Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Shorepointe Nursing Center, ) Date: September 30, 2009

(CCN: 23-5443), )
)
Petitioner, )
)

-V.- ) Docket No. C-08-690

) Decision No. CR2011
Centers for Medicare & Medicaid )
Services. )
)

DECISION

Petitioner, Shorepointe Nursing Center (Petitioner or facility), is a long term care facility
located in St. Clair Shores, Michigan, that participates in the Medicare program. The
Centers for Medicare and Medicaid Services (CMS) has determined that, from May 15
through July 10, 2008, the facility was not in substantial compliance with Medicare
requirements. Although Petitioner concedes its substantial noncompliance with some
requirements, it challenges CMS’s determinations that, based on a May 2008 survey, it
was not in substantial compliance with 42 C.F.R. § 483.25(h) (accident prevention) and,
based on a June 2008 survey, it was not in substantial compliance with 42 C.F.R.

§ 483.25(c) (pressure sores). Petitioner also challenges the amount of the civil money
penalty (CMP) imposed.

I conclude that, from May 15 through July 10, 2008, the facility was not in substantial
compliance with the regulations cited. I also affirm as reasonable the civil money
penalties (CMPs) imposed: $300 per day for 29 days (May 15-June 12, 2008) and $350
per day for 28 days (June 13 through July 10, 2008).

I. Background

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 to
promulgate regulations implementing those statutory provisions. Act § 1819. The
Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the Medicare
program, a nursing facility must maintain substantial compliance with program
requirements. To be in substantial compliance, a facility’s deficiencies may pose no
greater risk to resident health and safety than “the potential for causing minimal harm.”
42 C.F.R. § 488.301. So long as CMS finds one single deficiency at scope and severity
level D or higher, it may impose a remedy and I have no authority to review either its
determination to impose a remedy or its selection of remedies. 42 C.F.R. §§ 488.408(g),
488.438(e), 498.3(d)(11).'

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act § 1864(a);
42 C.F.R. § 488.20. The regulations require that each facility be surveyed once every
twelve months, and more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a), 488.308.

Here, following a survey completed May 15, 2008, CMS determined that the facility was
not in substantial compliance with Medicare participation requirements, specifically:

e 42 C.F.R. § 483.12(a)(7) (Tag F204 — orientation for transfer or discharge) at a D
level of scope and severity (isolated instance of noncompliance that causes no
actual harm with the potential for more than minimal harm);

© 42 C.F.R. § 483.25(f)(1) (Tag F 319 — mental and psychosocial functioning) at a D
level of scope and severity; and

e 42 C.F.R. § 483.25(h) (Tag F323 — accident prevention) at a G level of scope and
severity (isolated instance of noncompliance that causes actual harm that is not

immediate jeopardy).

CMS Ex. 1.

' In this regard the regulations are unambiguous and the law is well-settled. I
therefore find puzzling CMS’s gratuitous statement that “[b]ecause a [scope and severity]
level G deficiency had been cited at this survey and on the previous standard survey of
August 3, 2007, remedies could be imposed immediately.” CMS Cl. Br. at 1. Nothing in
the statute or regulations requires two surveys with G level deficiencies before remedies
can be imposed. See Gilroy Healthcare and Rehabilitation Center, DAB CR1865, at 3
(2008).
After a second survey, completed June 13, 2008, CMS determined that the facility was
still not in substantial compliance with participation requirements, citing deficiencies
under the following regulations:

42 C.F.R. § 483.20(b)(2)(iii) (Tag F275 — resident assessment) at a D level of
scope and severity;

42 C.F.R. § 483.20(c) (Tag F276 — quarterly review assessment) at a D level of
scope and severity;

42 C.F.R. §§ 483.20(d), 483.20(k)(1) (Tag F279 — comprehensive care plans) at a
D level of scope and severity;

42 C.F.R. § 483.25 (Tag F309 — quality of care) at a D level of scope and severity;

42 C.F.R. § 483.25(c) (Tag F314 — pressure sores) at a G level of scope and
severity;

42 C.F.R. § 483.25(f)(2) (Tag F320 — mental and psychosocial functioning) at a D
level of scope and severity;

42 C.F.R. § 483.25(1) (Tag F329 — unnecessary drugs) at a D level of scope and
severity; and

42 C.F.R. § 483.65(a) (Tag F441 — infection control) at an F level of scope and
severity (widespread noncompliance that causes no actual harm with the potential
for more than minimal harm).

CMS Ex. 2. CMS subsequently determined that the facility returned to substantial
compliance on July 11, 2008. CMS Ex. 8.

CMS has imposed against the facility a CMP of $300 per day from May 15 through June
12, 2008 (29 days x $300 = $8700) and $350 per day from June 13 through July 10, 2008
(28 days x $350 = $9800), for a total CMP of $18,500. CMS Ex. 3, at 2; CMS Ex. 8.

Theld a hearing in Detroit, Michigan, on May 22, 2009. Ms. Rebecca Simkins appeared
on behalf of Petitioner, and Ms. Juanita S. Temple appeared on behalf of CMS. I have
admitted into evidence CMS Exhibits (CMS Exs.) 1-25, and Petitioner’s Exhibits (P.
Exs.) 1-8. Tr. 2; Order at 2 (March 26, 2009). The parties have filed pre-hearing briefs
(CMS Br.; P. Br.), closing briefs (CMS Cl. Br.; P. Cl. Br.), and reply briefs (CMS Reply;
P. Reply).
II. Issues

Petitioner limits its appeal to the two deficiencies cited at the G level of scope and
severity. I therefore conclude that the facility was not in substantial compliance with
Medicare program requirements and CMS has the authority to impose a CMP of at least
$50 per day. See Order at 1 (March 26, 2009); Tr. 1-2; Act § 1819(h); 42 C.F.R. §§
488.400, 488.402, 488.406, 488.408, 488.438, 498.20(b).

The remaining issues before me are: 1) Whether, from May 15 through July 10, 2008,
the facility was in substantial compliance with 42 C.F.R. § 483.25(h) (accident
prevention) and 42 C.F.R. § 483.25(c) (pressure sores); 2) If the facility was not then in
substantial compliance, were the penalties imposed in excess of $50 per day — $300 per
day for 29 days of noncompliance and $350 per day for 28 days of noncompliance (total
$18,500) — reasonable?

II. Discussion

A, The facility was not in substantial compliance with 42 C.F.R. § 483.25(h)
because staff did not follow the resident care plan instructions for preventing
falls

Under the statute and the “quality of care” regulation, each resident must receive, and the
facility must provide, the necessary care and services to allow a resident to attain or
maintain the highest practicable physical, mental, and psychosocial well-being, in
accordance with the resident’s comprehensive assessment and plan of care. Act

§ 1819(b); 42 C.F.R. § 483.25. The regulation also requires that the facility “take
reasonable steps to ensure that a resident receives supervision and assistance devices
designed to meet his or her assessed needs and to mitigate foreseeable risks of harm from
accidents.” Windsor Health Care Center, DAB No. 1902, at 5 (2003); Briarwood
Nursing Center, DAB No. 2115, at 5 (2007); Guardian Health Care Center, DAB No.
1943, at 18 (2004) (citing 42 C.F.R. § 483.25(h)(2)). The facility must anticipate what
accidents might befall a resident and take steps to prevent them. 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.
Briarwood at 5; Windsor Health Care Center at 5.

2 My findings of fact/conclusions of law are set forth, in italics and bold, in the
discussion captions of this decision.
Resident 511 (R511). R511 was an 85-year-old woman, admitted to the facility on April
5, 2008, suffering from syncope and collapse, dementia, orthostatic hypotension, and
other ailments. CMS Ex. 16, at 4; CMS Ex. 7, at 14. She required extensive assistance
with all activities of daily living. CMS Ex. 7, at 8. She had a history of falls, and scored
20 on a fall risk assessment, where a score of 21 or greater put the resident at high risk for
falls. CMS Ex. 7 at 5; CMS Ex. 16 at 23.

At the time of admission, R511’s family warned staff that she would attempt to get out of
bed and would ambulate, but would fall because of lower extremity weakness. CMS Ex.
7, at 14. Her April 5, 2008 care plan identified her as at risk for falls due to her history of
falls and syncope.’ To prevent falls, staff devised a care plan that called for bed and chair
alarms “at all times to notify staff when resident is attempting to rise without assistance.”
The plan also directed that R511 be placed in a low bed with mats “to lessen the impact
of falls.” CMS Ex. 7, at 13.

R511 was not placed in a low bed with surrounding mats. In fact, staff did not even
obtain an order for the bed and mats until after R511 had suffered two falls. CMS Ex. 7,
at 16.

On April 19, 2008, R511 “rolled out of bed.” Staff apparently found her on the floor,
rolled up in her blankets, her alarm sounding. They speculated that she fell out of bed
because her feet were tangled in the bed linens. CMS Ex. 16, at 9, 24, 30. She sustained
a small skin tear and hematoma to her right elbow. Her care plan was amended to call for
a pressure sensitive mattress alarm (when available) along with the tab alarm that was
already in place. CMS Ex. 16, at 30. A physician’s telephone order, dated April 19,
2008, called for a “wheel chair and bed tab alarm.” CMS Ex. 16, at 34.5

* The care plan is somewhat confusing, because it characterizes her as “low risk.”
This does not mean that staff considered her unlikely to experience a fall, however.
Rather, the facility’s assessment tool presented options of “high risk” and “low risk.” It
had no “moderate risk” category. But facility staff obviously recognized that R511 was
at risk of falling, and so incorporated fall prevention strategies into her care plan.

* The tab alarm clips to the resident and to either the resident’s bed or chair. If the
resident moves too far from his/her location in a chair or bed, it becomes unclipped and
the alarm sounds. A pressure sensitive alarm, placed under a mattress or seat cushion,
alerts staff to the resident’s movement. Tr. 9.

* It seems that staff had applied the tab alarm without first obtaining a physician’s
order.
But staff did not order a pressure sensitive alarm, as called for in the April 19 amendment
to R511’s care plan. For reasons not fully explained, staff neither requested nor obtained
a physician’s order for such an alarm. And they still did not place R511 in a low bed
with mats to cushion her falls, as called for in her initial care plan. Tr. 17

In the middle of the night of April 24-25, 2008, staff again found R511 lying on the floor
next to her bed. Her bed tab alarm was still attached, although it had not sounded,
apparently because the cord attaching the alarm to its tab was too long. R511 suffered
hemotomas and a right orbital fracture. CMS Ex. 16, at 8, 9, 10, 11, 17, 31, 32; Tr. 16,
57. Following that accident, the facility finally ordered the bed sensor alarm called for in
her care plan, as well as a low bed with mats. CMS Ex. 16, at 9, 18, 30.

