Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
The Clairmont Tyler, LP )
(CCN: 45-5485), ) Date: March 12, 2008
)
Petitioner, )
)
-Vv.- ) Docket No. C-06-462
) Decision No. CR1748
Centers for Medicare & Medicaid )
Services. )
_)
DECISION

I sustain the decision of the Centers for Medicare & Medicaid Services (CMS) to impose
a per-instance civil money penalty (PICMP) of $3500 upon Petitioner, The Clairmont
Tyler, LP, for a violation of 42 C.F.R. § 483.70(a), based on a finding of immediate
jeopardy and cited as Life Safety Code (LSC)! Tag K-106.

I. Background
Petitioner is a long-term care facility located in Tyler, Texas, and is authorized to

participate in the Medicare and Medicaid programs. It is required to be in substantial
compliance with program requirements to remain a participant.

' Pursuant to 42 C.F.R. § 483.70(a), long-term care facilities are required to comply

with the LSC of the National Fire Protection Association (NFPA), 2000 edition (NFPA
101), which contains procedural safeguards to prevent and respond to fires and other
types of accidents, including power failure.
2

This case arose from a survey of Petitioner’s facility conducted by the Texas Department
of Aging and Disability Services (state agency) on March 9, 2006. The state agency
found multiple instances of noncompliance with program requirements.” Among the
findings was a violation of 42 C.F.R. § 483.70(a), for which multiple LSC Tags were
cited. Of those Tags, Tag K-106, which concerns one resident (Resident 18, hereinafter,
“R-18”), is the subject of this decision.

On March 23, 2006, the state agency notified Petitioner of its survey findings. Based on
its review of those findings, on March 24, 2006, CMS notified Petitioner that it was not in
substantial compliance with program requirements; that its provider agreement would be
terminated effective August 9, 2006, unless the facility returned to substantial compliance
before that date; and that a denial of payment for new admissions (DPNA) would become
effective April 8, 2006, to continue until the facility achieved substantial compliance or
its provider agreement was terminated, whichever occurred first. As monetary sanctions,
Petitioner was assessed a civil money penalty (CMP) of $7000, $3500 of which
represented a PICMP for a violation of 42 C.F.R. § 483.70(a) (LSC Tag K-106).?
Petitioner also was advised that the survey findings and remedies imposed could affect
the approval status of the facility’s Nurse Aide Training and Competency Evaluation
Program (NATCEP) and Competency Evaluation Program. On May 25, 2006, CMS
informed Petitioner that based on the state agency’s conclusion that the facility had
returned to substantial compliance, it rescinded the proposed termination of the facility’s
provider agreement, but that the DPNA in effect from April 8, 2006, through April 23,
2006, and the $7000 CMP would not be rescinded.

By letter dated May 15, 2006, Petitioner, by counsel, requested a hearing before an
administrative law judge (ALJ) and disputed all noncompliance findings and remedies
imposed or proposed. The parties filed their pre-hearing briefs and complied with my
October 11, 2006 Order. I scheduled a hearing to be convened on March 19, 2007, to
continue through March 22, 2007, in Dallas, Texas. On November 9, 2006, CMS filed its
Witness and Exhibit List, along with exhibits (CMS Exs.) | through 37. On December

2

° The regulatory bases for noncompliance findings made following the March 9,
2006 survey were: 42 C.F.R. §§ 483.13(c)(1)(ii) and (iii)(2),(3), and (4) (Resident
Behavior/Facility Practices); 483.15(h)(2) and (5) (Quality of Life); 483.25(a)(3) (Quality
of Care); 483.25(c) (Quality of Care); 483.25(k) (Quality of Care); 483.35(c)(1)-(3)
(Dietary Services); 483.35(d)(1) and (2) (Dietary Services); 483.60(a) (Pharmacy
Services); 483.70(a) (Physical Environment; LSC Tags K-18, K-21, K-29, K-39, K-62,
K-76, K-106, and K-141); and 483.75 (Administration).

3 A PICMP of $3500 was cited for a violation of 42 C.F.R. § 483.25(k).
3

13, 2006, Petitioner filed its Witness List, Exhibit List, and exhibits (P. Exs.) 1, 2, and 3.
Without objections to the exhibits as submitted, I admit CMS Exs. 1-37 and P. Exs. 1-3.

On February 20, 2007, I convened a telephonic pre-hearing conference, at which time
counsel informed me that the parties reached partial compromise such that the only matter
remaining for my adjudication is the dispute concerning LSC Tag K-106, for which a
$3500 PICMP was imposed. Counsel and | agreed that an in-person hearing would be
unnecessary in light of the partial settlement and that I would adjudicate the remaining
dispute (LSC Tag K-106) based on written submissions.* On February 22, 2007, I issued
an Order Cancelling Hearing and Setting Briefing Schedule.

Pursuant to my February 22, 2007 Order, on March 22, 2007, CMS filed its brief, titled
“Respondent’s Brief Submitted for Decision” (CMS Brief), along with a Motion to
Supplement Pre-Hearing Exchange with two additional exhibits (CMS Exs. 38 and 39)
and CMS Exs. 38 and 39.° On April 23, 2007, Petitioner filed its brief, titled “Petitioner’s
Written Submissions In Lieu of Oral Hearing” (P. Brief). Without objection to CMS Exs.
38 and 39, or opposition to CMS’s Motion to Supplement Pre-Hearing Exchange, I admit
CMS Exs. 38 and 39. And although my February 22, 2007 Order permitted the parties to
file reply briefs, they declined to do so, by letters dated May 18, 2007 (CMS) and May
21, 2007 (Petitioner). Therefore, the record is complete for my decision.

Petitioner has raised allegations of due process violations and constitutional challenges in
its request for hearing (at 2) and Pre-Hearing Brief (at 2), and in P. Brief at 2-3. I do not
have jurisdiction over these matters, but Petitioner has raised them with sufficient clarity
that they are preserved for any future appeal in a forum that enjoys jurisdiction to
consider them.

4 CMS stated (CMS Brief at 3) that the parties “mutually entered into settlement of
all tags and remedies except the Life Safety Code tag K-106 and its corresponding civil
money penalty in the amount of $3,500.00, which is the remaining issue on appeal.”

5 CMS Exs. 38 and 39 are affidavits of two surveyors (one, an engineer; the other, a
registered nurse), and the latter includes copies of certain medical journal materials and
Internet-based medical information. CMS Exs. 38 and 39 were submitted with cover
sheets marked “CMS Exhibit #38” and “CMS Exhibit #39,” but the exhibits themselves
are not marked accordingly. Rather, the pages constituting CMS Ex. 38 are marked CMS
Ex. | and the pages constituting CMS Ex. 39 are marked CMS Ex. 2; and neither CMS
Ex. 38, nor CMS Ex. 39, duplicates previously-submitted exhibits. Any reference to
either of these exhibits will be to CMS. Ex. 38 or CMS Ex. 39.

If. Applicable Law and Regulations

Sections 1819 and 1919 of the Social Security Act (Act) and regulations in 42 C.F.R. Part
483 govern Medicare/Medicaid program participation requirements for long-term care
facilities. Pursuant to Sections 1819 and 1919 of the Act, the Secretary of Health and
Human Services may impose remedies against a facility for noncompliance with federal
participation requirements. Facilities participating in Medicare are subject to surveys by
state agencies on behalf of CMS to determine whether they are so compliant. 42 C.F.R.
§§ 488.10-488.28, 488.300-488.335.

CMS may impose various sanctions for failure to substantially comply with participation
requirements, including a PICMP or per-day CMP. 42 C.F.R. §§ 488.406; 488.408;
488.430. Per-day CMPs fall into one of two ranges of penalties. 42 C.F.R. §§ 488.408,
488.438. The upper range, from $3050 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, from $50
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). As for PICMPs, the
regulations provide for one range of CMP from $1000 to $10,000, which could be
imposed whether or not immediate jeopardy is found. 42 C.F.R. §§ 488.408(d)(1)(iv);
488.438(a)(2).

