchairs. Immediate jeopardy was
identified as occurring on November 30, 2004 when the administrator was notified of the
van not having enough safety belts and instructed staff to use any type of device to secure
residents in their wheelchairs during transport. Immediate jeopardy was removed on
January 5, 2005, when the facility took the van out of service and completed staff in-
services. CMS Ex. 3.

Resident No. 3 (R3)

On November 30, 2004, R3 voiced a concern to the facility administrator, Ms. Sharon
Stiles, about residents being transported in wheelchairs that were not properly fastened
down in the passenger van. In response to that concern, the facility administrator spoke
with the driver by the name of Durk,° and instructed him to use a belt around the residents
to secure them in the van. Ms. Stiles also indicated that she ordered a new van. P. Ex. 7.
I infer from the action taken by the administrator that there was substance to the concern
raised by R3.

In an affidavit dated January 10, 2005, Ms. Stiles stated that R3 complained to her that
the driver was not fastening her down in the wheelchair in the passenger van. P. Ex. 6, at
1. However, a mere reading of the grievance report of November 30, 2004, prepared by
Ms. Stiles, reveals that R3 was not solely concerned about herself not being strapped to
the wheelchair. Her concern included the safety of other residents. Ms. Stiles noted her

> The driver’s full name is Durk Dean Campbell.
6

concern to be that: “patients using wheelchairs that they were not fastened down while in
wheelchair.” P. Ex. 7, at 1. Ms. Stiles’ resolution of the issue brought to her attention is
further indication that R3’s concern included other residents. In this regard, I note that
she instructed Durk “to use a belt around patients to secure them to the van.” /d. Another
more revealing fact is that R3 was not wheelchair bound. It is evident from the Minimum
Data Set (MDS) Assessment that she was ambulatory and required no assistance for
ambulation. CMS Ex. 11, at 10, 11. Moreover, in a statement dated January 7, 2005,
Durk Campbell indicated that R3 was able to walk and did not need to be transported in a
wheelchair, but could be positioned in a seat up front with a CNA. P. Ex. 6, at 2. Thus,
the issue with respect to this deficiency is not whether it can be established that R3 was
transported in the facility van without her wheelchair being properly fastened and
strapped, but rather, whether the facility failed to ensure that wheelchair dependent
residents were appropriately strapped in the facility’s van during transport.

Ms. Stiles’ affidavit (P. Ex. 6, at 1), along with the testimony of Robert Powe, reveals that
during the period at issue the facility had two van drivers. One was Durk (Campbell) and
the other was Robert Powe. Durk quit his job unexpectedly on December 21, 2004, but
Robert Powe remained in his position. Durk Campbell was the driver of an older van that
had space for “maybe 5 wheelchairs, but was short one or two straps and seatbelts,” as he
put it. Tr. at 90. According to Ms. Stiles, at some point the facility leased another van
because more transportation was needed for the dialysis residents. The leased van was
driven by Robert Powe. On January 7, 2005, after the state survey team made it known to
the facility that residents were being transported without the appropriate straps and seat
belts to secure their wheelchairs, Ms. Stiles and her assistant reviewed the transportation
logs, and found that there were several days in which Durk took three [wheelchair]
patients at the same time. Thus, they asked him how he was securing the third patient
since the van only had two van seat belts, and he said that he was using a wheelchair soft
belt. P. Ex. 6, at 1.

After Durk Campbell quit, the facility returned the leased van on December 30, 2004, and
Robert Powe started using the older van previously driven by Durk Campbell. Ms. Stiles
remembered telling Robert that he could use a wheelchair soft belt to secure residents
transported in the van. Thus, she should not have been surprised that Durk had been
using the same type of restraint, because the practice was consistent with her instructions.
Furthermore, Ms. Stiles stated in her affidavit that she was unaware that Robert was not
using the van seat belts® until after the state survey. She must have known that on

° Ms. Stiles referred to the wheelchair restraints as “van seat belts.” Robert Powe
described the means by which residents’ wheelchairs were secured in the van with those
7

occasion he would use a soft belt because the vehicle was short straps and seat belts for at
least one wheelchair. That is why she had instructed him to use a soft belt. This practice
was also consistent with the information she obtained from Durk after reviewing the logs,
and noting that on several occasions he transported one wheelchair resident for whom
there was no van seat belt. On each of those occasions, he substituted a soft belt for the
absent van seat belt.

Petitioner alleges confusion on the part of Ms. Stiles by pointing out that at one point in
her affidavit she states that it was Mr. Powe who used a soft belt to restrain wheelchair
residents in the van, while elsewhere she attributes the practice to Mr. Campbell. P. Br. at
8. I find that no such confusion exists. It is clear from her affidavit that both drivers used
the soft belt to secure wheel chair residents in the facility van. I do not find Robert
Powe’s testimony at the hearing to the effect that he never used a soft belt to be credible.
Tr. at 95. Such testimony given for litigation purposes, more than a year after the
incident, does not have the probative value nor candor of the statement by the
Administrator that is more contemporaneous with the events here under consideration.
Additionally, at a time closer to those events, he admitted to the surveyor that he used the
soft belt on residents being transported in the van on a couple of occasions. Tr. at 25, 44.

The surveyor also testified that the use of soft belts in place of van seat belts constitutes a
safety hazard, and exposes residents using them in passenger vans to the risk of injury.
Tr. at 27. In fact, Posey Company, a firm that manufactures those Self-Releasing Soft
Lap Belts warns that they should never be used as a seat belt in a moving vehicle. CMS
Ex. 14, at 3. To Robert Powe’s credit, he admitted during his testimony that it would be
ridiculous to use a soft belt as a seat belt in a vehicle. Tr. at 95.

Petitioner advances arguments that raise doubts as to whether R3 is a reliable source
regarding the facility’s alleged failure to secure wheelchair residents in the passenger van.
My analysis, however, renders such arguments irrelevant to the issue here under
consideration. P. Br. at 10, 11.

“seat belts” in the following way: “[i]f you’re transporting a wheelchair, they’re
supposed to be strapped to the chair with what you call a four-point restraint, which has
two straps in the front, one on each wheel, two straps in the back, one on each wheel.
And it holds the wheelchair in place. And they’re supposed to have a full harness
seatbelt, as you would in a regular car.” Tr. at 93.
8

In view of the foregoing, I find that CMS has established a prima facie case that
Petitioner was not in substantial compliance with the requirements at Tag F323 because it
failed to ensure that the resident environment remained as free of accident hazards as
possible, as required by 42 C.F.R. § 483.25(h)(1). Petitioner has not overcome that
showing by a preponderance of the evidence.

2. Staff Treatment of Resident (Tag F224). CMS established that the
facility failed to develop and implement written policies and procedures
that prohibit mistreatment, neglect, and abuse of residents and
misappropriation of resident property. 42 C.F.R. § 483.139(c)(1)(i).

3. (Quality of Care (Tag F324). The facility failed to ensure that each

resident receives adequate supervision and assistance devices to prevent
accidents.”

Based on medical record review, observations, and staff interviews, the facility failed to
implement its elopement assessment policy and neglected to protect a resident from
elopement.

Immediate jeopardy was identified as occurring on January 5, 2005, and was removed on
January 13, 2005. However, the facility remained out of compliance at a scope and
severity of a level “D” commencing January 13, 2005.

Resident No. 4 (R4)

Petitioner summarizes the facts pertaining to this Tag as set forth in the Statement of
Deficiencies as follows:

The Statement of Deficiencies alleges that the resident (R4)
had been admitted to the Center on December 31, 2004, six
days before the incident, suffering from, among other things,
Alzheimer’s and dementia; that she had been assessed to be at
risk for wandering; that she somehow managed to ride a
secured elevator from the third floor of the Center where she
lived, to the lobby without triggering an alarm; that she left
the Center sometime during the afternoon but was not missed

7 T will address these Tags jointly because identical facts are alleged to support the
deficiencies under the two Tags.
9

until her family visited later in the day; and that she was
missing until about 8:30 p.m., when a nearby neighbor called
the Center and reported that she had found her.

Petitioner concedes that R4 eloped and concedes the immediate jeopardy citation. Tr.

at 7; P. Br. at 16. However, Petitioner contends that it abated the immediate jeopardy by
January 6, 2005, and is at a loss to know what else remained to be done after that date.*

P. Br. at 19, 20. Thus, Petitioner disputes the appropriateness of extending the immediate
jeopardy as to Tags F224 and F324 through January 12, 2005.