Resident 506 (R506). R506 was a 98-year-old woman who had resided in the facility
since August 30, 2004. CMS Ex. 15, at 11. She suffered multiple falls. On March 3,
2007, she slid out of her wheelchair onto the floor while attempting to close some blinds.
CMS Ex. 15, at 24. On April 11, 2007, she slid out of her wheelchair while reaching for
an item from a drawer. It seems that the breaks on her wheelchair had not been locked.
CMS Ex. 15, at 24, 25.

According to her care plan, as of August 30, 2007, R506 was considered high risk for
falls due to her arteriosclerotic heart disease, organic brain syndrome, and gouty arthritis.
She had a history of falls, visual and auditory impairments, and was occasionally
confused. The plan called for use of a chair alarm at all times, as well as a lowered bed
with mats. CMS Ex. 15, at 28.

On September 1, 2007, R506 again slid out of her wheelchair onto the floor. This time
staff cited the presence of a glossy magazine on the seat of the wheelchair as the cause
for her fall. CMS Ex. 15, at 24, 26, 30. On January 30, 2008, she slipped out of her
wheelchair while reaching for a blanket. CMS Ex. 15, at 24, 26, 30.

At 11:00 a.m. on March 16, 2008, R506 “was found” leaning forward out of her
wheelchair, her hands and forehead on the floor. No staff witnessed the incident, but they
surmised that she had been leaning forward to arrange flowers. She had bruising on her
left wrist, and complained of pain. X-rays showed a fracture of the distal radius. CMS
Ex. 15, at 6-10, 12, 15, 20-21. Her chair alarm was not in place because the nurse’s aide
responsible for R506’s care had not attached it. CMS Ex. 15, at 10, 14, 18; Tr. 13, 20,
53-54.

Because facility staff included alarm use in the residents’ care plans, I can reasonably
infer that they considered them effective in preventing accidents. To hold otherwise
would mean that the facility developed inadequate care plans, which would also put the
facility out of substantial compliance with program requirements. Nevertheless,
Petitioner now argues that alarms are ineffective. Citing the results of a study conducted
by Masspro, a “performance improvement organization” founded by the Massachusetts
Medical Society, Petitioner argues that alarms alert staff to falls, but do not necessarily
prevent them. P. Cl. Br. at 5-6; P. Ex. 7. Lagree that, while an alarm is a tool that can

assist staff in preventing accidents, it is not a substitute for adequate supervision, and a
facility must also have in place sufficient staff, who are capable and willing to respond
promptly when an alarm sounds.

Masspro’s very interesting study underscores the importance of supervision. The study
describes one facility’s successful program to reduce falls while eliminating its use of
alarms. But that facility did not just eliminate the use of alarms. Prior to implementing
any changes, it trained its staff in falls prevention strategies. It designed a hall
monitoring system which involved the presence on the units of high-level staff who were
monitoring for safety. A resource aide focused specifically on high-risk residents. Staff
increased their surveillance and added activities. Residents were toileted in advance of
need; they were re-positioned and ambulated with greater frequency (which had the
unintended but highly beneficial effect of reducing the incidents of pressure sores). The
facility falls committee evaluated the program daily and weekly, making changes as
appropriate. P. Ex. 7. With or without an alarm system, these are strategies Petitioner
could have employed, but I see no evidence that it did so.

The facility recognized that R511 and R506 were at risk for falls, and devised plans to
mitigate those foreseeable risks. But facility staff did not provide R511 or R506 with the
assistance devices called for in their plans. Even when they provided R511 with a tab
alarm, either its cord was too long or they attached it improperly, which rendered it
ineffective. Because the facility failed to follow its own care plans, it did not insure that
R511 and R506 received necessary care and services to allow them to maintain their
highest practicable physical, mental, and psychosocial well-being in accordance with
their assessments and plans of care. Nor did it take reasonable steps to ensure that they
received supervision and assistance devices designed to meet their assessed needs and to
mitigate foreseeable risks of harm from accidents. The facility was therefore not in
substantial compliance with 42 C.F.R. § 483.25(h)(2).

B. Because its staff failed to take all necessary precautions to prevent pressure
sores, the facility was not in substantial compliance with 42 C.F.R. § 483.25(c).

The quality of care regulation also requires that the facility ensure, based on the
resident’s comprehensive assessment, that a resident who enters the facility without
pressure sores does not develop them unless his/her clinical condition shows that they
were unavoidable. 42 C.F.R. § 483.25(c)(1). If the resident has pressure sores, the
facility must ensure that he/she receives the treatment and services necessary to promote
healing, prevent infection, and prevent new sores from developing. 42 C.F.R.

§ 483.25(c)(2). In assessing the facility’s compliance with this requirement, the relevant
question is: did the facility take all necessary precautions to prevent new sores from
developing. If it did so and the resident develops sores anyway, I could find no
deficiency. But if the evidence establishes that the facility fell short of taking all
necessary precautions, then the regulation is violated. Koester Pavilion, DAB 1750, at 32
(2000).

CMS’s allegations of noncompliance with section 483.25(c) center around the care
provided to Resident 415 (R415). Admitted to the facility on March 26, 2002, R415 had
just turned 98-years-old at the time of the June 2008 survey. She suffered from arthritis
and dementia, and had been admitted to hospice care. CMS Ex. 6, at 7,9. She was
“functionally chair bound” and completely dependent on staff for activities of daily
living. CMS Ex. 14, at 8-9, 30. She was assessed as at moderate risk for pressure sores.
CMS Ex. 6, at 12.

There has been some confusion as to which, if any, plans were in place to prevent
pressure sores prior to R415’s developing a sore in April 2008. According to Surveyor
Melissa McKenny, she asked to see such a plan, but the facility’s assessment nurse told
her that she had inadvertently failed to develop one. Tr. 41-43. Petitioner has
nevertheless produced a document, which it identifies as R415’s care plan, in place prior
to April 2008. CMS Ex. 14, at 20. The document is not dated but includes a 6/08 target
date. Since care plan target dates are generally about 90 days from the date of a plan’s
inception, I can reasonably infer that the plan was developed in about March 2008.
According to Petitioner, the document was not provided to the surveyor because it had
been removed from the resident’s file during a “period of transition,” i.e. when the
facility changed ownership. P. Ex. 5, at 3 (Hampton Decl. § 8).

The plan is not very specific; it calls for a “pressure reducing device as needed for bed
and chair” and reducing R415’s time in her chair to less than two hours. No evidence
suggests that these interventions were implemented. Moreover, it was R415’s practice to
sit with her right arm on her wheelchair’s armrest (CMS Ex. 14, at 30), and, according to
Director of Nursing, Deborah Hampton, a pressure ulcer had been reported on R415’s
right elbow as early as January 18, 2008. P. Ex. 5, at 3 (Hampton Decl. § 9). Yet, not
until April 13, 2008 were an elbow protector and right arm cushion added to R415’s care
plan. CMS Ex. 14, at 20.

A notation on the care plan dated April 13, 2008, describes a skin tear/decubitus found on
R415’s right elbow, and lists interventions of “treatment orders daily[,] elbow protector
ordered by wound M.D.” and cushioning the right arm of the resident’s wheel chair.
CMS Ex. 14, at 20. A physician telephone order dated April 14, 2008, called for staff to
cleanse the right elbow ulcer with saline solution and to wrap the elbow, applying the
medication Kerlix. CMS Ex. 14, at 3.
A weekly pressure ulcer record, dated April 15, 2008, describes a stage II ulcer on
R415’s right elbow, 1.4 cm x 2.2 cm in size, with shallow depth and a small amount of
yellow drainage.’ “Pressure relieving interventions” list “positioned with pillows for no
pressure.” CMS Ex. 14, at 11. A care plan dated April 15, 2008, notes the 1.4 cm x 2.2
cm wound, and lists 16 interventions, including keeping pressure off the affected site and
repositioning every hour while in her chair. CMS Ex. 14, at 16. An order dated April 15,
2008 notes the open area on the resident’s right elbow and recommends an assessment by
the resident’s attending physician. CMS Ex. 14, at 3.

In a consultation dated April 17, 2008, the attending physician describes R415 as
“functionally chair-bound” and notes that her skin is “very thin and senile” and that she
positions her right arm on the wheelchair armrest. As a result, a stage II pressure ulcer
developed, which the physician characterized as “uncomplicated” and healing. The
physician ordered a foam elbow dressing and “pad wheelchair [arm].” CMS Ex. 14, at
30. An accompanying assessment notes a stage II pressure sore at the right elbow
“secondary to senile skin and [patient] positioning of arm on rest,” and places the wound
at 2 cm x 1.3 cm with moderate drainage. It repeats that the physician ordered a topical
‘oam dressing and a pad on the right arm rest of the resident’s chair. CMS Ex. 14, at 31.

On April 18, the weekly ulcer record describes the elbow ulcer as stage II, 2 cm x 1.3 cm,
shallow depth, with scant yellow drainage, and describes preventive measures as “pad
wheelchair] arm.” CMS Ex. 14, at 11. An order dated April 18, 2008, calls for a
nonadhesive heel pad to the right elbow, and a “foam pad to [the wheelchair] arm cushion
or added protection.” CMS Ex. 14, at 4, 21.

Remarkably, R415’s quarterly assessment, dated April 28, 2008, says that she had no
ulcers of any type within the previous seven days. CMS Ex. 14, at 9. A care plan dated
April 28 again lists only general approaches to preventing skin breakdown, including
“heel and elbow guards as necessary.” It says nothing about her vulnerable right elbow.

° Pressure sores (also referred to as pressure ulcers or decubitus ulcers) are
classified into stages, based on the extent of the damage to skin and underlying tissues.
At stage I, the skin may appear reddened, like a bruise. Although the integrity of the skin
remains intact, the area is at high risk of further breakdown, so it is crucial that the area
be identified promptly and treated properly. At stage II, the skin breaks open, wears
away, and forms an ulcer. At stage III, the sore worsens and extends beneath the skin
surface, forming a small crater, presenting a high risk of tissue death and infection. By
stage IV, deeper tissues (muscles, tendons, bones) suffer extensive damage, which can
cause serious complications, such as osteomyelitis (infection of the bone) or sepsis
(infection carried through the blood). John L. Zeller et al., Pressure Ulcers, 296 J. MED.
ASS’N 1020 (2006), available at www.jama.com; CMS Ex. 9, at 4.
10

CMS Ex. 14, at 18. This glaring omission raises questions about the quality of the
assessment and care planning.

