Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Albelardo Lecompte-Torres, M.D.,
Petitioner
v.
The Inspector General.
Docket No. C-11-124
Decision No. CR2379

Date: May 31, 2011

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner Albelardo Lecompte-
Torres, M.D., from participation in Medicare, Medicaid, and all other federal health care
programs for a period of five years. The I.G.’s Motion and determination to exclude
Petitioner are based on the mandatory authority conveyed by section 1128(a)(4) of the
Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(4). The predicate for the I.G.’s action
is Petitioner’s felony conviction of conspiracy to distribute controlled substances in
violation of 21 U.S.C. § 846. The undisputed material facts in this case require the
imposition of a five-year exclusion. Accordingly, I grant the I.G.’s Motion for Summary
Disposition.

I. Background

On September 30, 2010, the I.G. notified Petitioner that for a period of five years,
effective October 20, 2010, he was excluding Petitioner from participation in Medicare,
Medicaid, and all other federally funded health care programs because he had been
convicted of a criminal offense described at section 1128(a)(4) of the Act. LG. Ex. 1.
By letter dated November 24, 2010 Petitioner timely requested review of the I.G.’s
action. I convened a prehearing conference by telephone on December 20, 2010,
pursuant to 42 C.F.R. § 1005.6, in order to discuss procedures best suited for addressing
the issues presented by the case. By Order of December 22, 2010 I established a
schedule for the submission of documents and briefs. The record in this case closed for
purposes of 42 C.F.R. § 1005.20(c) on April 8, 2011 in circumstances set out in my Order
of that date.

The evidentiary record on which I decide the issues before me contains the five exhibits
proffered by the I.G., I.G. Exs. 1-5. Petitioner proffered two exhibits, P. Exs. 1-2. In the
absence of objection, I have admitted all proffered exhibits.

IL. Issues

The legal issues before me are limited to those set out at 42 C.F.R. § 1001.2007(a)(1). In
the context of this record they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(a)(4) of the Act; and

2. Whether the proposed period of exclusion is unreasonable.

The controlling authorities require that these issues be resolved in favor of the I.G.’s
position. Section 1128(a)(4) of the Act mandates Petitioner’s exclusion, for his predicate
conviction has been established. A five-year period of exclusion is the minimum period
established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B), and is
therefore as a matter of law not unreasonable.

III. Controlling Statutes and Regulations

Section 1128(a)(4) of the Act, 42 U.S.C. § 1320a-7(a)(4), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of “[a]ny individual or entity that has been convicted for an offense which
occurred .. . [after August 21, 1996] . . . under Federal or State law, of a criminal offense
consisting of a felony relating to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance.” The terms of section 1128(a)(4) are restated
somewhat more broadly in regulatory language at 42 C.F.R. § 1001.101(d).

The Act defines “convicted” as including those circumstances: “(1) when a judgment of
conviction has been entered against the individual . . . by a Federal . . . court;” or “(2)

when there has been a finding of guilt against the individual . . . by a Federal . . . court;”
or “(3) when a plea of guilty or nolo contendere by the individual . . . has been accepted

by a Federal . .. court... .” Act § 1128(i)(1)-(3), 42 U.S.C. § 1320a-7(i)(1)-(3). These
definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(4) is mandatory and the I.G. must impose it for a
minimum period of five years. Act § 1128(c)(3)(B); 42 U.S.C. § 1320a-7(c)(3)(B).

IV. Findings and Conclusions

Based on the undisputed material facts in the record before me, I find and conclude as
follows:

1. On May 2, 2007, the Federal Grand Jury sitting for the United States District
Court for the District of Puerto Rico charged Petitioner and six co-defendants
with 41 criminal counts including: “Conspiracy to Distribute Controlled
Substances,” “Distribution of Controlled Substances,” “Conspiracy to Commit
Wire Fraud,” and “Money Laundering.” I.G. Ex. 3, at 5, 12, 15, 20.

2. On December 19, 2007, Petitioner pleaded guilty to Count One of the
Superseding Indictment, “Conspiracy to Distribute Controlled Substances,” in
violation of 21 U.S.C. § 846. IG. Ex. 4 at 2; see I.G. Ex. 3. Count One
charged that, “[I]n or about October 30, 2003 through on or about May 2006,
in the District of Puerto Rico, [Petitioner and his co-defendants] did knowingly
and intentionally conspire and agree, together, . . . to distribute and possess
with intent to distribute, outside the scope of professional practice and not for
legitimate medical purpose, a controlled substance, which offense involved a
quantity of not less than 40,000 units of Hydrocodone, a Schedule III
controlled substance,” a felony violation of 21 U.S.C. §§ 841(a)(1);
841(b)(1)(D); 846. I.G. Ex. 4, at 1-2; 1.G. Ex. 3, at 1-12; see 21 U.S.C.

§ 841(b)(1)(E); 18 U.S.C. § 3559(a)(3).

3. On August 8, 2008, the United States District Court for the District of Puerto
Rico accepted Petitioner’s guilty plea. Petitioner was adjudicated guilty of the
offense, “Conspiracy to possess with intent to distribute hydrocodone” ending
May 2006. I.G. Ex. 5, at 1. Petitioner’s sentence included a three-year term of
probation, during which he was required to perform 288 hours of unpaid
community service, a $100.00 assessment, and forfeiture of any property, other
than his medical license, involved in, or traceable to, the offense. I.G. Ex. 5, at
2-5.

4. On September 30, 2010, the I.G. notified Petitioner that he was being excluded
from participation in Medicare, Medicaid, and all federal health care programs
for a period of five years, based on the authority set out in section 1128(a)(4)
of the Act. IG. Ex. 1.
5. Petitioner timely perfected this appeal from the 1.G.’s action by filing his
hearing request dated November 24, 2010 on November 26, 2010.

6. The plea, judgment, and sentence described above in Findings 2 and 3
constitute a “conviction” within the meanings of sections 1128(a)(4) and
1128(i)(1), (2), and (3) of the Act, and 42 C.F.R. § 1001.2.

7.  Petitioner’s conviction described above in Findings 2 and 3 constitutes a Class
C felony. 21 U.S.C. § 841(b)(1)(E); 18 U.S.C. § 3559(a)(3); see also I.G. Ex.
4, at 4.

8.  Petitioner’s conviction described above in Findings 2 and 3 was for conduct
relating to the unlawful manufacture, distribution, prescription, or dispensing
of a controlled substance. I.G. Ex. 5.

9.  Petitioner’s conviction described above in Findings 2 and 3 was for conduct
that occurred after August 21, 1996. LG. Exs. 3-5.

10. By reason of the conviction described above in Findings 2 and 3, Petitioner
was subject to, and the I.G. was required to impose, a period of exclusion from
participation in Medicare, Medicaid, and all other federal health care programs.
Act § 1128(a)(4), 42 U.S.C. § 1320a-7(a)(4).

11. Because the five-year period of Petitioner’s exclusion is the mandatory
minimum period provided by law, it is not unreasonable. Act § 1128(c)(3)(B),
42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

12. There are no disputed issues of material fact and summary disposition is
appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007);
Thelma Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

1. Petitioner’s exclusion is mandated by section 1128(a)(4) of the Act
because Petitioner was convicted of a felony criminal offense related to
the unlawful distribution of a controlled substance after August 21,
1996.

The essential elements necessary to support an exclusion based on section 1128(a)(4) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; (2) the criminal offense must have been a felony; (3) the felony conviction must
have been for conduct relating to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance; and (4) the felonious conduct must have occurred
after August 21, 1996. Thomas Edward Musial, DAB No. 1991 (2005); Russell A.
Johnson, DAB CR1378 (2005); Gerald A. Levitt, D.D.S., DAB CR1272 (2005); Robert
C. Richards, DAB CR1235 (2004).

In this case those elements are established. Petitioner’s exclusion is mandated by the
facts underlying his conviction in the United States District Court for the District of
Puerto Rico of a felony criminal offense that occurred between October 30, 2003, and
May 2006, and was related to the unlawful distribution of a controlled substance. I.G.
Ex. 1.

The criminal charge to which Petitioner pleaded guilty was based on the following facts.
From approximately October 30, 2003 through May 2006, Petitioner, a licensed
physician in the Commonwealth of Puerto Rico, conspired with others to distribute and
possess with intent to distribute certain controlled substances, outside the scope of
professional practice and not for a legitimate medical purpose. I.G. Ex. 3, at 5-6.
Petitioner and his co-defendants, also physicians, worked with various internet
facilitation centers to provide prescription services. The internet facilitation centers
solicited customers throughout the United States through their internet websites.
Customers from across the United States seeking controlled substances would access
these websites and order prescription drugs after filling out an online questionnaire and
providing payment. I.G. Ex. 3, at 7. Petitioner and his co-defendants prescribed
controlled substances and dangerous drugs to the internet customers without establishing
a patient history, performing a mental or physical exam, without using appropriate
diagnostic or laboratory testing, and without providing a means to monitor medication
response. The prescriptions were made after only an alleged internet consultation.
Petitioner and his co-defendants were paid based on the number of prescriptions they
wrote. I.G. Ex. 3, at 10. Petitioner and his co-defendants received at least $3,288,024.25
in wire transfers for the prescriptions illegally approved by him and his co-defendants. In
connection with these illegally prescribed medications, at least one individual was
ospitalized and one individual died as a result of drug overdoses.’ I.G. Ex. 3, at 11-12.

As a result of Petitioner’s scheme, the Federal Grand Jury charged Petitioner in a 41-
count indictment with a number of violations, including “Conspiracy to Distribute
Controlled Substances,” “Distribution of Controlled Substances,” “Conspiracy to Commit
Wire Fraud,” and “Money Laundering.” I.G. Ex. 3, at 5, 12, 15, 20. On December 19,
2007, Petitioner, as part of a negotiated agreement, pleaded guilty to Count One of the
Superseding Indictment and the United States agreed to move for dismissal of the
remaining counts against Petitioner. I.G. Ex. 4, at 6. On August 8, 2008, the United
States District Judge accepted Petitioner’s guilty plea to the charge of conspiracy to

' T note, however, that as part of Petitioner’s Plea and Cooperation Agreement it was
noted that his “offense did not result in death or serious bodily injury to any person.” See
LG. Ex. 4, at 6.
possess with intent to distribute hydrocodone, in violation of 21 U.S.C. § 846. LG. Ex. 5,
at 1. Petitioner was sentenced to three years of probation, 288 hours of unpaid
community service, a $100.00 assessment, and forfeiture of any property, other than his
medical license, involved in or traceable to the offense. I.G. Ex. 5, at 2-5.

