Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Autumn Healthcare of Zanesville,
(CCN: 365464),

Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-13-940
ALJ Ruling No. 2014-26

Date: March 18, 2014

RULING

Here, the Centers for Medicare & Medicaid Services (CMS) has terminated the Medicare
participation of Petitioner, Autumn Healthcare of Zanesville, a long-term care facility
that has a history of significant noncompliance with Medicare program requirements.
Petitioner seeks administrative review. CMS asserts that Petitioner voluntarily waived its
appeal rights and asks that I dismiss this appeal or summarily affirm the remedies
imposed.

lagree that Petitioner waived its appeal rights. Because Petitioner has no right to a
hearing, I dismiss its hearing request pursuant to 42 C.F.R. § 498.70(b).

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. pt. 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 CFR. § 488.301.

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. If, as here, a facility
“has consistently demonstrated failure to maintain compliance,” and its practices have
harmed residents, it will be designated a “‘special focus facility,” which must be surveyed
at least once every six months. Act §1819(£)(8); see CMS Ex. 2 (CMS State Survey and
Certification Memorandum, S&C-10-32-NH (September 17, 2010)).

CMS’s policies with respect to special focus facilities have been relatively lenient.
Although it has the authority to terminate facilities that are not in substantial compliance
(see discussion below), it apparently has allowed these substandard facilities to continue
as special focus facilities, without demonstrating correction, for at least two additional
years. To “graduate,” i.e. shed the designation, a facility must have two consecutive
surveys with no deficiencies cited at scope and severity level “F” or higher. An F-level
deficiency is not trivial; although it does not involve actual harm, the facility’s
noncompliance is widespread and presents the potential for more than minimal harm.
CMS Ex. 2 at 5.

In a survey and certification memorandum issued by CMS on April 5, 2013, CMS
recognized that the agency spends a disproportionate amount of its scarce resources
monitoring these chronically and seriously deficient facilities. The memo describes the
steps CMS planned to take in response to a decrease in program funding. For nursing
homes, such as Petitioner, “that have exhibited a persistent pattern of poor quality and
have been enrolled in the Special Focus Facility initiative” for more than 18 months, but
have failed to improve, the state agency would schedule a final “last chance” survey. If
that survey did “not reveal appropriate improvement[,] or unless there is a major new
development that CMS concludes is very likely to eventuate in timely and enduring
improvement in the quality of care or safety[,]” a termination notice might be issued.
CMS Ex. 3 at 3 (CMS State Survey and Certification Memorandum, S&C-13-23-ALL
(April 5, 2013)).

Petitioner here became a special focus facility in December 2008, and at every survey
thereafter it was not in substantial compliance with program requirements. CMS Ex. 7.
Although it could not graduate from the special focus facility program, it continued to
participate in Medicare.
Finally, on April 27, 2012, the state agency completed standard and complaint
investigation surveys at the facility. The state surveyors cited multiple deficiencies,
including deficiencies that caused actual harm to resident health and safety (scope and
severity level “G’’) and that presented patterns of substantial noncompliance with the
potential for more than minimal harm to resident health and safety (scope and severity
level “E”). CMS Ex. | at 2 (Lang Decl. § 5). In a notice letter dated May 24, 2012, CMS
advised the facility of the survey results and its proposed penalties: denial of payment for
new Medicare/Medicaid admissions; a civil money penalty of $900 per day effective
April 27, 2012; and termination effective June 27, 2012. CMS Ex. 4.

The facility avoided termination, however, by entering into a written agreement, referred
to as a Systems Improvement Agreement or SIA, with CMS and the state agency. By its
terms, CMS gave the facility a full year to correct its deficiencies, achieve substantial
compliance, and graduate from the special focus facility program. In return, the facility
waived its rights to challenge any remedies CMS imposed based on the surveys
conducted during that year. CMS Ex. 5. The facility explicitly agreed that its program
participation would terminate if an “F” level deficiency — or worse — were cited during a
standard health or complaint survey. CMS Ex. 5 at 7 (4 D.8).

CMS kept its part of the bargain, and the facility continued to participate in the Medicare
program and to receive reimbursement. Following a survey completed June 3, 2013,
however, CMS determined that the facility was not in substantial compliance with
multiple program requirements, including two — accident prevention (42 C.F.R.

§ 483.25(h)) and nutritional status (42 C.F.R. § 483.25(i)) — that posed actual harm to
resident health and safety (scope and severity level “G’”); and two — food safety (42
C.F.R. § 483.35(i)) and infection control (42 C.F.R. § 483.65) — that constituted
widespread noncompliance with the potential for more than minimal harm to resident
health and safety (scope and severity level “F”).!

Ina letter dated June 14, 2013, CMS advised the facility of the most serious survey
findings. The letter said that, as a result of those findings, it would deny payment for new

' Some of the survey findings were deeply disturbing. Video surveillance footage
(instituted as part of an investigation by the state attorney general) showed that staff
repeatedly failed to provide ordered care but documented that they had done so. One
underweight resident had suffered significant weight loss. He needed eating assistance,
because he was unable to take food from his plate to his mouth, and he choked when
swallowing. Video surveillance showed that staff not only failed to assist him as ordered,
they sometimes did not feed him at all. Then they falsely recorded that they had done so.
CMS Ex. 6 at 48, 50-51, 55-68. Not only did the staff’s actions jeopardize this individual
resident’s health and safety, but their willingness to falsify treatment records raises
serious questions about the reliability of the facility’s other records.
admissions effective June 20, 2013, and terminate the facility’s provider agreement
effective August 2, 2013. Attachment to hearing request.

Notwithstanding its explicit waiver of all appeal rights, the facility requested a hearing to
challenge the June 3 survey findings. While this appeal was pending, the facility filed in
federal court a complaint and motion for a temporary injunction to halt the termination.
In a decision dated August 6, 2013, the district court for the Southern District of Ohio
dismissed the case for lack of jurisdiction, noting, among other findings, that the “risk of
an erroneous deprivation [of the facility’s provider status] is low.” Autumn Health Care
of Zanesville, Inc. v. U.S. Dep’t of Health & Human Servs., 959 F. Supp. 2d 1044 (S.D.
Ohio Aug. 6, 2013).

Discussion”

“Unconstitutional conditions.” Petitioner argues that the Systems Improvement
Agreement it willingly entered into is nevertheless unenforceable based on the doctrine of
unconstitutional conditions. According to that doctrine, a state may not condition a
party’s receipt of a benefit on its waiver of constitutional rights.’ According to Petitioner,
the Systems Improvement Agreement here is unenforceable, because it compels the
facility to waive its constitutionally-protected rights to administrative and judicial review
in order to participate in the Medicare and Medicaid programs. P. Br. at 4.

As a threshold matter, I note that CMS did not enter into the Systems Improvement
Agreement in order to achieve some constitutionally-suspect goal, independent of any
legitimate government interest. As CMS points out, the agency did not begin termination
proceedings back in 2012 in order to coerce the facility into giving up its appeal rights. It
began the termination proceedings because, for years, the facility was unable to maintain
anything approaching substantial compliance with program requirements.

Moreover, as the Ohio district court observed, Petitioner’s waiver does not fall within the
narrow range of agreements made unenforceable by the doctrine. Petitioner
acknowledges that the Ohio district court rejected its argument, but points out that the
court lacked jurisdiction to make any determinations, so the opinion is not binding. That
may be so but does not detract from the court’s sound reasoning. As it pointed out,

? With its motion, CMS submitted a brief and seven exhibits (CMS Exs. 1-7). Petitioner
submitted a brief and CMS filed a reply.

> CMS quotes Judge Posner, who characterized as a misnomer the term, “doctrine of
unconstitutional conditions,” because it creates the incorrect impression that such waivers
are necessarily unconstitutional. Judge Posner suggested that “doctrine of constitutional
conditioning” would be a more appropriate term. Burgess v. Lowery, 201 F.3d 942, 947
(7" Cir. 2000); CMS Reply at 2 n.2. I agree.
courts recognize that “many constitutional rights may be knowingly and voluntarily
waived as part of the settlement of disputes.” Autumn Health Care at 1053-1054, citing
Town of Newton v. Rumery, 480 U.S. 386 (1987) (upholding contract waiving right to
bring civil claims for alleged violations of constitutional rights by state actors); K.M.C.
Co. v. Irving Trust Co., 757 F.2d 752, 758 (6" Cir. 1985) (concluding that when a party
knowingly, voluntarily, and intentionally signs a jury waiver provision in a civil case, that
party has waived its right to a jury trial); Lake James Cmty. Volunteer Fire Dep’t v. Burke
County, 149 F. 3d 277 (4" Cir. 1998) (agreement between a volunteer fire department
and the county that prohibited the fire department from suing the county was enforceable,
even though it waived the fire department’s constitutional right to petition the
government). So long as a party knowingly and voluntarily waives his rights, an appeal
waiver is enforceable. United States v. Toth, 688 F.3d 374, 378 (6" Cir. 2012); United
States v. Wilson, 438 F.3d 672, 673 (6" Cir. 2006); West Chelsea Buildings, LLC v.
United States, 109 Fed. Cl. 5, 27 (2013) (“Where, as here, plaintiffs voluntarily waived
their constitutional rights as part of a voluntary agreement, the doctrine of
unconstitutional conditions does not apply.”).

Here, as the district court pointed out, the parties’ “ongoing dispute . . . culminated in a
lengthy agreement that included a waiver of the right to [administrative and] judicial
review.” Id. The facility, which was represented by counsel throughout these
proceedings, knowingly and voluntarily waived its hearing rights, and reaped the benefits
of that waiver for more than a year. It therefore has no right to a hearing, and I may
dismiss its hearing request entirely. 42 C.F.R. § 498.70(b).