A June care plan repeats most of the 16 interventions contained in the April 15 care plan
with minor deviations. CMS Ex. 14, at 17.

By June 4, 2008, the ulcer was still at stage II, measuring 1.2 cm x 1.6 cm, with scant
yellow drainage. Preventive measures are listed as turn every two hours, and position
with pillows for no pressure. CMS Ex. 14, at 15.

A note dated June 11 says that the nurse was unable to check R415’s right elbow dressing
because supplies had not been sent from the pharmacy. The nonadhesive dressing then in
place is described as “intact.” CMS Ex. 14, at 25.

Surveyor McKenny testified that on June 12, 2008, she saw R415 in the restorative
dining room, sitting in a wheelchair, alert but confused. A dressing was attached to her
right elbow, but a towel, rather than a foam pad, was wrapped around the wheelchair’s
right arm. CMS Ex. 20, at 2 (McKenny Decl. J 6). A day later, Surveyor McKenny
observed the stage II pressure sore, measuring 1.2 cm x 1.6 cm, on R415’s right elbow.
The depth was shallow with scant yellow drainage. CMS Ex. 20, at 2 (McKenny Decl.
4] 7). She asked the treatment nurse about the interventions the facility had in place to
prevent pressure sores, and the nurse told her that, after R415 developed a pressure sore,
staff placed a towel on the right arm of her wheelchair. CMS Ex. 20, at 2-3 (McKenny
Decl. § 8).

Based on all of this, I do not consider that the facility took all necessary precautions to
prevent pressure sores from developing. At a minimum, from the time staff observed her
tendency to rest her right arm on her wheelchair’s arm rest, staff should have targeted that
behavior as problematic and taken steps (positioning, padding) to address it.

Petitioner nevertheless argues that the pressure sores were inevitable. First, the evidence
does not support this conclusion. R415 was assessed at “moderate” risk, not high risk for
pressure sores. Her attending physician recognized her vulnerabilities (very thin, senile
skin, functionally chair-bound), but also cited the positioning of R415’s arm as a cause
or the sore’s development. CMS Ex. 14, at 30. It was within the facility’s power to
correct the positioning of R415’s arm. Moreover, the facility is not deficient because
R415 developed a pressure sore; the facility is deficient because it did not take all
necessary precautions to prevent the pressure sore from developing.

11

C. The penalty imposed is reasonable.

I next consider whether the 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. 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; and 3) the facility’s prior
history of noncompliance in general and specifically with reference to the cited
deficiencies.

In reaching a decision on the reasonableness of the CMP, I consider whether the evidence
supports a finding that the amount of the CMP is at a level reasonably related to an effort
to produce corrective action by a provider with the kind of deficiencies found, and in
light of the above factors. I am neither bound to defer to CMS’s factual assertions, nor
free to make a wholly independent choice of remedies without regard for CMS’s
discretion. Community Nursing Home, DAB No. 1807, at 22 et seg. (2002); Barn Hill
Care Center, DAB No. 1848, at 21 (2002); Emerald Oaks, DAB No. 1800, at 9 (2001);
CarePlex of Silver Spring, DAB No. 1683, at 8 (1999).

CMS has imposed per-day penalties of $300 and $350 which are at the low end of the
penalty range ($50-$3000). 42 C.F.R. §§ 488.408(d), 488.438(a).

CMS points to the facility history as a justification for increasing the penalty. In August
2007, the facility had G-level deficiencies under tags F324 and F325, and F-level
deficiencies under tags F45, F52, and F106. CMS Ex. 9, at 2. CMS does not explain
what these deficiencies represent, except to characterize them as the “same infractions.”
CMS Cl. Br. at 19. I, nevertheless, recognize that Tag F324 has, in the past, been cited
for deficiencies under 483.25(h)(2). See, e.g., Kenton Healthcare, LLC, DAB CR1666, at
3 (2007), aff'd, DAB 2186 (2008). In any event, I am satisfied that the facility has a
history of noncompliance, including noncompliance related to its failure to prevent
accidents. That history alone justifies a penalty above the minimum.

Petitioner complains that the facility’s earlier deficiencies occurred when the “physical
structure” was owned and operated by a prior owner. P. Cl. Br. at 8. I consider the
change of ownership irrelevant. Regulations provide that when there is a change of a
facility’s ownership, the existing provider agreement will automatically be assigned to
the new owner, and that an assigned agreement is subject to all applicable statutes and
regulations and to the terms and conditions under which the agreement was originally
issued. 42 C.F.R. § 489.18(c), (d). Those terms and conditions include, but are not
12

limited to, any existing plan of correction and compliance with applicable health and
safety standards. A facility’s new owner thus necessarily “acquires the relevant
compliance history/issues of the facility if it undertakes to assume the facility’s provider
number.” Kenton Healthcare, LLC, DAB No. 2186, at 31 (2008).

Petitioner does not argue that its financial condition prevents it from paying the CMP.
Applying the remaining factors, I note that the deficiencies were not trivial, and that they
caused actual harm to facility residents. Further, the relatively low $300 per day penalty
did not produce corrective action. When the surveyor returned to the facility in June, it
still had not achieved substantial compliance. If anything, more deficiencies were cited,
including a widespread infection control problem. The facility’s failure to achieve
substantial compliance by the time of the second survey more than justifies the slight
increase in penalty amount.

The CMP is therefore reasonable.
IV. Conclusion

For the reasons discussed above, I find that, from May 15 through July 10, 2008, the
facility was not in substantial compliance with Medicare requirements and affirm as
reasonable the CMPs imposed — $300 per day for 29 days of noncompliance and $350
per day for 28 days of noncompliance.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Beatrice State Development Center, ) Date: September 23, 2009

(CCN: 28-G002) )
)
Petitioner, )
)

-V.- ) Docket No. C-08-271

) Decision No. CR2009
Centers for Medicare & Medicaid )
Services. )
)
)

DECISION

Petitioner, Beatrice State Developmental Center (“Petitioner” or “facility”), is a state-
owned-and-operated intermediate care facility for the mentally retarded (ICF/MR),
located in Beatrice, Nebraska. For more than a year, the facility was not in substantial
compliance with conditions of participation for ICFs/MR, and its conditions frequently
posed immediate jeopardy to client health and safety.’ CMS finally imposed the only
remedy it is authorized to impose against noncompliant ICFs/MR - terminating the
facility’s Medicaid participation. CMS Ex. |, at 1. Petitioner has appealed CMS’s
determination.

For the reasons discussed below, I find that the facility was not in substantial compliance
with the conditions of participation for ICFs/MR, and that CMS is therefore authorized to
terminate its program participation.

I. Background
ICFs/MR. Among the services that a state may fund under its Medicaid program (with

federal financial assistance) are services furnished in ICFs/MR. Act § 1905(a)(15). An
ICF/MR is an institution whose primary purpose is to provide health or rehabilitative

' Residents of ICFs/MR are referred to as “clients.”
services to mentally retarded individuals. The institution must meet standards prescribed
by the Secretary of Health and Human Services, and must provide active treatment to all
of its clients. Act § 1905(d); 42 C.F.R. § 440.150; 42 C.F.R. § 442.101(d)(1).

Each client must receive a continuous active treatment program, which includes
aggressive, consistent implementation of a program of specialized and generic training,
treatment, health services, and related services... directed toward —

(i) The acquisition of the behaviors necessary for the client to function
with as much self determination and independence as possible; and

(ii) | The prevention or deceleration of regression or loss of current optimal
functional status.

42 CER. § 483.440(a)(1).

Program requirements, referred to as “conditions of participation,” are set forth at 42
C.F.R. Part 483, Subpart I. A “condition of participation” represents a broad category of
services. Each condition is contained in a single regulation, which is divided into
subparts called standards. Compliance with a condition of participation is determined by
the manner and degree to which the provider satisfies the standards within the condition.
42 C.F.R. § 488.26(b). If deficiencies are of such character as to “substantially limit [its]
capacity to furnish adequate care or which adversely affect the health and safety of
[clients],” the facility does not substantially comply with the conditions. 42 C.F.R.

§ 488.24(b).

CMS, acting on behalf of the Secretary, makes “independent and binding
determinations,” based on its own surveys, as to whether ICFs/MR meet the Secretary’s
certification requirements. Act § 1902(a)(33)(B). CMS may cancel a facility’s
Medicaid provider agreement if the facility does not meet program requirements.

Act § 1910(b)(1).?. The regulations specify that “the failure to meet one or more of the
applicable conditions of participation is cause for termination or non-renewal of the

? Section 1910(b)(1) authorizes the Secretary to “cancel approval” of an ICF/MR
“at any time” if the facility fails to meet certain statutory requirements, or if she “finds
grounds for termination of [her] agreement with the facility pursuant to section 1866(b).”
Section 1866(b) is a Medicare provision that authorizes the Secretary to terminate a
Medicare-certified facility that “fails to comply substantially” with the provisions of its
provider agreement, applicable conditions of participation, or similar requirements.
Thus, Congress has applied Medicare termination procedures to ICFs/MR. See,
Oakwood Community Center, DAB No. 2214, at 6, n. 5 (2008) (Departmental Appeals
Board found it “difficult to conceive” of any other meaningful interpretation of section
1910(b)(1)).
ICF/MR provider agreement.” 42 C.F.R. § 442.101(e); Oakwood Community Center,
DAB No. 2214, at 7 (2008).

Facility history of noncompliance. Here, the facility has a significant history of
noncompliance with program requirements, and CMS has afforded it multiple
opportunities to correct. In September 2006, CMS surveyors determined that the facility
was not in substantial compliance with seven conditions of participation and that its
deficiencies posed immediate jeopardy to client health and safety. After a follow-up
survey in October 2006, CMS found that the immediate jeopardy had been removed, but
that the facility’s non-compliance continued at the condition level “due to existing
systemic problems.” CMS conducted another follow-up survey in April 2007 and found
that Petitioner remained non-compliant with two conditions of participation and that its
conditions again posed immediate jeopardy to client health and safety. CMS completed a
follow-up survey in May 2007, and again found that, although the immediate jeopardy
had been removed, the facility remained non-compliant with conditions of participation.
Nevertheless, CMS allowed the facility to continue its program participation. CMS Ex. 8
at 3 (Priyanath Decl. 912); CMS Ex. 9.