Petitioner argues that his criminal conviction should not be considered a criminal offense
as follows:

The acts for which Petitioner were convicted cannot be validly considered
to be Criminal Acts, or violations to the Law, due to the fact that those acts
are authorized by the Commonwealth of Puerto Rico, as well as other
States.

Hearing Request at 2; see Petitioner Brief (P. Br.) at 7-8.

This argument, however, is not persuasive. It fails for at least two reasons. First, federal
law — specifically section 1128(i) of the Act — not state law, or the law of the
Commonwealth of Puerto Rico, defines the circumstances under which an individual is
considered convicted for the purposes of section 1128(a) and (b) of the Act. See supra
Part III. This definition differs from many state criminal law definitions. In Henry L.
Gupton, DAB No. 2058, at 8 (2007), the Departmental Appeals Board explained why, in
these I.G. proceedings, the federal definition of “conviction” must apply. Henry L.
Gupton, DAB No. 2058, aff'd Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008).
For purposes of section 1128(a) of the Act, Congress deliberately defined “conviction”
broadly to ensure that exclusions would not hinge on state criminal justice policies or
definitions. Second, in this case, Petitioner was convicted of a criminal offense against
the laws of the United States, not those of Puerto Rico, when his guilty plea was accepted
by the United States District Court for the District of Puerto Rico. Whether “the
Commonwealth of Puerto Rico, as well as other States” allow or condone Petitioner’s
behavior — a proposition in no need of resolution in this case — is irrelevant here: the
United States has by law declared it to be felonious.

I further note that Petitioner’s argument is essentially a collateral attack on the propriety
of the conviction, which neither the I.G. nor the ALJ may consider in the case of a
mandatory exclusion based on a criminal conviction. 42 C.F.R. § 1001.2007(d); Joni D.
Sisodia, M.D., DAB No. 2224 (2008); Paul R. Scollo, D.P.M., DAB No. 1498 (1994);
Peter Edmondson, DAB No. 1330 (1992); Charles W. Wheeler and Joan K. Todd, DAB
No. 1123, at 9 (1990), aff'd, Wheeler v. Sullivan, No. 2:90-0266 (S.D. W.Va. 1991).
2. A five-year exclusion is reasonable as a matter of law.

Because the I.G. has established a basis for Petitioner’s exclusion pursuant to section
1128(a)(4), his exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of
the Act. 42 U.S.C. § 1320a-7(c)(3)(B). That period is reasonable as a matter of law.
Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850; Lorna
Fay Gardner, DAB No. 1733 (2000); David A. Barrett, DAB No. 1461 (1994).

Petitioner contends, however, that because the exclusion began two years after he was
sentenced, the exclusion is in effect punitive rather than remedial and overly severe.
Hearing Request at 6-7; P. Br. at 8-9. Specifically, after serving two years of his three-
year term of probation, Petitioner received notice that beginning October 20, 2010, he
would be excluded for a period of five years. Id.; see 1.G. Ex. 1. Petitioner argues that
he “already stopped practicing telemedicine,” and that “an additional five (5) years of
sanctions . . . would hinder his practicing of medicine.” Hearing Request at 6-7; P. Br.
at 8-9.

Neither the statute nor the regulations, however, require the I.G. to act promptly once an
individual has become subject to exclusion. Chander Kachoria, R.Ph., DAB No. 1380
(1993). An I.G. exclusion imposed after substantial delay, and even well after the
beginning of other sanctions to which a petitioner may be subject, is in no way any less
valid, even if the results of that delay are enough to shame reason and conscience. An
ALJ cannot adjust the effective date of a validly-imposed exclusion by invoking
principles of even the most basic fairness, which I note are not clearly apparent in the
present case. See, e.g., Vivienne Esty-Fenton, DAB CR1931 (2009); Kimberley Mazzeo,
DAB CR1591 (2007); Stephen Michael Cook, M.D., DAB CR1234 (2004). An
unbroken line of authority spanning over two decades places the timing of the I.G.’s
action completely beyond my review here. Randall Dean Hopp, DAB No. 2166 (2008);
Kevin J. Bowers, DAB No. 2143 (2008); Kailash C. Singhvi, DAB No. 2138 (2007);
Thomas Edward Musial, DAB No. 1991 (2005); Samuel W. Chang, M.D., DAB No.
1198 (1990).

Resolution of a case by summary disposition is appropriate when there are no disputed
issues of material fact and when the undisputed facts, clear and not subject to conflicting
interpretation, demonstrate that one party is entitled to judgment as a matter of law.
Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary
disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. CIv. P. 56 for guidance in applying that regulation. Robert C. Greenwood, DAB
No. 1423 (1993); Thelma Walley, DAB No. 1367. The material facts in this case are
undisputed, clear, and unambiguous, and support summary disposition as a matter of law.
IV. Conclusion

For the foregoing reasons, the I.G.’s Motion for Summary Disposition should be, and it
is, GRANTED. The I.G.’s exclusion of Petitioner, Albelardo Lecompte-Torres, M.D.,
from participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years pursuant to the terms of section 1128(a)(4) of the Act, 42 U.S.C. §
1320a-7(a)(4), is sustained.

/s/

Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Elgin Nursing and Rehabilitation Center,
(CCN: 67-6180),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-679
Decision No. CR2376

Date: May 26, 2011

DECISION

Petitioner Elgin Nursing and Rehabilitation Center contests a determination by the
Centers for Medicare and Medicare Services (CMS) that it was not in substantial
compliance with certain requirements for participation in the Medicare and Medicaid
programs. Below, I sustain CMS’s determination that Petitioner was not in substantial
compliance with the regulatory requirement outlined at 42 C.F.R. § 483.35(i) and
identified during the February 12, 2010 survey as deficiency tag F-371. I also sustain the
per-instance civil monetary penalty (PICMP) of $5000 imposed by CMS.

I. Background

Petitioner is a long-term care facility located in Elgin, Texas, that participates in the
Medicare and Medicaid programs. The Texas Department of Aging and Disability
Services completed a survey of Petitioner’s facility on February 12, 2010. The survey
cited a deficiency under 42 C.F.R. § 483.35(i) (tag F-371, at a scope and severity level of
“K”),! CMS Ex. 3, at 26-33. By letter dated March 2, 2010, CMS notified Petitioner that

' A scope and severity level of “K” denotes a pattern of deficiencies that constitute
immediate jeopardy to resident health and safety. 42 C.F.R. § 488.408; State Operations
Manual (SOM), Ch. 7 § 7400E (scope and severity matrix).
2

it was imposing the following remedies: a PICMP of $5000; termination of Petitioner’s
provider agreement; a denial of payment for new admissions (DPNA) beginning March
17, 2010; and withdrawal of approval for Petitioner to conduct a nurse aide training and
competency evaluation program (NATCEP) for a period of two years. By letter dated
May 13, 2010, CMS rescinded the termination and DPNA remedies. CMS Ex. 1, at 1-4.
Petitioner requested a hearing by letter dated May 3, 2010.

CMS filed a motion for summary judgment on June 10, 2010, asserting that there were no
genuine issues of material fact. Petitioner filed a response resisting CMS’s motion on
July 28, 2010. Having determined that Petitioner offered evidence in direct contradiction
of CMS’s arguments, I denied CMS’s motion for summary judgment. See Ruling issued
August 13, 2010.

Although Petitioner was cited for other deficiencies during the survey, Petitioner appeals
only the alleged deficiency cited as tag F-371. Request for hearing; Prehearing Order
issued October 15, 2010, at 3-4. Because the PICMP proposed by CMS is within the
single range available, Petitioner may not challenge the assessment of its alleged
noncompliance at the “K” level of scope and severity. 42 C.F.R. §§ 498.3(b)(14),
(d)(10)(). Consequently, the only citation for my review and the only citation which is
the sole basis for the imposed remedies is that based on 42 C.F.R. § 493.35(i), tag F-371.

A brief hearing was held on Thursday, November 4, 2010, in Dallas, Texas. At hearing
the parties informed me for the first time that they had agreed to all of the material facts
in the case and presented me with a written Agreed Stipulation of Facts. They then
represented to me that because they had reached this agreement to eliminate all factual
disputes in this case, they believed that they had thereby eliminated the need for
evidentiary testimony. Tr. at 15-16. Consequently, no evidence was taken by oral
testimony and in the absence of objection CMS Exs. 1-14 and P. Exs. 1-18” were
admitted. Tr. at 26-27. The Agreed Stipulation of Facts has been marked as ALJ Ex. A
and admitted into the record. The parties’ post-hearing submissions were received and
this matter is now before me for decision.