CMS, on the other hand, contends that the facility remained out of substantial compliance
at the immediate jeopardy level through January 12, 2005 because the corrective action
Petitioner attempted to implement after the elopement was not sufficient to keep other
residents from harm. CMS Br. at 17. Specifically, CMS argues the following reasons for
Petitioner’s noncompliance:

. It had not in-serviced the receptionist on how to respond to alarms;

. It had not in-serviced all of its staff on how to respond to alarms;

. Staff failed to respond to an alarm on the elevator on January 13, 2005;

. The facility’s front outside doors did not lock when approached by a
Wanderguard;

. The facility did not implement any additional monitoring of its front door

after the incident; and

. People other than nursing staff had access codes for the elevators, rendering
its system of locking the doors ineffective.

CMS Reply at

The facility had more than one receptionist, and at least one had been in-serviced. Tr. at
69, 70. Inasmuch as not all of the staff members that were assigned to monitor the main
exit doors were receptionists, it cannot be concluded that those doors were being
monitored by receptionists that had not been in-serviced. However, it is also true that

* The steps allegedly taken by Petitioner are itemized at P. Ex. 18.
10

during the day, the receptionist monitoring the main entrance was assigned the
performance of other tasks. I, thus, infer that during the daytime the staff member who
was stationed at the reception desk could not provide undivided attention to the main
entrance doors. Petitioner argues that a 24-hour watch was immediately posted at the
front lobby doors until the staff was satisfied, several days later, that the alarm system
functioned appropriately. P. Br. at 18. The facility’s plan of correction further indicated
that monitoring of the front lobby and side door areas would be in effect 24 hours a day
until the alarm system was operable. CMS Ex. 25. Nonetheless, as indicated earlier, I
find that it would not appear feasible that the receptionist could handle other duties at the
reception desk and simultaneously monitor the front doors. The desired surveillance
would be even less likely if the receptionist was also required to monitor the side area
door. Thus, Petitioner’s assertion that “a 24 hour watch was immediately posted at the
front lobby doors” is not supported by the credible evidence of record.

Petitioner also admits that it was not until January 11, 2005 that in-service of staff on
Wanderguard documentation and monitoring was completed. Furthermore, the plan of
correction dated January 14, 2005 made no mention of in-service on responding to
alarms. The staff's lack of appropriate response to alarms was made evident on January
13, 2005, when staff failed to respond to the elevator alarm. It should be noted here, that
the alarm on that occasion was triggered by a visitor who was given access to the elevator
code by facility staff. CMS Ex. 2, at 4.

Petitioner also argues that CMS places too much emphasis on the fact that the alarm
system was not completely “fine tuned” until after the survey was completed on January
14, 2005. P. Br. at 18. However, what the facility’s plan of correction asserted was that,
as of January 14, 2005, the alarm system was not yet “completely operable.” CMS Ex.
25. The facility planned to make up for this shortcoming by having staff monitor the exits
on a 24-hour schedule, but as | discussed above, that monitoring was inadequate.
Moreover, the facility did not report the lobby doors to be operable until January 24,
2005. CMS Ex. 2, at 1.

Based on Petitioner’s Plan of Correction, it was determined that immediate jeopardy was
abated as of January 13, 2005 in that:

. The facility agreed to have a dedicated staff member monitor the front and
side lobby doors twenty four hours a day until the system was operable;

. The facility agreed to have the doors automatically lock at 9:00 p.m. and
reopen at 6:30 a.m.;
11

. The alarm vendor would continue to work on the lobby doors until the
system was completely operable;

. All staff would be in-serviced on how to respond to alarms;

. The facility once again changed the codes on the elevators and alerted staff
not to give codes to any visitors or volunteers; and

. It finally in-serviced all of its receptionists.
CMS Reply at 14; see also, P. Ex. 2, at 1-2, 12-13, 20-21.

Petitioner’s contention that the immediate jeopardy was removed as early as January 6,
2005 is not supported by the evidence. In view of the foregoing, I find that Petitioner was
not in substantial compliance at the immediate jeopardy level as to Tags F224 and F324
through January 12, 2005.

B. CMS’s finding of immediate jeopardy was not clearly erroneous (Tag
F324)?

Ihave already found that CMS has established a prima facie case that Petitioner was not
in substantial compliance with federal requirements for skilled nursing facilities
participating in the Medicare and Medicaid programs regarding Tag F324. Petitioner has
not overcome CMS’s showing by a preponderance of the evidence. Furthermore, I
sustain CMS’s finding that Petitioner’s level of noncompliance constitutes immediate
jeopardy.

The regulations define immediate jeopardy as a situation in which a provider’s non-
compliance with one or more requirements of participation has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301. A
finding of immediate jeopardy does not require “a finding of present harm, but also
encompasses a situation that is [likely to cause] harm.” Britthaven, Inc., d/b/a/ Britthaven
of Smithfield, DAB No. 2018, at 22 (2006) (quoting Hermina Traeye Memorial Nursing

° Tneed not discuss CMS’s determination that the facility was not in substantial
compliance from January 6, 2005 through January 12, 2005, inasmuch as Petitioner has
conceded the deficiency that was the basis of CMS’s finding of noncompliance. J have
discussed, however, the factors considered by CMS to determine the duration of the
deficiency.
12

Home, DAB No. 1810, at 10 (2002)). CMS’s determination of immediate jeopardy must
be upheld unless it is clearly erroneous. 42 C.F.R. § 498.60(c)(2). The burden rests on
the provider to prove that CMS’s determination of immediate jeopardy is clearly
erroneous. Petitioner has not met that burden here.

Petitioner contends that the immediate jeopardy Tag under F324 was not warranted
because there is no reliable evidence to support the allegation that the facility transported
residents in wheelchairs without proper safety restraints. Specifically, Petitioner asserts
that R3 did not complain that she was never was properly strapped, but rather that other
residents were not properly strapped. Furthermore, Petitioner contends that there is no
record that other residents ever complained or corroborated R3’s complaint regarding the
facility’s failure to properly strap residents in wheelchairs being transported in the
passenger van. Moreover, adds Petitioner, R3’s mental status made her an unreliable
historian. As I have discussed above, R3’s reliability is not relevant here in light of the
facility staff's admission that residents were in fact transported in the passenger van
without the proper safety restraints. J have also pointed out that the facility gave credence
to R3’s complaints and immediately began to take action (albeit inadequate), to correct
the safety shortcomings based on her grievance.

Petitioner should have foreseen that transporting residents in wheelchairs in an unsafe
manner in its passenger van was likely to cause serious injury, harm, impairment, or
death. I should add that the statistical analysis submitted by Petitioner at P. Ex. 8,
regarding Wheelchair Users Injuries and Deaths Associated with Motor Vehicle Related
Incidents, cannot serve as a basis for ignoring the facility’s duty to transport its
wheelchair residents in its passenger van in a safe manner, regardless of whether the
number of those who have lost their lives being so transported is few.

C. The amount of the penalty imposed by CMS is reasonable.

Petitioner contends that CMS failed to specifically provide any basis for a finding of
immediate jeopardy that justifies the imposition of a $3,050 penalty from November 30,
2004 through January 5, 2005. I have already discussed the basis for a finding of
noncompliance. Indeed, there is not only a prima facie case of noncompliance here, but
the preponderance of the evidence is that Petitioner was not complying substantially with
the regulatory requirements under 42 C.F.R. § 483.25(h)(2). Furthermore, Petitioner has
not met its burden of showing that CMS’s determination of immediate jeopardy is clearly
erroneous. Moreover, the CMP of $3,050 per day is the minimum CMP that may be
imposed for noncompliance at the immediate jeopardy level.
13

Talso conclude that CMS satisfied the criteria for imposing remedies at the less than
immediate jeopardy level from January 13 through February 9, 2005.

By letter dated February 22, 2005, CMS notified Petitioner that it was imposing a $3,050
per day CMP from November 30, 2004 through January 12, 2005, and a $100 per day
CMP effective January 13, 2005 until the facility returned to substantial compliance.
CMS Ex. 1. Subsequent to a February 10, 2005 survey, CMS determined that the facility
had not achieved substantial compliance and raised the per day CMP to $500
commencing on that date. That determination was noticed to Petitioner in a letter dated
March 8, 2006. However, Petitioner did not appeal the additional CMP period beginning
February 10, 2005, nor has it refuted CMS’s finding that its facility continued to be out of
substantial compliance through February 9, 2005. Thus, Petitioner has not satisfied its
burden of showing that it eliminated the noncompliance on any date prior to February 9,
2005. I therefore find that in addition to the immediate jeopardy CMP noted above, CMS
was also justified in imposing a $100 penalty from January 13, 2005 through February 9,
2005. This CMP is at the low end of permissible penalties for a deficiency at the less
than immediate jeopardy level.