November 2007 survey. Six months later, on November 7, 2007, CMS completed yet
another survey and determined that the facility was still not in substantial compliance,
and that its deficiencies again posed immediate jeopardy to client health and safety.*
CMS Ex. 1, at 1. Specifically, CMS found that the facility was not in substantial
compliance with:

42 C.F.R. § 483.410 (governing body and management)
42 C.F.R. § 483.420 (client protections)

42 C.F.R. § 483.430 (facility staffing)

42 C.F.R. § 483.440 (active treatment services)

eoocee

CMS has imposed the only sanction available against substantially noncompliant
ICFs/MR -— termination. CMS Exs. 2, 14.

Appeal. Petitioner timely requested a hearing, and, pursuant to section 1910(b)(2) of the
Act, its termination has been halted pending resolution of this case.

I held a hearing in Omaha, Nebraska on November 19, 2008. Messrs. Thomas B. York
and Donald Zaycosky appeared on behalf of Petitioner, and Mr. Harry B. Mallin

> At the same time, CMS determined that the immediate jeopardy abated effective
November 7, 2007. CMS Ex. 1, at 1. Surveyors subsequently returned to the facility, and
completed another follow-up on March 4, 2008, finding substantial noncompliance at the
immediate jeopardy level. CMS Ex. 4. CMS then determined that the immediate
jeopardy was removed as of March 7, 2008, but that the substantial noncompliance
continued. CMS Ex. 8, at 5; CMS Brief, at 2.
appeared on behalf of CMS. I admit into evidence CMS exhibits (CMS Exs.) 1-21 and
Petitioner’s exhibits (P. Exs.) 1-129 and 500-759. Tr. 3; See Pre-Hearing Conference
Order, at 2 (August 29, 2008). The parties have submitted pre-hearing briefs (CMS Br.;
P. Br.) and closing briefs (CMS Cl. Br.; P. Cl. Br.). CMS filed a reply brief (CMS
Reply).

Without asking that they be admitted as exhibits, Petitioner submits with its closing brief
24 additional documents, numbered P. Exs. 130-153. Petitioner’s justification for such a
late submission lacks coherence. First, it complains that CMS made “no reasonable
attempt to cross-examine its expert witnesses,” so those witnesses had no opportunity to
“address . . . any of the documents on which they relied if challenged as to any of their
findings.”* Next, it alludes to the ALJ’s “great reliance on the individual documents to
dispute the findings of the surveyors.”® Petitioner then suggests that I should “accept and
weigh heavily the uncontradicted and unchallenged opinions of [its] experts based on

* With its pre-hearing submissions, Petitioner included a substantial number of
proposed exhibits, beginning with P. Ex. 1 and ending with P. Ex. 759. However, for
reasons that were not explained, Petitioner’s numbering of exhibits skipped from P. Ex.
129 to P. Ex. 500; no exhibits numbered P. Ex. 130 through P. Ex. 499 were included. In
error, I assumed that Petitioner had submitted 759 consecutively numbered exhibits, and,
during the August 28, 2008 pre-hearing conference, announced that Petitioner had
submitted 759 exhibits, numbered P. Ex. 1 through P. Ex. 759. Remarkably, neither
party pointed out my error during the pre-hearing conference, during the in-person
hearing, nor anytime thereafter. Upon my review of the entire record, I discovered the
error.

5 Petitioner repeatedly makes this puzzling allegation. In fact, Petitioner’s
witnesses had the opportunity to address these and all other relevant issues in their
written direct testimony. See, Acknowledgment and Initial Pre-hearing Order, at 3 {| 4,
5 (February 11, 2008). Moreover, it is not the responsibility of CMS counsel to advance
Petitioner’s case through cross-examination.

° In this regard, Petitioner may be confused. I have repeatedly emphasized that
the issue before me is whether the facility was in substantial compliance with Medicaid
conditions of participation fcr ICFs/MR. I also noted that many of the deficiencies cited
were based on record review (as this decision illustrates). Since the documents that form
the basis for the deficiencies are in the record, and my review here is de novo, cross-
examining the surveyor about their contents or arguing with her about the legal
conclusions she drew from them was not the most effective use of time. See, e.g., Tr. 15-
16, 18-19, 20 (“Now if a surveyor comes in and says, [‘]I observed an incident of
abuse,[’] obviously, that surveyor would have to be produced and you would be entitled
to cross-examine them. But if the surveyor goes into the facility and says, [‘]I looked at
your documents where you documented abuse[’]... I have the document [and] I’ll draw
my own conclusions from the document.”)
their voluminous document review,” but “senses that [the ALJ] may have wanted even
more exhibits placed into evidence.” Petitioner then offers “without formally moving
their admission” the newly-submitted documents “‘to assist [the ALJ] in understanding
how the Petitioner’s experts relied on additional documents to assist the Board in its
review.” P. Cl. Br. at 20.

Not surprisingly, CMS asks that the documents be excluded from the record. Inasmuch
as Petitioner has not asked that the documents be admitted, and has offered no good cause
for the long delay in their submission (ten months after its submissions were due, nine
months after it received CMS’s submission, and five months after the in-person hearing),
the documents are not admitted.

IL. Issue

The sole issue before me is whether, at the time of the November 2007 survey, Petitioner
was in substantial compliance with the Medicaid conditions of participation governing
ICFs/MR.

II. Discussion

A. The facility was not in substantial compliance with 42 C.F.R. § 483.420
because it did not adequately implement policies and procedures prohibiting
mistreatment, neglect and abuse of its clients; its staff failed to report
immediately allegations of mistreatment, neglect, abuse and injuries of
unknown source; and it did not take appropriate corrective action in response to
verified violations.

ICFs/MR must develop and implement written policies and procedures that prohibit
mistreatment, neglect or abuse of facility clients. Among other prohibitions, facility staff
may not use physical, verbal, sexual or psychological abuse or punishment. 42 C.F.R. §
483.20(d) (1). The facility must ensure that all allegations of mistreatment, neglect, or
abuse, as well as injuries of unknown source, are reported immediately to the facility
administrator and appropriate state officials. Alleged violations must be investigated
thoroughly, and the results of those investigations must be reported to the administrator
or his/her designated representative as well as to other officials in accordance with state
law. If the alleged violation is verified, appropriate corrective action must be taken. 42
C.F.R. 483.420(d)(4).

Facility policies establish the standard of care that the facility expects its staff to provide
and they are evidence of professional standards of care. The Laurels at Forest Glen,
DAB No. 2182, at 18 (2008); Oxford Manor, DAB No. 2167, at 5-6 (2008) Here,
consistent with the regulations, the facility’s neglect and abuse policy required all
employees to “report all observed or suspected cases of abuse or neglect... .” CMS
Ex. 12, at 3; P. Ex. 741, at 2.’ The policy defines abuse as “any knowing, intentional, or
reckless act or omission on the part of a person which results in physical, sexual, verbal,
or mental abuse, unreasonable confinement, cruel punishment, exploitation, or denial of
essential care, treatment or services to a protected individual.” CMS Ex. 12, at 4; P. Ex.
741, at 2. Physical abuse is further defined as “[a]ny knowing, intentional, or reckless
act or omission which results in physical injury, pain, or anguish.” Physical injury
includes fractures, bruises, lacerations, as well as physical pain. CMS Ex. 12, at 4; P. Ex.
TA, at 4.

The policy defines neglect as a “failure to provide minimal services or resources to meet
basic needs.” Examples of neglect include withholding, or inadequately providing, food,
hydration, clothing, medical care and good hygiene. Leaving a protected individual
unattended is an example of neglect. CMS Ex. 12, at 4; P. Ex. 741, at 3-4.

The policy specifically requires that “[e]mployees will intervene immediately, as
needed, to protect individuals if abuse/neglect is suspected, observed or reported.
Intervention is provided regardless of the source of the abuse and regardless of whether
[the employees] are responsible for the individual’s supervision.” (emphasis in original)
CMS Ex. 12, at 5; P. Ex. 741, at 5. After insuring the individual’s safety, employees “are
mandated” to report immedictely allegations of an abuse/neglect incident to their
designated supervisor/management staff. CMS Ex. 12, at 6; P. Ex. 741, at 5. The
Neighborhood Services Team Leader or his/her designee immediately insures the
protection of the alleged victim, and ensures that the investigation process is begun.
CMS Ex. 12, at 6; P. Ex. 741, at 6.

CMS finds no particular fault with the written policy, and neither do I. However, a
written policy has no value if it is not effectively implemented. Sufficient examples of
abuse and/or neglect demonstrate that the policy has not been implemented. Emerald
Oaks, DAB No. 1800, at 12 (2001).

Petitioner complains generally that the November 2007 (and March 2008) surveys “place
an inordinate amount of emphasis” on the staff treatment of clients standard found at 42
C.F.R. § 483.420(d), pointing out that the November survey “dedicates 23 pages of
citations to that deficiency alone.” P. Ex. 126, at 10. At the same time, notwithstanding

’ The facility apparently amended its policy three months after the survey, in
February 2008. P. Ex. 543. However, the policy relevant to this inquiry is the one that
was in effect in November 2007.

* Because the deficiency was with implementation, not the content of the written
policy, I reject Petitioner’s assertion that, based on amendments to its policies and
procedures made prior to the conclusion of the survey, it “was 100% compliant at the
conclusion of the November 2007 survey.” P. Cl. Br. at 22.
the sheer number of deficiencies cited, Petitioner characterizes the multiple citations as
“only isolated and minor incidents of deficiencies, which do not rise to the level of non-
compliance.” P. Br. at 6; P. Cl. Br. at 185.

Providing a vulnerable population with a safe environment is critically important, and
CMS justifiably takes a dim view of mistreatment, abuse and neglect, particularly when it
involves staff mistreatment of clients. If clients are not safe, the facility cannot hope to
achieve any of their treatment goals, and the client’s need for treatment justifies housing
them in the institution, so I reject the suggestion that surveyor emphasis on mistreatment,
abuse, and neglect could ever be “inordinate.” Here, the list of deficiencies cited is long
because the surveyors found so many problems. Indeed, given the number and
seriousness of the incidents cited, I find no merit to Petitioner’s claim that the events
were “isolated” and “minor.”