> T note that on page 3 of the hearing transcript there is an incorrect notation that CMS
Ex. 15 was proffered and admitted. It is clear from the hearing transcript at page 21 that
CMS proffered only 14 exhibits and that all were admitted at hearing. Compare Tr. at 3
with Tr. at 21, 26. At hearing, P. Exs. 11-18 were conditionally admitted with the proviso
that Petitioner provide to my office an accurate exhibit list of all of its exhibits. Tr. at 21-
22. Petitioner satisfied this requirement subsequent to the hearing. I note also that
although P. Exs. 11-18 are properly paginated, the cover sheet for each of these exhibits
incorrectly lists the docket number as C-10-670 instead of C-10-679. In order not to
delay the proceedings in this case, Petitioner was not asked to re-file the exhibits and they
were admitted as noted above. Where the parties have submitted duplicate copies of
exhibits or pages contained in exhibits, I generally refer to CMS’s exhibit.
IL. Issues, Applicable Law, Findings of Fact and Conclusion of Law
A. Issues
The issues in this case are:

1. Whether Petitioner failed to comply with the Medicare participation
requirement at 42 C.F.R. § 483.35(i) (tag F-371); and

2. Whether the remedies imposed are reasonable.
B. Applicable Law and Regulations

Petitioner’s participation in Medicare and Medicaid is governed by sections 1819 and
1919 of the Social Security Act (Act) and the regulations at 42 C.F.R. Part 483. Sections
1819 and 1919 of the Act vest the Secretary of Health and Human Services (Secretary)
with authority to impose civil money penalties (CMPs) and other remedies against a
long-term care facility for failure to comply substantially with participation requirements.
Pursuant to the Act, the Secretary has delegated to CMS the authority to impose various
remedies against a long-term care facility that is not complying substantially with federal
participation requirements.

The applicable regulations at 42 C.F.R. Part 488 provide that facilities participating in
Medicare and Medicaid may be surveyed on behalf of CMS by state survey agencies in
order to ascertain whether the facilities are complying with participation requirements.
42 C.F.R. §§ 488.10-488.28; 488.300.335. A state or CMS may impose a CMP against a
long-term care facility if a state survey agency ascertains that the facility is not
complying substantially with participation requirements. 42 C.F.R §§ 488.406; 488.408;
and 488.430. The CMP may begin to accrue as early as the date the facility was first
substantially out of compliance, and may continue to accrue until the date the facility
achieves substantial compliance or until CMS terminates the facility’s provider
agreement. 42 C.F.R. § 488.440.

The regulations define the term “substantial compliance” to mean “a level of compliance
with the requirements of participation such that any identified deficiencies pose no
greater risk to resident health or safety than the potential for causing minimal harm.”
Noncompliance that is immediate jeopardy is defined as “a situation in which the
provider’s noncompliance with one or more requirements of participation has caused, or
is likely to cause, serious injury, harm, impairment, or death to a resident.” 42 C.F.R.

§ 488.301.

Sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Act prohibit approval of a NATCEP if
within the last two years the facility has been subject to, among other things, an extended
4

or partial extended survey; imposition of a CMP of not less than $5,000; or imposition of
a DPNA.

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

When a penalty is imposed and appealed, CMS has the burden of coming forward with
evidence related to disputed findings that are sufficient, together with undisputed findings
and relevant legal authority, to establish a prima facie case of noncompliance with a
regulatory requirement. If CMS makes this prima facie showing, a petitioner must then
carry its ultimate burden of persuasion by showing by a preponderance of the evidence on
the record as a whole that it was in substantial compliance during the relevant period.
CMS makes its prima facie showing if the evidence it relies on is sufficient to support a
decision in its favor absent an effective rebuttal. An effective rebuttal of CMS’s prima
facie case would mean that the petitioner has shown that a preponderance of the evidence
supports the facts on which its case depends. Evergreene Nursing Care Center, DAB
No. 2069, at 7 (2007). For the reasons enumerated below, I conclude that CMS did make
its prima facie showing here, which Petitioner has failed to rebut successfully.

C. Findings of Fact, Conclusions of Law, and Analysis

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

I. Petitioner failed to comply substantially with the participation
requirement at 42 C.F.R. § 483.35(i), cited as tag F-371.

The violation that CMS alleges in this case involves Petitioner’s improper cooking and
serving of eggs to five facility residents. The alleged lapse was discovered during a
survey of Petitioner’s facility in February 2010. The regulation at issue establishes
guidelines for the procurement, storage, preparation, and service of food provided to
facility residents, and provides, in pertinent part, that:

(i) Sanitary conditions. The facility must—

(1) procure food from sources approved or considered satisfactory by
Federal, State, or local authorities; [and]

(2) store, prepare, distribute, and serve food under sanitary conditions ... .
42 CFR. § 483.35(i).

As guidance for safe food preparation, the State Operations Manual (SOM), Appendix PP
— Guidance to Surveyors for Long Term Care Facilities advises, in pertinent part, that:

¢ Final Cooking Temperatures — Cooking is a critical control point in
preventing foodborne illness. Cooking to heat all parts of food to the
temperature and for the time specified below will either kill dangerous
organisms or inactivate them sufficiently so that there is little risk to the
resident if the food is eaten promptly after cooking. Monitoring the food’s
internal temperature for 15 seconds determines when microorganisms can
no longer survive and food is safe for consumption. Foods should reach the

following internal temperatures:

Unpasteurized eggs when cooked to order in response to resident
request and to be eaten promptly after cooking; - 145 degrees F

for 15 seconds; until the white is comp:

congealed; ...
SOM, App. PP, Tag F-371.

As guidance in the proper manner of preparing “‘so

of the Long Term Care Branch, Division of Survey and Certi
Regional Survey and Certification Letter 04-08, dated October 8, 2004, and titled

“Serving Undercooked or Raw Eggs to Nursing Ho
letter was to provide clarification as to “the accepta

letely set and the yolk is

t-cooked eggs”, David Wright, Chief

fication for CMS, issued

me Residents.” The intent of the
bility of serving ‘soft-cooked, runny,

or raw’ eggs to residents in nursing homes.” The letter stated that “[s]oft-cooked eggs are
considered undercooked if the yolk is runny and/or the egg w!

letter further clarified that “[i]f a facility serves ‘so
that are pasteurized, or otherwise treated in an acce}

t-cooked’

ite is not congealed.” The
eggs, they must use eggs

ptable manner to kill or inactive

bacteria and other harmful microorganisms.” The letter warned that if “undercooked
eggs are not pasteurized or otherwise treated, it is likely that the nursing home is placing
residents who consume these eggs in immediate jeopardy.” The letter contained an
attachment from the Food and Drug Administration (FDA) observing that the U.S.
Department of Agriculture, Food Safety and Inspection Service, through its Salmonella
Enteritidis Risk Assessment noted that persons with chronic diseases and nursing home
residents are particularly susceptible to salmonella infections. The attachment also notes
that a weekly report from the Center for Disease Control, dated January 3, 2003, included
a recommendation on how to prevent the risk of contracting salmonella infection
associated with the ingestion of eggs, which stated: “In hospitals, nursing homes, adult
or childcare facilities, and senior centers, pasteurized egg products or pasteurized in-shell
eggs should be used in place of pooled eggs or raw or undercooked eggs.” P. Ex. 4.

6

Although the parties have stipulated to the facts in this case* they differ as to the legal
consequences resulting from the application of the facts to law. I have reviewed and
considered all the evidence, including the documents and affidavits proffered, and the
arguments of both parties, although not all may be specifically discussed in this
decision. Based on that review, I find that the following undisputed material facts
require a finding that Petitioner was out of compliance with 42 C.F.R. § 483.35(i).

Petitioner purchased unpasteurized shelled eggs between August 2009 and February 2010
and served those eggs “‘soft-cooked” to residents in its facility. During a survey in
February 2010, surveyors found two-and-a-half cases (40 dozen, or 480 eggs) of
unpasteurized eggs in the facility’s refrigerator. Each egg case contained the following
instructions: “Safe handling instructions. To prevent illness from bacteria keep eggs
refrigerated, cook eggs until yolks are firm and cook foods containing eggs thoroughly.”
CMS Ex. 3, at 27; CMS Ex. 6, at 74; P. Br. at 4. On the morning of February 9, 2010,
five facility residents (Residents 6, 20, 21, 22, and 23) were served — and the residents
consumed by eating — “soft-cooked” unpasteurized shelled eggs. That morning the
facility cook prepared the eggs in the manner requested by the residents which included
either “over easy” or “soft-cooked” — also referenced as a “soft fried” egg. P. Ex. 14;
CMS Ex. 3, at 27. That same morning the surveyors observed smeared egg-yolks on
the plates of the residents. CMS Ex. 3, at 27. The surveyors did not observe the eggs
being cooked that morning. The internal temperature of each egg served to the five
residents after the eggs were cooked that morning was not taken by either the surveyor
or Petitioner’s cook. P. Ex. 1, at 1; P. Ex. 14, at 1, paragraphs 2, 3; CMS Ex. 3, at 26-
33; P. Ex. 18. Nevertheless, the parties stipulate and all the evidence agrees: the eggs
were not prepared according to the safety handling instructions on the egg cases. Tr.
at 35; CMS Ex. 3, at 28.

The surveyors allege in the SOD for the September 12, 2010 survey that Petitioner
violated 42 C.F.R. § 483.35(i) when Petitioner served “soft-cooked” unpasteurized
eggs with “runny” yolks from its facility kitchen to five residents (Residents 6, 20, 21,
22, and 23). CMS Ex. 3, at 27. CMS relies on the regulatory language of section
483.35(i) and the SOM’s interpretive guidance to support its view that Petitioner failed
properly to distribute and serve food under sanitary conditions by serving “soft-cooked”
eggs that were neither pasteurized nor otherwise treated in an acceptable manner to kill or
inactive bacteria and other harmful microorganisms in order to prevent food-borne illness
resulting from bacteria contamination such as salmonella. CMS Br. at 3, 4. According

* The parties stipulated to the facts established in the Statement of Deficiencies (SOD)
Form 2567 (CMS Ex. 3, at 26-33) for the February 12, 200 survey, tag F-371, including
surveyor observations, interviews and record reviews; and to the facts stated in the
affidavits of Pamela Sue Brummit, Gary Jefferson, Mary Abshire, and the video of
Pamela Sue Brummit. ALJ Ex. A; P. Exs. 10, 12, 14, and 17.
7

to CMS, the smeared yolk noted by the surveyors on the residents’ plates was an
indication that the yolks were not cooked until firm as required by the safe-handling
instructions listed on the egg cases. CMS Br. at 5.