Authority to terminate. Petitioner also challenges the remedy imposed, arguing that CMS
may only terminate a facility’s program participation if the deficiencies cited pose
immediate jeopardy to resident health and safety. Inasmuch as Petitioner waived its
appeal rights, I have no authority to decide this, or any other issue Petitioner raises. Even
if I had such authority, Petitioner’s argument is simply wrong as a matter of law. The
Act authorizes CMS (acting on behalf of the Secretary of HHS) to terminate a Medicare
provider agreement if the facility is not in substantial compliance with program
requirements. Act §§ 1819(h)(2); 1866(b)(2)(A); 42 C.F.R. § 488.412(a); see also
Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 21 (2000); Blossom South,
LLC v. Sebelius, 2014 WL 204201(WD NY January 17, 2014); Beverly Health & Rehab.
Servs., Inc., v. Thompson, 223 F. Supp. 2d 73, 111 (D.D.C. 2002) (holding that the
agency’s authority to terminate is not limited to immediate jeopardy cases, but “may span
all noncompliant facility behavior.”).

Conclusion

Because Petitioner knowingly and voluntarily agreed to waive its appeal rights and
realized the benefits of that waiver, it has no right to a hearing before me.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-0059)

Complainant
v.

Vandu, Inc.
d/b/a Romeoville Shell,

Respondent.
Docket No. C-14-523
Decision No. CR3157

Date: March 18, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an
administrative complaint on Respondent, Vandu, Inc. d/b/a Romeoville Shell, at 1
Alexander Circle, Romeoville, Illinois 60446, and by filing a copy of the
complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. The complaint alleges that Romeoville Shell impermissibly sold
tobacco products to a minor, violating the Federal Food, Drug, and Cosmetic Act
(Act), 21 U.S.C. § 301 ef seq., and its implementing regulations, 21 C.F.R. Part
1140. CTP seeks to impose a $500 civil money penalty against Respondent
Romeoville Shell.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on January 29, 2014, CTP served
the complaint on Respondent Romeoville Shell by United Parcel Service. In the
complaint and accompanying cover letter, CTP explained that, within 30 days,
Respondent should pay the penalty, file an answer, or request an extension of time
in which to file an answer. CTP warned Respondent that, if it failed to take one of

these actions within 30 days, the Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering it to pay the full amount of the
proposed penalty.

Respondent has neither filed an answer within the time prescribed, nor requested
an extension of time within which to file an answer. Pursuant to 21 C.F.R.

§ 17.11, assume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically, at approximately 6:34 PM on September 25,
2013, at Respondent’s business establishment, 1 Alexander Circle, Romeoville,
Illinois 60446, FDA-commissioned inspectors documented Respondent’s staff
selling a package of Newport Box cigarettes to a person younger than 18 years of
age.

In a decision dated January 31, 2013, which became final on March 2, 2013, the
Administrative Law Judge found:

e On December 21, 2011, Respondent’s staff sold cigarettes or smokeless
tobacco to a person younger than 18 years of age.

e CTP informed Respondent of the alleged December 21, 2011 violation by
warning letter dated February 9, 2012.

e On August 9, 2012, Respondent’s staff sold a package of Newport Box
cigarettes to a person younger than 18 years of age.

Vandu, Inc. d/b/a Romeoville Shell, DAB CR 2700, at 2-3 (2013).

These facts establish Respondent Romeoville Shell’s liability under the Act. The
Act prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco
product is misbranded if sold or distributed in violation of regulations issued under
section 906(d) of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21
C.F.R. § 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140
under section 906(d) of the Act. 21 U.S.C. § 387(a); see 21 U.S.C. § 387f(d)(1);
75 Fed. Reg. 13,229 (Mar. 10, 2010). Under 21 C.F.R. § 1140.14(a), no retailer
may sell tobacco products to any person younger than 18 years of age.

A $500 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $500 against
Respondent Vandu, Inc. d/b/a Romeoville Shell. Pursuant to 21 C.F.R. § 17.11(b),
this order becomes final and binding upon both parties after 30 days of the date of
its issuance.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Delmar Nursing & Rehabilitation Center,
(CCN: 085041),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-12-1212
Decision No. CR3156

Date: March 14, 2014

DECISION

Petitioner, Delmar Nursing & Rehabilitation Center (Petitioner or facility), is a long-term
care facility located in Delmar, Delaware, that participates in the Medicare program.
Based on a complaint survey completed on May 15, 2012, the Centers for Medicare &
Medicaid Services (CMS) determined that Petitioner was not in substantial compliance
with Medicare participation requirements. CMS imposed against Petitioner a per
instance civil money penalty (PICMP) of $6,000 for noncompliance with 42 C.F.R.

§ 483.25.

Petitioner appealed, and CMS moved for summary judgment. I grant summary judgment
in favor of CMS because the undisputed evidence establishes that the facility was not in
substantial compliance with Medicare requirements. Specifically, Petitioner did not
provide the necessary care and services to a resident in accordance with a physician’s
order, the resident’s plan of care, and the facility’s policy. I also find that the PICMP that
CMS imposed is reasonable.
I. Background

The Social Security Act (Act) sets forth requirements for nursing facilities’ participation
in the Medicare program and authorizes the Secretary of the U.S. Department of Health
and Human Services (Secretary) to promulgate regulations implementing those statutory
provisions. Act § 1819 (42 U.S.C. § 1395i-3). The Secretary’s regulations are found at
42 C.F.R. Part 483. To participate in the Medicare program, a facility must maintain
substantial compliance with program requirements. To be in substantial compliance, a
facility’s deficiencies may “pose no greater risk to resident health or safety than the
potential for causing minimal harm.” 42 C.F.R. § 488.301.

The Secretary contracts with state agencies to conduct periodic surveys to determine
whether skilled nursing facilities are in substantial compliance. Act § 1864(a) (42 U.S.C.
§ 1395aa(a)); 42 C.F.R. § 488.10. Each facility must be surveyed once every 12 months,
and more often if necessary, to ensure it corrects identified deficiencies. Act

§ 1819(g)(2)(A) (42 U.S.C. § 1395i-3(g)(2)(A)); 42 C.F.R. §§ 488.20(a), 488.308.

Here, surveyors from the Delaware Health and Social Services Division of Long Term
Care Residents Protection (state survey agency) conducted a complaint survey of
Petitioner that ended on April 9, 2012 and another complaint survey that ended on May
15, 2012. The state survey agency also completed a standard recertification survey of
Petitioner on May 17, 2012. Based on their findings, CMS determined that the facility
was not in substantial compliance with participation requirements.

By letter dated June 21, 2012, CMS referenced the April 9, May 15, and May 17, 2012
surveys and explained it would be imposing a mandatory denial of payment for new
admissions (DPNA), effective July 9, 2012. By letter dated July 10, 2012, CMS notified
Petitioner that it was imposing a PICMP of $6,000 based on the alleged deficiency under
42 C.F.R. § 483.25 (Tag F309) cited in the May 15, 2012 survey. CMS Ex. 5. The state
survey agency conducted a revisit on July 16, 2012, finding that Petitioner’s facility
remained out of substantial compliance.

On August 20, 2012, Petitioner timely requested a hearing to contest CMS’s findings of
noncompliance, specifically Tag F309 cited in the May 15, 2012 survey, and Tags F249
and F469 cited in the May 17, 2012 survey. Petitioner also requested review of the
DPNA and PICMP remedies set forth in the CMS notices issued on June 21, 2012 and
July 10, 2012. The case was assigned to me for hearing and decision. On September 7,
2012, I issued an Acknowledgment and Initial Prehearing Order establishing a briefing
schedule. In accordance with that schedule, CMS submitted its prehearing exchange,
consisting of its prehearing brief, exhibit and witness lists, and 31 exhibits (CMS Exs. 1-
31). Petitioner responded with its prehearing exchange, consisting of its prehearing brief
(P. Prehearing Br.), exhibit and witness lists, and 18 exhibits (P. Exs. 1-18). CMS then
filed a motion for summary judgment (CMS Br.), and Petitioner filed a response in
opposition to CMS’s motion for summary judgment (P. Response).

On October 19, 2012, CMS filed a Motion for Partial Dismissal for Cause and Supporting
Brief and Exhibits. By letter dated November 7, 2012, Petitioner voluntarily withdrew its
challenges to the DPNA remedy and two tags, Tag F249 and Tag F469, which were cited
in the May 17, 2012 survey. Petitioner stated that its appeal would focus only on the Tag
F309 “G” level deficiency cited at the May 15, 2012 survey and the PICMP that was
imposed specifically for that deficiency. Based on Petitioner’s actions, CMS’s motion
for partial dismissal became moot.

IL. Issues

Whether the undisputed evidence establishes that:
A. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25; and
B. the PICMP that CMS imposed is reasonable.

Ill. Findings of Fact and Conclusions of Law
A, Summary judgment is appropriate.

CMS moves for summary judgment relying on the following facts, which are undisputed
unless otherwise noted. Resident 1 (R1) was a 30-year old male who was admitted to
Petitioner’s facility on March 6, 2012. His diagnoses included insulin-dependent
diabetes mellitus since childhood, hypertension, history of cerebrovascular accident,
transient ischemic attack, and peripheral neuropathy. P. Ex. 3, at 1; CMS Exs. 11; 14, at
1, 8; 15; 16; 21, at 1. R1 had been hospitalized several times for diabetic ketoacidosis,
acute renal insufficiency, and uncontrolled hypertension. See CMS Ex. 21, at 66. Prior
to his admission, R1 had been hospitalized in January 2012, and his diagnoses included
diabetic ketoacidosis, acute renal insufficiency, and hypothermia. CMS Ex. 21, at 1-5,
45, 70-74, 76.

R1’s care plan incorporated his physician’s order for three daily AccuCheck (finger stick)
tests to test his blood glucose levels. P. Ex. 2, at 3 (Physician’s Written Statement In
Lieu of Direct Testimony, §] 7); see CMS Ex. 14, at 1-2. On March 10 and March 14,
2012, R1’s medical records show Petitioner’s staff only checked R1’s blood glucose
twice per day. Further, on March 16, 2012, at around 9:00 p.m., R1 was sweating and
took a shower. P. Ex. 11, at 2 (CNA’s Written Statement in Lieu of Direct Testimony, J
5). According to the CNA, R1’s sweating was due to the fact that he had physically
exerted himself from propelling in his wheelchair between floors. P. Ex. 11, at 2 (CNA’s
Written Statement in Lieu of Direct Testimony, § 5). An AccuCheck performed on R1 at
5:07 p.m. was documented as within normal limits. Although it is not documented in
R1’s medical records, a LPN claims to have checked R1’s blood glucose level again at
around 9:00 p.m., with another finger stick test, which she claims was also within normal
limits. P. Ex. 10, at 2-3 (LPN’s Written Statement in Lieu of Direct Testimony, {J 5, 7,
10).