Vv. Conclusion

Based on the testimony offered at the hearing, the documentary evidence, the arguments
of the parties, and the applicable law and regulations, I find that Petitioner was not in
substantial compliance at the immediate jeopardy level from November 30, 2004 through
January 12, 2005, and that the imposition of a $3,050 per day CMP is reasonable.
Additionally, I conclude that a CMP of $100 per day is reasonable for deficiencies at the
less than immediate jeopardy level based on Petitioner’s noncompliance from January 13,
2005, through February 9, 2005.

/s/

Jose A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

)
In the Case of: )
) Date: January 24, 2007
Roger Aveyard, )
) Docket No. C-06-241
Petitioner, ) Decision No.CR1558

Vv.

Centers for Medicare & Medicaid Services.

DECISION

Petitioner, Roger Aveyard, does not qualify for a Medicare Part B provider enrollment
number as a psychologist and his application was properly denied.

I. Background

Petitioner requested a hearing by an administrative law judge (ALJ) by letter dated
January 9, 2006. Petitioner challenges the December 19, 2005 decision of a Medicare
Hearing Officer for Blue Cross Blue Shield of Kansas that he is not qualified to be issued
a Medicare Part B provider enrollment number. Because Petitioner has been denied a
provider number, he is not eligible to seek compensation for services he provides from
the Medicare program.

On March 3, 2006, this case was assigned to ALJ Anne E. Blair for hearing and decision.
On April 13, 2006, Judge Blair convened a prehearing conference by telephone, the
substance of which is set forth in her Amended Order and Schedule for Filing Briefs
dated May 1, 2006. According to Judge Blair’s order, the parties agreed that this case can
be decided on written submissions without the need for an in-person, oral hearing. Judge
Blair set a briefing schedule. This case was reassigned to me for hearing and decision on
September 6, 2006, upon Judge Blair’s retirement and the parties were so advised by
letter of the same date.
2

The Centers for Medicare and Medicaid Services (CMS) filed its “Brief in Support of an
Order Affirming the Medicare Hearing Officer” with three exhibits (CMS Ex.), on May
15, 2006. Petitioner filed a response to the CMS brief with three exhibits (P. Ex.) on May
23, 2006. Previously on May 4, 2006, Petitioner submitted a packet of documents marked
P. Ex. | through 25, that he requested be considered in support of his position. The
exhibits submitted with his brief on May 23, 2006 are marked P. Ex. 1, 2, and 3. To
avoid confusion, I have remarked the exhibits attached to Petitioner’s response as P. Ex.
26, 27 and 28. Neither party has objected to the admissibility of any of the exhibits and
they are all admitted and considered as evidence.

II. Discussion
A. Law Applicable

Section 1831 of the Social Security Act (the Act) ( 42 U.S.C. § 1395j) establishes the
supplementary medial insurance benefits program for the aged and disabled known as
Medicare Part B. Qualified psychologist services are covered by the program for those
enrolled, subject to some limitations. Act, §§ 1832(a), 1861(s)(2)(M) (42 U.S.C.

§§ 1395k(a), 1395x(s)(2)(M)). “Qualified psychologist services” means those services
furnished by a clinical psychologist that the psychologist is legally authorized to perform
under state law. Act, § 1861(ii) (42 U.S.C. § 1395x(ii)). Payment under the program may
only be made to eligible providers of services. Act, § 1835(a) (42 U.S.C. § 1395n(a)), see
also Act, § 1842(b)(18)(C) (42 U.S.C. § 1395u(b)(18)(C)). The Act requires the
Secretary of Health and Human Services (Secretary) to issue regulations that establish a
process for the enrollment of providers and suppliers including the right to a hearing and
judicial review in the event of denial or non-renewal. Act, § 1866(j) (42 U.S.C.

§ 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a provider or supplier must be enrolled in
the Medicare program and receive a billing number to have billing privileges and to be
eligible to receive payment for services rendered. When applying for enrollment, the
provider or supplier is required to submit information and documents specified by the
regulations, including documents that show that the provider or supplier meets “all
applicable Federal and State licensure and regulatory requirements that apply to the
specific provider or supplier type that relate to providing health care services. ...” 42
C.F.R. § 424.510(d)(2)(iii). The Secretary requires that a clinical psychologist hold a
doctoral degree in psychology and be licensed or certified in the state in which he or she
practices to practice psychology independently. 42 C.F.R. § 410.71(d). A provider or
supplier denied enrollment may appeal the decision and obtain review by an ALJ. 42
C.F.R. § 424.545,
B. Findings and Conclusions

My conclusions of law are set forth in the following numbered paragraphs followed by
my factual findings and analysis.

1. Petitioner has not established that he is licensed as a psychologist in
the State of Nebraska.

Petitioner applied for enrollment in Medicare as a psychologist billing independently. P.
Ex. 26. His application was denied and the hearing officer agreed with the denial. CMS
asserts in its brief that Petitioner’s application was denied on October 10, 2005, because
he was not licensed to perform the services he intends to render. CMS Brief at 4.
However, neither party has provided me a document that shows the initial determination
to deny enrollment. The hearing officer also indicated in her decision that Petitioner’s
enrollment was denied on October 10, 2005, because Petitioner was not licensed to render
the services he intended to render. Request for Hearing (Hearing Officer Decision at 2).
The hearing officer, while alluding to the licensure requirement, never specifically
articulates whether she agreed that Petitioner should be denied enrollment because he was
not licensed to practice as a psychologist in the State of Nebraska.

CMS argues to me that there are two grounds upon which I should deny Petitioner
enrollment: (a) Petitioner does not hold a doctoral degree in psychology (CMS Brief at
4); and (b) Petitioner is not licensed in Nebraska as a psychologist. /d. at 5. The
Secretary requires that to qualify as a psychologist to participate in Medicare, an applicant
must have both a degree in psychology and be licensed to practice as a psychologist. 42
C.F.R. § 410.71(d). An individual who fails to meet either requirement is ineligible to
enroll in the Medicare program as a psychologist. In this case, Petitioner has not shown
he is licensed to practice as a psychologist and denial of his application to participate as a
psychologist in Medicare is required.

CMS has presented evidence that Petitioner is only licensed in the State of Nebraska as a
“Mental Health Practitioner” and a “Professional Counselor.” CMS Ex. 3. The State of
Nebraska requires licensure for one to practice as a Psychologist (Nebraska Revised
Statutes (Neb. Rev. Stat.) § 71-1,206.15), a Mental Health Practitioner (Neb. Rev. Stat.

§ 71-1,314), or a Professional Counselor (Neb. Rev. Stat. § 71-1,325) and each has
separate licensing requirements. Petitioner asserts in his brief that he has licenses in
Nebraska as a Mental Health Practitioner and as a Certified Professional Counselor and
that should qualify him to provide mental health services to Medicare clients. However,
Petitioner applied to enroll as a psychologist and he has presented no evidence that he is
licensed as a “psychologist” by the State of Nebraska or any other jurisdiction.
4

2. Petitioner has not shown that he is eligible for a provider enrollment
number as a provider of qualified psychologist services and his
application is appropriately denied.

Because Petitioner has not shown that he is licensed as a psychologist as required by 42
C.F.R. § 410.71(d)(2), he is not eligible to participate in Medicare as a psychologist.
Accordingly his application for an enrollment number must be denied.

III. Conclusion

Petitioner does not qualify for a Medicare Part B provider enrollment number as a
psychologist and his application was properly denied.

/s/

Keith W. Sickendick
Administrative Law Judge


Department of Health And Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Hazem Garada, M.D., ) Date: January 23, 2007

)
Petitioner, )

) Docket No. C-06-401

-V.- ) Decision No. CR1557
)
The Inspector General. )
)

DECISION ON REMAND

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Hazem
Garada, M.D., from participating in Medicare and other federally funded health care
programs for a period of at least 13 years.