I discuss several of these incidents, occurring between August 31 and Octdber 4, 2007:°

August 31, 2007. (Case # 07-187)'° When he was not in his room, Client 42 required
one-to-one supervision to prevent him from stealing food. This was a safety issue
because Client 42 was on a restricted diet. P. Ex. 79, at 4. On August 31, 2007,
however, his assigned supervisor was distracted by another client’s acting out with a pair
of scissors. While unsupervised, Client 42 went into the kitchen and managed to eat a pie
~ or some portion thereof — as well as an onion, and an additional unidentified item or
items. Staff stopped him, took away the remaining food, and cleaned his hands and face,
but they left him in his food-soiled clothing. They seated him on the living room couch
and did not allow him to move. When he attempted to stand, a staff member,
Developmental Technician (DT) Larry Warnsing, pushed him back down onto the couch
by his head. A short time later, Client 42 again tried to stand, and a second staff member,
DT Clarence Farley, pushed him back down onto the couch, again by his head. P. Ex. 79,
at 16-17, 23, 27.

° Understandably, the facility’s investigative reports include conflicting statements
from staff and witnesses. In sorting through the conflicts, I accept the ultimate
conclusions and findings of the facility administrator and/or other reviewing officials. To
protect client privacy, I do not identify the specific units where the incidents occurred,
but note that each occurred at a different address, which shows that the facility’s
deficiencies were not limited to one unit, but were more wide-spread.

'° Petitioner complains that the surveyors did not adequately document their
findings. Documentation is “adequate” if it describes the specific deficiencies that
resulted in CMS’s determination. See 42 C.F.R. § 488.18(a). In this case, the statement
of deficiencies describes in significant detail all of the incidents that I discuss here (as
well as numerous others). Petitioner’s own documents then confirm those survey
findings. For CMS’s “documentation” of Case # 07-187, for example, see CMS Ex. 1, at
51-57; see also CMS Ex. 15, at 22-47 and CMS Ex. 16 at 2-29.
When asked specifically about this incident, Petitioner’s witness, Craig Blum, PhD,'!
agreed that the “behavior of pushing someone down is not an appropriate behavior.”
Tr. 79.

Facility staff, however, were either unaware of these incidents, did not consider them
significant, or simply chose to ignore them. But Tricia Kingsley, Chief Advocate for
Nebraska Advocacy, was visiting the unit; she observed and reported the events. P. Ex.
79, at 3-5. An investigative report was completed on September 10, 2007, and reviewed
by the facility administrator, Deb Uarich, who directed the Human Resources Manager
and the 3 Shift Manager to “take appropriate corrective action with Larry Warnsing for
his physical abuse” of the resident, and to “take appropriate corrective action with
Clarence Farley for his physical abuse and neglect” of the resident. P. Ex. 79, at 18. It
seems that DT Farley was responsible for changing the client into clean clothing, which
he failed to do — hence, the neglect finding. CMS Ex. 1, at 50-55; P. Ex. 79, at 4.
Administrator Uarich set a September 28, 2007 due date for documentation of the
corrective action.

In a notice dated September 18, 2007 (signed September 19) Supervisor Mary Klein
advised DT Warnsing that his August 31 behavior constituted abuse/neglect in violation
of state and federal law as well as the facility policy on abuse/neglect. “Such behavior is
not tolerated when dealing with individuals living on this campus.” CMS Ex. 16, at 2.
The notice directed him to view something called “Signs and Symptoms of
Abuse/Neglect and the Responsibility of Reporting,” and to take an accompanying quiz.
He was also directed to attend a six-hour class on de-escalating situations and managing
people. The notice advised him that, in the future, he should contact his shift manager or
supervisor if he needed assistance or had a question regarding a behavioral problem, and
directed him to meet with his manager bi-weekly over a 60-day period to discuss any
questions or problems. CMS Ex. 16, at 2-4.

In a memo to DT Farley, dated October 2, 2007 (which is obviously later than
Administrator Uarich’s September 28 deadline), Team Leader Greg Butler described the
August 31 incident, along with a second incident in which DT Farley threatened another
client with physical harm and called him a “jerk.” Team Leader Butler concluded that
the allegations against DT Farley had been substantiated. As a result, he was “being
issued an informal conference” which involved “work improvement expectations.” CMS
Ex. 16, at 20-24; CMS Ex. 15, at 49-61.

" Dr. Blum has a PhD in counseling. He is currently the vice-president for quality
management of a management services consulting organization. He has a private
consulting business, and performs surveys for the Joint Commission on Accreditation of
Healthcare Organizations. P. Ex. 83. He first visited the facility in June 2008. Tr. 77.
CMS questions this minimal level of corrective action, which, it points out, is comparable
to that imposed for such minor infractions as tardiness. Petitioner maintains that its
management had no choice because its collective bargaining agreements mandate
progressive discipline in the face of employee misconduct. I find this unpersuasive.
Petitioner has not submitted the relevant provision of the collective bargaining
agreement, but, no matter what that agreement says, facilities are simply not free to
bargain away the health and safety of their residents. Moreover, Petitioner’s claim rings
hollow inasmuch as this represented the fifth allegation of abuse/neglect leveled against
DT Farley in less than a year. P. Ex. 79, at 17; CMS Ex. 15, at 62-63.

Thus, at the time of the November survey, the implicated staff members were still
working with facility clients. When questioned about that, the facility’s acting
administrator, Ron Stegemann, told federal surveyor Sahana Priyanath, that he was
“unaware of any reason why they would not be able to.” CMS Ex. 1, at 62; see CMS Ex.
8, at 4 (Priyanath Decl. ¥ 15).

In disciplinary notices dated December 2007, the Director of Developmental Disabilities
for the State of Nebraska concluded that staff’s failure to address client needs for
personal hygiene (i.e., leaving Client 42 in soiled clothing) was abuse and neglect,
violating state and federal law as well as the facility policy on abuse/neglect. P. Ex. 79,
at 19. Restricting the client’s movement for no apparent reason was also abuse and
neglect, and violated state and federal law and the facility policy on abuse/neglect. P. Ex.
79, at 19.

Perhaps even more disturbing than these specific instances of abuse and neglect are the
staffs undisputed descriptions of the environment in which they occurred. The
investigative reports describe an institution in chaos.

[T]he living unit... was very chaotic and... staff really
didn’t know what they were supposed to be doing . . . . the
most senior staff on [the] shift... had only been working for
a short while and didn’t know what she should be charting.

P. Ex. 79, at 5.

[Staff member] really can’t recall much about what happened
... because of all the chaos of so many people going in and
out of the living unit.

P. Ex. 79, at 8.

Staff [were] all inexperienced regular staff, pulled staff and
overtime staff. The lead staff for 1 shift for the day was a
new employee who had only been working on the unit for
about one month and had not been in-serviced on the
10

individuals[’] programs, supervision levels, what all needed
to be done each day, what all needed to be charted or how to
chart the events of the day.

The living unit was for a time in a state of total chaos, with
staff not knowing each others[’] names, the supervision cards
were being passed around so much that no one really knew
who had what card and when and no one really knew who
was working when on the living unit.

ROKK

There have been several investigations on [the unit]. It is
noted that there have been inexperienced and unfamiliar staff
involved in many of the investigations. It is also noted that
[the unit] has 8-9 individuals with supervision levels of
enhanced or higher which places the staff working in a
position of jeopardy because of not being able to provide the
levels of supervision when other individuals are displaying
inappropriate behaviors.

P. Ex. 79, at 15.

The facility’s own staff thus recognized that the unit’s chaos, inexperienced staff, and
high maintenance clients created an environment ripe for mistreatment, neglect, and
abuse.

September 23, 2007. (Case #07-195)? On September 23, 2007, DT Jeannie Stevens was
apparently working a double shift. She completed her first shift at 3:00 p.m., left the
facility on a personal errand, and returned to begin her second shift at 4:15 p.m. No
back-up staff were assigned responsibility for her clients during her absence. Other staff
were aware of her absence and knew that her assigned residents required toileting, but
they were unable or unwilling to assist. When DT Stevens returned, no one mentioned
that her five assigned clients had not been toileted, and she did not inquire about them.
She apparently did not check them nor take any of them to the toilet until an hour later.
At 5:15 p.m., when it was time to prepare them for supper, she found that three of the
residents were “soaked with urine” and two had had bowel movements. P. Ex. 59, at 9,
11, 13.

Although she recognized that her clients had been neglected during her absence, DT
Stevens delayed reporting the neglect. P. Ex. 59, at 13.

® See CMS Ex. 1, at 64-66 for surveyor documentation of this situation.
at

Petitioner denies any findings of neglect with respect to the five individuals. P. Cl. Br. at
195. However, the record establishes that, following an investigation and conflicting
conclusions as to staff accountability for the neglect, Administrator Elton Edmond
concluded that the five individuals assigned to DT Stevens had been neglected. He
nevertheless pointed out that the demands on remaining staff would have made it difficult
for them to check and change the residents in DT Stevens’ absence. (See Staffing
Discussion, infra.)'* He also noted:

There appears to be a break down in the communication between
these staff and their willingness to work with each other. This lack
of communication also contributed to the clients not being
checked/changed until the later time.

P. Ex. 59, at 13. He recommended that the team leader implement strategies for
improved communication about clients, workloads, and the need to work together. He
also recommended corrective action against DT Stevens for late reporting of the neglect.
P. Ex. 59, at 13.

Inasmuch as all the employees on the unit were aware of the neglect, but only DT
Stevens reported it, I find puzzling and disturbing Administrator Edmond’s decision to
limit corrective action to the person who reported.

October 4, 2007. (Case # 07-204)"* Donald Farnsworth was a psychology intern who, on
the afternoon of October 4, 2007, observed DT Mike Weber “forcefully” slap Client 53
on his left shoulder, then grab the resident’s shirt sleeve and pull him from the kitchen
into the day room. Intern Farnsworth did not intervene to protect the resident, nor did he
immediately report the abuse, claiming that he “was unsure of whether or not it qualified
as abuse” and he wanted to consult his supervisor. He delayed speaking to his supervisor
because he had a previous commitment to talk to one of the individuals in the unit. P. Ex.
80, at 4-6. He eventually reported the incident to his supervisor, the facility’s acting
director of psychology, but, remarkably, the acting director of psychology purportedly
did not know whether the incident qualified as abuse. After reviewing the facility policy
on abuse, and consulting the investigations administrator and acting CEO, Intern
Farnsworth finally reported the incident. P. Ex. 80, at 6, 8, 11; CMS Ex. 1, at 57-59.

® Petitioner submitted two Reports of Investigation of this incident, each dated
September 28, 2007 (P. Exs. 58 and 59). P. Ex. 58 is labeled “Original Report” and
substantiates neglect on the part of two employees and recommends corrective action. P.
Ex. 59 is labeled “Corrected Report” and states that although neglect occurred, it was not
attributable to the employees involved. The only employee discipline recommended in P.
Ex. 59 is for the late reporting of the neglect.