A long-term care facility against which CMS has determined to impose a CMP is entitled
to a hearing before an ALJ. Act, section 1128A(c)(2); 42 C.F.R. §§ 488.408(g);
498.3(b)(13). A hearing before an ALJ is a de novo proceeding. Anesthesiologists
Affiliated, et al., DAB CR65 (1990), aff'd, Anesthesiologists Affiliated, et al. v. Sullivan,
941 F.2d 678 (8th Cir. 1991). The facility has a right to appeal a “certification of
noncompliance leading to an enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also
42 C.F.R. § 488.330(e). However, the choice of remedies by CMS or the factors CMS
considered in choosing remedies are not reviewed. 42 C.F.R. § 488.408(g)(2). A facility
may only challenge the scope and severity level of a noncompliance found by CMS ifa
successful challenge would affect the CMP amount that could be collected by CMS or
have an impact upon the facility’s NATCEP. 42 C.F.R. §§ 498.3(b)(14), (d)(10)(i).
CMS’s determination as to the level of noncompliance is upheld unless it is “clearly
erroneous.” 42 C.F.R. § 498.60(c)(2). This includes its finding of immediate jeopardy.
Woodstock Care Center, DAB No. 1726, at 9, 38 (2000), aff'd, Woodstock Care Center v.
Thompson, 363 F.3d 583 (6th Cir. 2003). The DAB has long held that a provider has no
right to challenge the scope and severity level assigned to a noncompliance finding,
except where that finding was the basis for an immediate jeopardy determination. See,
e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB No. 1750 (2000).
The review of a CMP by an ALJ is governed by 42 C.F.R. § 488.438(e).

5

In a case where a CMP was imposed, CMS must make a prima facie case that the facility
failed to comply substantially with participation requirements. To prevail, a facility must
overcome CMS’s showing by a preponderance of the evidence. Hillman Rehabilitation
Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. U.S. Dep’t of
Health and Human Services, No. 98-3789 (GEB), slip op. at 25 (D.N.J. May 13, 1999).

III. Issues
The issues in this case are:

(1) Whether Petitioner was in substantial compliance with 42 C.F.R.
§ 483.70(a) (LSC Tag K-106).

(2) Whether the finding of immediate jeopardy is clearly erroneous.
(3) Whether the PICMP of $3500 is reasonable.
IV. Findings and Discussion

The following findings of fact and conclusions of law are italicized and followed by a
discussion of each.

A. Petitioner violated 42 C.F.R. § 483.70(a) (LSC Tag K-106).

Petitioner did not maintain specialized patient care electrical receptacles
in R-18’s sleeping room 117 that required the use of life-support
equipment where the specialized patient care electrical receptacles were
connected to the Critical Electrical Branch of Type I Emergency
Electrical System consistent with NFPA 99.

A facility must be designed, constructed, equipped, and maintained to protect the health
and safety of residents, personnel, and the public. 42 C.F.R. § 483.70. It must meet
applicable provisions of NFPA 101. 42 C.F.R. § 483.70(a)(1)(i). NFPA 101 requires
hospitals, nursing homes, and hospices that have life-support equipment to have a Type 1
Essential Electrical System (EES) powered by a generator with a transfer switch and
separate power supply. The EES is in accordance with NFPA 99 (Standard for Health
Care Facilities), 3.4.2.2, 3.4.2.1.4. CMS Ex. 9, at 34.
6

On March 9, 2006, the surveyor concluded that Petitioner was not substantially
compliant’ with 42 C.F.R. § 483.70(a)(1) because it failed to maintain specialized patient
care electrical receptacles in a single area (R-18’s sleeping room 117) that required the
use of life support equipment where the specialized patient care electrical receptacles
were connected to the Critical Electrical Branch of Type I EES consistent with NFPA 99.
CMS Ex. 3, at 52. In the event of a power outage, there would be no alternate power
source from the emergency generator to continue operating R-18’s life-support equipment
while R-18 is in sleeping room 117. Therefore, this deficiency was categorized as an
immediate jeopardy finding. CMS Ex. 3, at 52-53. R-18 was transferred from the facility
and, after Petitioner submitted a plan of correction, the immediate jeopardy finding was
removed on March 8, 2006. The surveyor determined that the deficiency remained
uncorrected pending the facility’s monitoring to determine the effectiveness of the
corrective action.’ CMS Ex. 3, at 53, 55-56.

I have considered Petitioner’s arguments as to why the citation of LSC Tag K-106 based
on a finding of immediate jeopardy and the imposition of a $3500 PICMP should not be
sustained. Petitioner does not dispute the one crucial determination made by the surveyor
that defeats its case: that Petitioner failed to ensure the availability of an alternate
electricity source in the event of a power failure to prevent risk of harm to residents
relying upon electricity to power life-sustaining equipment. Rather, the central theme of
its various arguments is that R-18’s ventilator was not a life-support device, but was a
supplemental breathing aid that R-18, mostly independent, used if and when he wanted to
use it, and therefore, there was no actual, or even potential for, harm.

R-18 apparently told the surveyor that he used the ventilator only while lying down or
during night-time, and that he could breathe independently while in an upright position,
typically during daytime. Petitioner’s Director of Nurses reported similarly. CMS Exs.
3, at 53-54, and 9, at 1. (But there is some indication that R-18 did not limit his use of the
ventilator only to times when he is in a reclining position, or while in bed. CMS Ex. 39,
at 6.) Also, Petitioner proffered R-18’s clinical records, including Dr. R. Becker’s
statements and nursing notes (see in particular P. Ex. 1, at 2,5, 8, 10, 11, 13, 15, 17, 19;
P. Ex. 3, at 1-3), to show that R-18 was not truly vulnerable and was mostly independent;
that he used the non-invasive ventilator electively and only to supplement his own
breathing capability; and that R-18’s ventilator was not a life-support device.

6 “Substantial compliance” is “a level of compliance with the requirements of

participation such that any identified deficiencies pose no greater risk to resident health or
safety than the potential for causing minimal harm.” 42 C.F.R. § 488.301.

7 The scope and severity level was decreased to “isolated potential for more than

minimal harm that is not immediate jeopardy.” CMS Ex. 3, at 53.
Iam not convinced by these arguments. First, the issue of whether Petitioner violated 42
C.F.R. § 483.70(a)(1) does not turn on whether R-18 actually depended on his ventilator
at all times to sustain his life, or whether R-18 was actually harmed or was at risk of
actual harm. The cornerstone of that provision is that any resident using a life-support
device powered by electricity should have available an alternate power source should the
primary power source fail, to prevent interrupted operation of the device. The undisputed
evidence before me is that Petitioner did not meet that requirement. That the violation
was cited only as it applied to R-18 does not affect my conclusion.* Nor does the absence
of surveyor observation of R-18 in respiratory distress at the time of the survey. The
regulation exists to safeguard residents against potential harm from failure of equipment
due to power failure; Petitioner is not absolved from a deficiency finding based on after-
the-fact assertion that R-18 did not actually suffer harm. Also on this point, while I have
considered the statements of two staff-persons that the facility had in place an emergency
protocol, which included the availability of a disaster kit containing extension cords that
could connect a red emergency plug to R-18’s bed area (P. Ex. 3, at 4-5), that protocol
does not comply with the specific regulation at issue.

