Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Legacy Health and Rehabilitation ) Date: March 18, 2009
(CCN: 04-5267), )
)
Petitioner, )
)

-V.- ) Docket No. C-08-507

) Decision No. CR1927
Centers for Medicare & Medicaid )
Services. )
)

DECISION

Legacy Health and Rehabilitation Center (Petitioner or facility) is a nursing facility,
located in Fort Smith, Arkansas, that participates in the Medicare program. Based on a
survey completed March 12, 2008, the Centers for Medicare and Medicaid Services
(CMS) determined that the facility was not in substantial compliance with program
participation requirements and imposed a $5000 per instance civil money penalty (CMP).
Petitioner here challenges that determination and CMS now moves for summary
judgment.

For the reasons discussed below, I find that summary judgment is appropriate. Based on
the undisputed evidence, I conclude that the facility was not in substantial compliance
with Medicare requirements governing notification of changes, 42 C.F.R.

§ 483.10(b)(11), and I affirm, as reasonable, the imposition of a $5000 CMP.

I. Background

The Social Security Act (Act) sets forth requirements for nursing facility participation in
the Medicare program, and authorizes the Secretary of Health and Human Services to
promulgate regulations implementing the statutory provisions. Act § 1819. The
Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the Medicare
program, a nursing facility must maintain substantial compliance with program
2

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

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

§§ 488.20(a); 488.308.

In this case, surveyors from the Arkansas Department of Human Services’ Office of
Long-Term Care (State Agency) completed a complaint investigation survey on March
12, 2008. Based on the survey findings, CMS determined that the facility was not in
substantial compliance with federal requirements for nursing homes participating in the
Medicare and Medicaid programs, and that its deficiencies posed immediate jeopardy to
resident health and safety. Specifically, they found that the facility did not meet federal
requirements under: 42 C.F.R. § 483.10(b)(11) (Tag F157 — Resident Rights-Notification
of Changes), and 42 C.F.R. § 483.25(h) (Tag F323 — Quality of Care). CMS Exs. 1, 2.
CMS imposes a per instance CMP of $5000 for the deficiencies cited under 42 C.F.R.

§ 483.10(b)(11).

Petitioner timely requested a hearing. CMS has moved for summary judgment, which
Petitioner opposes. With its motion and brief, CMS has submitted eleven exhibits (CMS
Exs. 1-11). With its response (P. Br.), Petitioner has submitted 34 exhibits (P. Exs. 1-34).

II. Issues

I consider whether summary judgment is appropriate. On the merits, the issues before me
are: 1) whether the facility was in substantial compliance with 42 C.F.R. § 483.10(b)(11)
(notification of changes); and 2) if the facility was not in substantial compliance, is the
penalty imposed, $5000 per instance, reasonable?

The parties agree that, because CMS imposed no penalties for the deficiencies cited under
the quality of care regulation, 42 C.F.R. § 483.25(h), the facility’s compliance with that
issue is not before me. 42 C.F.R. § 498.3(d)(10)(ii); Schowalter Villa, DAB No. 1688
(1999) (The imposition of a remedy, not the citation of a deficiency, triggers the right to a
hearing.).

Nor may I review CMS’s immediate jeopardy determination since a successful challenge
to that determination would not affect either 1) the range of CMP amounts, or 2) a
finding of substandard quality of care that results in the loss of approval of the facility’s
nurse aide training program. 42 C.F.R. § 498.3(b)(14). The penalty imposed here is a
3

per instance CMP, for which the regulations provide only one range ($1000 to $10,000),
so the level of noncompliance does not affect the range of the civil money penalty. 42
C.F.R. § 488.438(a)(2). Nor does it affect approval of the facility’s nurse aide training
program. Even without the immediate jeopardy finding, the facility’s nurse aide training
program could not be approved because the facility has been assessed a $5000 CMP. Act
§ 1819(£)(2)(B).