Petitioner adopts a different view of the implications of these undisputed facts and
advances several arguments. First, as for CMS’s reliance on the SOM, Petitioner argues
that although the SOM provides guidance in the interpretation of the regulations, the
manual’s provisions as policy guidance do not have the effect of enforceable, substantive
regulation. P. Br. at 4-5. Petitioner argues that CMS has failed to provide evidence via
scientific research that the SOM’s requirement that unpasteurized eggs “not be served
runny and/or with uncongealed egg white” supports the regulatory requirement. P. Br. at
5.

In addressing Petitioner’s first argument, I note that the regulatory language of section
483.35(i)(2) does not outline how unpasteurized eggs are to be cooked in order to assure
they are sanitary and thus safe for consumption. However, the SOM clearly outlines that
facilities are to cook unpasteurized eggs until the eggs reach 145 degrees for 15 seconds
until the white is completely set and the yolk is congealed. As Petitioner has correctly
noted, a federal agency’s interpretation of a regulation is entitled to deference with the
caveat of as long as the interpretation is reasonable. Here, I find CMS’s interpretation to
be reasonable for the following reasons. Although the SOM is not enforceable as a
regulation or statute it is a policy statement from CMS and provides guidance to
surveyors. Moreover, although the SOM does not have the force and effect of law, the
provisions of the Act and regulations interpreted clearly do have such force and effect.
See Vencor Nursing Centers, L.P. V. Shalala, 63 F. Supp. 2d 1, 11-12 (D.D.C. 1999);
Beverly Health & Rehabilitation Services, Inc., et al vy. Thompson, 223 F. Supp. 2d 73,
98-103 (D.D.C. 2002); Cal Turner Extended Care Pavilion, DAB No. 2030 (2006); see
also Northwest Tissue Center v. Shalala, | F.3d 522 (7th Cir. 1993); State of Indiana
by Indiana Department of Public Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991).
Thus, while the Secretary may not seek to enforce the provisions of the SOM, she
may seek to enforce the provisions of the Act or regulations as interpreted by the
SOM. In this case, the interpretation of the SOM which CMS urges is consistent with
both the Secretary’s regulations and the Act. The SOM provision is a reasonable
interpretation of the regulation and I afford it substantial deference. Missouri
Department of Social Services, DAB No. 2185 (2008).

Second, Petitioner seeks to establish its compliance through reliance on Texas state law
which provides that unpasteurized eggs must be cooked to heat all parts of the egg to 145
degrees or above for 15 seconds but does not address, as the SOM does, the requirement
that the “egg white is completely set and the yolk is congealed.” 25 TEX. ADMIN. CODE
§ 229.164(c)(4)(A); P. Ex. 5, at 1-2. Petitioner maintains that the condition of the egg-
whites outlined in the SOM is an additional requirement that is not supported by the
regulatory language. Petitioner asserts that Texas state law does not mention any degree
8

of “runniness” or congealment of the egg as a factor in the safe preparation of the eggs,
and that to impose such a restriction is not supported by state law or even the FDA Food
Code § 3-401.11 (raw animal food is to be cooked at 145 degrees F or above for 15
seconds). P. Br. at 7, 12; Tr. at 30. Petitioner alleges that it follows state law and FDA
Food Code guidelines for the preparation of foods in its facility. Petitioner claims that
CMS focuses on the mere presence of “runny” eggs rather than on the temperature or
cooking time of the eggs, and that the evidence presented by CMS does not establish a
prima facie case of its noncompliance. P. Br. at 11. I first point out that it is federal
statutory and regulatory standards, not state law, that apply in ascertaining substantial
compliance or noncompliance with Medicare participation requirements and impose
uniform participation requirements across state lines. Woodstock Care Center, DAB No.
1726, at 19-20 (2000), aff’d, Woodstock Care Center v. Thompson, No. 01-3889 (6th Cir.
2003). While useful reference may sometimes be made to state law, it is federal law that
ultimately governs here.

According to Petitioner the unpasteurized eggs served to the residents were cooked to the
temperature and for the time specified in order to “either kill dangerous organisms or
inactive them” to ensure little risk to residents. P. Br. at 12. In support of this assertion,
Petitioner provides the affidavit of Mary Abshire, RD, a dietary consultant for
Petitioner’s facility. Ms. Abshire contends that a cooking demonstration by the facility’s
cook, performed on February 12, 2010, after the survey, resulted in eggs that reached a
temperature of at least 145 degrees. P. Ex. 17, at 1, paragraphs 3, 4; see also P. Ex. 18.
Petitioner provides also the affidavit of Pamela Sue Brummit, a registered dietician, who
claims also to have recreated the cooking method used by the facility’s cook, Gary
Jefferson, on the morning of February 9, 2010; Ms. Brummit asserts that she was able to
produce eggs that reached temperatures of at least 145. P. Ex. 12. The affidavit of the
facility cook, Gary Jefferson, who cooked the eggs for breakfast on the morning of
February 9, 2010, provides details as to the steps he took in cooking the eggs, but his
statements do little to provide support to Petitioner’s assertion that the eggs were cooked
at 145 degrees for 15 seconds as required. P. Ex. 14, at 2, paragraph 2; P. Ex. 15.
Additionally, neither Ms. Abshire nor Ms. Brummit address in their affidavits whether
the internal temperature of the eggs were at 145 degrees or above for at least 15 seconds
as required. P. Ex. 5, at 1-2. Consequently, I find Petitioner has not provided sufficient
evidence that the eggs served to the five residents that are at issued here, were cooked to
a temperature of at least 145 degrees in all parts of the egg for at least 15 seconds. The
SOM guidance requires a measurement of both time and temperature as an assurance that
the unpasteurized eggs were properly cooked — as does the Texas state law and FDA
Food Code with which Petitioner purports to have been in compliance.

Last, Petitioner maintains that the eggs were cooked the way the residents wanted them,
implying that it was adhering to their right to make such choices. A resident has the right
to make choices about significant aspects of his or her life in the facility. 42 C.F.R.

§§ 483.10(b)(4);483.15(b)(1); and 483.15(b)(3). However, the facility is entrusted with
balancing necessary care and services with resident rights. 54 Fed. Reg. 5316, 5332
9

(Feb. 2, 1989); Koester Pavillion, DAB No. 1750, at 28 (2000). Here, Petitioner had a
countervailing duty to protect the individuals under its care against choices that could
place their health and safety in danger. This is rarely an easy balance to strike, and it
frequently obliges a facility to elevate safety concerns above residents’ preferences.
Ussery Roan Texas State Veterans Home, DAB CR2251 (2010). Beyond that, however, I
also note that as much as Petitioner may suggest that it was honoring its residents’ right
to choose how their eggs were to be cooked, that argument is undercut by the affidavit of
James P. Chudleigh, M.D., its Medical Director and the attending physician for four of
the five residents at issue (Residents 6, 20, 22 and 23) at the time of the survey. Any
attempt by Petitioner to suggest that the residents’ preferences were to be honored strictly
must be based on the assumption that the residents understood the health risks implicit in
what they preferred and were able to communicate those preferences clearly, and Dr.
Chudleigh’s affidavit is of very little help to Petitioner on that point. Dr. Chudleigh
states that each of these residents had “limitations of cognitive functioning and ability to
communicate owing to their disease condition ....” P. Ex. 13, at 1-2, paragraphs 7, 10,
13, 16.

Petitioner has failed to provide evidence that it complied with the SOM guidance, the
safe handling instructions on the egg cases, or even the Texas state law it claims to have
been following when it cooked the “soft-cooked” eggs for the five residents on February
9, 2010. Petitioner’s witness statements fail to provide evidence that can rebut CMS’s
prima facie showing of noncompliance. This record shows that Petitioner failed to

follow sanitary food handling and preparation guidelines to prevent the outbreak of food-
borne illnesses in its facility, placing the five residents at risk of food-borne illnesses such
as salmonella.

Petitioner asserts that none of its residents were harmed and that none were at risk of
being harmed. P. Br. at 13. A finding of immediate jeopardy does not require a finding
of actual harm but encompasses as well a situation likely to cause harm. 42 C.F.R.

§ 488.301. The record files for the five residents who consumed “soft-cooked”
unpasteurized eggs on February 9, 2010, show that they ranged in age at the time of
the survey from 57 to 90, and had suspect immune systems and chronic illnesses that
placed them at risk of serious illness or even death from exposure to salmonella. See
CMS Ex. 3, at 26-33; CMS Ex. 7, at 9-10; CMS Ex. 8, at 5-8; CMS Ex. 9, at 5-7;
CMS Ex. 10, at 5-6; CMS Ex. 11, at 5-7. The somber fact is that the eggs at issue were
undercooked, and no argument can get around the fact that they were. Petitioner does
not deny that the eggs were “runny;” that they were not prepared in accordance with
the controlling safe food-handling instructions; or that the temperature of each egg
was not taken the morning of February 9, 2010. Petitioner has not proven it adhered to
both the time and temperature requirements — that the eggs be cooked at 145 Fahrenheit
for 15 seconds to kill pathogenic microorganisms — on the morning of February 9, 2010.
The SOM specifically states that “[s]anitary preparations of unpasteurized eggs require a
final cooking temperature of 145 degrees F for 15 seconds until the egg white is

10

completely set and the yolk is congealed.” (emphasis added). The language in the SOM
is not ambiguous. I find that the SOM is sufficiently-clear guidance on the subject to
control this situation. Petitioner simply was not in compliance with the regulation when
it prepared, distributed, and served undercooked, unpasteurized eggs to the five residents.

Accordingly, I conclude that there was a prima facie showing of a violation of 42
C.F.R. § 483.35(i), cited as tag F-371. I conclude also that Petitioner has failed to rebut
the CMS prima facie showing of the violation.

2. The $5000 PICMP imposed is reasonable.

I have concluded that Petitioner was not in substantial compliance with all program
participation requirements due to a violation of 42 C.F.R. § 483.35(i), tag F-371, and that
the violation posed immediate jeopardy. Therefore, there is a basis for CMS to impose
an enforcement remedy in this case. Ifa facility is not in substantial compliance with
program requirements, CMS has the authority to impose one or more of the enforcement
remedies listed in 42 C.F.R. § 488.406, including a PICMP for each instance that a
facility is not in substantial compliance. 42 C.F.R. § 499.430(a). When a PICMP is
imposed against a facility based on an instance of noncompliance, the PICMP will be in
the range of $1000 to $10,000 per instance. 42 C.F.R. § 488.438(a)(2).