Around 6:00 - 6:30 a.m. the next morning on March 17, a nurse found R1 unresponsive.
An AccuCheck test performed on R1 at 6:50 a.m. showed a blood glucose level of 53.
CMS Ex. 11; see CMS Ex. 9, at 20; CMS Ex. 30, at 9 (State nurse surveyor’s Written
Statement in Lieu of Direct Testimony, § 28). The nurse administered Glucagon to R1 to
raise his blood glucose levels. R1 remained unresponsive, staff called 911, and R1 was
transported to the hospital where he subsequently died a few days later on March 22,
2012. CMS Ex. 11; see CMS Ex. 9, at 21; CMS Ex. 30, at 9-10 (State nurse surveyor’s
Written Statement in Lieu of Direct Testimony {J 29-31); CMS Ex. 22, at 1-5, 17-21.

In moving for summary judgment, CMS alleges that it is undisputed that Petitioner’s staff
did not conduct blood glucose checks on two days for R1 as required by his physician’s
order and plan of care, in violation of 42 C.F.R. § 483.25. CMS alleges further that the
undisputed evidence shows that Petitioner failed to follow its hypoglycemia management
policy when staff witnessed R1 sweating on March 16, 2012, also in violation of 42
CFR. § 483.25.

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986); Livingston Care Ctr. v. United States Dep’t of Health and Human Servs.,
388 F.3d 168, 173 (6th Cir. 2004). See also Illinois Knights Templar Home, DAB No.
2274, at 3-4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)). The
moving party may show the absence of a genuine factual dispute by presenting evidence
so one-sided that it must prevail as a matter of law, or 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 Ctr., 388 F.3d 168, 173 (quoting Celotex Corp. v. Catrett, 477
US. 317, 323-24 (1986)). To avoid summary judgment, the non-moving party must then
act affirmatively by tendering evidence of specific facts showing that a dispute exists.
See 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 Rehab. Ctr., DAB
No. 1918 (2004). To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but it must
furnish evidence of a dispute concerning a material fact. I/linois Knights Templar Home,
DAB No. 2274, at 4; Livingston Care Ctr., DAB No. 1871, at 5 (2003).

In examining the evidence for purposes of determining the appropriateness of summary
judgment, I must draw all reasonable inferences in the light most favorable to the non-
moving party. Brightview Care Ctr., DAB No. 2132, at 2, 9, 10 (2007); Livingston Care
Ctr., 388 F.3d at 168, 172; Guardian Health Care Ctr., DAB No. 1943, at 8 (2004).
However, drawing factual inferences in the light most favorable to the non-moving party
does not require that I accept the non-moving party’s legal conclusions. Cedar Lake,
DAB No. 2344, at 7 (2010); Guardian Health Care Ctr., DAB No. 1943, at 11 (“A
dispute over the conclusion to be drawn from applying relevant legal criteria to
undisputed facts does not preclude summary judgment if the record is sufficiently
developed and there is only one reasonable conclusion that can be drawn from those
facts.”).

My specific findings of undisputed facts and conclusions of law are set forth in the bold
italicized headings and supported by the discussions continued in the sections below.

B. The undisputed evidence establishes that Petitioner was not in substantial
compliance with 42 C.F.R. § 483.25 because Petitioner did not provide
necessary care and services to RI when it did not follow R1’s physician’s orders,
RI1’s plan of care, or the facility’s hypoglycemia management policy.

The opening provision of 42 C.F.R. § 483.25 (quality of care), which implements
section 1819(b)(2) (Medicare) of the Act, states:

Each resident must receive and the facility must provide the
necessary care and services to attain or maintain the highest
practicable physical, mental, and psychosocial well-being, in
accordance with the comprehensive assessment and plan of
care.

42 C.F.R. § 483.25.

The quality of care legislation and regulatory requirements are “based on the premise that
the facility has (or can contract for) the expertise to first assess what each resident’s
needs are (in order to attain or maintain the resident’s highest practicable functional
level) and then to plan for and provide care and services to meet the goal.” Spring
Meadows Health Care Ctr., DAB No. 1966, at 16 (2005). The regulation thus “imposes
on facilities an affirmative duty designed to achieve favorable outcomes to the highest
practicable degree.” Windsor Health Care Ctr., DAB No. 1902, at 16-17 (2003), aff'd,
Windsor Health Care Ctr. v. Thompson, No. 04-3018 (6th Cir. 2005). The facility must
take “reasonable steps” and “‘practicable’ measures to achieve that regulatory end.”
Clermont Nursing & Convalescent Ctr., DAB No. 1923, at 21 (2004), aff’d, Clermont
Nursing & Convalescent Ctr. v. Leavitt, 142 F. App’x 900 (6th Cir. 2005).

Accordingly, the Departmental Appeals Board (Board) has held that the language of 42
C.F.R. § 483.25 requires skilled nursing facilities to furnish the care and services set forth
in a resident’s care plan, to implement doctors’ orders, to monitor and document the
resident’s condition, and to follow its own policies. See, e.g., Alexandria Place, DAB
No. 2245 (2009) (upholding this deficiency where a petitioner failed to provide care in
accordance with a doctor’s order); Kenton Healthcare, LLC, DAB No. 2186 (2008)
(upholding this deficiency where a petitioner did not follow standards in a care plan for
supervision); Spring Meadows, DAB No. 1966, at 17 (“the clearest case of failure to meet
[section 483.25] is failure to provide one of the specific services outlined in the
subsections or failure otherwise to follow the plan of care based on the comprehensive
resident assessment”); and St. Catherine’s of Findley, DAB No. 1964, at 13 n.9 (2005)
(determining that a facility’s admission that it failed to follow its own supervision care
plan may make summary judgment appropriate). The quality of care provision also
implicitly imposes on facilities a duty to provide care and services that, at a minimum,
meet accepted professional standards of quality “since the regulations elsewhere require
that the services provided or arranged by the facility must meet such standards.” Spring
Meadows DAB No. 1966, at 17, citing 42 C.F.R. § 483.75.

I. The undisputed evidence establishes that Petitioner was not in
substantial compliance with 42 C.F.R. § 483.25 because Petitioner did not
provide necessary care and services to R1 in accordance with his
physician’s order regarding glucose blood checks.

R1’s physician, who was also Petitioner’s Medical Director, ordered the facility test R1’s
blood glucose three times a day. CMS Ex. 14, at 1-2. The physician’s order required
glucose testing at 6:00 a.m., 11:00 a.m., and 4:00 p.m. CMS Ex. 14, at 1-2. R1’s care
plan incorporated the physician’s order. P. Ex. 2, at 3 (Physician’s Written Statement In
Lieu of Direct Testimony, § 7); see CMS Ex. 14, at 1-2.

In alleging that Petitioner failed to provide the necessary care and services to R1 under
42 C.F.R. § 483.25, CMS relies on the undisputed fact that Petitioner’s staff did not
check R1’s blood glucose levels in accordance with the physician’s order on two days.
The AccuCheck results form shows that on March 10 and 14, Petitioner’s staff performed
glucose checks on R1 only twice, rather than three times as ordered. On March 10,
Petitioner’s staff only checked R1’s blood glucose at 7:01 a.m. and 2:41 p.m. On March
14, Petitioner’s staff only checked R1’s glucose at 5:27 a.m. and 1:22 p.m. CMS Ex. 12.

Petitioner concedes that on March 10 and March 14, its staff failed to check R1’s blood
glucose three times each day. However, Petitioner argues that these were “two random
instances” which had no impact on R1’s well-being and that CMS is attempting to hold
Petitioner to a standard of perfection under 42 C.F.R. § 483.25. P. Response at 6-7.
Moreover, Petitioner argues that R1 was a “competent, mobile, self-determining young
man” who had a history of being noncompliant in his own care. P. Response at 6-8.
Petitioner contends that the record contains indications of R1’s noncompliance and that it
is likely that the missed blood glucose checks on March 10 and March 14 were due to the
fact that R1 refused to have his glucose tested. P. Response at 8. Petitioner argues that
given these circumstances, it is not reasonable to conclude that it failed to provide
necessary care and services to R1.

In support of its position that R1 was a non-compliant resident, Petitioner relies upon,
among other things, the written direct testimony of R1’s physician. According to R1’s
physician, R1 was reluctant to have his blood glucose checked more than twice a day. P.
Ex. 2, at 3 (R1’s Physician’s Written Statement in Lieu of Direct Testimony, 7).
Petitioner also notes that its expert stated in his declaration of direct testimony that
patients with a long history of Type | diabetes “frequently will not submit to [testing] 3
times a day.” P. Ex. 16, at 4 (Petitioner’s Expert’s Declaration, | 16). Petitioner asserts
that R1 refused to have his blood sugar checked on at least four occasions: March 8 at
6:00 a.m, March 13 at 11:00 a.m., March 13 at 4:00 p.m., and March 16 at 4:30 p.m. P.
Ex. 2, at 3 (R1’s Physician’s Written Statement in Lieu of Direct Testimony, § 7); P. Ex.
8, at 1; CMS Ex. 10, at 1; see P. Prehearing Br. at 5. For purposes of summary judgment,
I will accept that Petitioner may have been reluctant to have his blood glucose checked
more than twice a day on March 10 and 14.

However, Petitioner does not dispute that, if Petitioner was in fact reluctant to have staff
check him, its staff did not document the reluctance. I find that Petitioner has not come
forward with any documentation showing that R1 was noncompliant with his blood
glucose testing on March 10 and March 14. Whenever R1 refused to have his blood
glucose tested, Petitioner’s staff was able to specifically document the refusals in his
medication record as a code “1”, which corresponded to “Drug Refused.” See P. Ex. 8, at
; CMS Ex. 10, at 1. R1’s physician relies on this documentation for his assertion that at
times R1 refused testing (“according to his medical records while at the Facility, [R1
refused] on at least four occasions.”). P. Ex. 2, at 3 (R1’s Physician’s Written Statement
in Lieu of Direct Testimony, §] 7) (emphasis added).