Further, I find Petitioner’s assertions to the effect that R-18 was never truly in danger
ecause the ventilator was not a life-support device, and which had an internal battery
that would have operated as a back-up power source in the event of power failure, and
that the facility’s staff merely needed to place R-18 in an upright position to keep him
reathing continuously, specious. On this point, S. Cruz (a nurse) said, based on her
survey findings, that the facility staff either said the battery would operate for 30 minutes
or that they were uncertain as to the expected life of the battery; and that the battery
needed routine maintenance, but that they did not know when it was last serviced. CMS
Ex. 39, at 6-7. Petitioner itself admitted that its staff lacked knowledge about R-18’s
ventilator, and Dr. Becker called it “an antique.” Prehearing Brief at 29-30; P. Ex. 3, at 1.
R-18 could not move on his own while he is in bed at night (CMS Ex. 3, at 20), which
would suggest that he would have difficulty operating, or would be unable to operate, the
ventilator on his own. It would follow, then, that in the event of power failure, at night,

8 The surveyor noted that no resident room had electrical receptacles connected to

the Critical Electrical Branch of EES. CMS Exs. 3, at 53, 54, and 9, at 1-2. Nonetheless,
it is evident that only Tag K-106 was cited because R-18 alone would have been affected
by the violation. But, Petitioner’s argument that the citation of K-106 only,
notwithstanding the lack of emergency receptacles in other areas, is indicative of
surveyors’ lack of knowledge of the purpose and use of R-18’s ventilator (P. Brief at 11-
12) muddles the issue, which is simply whether there was a back-up power source to
prevent risk of harm to residents relying on electricity to power life-support equipment,
consistent with the LSC of NFPA 101.

8

R-18 very well could have been in danger if the battery did not operate, or, even if it
operated for a short duration, if staff unfamiliar with the ventilator or the battery in it
could not react timely.

Based on the foregoing, I conclude that Petitioner violated 42 C.F.R. § 483.70(a), cited as
LSC Tag K-106.

B. An immediate jeopardy finding for LSC Tag K106 is not clearly erroneous.

Immediate jeopardy exists where a “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. Fora finding of immediate
jeopardy, it is not necessary to show that the noncompliance actually caused serious
injury, harm, impairment, or death; rather, it is sufficient to show that the noncompliance
was likely to cause, or had the potential for causing, serious injury, harm, impairment, or
death. Fairfax Nursing Home, Inc., DAB No. 1794, at 14 (2001). I must uphold CMS’s
immediate jeopardy determination unless Petitioner meets the burden to show the finding
was clearly erroneous. 42 C.F.R. § 498.60(c)(2).

n this case there is strong prima facie evidence of immediate jeopardy-level deficiency
inasmuch as a vulnerable resident was placed at risk of serious, imminent harm of
respiratory failure or death. It is evident that upon admission into Petitioner’s facility in
November 2005, R-18 was diagnosed with chronic respiratory failure and history of
Polio, and was on life support. CMS Exs. 39, at 6, 3, at 54, and 9, at 1; P. Exs. 1, at 1, 2,
5, and 3, at 1. Petitioner acknowledged that R-18 also had a history of kyphosis, marked
y curvature of the spine, which could play a role in compressing lung space and, thus,
contribute to labored breathing. P. Brief at 9-10; P. Ex. 1, at 1 (showing a diagnosis of
yphoscoliosis). These considerations are indicative of R-18’s susceptibility to harm
should his breathing device fail to operate for any reason and, thus, should have
eightened the vigilance with which Petitioner’s staff should have cared for R-18. Under
the circumstances, I cannot conclude that Petitioner has met its burden to show that the
immediate jeopardy finding was clearly erroneous. I therefore uphold CMS’s finding.

C. The PICMP of $3500 imposed for LSC Tag K-106 is reasonable.

I find a basis for a noncompliance finding and, thus, there is a basis for an enforcement
remedy. I also conclude that the immediate jeopardy finding for a violation of 42 C.F.R
§ 483.70(a), cited as LSC Tag K-106, is not clearly erroneous. The final inquiry is
whether the $3500 PICMP is reasonable.
9

To determine whether the CMP is reasonable, factors in 42 C.F.R. § 488.438(f) must be
considered: (1) the facility’s history of noncompliance, including repeated deficiencies;
(2) its financial condition; (3) the seriousness of the deficiencies as set forth in 42 C.F.R.
§ 488.404; and (4) the degree of culpability.

If a facility is not in substantial compliance with program requirements, then CMS may
impose one or more of the enforcement remedies listed in 42 C.F.R. § 488.406, including
a DPNA anda CMP. The CMP may be either a per-day CMP for the number of days that
a facility is not in compliance, ora PICMP. 42 C.F.R. § 488.430(a). In this case CMS
could have imposed a per-day CMP within the upper range ($3050 per day to $10,000 per
day) based upon an immediate jeopardy finding (42 C.F.R. §§ 488.438(a)(1)(i), (d)(2)),
but it instead elected to impose a PICMP.

Within the sole range from $1000 to $10,000 permitted for a PICMP, which could have
been imposed even without immediate jeopardy (42 C.F.R. §§ 488.408(d)(1)(iv);
488.438(a)(2)), CMS elected to impose $3500, which is at the lower end of this range. I
do not find evidence of a history of noncompliance, or of inability to pay the PICMP.
There is, however, evidence of a serious deficiency and of culpability. Petitioner said,
“fa]t worst, a failure of the total machine would [have] cause[d] [R-18] some lost sleep
and, maybe, anxiety.” P. Brief at 16. I disagree, and the effect of my disagreement will
be seen at once. The deficiency at issue posed the possibility of significant danger. In the
event of a power failure, there would have been no power source to ensure continued
operation of R-18’s ventilator while R-18 is in room 117. I make this point again because
it is at the core of the issue of this facility’s culpability. The deficiency in this case and
Petitioner’s statement as quoted above, in my opinion, suggest indifference and,
therefore, culpability, on the facility’s part. Based on the foregoing, I conclude that the
$3500 PICMP is reasonable.

V. Conclusion

CMS’s determination that Petitioner was not compliant with federal requirements
governing participation of long-term care facilities in Medicare and Medicaid programs at
the immediate jeopardy level, cited as a violation of 42 C.F.R. § 483.70(a) (LSC Tag K-
106), and its imposition of a PICMP of $3500 is, in all respects

AFFIRMED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

)
In the Case of: ) Date: March 5, 2008
)
Community Alternatives Missouri, Inc., )
d/b/a Turtle Creek Group Home, ) Docket No. C-08-16
) Decision No. CR1746
Petitioner, )
)
v. )
)
The Inspector General. )
oo )
DECISION

Petitioner, Community Alternatives Missouri, Inc., d/b/a Turtle Creek Group Home, is

excluded from participation in Medicare, Medicaid and all federal health care programs
pursuant to section 1128(a)(2) of the Social Security Act (the Act) (42 U.S.C. § 1320a-
7(a)(2)), effective August 20, 2007, for the minimum statutory period of five years.'

I. Background

The Inspector General (I.G.) notified Petitioner by letter dated July 31, 2007, that it was
being excluded from participation in Medicare, Medicaid, and all federal health care
programs for five years pursuant to section 1128(a)(2) of the Act. The I.G. cites as the
basis for Petitioner’s exclusion its conviction in the 30" Judicial Circuit, Circuit Court of
Polk County, Missouri, of a criminal offense related to neglect or abuse of patients in
connection with the delivery of a health care item or service.

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only
after the period of exclusion expires. Reinstatement is not automatic upon completion of
the period of exclusion.
2

Petitioner requested a hearing by letter dated October 3, 2007. The case was assigned to
me on October 24, 2007. I held a prehearing conference in the case on November 15,
2007. As memorialized in my Order dated November 21, 2007, during the conference the
parties agreed that only legal issues were in dispute and they further agreed to waive an
in-person hearing and have the case decided on documents and briefs. The I.G. filed a
brief (I.G. Br.), accompanied by three exhibits (1.G. Exs.) 1-3, on December 17, 2007.
Petitioner submitted a response (P. Br.), accompanied by two exhibits (P. Exs.) 1-2, on
January 15,2008. The I.G. submitted a reply (1.G. Reply), accompanied by two more
exhibits, I.G. Exs. 4-5, on January 31, 2008. Petitioner requested leave to submit a sur-
reply (P. Reply) and did so on February 21, 2008, accompanied by P. Ex. 3.’ I accept
Petitioner’s sur-reply and I admit into evidence I.G. Exs. 1-5 and P. Exs. 1-3.