Here, Petitioner disagrees with the amount of the PICMP stating that it is excessive in
light of the factors outlined at 42 C.F.R. § 488.438(f). Request for Hearing; P. Br. at 12.
My review of the reasonableness of the PICMP imposed is de novo and is based upon the
evidence in the record before me. In determining the reasonableness I apply the factors
listed at 42 C.F.R. § 488.438(f) which include: (1) the facility’s history of
noncompliance; (2) the facility’s financial condition; (3) factors specified at 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 at 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.

CMS does not urge me to consider any history of noncompliance in determining whether
the proposed PICMP is reasonable. Petitioner has not presented evidence that it cannot
pay the PICMP. However, as I have explained above, a number of this facility’s
residents were placed in immediate jeopardy. Because it did so, Petitioner’s
noncompliance was serious, and I therefore find that Petitioner was culpable within the
meaning of the regulations.

CMS proposes a $5000 PICMP which is in the middle range of PICMPs when immediate
jeopardy is found. Given Petitioner’s failure, the amount of the CMP imposed is
11

reasonable. The prohibition of Petitioner’s offering any NATCEP follows as a matter of
law. Act §§ 1819(f)(2)(B)(iii); 191 9(f)(2)(B)(iii).

II. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance
with program requirements at 42 C.F.R. § 483.35(i), cited as tag F371, and the $5000
PICMP for one instance of noncompliance is reasonable.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Wagnon Place,
(CCN: 04-5201),

Petitioner
v.
Centers for Medicare & Medicaid Services.

Docket No. C-10-581
Decision No. CR2375

Date: May 26, 2011

DECISION

Petitioner Wagnon Place challenges the determination of the Centers for Medicare &
Medicaid Services (CMS) that it was not in substantial compliance with program
participation requirements. Petitioner also challenges CMS’s imposition of a $4000 per
instance civil money penalty (PICMP). For the reasons discussed below, I find that
Petitioner was not in substantial compliance with program participation requirements at
the relevant time. However, I find that the PICMP imposed is not reasonable. I find a
PICMP of $1500 to be reasonable.

I. Background
Petitioner is a long-term care facility located in Warren, Arkansas. Petitioner participates

in the Medicare and Medicaid programs. The Arkansas Department of Human Services
(state agency) completed a complaint survey of Petitioner’s facility on January 7, 2010.
The survey cited deficiencies under 42 C.F.R. § 483.10(b)(11) (Tag F157,' scope and
severity level (ss) H); 42 C.F.R. § 483.25(c) (Tag F314, ss H); and 42 C.F.R. § 483.75
(Tag F490, ss H). By letter dated January 20, 2010, CMS notified Petitioner that it was
imposing PICMPs of $1500 for the deficiency at Tag F157; $1000 for the deficiency at
Tag F490; and $1500 for the deficiency at Tag F314. A denial of payment for new
Medicare and Medicaid admissions was to be imposed as of February 4, 2010, if
Petitioner was not in substantial compliance by that date, and Petitioner’s provider
agreement was to be terminated if Petitioner did not achieve substantial compliance
before April 7, 2010. By letter dated March 12, 2010, CMS notified Petitioner that it had
achieved substantial compliance with participation requirements, rescinded the
termination and denial of payment remedies, and revised the PICMPs to a $4000 PICMP
for the instance of noncompliance on January 7, 2010, as described at Tag F314.
Petitioner requested a hearing by letter dated March 19, 2010.

I held a hearing in this case in Little Rock, Arkansas, on November | and 2, 2010. A
320-page transcript (Tr.) was prepared. Testifying for CMS were state agency surveyors
S. Muscovalley, R.N. (Surveyor Muscovalley) and G. Chunn, R.N. (Surveyor Chunn).
Testifying for Petitioner were S. Hewitt, R.N., Petitioner’s Director of Nursing (DON
Hewitt) and J. Lessenberry, D.O. (Dr. Lessenberry), a consultant who provided training
and monitoring services for Petitioner, including the provision of training and services for
wound care. I admitted CMS Exhibits (CMS Exs.) 1 — 8° and Petitioner’s Exhibits (P.

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

> A scope and severity level of H denotes a pattern of actual harm that does not constitute
immediate jeopardy to resident health and safety. SOM, section 7400; 42 C.F.R. §§
488.301, 488.408. In its brief, CMS inexplicably asserts that Petitioner’s alleged
violation of Tag F314 constituted immediate jeopardy to one of the resident examples.
CMS Br. at 4. There is no evidence of record, however, that the noncompliance alleged
was cited at a level of immediate jeopardy. It is regrettable that CMS chose not to file a
reply brief to correct this discrepancy.

> In its brief, CMS asserts that it offered 10 exhibits. CMS Br. at 5. In fact, CMS
proffered and I admitted only eight CMS exhibits. Tr. at 19, 300-01. It is also regrettable
that CMS chose not to file a reply brief to correct this discrepancy.
Exs.) 1 —7. Both parties filed post-hearing briefs (CMS and P. Br.) and Petitioner filed a
post-hearing reply brief (P. Reply). CMS announced by e-mail that it did not choose to
file a reply brief. As I note in footnotes 2 and 3, this tactical choice by CMS was
manifestly unhelpful, since it had the effect of leaving certain points unclear and
unaddressed.

II. Issues
The issues before me are:

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

2. Whether the remedy imposed is reasonable.
II. Controlling Law

Sections 1819 and 1919 of the Social Security Act (Act) and the regulations at 42 C.F.R.
Part 483 govern Petitioner’s participation in Medicare and Medicaid. Sections 1819 and
1919 of the Act provide the Secretary of Health and Human Services (Secretary) with
authority to impose remedies, including CMPs and PICMPs, against long-term care
facilities for failure to comply with participation requirements.

Regulations define the term “substantial compliance” to mean:

[A] level of compliance with the requirements of participation such that any
identified deficiencies pose no greater risk to resident health or safety than the
potential for causing minimal harm.

42 CFR. § 488.301.

The Secretary has delegated to CMS and the states the authority to impose remedies
against long-term care facilities not complying substantially with federal participation
requirements. The applicable regulations at 42 C.F.R. Part 488 provide that state survey
agencies, on behalf of CMS, may survey facilities participating in Medicare and
Medicaid to ascertain whether the facilities are complying with participation
requirements. 42 C.F.R. §§ 488.10-488.28. The regulations contain special survey
conditions for long-term care facilities. 42 C.F.R. §§ 488.300-488.335. Under Part 488,
a state or CMS may impose a CMP against a long-term care facility if a state survey
agency ascertains that the facility is not complying substantially with participation
requirements. 42 C.F.R. §§ 488.406, 488.408, and 488.430. The CMP may begin to
accrue as early as the date that the facility was first substantially out of compliance and
may continue to accrue until the date the facility achieves substantial compliance, or until
CMS terminates the facility’s provider agreement. 42 C.F.R. § 488.440.

The regulations specify that if a CMP is imposed against a facility based on an instance
of noncompliance, the CMP will be in the range of $1000 to $10,000 per instance. 42
C.F.R. § 488.438(a)(2). When a CMP is imposed against a facility on a per-day basis, it
must fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The
upper range of CMP, from $3050 per day to $10,000 per day, is reserved for deficiencies
that constitute immediate jeopardy to a facility’s residents and, in some circumstances,
for repeated deficiencies. 42 C.F.R. § 488.438(a)(1)(i), (d)(2). The lower range of CMP,
from $50 per day to $3000 per day, is reserved for deficiencies that do not constitute
immediate jeopardy, but either cause actual harm to residents or cause no actual harm,
but have the potential for causing more than minimal harm. 42 C.F.R. §
488.438(a)(1)(ii). “Immediate jeopardy” is defined as:

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

42 CFR. § 488.301.

Sections 1819(f)(2)(B) and 1919(f)(2)(B) of the Act prohibit approval of a nurse aide
training and/or competency evaluation program (NATCEP) if within the last two years
the facility has been subject to, among other things, an extended or partial extended
survey; imposition of a CMP of not less than $5,000; or imposition of a denial of
payment for new admissions.

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

The Departmental Appeals Board (Board) has long held that the net effect of these
regulations is that a provider has no right to challenge the scope and severity assigned to
a noncompliance finding except in the situation where that finding is the basis for an
immediate jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002);
Koester Pavilion, DAB No. 1750 (2000).

Petitioner vehemently contests the “H” level of scope and severity imposed by CMS.
However, other than in a mistaken — and uncorrected — reference to immediate
jeopardy in its brief, CMS has not asserted that immediate jeopardy level noncompliance
exists in this case. Neither party has indicated that Petitioner has lost a NATCEP. Thus,
I may not address the scope and severity of CMS’s noncompliance finding in my
decision, and I do not do so below.

IV. Discussion

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

1. Petitioner failed to comply substantially with the participation requirement at
42 C.F.R. § 483.25(c).

The regulation at 42 C.F.R. § 483.25 states that:

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

The subsection at 42 C.F.R. § 483.25(c) references pressure sores and requires that:

(c) Pressure sores. Based on the comprehensive assessment of a resident, the
facility must ensure that —

(1) A resident who enters the facility without pressure sores does not
develop pressure sores unless the individual’s clinical condition demonstrates that
they were unavoidable; and

(2) A resident having pressure sores receives necessary treatment and
services to promote healing, prevent infection, and prevent new sores
from developing.