R1’s medication administration record shows that Petitioner’s staff did, in fact, document
times when R1 refused blood glucose testing. According to these records, Petitioner’s
staff documented that R1 refused a total of four AccuCheck tests on March 8, March 13,
and March 16. P. Ex. 8, at 1; CMS Ex. 10, at 1. However, under the dates of March 10
and March 14, there are no notations indicating that R1 refused any AccuChecks. P. Ex.
8, at 1; CMS Ex. 10, at 1.

To defeat CMS’s motion for summary judgment, Petitioner must do more than make a
bald assertion that the likely explanation for any missed blood glucose tests on March 10
and 14 was due to the fact that R1 refused to have the tests performed. Matsushita, 475
U.S. 574, at 586 (finding the opposing party must do more than show that there is “some
metaphysical doubt as to the material facts.”) Here, Petitioner has not come forward with
any specific evidence to support the claim that R1 refused efforts to test his glucose on
the relevant dates. The uncontroverted evidence, therefore, leads to only one reasonable

conclusion — Petitioner’s staff failed to perform the three glucose checks on R1 on March
10 and 14, as ordered by his physician.

2. The undisputed evidence establishes that Petitioner was not in
substantial compliance with 42 C.F.R. § 483.25 because Petitioner did not
provide necessary care and services to R1 in accordance with his plan of
care regarding glucose checks and related medication dosage.

On R1’s care plan, dated March 6, 2012, Petitioner’s staff listed diabetes mellitus as a
problem to address. P. Ex. 3, at 4; CMS Ex. 17, at 1. The care plan listed the following
approach for controlling R1’s diabetes: “[a]dminister medications and obtain lab values
per order.” P. Ex. 3, at 4; CMS Ex. 17, at 1. The care plan directed staff to administer 15
units of Lantus at bedtime and Humalog at breakfast, lunch, and dinner according to a
sliding scale depending on R1’s blood glucose readings.' P. Ex. 3, at 4; CMS Ex. 17, at
1. As explained above, R1’s care plan also incorporated his physician’s order for three
daily AccuChecks. P. Ex. 2, at 3 (Physician’s Written Statement In Lieu of Direct
Testimony, § 7); see CMS Ex. 14, at 1-2.

CMS argues that the missed blood glucose tests on March 10 and March 14 show that
Petitioner not only violated R1’s physician’s order but also violated R1’s care plan. CMS
Br. at 3, 5, 6. Petitioner, in its response brief, has not presented any additional arguments
establishing a factual dispute on this issue other than to contend that they were “isolated
incidents of deviation from a care plan.” P. Response at 12.

3. The undisputed evidence establishes that Petitioner was not in
substantial compliance with 42 C.F.R. § 483.25 because Petitioner did not
provide necessary care and services to R1 in accordance with its
hypoglycemia management policy despite staff observations of R1’s
diaphoresis.

The Board has held that CMS may reasonably rely on a facility’s policy relating to the
care and treatment of its residents as evidencing the facility’s understanding of what must
be done to attain or maintain residents’ highest practicable physical, mental, and
psychosocial well-being, as required by 42 C.F.R. § 483.25. The Laurels at Forest
Glenn, DAB No. 2182, at 18 (2008) (citing Spring Meadows, DAB No. 1966, at 16-20.
Such a policy “is also evidence of the standard of care the facility expect[s] its staff to
provide” and of professional standards of care. The Laurels at Forest Glenn, DAB No.
2182, at 18 (citing Oxford Manor, DAB No. 2167, at 5-6 (2008)). Consequently, the

' Lantus and Humalog are medications used to help control glucose levels. See CMS Ex.
28, at 5; P. Ex. 16, at 3. On March 11, 2012, R1’s physician discontinued the sliding
scale and issued a new sliding scale to be followed for the administration of Humalog,
which was still dependent on R1’s glucose readings. CMS Ex. 14, at 4.
Board has decided, a facility’s failure to follow or implement its own resident care policy
may constitute a deficiency under 42 C.F.R. § 483.25. The Laurels at Forest Glenn,
DAB No. 2182, at 18.

It is undisputed that Petitioner had a hypoglycemia management policy in effect for
residents with diabetes during the relevant time period. Petitioner’s policy, titled
“Diabetes: Hypoglycemia Management,” instructs its nurses how to monitor residents
for signs of hypoglycemia. CMS Ex. 23. The policy listed the following signs and
symptoms: diaphoresis, tremors, pallor, tachycardia, and cold, clammy skin. CMS Ex.
23, at 1. Ifa resident exhibited any of the aforementioned signs or symptoms, the policy
instructed the nurses to perform a finger stick for a baseline blood glucose reading. CMS
Ex. 23, at 1. The policy required recordation of a// finger stick results. CMS Ex. 23, at 2.
The policy also stated, “[t]he following protocol will be carried out for abnormal
fingerstick blood sugars unless specific physician’s orders specify otherwise.” The
policy then explicitly described a protocol when a “fingerstick blood sugar [is] less than
65 and/or exhibits any signs or symptoms of hypoglycemia.” CMS Ex. 23, at 2. Under
this scenario, the policy required staff to: administer glucose in the form of either food
(milk with graham crackers or orange juice with sugar) or glucose gel; immediately
notify the nursing supervisor; record vital signs in the nursing notes; notify the physician
of the resident’s vital signs within 15 minutes; and repeat the finger stick blood sugar test
within 30 minutes. CMS Ex. 23.

Petitioner’s policy also sets out a protocol when a “fingerstick blood sugar [is] less than
50 OR there is acute confusion, delirium, or unresponsiveness.” CMS Ex. 23, at 2.
Under this scenario, the policy required staff to: administer Glucagon; record the
resident’s vital signs in the nursing notes; notify the physician of the vital signs and
action taken within 15 minutes; and repeat the finger stick blood sugar test within 30
minutes.

There is no dispute that R1 had a sweating episode on the night of March 16, 2012. CMS
has come forward with evidence alleging that Petitioner’s nursing staff did not follow its
hypoglycemia management policy, which CMS claims was triggered by observation of
R1’s sweating episode. Contrary to Petitioner’s hypoglycemia policy, the nursing staff
did not record R1’s baseline blood glucose reading, vital signs, and did not immediately
notify the nursing supervisor that he was sweaty around 9:00 p.m. on March 16, 2012,
nor did they notify his physician of R1’s condition within 15 minutes (or at all) that
evening. Further, R1’s medical records contain no documentation that staff did notice R1
to be sweating or that nursing staff closely monitored R1 and observed him frequently for
the next 24 hours. See CMS Ex. 23, at 2; CMS Ex. 30, at 7 (nurse surveyor’s Written
Statement in Lieu of Direct Testimony, § 23).

The next morning, around 6:00 a.m. or 6:30 a.m., a nurse found R1 unresponsive, and, at
6:50 a.m., his blood glucose reading was 53. The staff administered Glucagon to R1 to
10

raise his blood glucose levels and notified his physician. R1 continued to remain
unresponsive, staff called 911, and R1 was transported to the hospital where he
subsequently died on March 22, 2012. CMS Ex. 9, at 20, 21; CMS Ex. 11; see CMS Ex.
22, at 20-21; CMS Ex 28, at 5 (CMS’s Expert Witness’s Written Statement in Lieu of
Direct Testimony, §] 22); CMS Ex. 30, at 9-10 (State nurse surveyor’s Written Statement
in Lieu of Direct Testimony, J 28-31).

Petitioner does not dispute that there is no documentation related to R1’s sweating
episode contemporaneously recorded on the night of March 16, 2012. Petitioner argues,
owever, that R1’s sweating episode did not trigger its hypoglycemia management
policy. Petitioner contends that R1 did not have “profuse” or “excessive” sweating, and
thus, did not satisfy the definition of diaphoresis under its policy such that monitoring
was necessitated. P. Response at 9-10. Petitioner claims further that CMS’s only
evidence concerning R1’s sweating comes from the surveyor’s notes of interviews with
its staff. P. Response at 9 n.7. According to Petitioner, R1 was not in any distress and
is sweating episode “was attributable to physical exertion and not a hypoglycemic
episode.” P. Response at 9-10 (emphasis in original). Petitioner also points out that R1
never had a glucose reading below the threshold minimum of 65 prior to 6:50 a.m. on
March 17. Petitioner notes that its staff had in fact performed an AccuCheck test on R1
around 5:07 pm, and the recorded blood glucose reading was 129, which is “clearly not in
the range of hypoglycemia.” P. Prehearing Br. at 19; see CMS Ex. 12.

Petitioner relies on the definition of “diaphoresis” found in Webster’s New World
College Dictionary (4" ed. 2004), which defines “diaphoresis” as “perspiration,
esp[ecially] when profuse.” P. Prehearing Br. at 20. Petitioner also relies on the Board’s
decision in Life Care Ctr. of Tullahoma, in which the Board noted that the facility’s
Medical Director had testified that “[c]ommon symptoms of low blood sugar
(hypoglycemia) include excessive perspiration, weakness, faintness or dizziness, blurred
vision, tremors, tachycardia (racing heartbeat), headache, or even sudden
unconsciousness.” P. Prehearing Br. at 20, citing Life Care Ctr. of Tullahoma, DAB No.
2304, at 12 n.2.

As further support that its hypoglycemia policy was not implicated by R1’s sweating
episode, Petitioner cites the testimony of both R1’s physician and its medical expert
witness. P. Prehearing Br. at 18-19; P. Exs. 2, 16. R1’s physician states:

[Petitioner’s hypoglycemia] Policy is not implicated unless a
resident is exhibiting any of the enumerated symptoms and a
blood glucose reading registers below 65 or above 350. Even
if Resident 1’s reported sweating were consistent with
diaphoresis, and I understand that it was not, Resident 1’s
blood glucose readings around the time the sweating was
observed were within normal limits. Second, it would be
11

irrational to implement the procedures contained in the Policy
if a patient was exhibiting only one of the symptoms
contained therein and did not have a blood glucose reading
indicating hypoglycemia... . [I]t is my understanding that
the sweating was attributable to a known and obvious cause —
Resident 1’s physical exertion — and has not been described
anywhere in the record as the type of profuse or excessive
sweating that would raise a concern that Resident 1 was
diaphoretic.