II. Discussion
A. Findings of Fact

The following findings of fact are based upon the uncontested and undisputed assertions
of fact in the parties’ pleadings and the exhibits submitted.

1. On November 28, 2001, Petitioner, a residential facility licensed by the Missouri
Department of Mental Health, was charged with one count of involuntary
manslaughter and one count of resident neglect in the 30" Judicial Circuit Court of
Polk County, Missouri. P. Br. at 2-3; 1.G. Exs. 2, at 1; 3, at 1.

2. On July 25, 2006, a jury returned a verdict of “not guilty” with respect to the
charge of involuntary manslaughter, and a verdict of “guilty” on the resident
neglect charge. P. Br. at 3; 1.G. Ex. 2, at 1.

3. The information upon which Petitioner was convicted, alleged that between
November 28, 2001 and January 10, 2002, Petitioner’s employees failed to provide
necessary health care services to a resident of Petitioner’s facility and the failure
presented an “imminent danger to the health, safety, or welfare” of that resident.
1G. Ex. 3, at 1.

> By letter dated February 25, 2008, Petitioner informed me that Petitioner’s
appeal of its conviction was transferred to the Supreme Court of Missouri. As discussed
below, Petitioner’s appeal of its criminal conviction, and where that appeal is currently
pending, is irrelevant to my decision here.
3

4. On September 28, 2006, Petitioner was ordered to pay a $5000 fine. I.G. Ex. 2, at

5. Petitioner is appealing its criminal conviction. P. Exs. 1, 2.

B. Conclusions of Law

1. Petitioner’s request for hearing was timely and I have jurisdiction.
2. Petitioner was convicted within the meaning of section 1128(i) of the Act.
3. Petitioner’s conviction is related to the neglect of a patient (here a resident

receiving health care services in Petitioner’s facility) in connection with the
delivery of a health care item or service within the meaning of section 1128(a)(2)

of the Act.
4. Petitioner’s exclusion is mandated by section 1128(a)(2) of the Act.
5. A five-year exclusion is mandatory pursuant to section 1128(c)(3)(B) of the Act.
6. Exclusion is effective 20 days from the date of the notice of exclusion. 42 C.F.R.

§ 1001.2002(b).

7. I have no authority to stay Petitioner’s exclusion pending final disposition of
Petitioner’s appeal of its criminal conviction.

8. Petitioner received appropriate notice of its exclusion and the opportunity to
request a hearing before an administrative law judge (ALJ) on issues an ALJ is
authorized to hear.

9. I do not have the authority to address Constitutional issues.

C. Applicable Law
Petitioner’s right to a hearing by an ALJ and judicial review of the final action of the

Secretary of Health and Human Services is provided by section 1128(f) of the Act (42
U.S.C. § 1320a-7(f)).
4

Pursuant to section 1128(a)(2) of the Act, the Secretary must exclude from participation
in the Medicare and Medicaid programs “(a)ny individual or entity that has been
convicted under Federal or State law, of a criminal offense relating to neglect or abuse of
patients in connection with the delivery of a health care item or service.” One is
convicted of a criminal offense when a judgment of conviction is entered against an
individual or entity by a state or federal court, regardless of whether there is an appeal
pending or the judgment of conviction or other record is ultimately expunged; or there is
a finding of guilt; or a plea of guilty or no contest is accepted; or the individual or entity
enters a first offender, deferred adjudication, or similar arrangement where a judgment of
conviction is withheld. Act § 1128(i).

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act shall be for a minimum period of five years.

An excluded entity is entitled to reasonable notice and an opportunity for hearing under
section 205 of the Act. Act § 1128(f) (42 U.S.C. § 1320a-7(f)).

D. Issues

The Secretary has by regulation limited my scope of review to two issues in a case where
exclusion is based on section 1128(a)(2) of the Act:

1. Whether there is a basis for the imposition of the exclusion; and
2. Whether the length of the exclusion is unreasonable.

42 C.F.R. § 1001.2007(a)(1). Here, where the I.G. has excluded Petitioner for the
minimum mandatory period, the only issue for my consideration is whether there is a
basis for the imposition of the exclusion.

E. Analysis

There are no issues of material fact for resolution here. The facts necessary to my
decision are either admitted or not disputed and set forth in the Findings of Fact above.
There is a basis for Petitioner’s exclusion. Petitioner’s conviction in a Missouri state
court of failure to provide necessary health care services to a resident of its facility clearly
constitutes patient neglect in connection with the delivery of a health care item or service.
Congress has mandated that an individual or entity convicted of such an offense be
5

excluded by the Secretary from participation in Medicare, Medicaid and all federal health
care programs. Act § 1128(a)(2). Five years is the minimum period of exclusion
authorized by Congress when exclusion is pursuant to section 1128(a). Act

§ 1128(c)(3)(B).

Petitioner admits the “legal tenets” underlying this case, stating that: an entity must be
excluded if convicted of a criminal offense under section 1128(a)(2) of the Act; that the
mandatory length of an exclusion is five years when there is a conviction subject to
section 1128(a)(2) of the Act; that the conviction underlying a section 1128(a)(2)
exclusion cannot be collaterally attacked; that pre-exclusion administrative hearings are
only permitted in limited cases and this is not one of those cases; and that the regulations
state that a section 1128(a)(2) exclusion is effective 20 days from the date of the
exclusion notice. P. Br. at 4.

Petitioner asserts that it is not asking me to find that the effective date of the exclusion is
invalid or to enjoin the Secretary, refuse to adhere to the regulation at 42 C.F.R.

§ 1001.2007(a)(1)(i), or invalidate or refuse to follow federal statutes, regulations or
secretarial delegations of authority under 42 C.F.R. § 1005.4(c)(4). P. Reply at 3-4.
Instead, Petitioner argues that Constitutional principles preclude its exclusion prior to the
exhaustion of its appeal of its underlying conviction. Petitioner asserts that such pre-
exhaustion penalties are a violation of its property and/or liberty interests under the due
process clause of the Fifth Amendment. Petitioner notes that the statute and regulations
do not provide for effective “restitution, compensation, remedy, or redress” in the event
its conviction is reversed because its sole remedy would be prospective reinstatement and
it could not be made whole for the “injurious effects” of its exclusion. Alternatively,
Petitioner requests that I stay the case pending the disposition of Petitioner’s appeal of its
criminal conviction. P. Br. at 5; P. Reply at 4-5.

Petitioner cites Erickson v. U.S. ex. rel. Department of Health and Human Services, 67 F.
3d 858 (9" Cir. 1995), a case which does not support Petitioner’s contentions and which
Petitioner attempts to distinguish. Petitioner states that in Erickson, rather than pursuing
an administrative remedy, the individual and entity involved sought and obtained a
temporary restraining order and permanent injunction from a federal district court
prohibiting exclusion until final disposition of any appeals from the criminal conviction.
On appeal, the Ninth Circuit reversed and dissolved the permanent injunction. The Ninth
Circuit reasoned that the excluded individual and entity did not have a protected property
interest in continued participation in federal health programs (although there was a
protected liberty interest with respect to their reputations). Moreover, the excluded
6

individual and entity had received all process to which they were due, the risk of an
erroneous deprivation was remote, and the government’s interest in protecting against a
waste of public resources outweighed the excluded individual’s and entity’s interest in
preventing exclusion and publication of exclusion.

In its attempt to distinguish Erickson from its own situation, Petitioner argues that the
Ninth Circuit’s constitutional analysis is faulty. In particular, Petitioner argues that the
Ninth Circuit failed to recognize or mention that the regulatory scheme underlying its
exclusion offers excluded individuals and entities no prospect of relief in the event their
underlying conviction is reversed. Petitioner asserts this factor “tilts the constitutional
balance against the government’s interest.” Petitioner posits that the government could
rectify this situation through “various options,” including synchronizing the effective date
of the exclusion with the final dates of disposition of the underlying criminal cases, or
furnishing other relief, such as money restitution, in cases where any exclusion
effectuated was “proved wrong.” Petitioner asserts that because the government has
chosen not to invoke such options, its practice of imposing exclusions prior to final case
disposition is unconstitutional. P. Br. at 5-6.