II. Discussion

A, Because the undisputed facts establish that facility staff did not immediately
consult an attending physician when its residents suffered an accident or
change in condition, or needed a significant change in treatment, the facility
was not in substantial compliance with 42 C.F.R. § 483.10(b)(11), and CMS is
entitled to summary judgment.'

Summary judgment is appropriate if a case presents no genuine issue of material fact, and
one party is entitled to judgment as a matter of law. The moving party may show the
absence of a genuine factual dispute by presenting evidence so one-sided that it must
prevail as a matter of law, or by showing that the non-moving party has presented no
evidence “sufficient to establish the existence of an element essential to [that party’s]
case, and on which [that party] will bear the burden of proof at trial.” Livingston Care
Center v. Dep’t of Health & Human Services, 388 F.3d 168, 173 (6th Cir. 2004) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). To avoid summary judgment,
the non-moving party must then act affirmatively by tendering evidence of specific facts
showing that a dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon
Nursing and Rehabilitation Center, DAB No. 1918 (2004). In examining the evidence
for purposes of determining the appropriateness of summary judgment, I must draw all
reasonable inferences in the light most favorable to the non-moving party. Livingston
Care Center, 388 F.3d at 172; Guardian Health Care Center, DAB No. 1943, at 8
(2004). However, drawing factual inferences in the light most favorable to the non-
moving party does not require that I accept the non-moving party’s legal conclusions. Cf
Guardian Health Care Center, DAB No. 1943, at 11 (“A dispute over the conclusion to
be drawn from applying relevant legal criteria to undisputed facts does not preclude
summary judgment if the record is sufficiently developed and there is only one
reasonable conclusion that can be drawn from those facts.”).

' My findings of fact and conclusions of law are set forth, in italics and bold, in
the discussion captions of this decision.
4

CMS’s case centers around the care provided to two of the facility’s residents, identified
as Resident 8 and Resident 10.

Resident 10 (R10). First, with respect to R10, CMS has come forward with evidence —
primarily the facility’s own records — establishing that:

R10 had diagnoses of respiratory distress, congestive heart failure, renal failure,
anemia, and schizophrenia. (CMS Ex. 5, at 1, 11; see also P. Exs. 13, 14; P. Ex.
15, at 2);

Because of her respiratory difficulties, R10 was not able to lie flat (CMS Ex. 5, at
8) and required oxygen therapy (CMS Ex. 5, at 9);

Among her medication orders, R10’s physician called for 3-5 liters of oxygen via
nasal cannula, keeping her oxygen saturation (O*) levels greater than 92%. He
ordered an “updraft treatment” with a one-unit dose of Albuterol every six hours
for shortness of breath.’ Staff were to stay with her while administering the
treatment and to document the time of the updraft in minutes. The orders also
called for one mg Ativan every eight hours as needed for anxiety (CMS Ex. 5, at
11; see also P. Ex. 15, at 1, 2, 19, 21, 23; P. Ex. 16, at 5, 7);

R10’s care plan also identified her as at risk for dehydration and directed staff to
observe and report to her physician “immediately” incidents of vomiting or
diarrhea (CMS Ex. 5, at 15);

At 4:00 in the afternoon on February 10, 2008, R10, who was returning from an
outing with her family, vomited a large amount of undigested food; she was short
of breath, and her O? level was 68% without oxygen. A facility nurse
administered oxygen via nasal cannula, and her O? level increased to 89%.
Assisted to bed, the resident “[continued] to holler and be very anxious.” Staff
administered Ativan. The resident complained of nausea (CMS Ex. 5, at 28);

At 6:00 p.m., R10’s anxiety was continuing; she pulled off her oxygen and
complained of nausea. She was incontinent of urine and feces. According to the
nurse, “This behavior [is] not normal for [her].” The nurse administered her
Albuterol updraft treatment, after which her O? level was 78% (CMS Ex. 5, at 28-
29);