P. Ex. 2 (R1’s Physician’s Written Statement in Lieu of Direct Testimony, { 6).

In Petitioner’s medical expert’s declaration, the expert echoes the physician’s statement
in stating that “[t]here is no evidence” to support that R1’s sweating episode represented
a “pathological event requiring further evaluation and/or treatment.” The expert claims
that R1 was “hot from exercise” and there was no basis to conclude that he was
diaphoretic and Petitioner’s hypoglycemia policy should have been evoked. The expert
also notes that a nurse observed R1 around 3:00 a.m. on the morning of March 17, 2012,
and “he was his usual normal self and was talking with no problems.” According to the
expert, someone who has had a hypoglycemic event would not reasonably be expected to
improve without any interventions. P. Ex. 16 (Petitioner’s Medical Expert’s Declaration,
49 21-23, 27).

Neither R1’s physician nor Petitioner’s expert witness had any first hand observation of
R1’s sweating episode on the night of March 16, 2012. Their knowledge of R1’s
sweating is derived after the fact, from their review of R1’s records and statements of
Petitioner’s staff.” I note further that the record they reviewed lacked any
contemporaneous documentation related to R1’s sweating episode. Nevertheless, I
accept, for purposes of summary judgment, that R1 was not profusely or excessively
sweating. I also accept that during that time R1 did not have a glucose reading below the
threshold minimum of 65 prior to 6:50 a.m. on March 17, 2012. Further, I also accept
that R1’s sweating was due to his physical exertion as a result of propelling himself in his
wheelchair. However, Petitioner’s assertions do not create any disputes of material fact.
Moreover, the claims by R1’s physician and Petitioner’s expert witness that only profuse
or excessive, non-exercise-related, sweating would be considered a hypoglycemic
symptom sufficient to trigger the facility’s hypoglycemia policy has no support in the
plain language of Petitioner’s policy.

It is unreasonable for me to make an inference for summary judgment purposes that
Petitioner’s policy actually required an observation of profuse sweating or that Petitioner

> Petitioner’s expert also indicated that he had reviewed CMS’s prehearing brief and
related exhibits.
12

excepted sweating due to physical exertion from its policy. Ido not have to accept as
true inferences that are unreasonable for the purposes of summary judgment. See
Brightview Care Ctr., DAB No. 2132, at 10. Petitioner’s hypoglycemia policy does not
make exceptions for different types or causes of diaphoresis or sweating. CMS Ex. 23.
Nowhere is there any language that further defines diaphoresis or states that a resident’s
sweating must be profuse or excessive to trigger the policy. Based on the plain language
of the policy, any diaphoresis, regardless of the degree of sweating, would be sufficient to
trigger the protocols. Moreover, even if R1’s sweating may have been caused by his
physical exertion rather than a change in his blood glucose level, this is irrelevant
inasmuch as Petitioner’s policy does not instruct its nurses to ascertain the cause of a
resident’s sweating. The fact that Rl was having a sweating episode was sufficient, in
and of itself, to trigger Petitioner’s hypoglycemia policy.

Further, the Webster’s Dictionary definition of “diaphoresis” on which Petitioner relies
would not preclude R1’s sweating episode from triggering Petitioner’s policy. The
relied-upon dictionary definition does not state that diaphoresis refers only to “profuse
sweating.” The definition is worded to state that diaphoresis is perspiration, and notes
that it “especially” includes “profuse” perspiration.

Despite arguing that the facility’s hypoglycemia policy did not apply to R1’s sweating
episode, Petitioner does purport, however, that a LPN performed an additional
AccuCheck test on R1 around 9:00 p.m. on March 16, and that the blood glucose reading
was 135, which is normal. P. Ex. 10, at 2 (LPN’s Written Statement in Lieu of Direct
Testimony, § 7). The LPN admits that she did not record this blood glucose result
anywhere in R1’s medical records. P. Ex. 10, at 2 (LPN’s Written Statement in Lieu of
Direct Testimony, §] 7). According to Petitioner, because the finger stick test returned a
normal reading, R1 was “not in distress” and its staff was not required to take any further
actions under its hypoglycemia policy. P. Response at 10-11.

For purposes of summary judgment, I will accept that Petitioner’s LPN took an
unrecorded finger stick test of R1 around 9:00 p.m., which would be around the time of
R1’s sweating episode. I also accept that this test satisfied, in part, Petitioner’s
ypoglycemia policy’s requirement as it regarded a baseline finger stick. Moreover, I
accept that the LPN obtained a normal blood glucose reading for R1, which she did not
document in R1’s medical records.

Although the LPN may have administered the finger stick test as required under
Petitioner’s policy, it is undisputed that Petitioner’s nurses failed to record it as required
or take any further actions after staff observed R1 sweating. Petitioner disputes whether
further action was necessary by relying on R1’s physician’s statement. P. Prehearing Br.
at 19. In his written statement quoted above, R1’s physician stated that Petitioner’s
“Policy is not implicated unless a resident is exhibiting any of the enumerated symptoms
and a blood glucose reading registers below 65 or above 350.” P. Ex. 2 (R1’s Physician’s

13

Written Statement in Lieu of Direct Testimony, § 16) (emphasis in original). According
to R1’s physician, it was “irrational to implement the procedures contained in the Policy
if a patient was exhibiting only one of the symptoms contained therein and did not have a
blood glucose reading indicating hypoglycemia.” P. Ex. 2 (R1’s Physician’s Written
Statement in Lieu of Direct Testimony, § 16).

I need not accept R1’s physician’ assertions because they are inconsistent with and
unsupported by the plain language of Petitioner’s hypoglycemia policy. As stated above,
Petitioner’s policy explicitly sets out a protocol that its nurses are to follow in a situation
where a resident’s blood sugar reading is “less than 65 and/or exhibits any signs or
symptoms of hypoglycemia.” CMS Ex. 23, at 2 (emphasis added). The “and/or”
phrasing contained in the policy contradicts R1’s physician’s claim that a resident has to
exhibit both a hypoglycemic symptom and an abnormal blood glucose reading to trigger
the policy.

Although R1 apparently had a normal blood glucose reading when the LPN checked him
around 9:00 p.m., there can be no dispute that the “and/or” phrasing (versus an inclusion
of simply the word “and”) in Petitioner’s protocol meant that the presence of R1’s
sweating, even in the absence of an abnormal blood sugar reading, triggered Petitioner’s
policy. Because R1 had a sweating episode, Petitioner’s nurses should then have
implemented all of the following steps of the protocol, especially including: notifying the
nursing supervisor immediately, recording his vital signs in the nursing notes, notifying
his physician within 15 minutes, monitoring R1 closely until his blood sugar was in the
normal range “and/or” he was asymptomatic, then observing him frequently for 24 hours
with documentation in the nursing notes and the 24-hour report, and transferring him to
the hospital if he failed to respond to the foregoing interventions. CMS Ex. 23, at 2.

In her written statement, the state agency nurse surveyor confirmed that she found no
documentation in Petitioner’s records that its nurses had notified the nursing supervisor
or R1’s physician that R1 had a sweating episode and found no documentation that
Petitioner’s nurses observed him frequently for 24 hours, as required by Petitioner’s
policy. CMS Ex. 30, at 7 (State nurse surveyor’s Written Statement in Lieu of Direct
Testimony, § 23). Petitioner has not challenged these statements of the nurse surveyor.

The uncontroverted evidence establishes that Petitioner’s staff did not follow the plain
language of its hypoglycemia management policy when facility staff observed R1 having
a sweating episode on March 16, 2012. Because its staff did not follow the policy,
Petitioner thus failed to provide the necessary care and services to R1 under 42 C.F.R.

§ 483.25.

14

C. The PICMP that CMS imposed is reasonable.

In determining whether the $6,000 PICMP amount imposed against Petitioner is
reasonable, I consider the factors listed in 42 C.F.R. § 488.438(f): 1) the facility’s history
of noncompliance, including repeated deficiencies; 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.

I also 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. CarePlex of Silver Spring, DAB No. 1683, at 8 (1999). Iam
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. Barn Hill Care
Ctr., DAB No. 1848, at 21 (2002); Cmty. Nursing Home, DAB No. 1807, at 22-26
(2002); Emerald Oaks, DAB No. 1800, at 9 (2001); CarePlex of Silver Spring, DAB No.
1683, at 8.

Other than claiming in its prehearing brief that the $6,000 PICMP is “unreasonable,”
Petitioner has not otherwise come forward with any evidence with respect to any of the
regulatory factors that would affect my consideration of the amount of the penalty. P.
Prehearing Br. at 25; see 42 C.F.R. § 488.438(f). In discussing the burden of proof
regarding the regulatory factors, the Board has held that “an ALJ or the Board properly
presumes that CMS considered the regulatory factors and that those factors support the
amount imposed.” Pinecrest Nursing & Rehab. Ctr., DAB No. 2446, at 23 (2012)
(emphasis in original; citations omitted). Thus, CMS is not required to present evidence
regarding each regulatory factor. Instead, the burden is on Petitioner “to demonstrate,
through argument and the submission of evidence addressing the regulatory factors, that a
reduction is necessary to make the CMP amount reasonable.” Pinecrest Nursing &
Rehab. Ctr., DAB No. 2446, at 23, quoting Oaks of Mid City Nursing & Rehab. Ctr.,
DAB No. 2375, at 26-27 (2011).

Nonetheless, I am compelled to comment on the seriousness of Petitioner’s
noncompliance. Vigilant monitoring of blood sugar levels in a diabetic resident is
critically important. Here, Petitioner’s nursing staff did not perform the required number
of blood glucose checks on R1 on March 10 and March 14, 2012, in contravention of
R1’s physician’s order. Because of this noncompliance, on those two dates staff would
not have obtained required blood glucose readings necessary to monitor R1’s condition
and would not have been able to administer the proper dosage of R1’s sliding scale
diabetes medication under his care plan, which was dependent on his blood glucose
15

levels. Further, on March 10, 2012, Petitioner’s staff failed to follow R1’s care plan
because they did not administer sliding scale Humalog at all to R1 on that date. These
deficiencies alone substantiate the amount of the penalty.