In conclusion, Petitioner states that I should deny the I.G.’s motion for summary
affirmance and reverse the exclusion, holding that an exclusion should become effective
only when there is an adverse final disposition of the criminal case on which the
exclusion is based. Alternatively, Petitioner asserts that I should stay the exclusion
pending final disposition of the appeal of its criminal case. P. Br. at 7; P. Reply at 4-5.
Petitioner’s arguments are unavailing.*

* With its reply brief Petitioner attaches (as P. Ex. 3) an order in the case of Victor
Valley Community Hospital v. Leavitt, Case No. EDCV 07-1189-VAP (OPx) (C.D. Cal.
Jan. 10, 2008), in which the court issued a preliminary injunction enjoining the
Department from canceling the plaintiffs approval to receive Medicare and Medicaid
payments pending a hearing. Petitioner asserts that in granting the injunction the court
examined the relevant law and determined that cancellation of approval for the plaintiff's
clinical laboratory was not within the array of permissible sanctions that could be
imposed without exhaustion of remedies. Petitioner asserts that the case highlights the
proposition that tribunals should be loathe to permit imposition of pre-exhaustion
administrative sanctions and that, in its case, there is no recourse to Petitioner if its
conviction is reversed. Thus, Petitioner infers that his exclusion should be stayed pending
resolution of his appeal of his criminal conviction. P. Reply at 1-3. The court’s order in
Victor Valley is simply inapposite to Petitioner’s case, as it does not rest on a criminal
conviction. Petitioner’s exclusion is derivative of an action taken by another fact-finder
(its conviction in state court), and is materially different than the cancellation of Medicare
7

n this case, Congress mandates Petitioner’s exclusion based upon the nature of the
conviction and that the exclusion occur whether or not Petitioner has an appeal of the
underlying conviction pending. Act §§ 1128(a)(2) and 1128(i)(1). Congress has not
authorized that exclusion be stayed pending completion of appeals of a criminal
conviction. Petitioner’s complaint is with Congress not the Secretary, the LG., or me. I
ave no authority to resolve Petitioner’s perceived “Constitutional” issue. My
jurisdiction is limited to the issues that I am authorized to hear, which are whether there is
a basis for a petitioner’s exclusion and, in the appropriate case, whether the length of the
exclusion imposed is reasonable. 42 C.F.R. §§ 1001.2007(a), 1005.4(c)(1); see Keith
Michael Everman, D.C., DAB No. 1880 (2003); Sentinel Medical Laboratories, Inc.,
DAB No. 1762 (2001).

note, however, that Petitioner has not been deprived of any due process afforded by the
Act and regulations. Petitioner received appropriate notice of its exclusion and has been
afforded an opportunity to be heard by an ALJ. Furthermore, if Petitioner’s criminal
conviction is reversed or vacated on appeal, the I.G. must reinstate Petitioner retroactive
to the effective date of the exclusion and make retroactive payments for covered services
provided during the period of exclusion. 42 C.F.R. § 1001.3005(a)(1) and (b).

Ill. Conclusion

There is a basis for exclusion and five years is the minimum period of exclusion
authorized by law.

/s/
Keith W. Sickendick
Administrative Law Judge

and Medicaid payments in Victor Valley, where the facts had not previously been
established in an administrative hearing or other judicial proceeding. See Thomas Bruce
Vest, M.D., DAB CR453 (1997).


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Date: March 7, 2008

Sunnyview Nursing Home & Apartments,
(CCN: 26-5715),

Decision No. CR1745

)
)
)
)
)
) Docket No. C-06-132
Petitioner, )
)
)
)
)

DECISION

Petitioner, Sunnyview Nursing Home & Apartments, violated 42 C.F.R. § 483.25.’ A
per-instance civil money penalty (PICMP) of $10,000 and the denial of payment for new
admissions (DPNA) for the period from October 1, 2005 through October 16, 2005, are
reasonable enforcement remedies.

I. Background

Petitioner, located in Trenton, Missouri, is authorized to participate in Medicare as a
skilled nursing facility (SNF) and in the Missouri Medicaid program as a nursing facility
(NF). Petitioner was subject to a survey by the Missouri Department of Health & Senior
Services (the state agency) that was completed on September 28, 2005. Surveyors
concluded that Petitioner was not in substantial compliance with program participation
requirements and that there was immediate jeopardy to resident health and safety.

' All references to the Code of Federal Regulations (C.F.R.) are to the revised
C.F.R. in effect at the time of the survey, unless otherwise indicated.
2

The state agency notified Petitioner by letter dated September 29, 2005, that Petitioner
was not in substantial compliance with participation requirements and that there was
immediate jeopardy to the health, safety, and welfare of Petitioner’s residents, specifically
with regard to Petitioner’s violation of 42 C.F.R. § 483.25 (Tag F309°). The state agency
imposed a DPNA effective October 1, 2005. The state agency advised Petitioner that it
would recommend to the Centers for Medicare & Medicaid Services (CMS) that it impose
a civil money penalty (CMP) and terminate Petitioner’s provider agreement. CMS
Exhibit (CMS Ex.) 1, at 16-19. The state agency provided Petitioner a copy of the
statement of deficiencies (CMS Form 2567 or SOD) as an enclosure to a letter dated
October 14, 2005. CMS Ex. 1, at 10-12. Petitioner was subject to a revisit survey on
October 17, 2005, that determined Petitioner returned to substantial compliance effective
that date. CMS Ex. 1, at 8; CMS Ex. 3.

CMS notified Petitioner by letter dated October 20, 2005, that based upon the violation of
42 C.F.R. § 483.25 (Tag F309) found by the September 28, 2005 survey, CMS was
imposing a PICMP of $10,000. CMS also advised Petitioner that its authority to conduct
a Nurse Aide Training and Competency Evaluation Program (NATCEP)? would be
withdrawn; the DPNA imposed by the state effective October 1, 2005, ended effective
October 17, 2005; and that Petitioner’s provider agreement would not be terminated.
CMS Ex. 1, at 5-7.

Petitioner requested a hearing by letter dated November 18, 2005. The request for
hearing was docketed as C-06-132 and assigned to me on December 23, 2005, for hearing
and decision. A Notice of Case Assignment and Prehearing Case Development Order
(Prehearing Order) was issued at my direction on December 23, 2005.

> This is a “Tag” designation as used in the State Operations Manual (SOM),
Appendix PP — Guidance to Surveyors for Long Term Care Facilities. The “Tag” refers
to the specific regulatory provision allegedly violated and CMS’s guidance to surveyors.
Although the SOM does not have the force and effect of law, the provisions of the Social
Security Act (Act) and regulations interpreting the Act clearly do have such force and
effect. State of Indiana by the Indiana Department of Public Welfare v. Sullivan, 934
F.2d 853 (7" Cir. 1991); Northwest Tissue Center v. Shalala, 1 F.3d 522 (7" Cir. 1993).
Thus, while the Secretary of Health and Human Services (Secretary) may not seek to
enforce the provisions of the SOM, he may seek to enforce the provisions of the Act or
regulations as interpreted by the SOM.