> Albuterol is a common bronchodilator, often administered by means of an

inhaler. An “updraft nebulizer” is a specialized type of inhaler that helps the medication
get deeper into the lungs.
« Nurses notes report that at 8:00 p.m. R10 was still very anxious, and intermittently
pulled off her oxygen (CMS Ex. 5, at 29);

« At 10:00 p.m., nurses describe R10 as “hollering loudly — very anxious.” Her O?
level was 58%. Staff administered three liters then an additional five liters of
oxygen, and her O? rose to 61%. Her heart rate was 126; she was “very limp — not
supporting neck.” Staff called her physician who ordered her transferred to the
hospital (CMS Ex. 5, at 29);

« When R10 arrived at the emergency room, her shortness of breath was severe, and
she was diagnosed with acute respiratory failure (CMS Ex. 5, at 31-32);°

« R10 was admitted to the hospital in the early morning hours of February 11, and
she died there on February 26, 2008 (CMS Ex. 5, at 29, 33).

In CMS’s view, these undisputed facts put the facility out of substantial compliance with
42 C.F.R. § 483.10(b)(11), which requires that the facility immediately consult with a
resident’s physician whenever there is 1) an accident involving the resident that results in
an injury that has the potential for requiring physician intervention; 2) a significant
change in the resident’s physical, mental, or psychosocial status (i.e., a deterioration in
health, mental, or psychosocial status in either life-threatening conditions or clinical
complications); or 3) a need to alter treatment significantly (i.e., a need to discontinue an
existing form of treatment due to adverse consequences, or to commence a new form of
treatment).

Petitioner does not challenge any of CMS’s facts, but asserts that, prior to 10:00 p.m. on
February 10, R10’s condition did not merit physician consultation because she regularly
experienced such symptoms, and nurses were able to raise her O? levels and decrease her

> A surveyor note indicates that the surveyor contacted the Emergency Medical
Services (EMS) who reported that the facility called EMS at 10:46 p.m. CMS Ex. 5, at 5.
Petitioner has presented no evidence suggesting any dispute over this assertion, although
it claims generally that R10 “was promptly transferred to a hospital.” P. Br. at 4.

* The hospital’s death summary report contains inconsistent dates of death. The
text says that R10 died on the evening of February 23, but sets her discharge date at
February 26, 2008. CMS Ex. 5, at 33. The facility’s nurses notes set the date of death at
February 26. For purposes of resolving this motion, I accept the date offered by
Petitioner, February 26. See P. Ex. 32, at 3 (Stewart Decl. § 6); P. Ex. 34, at 2 (Ross
Decl.).
6

anxiety without physician involvement. According to Licensed Practical Nurse (LPN)
Kathy Stewart, R10 would remove her nasal cannula almost every day, and, when she did
so, her O? levels dropped, and she became anxious. LPN Stewart did not contact R10’s
physician when this occurred because she “was always able to bring her saturation levels
back up.” P. Ex. 32, at 1-2 (Stewart Decl. 4 3).

With regard to the events of February 10, LPN Stewart confirms that the resident
vomited, was short of breath, and her O? level was 68%. LPN Stewart administered
oxygen via nasal cannula, and Ativan, a combination that, in the past, had eventually
reduced R10’s anxiety. P. Ex. 32, at 2 (Stewart Decl. { 4).

LPN Stewart also confirms CMS’s assertion that, when R10 awakened at 6:00 p.m., she
was still anxious, was pulling off her oxygen, and complaining of nausea. R10 was also
incontinent, however, “which [is] not normal behavior for her.” LPN Stewart
administered an updraft treatment, and R10’s O? level rose to 78%. LPN Stewart does
not comment on the physician order that R10’s O? level be kept at or above 92%. But see
note 7 below. LPN Stewart claims that a 78% level “was not low for this [r]esident, as
her oxygen levels were consistently at or around this level.” P. Ex. 32, at 2-3 (Stewart
Decl. 4).