I. Background

This case originally was before me as Petitioner’s challenge of the I.G.’s March 31, 2005
determination to exclude him. On December 22, 2005 I issued a decision in which I
upheld the determination. Hazem Garada, M.D., DAB CR1384 (2005). I held that the
LG. proved that Petitioner was convicted of a criminal offense — fraud against Medicare
and another health insurer — for which exclusion was mandated by sections 1128(a)(1)
and (a)(3) of the Social Security Act (Act). I found that the length of the exclusion was
justified based on the presence of aggravating factors and the absence of any mitigating
factors.

Petitioner appealed my decision to the Departmental Appeals Board (Board). On April
25, 2006 an appellate panel of the Board remanded my decision to me with instructions
that I provide Petitioner with an in-person hearing at which Petitioner could present
evidence concerning his assertion that a mitigating factor was present in the case. Hazem
Garada, M.D., DAB No. 2027 (2006).
2

Pursuant to the panel’s remand order I gave Petitioner the opportunity to request
subpoenas of individuals who he believed had evidence that was relevant to his case.
Petitioner filed a request which the I.G. opposed in part. On July 31, 2006 I ruled in favor
of Petitioner’s request that I subpoena two named individuals, Ms. Rachael Plazas and
Mr. Scott A. Amott. Ruling on Request for Subpoenas, July 31, 2006. I ruled against
Petitioner’s request that I subpoena other individuals because Petitioner did not describe
any information that these individuals might possess that would be relevant to a
mitigating factor. Id.

I convened an in-person hearing in Washington, D.C. on November 2, 2006 at which I
received testimony from Petitioner, Mr. Amott, and Kenneth Marty, a rebuttal witness
called by the I.G. I left the record open at that hearing due to the failure of Ms. Plazas to
appear and testify. On December 6, 2006 I completed the hearing, taking Ms. Plazas’
testimony by telephone.'

At the November 2 hearing I received exhibits from the parties in addition to those which
I had received previously. From the I.G. I received an exhibit which I identified as LG.
Ex. 10. From Petitioner I received an exhibit which I identified as P. Ex. 8.?

IL. Issues, findings of fact and conclusions of law
A. Issue

The sole issue in this case is whether Petitioner proved the existence of mitigating
evidence, identified at 42 C.F.R. § 1001.102(c)(3)(i)-(iii), that would justify reducing the
duration of his exclusion.

B. Findings of fact and conclusions of law

In my original decision I made findings of fact and conclusions of law (Findings) which
held that: (1) an in-person hearing was not warranted; (2) Petitioner was convicted of
criminal offenses as described in sections 1128(a)(1) and (a)(3) of the Act; and (3) an
exclusion of at least 15 years was reasonable. The Board appellate panel did not disturb
my second Finding. It reversed my first Finding and remanded the case to me so that I

' Prior to the November 2 hearing Petitioner agreed that the testimony of both Mr.
Amott and Ms. Plazas would be taken by telephone.

? Exhibits which I received prior to my first decision in this case remain in
evidence.
3

might hear evidence concerning the possible presence of a mitigating factor. In doing so
it did not find that I had erred in finding the presence of four aggravating factors.
Consequently, I limit this decision only to deciding whether Petitioner offered mitigating
evidence, the presence of which might be a basis for finding unreasonable the duration of
the exclusion imposed by the L.G.’s exclusion. In addressing this issue I make an
additional Finding, which I set forth below and discuss in detail.

1. Petitioner did not offer mitigating evidence that justifies reduction of
the duration of his exclusion.

The mitigating factor alleged by Petitioner is set forth at 42 C.F.R. § 1001.102(c)(3)(i)-
(iii). The regulation provides that the duration of an exclusion might be reduced if an
excluded individual proves that his cooperation with federal or State officials resulted in:

(i) Others being convicted or excluded from Medicare, Medicaid and all
other Federal health care programs,

(ii) Additional cases being investigated or reports being issued by the
appropriate law enforcement agency identifying program vulnerabilities or
weaknesses, or

(iii) The imposition against anyone of a civil money penalty or assessment under . .
. [42 CFR. Part 1003].

Id.

Petitioner made numerous allegations about his offers of cooperation with federal and
State officials. All of his allegations must be evaluated pursuant to the criteria of 42
C.F.R. § 1001.102(c)(3)(ii) inasmuch as Petitioner does not allege that his cooperation
resulted in others being convicted or excluded or that it has led to the imposition of a civil
money penalty or assessment against anyone.

Iam not persuaded that Petitioner’s allegations and the evidence he offered to support
them establish meaningful mitigating evidence. First, Petitioner asserted that he
provided information to various authorities concerning immigration law violations by a
number of individuals and/or activities by such individuals that might be construed as
participation in or abetting certain terrorist organizations. Even assuming that to be true
such information is irrelevant to establishing a mitigating factor because it does not relate
to program vulnerabilities or weaknesses. The regulation is explicit. An offer by an
excluded person to cooperate with prosecuting authorities is not relevant to the issue of
4

trustworthiness to provide care to Medicare beneficiaries or Medicaid recipients unless
that offer relates to a health care program’s vulnerability or weakness. True, the
regulation does not define the word “program.” But, its meaning is obvious from the
context of the word within the regulation and within the broader regulations addressing
exclusion.*

Second, Petitioner failed to prove that any information that he gave concerning possible
program-related violations produced any positive results. The officials to whom
Petitioner made offers of program-related cooperation looked at what he had to offer and
concluded that the information was not worth pursuing.

The November 2-December 6, 2006 hearing received the testimony of three witnesses
other than Petitioner. These individuals were: Scott Amott, an official with the State of
Virginia; Kenneth Marty, a criminal investigator with the Office of Investigations of the
L.G.; and Rachael Plazas, an investigator for TriCenturion, a contractor that investigates
complaints and provides support to law enforcement agencies. Although Mr. Arnott
refused to attest to the substance of Petitioner’s cooperation Petitioner admitted that his
cooperation did not produce substantive results. Tr. at 10-11. Ms. Plazas testified that
the I.G. and TriCenturion declined to investigate based on information provided to them
by Petitioner. Tr. at 59. Mr. Marty testified that the I.G. declined to open an
investigation based on information provider by Petitioner:

Based on my investigation and my contact with . . . [Petitioner], his
credibility was zero. He had lied to us repeatedly during the investigation
and I had no reason to believe anything he said on that.

Tr. at 46.

The aggravating and mitigating factors that are set forth at 42 C.F.R. § 1001.102(b) and
(c), including the mitigating factor at subsection (c)(3)(i)-(iii), function very much like
rules of evidence. If evidence relates to an aggravating or mitigating factor it is deemed

> The distinction between an offer of cooperation that is related to program
vulnerabilities or weaknesses and an offer that addresses some other, non-program
related, illegal conduct, is the basis for my denying Petitioner’s requests for a subpoena of
an individual whom Petitioner asserted was associated with the “West Virginia Joint
Terrorism Task Force” and other individuals who might possess information about
Petitioner’s alleged non-program related cooperation. Ruling on Request for Subpoenas,
July 31, 2006, at 2.
5

to be relevant to deciding the ultimate question of an excluded individual’s
trustworthiness. But, nothing in the regulation or the Act assigns weight to aggravating or
mitigating evidence. How much weight should be assigned to that evidence depends on
what it says about the excluded individual’s trustworthiness to provide care.

Here, the evidence Petitioner offered about his cooperation offers no support for a
conclusion that he is trustworthy to provide care. The evidence establishes that he offered
cooperation to federal and State officials — after he had been charged with a crime and as
part of a plea arrangement — but that the evidence was found not to be valuable by those
who examined it. Nothing that Petitioner said or offered led anywhere. Given that, there
is no reason for me to consider Petitioner’s cooperation as providing grounds to reduce
the duration of the exclusion imposed by the I.G.

Moreover, it is at least arguable that Petitioner’s cooperation was insufficient even to
qualify as mitigating evidence. As I read 42 C.F.R. § 1001.102(c)(3)(ii), the subsection
requires that cooperation produce positive results in order to be deemed as mitigating
evidence. The phrase “identifying program vulnerabilities or weaknesses” in that
subsection applies on its face to the preceding phrases “additional cases being
investigated” and “reports being issued.” On the strength of this interpretation a mere
offer of cooperation or the offer of information that turns out not to be useful would not
be enough to meet the regulatory definition of a mitigating factor.*

Notwithstanding my reading of the regulation I have evaluated the cooperation offered by
Petitioner as if the mere offer of cooperation along with information — regardless of its
value — constitutes mitigating evidence. For the reasons I have discussed, I conclude that
the information that Petitioner offered does not justify reducing the duration of his
exclusion.