> Petitioner advised me at hearing that it had no NATCEP. Transcript (Tr.) 192-
93.
3

I convened a hearing in Kansas City, Missouri, on June 15, 2006. CMS offered CMS
exhibits 1 through 5, 9, 10, and 11. I admitted CMS exhibits | through 5 (pages 5
through 12), 9, 10 (pages | through 3, 7 through 8, 19, 29 through 52, 54 through 57, 59
through 61, and 69 through 72), and 11. Tr. 22-27. Petitioner offered, and I admitted,
Petitioner’s exhibits (P. Exs.) 1, 2, 2A, 3, 4, 4A, and 5 through 35. Tr. 19-21. Post-
hearing, Petitioner submitted P. Ex. 36 for admission to the record. P. Ex. 36 is
Petitioner’s plan of correction and it was discussed at hearing. Tr. 13-16, 18. CMS did
not object to admission and consideration of P. Ex. 36 and it is admitted.’ Petitioner also
requested post-hearing that I take administrative notice of the version of the SOM in
effect at the time of the survey; CMS did not object; and the motion is granted. CMS
called as a witness surveyor Barbara J. Barnes. Petitioner called as witnesses licensed
practical nurse Lindsay N. Porter; Director of Nurses Abigail E. Neff; and Jeanne
Rutledge, an independent consultant to long-term care facilities and agencies providing
elderly-care services. The parties submitted post-hearing briefs and post-hearing reply
briefs.

II. Discussion
A. Findings of Fact

The following findings of fact are based upon the exhibits admitted and the parties’
stipulations. Citations to exhibit numbers related to the findings of fact are in the analysis
section of this decision if not found here.

1. Resident 1 was a female, 83 years-old at the time of her death, with diagnoses
including end-stage Parkinson’s disease, a history of coronary artery disease,
ypothyroidism, hypertension, depression, arthritis, peripheral neuropathy,
diverticulosis, and urge urinary incontinence. CMS Ex. 11, at 11-12; P. Exs. 2A,
3,5, 6, 17, 32.

2. Resident 1 complained of difficulty initiating urination despite urgency, burning
with urination, and low back pain, on August 26, 2005. CMS Ex. 11, at 17; P. Ex.
1, at 2.

* Petitioner requested that all exhibits from which residents’ names and other
identifying information have not been redacted be treated as sealed. CMS did not oppose
the motion and it is granted. Tr. 29-30.
4

On August 26, 2005, Petitioner’s staff requested that Dr. H. Borhani, Resident 1’s
treating physician, order a urinalysis, and an order for urinalysis was issued during
the morning on August 26, 2005. CMS Ex. 11, at 17; P. Ex. 11, at 2.

On August 27, 2005, Resident 1 continued to have diarrhea and complained of
shaking and feeling cold with a temperature of 99 degrees Fahrenheit, which had
increased from a temperature of 96.9 degrees as recorded on August 26, 2005.
CMS Ex. 11, at 17; P. Ex. 11, at 2.

Resident 1’s temperature was recorded as 99.7 degrees at 6:30 p.m. on August 27,
2005, and she continued to have diarrhea. CMS Ex. 11, at 17; P. Ex. 11, at 2.

Resident 1 continued to have diarrhea and elevated temperature on August 28,
2005. CMS Ex. 11, at 17; P. Ex. 11, at 2.

Petitioner’s staff did not obtain a urine sample for urinalysis until 7:35 a.m. on
August 29, 2005, when it was obtained with “minimal difficulty” by catheter and it
was tea-colored. CMS Ex. 11, at 17; P. Ex. 11, at 2.

Resident 1 continued to feel badly at 9:25 a.m. on August 29, 2005, and her doctor
was called. CMS Ex. 11, at 17; P. Ex. 11, at 2.

A laboratory report dated August 29, 2005, shows that it was verified at 10:58 a.m.
on August 29, that Resident 1 had a large amount of bacteria in her urine; the
report was sent by facsimile to both Petitioner and Resident 1’s doctor; and an
antibiotic was ordered for administration to Resident 1. CMS Ex. 11, at 21; P. Ex.
16, at 2; P. Ex. 32.

At 11:00 a.m. on August 29, 2005, Resident 1’s temperature continued at 101.3
degrees, but decreased to 100 degrees by 1:30 p.m. CMS Ex. 11, at 17; P. Ex. 11,
at 2.

Resident | was noted to have a temperature of 99.8 degrees and diarrhea, and to
have been drinking a lot of Maalox from a bedside bottle; the Maalox was
removed by the evening shift on August 29, 2005. CMS Ex. 11, at 17; P. Ex. 11,
at 2.

Resident 1’s temperature was 99.6 degrees at 3:15 a.m., but had increased to 101.1
degrees at 6:00 a.m. on August 30, 2005; Resident | was noted to be complaining

of aching all over and she had difficulty swallowing medication. CMS Ex. 11, at

17; P. Ex. 11, at 2.
5

At 8:00 a.m. on August 30, 2005, Resident 1’s breathing was labored; her oxygen
saturation was only 89 percent and she was put on oxygen; her skin was dusky in
color; she was wheezing bilaterally; her heart rate was fast; the nurses were unable
to get an accurate blood pressure; Resident | was noted to have received a dose of
antibiotic for a urinary tract infection (UTI); she had blood in her stool; and she
had lower extremity swelling or edema; her doctor was notified; and she was
transported to the hospital by ambulance. CMS Ex. 11, at 17-18; P. Ex. 11, at 2-3.

Resident | was unresponsive when she arrived at the hospital on August 30, 2005;
she was described as comatose and in severe distress with a temperature of 102.7
degrees, respiration of 36, oxygen saturation of 89 percent, pulse of 109, and blood
pressure reading of 64/36; and urine extracted by Foley catheter was dark and
creamy. CMS Ex. 11, at 1-3; P. Ex. 17.

At the hospital on August 30, 2005, Resident 1 was assessed with septic shock
with coma, “most probably” due to UTI and urosepsis, or intra-abdominal
infection, mental status change and coma secondary to sepsis, renal failure,
advanced end-stage Parkinson’s disease, hypertension, a history of coronary artery
disease, hypothyroidism, gastroesophageal reflux disease, osteoarthritis, and
peripheral neuropathy. CMS Ex. 11, at 1-3; P. Ex. 17, at 2-3.

Resident | died at the hospital August 31, 2005, at 9:58 a.m. P. Exs. 11, at 3; 19.

The cause of Resident 1’s death is listed on her discharge summary as septicemia
with multi-organ failure, probably due to urosepsis rather than peritonitis; renal
failure and anuria (kidney failure); and advanced Parkinson’s disease, among other
causes. CMS Exs. 11, at 4, 6; P. Exs. 19 and 32.

The death certificate lists as the underlying cause of death “possible septicemia —
few days” and advanced end-stage Parkinson’s disease is listed as a significant
condition. CMS Ex. 11, at 81; P. Ex. 32.

B. Conclusions of Law
Petitioner timely requested a hearing and I have jurisdiction.
Petitioner violated 42 C.F.R. § 483.25.

There is a basis for the imposition of remedies.
6

4. A DPNA from October 1, 2005 through October 16, 2005, and a PICMP of
$10,000, are reasonable enforcement remedies.

C. Issues
The issues in this case are:

(1) Whether there is a basis for the imposition of an
enforcement remedy; and

(2) Whether the remedies, including a DPNA from October 1, 2005
through October 16, 2005, and a PICMP of $10,000, are reasonable.

D. Applicable Law

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

Facilities that participate in Medicare are subject to surveys by state agencies on behalf of
CMS to determine whether the facilities are complying with federal participation
requirements. 42 C.F.R. §§ 488.10-488.28, 488.300-488.335. Pursuant to 42 C.F.R. Part
488, CMS may impose various sanctions for failure to substantially comply with
Medicare program requirements, including a PICMP or per-day CMP against a

long-term care facility. 42 C.F.R. §§ 488.406; 488.408; 488.430.