LPN Stewart says that she checked on R10 at 8:00 p.m., and, the resident “intermittently
remove[d] her nasal cannula, causing her to become anxious.” But again, according to
LPN Stewart, such was “[c]onsistent with her normal, usual behavior.” P. Ex. 32, at 3
(Stewart Decl. § 4).

LPN Stewart concludes that, from 4:00 to 10:00 p.m., R10’s O? levels and anxiety “were
neither a change in her status nor did it warrant any need to alter treatment significantly,
but rather were a daily occurrence” for her. P. Ex. 32, at 3 (Stewart Decl. 45). At 10:00
p.m., however, R10 was “hollering very loudly and continued to be anxious”; her O?
level had dropped to 58% and LPN Stewart could not bring it up any higher than 61%.
R10’s heart rate was 126, and she was “limp.” LPN Stewart then notified R10’s
physician, R.W. Ross, M.D., who ordered her transferred to the hospital. P. Ex. 32, at 3
(Stewart Decl. { 6).

Dr. Ross, who is also the facility’s medical director, echoes much of LPN Stewart’s
testimony. He declares that, based on his regularly reviewing records, R10’s oxygen
saturation levels dropped “nearly every day.” He declares it “prudent” for her caregiver
to replace immediately her nasal cannula before calling a physician. “I should have
written that order but did not.” Dr. Ross refers vaguely to “a couple of occasions” when

7

he was notified of additional complications regarding R10.° Consistent with assertions
from LPN Stewart and CMS, he says that, when the facility notified him on February 10
of R10’s vomiting, anxiety, and O? level of 58%, which staff could not bring above 61%,
he ordered her transfer to the hospital. P. Ex. 34 (Ross Decl.). Dr. Ross says nothing
about his order that R10’s O? level be kept at or above 92%. See note 7 below.

Petitioner also offers the declaration of the facility’s minimum data set (MDS)
coordinator, Jennifer Garner, R.N., who confirms that R10’s care plan required
immediate physician notification “if the resident is observed for vomiting or diarrhea,”
and explains that she added that provision because R10 was susceptible to dehydration.
P. Ex. 33, at 2 (Garner Decl. 6).°

Thus, Petitioner’s witnesses confirm CMS’s factual allegations, and add the additional
factual assertion that R10’s O? levels regularly fell below 92%.’ For purposes of
summary judgment, I accept this as true. From this, Petitioner argues that staff were not
obliged to consult R10’s physician because anxiety and low O? levels did not represent
any significant change for her.

But even accepting the assertion that anxiety and extremely low O? levels were normal
for R10, and did not represent a significant change in her status requiring physician
consultation, the facility’s treatment of R10 still violated 42 C.F.R. § 483.10(b)(11).
Staff failed to consult immediately her physician when she exhibited other symptoms that
unquestionably represented significant changes: at 4:00 p.m. she vomited a large
amount; at 6:00 p.m. she was incontinent of urine and feces.

> Dr. Ross is apparently referring to two earlier instances when nurses were
unable to bring up R10's O? levels. On October 14, 2007, staff notified him that R10's O?
level dropped to 87% and her pulse was 80. The following day (October 15), her O? level
was 88% and she coughed up white colored sputum. P. Br. at 8-9; P. Ex. 18, at 5.

® The facility must develop for each resident an individualized, comprehensive
care plan. Among other requirements, the plan must be prepared by an interdisciplinary
team that includes the attending physician, a registered nurse, and other appropriate staff.
42 CFR. § 483.20(k).

7 Petitioner claims that the physician order that staff maintain an O? level of 92%
was discontinued, and presents a copy of R10's chart in which that order has been crossed
out. P. Br. at 15; P. Ex. 15, at 19; but see CMS Ex. 5, at 11. Whether the order was in
effect on February 10 is not material. I accept, for purposes of summary judgment, that
the order had been discontinued.