'* See CMS Ex. 1, at 57-60 for surveyor documentation.
Dr. Blum agreed that slapping a client, and dragging him away by his shirt constitutes
abuse. Tr. 81.

Although the client apparently did not sustain any visible injuries from the encounter
(aside from a stretched-out tee-shirt), he had fading bruises and partially healed marks on
his left shoulder and upper arm. P. Ex. 80, at 3, 6, 14. The investigator reviewed
progress notes for the prior month, but found no reference to any bruising. No incident
reports indicated that bruising was found and reported “even though the marks [were]
readily visible and should have been reported by any staff member who assisted [R53]
with bathing or dressing.” Staff opined that the bruising may have emerged after an
October 2, 2007 incident in which Client 53 fell and hit his head. No progress notes
reported that the resident had twice on October 4, 2007, been taken to the out-patient
clinic. P. Ex. 80, at 3, 12.

Other disturbing aspects to this incident underscore staff’s pervasive disregard for the
reporting and investigative requirements of section 483.420. Although she should have
immediately obtained witness statements, the shift’s team leader, Connie Brancheau, did
not do so because, she claimed, “everyone seemed clueless as to any potential
abuse/neglect incident that had occurred on the unit” and she “felt it important to not taint
the case by providing details to staff” until the investigator conducted a formal interview.
P. Ex. 80, at 3, 12, 14. She subsequently wrote a confusing report, suggesting that she
had witnessed the event, which she had not. P. Ex. 80, at 12, 14.

At the time of the survey, DT Weber was also still working with clients, and, again, the
facility’s acting administrator, Ron Stegemann, told federal surveyor, Sahana Priyanath,
that he was “unaware of any reason why [DT Weber] would not be able to.” CMS Ex.1,
at 62; see P. Ex. 8, at 4 (Priyanath Decl. 15).

Other unexplained injuries. Nor was Client 53 the only facility client with unexplained
injuries. Among the most disturbing is the situation of Client 159. The surveyors
reviewed her plan which required that she receive a one-to-one level of supervision and
that her supervisor remain within five to eight feet of her at all times. Staff assigned to
her would be responsible for no other clients. Yet, incident reports dated 9/4, 9/20, 9/21,
10/1, 10/14, and 10/17 describe multiple unexplained injuries. CMS Ex. 1, at 34-35, 45-
46. Apparently the facility’s Acting Quality Improvement Director could not explain
why these incidents had not been thoroughly investigated nor why corrective action had
not been taken. CMS Ex. 1, at 35. Nor could Petitioner’s witnesses explain how
someone purportedly receiving such close supervision could suffer so many unexplained
injuries. Tr. 73.

Petitioner concedes that the survey report accurately reflects the contents of its
investigative report, but again argues that, had its staff been allowed to offer direct
testimony at the administrative hearing, they would have reviewed the incident report, the
client’s individual program plan and behavior plan to show that the facility “had taken
steps to address the injury in this instance.” P. Cl. Br. at 163; but see footnote 5, above.
Petitioner then cites P. Ex. 131, its investigation of the October 17 injury, which is among
the documents it withheld and submitted with its closing brief. Petitioner also argues that
the facility’s incident review team was not required to review every incident “in order to
establish patterns or trends across the facility.” P. Cl. Br. at 163.

Petitioner also faults the surveyor criticism that, in investigating Client 159’s injuries, no
statements were taken from staff responsible for providing her one-to-one supervision.
Citing the un-admitted P. Ex. 131, Petitioner maintains that the investigation summary
“clearly indicates that Ms. Patti Eglers, who was the 1:1 staff at the time the injury was
observed, was interviewed.” P. Cl. Br. at 178; see also P. Cl. Br. at 203. DT Eglers
submitted a statement in which she reported that she went into the client’s room “to
relieve Holly” when she noticed a bruise on the client’s forearm. The investigator then
obtained statements from employees who had no contact with the client, but did not
include a statement from “Holly” nor any other staff member who might have been
assigned to Client 159 when the injury occurred. Since not properly admitted, P. Ex. 131
is not before me and Petitioner may not rely on it. Nevertheless, its admission would not
have furthered Petitioner’s case. To the contrary, the document confirms the surveyor
findings and underscores the inadequacy of the facility’s investigation.

Thus, the facility did not implement policies to prevent mistreatment, neglect, and abuse.
The undisputed evidence establishes multiple examples involving a variety of staff and
clients. Incidents were not reported immediately; clients suffered unexplained injuries
which were neither reported nor investigated; staff did not seem even to recognize
instances of mistreatment/neglect/abuse. Critical staff were unaware of their
investigative responsibilities. I find that these deficiencies adversely affect the health and
safety of facility clients. The facility is therefore not in substantial compliance with 42
C.F.R. § 483.420, and, on that basis alone, without regard to any other deficiencies, CMS
may terminate its [CF/MR provider agreement. 42 C.F.R. § 442.101(e).

B. The facility was not in substantial compliance with 42 C.F.R. § 483.430
because it consistently lacked sufficient direct care staff to manage and
supervise clients in accordance with their individual program plans.

The facility must provide sufficient direct care staff to manage and supervise clients in
accordance with their individual program plans. 42 C.F.R. § 483.430(d).

Throughout its long and extraordinarily repetitive closing brief, Petitioner points to the
same testimony of witnesses who describe generally the procedures the facility had in
place to achieve adequate staffing levels and to assure that staff were trained and
competent. P. Cl. Br. at 33-35, 238-239, 249-250. Neighborhood Services Assistant
Administrator Cheryl L. Scheele testified that the Neighborhood Assistant Administrator
would “monitor the staffing levels on an on-going basis,” and “re-assign and re-allocate
employees as needed.” According to Assistant Administrator Scheele, home managers
ensure adequate numbers of staff, and, “in conjunction with Developmental Specialists[,]
monitor the staffing levels daily to ensure the assignment of adequate numbers of
staff... to each home to meet the needs of the individuals.” If staffing numbers are low,

the Home Manager in conjunction with the Developmental
Specialists will get their staffing numbers up to at least the
minimum number of staff needed for each home by
scheduling on-call staff, living unit staffing pool staff and by
scheduling regular staff for voluntary overtime... . The
facility also has a process in place for pulling staff and
holding staff over to meet the needs of the individuals should
the numbers for a specific home be low on a specific day.

P. Ex. 94, at 1.'°

Of course, that the facility had a staffing system in place does not establish that its direct
care staff were sufficient “to manage and supervise clients in accordance with their
individual program plans,” as required by 42 C.F.R. § 483.430(d), and, here, the
system’s inadequacies are well-documented, as the above discussion suggests. Indeed,
the incidents described above show a staff ill-equipped to treat clients with the level of
care, protection, and dignity they require.

For example, the situation on August 31, 2007, reflects the procedures described by
Assistant Administrator Scheele, but also illustrates an inadequately staffed unit. “Staff
[were] all inexperienced regular staff, pulled staff and overtime staff.” The lead staff for
the first shift “was a new employee who had only been working on the unit for about one
month and had not been in-serviced on the individuals’ programs, supervision levels,
what needed to be done each day, what all needed to be charted or how to chart the
events of the day.” P. Ex. 79, at 15. Plainly, the facility did not have staff that were
capable of managing and supervising the clients.

Nor was this an unusual situation for that unit. Both the incident investigator and the
facility administrator pointed out the “numerous investigations” there, and staff’s
inability “to safely provide care and supervision.” P. Ex. 79, at 17.

'S Unfortunately, Petitioner’s closing brief is replete with mis-citations to the
record. Because Petitioner submitted so many exhibits, which include multiple
statements from multiple individuals (rather than one declaration per witness), such errors
make it difficult to locate the support for some of its arguments. Here, for example,
Petitioner quotes repeatedly from Assistant Administrator Scheele’s statement which is
found at P. Ex. 94, at 1, but Petitioner repeatedly (and incorrectly) cites to P. Ex. 127.
There have been several investigations on [the unit]. It is
noted that there have been inexperienced and unfamiliar staff
involved in many of the investigations. It is also noted that
(the unit] has 8-9 individuals with supervision levels of
enhanced or higher which places the staff working in a
position of jeopardy because of not being able to provide the
levels of supervision when other individuals are displaying
inappropriate behaviors.

P. Ex. 79, at 15.

The September 23, 2007 incident (involving clients who were not toileted) demonstrates
the facility’s staffing inadequacies in a different unit. Five clients were neglected
because no back-up staff covered for DT Stevens during her absence. Indeed, while
acknowledging that clients went unsupervised and neglected, the facility administration
did not hold staff accountable because the demands on them were too great to afford
them an opportunity to care for the clients. P. Ex. 59, at 4, 9, 13. The findings thus
establish an institutional staffing problem that plainly violates section 483.430(d).

And the staffing problems were not limited to these two units. The investigator of the
October 4 slapping incident could not even determine who was responsible for
supervising the resident since “all four staff on duty signed for all the individuals’
supervision in the same order.” P. Ex. 80, at 12, 14.

Finally, the survey report form describes multiple additional instances in which clients
were denied necessary services due to inadequate staffing. CMS Ex. 1, at 86-100.
Petitioner does not deny any of these specific findings, but instead complains about the
adequacy of the surveyor notes. P. Cl. Br. at 66-68, 209-211. I discuss below how any
purported inadequacies in surveyor performance do not invalidate adequately
documented deficiencies. Moreover, although the notes are terse, as Petitioner’s own
chart shows, they detail a significant number of staffing deficiencies. P. Cl. Br. at 67.
(“Tammy can’t get aquatic therapy [because] of lack of staff”; “PT scheduled — don’t get
it [because] no staff to drive over and get it”; “Could not go to specialized work
assignment [due to] inexperienced staff”; “9/3/07 can’t do showers”; “8/20/07 shortage of
staff ‘house chaotic’ can’t run behavior plans”).

Thus, notwithstanding the systems it had in place to assure adequate staffing ratios, the
record establishes that the facility’s staff-sharing practices repeatedly placed
inexperienced and untrained staff in situations they were ill-equipped to handle. The
facility was therefore not in substantial compliance with 42 C.F.R. § 483.430(d), and its
staffing inadequacies were so pervasive as to “substantially limit” its “capacity to furnish
adequate care” and to “adversely affect the health and safety” of facility clients, which
puts the facility out of substantial compliance at the condition level. 42 C.F.R. §
488.24(b).
16

C. Based on its widespread failure to protect clients from mistreatment, abuse
and neglect, as well as its failure to provide sufficient direct care staff to manage
and supervise clients, the facility’s governing body did not adequately direct the
facility and was therefore not in substantial compliance with 42 C.F.R. §
483.410.