I reiterate what I stated in my original decision. Petitioner’s criminal activity and the
aggravating factors that I identified in my original decision provide ample support for the
1.G.’s exclusion determination. The evidence offered by Petitioner does not provide a
basis to reduce the duration of the exclusion below the 13-year term that the I.G.
ultimately determined to impose.

* The I.G. determined to reduce the duration of Petitioner’s exclusion from at least
15 to at least 13 years based on the facts that Petitioner had offered cooperation and that
files had been opened based on what he’d offered. That determination does not comport
with my reading of the regulation. However, I am not questioning the I.G.’s exercise of
discretion in this case.
6

The I.G. now argues that I should consider additional evidence concerning Petitioner’s
untrustworthiness that was not before me when I issued my original decision.
Specifically, the I.G. asks that I consider evidence showing that Petitioner committed
crimes in addition to those that were the basis for the I.G.’s exclusion determination and
my original decision in this case. Specifically, Petitioner admitted to: providing
prescription drugs to patients in exchange for sexual relations; engaging in a scheme with
a pharmacist to supply the pharmacist with drug samples that would be sold for profit by
the pharmacist, with the proceeds of the sales being split with Petitioner; and falsely and
fraudulently accepting payment from the Immigration and Naturalization Service for
critical medical tests that he did not, in fact, provide. I.G. Ex. 10, at 2-4. Ido not
consider this additional evidence as being relevant, for two reasons. First, the appellate
panel’s remand decision was strictly limited to the issue of whether Petitioner could
establish mitigating evidence. Thus, basing my decision on the I.G’s evidence of
additional criminal activity by Petitioner would exceed the scope of the remand in this
case. Second, the evidence offered by the I.G. is untimely. The I.G. offered no
explanation for his failure to produce this evidence prior to my original decision.

/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Care Center of Opelika, ) Date: January 23, 2007
)
Petitioner, )
) Docket Nos. C-06-63; C-06-138
)
) Consolidated Docket No. C-06-138
-Vv.- ) Decision No. CR1556
)
Centers for Medicare & Medicaid )
Services. )
)
DECISION

Petitioner, Care Center of Opelika (Petitioner or facility), is a long-term care facility
certified to participate in the Medicare program as a provider of services. Surveyors from
the Alabama Department of Public Health (State Agency) completed a survey on October
6, 2005, and discovered that, for more than two months, the facility lacked a functioning
call light system. As a result of this and other survey findings, the Centers for Medicare
& Medicaid Services (CMS) determined that the facility was not in substantial
compliance with program participation requirements, and, from July 27 through October
5, 2005, the facility’s deficiencies posed immediate jeopardy to resident health and safety.
CMS imposed civil money penalties (CMPs) of $3,050 per day for 71 days of immediate
jeopardy, and $100 per day for the remaining days of noncompliance that was not
immediate jeopardy. Petitioner here challenges those determinations.

For the reasons set forth below, I find that the facility was not in substantial compliance
with program requirements for the period in question, and that, from July 27 through
October 5, 2005, its deficiencies posed immediate jeopardy to resident health and safety.
Since CMS imposes the statutory minimum CMP for the period of immediate jeopardy,
the question of its reasonableness is not before me. I find reasonable the $100 per day
CMP for the remaining period of noncompliance.
I. Background

Following a complaint investigation completed July 7, 2005, and a certification survey
completed October 6, 2005, CMS determined that the facility was not in substantial
compliance with federal requirements for nursing homes participating in the Medicare
program.' Most significantly, CMS asserts that the facility did not meet federal
requirements under 42 C.F.R. § 483.70(f) (Tag F-463 — Physical Environment) because it
did not have a functioning call light system, and the absence of a functioning call light
system posed immediate jeopardy to resident health and safety. CMS Exhibit (Ex.) 1, at
9-12. CMS also claims that the facility was not in substantial compliance with 42 C.F.R.
§ 483.15(e)(1) (Tag F-246 — Quality of Life) and 42 C.F.R. § 483.25(h)(1) (Tag F-323 —
Quality of Care). Id. at 1-9.

After a follow-up visit on December 8, 2005, CMS determined that the facility achieved
substantial compliance. CMS Exs. 2, 15, 21, at 11; P. Exs. 6, 8. CMS has imposed
CMPs in the amount of $3,050 per day for 71 days ($216,550) of immediate jeopardy,
and $100 per day for the remaining days of noncompliance that was not immediate
jeopardy. CMS Ex. 22

' CMS sent two separate notice letters addressing these surveys; Petitioner filed
separate hearing requests; and this office opened two case files (C-06-63 and C-06-138).
By motion dated March 6, 2006, the parties asked that the matters be consolidated
because they concern the same facility and the same survey cycle. By order dated March
9, 2006, I granted the motion and consolidated the cases as C-06-138.

> The record is confusing as to the date Petitioner achieved substantial compliance.
In its preliminary brief (CMS Br.), CMS asserts that the facility achieved substantial
compliance on November 4, 2005. CMS Br. at 11. However, in CMS’s closing brief
(CMS Cl. Br.), it sets the date of substantial compliance as December 8, 2005. CMS Cl.
Br. at 1-2. Inexplicably, Petitioner has not challenged this December date. According to
the state surveyor, Wayne DuBose, the surveyors accepted the November 4, 2005 date.
CMS Ex. 21, at 11 (DuBose Decl. J 19). However, the record is silent as to whether
CMS accepted the surveyor recommendation. Since neither party has briefed the issue, I
consider that duration is not before me, and I decline to resolve the question. However, if
the parties, in fact, disagree about the date the facility achieved substantial compliance,
they may ask that the case be reopened pursuant to 42 C.F.R. § 498.100, for the limited
purpose of resolving that issue.
3

The facility timely requested a hearing, and the matter was assigned to me. The parties
have agreed that this matter may be decided on the written record, without an in-person
hearing. Summary of 7/19/2006 Prehearing Conference; Petitioner’s correspondence
(July 21, 2006). The parties have filed preliminary and closing briefs. (CMS Br., CMS
Cl. Br., P. Br., P. Cl. Br.). Petitioner also filed a letter brief in reply to CMS’s closing
brief. (P. Reply). CMS submitted 25 exhibits (CMS Exs. 1-25), and Petitioner submitted
46 exhibits (P. Exs. 1-46). I have admitted CMS Exs. 1-25 and P. Exs. 1-46. Summary
of 7/19/2006 Prehearing Conference.’

II. Issues
The case presents the following questions:

1. Was the facility in substantial compliance with requirements for facilities
participating in the Medicare program, specifically 42 C.F.R.
§§ 483.70(f), 483.15(e)(1), and 483.25(h)(1)?

2. If the facility was not in substantial compliance from July 27 through
October 5, 2005, did its deficiencies then pose immediate jeopardy to
resident health and safety?

3. If the facility was not in substantial compliance after October 5, 2005, is the
amount of the CMP imposed, $100 per day, reasonable?

Ill. Discussion

The Social Security Act (Act) sets forth requirements for nursing facility participation in
the Medicare program, and authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations implementing the statutory provisions. Act, section
1819. The Secretary’s regulations governing nursing facility participation in the
Medicare program are found at 42 C.F.R. Part 483. Facilities must maintain substantial

> My summary of the July 19, 2006 prehearing conference reflected that Petitioner
had submitted 47 exhibits. In fact, Petitioner only submitted 46 exhibits. Petitioner’s list
of exhibits indicated that it would be submitting a 47" exhibit which was to consist of
relevant sections of the Code of Federal Regulations; it is not necessary to submit copies
of federal regulations as exhibits
4

compliance with program requirements, and, to be in substantial compliance, a facility’s
deficiencies may pose no greater risk to resident health and safety than “the potential for
causing minimal harm.” 42 C.F.R. § 488.301.

A. Because its call light system was essentially inoperable from July 27 through
October 5, 2005, the facility was not in substantial compliance with the program
participation requirement set forth at 42 C.F.R. § 483.70(f), and that deficiency

posed immediate jeopardy to resident health and safety.*

Section 483.70 requires that the facility be equipped and maintained “to protect the health
and safety of residents, personnel and the public.” Among other specific requirements,
the nurse’s station must be equipped to receive resident calls through a communication
system from both the resident rooms and from toilet and bathing facilities. 42 C.F.R.