Per-day CMPs 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). As for PICMPs, the regulations provide for a single range from
$1000 to $10,000, which could be imposed whether or not immediate jeopardy is found.
42 C.F.R. §§ 488.408(d)(1)(iv); 488.438(a)(2).
7

A long-term care facility against which CMS has determined to impose an enforcement
remedy is entitled to a hearing before an administrative law judge (ALJ). Act,

§ 1128A(c)(2); 42 C.F.R. §§ 488.408(g); 498.3(b)(13). A hearing before an ALJ is a de
novo proceeding. Anesthesiologists Affiliated, et al., DAB CR65 (1990), aff'd,
Anesthesiologists Affiliated, et al. v. Sullivan, 941 F.2d 678 (8" Cir. 1991); Emerald
Oaks, DAB No. 1800, at 11 (2001); Beechwood Sanitarium, DAB No. 1906 (2004); Cal
Turner Extended Care Pavilion, DAB No. 2030 (2006); The Residence at Salem Woods,
DAB No. 2052 (2006). A facility has a right to appeal a “certification of noncompliance
leading to an enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also 42 C.F.R.

§§ 488.330(e) and 498.3. However, the choice of remedies by CMS or the factors CMS
considered when choosing remedies are not subject to review. 42 C.F.R. § 488.408(g)(2).
A facility may only challenge the scope and severity level of noncompliance found by
CMS if a successful challenge would affect the amount of the CMP that could be
collected by CMS or impact upon the facility’s NATCEP. 42 C.F.R. §§ 498.3(b)(14) and
(d)(10)(i). CMS’s determination as to the level of noncompliance “must be upheld unless
it is clearly erroneous.” 42 C.F.R. § 498.60(c)(2). This includes CMS’s finding of
immediate jeopardy. Woodstock Care Center, DAB No. 1726, at 9, 38 (2000), aff'd,
Woodstock Care Center v. Thompson, 363 F.3d 583 (6" Cir. 2003). The Departmental
Appeals Board has long held that the net effect of the regulations is that a provider has no
right to challenge the scope and severity level assigned to a noncompliance finding,
except in the situation where that finding was the basis for an immediate jeopardy
determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB
No. 1750 (2000). Review of a CMP by an ALJ is governed by 42 C.F.R. § 488.438(e).

When a penalty is proposed and appealed, CMS must make a prima facie case that the
facility has failed to comply substantially with federal participation requirements. “Prima
facie” means that the evidence is “[s]ufficient to establish a fact or raise a presumption
unless disproved or rebutted.” Black’s Law Dictionary 1228 (8" ed. 2004); see also,
Hillman Rehabilitation Center, DAB No. 1611, at 8 (1997), aff'd, Hillman Rehabilitation
Center v. U.S. Dept. of Health and Human Services, No. 98-3789 (D.N.J. May 13, 1999).
To prevail, a long-term care facility must overcome CMS’s showing by a preponderance
of the evidence. Batavia Nursing and Convalescent Center, DAB No. 1904 (2004);
Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004); Emerald Oaks, DAB No.
1800 (2001); Cross Creek Health Care Center, DAB No. 1665 (1998); Evergreene
Nursing Care Center, DAB No. 2069, at 7-8 (2007).

E. Analysis
1. Petitioner violated 42 C.F.R. § 483.25 (Tag F309).

Pursuant to 42 C.F.R. § 483.25, Petitioner is required to provide each of its residents
necessary care and services to attain or maintain the resident’s highest practicable
physical, mental, and psychosocial well-being, in accordance with the resident’s
comprehensive assessment and plan of care. The surveyors allege in the SOD that
Petitioner violated the regulation because Petitioner’s “staff failed to obtain a physician
ordered urinalysis in a timely manner and provide prompt medical attention for one
resident (Resident #1).” P. Ex. 36, at 1. The facts pertinent to this decision are set forth
in my Findings of Fact and need not be repeated in detail here. The key facts are: on
August 26, 2005, staff recognized Resident 1’s signs and symptoms as indicating a
possible UTI; staff asked Resident 1’s primary care physician, Dr. Borhani, for an order
for a urinalysis for a suspected UTI; Dr. Borhani gave the order for a urinalysis on August
26, 2005, but Petitioner’s staff failed to obtain a urine specimen until August 29; and the
laboratory results confirmed that Resident 1 was suffering from a UTI on August 29,
2005. From the time the order for a urinalysis was requested during the morning of
August 26, 2005, to the time a urine sample was obtained and sent to the laboratory
during the morning of August 29, 2005, Petitioner’s clinical records show that Resident

*s condition worsened, whic
this case is not whether Resid
Petitioner acted reasonably to
as required by the regulation.

treatment for the UTI. Thus,

Petitioner argues that “CMS r
employed part-time by the sta’
Barnes’s testimony was objec
process and her testimony lac

l infer was due to her worsening infection. The issue in

ent | died from a UTI. The issue is whether or not

ensure that Resident 1 received necessary care and services
I conclude that Petitioner did not act reasonably to ensure

that Resident 1 received necessary care and services and, specifically, the urinalysis and

Petitioner violated the regulation.

elies on the testimony of Barbara Barnes, a surveyor

te agency, to establish its prima facie case,” but that Ms.
tionable because she had limited involvement in the survey
ed “proper foundation to support CMS’ prima facie case.”

Petitioner’s Opening Post Hearing Brief (P. Brief) at 5-6. I disagree with Petitioner that
there was no proper foundation for Ms. Barnes’s testimony. Ms. Barnes was involved in
the survey process and had knowledge of the basis for the citation of deficiency at issue.
Tr. 37-38. I note that this decision does not turn on the testimony of Ms. Barnes. Rather,
my decision is based largely upon Petitioner’s own records.
9

Petitioner does not deny that its staff failed to obtain a urine sample for three days after a
urinalysis was ordered by Resident 1’s physician. The doctor’s order raises the
presumption that the urinalysis was reasonable and necessary.’ Petitioner’s failure to
obtain the urine specimen and submit it for laboratory testing in accordance with Dr.
Borhani’s order is prima facie evidence of a violation of 42 C.F.R. § 483.25 (Tag F309),
i.e., the resident’s doctor determined that the urinalysis was a necessary service that
Petitioner then failed to deliver. Petitioner is mistaken in its arguments that CMS failed
to make a prima facie showing of a violation. Petitioner argues that CMS did not show
Resident 1 had an elevated temperature, or that the failure to obtain the urinalysis when
ordered led to septic shock and death. P. Brief at 5. Petitioner’s clinical records for
Resident 1 obtained by the surveyors and admitted as evidence clearly show that Resident
had an elevated temperature. Findings of Fact 4 through 6. Further, while the cause of
death could reflect the seriousness of the harm in this case, the cause of death is not
important to the conclusion that the regulation was violated. It is sufficient to find a
violation based on evidence in this case that a doctor’s order was issued and that the order
was not promptly fulfilled.

The issues remaining are whether or not Petitioner was in substantial compliance despite
the delay in obtaining the urinalysis and beginning treatment for the UTI; whether
Petitioner has an affirmative defense that might excuse its failure to act; and whether or
not Resident 1 suffered any harm due to the delay in receiving antibiotics. If these issues
are resolved against Petitioner, the final question is whether or not the remedy proposed
by CMS is reasonable.

Petitioner argues that Resident 1’s treating physician, Dr. Borhani (P. Ex. 32), and its
experts Dr. Boulware (P. Exs. 23 and 33) and Jeanne Rutledge (Tr. 194-231), provided
evidence that there is no established connection between the failure to obtain the
urinalysis and suspected septic shock and death of the resident. P. Brief at 5. Petitioner
argues that Dr. Boulware opined that a delay in obtaining a urine specimen had no effect
or impact on Resident 1; that any delay in obtaining the urinalysis was not the proximate
cause of the resident’s deterioration; that Resident 1 was appropriately monitored,
assessed, and treated from August 25, 2005 to August 30, 2005; that Petitioner was in
substantial compliance with the regulation; that any identified deficiency posed no greater

* | do not find credible or persuasive Petitioner’s argument, based upon the
testimony of Jeanne Rutledge, that the urinalysis was unnecessary based upon her
interpretation of CMS or Centers for Disease Control (CDC) policy statements. P. Brief
at 5. I find more persuasive that Petitioner’s staff identified Resident 1’s signs and
symptoms; that Resident 1’s treating physician ordered a urinalysis based upon staff’s
request; and that the delayed urinalysis confirmed the resident had been suffering the
effects of a UTI for at least three days.
10

risk to Resident | than the potential for minimal harm; that the cited deficient practice did
not pose immediate jeopardy; that Resident 1 received nursing care consistent with
acceptable nursing practice; and that the delay in obtaining a urinalysis did not contribute
to the resident’s decline or death. P. Brief at 8-9. Petitioner argues that Jeanne Rutledge
testified that Resident 1’s signs and symptoms did not meet the criteria established by
CMS or the CDC for when a facility should suspect and treat a UTI. P. Brief at 5.
Petitioner argues that Dr. Borhani opined that it was not possible to determine to a
reasonable degree of medical certainty that Resident 1’s decline and death were due to
septic shock rather than another cause. P. Brief at 8. Petitioner’s briefing evinces the
hope that I will find a defense among the hodgepodge of opinions provided.