In addition, Petitioner’s staff did not implement its hypoglycemia management policy
when R1 had a sweating episode. By not executing the steps outlined in the facility’s
policy, which included heightened monitoring, notification of the nursing supervisor and
the physician, and documentation in R1’s medical records, staff clearly put R1 at risk for
serious harm. I thus find that Petitioner is also culpable for that noncompliance.

Given the seriousness of Petitioner’s noncompliance and its culpability, I find that a
PICMP of $6,000, which is in the middle of the allowable PICMP range ($1,000 to
$10,000), is a reasonable remedy for Petitioner’s failure to comply substantially with
Medicare requirements. 42 C.F.R. §§ 488.408(d)(iv), 488.438(a)(2).

As set forth above, I grant summary judgment in favor of CMS finding that the
undisputed material facts establish that Petitioner was not in substantial compliance with
quality of care Medicare requirements and that the PICMP CMS imposed is reasonable.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Thomas Macari, D.O.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-550
Decision No. CR3155

Date March 14, 2014

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
deny Petitioner early termination of his opt-out status.

I. Background

Petitioner is a physician located in Lynnfield, Massachusetts. It is undisputed that in July
2012 he spoke with a Medicare representative regarding enrollment in the Medicare
program. The representative advised him that he could either enroll in the Medicare
program or “sign up for the opt-out list.” Petitioner asserts he was not advised that he
had the option of becoming a non-participating physician. CMS Exhibit (Ex.) | at 1
(Petitioner’s September 6, 2013 request for hearing).

On July 10, 2012, Petitioner signed and submitted an “opt-out affidavit” to NHIC, Corp.
(a Medicare contractor). CMS Ex. 2. In this document, Petitioner affirmed:

I promise that I will not submit any claim to Medicare for any item or service
provided to any Medicare beneficiary during the 2-year period beginning on the
following effective date July 10, 2012 nor will I permit any entity acting on my
behalf to submit a claim to Medicare for services furnished to a Medicare
beneficiary, except as specified in 42 C.F.R. [§] 405.440.

CMS Ex. 2.

After signing the affidavit, Petitioner began independent contract work in order to
supplement the income of his newly established medical practice. In April 2013 his
employer informed him that he could not perform this independent contract work because
his name was on Medicare’s opt-out list. CMS Ex. 1 at 1. On April 23, 2013, Petitioner
wrote NHIC requesting early termination of his opt-out status. NHIC transmitted his
request to CMS. See CMS Ex. 3 at 1.

On August 26, 2013, CMS issued an initial determination denying Petitioner’s April 23,
2013 request for early termination of his opt-out status. CMS Ex. 3. On September 6,
2013, Petitioner requested reconsideration. CMS Ex. | at 1-2. On December 6, 2013,
National Government Services (NGS), on behalf of CMS, denied Petitioner’s
reconsideration request. NGS stated that “[b]ased on section 1802(b) of the Social
Security Act (the Act), and 42 CFR § 405.445(b) you are not eligible for early
termination of your opt-out status.” NGS also stated that:

Physicians and practitioners who have not previously submitted an opt-out
affidavit under section 1802(b)(3) of the Act, may choose to terminate their opt-
out status within 90 days after the effective date of the opt-out affidavit, if the
physician or practitioner satisfies the requirements of 42 CFR § 405.445(b). No
other method of terminating opt-out status before the end of the two year period is
available.

CMS Ex. 4 at 1. Petitioner filed a timely hearing request and the case was assigned to me
for hearing and decision. CMS filed a motion for summary judgment and brief
accompanied by proposed exhibits that it identifies as CMS Exs. | — 4. Petitioner
opposed CMS’s motion (P. Brief). Petitioner did not file any exhibits, although he filed
attachments to his hearing request which CMS incorporated into its exhibits. Petitioner
did not object to CMS’s proposed exhibits. I receive CMS Exs. | — 4 into the record.

I am electing to treat CMS’s motion for summary judgment and Petitioner’s opposition to
that motion as final briefs addressing the merits of the case given that neither party
desires to offer testimony. I base my decision on the parties’ arguments and the exhibits
CMS filed.
IL. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether CMS properly denied Petitioner early termination of his opt-out
status.

B. Findings of Fact and Conclusions of Law
I. CMS properly denied Petitioner early termination of his opt-out status.

The Medicare program covers physician services as a Part B benefit. A physician is a
supplier to the Medicare program. Social Security Act (Act), §§ 1832 (42 U.S.C. §
1395k)); 1861(d) (42 U.S.C. § 1395x(d)); and 1861(s)(1) (42 U.S.C. § 1395x(s)(1)). A
physician has three options regarding Medicare reimbursement for his or her services.
The physician can elect to: (1) participate in the Medicare program and take assignment
on all Medicare claims and accept Medicare’s approved amount as payment for services;
(2) become a non-participating physician and, on a case-by-case basis, either accept
assignment from Medicare or bill a Medicare beneficiary a Medicare-limited amount.
Act, §§ 1833(a)(1) (42 U.S.C. § 1395(1(a)(1)); 1842(h)(1) (42 U.S.C. § 1395u(h)(1));
1842(j)(1)(A) (42 U.S.C. § 1395u(j)(1)(A)); 1848(a)(3) (42 U.S.C. § 1395w-4(a)(3)); and
42 C.F.R. § 400.202; or (3) “opt out” of Medicare and contract privately with Medicare
beneficiaries. Act, §§ 1802(b)(3) (42 U.S.C. § 1395a(b)(3)); 1851 (42 U.S.C. § 1395w-
21)); and 42 C.F.R. § 405.405.

In the event that a physician elects to opt out, Medicare makes no payment for the
services he or she provides to beneficiaries except in emergency or urgent care
circumstances. 42 C.F.R. §§ 405.405; 405.440. To opt out, a physician must sign an
affidavit attesting that, during the two-year opt-out period, the physician will provide
services to Medicare beneficiaries only through private contracts and will not submit
claims for payment to Medicare or allow any entity to submit a Medicare claim on his or
her behalf. 42 C.F.R. § 405.420. The opt-out period is the two-year period beginning on
the effective date of the affidavit.' 42 C.F.R. § 405.400.

For a physician to properly terminate an opt-out status early, the regulation at 42 C.F.R. §
405.445(b) requires that a physician must:

(1) Not have previously opted out of Medicare.

' The reconsideration determination states that the effective date of Petitioner’s opt-out
status is July 16, 2012. However, CMS now asserts that the effective date is the date
Petitioner signed his affidavit, July 10, 2012. CMS Br. at 1 n.1.
(2) Notify all Medicare carriers, with which he or she filed an affidavit, of the
termination of the opt-out no later than 90 days after the effective date of the opt-
out period.
(3) Refund to each beneficiary with whom he or she has privately contracted all
payment collected in excess of:

(i) the Medicare limiting charge (in the case of physicians); or

(ii) The deductible and coinsurance (in the case of practitioners).
(4) Notify all beneficiaries with whom the physician or practitioner entered into
private contracts of the physician’s or practitioner’s decision to terminate opt-out
and of the beneficiaries’ right to have claims filed on their behalf with Medicare
for services furnished for the period between the effective date of the opt-out and
the effective date of the termination of the opt-out period.

42 CFR. § 405.445(b).

CMS’s determination that a physician failed to properly terminate an opt-out status is an
initial determination that the physician may appeal pursuant to the review procedures at
42 C.F.R. § 498. 42 C.F.R. §§ 405.450; 405.803. A physician dissatisfied with an initial
determination may request reconsideration. 42 C.F.R. § 498.22. A physician dissatisfied
with a reconsidered determination is entitled to a hearing before an administrative law
judge. 42 C.F.R. § 498.40.

Petitioner does not dispute that he signed an opt-out affidavit and admits that he did not
seek to terminate his opt-out status within 90 days of its effective date or otherwise fulfill
any of the requirements of 42 C.F.R. § 405.445(b). CMS Ex. | at 1-2; P. Brief. The
evidence shows that Petitioner signed his opt-out affidavit on July 10, 2012 attesting that
he would not submit any claims to Medicare for services provided to a Medicare
beneficiary, or allow another entity to do so on his behalf, for two years starting on July
10, 2012. CMS Ex. 2. Petitioner did not request termination of his opt-out status until
April 23, 2013, more than 90 days after his July 10, 2012 effective date. CMS Ex. 3 at 1.
Accordingly, I find that Petitioner is bound by the terms of the opt-out affidavit he signed
and that there is no basis under the statute or regulations for early termination of his opt-
out status.

2. Petitioner’s equitable argument is unavailing.

Petitioner argues that he should be allowed to terminate his opt-out status early because
he relied on “incorrect and incomplete” information supplied by a CMS representative
which led him to sign the opt-out affidavit. Petitioner argues also that denying him an
early opt-out means he is unable to do the contract work that supplements his income,
which has placed a “significant financial hardship” on his family. CMS Ex. | at 1-2.
Petitioner notes CMS’s argument that it was Petitioner’s responsibility to familiarize
himself with Medicare regulations prior to choosing to opt out of Medicare, and that
Petitioner has an affirmative duty to know the laws and regulations surrounding
Medicare. Petitioner argues, however, that because he was not informed by a CMS
representative that he had the option of becoming a non-participating physician prior to
signing his opt-out affidavit, his opt-out status should be terminated early despite any
duty he might have to familiarize himself with Medicare law. Petitioner asserts that:

As an individual practitioner who has not dealt with Medicare/Medicaid
previously, I attempted to familiarize myself with said regulations by directly
contacting the source at CMS. According to [CMS counsel] government
employees are not capable of providing accurate information. If this is the case,
they should not be providing any information or commentary on my options
regarding Medicare enrollment. They should be exclusively directing me to the
CMS website, which [CMS counsel] states has the necessary information. It is
unreasonable to expect anyone who calls CMS to know that their employee’s [sic]
are not privy to the complete and accurate information regarding job [sic]. Their
inability to do their job or direct me to the CMS website led me to circumstances I
am currently facing. [CMS counsel] also states that it is acceptable to use the
AMA [American Medical Association] or AAFP [American Academy of Family
Physicians] as more reliable sources of information than CMS’[s] own
representatives. It is also incomprehensible that I would seek out information
regarding CMS at any other location than CMS.