§ 483.70(f).

The facility has a total of 225 beds in four sections. The largest section, called Section
One, consists of 73 beds in 47 rooms. CMS Exs. 6, 7; P. Ex. 9. Section One’s electronic
call light system was installed in 1975, and, by 2002, was apparently showing its age.
CMS Ex. 3, at 3; P. Ex. 36, at 1. In March 2002, the facility had to replace the system’s
malfunctioning “main panel,” located at the nurse’s desk. The “main control unit” had to
be replaced twice, once in 2003, and again in 2005. On March 24, 2005, the entire
system went down, leaving the 73 beds in Section One without an electronic call system.
CMS Ex. 3, at 3; P. Ex. 36, at 1. With some difficulty — the distributor did not have the
necessary part in stock so it had to be back-ordered — the facility managed to restore the
system to “normal operation” on March 30, 2005. P. Ex. 22; CMS Ex. 3, at 3; P. Ex. 36,
at 15

* I make Findings of Fact and Conclusions of Law (Findings) to support my
decision in this case. I set forth each Finding, in italics and bold, as a separate heading.

> The state investigated complaints of system malfunction in a facility visit ending
July 7, 2005, but, at that time, the system was functional, and no penalties were imposed.
P. Ex. 36, at 2. Neither party has provided a complete Statement of Deficiencies for the
July 7 survey, so the record does not specify the deficiencies cited at that time, nor the
facility’s plan of correction. Petitioner claims that the State Agency cited no deficiencies,
at least with respect to the call light system. P. Ex. 44, at 1 (Hornsby Decl. § 3).
According to CMS’s notice letters, however, the State Agency found significant
deficiencies but suspended its recommendation for enforcement action because the
facility had submitted a plan of correction and the State Agency presumed that it had
corrected its deficiencies. CMS Ex. 2, at 2. When the October 6 survey revealed that the
5

Thereafter, however, the system was intermittently beset with malfunctions. P. Exs. 23,
34, 36, 37, 44; CMS Ex. 4. On June 22, 2005, problems with the control panel disabled
the call lights in three rooms, but the malfunction could not be corrected because,
according to maintenance staff, “system old — bad wiring.” P. Ex. 23, at 5; CMS Ex. 4, at
5. Then, on July 27, 2005, the system broke down, and was never more than partially
functional thereafter. Petitioner attempted repairs; it ordered a new control unit, and
subsequently ordered additional parts. But the system kept shorting out. P. Ex. 23, at 8,
9; P. Ex. 34, at 4; P. Exs. 36, 42 (Cook Decl.); P. Ex. 44 (Hornsby Decl.). The system
was simply “antiquated” and parts were no longer available; the system’s manufacturer no
longer serviced it, and Petitioner had difficulty finding service people willing to attempt
the repairs. P. Ex. 32, at 1; P. Ex. 37; P. Ex. 44, at 2 (Hornsby Decl. 5).

Finally, in a requisition request dated September 6, 2005, the facility sought from its
corporate office approval for replacing the system. P. Ex. 32, at 1; P. Ex. 37, at 2, P. Ex.
44, at 3 (Hornsby Decl. J 13). The expenditure was approved, and installation of a new
call system began on September 19, 2005. The work was completed on October 6, 2005.
P. Exs. 33, 35, 37, 44, at 3-4 (Hornsby Decl. §] 13).

The uncontroverted evidence thus establishes that from July 27 through October 5, 2005,
the facility had no reliable call light system. During that time, the nurse’s station was
simply not “equipped to receive resident calls through a communication system” from
both resident rooms and from toilet and bathing facilities. See 42 C.F.R. § 483.70(f). On
its face, this finding seems to resolve, without further discussion, the question of the
facility’s substantial compliance with the physical environment regulation.

I recognize, however, that extraordinary and unforeseeable circumstances might
nevertheless preclude a finding of substantial noncompliance (which no doubt explains
CMS’s unwillingness to impose a remedy in March 2005, even though the facility was
then without a working system for a week). Here, Petitioner suggests that the system
failure was not foreseeable, and claims that it took “all reasonable steps to keep its
electronic call light system in working order.” P. Cl. Br. at 5. I disagree.

The circumstances surrounding the July 2005 failure of the call light system were neither
extraordinary nor unforeseeable. No one can reasonably expect an electrical system to
last forever, and this system was quite old. I do not doubt that the facility’s maintenance
staff did its best to keep the system functioning. See, e.g., P. Ex. 42. The many

facility had not corrected and had not achieved substantial compliance, CMS made
deficiency findings and imposed penalties.
6

maintenance documents show that these individuals were making significant efforts, but
those documents also establish that the facility knew that it had an old, unreliable system
— broken down more often than it was operational. P. Ex. 42, at 2 (Cook Decl. 4.8); P.
Exs. 22-35. By March, Petitioner should have known that the system was on its way out
and that it needed to start planning for a replacement system. In early June, maintenance
staff reported that they were unable to repair the system because it was old and the wiring
was bad. P. Ex. 23, at 5. And when the system broke down in July, the technician told
the facility’s maintenance director that he needed to replace all of the rooms’ old call
stations with a new series. P. Ex. 23, at 8.

Petitioner should also have known that replacing the system would be complicated and
time-consuming. Jim Williams, from Columbus Fire & Safety (the company that
ultimately installed the new system), described the difficulties in replacing a call light
system:

There is not a one-size-fits-all call light system for a nursing
facility, so providing a quote for a new call light system is not
something that can just be recited upon request. Our company
has to generate drawings for the facility before it can design
the system to be installed and provide a quote.

P. Ex. 43, at 1 (Williams Decl. 5); see also P. Ex. 44, at 2 (Hornsby Decl. { 5, 6).
These steps should and could have been taken months earlier, probably in March, when
the broken-down system took a week to repair, and no later than June, when staff
acknowledged that malfunctions could not be repaired because of the system’s age. Yet,
the facility did not even contact vendors to discuss the system’s replacement until
September 2005. I therefore do not agree that Petitioner took “all reasonable steps” to
maintain an effective call light system.

Petitioner also argues that it had in place an adequate back-up system. Initially, this
“system” consisted of distributing hand bells to some, but not all, of the Section One
residents. On August 24, about a month after the system broke down, the facility added
“bell monitors,” who, for twelve hours per day (from 7:00 pm to 7:00 am) walked the
halls listening for ringing bells. P. Ex. 12, at 1, 7,9, 23; P. Ex. 44, at 3 (Hornsby Decl. J
12).° It appears that bell monitors were occasionally not assigned, and sometimes were
“pulled” from that assignment due to staffing shortages. P. Ex. 12, at 1, 7, 9, 23.

® It appears that, between July 27 and August 24, no special efforts were made to
assist the regular nursing staff in hearing and responding to the hand bells.
1

With or without bell monitors, the hand bell system was not an effective substitute for an
electronic call light system, and the record in this case demonstrates its inadequacies.

First, not all residents were even capable of using hand bells. The Assistant Director of
Nursing identified the residents of rooms 104A, 111A-B, 114A, 138A, 140, and 141 as
incapable of using the hand bells, so none were provided. CMS Ex. 21, at 10 (DuBose
Decl. { 17). Second, the bells were not available in all of the rooms, even for residents
capable of using them. Surveyor DuBose saw no bells for the residents in rooms 102A,
103A-B, 105, 126A, 127A-B, 128A, 130A-B, 132A-B, 133B, 135B, 136A-B, and 137A-
B. CMS Ex. 21, at 10 (DuBose Decl. J 17). In her declaration, the facility’s
administrator, Jane Hornsby, acknowledges that, during his initial walk-through of the
facility, Surveyor DuBose complained about not finding bells in certain resident rooms.
She claims, however, that three of her staff subsequently located the bells in all but three
of the resident rooms. P. Ex. 44, at 4 (Hornsby Decl. 16). Petitioner provides no
additional details about where the bells were found. The uncontroverted evidence thus
establishes that three capable residents had no bells in their rooms at the time of the
survey, and fifteen other capable residents did not have bells readily available to them.