8

The facility’s own policies list examples of a change in condition necessitating physician
involvement, and that list includes “nausea, vomiting, diarrhea” as well as “sudden
incontinence.” CMS Ex. 7, at 1. Further, R10’s care plan required staff to report to her
physician “immediately” incidents of vomiting. CMS Ex. 5, at 15. Staff either ignored
or were unaware of these unambiguous directives.

Although vomiting and incontinence represented significant changes, staff did not consult
R10’s physician until hours after they occurred, by which time her condition had
significantly deteriorated. Such delay violates the regulation. “Immediately” means “as
soon as the change . . . is detected, without any intervening interval of time.” Magnolia
Estates Skilled Care, DAB No. 2228, at 8 (2009); The Laurels at Forest Glenn, DAB No.
2182, at 13 (2008).

Resident 8 (R8). The situation involving R8 is even more straight-forward. CMS has
come forward with the following evidence, which Petitioner does not challenge:

« R8 was a bilateral amputee, with a history of stroke, who suffered from diabetes
(CMS Ex. 4, at 4, 7);

« R8 was totally dependent on staff to move within her room, throughout her unit,
and off her unit (CMS Ex. 4, at 7). She was at risk for falls, and had a history of
falls (CMS Ex. 4, at 10-11);

« At 6:45 p.m. on March 6, 2008, R8 was found sitting on the sidewalk with
abrasions around her left eye. Staff had rolled her wheelchair out of the facility so
that she could smoke, but apparently failed to lock the chair’s brakes. Another
resident rolled through the doorway, his chair hit her chair, she rolled away, her
chair hit the curb, and she fell out (CMS Ex. 4, at 12-15);

¢ Staff notified R8's daughter of the incident, and sent a fax to R8's physician (CMS
Ex. 4, at 15);

¢ Following the accident, R8 complained of hip and shoulder pain, and staff
administered Tylenol (CMS Ex. 4, at 15);

« At7:45 p.m., R8 continued to complain of pain, and the nurse wrote that, if her
complaints continued through the night shift (11p.m. to 7 a.m.), staff would
follow-up with the day shift (7 a.m. to 3 p.m.) for x-rays (CMS Ex. 4, at 15);

« At midnight, R8 was awake, complaining of pain in her right leg. Staff gave her
Tylenol (CMS Ex. 4, at 16);
9

« At 2:00 a.m., R8 was still complaining of right leg pain, and staff reported that the
Tylenol was “ineffective” (CMS Ex. 4, at 16);

¢ The following afternoon (March 7 at 1:45 p.m.), R8's family asked that she be sent
to the emergency room for evaluation and treatment. Because of her “severe
pain,” the facility called EMS, and R8 was transported to the hospital in an
ambulance (CMS Ex. 4, at 16, 17);

« X-rays showed no fractures, although R8 had contusions to both her left shoulder
and hip. She returned to the facility with a prescription for Lortab
(Acetaminophen with the narcotic, Hydrocodone) and instructions to limit her
activity (CMS Ex. 4, at 19, 20, 21).

Based on these undisputed facts, I find that the facility did not immediately consult R8's
physician following her accident, nor when she subsequently complained of significant
pain.

Sending a fax to the physician’s office — particularly after regular business hours — does
not satisfy the requirement to “consult.” As the Departmental Appeals Board recently
ruled in Magnolia Estates, consultation requires more than just informing or notifying the
physician.

Consultation . . . requires a dialogue with and a responsive
directive from the resident’s physician as to what actions are
needed; it is not enough to merely notify the physician of the
resident’s change in condition. Nor is it enough to leave just
a message for the physician.

DAB No. 2228, at 9. The facility then compounded its error when it failed to consult the
physician about R8's escalating complaints of pain, for which Tylenol proved
“ineffective.”