The facility must identify an individual or individuals to constitute its governing body,
which exercises general policy, budget, and operating directions over the facility. 42
CFR. § 483.410.

The Departmental Appeals Board has held that a finding of substantial noncompliance in
facility administration may derive from findings of substantial noncompliance in other
areas. See, e.g., Asbury Center at Johnson City, DAB No. 1815, at 11 (2002); Odd
Fellow and Rebekah Health Care Facility, DAB No. 1839, at 7 (2002) (Immediate
jeopardy finding put facility out of substantial compliance with regulation requiring that
facility be administered in a manner that used its resources effectively to attain the
highest practicable physical, mental, and psychosocial well-being of each resident);
Sunbridge Care Center, DAB No. 2170, at 33 (2008), aff'd, Sunbridge Care and
Rehabilitation Center v. Leavitt, No. 08-1603 (4" Cir. 2009) (Staff's inability to comply
with and enforce the facility’s written policy puts the facility out of substantial
compliance with regulation requiring that facility be administered in a manner that used
its resources effectively to attain the highest practicable physical, mental, and
psychosocial well-being of each resident 42 C.F.R. § 483.75).

Thus, because the facility’s governing body failed to protect facility clients from
mistreatment, abuse, and neglect, and because it failed to provide adequate staffing, the
facility was not in substantial compliance with 42 C.F.R. § 483.410."°

D. The facility must meet requirements for program participation without
regard to the quality of the survey.

Petitioner has challenged few of the factual findings described above, but instead bases
its case on purported surveyor errors. Citing 42 C.F.R. §§ 488.18(a) and 488.26(d),
Petitioner asserts that survey findings “must be adequately documented” and suggests
that that, unless the surveyors follow every step set forth in Appendix J of the State

‘© The facility’s substantial noncompliance with three conditions of participation
was persuasively established and sufficient to support the termination. I therefore do not
reach the issue of whether the facility was in substantial compliance with 42 C.F.R. §
483.440, which requires that each client receive a continuous active treatment program.
See Beechwood Sanitarium, DAB No. 1824, at 19 (2002).
Operations Manual (SOM), “the findings in the Statement of Deficiencies are not
accurate.” P. Cl. Br. at 5-6.

The courts and the Board have pointed out that, while provisions of the SOM may
provide useful guidance as to CMS’s interpretations of applicable law, its provisions do
not constitute enforceable, substantive rules. Beverly Health and Rehabilitation Services
v. Thompson, 223 F. Supp. 2d 73, at 99-106 (D.D.C. 2002); Oakwood Community Center,
DAB No. 2214, at 16 (2008); Aase Haugen Homes, Inc., DAB No. 2013, at 15 (2006).

Moreover, the sections that Petitioner relies on do not apply to CMS. CMS conducts
some of its own surveys, but it also contracts with state survey agencies to perform the
survey function. Act, § 1864(a); 42 C.F.R. §§ 488.10; 488.20. Petitioner relies on
provisions that govern the performance of state survey agencies, not federal survey
teams: “The findings of the State agency with respect to each of the conditions . . . must
be adequately documented.” (emphasis added) 42 C.F.R. § 488.18(a); “The State survey
agency must use the survey methods, procedures and forms that are prescribed by CMS.”
(emphasis added). 42 C.F.R. § 488.26(d). These regulation describe the means by which
CMS can monitor a state agency’s performance. CMS may sanction a state survey
agency for inadequate survey performance (42 C.F.R. § 488.320). But the regulations are
explicit: “Jnadequate survey performance does not . . . invalidate adequately
documented deficiencies.” (emphasis added) 42 C.F.R. § 488.318(b)(2).

Finally, even if section 488.18(a) applied to CMS (which it does not), that subpart also
explains what “adequate” documentation means with respect to a noncompliant facility:
“a description of the specific deficiencies which resulted in the [state] agency’s
recommendation,” and “any provider. . . response.” Here, the survey report form sets
forth in considerable detail “a description of the specific deficiencies” that led to CMS’s
determination, and I consider it more than adequate documentation. CMS Ex. 1.

E. Petitioner’s objections to the procedures followed are without merit.

Petitioner has also submitted lengthy arguments addressing issues other than the actual
survey findings that resulted in CMS’s determination to terminate the facility’s program
participation. Without losing sight of our purpose here — which is to decide whether the
facility was in substantial compliance with the conditions of participation — I now
consider Petitioner’s complaints about the procedures followed in this case.

Petitioner complains that I amended my initial order and directed it to file the first round
of submissions.

Although Petitioner’s February 1, 2008, hearing request was timely, Petitioner admits
that it did not satisfy the regulatory requirements for a valid hearing request because it
did not identify the specific issues and findings of fact and conclusions of law with which
the Petitioner disagreed, nor specify the basis for its contending that those findings were
incorrect. 42 C.F.R. § 498.40(b). On April 7, 2008, CMS moved to dismiss the
inadequate hearing request. In a response dated April 16, 2008, Petitioner argued that it
could not reasonably have filed a valid hearing request within 60 days because the survey
report form “was extremely detailed and complicated” and the facility was in negotiations
with CMS to resolve or at least limit the issues. Petitioner also complained that its efforts
were further complicated because a follow-up survey yielded an even lengthier statement
of deficiencies.

But by mid-April Petitioner had known of the cited deficiencies for five months, and
more than four months had passed since it received CMS’s termination notice, which
included notice of its appeal rights. Nevertheless, Petitioner did not come forward with a
valid hearing request; instead, it claimed that it required additional time for filing. In my
view, a facility is not entitled to more time to file its hearing request simply because of
the number of deficiencies cited. To hold otherwise would lead to the ironic and wholly
undesirable result of affording additional rights to those facilities with the most
deficiencies cited. And the truly deficient facility would be allowed to continue its
program participation for the longest time of all, just by arguing that it needed the most
amount of time to determine its defense.

Moreover, although Petitioner cites the burden of responding to such an extensive list of
deficiencies for its failure to meet the regulatory requirements, it claims throughout its
closing brief that, due to CMS’s practice of cross-referencing deficiencies, “a small
number of alleged findings are reported in multiple locations throughout the survey.” P.
Cl. Br. at 48. See also, P. Cl. Br. at 55 (“In reality there are very few deficiencies actually
reported in the survey.”) Petitioner was required only to identify with which of those
purportedly “small number” of findings and conclusions it disagreed and why. Sixty
days was not an unreasonable amount of time in which to do that.

In an April 23, 2008 order, I nevertheless denied CMS’s motion to dismiss, citing Board
decisions in The Carlton and the Lake, DAB No. 1829 (2002) and Alden Nursing Center
— Morrow, DAB No. 1825 (2002), which direct ALJs to “choose remedies short of
outright dismissal to effectuate regulatory purposes” of requiring specificity in hearing
requests. However, in order to achieve the regulatory purposes of requiring Petitioner to
specify what it was appealing, and to avoid any additional delay of the administrative
process, I simply directed Petitioner to file its pre-hearing exchanges first, and directed
CMS to file its exchanges 30 days later. Petitioner had 55 days from the date of my order
in which to comply, not an unreasonable amount of time. See, e.g. 42 C.F.R. § 498.17(b)
(party afforded 20 days in which to submit rebuttal statements or additional evidence);
Rule 12 FRCP (20 days for responsive pleadings).

Citing the Board’s decision in Hillman Rehabilitation Center, DAB No. 1611 (1997),
aff'd Hillman Rehabilitation Center v. HHS, No. 98-3789 (D.N.J. May 13, 1999),
Petitioner complains that it was “denied a fair opportunity to learn what CMS claimed
was a prima facie case and to prepare a response to that alleged prima facie case.” P. Cl.
Br. at 6, note 5.'” Petitioner’s assertion that it was required “to proceed without the
benefit of knowing the specifics and factual support for Respondent’s allegations” is
simply not so. P. Cl. Br. at 8. CMS’s “extremely detailed” statement of deficiencies,
more than adequately set forth CMS’s prima facie case. See Oxford Manor, DAB No.
2167, at 2 (A statement of deficiencies may function both as a notice document and as
evidence of the facts asserted therein. If a finding is not disputed, CMS need not present
evidence in support of that finding).

Moreover, Petitioner confuses an evidentiary standard with procedural rules. The
regulations give the ALJ the authority to determine the order in which the evidence and
the arguments of the parties are presented. 42 C.F.R. § 498.60; Beechwood Sanitarium,
DAB No. 1824, at 17 (2002). In Beechwood, the Petitioner faulted the ALJ for his
disinclination to rule on the adequacy of CMS’s case prior to demanding that Petitioner
respond to CMS’s claims, arguing that the ALJ’s actions were “unfair and impractical”
and hampered Petitioner’s efforts to forward its case “in the most effective and efficient
manner possible.” Beechwood at 16. Citing 42 C.F.R. § 498.60, the Board ruled that
“the regulation clearly provides that the ALJ has the discretion to set the process for
presentation of the parties’ arguments.” Beechwood at 17; See also VITAS HealthCare
Corporation of California, DAB No. 1782, at 2 (2001) (Board cites with approval “many
common practices, such as allowing presentation of witnesses out of order and admitting
exhibits prior to the in-person hearing,” and concludes that the parties to the
administrative process “routinely benefit from such flexibility.”)

Further, Petitioner received CMS’s pre-hearing submissions four months before the in-
person hearing, and did not ask leave to supplement its own pre-hearing exchange. My
pre-hearing order specifically sets forth a procedure by which the parties can do so:

A party may move to amend its pre-hearing exchange... .

I will decide a motion to supplement a pre-hearing exchange
based on considerations of good cause and absence of
prejudice to the opposing party.

Acknowledgment and Initial Pre-hearing Order, at 2-3 (2008).

Finally, without citing to any portion of the record, Petitioner complains that it was
denied “reasonable opportunity to challenge the allegations of the CMS surveyors,” and
was “not allowed to fully inquire as to the flawed methodology of the survey.” In this
regard Petitioner complains that CMS presented the testimony of only one surveyor.

"" Hillman set out the parties’ respective burdens of going forward and burdens of
proof. I do not even consider application of the Hillman standard to this case since, under
any reasonable standard, the evidence so overwhelmingly establishes that the facility was
not in substantial compliance with program requirements.
20

Nothing precluded Petitioner from calling as its own witness any one from whom it
sought to elicit testimony. If not willing to cooperate, Petitioner could have asked that
the witness be subpoenaed pursuant to 42 C.F.R. § 498.58.