The problem for Petitioner is that its arguments and the testimony of its experts do not
address objective medical evidence that Resident 1’s urine was finally tested on August
29, 2005, and it was confirmed that Resident 1 had a UTI. CMS Ex. 11, at 26; P. Ex. 32,
at 2. The laboratory test result is unrebutted. There is no dispute that on August 29,
2005, Dr. Borhani ordered an antibiotic “covering both pathogens isolated from her
(Resident 1’s) bladder... .” P. Ex. 32, at 2. According to Dr. Borhani, the urinalysis
done at the hospital showed that the amount of bacteria in Resident 1’s urine was less
than that found as a result of a prior test. P. Ex. 32, at 2. However, Dr. Borhani stated in
his affidavit that the resident still had an infection when she arrived at the emergency
room and that she was administered Vancomycin and Levaquin, both of which are
antibiotics. P. Ex. 32, at 2. Thus, there is no question that Petitioner’s staff was correct
on August 26, 2005, when it requested an order for a urinalysis to confirm whether or not
Resident | had a UTI. There is no question that Dr. Borhani correctly determined
laboratory testing of the resident’s urine was reasonable and necessary and that ordering
the urinalysis was a correct medical judgment.

Petitioner fails to adequately address the delay in obtaining the urine sample for testing
once ordered by Dr. Borhani, or to show the delay in obtaining the urine and urinalysis
and the resulting delay in treatment for the UTI, was reasonable or excusable. The
opinion of Jeanne Rutledge that CMS or CDC criteria for identifying a UTI were not met
in this case, even if her opinion is correct, offers no defense in this case. Petitioner’s staff
correctly identified signs and symptoms of a UTI. Contrary to Petitioner’s position, Ms.
Rutledge testified that no more than 24 hours should have passed without a clean catch of
urine before staff contacted Dr. Borhani to request an order to obtain a urine sample by
catheter. Tr. 227. Dr. Borhani does not suggest in his affidavit that the delay in obtaining
11

the urine specimen was acceptable to him or consistent with standard practice. P. Ex. 32.
Nowhere in his lengthy affidavit does Dr. Boulware opine that the three-day delay in
obtaining the urinalysis was acceptable. P. Ex. 33.°

Although the weight of the expert testimony is that it is not possible to decide with
certainty the cause of death, there is no question that Resident | suffered harm by the
delay in complying with Dr. Borhani’s order and the resulting delay in treatment. My
Findings of Fact 2 through 6, and 8, show that Resident 1 was in discomfort between
August 26 and 29, 2005. Findings of Fact 10 through 14 show that Resident 1 continued
to suffer discomfort until her death. Petitioner has not shown that Resident 1’s
discomfort was not attributable, at least in part, to the UTI, or that the UTI was not more
severe due to the delayed diagnosis and treatment with antibiotics. Dr. Boulware’s
opinions that might be construed to the contrary are simply not credible. Accordingly, I
conclude that Resident 1 suffered actual harm due to Petitioner’s failure to deliver
necessary care and services. Furthermore, Petitioner has not presented credible evidence
that an untreated UTI in a resident in a SNF or NF is unlikely to cause serious injury,
harm, impairment, or death of a resident. Thus, CMS’s conclusion that the deficiency
posed immediate jeopardy has not been shown to be clearly erroneous.’

° Dr. Boulware’s affidavit demonstrates the danger of offering an expert opinion
without the opportunity for cross-examination or examination by the ALJ, to establish the
foundation for the opinions or to test their validity. Dr. Boulware opines favorably to
Petitioner that the delay in obtaining the urinalysis probably did not harm Resident 1.
However, several of his opinions could be read to support a conclusion that Resident |
was deprived of necessary care and services because Petitioner’s staff failed to identify
signs and symptoms of a gastrointestinal infection, e.g., P. Ex. 33, at 9, para. 41, 42; at 10,
para. 43, 45; at 11, para. 48, which include Dr. Boulware’s opinion that sepsis was due to,
or indicated by, Resident 1’s continuing diarrhea, but Dr. Borhani was not aware of the
diarrhea present prior to August 26, because staff had not consulted with him regarding
the diarrhea. CMS did not give Petitioner prior notice of such a basis for finding a
regulatory violation. I conclude that the delay in obtaining the urinalysis and the resulting
delay in treatment of confirmed UTI constitute a deprivation of necessary care and
services and a violation of 42 C.F.R. § 483.25. Therefore, I conclude it unnecessary to
reopen the record to further develop the record to establish more grounds for finding
regulatory violations. 42 C.F.R. § 498.56.

7 Petitioner had no NATCEP and the proposed remedy is a PICMP and DPNA.
Therefore, whether or not the deficiency posed immediate jeopardy is not at issue.
12

Petitioner also argues that it would be denied due process if I found it responsible for
CMS’s allegations first raised at hearing and which were not included in the SOD. If not
clear from the foregoing analysis, my decision is limited to the allegations originally
made by the surveyors as set forth in the SOD, at P. Ex. 36, at 1. Accordingly,
Petitioner’s due process concern is unfounded.

2. The DPNA and PICMP imposed in this case are reasonable.

I have concluded that Petitioner violated 42 C.F.R. § 483.25. Hence, there is a basis for
the imposition of an enforcement remedy and I must consider the reasonableness of the
remedies imposed by CMS.

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

§ 488.406, including a DPNA and a CMP. CMS may impose a CMP for the number of
days that the facility is not in compliance or for each instance that a facility is not in
substantial compliance. 42 C.F.R. § 488.430(a). In this case CMS chose to impose a
PICMP. CMS is authorized to impose a PICMP from $1000 to $10,000. Unlike a
per-day CMP, a finding of immediate jeopardy is not required to impose the maximum
PICMP.

In determining whether the amount of the CMP is reasonable, the following factors
specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history of
non-compliance, including repeated deficiencies; (2) the facility’s financial condition; (3)
the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and (4) the
facility’s degree of culpability.

I have received no evidence of prior noncompliance and Petitioner has not offered any
evidence showing an inability to pay. The key considerations in this case are the
seriousness of the deficiency and Petitioner’s culpability. The evidence shows, and I
have found, that Resident | suffered actual harm. Although the evidence is not
conclusive that Resident 1’s decline and death was due to sepsis from an untreated UTI,
the untreated UTI was clearly a contributing factor. Dr. Boulware’s and Dr. Borhani’s
affidavits, evidence offered by Petitioner, show that Resident 1 suffered from multiple
problems, all of which potentially contributed to her death, but none of which Petitioner’s
staff specifically addressed with Dr. Borhani. Petitioner is culpable in the resident’s
suffering, if not her death. Petitioner offers no credible explanation for why three days
passed without obtaining a urine specimen so that Resident 1 could be administered
antibiotics.
Ill. Conclusions

For the foregoing reasons, I conclude that Petitioner violated 42 C.F.R. § 483.25. I
further conclude that the remedies of a DPNA from October 1, 2005 through October 16,
2005, and a PICMP of $10,000, are reasonable.

/s/
Keith W. Sickendick
Administrative Law Judge