Petitioner justifies its inaction by pointing out that R8 ultimately suffered no broken
bones, and asserting (without any support) that the narcotic pain medication Lortab is
“not much more potent than the [Tylenol].” P. Br at 13.

I reject Petitioner’s arguments. First, “significant” does not mean “life-threatening.” Nor
does the regulation require a medical emergency. Drafters of the regulation emphasized
that “‘in all cases, whether or not there is a medical emergency,” the facility must
immediately consult the attending physician. 56 Fed. Reg. 48826, 48833 (September 26,
1991). As the drafters explained, a “significant change” could be life-threatening, but it
could also involve clinical complications, such as the development of a stage II pressure
sore or onset of delirium. The Laurels at Forest Glen, DAB No. 2182, at 11-12.
10

Here, an elderly and infirm woman fell out of her wheel chair, suffering abrasions around
her left eye, and, as discovered a day later in the emergency room, contusions to both her
left shoulder and hip. She complained of significant pain throughout the night and the
following morning. When, at the insistence of her family, the facility sent her to the
emergency room, she had to be transported by ambulance because of her “severe pain.”
CMS Ex. 4, at 12-17. Fortuitously, she was not more seriously injured. However, she
was undeniably involved in an accident resulting in an injury “that had the potential for
requiring physician intervention”; she underwent a significant change in her status —
experiencing severe pain; and ultimately required a significant treatment change — x-rays
to rule out fracture, and a prescription narcotic to treat her pain.

Thus, the undisputed facts lead to the inescapable conclusion that the facility did not
immediately consult with either resident’s physician following an accident/change in
condition/need to alter treatment. The facility was therefore not in substantial
compliance with 42 C.F.R. § 483.10(b)(11).

B. The CMP imposed — $5000 per instance — is reasonable.

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

It is well-settled that, in reaching a decision on the reasonableness of the CMP, I may not
look into CMS’s internal decision-making processes. Instead, I consider whether the
evidence presented on the record concerning the relevant regulatory factors supports a
finding that the amount of the CMP is at a level reasonably related to an effort to produce
corrective action by a provider with the kind of deficiencies found and in light of the
other factors involved (financial condition, facility history, culpability). 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); Community Nursing Home, DAB No. 1807, at 22 et seq. (2002);
Emerald Oaks, DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1683, at
8 (1999).

11

CMS does not claim that facility history warrants any increase in penalty. Petitioner has
not suggested that its financial condition affects its ability to pay the penalty. However,
with respect to the other factors, I note that this was not a single isolated incident. The
facility’s repeated failure to consult the attending physician put each of these residents at
significant risk, threatening her comfort, health and safety, for which the facility is
culpable. Moreover, although toward the mid-range for per instance situations (per 42
C.F.R. § 488.438(a)(2), the range is $1000 — $10,000), $5000 seems a minimal
penalty for inducing any corrective action.

Because the undisputed facts establish deficiencies that are sufficient to sustain the
penalties imposed, CMS is entitled to summary judgment.

IV. Conclusion

For all of the reasons discussed above, | find that the facility was not in substantial
compliance with 42 C.F.R. § 483.10(b)(11) (notification of changes). I also sustain the
$5000 per instance CMP.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


The Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the case of: )
)

Plum City Care Center, ) Date: March 19, 2009
(CCN: 52-5440), )
)

Petitioner, ) Docket No. C-07-747

) Decision No. CR1926
-V.- )
)
The Centers for Medicare & Medicaid )
Services. )
)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose a per-instance civil money penalty of $10,000 against Petitioner, Plum City Care
Center.'

I. Background

Petitioner is a skilled nursing facility doing business in the State of Minnesota. It
participates in the Medicare program. Its participation in Medicare is governed by
sections 1819 and 1866 of the Social Security Act and by implementing regulations at 42
C.F.R. Parts 483 and 488. Its right to a hearing in this case is governed by regulations at
42 CFR. Part 498.