Otherwise, Petitioner cites no specific point in the record where it was not allowed to ask
a relevant question and I am puzzled by its suggestion that it was not allowed to cross-
examine the surveyor in the manner it wanted.

Tam bound to inquire fully into all of the matters at issue and to receive in evidence
testimony of witnesses and documents that are “relevant and material.” 42 C.F.R. §
498.60(b). Although I repeatedly explained the de novo nature of this review, and
advised Petitioner that inadequate survey performance does not invalidate adequately
documented deficiencies, I nevertheless, afforded counsel wide latitude in questioning the
surveyor. See Tr. 14 (“I’m letting you ask these questions, but this is a good example of
the kinds of questions that are not helpful to me.”); Tr. 21 (“I’m going to let you do this
any way you want. I’ve told you... what I think I’m reviewing here. I’Il let you do it
any way you want. You have all of today. You can even go into a couple of hours
tomorrow and then you’re finished... . And if you think I’m wrong, that’s fine. You'll
take itup....”)

In addition to being afforded wide latitude at the hearing, Petitioner has submitted 389
exhibits and a whopping 550 pages of argument (including pre-hearing and closing
briefs) all of which I have reviewed and considered, which should have offered it
sufficient opportunity to present its case in full.

IV. Conclusion

For the reasons discussed above, I find that the facility was not in substantial compliance
with at least three conditions of participation for Medicaid-certified ICFs/MR -- 42
C.F.R. §§ 483.410, 483.420, and 483.430. CMS is therefore authorized to terminate its
program participation.

/s/ Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Mission Home Health, et al., ) Date: September 18, 2009

)
Petitioner, )
)

-Vv.- ) Docket No. C-09-389

) Decision No. CR2007
Centers for Medicare & Medicaid )
Services. )
)

DECISION

The Centers for Medicare and Medicaid Services (CMS) has denied Medicare enrollment
applications for twenty-two entities, each “doing business as” Mission Home Health, the
petitioner in this case.' Petitioner appeals, and CMS has moved for summary judgment.

For the reasons discussed below, I grant CMS’s motion.
Background

A business enterprise called Home Health Licensing Specialists, Inc. has been offering
for sale what it characterizes as “turn key” home health agencies (HHAs). According to
its literature, customers who want to avoid the “bureaucratic red tape” required to set up a
licensed and Medicare-certified HHA could instead purchase from this enterprise an
HHA that has “already passed the initial survey and [has] its provider number ready to
go.” CMS Ex. 30, at 2; P. Br. at 3.

Apparently, Home Health Licensing, Inc. obtained licensing and certification for eleven
such HHAs before CMS noticed anything amiss. In letters dated June 12, 2008, CMS’s
Medicare contractor, Palmetto Government Benefits Administrators, denied twenty-two
subsequent Medicare enrollment applications that were filed under the auspices of Home

' The entities are: Twelve LAC, Inc.; Fourteen LAC, Inc; Fifteen LAC, Inc.;
Sixteen LAC, Inc.; Seventeen, LAC, Inc.; Eighteen, LAC, Inc.; Nineteen, LAC, Inc.;
Twenty, LAC, Inc; 21 HHA, Inc.; 22 HHA, Inc.; 23 HHA, Inc.; 24 HHA, Inc.; 25 HHA,
Inc.; 26 HHA, Inc.; 28 HHA, Inc.; 29 HHA, Inc.; 30 HHA, Inc.; 31 HHA, Inc.; 32 HHA,
Inc.; 33 HHA, Inc.; 34 HHA, Inc.; 35, HHA, Inc. CMS Ex. 27.
2

Health Licensing, Inc. P. Br. at 4; CMS Exs. 23, 24. Those twenty-two, each ostensibly
doing business as Mission Home Health, sought reconsideration. In a notice dated
February 11, 2009, CMS upheld Palmetto’s initial determinations. CMS Ex. 27.
Petitioners now seek review by an administrative law judge.

CMS has moved for summary judgment, which Petitioner opposes. With its motion and
brief (CMS Br.), CMS initially submitted 29 exhibits (CMS Ex. 1-29). Petitioner
responded with its “answer in opposition” to summary judgment (P. Br.), accompanied
by one exhibit (P. Ex. 1). CMS filed a reply with one additional exhibit (CMS Ex. 30).

Discussion

CMS is entitled to summary judgment because the undisputed facts establish
that none of these 22 entities doing business as Mission Home Health are
operational, and CMS may deny Medicare enrollment if it determines that a
potential provider is not operational. 42 C.F.R. § 424.530(a).?

Summary judgment is appropriate if a case presents no genuine issue of material fact.
“To defeat an adequately supported summary judgment motion, the non-moving party
may not rely on the denials in its pleadings or briefs, but must furnish evidence of a
dispute concerning a material fact... .” Livingston Care Center, DAB No. 1871 (2003).
The moving party may show the absence of a genuine factual dispute by showing that the
non-moving party has presented no evidence “sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Livingston Care Center v. Dep’t of Health and Human Services, 388 F.3d
168, 173 (6" Cir. 2004). To avoid summary judgment, the non-moving party must then
act affirmatively by tendering evidence of specific facts showing that a dispute exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986). See
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehabilitation Center,
DAB No. 1918 (2004).

A provider applying for enrollment in the Medicare program “must be operational to
furnish Medicare covered items or services.” 42 C.F.R. § 424.510(d)(6). A provider is
“operational” when it has a “‘qualified physical practice location, is open to the public for
the purpose of providing health care related services, is prepared to submit valid
Medicare claims, and is properly staffed, equipped, and stocked . . . to furnish these items
and services.” 42 C.F.R. § 424.502.

> Although Petitioner’s request for review is dated March 31, 2009, it was
not post-marked until April 8, 2009. The Civil Remedies Division received it on
April 14, 2009.

* | make this one finding of fact/conclusion of law.
CMS has a right to perform on-site inspections to verify the accuracy of a provider’s
enrollment information, and to determine the provider’s compliance with Medicare
enrollment requirements. 42 C.F.R. § 424.510(d)(8). Based on an on-site review or other
“reliable evidence” that the provider is not operational or otherwise not meeting
reenrollment requirements to furnish covered items or services, CMS may deny a
provider’s enrollment. 42 C.F.R. § 424.530(a)(1) and (5).

In this case, CMS alleges — and presents evidence sufficient to establish — that none of
these 22 entities are operational. CMS Exs. 1-22. Although Petitioner complains about
the quality of CMS’s evidence, it furnishes no evidence of its own suggesting a dispute
concerning any material fact. CMS first points to portions of these entities’ enrollment
applications, which, on their faces, raise significant questions as to whether they were
properly staffed operations, open to the public, able to furnish home health services, and
to submit Medicare claims. As Palmetto noted in its June 5, 2007 letters recommending
denial, the multiple program applications all list the “exact same practice location.” P.
Ex. 1. The entities also share incorporation dates (four were incorporated on May 19,
2006; four were incorporated on July 14, 2006; five were incorporated on September 15,
2006, and nine were incorporated on October 23, 2006). They all have the same fax
number and one of two telephone numbers and e-mail addresses. While no one of these
factors would necessarily preclude enrollment, the mass production quality of the
applications justifiably calls for careful scrutiny from CMS, which must guard against
trafficking in Medicare provider numbers.

Next, CMS submits evidence establishing that, on May 27, 2008, an on-site investigator,
Larry Seals, visited 13759 San Pedro Avenue, San Antonio, Texas, the practice location
listed on the applications. CMS Exs. 28, 29. The address was a multi-story office
building. Mission Home Health was not listed in the tenant directory. Investigator Seals
went to Suite 600, the suite number listed in the address for four of the entities (Twelve
Lac, Inc; Fourteen LAC, Inc; Fifteen LAC, Inc.; and Sixteen LAC, Inc.). He learned that
Suite 600 “is the business address for several companies that rent one of the small office
spaces located within the suite,” but that Mission Home Health was no longer there.
CMS Ex. 29, at 2 (Seals Affidavit); See CMS Ex. 23. He then went to Suite 710, the
suite number listed in the address for the remaining 18 entities. The door was locked; the
space was dark; no one answered the door. He spoke to Senior Property Manager Susan
Sweet, who told him that Mission Home Health had been locked out of Suites 600 and
710 since March 2008 for non-payment of rent. CMS Ex. 29, at 3; See CMS Ex. 24.

I find CMS’s submissions sufficient to show “an absence of evidence to support”
Petitioner’s claim that its entities are entitled to Medicare enrollment. See Celotex Corp.
v. Carrett, 477 U.S. 317, 325 (1986). To avoid summary judgment, Petitioner needed to
present evidence “of evidentiary quality” (such as admissible documents, attested
testimony) demonstrating the existence of a genuine issue of material fact, as required by
Rule 56. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).’ But Petitioner
came forward with no such evidence. It provided nothing to suggest its entities were ever
operating as HHAs, e.g., that they were open to the public, had even one single
employee, or had purchased any of the equipment or stock necessary for providing home
health care services.

Thus, the undisputed evidence establishes that these 22 entities purportedly doing
business as Mission Home Health are not operational, and CMS is entitled to summary
judgment.

Petitioner also charges that its due process rights were violated because the Medicare
contractor failed to process its enrollment applications “within 45 days of receipt.” Of
course, I have no authority to review any Constitutional claims. Further, any undo delay
would only entitle Petitioner to a response to its enrollment application; it would not
create for these unqualified entities any right to participate in Medicare. Moreover,
Petitioner has not established any contractor delay, undo or otherwise. Based on the
record before me, I cannot determine how long it took Palmetto to process these
applications because Petitioner has not told me when they were submitted. (I note,
however, that the two year delay Petitioner alleges seems highly unlikely inasmuch as the
last of the entities were only incorporated on October 23, 2006, and Palmetto’s
recommendation to CMS was dated June 5, 2007).

Conclusion

The undisputed evidence establishes that the entities doing business as Mission Home
Health are not operational, and therefore may not enroll in the Medicare program as
HHAs. I therefore grant CMS’s motion for summary judgment, and affirm its
reconsidered determination.

/s/ Carolyn Cozad Hughes
Administrative Law Judge

* Petitioner incorrectly asserts that it “must only allege facts which, if they
are true, would dispute those facts relied on by CMS in support of its motion.”
(Emphasis added). P. Br. at 6. In fact, mere allegations are not sufficient to defeat
an adequately supported summary judgment motion. The non-movant “must
furnish evidence of a dispute concerning a material fact.” (Emphasis added).
Vandalia Park, DAB No. 1939, at 6 (2004), citing Matsushita Elec. Indus. at 586
n. 11.