The SOM notes that although the regulatory language refers to pressure sores, such sores

* [have reviewed the entire record, including all the exhibits and testimony. Because the
Federal Rules of Evidence do not control the admission of evidence in proceedings of this
kind (see 42 C.F.R. § 498.61), I may admit evidence and determine later, upon a review
of the record as a whole, what weight, if any, I should accord that evidence or testimony.
To the extent that any contention, evidence, or testimony is not explicitly addressed or
mentioned, it is not because I have not considered the contentions. Rather, it is because I
find that the contentions are not supported by the weight of the evidence or by credible
evidence or testimony.
are also referred to as pressure ulcers.* A pressure sore is defined as “any lesion caused
by unrelieved pressure that results in damage to the underlying tissue(s). . .. Although
friction and shear are not primary causes of pressure ulcers, friction and shear are
important contributing factors to the development of pressure ulcers.” SOM, Appendix
PP, Tag F314. The SOM defines an “unavoidable” pressure sore as,

“Unavoidable” means that the resident developed a pressure ulcer even though the
facility had evaluated the resident’s clinical condition and pressure ulcer risk
factors; defined and implemented interventions that are consistent with resident
needs, goals, and recognized standards of practice; monitored and evaluated the
impact of the interventions; and revised the approaches as appropriate.

The SOM also notes that there are other sorts of ulcers not related to pressure. These
ulcers are described in the SOM, Appendix PP, at Tag F309. The SOM discusses both
arterial, venous, and diabetic neuropathic ulcers. An arterial ulcer occurs “as a result of
arterial occlusive disease when non-pressure related disruption or blockage of the arterial
blood flow to an area causes tissue necrosis. . . . may be present in individuals with
moderate to severe peripheral vascular disease . . . . usually occurs in the distal portion of
the lower extremity and may be over the ankle or bony areas of the foot .... The wound
bed is frequently dry and pale with minimal or no exudate.” A venous ulcer (known
previously as a stasis ulcer) “is an open lesion of the skin and subcutaneous tissue of the
lower leg, often occurring in the lower leg around the medial ankle. Venous ulcers are
reported to be the most common vascular ulceration and may be difficult to heal, may
occur off and on for several years, and may occur after relatively minor trauma. The
ulcer may have a moist, granulating wound bed, may be superficial, and may have
minimal to copious serous drainage unless the wound is infected.” A diabetic
neuropathic ulcer “requires that the resident be diagnosed with diabetes mellitus and have
peripheral neuropathy.”

In assessing a facility’s compliance with this participation requirement, the Board has
stated:

... the preamble to the Notice of Final Rulemaking for section 483.25 provides
that facilities “should always furnish the necessary treatment and services to
prevent the development of pressure sores or, at the least, to promote the healing
of sores that have developed.” Clermont Nursing and Convalescent Center at 9;

* Dr. Lessenberry testified also that “sore” and “ulcer” are used interchangeably
depending on what region of the country one is in. She testified that the accepted clinical
standard use is pressure “ulcer.” Tr. at 299. The regulations, however, reference a
“pressure sore.” Below, I generally use the term “pressure sore,” although I may cite a
pressure sore as an “ulcer,” “decubitus,” or “wound,” depending on the context of the
discussion or testimony.
Koester Pavilion, DAB No. 1750, at 30-31 (2000), citing 56 Fed. Reg. 48,826, at
48,851 (Sept. 26, 1991); see also Woodland Village Nursing Center, DAB No.
2172, at 13 (2008) (“[the] regulatory language on pressure sore treatment and
prevention applies a particularly demanding standard, i.e., that the facility must
‘ensure’ healing and prevention as the outcomes of that treatment and those
services unless the facility can prove with clinical evidence that a negative
outcome was unavoidable despite the facility having furnished all necessary
care.”). Thus, as the ALJ recognized, the Board has concluded that a facility
cannot claim unavoidability unless it first shows that it furnished all necessary
treatment and services... .

Gooding Rehabilitation & Living Center, DAB No. 2239, at 14-15 (2009).

On January 7, 2010, the state agency completed a complaint investigation of Petitioner’s
facility. As noted above, only the noncompliance cited at Tag F314 is in contention here.
Under that Tag, the state agency alleged that based on record review and interview,
Petitioner failed to ensure that residents at risk of developing pressure sores, or who had
pressure sores, were: (1) monitored for skin breakdown in order that skin breakdown
would be quickly identified and communicated to residents’ physicians; (2) assessed at
least weekly to identify deterioration in order to promptly consult with a resident’s
physician regarding treatment; and that (3) physician’s orders for treatment of pressure
sores were obtained in a timely manner and implemented to prevent the potential for
deterioration for two residents (Residents 6 and 8). The state agency alleged that this
“failed practice” caused a pattern of actual harm for Resident 6 such that the resident
developed multiple pressure sores that deteriorated because the resident did not receive
prompt treatment. The state agency alleged that this failed practice also had the potential
to cause more than minimal harm to 13 other residents of the facility. P. Ex. 1, at 8; CMS
Ex. 2, at 8.°

CMS does not allege that the actual treatments and services that Petitioner provided the
residents were inadequate (i.e., the way the facility changed dressings). Instead, the crux
of CMS’s case goes to the process by which Petitioner monitored and assessed pressure
sores and notified residents’ physicians in order to ensure timely treatment of pressure
sores (although CMS does allege that some treatments were not documented as having
been done, and thus were not done). CMS alleges generally that the process by whic
Petitioner assessed pressure sores and communicated that information to its staff and to
residents’ physicians was flawed, in that information regarding pressure sores was not
timely provided to staff and, as a result, residents’ physicians were not made aware of the

° Both parties submitted copies of the SOD, Petitioner as P. Ex. | and CMS as CMS Ex.
2. The parties have also submitted copies of the same documents in numerous instances.
Below, I do not comb the record to indicate where each party has filed a duplicate
document. In general, I try to cite to CMS’s exhibits where there are duplicate exhibits.
development or change in a pressure sore in order to promptly initiate treatment or a
change in treatment. Below, although I do not find that CMS has made a prima facie
case with regard to all of the allegations in the January 7, 2010 statement of deficiencies
(SOD), I do find that CMS has made a prima facie case of noncompliance in several
respects that Petitioner has not rebutted. I discuss first the overarching failure of the
process by which Petitioner communicated its assessments of pressure sores to staff and
residents’ physicians, and I then separately discuss Petitioner’s specific failures with
regard to Residents 6 and 8 and their pressure sores. I then explain why some, although
not all, of CMS’s allegations regarding them must be sustained, and how those sustained
allegations constitute noncompliance.

The SOD relates that a registered nurse, RN-1, completed weekly body audits (body
audits) of Petitioner’s residents on Sunday and then filled out weekly skin/wound audit
summary spreadsheets (audit summaries). The audit summaries were forwarded to the
DON on the following Monday or Tuesday and treatment orders were then obtained.
CMS Ex. 2, at 14-15. Surveyor Muscovalley testified that weekly audit summaries are
not a regulatory requirement, and that this facility chose to do them. Tr. at 127.’

Surveyor Muscovalley testified that a facility needs to consult with a resident’s physician
early with regard to pressure sores in order to care plan for treatment of the sores and to
timely start or revise treatment. She testified that a physician is integral in devising a
care plan in order to either begin or change treatment of a pressure sore if an approach is
not working.® Tr. at 31, 34.

7 Apparently RN-1 was not sure how to fill out the audit summary form. Surveyor
Muscovalley testified that not filling out the form correctly is an important lapse, because
the facility needs to communicate accurate, detailed information to ensure that wounds
are treated timely and accurately. Tr. at 61. Although there may have been discrepancies
between the body audits and audit summaries, they are not material to my decision and I
do not discuss them.

* Surveyor Muscovalley testified that she expects to see improvement in a pressure sore
within a couple of weeks of initiation of a new treatment. Tr. at 31. DON Hewitt
testified that a facility can watch a pressure sore for two weeks to see if a treatment is
working. Tr. at 169. Petitioner takes from this that it should not be cited for a deficiency
until two weeks after initiation of a new treatment. However, if a new wound develops or
a wound deteriorates this rather obviously cannot mean that the facility is entitled to a
“grace period” of two weeks to contact a physician to ascertain if treatment needs to be
changed. That would not comport with the regulatory requirement to show that a facility
furnished all necessary treatment and services or show that the development or
deterioration of a pressure ulcer was unavoidable.
Surveyor Muscovalley testified that a treatment LPN at the facility told her that Petitioner
has skin/wound meetings on Thursday to look over Sunday’s weekly body audit
summaries. The LPN also told Muscovalley that she did not understand why they were
not given orders to treat the pressure sores earlier. Muscovalley testified that the LPN
was “ill informed” because she got information regarding pressure sores late in the week
when the body audits were done on a Sunday. Tr. at 60. Muscovalley testified that this
is not a good system because it can lead to delays in treatment and tracking orders.
Muscovalley testified that delaying pressure sore treatment is critical because such sores
can deteriorate within 24 hours. Muscovalley testified that surveyors are told pressure
sores must be acted on promptly and a physician must be contacted when a new pressure
sore is identified or when deterioration occurs in an identified pressure sore. This is to
get treatment started as soon as possible or change an approach for a pressure sore that is
not healing. Tr. at 55-56. Here, Petitioner was tracking more than 50 sores on the
weekly audit summaries and its documentation was difficult to follow and sporadic. Tr.
at 57. Surveyor Chunn echoes Muscovalley’s concern, noting that Petitioner’s system
was flawed because intervention should be done in a timely manner and that not doing so
could lead to deterioration of a pressure sore. A nurse doing treatment assessments
should be able to call a physician on a Sunday to ask for treatment orders. Petitioner’s
system, according to which it could take two or three days to get a change in treatment
orders, simply takes too long. Tr. at 147-49.

DON Hewitt did not materially disagree with the surveyors’ understanding of Petitioner’s
pressure sore assessment process. She testified that when RN-1 came in on a Sunday (or
sometimes on a Monday) to assess, if she found something that needed to be addressed,
such as a new wound, she would call or leave a note for staff to address the wound the
next day, in order that a nurse who knew the resident could be consulted. Tr. at 167-68.
Hewitt testified that RN-1 was not around during the week to explain the audit summary
and the documentation at times may have been “out of whack.” Tr. at 196.