P. Brief at 1-2.

In making this argument, Petitioner is asking for equitable relief, in essence arguing that
CMS should be estopped from denying him early termination of his opt-out status based
on the misinformation he received.

I am not authorized to provide Petitioner the equitable relief he seeks. First, | am
unsympathetic to Petitioner’s argument that he was in effect misled by a federal
employee into believing that opting out of Medicare would be in his self interest. As a
professional dealing with the program he has the duty to familiarize himself with the
regulations that govern his interactions with Medicare. Petitioner has not alleged that the
regulations that govern participation and opting out are vague or difficult to understand
(and, in fact, they are clear on their face). He could have and should have read the
regulations before making his election.

Second, I do not have the authority to reimburse or enroll in Medicare a physician who
does not meet statutory or regulatory requirements (which I would be doing here by
providing Petitioner an avenue not recognized by statute or regulation to terminate his
opt-out agreement early). Finally, even if I could consider Petitioner’s equitable
argument, however, it would not provide Petitioner justification for an early termination
of his opt-out status. Equitable estoppel cannot lie against the government (if at all)
absent a showing of affirmative misconduct, such as fraud. Petitioner has not alleged
such affirmative misconduct on behalf of CMS’s representatives in this instance.

/s/
Steven T. Kessel
Administrative Law Judge


The Center

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.
The Ave Superdeli, LLC,
Respondent.
Docket No. C-14-458
FDA Docket No. FDA-2013-H-1672
Decision No. CR3152

Date: March 13, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

‘or Tobacco Products (CTP) initiated the above-captioned matter when it

filed an Administrative Complaint for Civil Money Penalties (Complaint) with the
Departmental Appeals Board, Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. CTP seeks to impose civil

money penal

ties under the Federal Food, Drug, and Cosmetic Act (Act) and the Act’s

implementing regulations.

The Complai

int alleges the following facts. Respondent owns an establishment that sells

tobacco products and is located at 714 Albany Avenue, Hartford, Connecticut 06112.

Complaint §

3. CTP conducted two inspections of the establishment. Complaint { 9.

During one of the inspections, an FDA-commissioned inspector observed that:

[A] p

erson younger than 18 years of age was able to purchase a package of

Maverick Box 100s cigarettes on April 19, 2013, at approximately 8:54
AM; and. . . the minor’s identification was not verified before the sale, as
detailed above, on April 19, 2013, at approximately 8:54 AM.

Complaint § 10.

On May 2, 2013, CTP issued a warning letter to Respondent specifying the violations that
the inspector observed. The letter warned Respondent that if it failed to correct the
violations, civil money penalties could be imposed on it and that it was Respondent’s
responsibility to ensure compliance with the law. Complaint § 10.

Though an individual named “Cobbs” received the warning letter on May 6, 2013, the
FDA received no response to the warning letter. Complaint § 11.

During a subsequent inspection of Respondent’s establishment, FDA-commissioned
inspectors documented that “a person younger than 18 years of age was able to purchase
a package of Newport Box 100s cigarettes on July 24, 2013, at approximately 9:47 AM.”
Complaint § 1.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served Respondent with the
Complaint on January 15, 2014, via United Parcel Service. CTP charged Respondent
with violating 21 C.F.R. § 1140.14(a) (sale of tobacco products to a minor) and 21
C.F.R. § 1140.14(b)(1) (failure to verify the age of a person purchasing tobacco products
by means of photographic identification containing the bearer’s date of birth). Complaint
4 1, 10. CTP asked the CRD to impose a $250 civil money penalty based on two
alleged violations of the regulations in a 12-month period. Complaint § 13.

The Complaint provided detailed instructions related to filing an answer and requesting
an extension of time to file an answer. Complaint J 14-18, 20-22. The Complaint stated
that failure to file an answer could result in the imposition of a civil money penalty
against Respondent. Complaint § 19. Further, after CTP filed the Complaint, CRD sent
Respondent an Initial Order informing Respondent of the requirement to file an answer to
avoid a default judgment. CRD sent a form answer along with the Initial Order that
Respondent could fill out and file with CRD. Respondent neither filed an answer nor
requested an extension of time within the 30-day time period prescribed in 21 C.F.R.

§ 17.9.

If a respondent does not file an answer within 30 days of a properly served complaint, the
regulations provide that:

[T]he presiding officer shall assume the facts alleged in the complaint to be
true, and, if such facts establish liability under the relevant statute, the
3

presiding officer shall issue an initial decision within 30 days of the time
the answer was due, imposing:
(1) The maximum amount of penalties provided for by law for the
violations alleged; or
(2) The amount asked for in the complaint, whichever amount is smaller.

21 C.F.R. § 17.11(a). Further, a failure to file a timely answer means that “the
respondent waives any right to a hearing and to contest the amount of the penalties and
assessments” imposed in the initial decision. 21 C.F.R. § 17.11(b).

Accepting the facts alleged in the Complaint as true, I find that those facts establish
Respondent’s liability under the Act. See 21 U.S.C. §§ 333(f)(9), 387c(a)(7)(B), 387£(d);
21 C.F.R. §§ 1140.1(b), 1140.14. Lalso find that CTP’s request to impose a $250 civil
money penalty is permissible. See 21 C.F.R. § 17.2.

Therefore, Respondent is directed to pay a civil money penalty in the amount of $250.
This initial decision becomes final and binding upon both parties 30 days after the date of
its issuance. 21 C.F.R. § 17.11(b).

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

St. Catherine’s Health Services,
(PTAN: 10-8201),
(NPI: 1811950934),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-175
Decision No. CR3151

Date: March 12, 2014

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services
(CMS) to revoke the Medicare enrollment and billing privileges of Petitioner, St.
Catherine’s Health Services, Inc.

I. Background

Petitioner is a home health care agency that does business in the vicinity of Miami,
Florida. It participated in the Medicare program. CMS revoked Petitioner’s
Medicare enrollment and billing privileges, finding that Petitioner had claimed
reimbursement for Medicare services for individuals who had not been certified
properly as needing home health services by a treating physician. That
determination was affirmed on reconsideration and Petitioner requested a hearing
before an administrative law judge.

CMS filed its pre-hearing exchange and with it a motion for summary judgment.
Petitioner filed its exchange and opposed CMS’s motion. CMS filed a reply brief.
I conferred with the parties and each advised me that it did not desire to cross-
examine its opponent’s witness. Additionally, I offered to Petitioner’s counsel to
subpoena the physician whose alleged certifications of Medicare beneficiaries for
home health services are at issue in this case for the purpose of obtaining his
testimony. Petitioner’s counsel declined my offer.

lam electing to treat the motion for summary judgment and Petitioner’s
opposition to that motion as final briefs addressing the merits of the case given
that neither party desires to offer testimony. I base my decision on the parties’
arguments and the exhibits that they filed. CMS filed exhibits that it identified as
CMS Exs. 1 — 8, 9a, 9b, and 10.' Petitioner filed exhibits that it identified as P.
Exs. 1 — 93. I receive all of the parties’ exhibits into the record.

II. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether CMS properly revoked Petitioner’s Medicare participation
and its billing privileges.

B. Findings of Fact and Conclusions of Law

Providers and suppliers may participate in the Medicare program and receive
reimbursement for their services to eligible beneficiaries only if they comply with
all applicable laws and regulations governing their participation. CMS is
authorized to revoke the Medicare enrollment and billing privileges of any
participating provider or supplier that is not complying with enrollment
requirements. 42 C.F.R. § 424.535(a)(1).

The application for participation in Medicare explicitly imposes on a home health
care agency (or any provider or supplier) the obligation to comply with all
Medicare participation requirements. An applicant signs a certification in which it
expressly agrees that it is bound by these requirements. When Petitioner applied
to participate in Medicare it not only subjected itself to applicable laws and
regulations but it expressly agreed that it was doing so. CMS Ex. 2 at 49; CMS
Ex. 3.

+ CMS Ex. 9a and 9b are actually all part of one exhibit, CMS Ex. 9, with
consecutively numbered pages, that was filed in two parts. When I cite the exhibit
in this decision I cite it as “CMS Ex. 9 at (page).”
“Home health services” includes items or services furnished to an individual who
is under the care of a physician, by a home health agency, “under a plan. . .
established and periodically reviewed by a physician.” Social Security Act (Act)
§ 1861(m). A physician must certify that home health services are necessary in
order that they be reimbursable by Medicare. 42 C.F.R. § 424.22(a).

A written certification means more than a physician’s signature on a form.
“Certification” means that a physician has a treatment relationship with a patient,
that he or she sees and evaluates that patient, and that he or she determines and
attests in writing that the patient needs the services that are provided by a home
health agency. Governing regulations envision that a physician will premise his or
her certification on a face-to-face encounter with a beneficiary in which the
physician evaluates the beneficiary’s needs and determines that the beneficiary
needs skilled nursing care or physical or speech therapy and that the beneficiary is
confined to the home except when receiving outpatient services. 42 C.F.R.

§ 424.22(a)(1)(i), (ii). The physician must establish a comprehensive plan of
treatment for the beneficiary. 42 C.F.R. § 424.22(a)(1)(iii). The physician must
sign the certification at the time that the plan of treatment is established or as soon
thereafter as is practicable. 42 C.F.R. § 424.22(a)(2).

Failure by a home health care agency to obtain the proper certification by a
physician for home health services is a violation of participation requirements. It
is a basis for CMS to revoke that agency’s Medicare enrollment and its billing
privileges. 42 C.F.R. § 424.535(a)(1). A single instance of failure to provide
proper certification is sufficient grounds for revocation.