Third, the hand-bell “system” provided no coverage for toilets and bathing areas.
Rosemary Wilder is a registered nurse with many years of state and federal survey and
certification experience. CMS Ex. 23. She correctly points out that bathrooms can be
especially dangerous for nursing home residents; bathroom injuries are common among
the elderly, and it is therefore imperative that they have a means of communicating with
staff while in the bathroom. CMS Ex. 22, at 3 (Wilder Decl. ] 6). Petitioner suggests
that it provided such a system because hand bells are portable, and the residents could
have carried them into the bathroom. P. Reply at 3. I find this completely insufficient.
Aged and infirm residents cannot be relied upon to carry bells around. They may
reasonably decline to do so because they do not anticipate any emergencies, or they may
simply forget. Moreover, those with difficulty ambulating, requiring canes or walkers,
should not be expected to carry with them any additional items.

Finally, the hand-bell “system” just did not work effectively. Several residents
complained to Surveyor DuBose that staff could not hear the bells, heard them but did not
respond, or took a long time to respond. CMS Ex. 21, at 10 (DuBose Decl. J 18).
Surveyor DuBose tested the system by ringing several residents’ hand bells, and, in fact,
staff did not respond. Jd. Surveyor DuBose’s experience is consistent with statements
from the facility’s designated bell monitors. They reported that bells “on the far end”
could not be heard, and residents would stop ringing before their bells could be answered.
P. Ex. 38, at 1. If the resident was not in the act of ringing, staff would not know where
to go to respond. Most monitors reported that they could not hear the bell if the resident’s
8

door was closed, particularly on the back hall. P. Ex. 38, at 2, 3, 4, 6, 8, 11, 12, 15, 16,
17, 18. A couple of monitors said that they simply kept all the doors open in order to hear
the bells. P. Ex. 38, at 1, 14.7 One monitor reported that she had problems responding if
more than one bell was ringing at the same time. P. Ex. 38, at 9.

Petitioner claims to have addressed some of these problem by checking on residents
“frequently.” Sick residents and those whose doors were closed were checked every 30
minutes; others were checked every hour. P. Ex. 21, at 2; P. Br. at 6. Checking ona
resident hourly, or even every 30 minutes, does not adequately address emergency
situations. Much damage can occur in that time when an aged or infirm resident is
effectively out of contact with facility staff. Moreover, one bell monitor admitted that she
did not check on residents whose doors were closed. P. Ex. 38, at 16.

For these reasons, I find that, from July 27 through October 5, 2005, the facility had no
effective call light system, and was thus not in substantial compliance with 42 C.F.R. §
483.70(f).

With respect to the immediate jeopardy finding, Petitioner notes that no actual harm
occurred to any resident. The absence of actual harm is fortuitous, but not the standard
for determining immediate jeopardy. Immediate jeopardy exists if the facility’s
noncompliance has caused or is likely to cause “serious injury, harm, impairment, or
death to a resident.” 42 C.F.R. § 488.301. CMS’s determination as to the level of a
facility’s noncompliance — which includes its immediate jeopardy finding — must be
upheld unless it is “clearly erroneous.” 42 C.F.R. § 498.60(c). The Departmental
Appeals Board has observed repeatedly that the “clearly erroneous” standard imposes on
facilities a “heavy burden” to show no immediate jeopardy, and has sustained
determinations of immediate jeopardy where CMS presented evidence “from which
“[o]ne could reasonably conclude’ that immediate jeopardy exists.” Barbourville Nursing
Home, DAB No. 1962, at 11 (2005); Florence Park Care Center, DAB No. 1931, at 27-
28 (2004), citing Koester Pavilion, DAB No. 1750 (2000).

’ According to Petitioner, staff were instructed to “encourage” residents to leave
their doors open so that nurses could hear the bells. P. Ex. 21, at 2; P. Br. at 6. By their
own admission, however, some staff apparently interpreted this as a requirement and kept
all the doors open, potentially infringing on the residents’ privacy. P. Ex. 38, at 1, 14.
9

Nursing home residents include a highly vulnerable population, who often need
immediate assistance. Nurse Wilder correctly points out that residents use call systems
for mundane matters, but also to remind nursing staff to bring them medication or to
request assistance in going to the bathroom. The system is also a critical part of the
facility’s emergency system since it immediately alerts staff of a resident’s acute
symptoms or accident, and allows staff to summon additional help in an emergency.*
CMS Ex. 22, at 2 (Wilder Decl. § 3).

To protect their health and safety the regulation requires that residents and those caring
for them be able to communicate expeditiously with the nurse’s station from the resident
rooms as well as from toilet and bathing facilities. CMS’s conclusion that the extended
absence of such a communication system is likely to cause serious harm is therefore not
clearly erroneous.

B. The facility was not in substantial compliance with the quality of life
regulation, 42 C.F.R. § 483.15(e)(1), nor the quality of care regulation, 42
CFR. § 483.25(h)().

Quality of Life. Under the “quality of life” regulation, a resident has the right to receive
services in the facility “with reasonable accommodation” of his/her individual needs and
preferences, except when resident health or safety would be endangered. 42 C.F.R.

§ 483.15(e)(1).

Resident (R) 8 was 5’6” tall, and weighed almost 200 pounds. She was paralyzed on one
side, and could not turn or reposition herself. Her bed was wider than normal, and
Surveyor DuBose observed that she had no mattress cover. Instead of one appropriately
sized and fitted bottom sheet, the facility had covered her mattress with two overlapping
smaller sheets. These had separated, exposing her to the bare mattress. Surveyor
DuBose, who is an experienced registered nurse, noted that lying on a bare mattress
increases a resident’s risk of skin breakdown. CMS Ex. 1, at 3; CMS Ex. 21, at 5
(DuBose Decl. § 8).

® Petitioner dismisses the need for a call light system where staff might need
assistance in an emergency, arguing that staff can simply call for help. I do not consider
yelling an adequate substitute for an effective call light system.
10

Citing its Plan of Correction, Petitioner claims that R8 preferred ill-fitting sheets. P. Br.
at 19. This is incorrect. According to the Plan of Correction, after the survey, the facility
provided R8 with a mattress cover and properly fitting bed sheets. R8 informed the
facility “that she wants to use the full size fitted sheet on her bed, but wants to continue to
use the twin bed flat sheet to cover up.” P. Ex. 4, at 1. The deficiency here involved the
absence of a mattress cover and suitable bottom sheet. No problems were cited regarding
R8’s top sheet.

Surveyor DuBose also observed that water was not within reach of several residents,
including R6 and R7, even though their care plans called for “water pitcher in easy
reach.” According to Surveyor DuBose, R6 was “begging for water.” R7 showed signs
of dehydration (dry lips, thick mucus in his mouth). CMS Ex. 1, at 4-5; CMS Ex. 21, at
6-7 (DuBose Decl. ff 10, 11).

R11 was diabetic. Surveyor DuBose observed that her feet were dark and scaley, and her
toenails had not been trimmed; they extended beyond the end of her toes. CMS Ex. 1, at
6; CMS Ex. 21, at 8 (DuBose Decl. § 13). For diabetics, proper foot care is essential to
prevent injury caused by toenails scratching feet or legs, and to prevent diabetic foot
ulcers. CMS Ex. 21, at 8 (DuBose Decl. § 13).

Because any one of these deficiencies presents the potential for causing more than
minimal harm, the facility was not in substantial compliance with 42 C.F.R.
§ 483.15(e)(1).

Quality of Care. Under the statute and “quality of care” regulation, each resident must
receive and the facility must provide the necessary care and services to attain or maintain
for each resident the highest practicable physical, mental, and psychosocial well-being, in
accordance with the resident’s comprehensive assessment and plan of care. Act, section
1819(b); 42 C.F.R. § 483.25. Among other requirements, the facility must ensure that the
resident environment remains as free of accident hazards as possible. 42 C.F.R.

§ 483.25(h)(1).

Surveyor DuBose observed an unattended maintenance cart in an unlocked room on the
Alzheimer’s ward. The cart contained a hammer, metal snips, a wire stripper,
thermometer, screw drivers, screws, wrenches, drill bits, and light bulbs. CMS Ex. 1, at
7-8. The responsible maintenance employee was not in the vicinity, and the cart sat there
for about 25 minutes until removed by another maintenance worker. CMS Ex. 1, at 7-8;
CMS Ex. 21, at 8-9 (DuBose Decl. § 14).
11

On his tour of the facility, Surveyor DuBose also observed an unattended needle and
syringe lying on a bed table. After about ten minutes, the Resident Care Manager was
summoned to the room. When she picked up the syringe, the sheath covering the needle
fell to the floor. CMS Ex. 1, at 8; CMS Ex. 21, at 9 (DuBose Decl. { 15). Leaving
prepared medications and needles unattended violates good nursing practice. CMS Ex.
25.