As noted by the Board, the standard for determining whether a pressure sore is
unavoidable is particularly demanding in requiring that a facility provide all necessary
treatment and services to prevent or treat a pressure sore. The surveyors persuasively
testified that a pressure sore can form or deteriorate swiftly and that time is of the essence
in contacting a physician and beginning treatment. Dr. Lessenberry did not dispute that a
pressure sore could develop quickly, within a few hours in a situation where a resident
displays co-morbidities such as those of the residents discussed below. Tr. at 259.
Petitioner’s process for the assessment nurse, RN-1, to advise staff of the development or
deterioration of a sore and the need for treatment alone could take more than 24 hours.
Such a delay is too long. DON Hewitt’s explanation that the nurse did so because she
wanted to consult with a nurse who knew the patient is not a sufficient excuse or
justification for the failure to inform Petitioner’s staff on Sunday of her findings, and
thereby to enable them immediately to contact a resident’s physician to initiate or change
treatment.
Resident 6: At the time of the survey Resident 6 was an 85-year-old woman. She was
admitted to the facility on October 9, 2009, and a minimum data set (MDS) dated
October 19, 2009, encapsulating an assessment reference date of October 15, 2009,
indicates she had diagnoses of, among other things, peripheral vascular disease,
hypertension, congestive heart failure, depression and anemia. CMS Ex. 6, at 35, 37, 39.9
The October 19, 2009 MDS reflects specifically for purposes of this case that Resident 6
entered the facility with two Stage I sores and one Stage II sore.’ CMS Ex. 6, at 40.
The MDS does not note whether they were pressure sores or another type of sore.
Resident 6 was hospitalized and out of the facility on October 26 through 27, and
November 10 through 11, 2009. Otherwise, at all relevant times, Resident 6 was present
in the facility.

The SOD reflects that Resident 6 entered the facility with or developed sores in four
locations: her right lower leg, her left outer ankle, and her left and right heels. Tr. at 64-
65; CMS Ex. 2, at 8-13. I discuss below as noncompliance only the examples of the
pressure sores on Resident 6’s heels. Surveyor Muscovalley indicated during her
testimony that the wounds on Resident 6’s right lower leg and left outer ankle should not
have been cited under Tag F314 as they were not necessarily pressure sores but venous
ulcers. She testified that the right lower leg and left outer ankle ulcers should have been
cited instead under Tag F309, as a general quality of care violation.'’ Tr. at 83, 95, 122.

° Surveyor Muscovalley testified that the October 19, 2009 MDS indicated that the
resident had Alzheimer’s dementia. Tr. at 28. The MDS, however, does not document
that Alzheimer’s was one of her disease diagnoses, nor does the MDS for an assessment
period ending in December 2009. CMS Ex. 6, at 39, 48. I note this, although whether or
not the resident had Alzheimer’s dementia is irrelevant to my decision here.

Pressure ulcers are assessed in four stages. The SOM, at Appendix PP, defines a Stage
1 as being an observable, pressure-related alteration of intact skin, whose indicators as
compared to an adjacent or opposite area on the body may include changes in skin
temperature, tissue consistency, sensation, or a defined area of persistent redness in
lightly pigmented skin, or with persistent red, blue, or purple hues in darker skin tones;
Stage II is partial thickness loss of dermis presenting as a shallow open ulcer with a red-
pink wound bed without slough or an intact or open/ruptured blister; Stage III is full
thickness tissue loss where subcutaneous fat, but not bone, tendon or muscle may be
exposed. Slough may be present but does not obscure the depth of tissue loss and there
may be undermining or tunneling; and Stage IV is full thickness tissue loss with exposed
bone, tendon or muscle. Slough or eschar may be present on some parts of the wound
bed. There is often undermining and tunneling.

"' Although Resident 6 entered the facility with a pressure ulcer on her left outer ankle,
that sore healed. P. Ex. 4, at 4. A new ulcer appeared at that site which is the venous
ulcer Surveyor Muscovalley agreed should have been cited under Tag F309.
CMS argues in its brief that it was not until the hearing that Petitioner raised the
argument that the sores were venous ulcers and that I should thus not consider them as
violations of Tag F314. CMS argues that Petitioner did not present clinical evidence to
show they were venous ulcers. However, the recognition by Surveyor Muscovalley that
the ulcers should have been cited under another F Tag convinces me that they were not
pressure sores. CMS did not ask me to decide, and I will not decide, whether Petitioner’s
treatment of the right lower leg and left outer ankle ulcers constitute a violation of the
participation requirement at Tag F309. Thus, I address below only Resident 6’s right and
left heel pressure sores in the context of Tag F314.

Right heel pressure sore: Weekly body audits document the development of Resident
6’s right heel pressure sore. CMS Ex. 6, at 11, 67. On October 11, 2009, this sore, with
which Resident 6 was admitted to the facility, was assessed as a Stage 1, 4 cm. x 6 cm. x
0 cm. There is no documentation of the pressure sore on weekly body audits dated
October 18, 25, and 31, 2009. An audit summary dated October 12, 2009, notes that the
right heel pressure sore had healed. P. Ex. 4, at 4; P. Ex. 5, at 11; Tr. at 108.’ On
November 6, 2009, a Stage II fluid filled blister 4 cm. x 8 cm. x 0 cm. was identified on
Resident 6’s heel. CMS Ex. 2, at 11; CMS Ex. 6, at 11. Surveyor Muscovalley testified
that such a sore can happen quickly. Tr. at 108-09. Muscovalley testified that
Petitioner’s physician was not notified of the pressure sore until four days later.
Muscovalley testified that she would have expected the physician to be notified when the
blister first appeared. Tr. at 109-11.

DON Hewitt testified that she was not sure why Resident 6’s physician was not notified
about the development of the pressure sore. Hewitt testified that it is usual to leave a
Stage II blister alone and hope it will reabsorb. Hewitt testified that she is not sure if
Petitioner has a policy and procedure regarding notification of a physician regarding a
Stage II intact blister. Tr. at 180-82. Dr. Lessenberry testified that the pressure sore did
not “necessarily” require a physician order for treatment, although it would require
nursing intervention. Lessenberry did not know why the physician was notified of the
pressure sore on November 11, 2009. Lessenberry posited that the facility may have
decided the sore needed more than A & D ointment on it. Tr. at 260-61. Lessenberry
also testified that once having had a pressure sore in an area the tissue in that area is more
ikely to break down again. Tr. at 288-89.

® Surveyor Muscovalley testified that the regulations do not require a facility to
document on a weekly body audit that a pressure ulcer has healed. Tr. at 108. Dr.
Lessenberry says there is no policy at the facility to document healed wounds on weekly
body audits. Tr. at 259. However, if a facility does not somehow inform a resident’s
physician that a sore has healed, then the physician’s treatment orders remain active, not
discontinued, and the facility is obliged to follow them.
Petitioner’s failure to consult Resident 6’s physician for at least four days after
development of the pressure sore constitutes noncompliance with the participation
requirement at issue. Although Petitioner may argue that a facility needs time to see if
treatment of a sore has time to work, this was a new pressure sore and the physician
should have been contacted to initiate treatment. Petitioner did not submit evidence
showing that leaving a new Stage II pressure sore alone in the hope that it would reabsorb
is consonant with a recognized standard of care. Petitioner did not point out any facility
policy in this regard. Neither Dr. Lessenberry’s nor DON Hewitt’s testimony convinces
me that the failure to contact Resident 6’s physician for treatment orders constitutes an
acceptable standard of care or compliance with the regulation. The standard for
compliance with the regulation is high: for development of a pressure sore to be
unavoidable, a facility must be able to show that it furnished all necessary treatment and
services to that sore. In this instance a healed pressure sore reappeared. Dr. Lessenberry
testified that such sores are likely to reappear. It is incumbent upon a facility to properly
and promptly treat such sores. Ifa facility is to meet that obligation, then consultation
with a resident’s physician, and obtaining treatment orders, or a change in orders, from
the resident’s physician, are imperatives.

Resident 6’s physician readmitted her to the facility on November 11, 2009, and ordered
treatment of the pressure sore on her right heel on that date. Specifically, Petitioner’s
staff was to cleanse the heel with wound cleanser, apply A & D ointment, use 4 x 4’s, and
wrap with Kling every day. CMS Ex. 6, at 25, 29. The treatment administration record
(TAR) dated November | — 30, 2009, notes that Petitioner’s staff initialed treatment as
completed on November 11, 2009, and also on November 12 and 16, 2009. Facility staff
did not initial that the treatment was done from November 13 through 15, 2009. The
physician’s order was changed after November 16, 2009. CMS Ex. 6, at 15. The TAR
for December does not reflect treatments on December 26 or 27, 2009. CMS Ex. 6, at 16.
What the TARs do document is that Petitioner’s staff did not document by staff initials
that right heel treatment was done on several dates, although treatment was ordered to be
done every day.

DON Hewitt testified that such inconsistent documentation does not always mean that the
ordered treatments were not provided. Hewitt testified that if treatments were not
documented the wound report could be consulted to determine if the wound was getting
better or worse. Also, dressings are signed and dated and the nurse on the next shift
would have reported if a treatment had not been done. DON Hewitt testified, however,
that she could not prove that the treatments were done. Tr. at 185-87. Dr. Lessenberry
also testified that dressings are dated and initialed by the nurse changing the dressing. Tr.
at 264. The testimony of Hewitt and Lessenberry does not plausibly suggest, much less
prove, that the treatments were provided in this case. It is incumbent upon Petitioner to
show that it furnished all necessary treatment and services to this right heel sore.
Petitioner did not do so.