This case involves 26 Medicare beneficiaries who ostensibly were certified as
being eligible for home health care services by a physician, Dr. Carlos Gonzalez.
Petitioner submitted reimbursement claims for these beneficiaries listing Dr.
Gonzalez as the “attending” (certifying) physician for each of them. CMS Ex. 5;
CMS Ex. 7. In other words, Petitioner submitted reimbursement claims for the 26
beneficiaries in which they told Medicare that Dr. Gonzalez had certified each of
them for home health care services.

CMS investigated the services that Dr. Gonzalez had ostensibly certified because
he had not filed Medicare reimbursement claims for any of the 26 beneficiaries in
question. CMS Ex. 6. CMS investigators showed Dr. Gonzalez medical records
from Petitioner including plans of care for the 26 beneficiaries, all of which bore
signatures purporting to be that of Dr. Gonzalez. When confronted with these
records, Dr. Gonzalez denied signing any of them and signed statements
confirming that the signatures on the records were not his. CMS Ex. 7; CMS Ex.
9 at 1-167. Additionally, Dr. Gonzalez denied ordering home health agency
services, verbally or in writing, for any of the 26 beneficiaries. Id.
Medicare payment records corroborate Dr. Gonzalez’ assertion to the investigators
that he did not certify the 26 beneficiaries for home health care. CMS Ex. 5; CMS
Ex. 6. The payment records do not show Dr. Gonzalez as having claimed
reimbursement for services that he provided to any of the beneficiaries. CMS Ex.
5; CMS Ex. 7. The fact that Dr. Gonzalez — who does claim reimbursement for
patients that he treats — did not file reimbursement claims for any of the 26
beneficiaries in question strongly supports his assertions that he did not certify any
of the beneficiaries for home health care and that the signatures on Petitioner’s
records are not his. See CMS Ex. 6.

The inference that I draw from the evidence offered by CMS is that Petitioner filed
claims for Medicare reimbursement based on invalid certifications that these
individuals were eligible for home health care services and on equally invalid
plans of care and treatment orders. Petitioner’s failure to obtain valid
certifications before claiming reimbursement for the services it allegedly provided
to these beneficiaries is a violation of the regulations that govern home health care
services and ample legal justification for CMS to revoke Petitioner’s provider
enrollment and Medicare billing privileges.

Petitioner makes several arguments to counter the evidence that CMS offered.
First, it suggests that Dr. Gonzalez’ denial that he signed the certifications and
treatment plans for the 26 beneficiaries is not credible. However, Petitioner has
offered no evidence that undermines Dr. Gonzalez’ credibility. I afforded
Petitioner the opportunity to take Dr. Gonzalez’ testimony under oath and it
declined that offer. It has offered no affirmative proof to challenge his statements.
Furthermore, when the records that are at issue are looked at closely, they support
— rather than contradict — Dr. Gonzalez’ assertion that the signatures on the records
are not his. Dr. Gonzalez’ signature on the statements that he gave to CMS is
clearly very different from his purported signature on some of Petitioner’s records.
Compare, for example, Dr. Gonzalez’ signature on CMS Ex. 9 at | with his
purported signature at the bottom of P. Ex. 28 at 2.

Petitioner’s second argument is that even if Dr. Gonzalez may not have signed the
certifications, individuals who worked for Dr. Gonzalez signed other documents
relating to the beneficiaries and the care that they received. I find this argument to
be unpersuasive. First, it is Dr. Gonzalez and only Dr. Gonzalez who was
authorized to certify the beneficiaries for home health care. The regulations
governing home health care services envision a treating relationship between a
physician and a beneficiary. A home health agency may not accept a beneficiary
for care unless a physician certifies that individual’s need. 42 C.F.R.

§ 424.22(a)(1)(iii). Anything other than a physician’s certification is
unacceptable. Second, Petitioner has offered no evidence to show that the other
signatures on the documents, signatures purporting to have been written by a
physician’s assistant and a nurse practitioner, are authentic. Petitioner did not ask
any of the purported authors of these statements to attest to the authenticity of their
signatures. Moreover, Dr. Gonzalez denied working with either a physician’s
assistant or a nurse practitioner. CMS Ex. 7.

Petitioner also offers the affidavit of Brisaida Duarte, who is Petitioner’s
administrator. P. Ex. 92. Ms. Duarte avers that Petitioner “‘verified” the orders for
home health care services ostensibly ordered by Dr. Gonzalez and also “verified”
that all 26 of the beneficiaries in question were being cared for by Dr. Gonzalez.

P. Ex. 92. I find these assertions to be not credible. Not only does Ms. Duarte not
explain what she means by her assertion that she “verified” certain things, but she
does not provide even a shred of explanation as to how this alleged verification
occurred. She doesn’t say, for example, that she or anyone on her staff ever spoke
with Dr. Gonzalez.

Indeed, what is most striking about Petitioner’s evidence is the singular lack of
any evidence that anyone on Petitioner’s staff every met with or spoke to Dr.
Gonzalez. There is nothing in the welter of documents that Petitioner offered that
shows a single phone call to Dr. Gonzalez or a consultation of any type at any
time. Throughout the period when Petitioner allegedly provided care to all 26 of
the beneficiaries, Dr. Gonzalez remains a phantom according to Petitioner’s
documents, a shadowy figure who remains in the background, never seen, never
spoken to, never heard from.

And, yet, if Petitioner is to be believed, somehow Dr. Gonzalez managed to draft
and sign dozens of Petitioner’s records. Petitioner produced a host of treatment
records for the 26 beneficiaries, many containing signatures that purportedly are
that of Dr. Gonzalez. P. Exs. 54-57, 59-90. The signatures on these documents
are plainly put there to make it look as if Dr. Gonzalez played an active role in
ordering and treating the 26 beneficiaries. But, Petitioner offers no explanation at
all as to how he allegedly came to sign these records. If Petitioner’s staff was not
contacting Dr. Gonzalez by phone — and Petitioner has provided no evidence that
its staff did that — or meeting with him face to face — and Petitioner has provided
no evidence that it did that either — then how was it that Dr. Gonzalez would be
signing these documents as if he played an active role in the beneficiaries’ care?
Petitioner does not explain this mystery and the inference that I draw is that it
cannot.

Petitioner’s argues that even if all of these documents with Dr. Gonzalez’
purported signature on them are false, it still operated within the regulatory
requirements in claiming reimbursement for the services it provided for the 26
beneficiaries. That is because, according to Petitioner, it is not required by law to
authenticate anyone’s signature. It contends that it is allowed under Medicare
regulations to accept and rely on whatever paperwork that it receives and that it
has no duty whatsoever to ascertain whether the paperwork is authentic. Indeed, it
argues that it has no duty to communicate at all with a beneficiary’s physician
except in the case of a significant change in the beneficiary’s medical condition.
Thus, according to Petitioner, governing regulations permit it to receive written
certification from a physician for home health care services, provide care for the
beneficiary, and bill Medicare for that beneficiary, and never once speak to the
physician or even communicate with the physician in writing about the
beneficiary’s care except where there is a significant change in the beneficiary’s
condition.

This argument contradicts both the letter and intent of the regulations governing
ome health agencies. Petitioner cannot rely solely on the paperwork that it
receives from a beneficiary’s physician without actively communicating with that
physician about the beneficiary’s condition. The regulations do not envision that a
ome health agency functions as an independent, free-standing provider of care,
independent of a physician’s overall supervision of a beneficiary’s care. To the
contrary, the regulations assume that any beneficiary who is provided care by a
ome health agency remains under the care and supervision of a treating
physician. Any care plan that is established for a Medicare beneficiary while
under the care of a home health agency must be established and periodically
reviewed by the beneficiary’s physician. 42 C.F.R. § 424.22(a)(1)(iii). The home
ealth agency’s services must be furnished while the beneficiary is under the care
of a physician. 42 C.F.R. § 424.22(a)(1)(iv). By necessity the ongoing
relationship between a beneficiary and his or her physician contemplated by the
regulations must involve communication between the home health agency and the
beneficiary’s physician once the beneficiary is admitted to home health care. How
can a physician possibly update a plan of care unless he or she is kept apprised of
a beneficiary’s condition by the home health agency? How can a physician
provide care for any beneficiary if he or she is not in communication with the
agency that is providing care on a day-to-day basis?

Indeed, Petitioner’s care plans envision reporting to the beneficiaries’ physician
and these reports are not limited to circumstances where there are significant
changes in a beneficiary’s condition. E.g., P. Ex. 27 at 4. Had Petitioner’s staff
been in communication with Dr. Gonzalez they would have learned immediately
that he had not certified these beneficiaries for home health care.

The requirement that a home health agency remain in communication with a
beneficiary’s physician impliedly imposes on a home health agency the duty to
verify that the physician is actually ordering the services that he or she purports to
order. That does not mean that an agency must call a physician every time it
receives a document purportedly signed by him or her and inquire whether the
physician’s signature is authentic and whether the physician meant what he or she
is purported to have said. But, it does mean that in the context of an ongoing
treatment relationship the home health agency should learn whether the care was

actually ordered

by a physician.

Petitioner also asserts that it has statements from many of the 26 beneficiaries
whose care is at issue that establish that each of them had a treating relationship
with Dr. Gonzalez. P. Ex. 2—P. Ex. 23. These statements — all of them verbatim

identical except
certified any of tl

or the purported

lates of service — do not prove that Dr. Gonzalez

ese individuals for home health care. First, they do not even

mention Dr. Gonzalez. Secondly, none of the statements purports to prove that
Dr. Gonzalez or anyone else certified the beneficiary as being eligible for home

health care. Eac!
that means “visit

statement merely avers that the beneficiary had “assist” (I infer
ed”) a medical office that has the same address as Dr. Gonzalez’

office on a particular date for a “follow up” with “a doctor.” £.g., P. Ex. 2. None

of the statements specifies which

It is Petitioner’s

loctor was seen or the reason for the visit.

burden to prove that the certifications for the 26 beneficiaries
whose care is at issue are valid giv
CMS showing that these individual!
treating physician, Dr. Gonzalez.

en the strong prima facie case presented by
ls had not been certified by their (attending)
Petitioner clearly failed to meet that burden.

/s/
Steven T. Kessel
Administrative Law Judge