The unattended cart and the unattended needle and syringe posed hazards to facility
residents that had the potential for causing more than minimal harm. The facility was
therefore not in substantial compliance with 42 C.F.R. § 483.25(h)(1).

C. I find reasonable the $100 per day CMP, which is at the low end of the
CMP range for non-immediate jeopardy situations.

Aside from its claims regarding compliance, Petitioner offers little argument as to the
reasonableness of the $100 per day CMP. In any event, the penalty is at the low end of
the range, and is justified by the relevant criteria.

If CMS determines that a facility is not in substantial compliance with program
requirements, it may impose a CMP for each day of substantial noncompliance. Act,
section 1819(h); 42 C.F.R. §§ 488.402, 488.408. Where the deficiencies do not pose
immediate jeopardy to resident health and safety, but have either caused actual harm or
have the potential for causing more than minimal harm, the penalty will be in the range of
$50 to $3,000 per day. 42 C.F.R. §§ 488.408(d), 488.438(a). At $100 per day, the
penalty here is at the very low end of the range.

I determine whether the amount of a CMP is reasonable by applying the factors listed in
42 C-F.R. § 488.438(f): 1) the facility’s history of noncompliance; 2) the facility’s
financial condition; 3) factors specified in 42 C.F.R. § 488.404; and 4) the facility’s
degree of culpability, which includes neglect, indifference, or disregard for resident care,
comfort or safety. The absence of culpability is not a mitigating factor. 42 C.F.R.

§ 488.438(f). The factors in 42 C.F.R. § 488.404 include: 1) the scope and severity of
the deficiency; 2) the relationship of the deficiency to other deficiencies resulting in
noncompliance; 3) the facility’s prior history of noncompliance in general and
specifically with reference to the cited deficiencies.
12

Aside from some unhelpful references to the July survey, the record says nothing about
the facility’s history, and Petitioner has not claimed that its financial condition prevents it
from paying this small penalty. However, the remaining factors support this CMP. The
deficiencies cited were not trivial, and affected resident comfort, health and safety.
Failure to provide easily accessible water to thirsty residents suggests a level of neglect or
indifference. Leaving a syringe unattended is irresponsible and neglectful.

IV. Conclusion

For all of the reasons discussed above, I uphold CMS’s determination that Petitioner was
not in substantial compliance with program participation requirements. I find that from
July 27 through October 5, 2005, its deficiencies posed immediate jeopardy to resident
health and safety. I must therefore sustain the $3,050 per day CMP imposed for the
period of immediate jeopardy, since that is the statutory minimum. Finally, I sustain as
reasonable the $100 per day CMP imposed for the period of noncompliance that was not
immediate jeopardy.

/s/

Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Janice F. Fuller, ) Date: January 11, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-06-606

) Decision No. CR1554
The Inspector General. )
)

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Janice
Fuller, from participating in Medicare and other federally funded health care programs for
a period of five years.

I. Background

On June 30, 2006, the I.G. notified Petitioner that she was being excluded, for a period of
five years, from participating in Medicare and other federally funded health care
programs. The I.G. asserted that Petitioner was being excluded pursuant to the mandatory
exclusion requirements of section 1128(a)(1) of the Social Security Act (Act) because she
had been convicted of a criminal offense relating to the delivery of Medicare or Medicaid
items or services, including the performance of management or administrative services
relating to the delivery of Medicare or Medicaid items or services.

Petitioner requested a hearing and the case was assigned to me for a hearing anda
decision. I held a pre-hearing conference at which I established a schedule for the parties
to file exhibits and briefs. Additionally, I advised the parties that either of them could
request an in-person hearing. I explained that I would convene a hearing in person if a
party requested that I do so and if I decided that a hearing was necessary.
2

Neither party requested an in-person hearing. The I.G. filed a brief and a reply.

Petitioner filed a brief. With his brief the I.G. filed five proposed exhibits (I.G. Ex. 1 -
I.G. Ex. 5). Petitioner filed two proposed exhibits, which were designated Exhibit A and
Exhibit B. Neither party objected to my receiving the exhibits proposed by the opposing
party. Consequently, I receive I.G. Ex. 1 - .G. Ex. 5. I have redesignated Petitioner’s
Exhibit A and Exhibit B as P. Ex. 1 and P. Ex. 2, respectively, and I receive them, as well.

II. Issues, findings of fact and conclusions of law
A. Issue

The issue in this case is whether Petitioner was convicted of a criminal offense as is
described at section 1128(a)(1) of the Act, thereby mandating her exclusion from
participating in Medicare and other federally funded health care programs.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each Finding below as a separate heading. I discuss each Finding in
detail.

I. Petitioner was convicted of a criminal offense as is defined at section
1128(a)(1) of the Act.

These are the relevant facts. Petitioner was employed as the administrator of a nursing
home in Muskogee, Oklahoma. Petitioner’s Brief in Support of Appeal (P. Br.) at 1. On
March 31, 2004, a criminal information was filed against Petitioner in an Oklahoma State
court, charging her under Oklahoma law with the felony of Exploitation by Caretaker.
LG. Ex. 2, at 1. The information alleged that between on or about November 6, 2003 and
February 16, 2004 Petitioner exploited the financial resources of several nursing home
residents by taking money from a trust account for these individuals and purchasing
furniture for use in the lobby of the nursing home. /d. See also 1.G. Ex. 3. Each of these
residents was a recipient of care pursuant to Oklahoma’s Medicaid program and that
program paid for each resident’s stay at the nursing home. I.G. Ex. 5. On November 22,
2004, Petitioner entered a plea of no contest to the charge, for which she was sentenced to
pay a fine, restitution, and for which she received a deferred sentence. I.G. Ex. 1; I.G. Ex.
4. Petitioner’s conviction was subsequently expunged. P. Ex. 1.
3

Section 1128(a)(1) of the Act mandates the exclusion of any individual who is convicted
of a criminal offense related to the delivery of an item or service under Medicare or a
State Medicaid program, including the performance of management or administrative
services relating to the delivery of Medicare or Medicaid items or services. The facts of
this case establish that Petitioner was convicted of such an offense. First, it is evident that
Petitioner was convicted of a criminal offense. The undisputed facts prove that she was
charged under Oklahoma State law with a felony to which she subsequently entered a no
contest plea that was accepted by the sentencing court. Sentencing for her crime was
deferred. A person is “convicted” of a criminal offense, for purposes of the Act, when
that person enters a plea of nolo contendere (no contest) to a criminal charge and that plea
is accepted by a court. Act, section 1128(i)(3). The Act additionally defines a conviction
to include the entry by an individual into a deferred adjudication program. Jd., section
1128(i)(4).

Second, I find that Petitioner’s conviction consisted of a conviction that is related to the
delivery of items or services under the Oklahoma State Medicaid program. The residents
whose funds Petitioner expropriated unlawfully were all Medicaid recipients. They
would not have been at the nursing home but for Medicaid funding of their stays and
Petitioner would not have been able to convert the residents’ funds unlawfully but for
their presence at the facility. Moreover, the residents’ trust funds were subsidized by
Medicaid because Medicaid coverage enabled these residents to set aside small amounts
of money for personal expenses that otherwise they would have had to use to pay for their
health care.

Petitioner has not disputed the facts of this case nor has she argued that the facts fail to
establish a basis for her exclusion. She asserts only that she has been unable to determine
whether her possible future employment as a bookkeeper for an agency that provides
Medicare-related services would be covered by an exclusion. P. Br. at 2. That is not an
argument in opposition to her exclusion. I am not in a position to define what future
employment an exclusion will prohibit Petitioner from holding. My authority in this case
is limited solely to deciding whether the statutory basis for an exclusion exists.

2. The duration of Petitioner’s exclusion is not at issue because the LG.
determined to impose the minimum exclusion that is mandated by the Act.

The LG. has no discretion in determining whether to impose an exclusion pursuant to
section 1128(a)(1). The Act requires him to exclude an individual who is convicted of a
program related crime. Additionally, the Act mandates that any individual who is
excluded pursuant to section 1128(a)(1) must be excluded from participating in Medicare
4

and other federally funded health care programs for at least five years. Act, section
1128(c)(3)(B). In this case the I.G. determined to impose the minimum exclusion and I
have no authority to impose an exclusion of a shorter duration.

/s/

Steven T. Kessel
Administrative Law Judge