Left heel pressure sore: The same problems presented with this Resident’s right heel
pressure sore also present with her left heel pressure sore. Resident 6 had a pressure sore
on her left heel on October 1, 2009, which the facility identified as healed on the weekly
audit summary of October 12-18, 2009. P. Ex. 4, at 4. On November 11, 2009, Resident
6 was readmitted to the facility following a hospital procedure. CMS Ex. 6, at 25. On
her return, a body audit identified a new pressure sore on her left heel. It was noted to be
an open blister, Stage IL, 4.5 cm. x 7 cm. P. Ex. 5, at 45; Tr. at 44-45, 118, 183. Resident
6’s physician was not notified of the new left heel sore until November 19, 2009, when
the physician ordered a change in treatment. CMS Ex. 6, at 25; Tr. at 183-84. DON
Hewitt testified that she did not know why Resident 6’s physician was not called until
November 19, and posited that Petitioner’s protocol is to leave a blister alone. Tr. at 183-
84. Dr. Lessenberry testified that it was appropriate to wait until November 19, 2009, to
notify Resident 6’s physician because the facility was doing nursing interventions and
there is no policy that a physician be notified for a blister. Tr. at 262-63. Hewitt’s and
Lessenberry’s testimony is unpersuasive. A healed pressure sore reappeared in the same
location, Resident 6’s left heel. When Resident 6 returned from the hospital, the only
treatment ordered was to the right heel, there was no treatment ordered for the left heel or
a pre-existing order for treatment of the left heel. P. Ex. 5, at 34. It was thus incumbent
upon Petitioner to get treatment orders for that sore. As discussed above regarding the
right heel pressure sore, the length of time between identifying the new pressure sore and
notifying the physician was too long a period to comport with participation requirements.

As noted in the SOD, the December 2009 TAR documented treatment to the left heel, but
there is no documentation the treatments were administered on December 26 or 27, 2009.
CMS Ex. 2, at 13; CMS Ex. 6, at 16. Dr. Lessenberry testified that missing
documentation on a medication administration record (MAR) or TAR is merely a
documentation error and that such an error does not affect a pressure sore. Instead, a
documentation error would just be something to discuss with and re-inservice staff. Tr. at
263-64. Petitioner, however, did not show that treatment was actually done. As noted by
Surveyor Muscovalley, the troubling aspect of this sore was its reappearance. Tr. at 114.
Again, it is incumbent upon Petitioner to show that the pressure sore was unavoidable
because all necessary treatment and services had been provided to Resident 6 to heal the
left heel sore. Petitioner failed to do so.

Resident 8: Resident 8, a 95-year-old man, was readmitted to the facility on October 1,
2009. His admission orders diagnoses include “Decubitus/buttocks,” a urinary tract
infection, dermatitis, and a left above-the-knee amputation. CMS Ex. 7, at 21.

An admission body audit noted that he had a 5 cm. x 2 cm. Stage II pressure sore. It
appears from the diagram provided to have been sited somewhere between his buttocks.
CMS Ex. 7, at 5. His admission orders note that wound cleanser is to be applied once
daily. The orders do not say where the cleanser is to be applied. CMS Ex. 7, at 21. On
October 8, 2009, the resident’s physician was contacted and he ordered that the sore was
to be cleaned with wound cleanser, Santyl was to be applied to the wound bed, the sore
was to be covered with collagen to promote granulation tissue growth, and the sore was
then to be covered with a foam. The dressing was to be changed daily. CMS Ex. 7, at
34. The weekly body audit done on October 11, 2009, indicates the pressure sore is a
coccyx Stage III, 5 cm. x .8 cm. x .3 cm. and 100% granulation. CMS Ex. 2, at 14; Tr. at
141.

Surveyor Chunn testified that the pressure sore was deteriorating and there was no
physician’s order regarding the sore until October 8, 2009, seven days after the resident
was admitted to the facility. Tr. at 141. Chunn testified that after the pressure sore was
assessed, the resident’s physician should have been notified, a treatment order obtained,
and treatment interventions put in place. Tr. at 142, 146. Chunn testified that it was
possible for the sore to deteriorate from a Stage II to a Stage III during this period. Tr. at
147. Dr. Lessenberry testified that it was appropriate to treat the wound for seven days
with wound cleanser before notifying the resident’s physician. Tr. at 278. However, as I
discuss below, the physician’s admission orders were unclear, and within those seven
days the resident’s physician should have been consulted with regard to treatment of the
sore.

Surveyor Chunn testified that the physician’s admission order did not specify the location
of the pressure sore, and there is no documentation that the resident’s physician was
consulted for clarification. Tr. at 142. Chunn testified it was not enough to cite that there
was a decubitus to the buttocks (CMS Ex. 7, at 21). The admission body audit indicated
that the pressure sore was between the buttocks in the sacrum or coccyx area, and it
documents a rash to the buttocks, not a decubitus. CMS Ex. 7, at 5; Tr. at 157-58. DON
Hewitt testified that Resident 8 had a physician’s order for wound cleanser when
admitted and had only one sore so that the facility would know what it had to treat. Tr. at
189. Dr. Lessenberry testified that she probably would not have written the admission
order in the way it was written, but that a physician can write an order “whatever [way]
they want.” Lessenberry testified that a more appropriate order would have been to cite
the location of the pressure sore the physician wanted to be treated. Tr. at 276-77. The
admission orders do not identify exactly where the pressure sore was situated and do not
explain what it is that the physician wanted treated. I infer from Lessenberry’s admission
— that the order is not written the way she would have written it — that the substance of
that order is far from clear to her. Petitioner should have contacted the resident’s
physician to clarify the order.

Petitioner also did not document its treatment of the pressure sore. The TAR for October
1-31, 2009, notes the physician’s order of October 8, 2009 regarding treatment of the
pressure sore. CMS Ex. 7, at 10. It does not, however, document that the Resident
received treatment with wound cleanser through October 7, 2009. Moreover, it does not
document treatment to the sore on October 24 or 25, 2009. DON Hewitt testified that it
appears there was a clerical or medical record error which prevented the physician’s
order from being placed on the TAR when the resident was re-admitted, although she
testified that the failure did not necessarily contribute to the pressure sore going from a
Stage II to a Stage III. It is not clear from her testimony, however, whether wound
cleanser was ever used on the resident’s pressure sore prior to October 8, 2009, or
whether the error was purely documentary. Tr. at 190-94. Dr. Lessenberry was asked a
question about whether, if a treatment was not documented for eight days, would that be
a problem on chart review. Lessenberry testified that if she saw this on chart review she
would ask “what went on here and what’s happening” because, even if the treatment was
not documented, that “doesn’t mean that they didn’t do it; that just means they didn’t
document it.” Tr. at 281. However, whether the wound cleanser treatment was done or
not, the fact remains that on numerous dates in October the TAR does not record that
ordered treatment was done. As noted with Resident 6, this does not amount to a
showing that the pressure sore was unavoidable and that Petitioner was doing all it could
to provide all necessary treatment and services for Resident 8’s pressure sore.

2. The $4000 PICMP imposed is not reasonable. A $1500 PICMP is
reasonable.

To determine whether the PICMP imposed is reasonable, I apply the factors listed in 42
C.F.R. § 488.438(f), which are: (1) the facility’s history of noncompliance; (2) the
facility’s financial condition; (3) factors specified in 42 C.F.R. § 488.404; and (4) the
facility’s degree of culpability, which includes neglect, indifference, or disregard for
resident care, comfort, or safety. The absence of culpability is not a mitigating
circumstance in reducing the amount of the penalty. The factors listed in 42 C.F.R. §
488.404 include: (1) the scope and severity of the deficiency; (2) the relationship of the
deficiency to other deficiencies resulting in noncompliance; and (3) the facility’s prior
history of noncompliance in general and specifically with reference to the cited
deficiencies.

In reaching a decision on the reasonableness of a PICMP, I must consider whether the
evidence supports a finding that the amount of the PICMP is at a level reasonably related
to an effort to produce corrective action by Petitioner with the kind of deficiency found,
in light of the above factors. I am neither bound to defer to CMS’s factual assertions, nor
free to make a wholly independent choice of remedies without regard for CMS’s
discretion. Barn Hill Care Center, DAB No. 1848, at 21 (2002).

CMS initially imposed a PICMP of $1500 for the deficiency at Tag F314, $1500 for the
deficiency at Tag F157, and $1000 for the deficiency at Tag F490. Without explanation
other than “[t]he revision was based on an administrative review within the Regional
Office of the Centers for Medicare & Medicaid Services,” CMS revised the penalty to a
$4000 PICMP for Tag F314, dropping the penalties for Tags F157 and 490. CMS Ex. 1,
at 4.
I have no evidence with regard to Petitioner’s history of noncompliance or financial
condition. However, I do find that Petitioner is culpable and that its deficiencies are
serious. The process by which Petitioner assessed pressure sores and then communicated
that assessment to staff and to residents’ physicians was flawed and could impede timely
treatment of a pressure sore. The examples of Residents 6 and 8 reflect that physician
notification was delayed. Moreover, Petitioner failed to document treatment of pressure
sores and, without such documentation, it is not possible to know if treatments were
done. CMS thus made a prima facie case that treatments were not done and Petitioner
did not otherwise prove that the treatments were done. Thus, Petitioner did not show that
the pressure sores were unavoidable, because it did not show that it actually furnished all
necessary treatment and services. Accordingly, imposition of a PICMP is reasonable.

A $4000 PICMP is not, however, reasonable. On the same evidence, CMS initially
imposed only a $1500 PICMP for the noncompliance at Tag F314, and CMS did not
explain why it revised the PICMP to $4000. CMS simply noted in its March 12, 2010
notice letter that it was doing so. CMS has not otherwise explained the revision. It may
be that there is an explanation, and it may be that had CMS not declined to file a reply
brief, that explanation would be apparent and convincing. But, given CMS’s deliberate
waiver of a significant opportunity to plead its case, that explanation remains unvoiced. I
have not sustained all of the instances of noncompliance alleged by CMS, principally
those with regard to the ulcers on Resident 6’s right lower leg and left outer ankle. The
sustained instances of noncompliance are serious. Taking all of this into account, I find
that the PICMP initially imposed for the noncompliance at Tag F314, $1500, is
reasonable as a remedy for the noncompliance | have upheld.

IV. Conclusion

For the reasons discussed above, I find that Petitioner was not in substantial compliance
with the Medicare participation requirement at 42 C.F.R. § 483.25(c) (Tag F314). I
affirm as reasonable a $1500 PICMP for that noncompliance.

/s/
Richard J. Smith
Administrative Law Judge