Petitioner was surveyed for compliance with Medicare participation requirements on July
30, 2007 (July survey). The surveyors found that Petitioner was noncompliant in that it
allegedly failed to provide adequate supervision and assistance devices to one of its
residents in contravention of the requirements of 42 C.F.R. § 483.25(h)(2).7 CMS

"Asa consequence of my decision Petitioner also loses the authority to conduct a nurse aide
competency and training program for a period of two years. 42 C.F.R. § 483.151(b)(2)-(3).

> There was an additional noncompliance finding made at the July survey, but that is not at issue
in this case and, so, I do not address it in my decision.
concurred with the surveyors’ findings and determined to remedy them with a per-
instance civil money penalty of $10,000. Petitioner requested a hearing and the case was
assigned to me for a hearing and a decision.

I held a hearing in Minneapolis, Minnesota on December 11, 2008. At the hearing I
received into evidence exhibits from CMS that I identified as CMS Ex. 1 — CMS Ex. 15
and exhibits from Petitioner that I identified as P. Ex. 1 — P. Ex. 38, including 31A. The
parties each filed pre-hearing and post-hearing briefs.

IL. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are whether:

1. Petitioner failed to comply substantially with the requirements of 42
C.F.R. § 483.25(h)(2); and

2. A per-instance civil money penalty of $10,000 is reasonable.
B. Findings of fact and conclusions of law

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

1. Petitioner failed to comply substantially with the requirements of 42
CF.R. § 483.25(h)(2).

The regulation that is at issue requires a facility to ensure that each of its residents
receives adequate supervision and assistance devices to prevent the resident from
sustaining accidents. The regulation obligates a facility to undertake all reasonable
measures to protect its residents from sustaining accidents. In practice a facility must:
(1) assess each of its residents in order to assure that all known or knowable accident
risks are identified; (2) plan each resident’s care so as to develop all reasonable measures
to prevent the resident from sustaining an accident; and (3) implement each element of
the care plan thoroughly and effectively.

The evidence in this case supports my decision that Petitioner failed to discharge these
obligations in providing care to a resident who is identified as Resident # 7 in the report
of the July survey. Petitioner failed to: anticipate the risks of accidental injuries to this
resident resulting from removal of a seat belt and chair alarm from her wheelchair; plan
interventions that would have provided reasonable protection to the resident; and
supervise her adequately.
Resident # 7 was first admitted to Petitioner’s facility in January 2006. The resident, an
elderly individual, had numerous physical and mental problems that put her at a very high
risk for falling. She was diagnosed to be suffering from, among other things: dementia
manifested by confusion, severely impaired decision-making, disorganized speech and
altered perception along with short-term and long-term memory problems; abnormal
convex curvature of her spine (kyphosis); osteoporosis; moderately impaired vision with
glaucoma; and blindness in her left eye. CMS Ex. 7, at 1, 5, 8, 48, 55, 70, 73, 98; CMS
Ex. 12, at 10-12, 33; Tr. 11, 120.

The resident had suffered several falls prior to her admission and was identified by
Petitioner and its staff as being at risk for falling. CMS Ex. 12, at 22; P. Ex. 30, at 2-3; P.
Ex. 33, at 2-3. During the early part of her stay at Petitioner’s facility the resident
sustained falls while attempting to ambulate or to transfer herself from her bed or her
chair. CMS Ex. 7, at 5-11.

Petitioner attempted several interventions to protect Resident # 7 against falling. In
February 2006 the staff, noting the resident’s tendency to fall forward from her
wheelchair, equipped the wheelchair with a lap buddy — essentially a pad — which was
intended to keep the resident stable while she was in the chair. CMS Ex. 12, at 23-24. In
October, 2006, the staff discontinued the lap buddy and replaced it with a self-releasing
seat belt and a chair alarm. CMS Ex. 7, at 75. The intent of the staff was to keep the
resident securely in her chair but also to provide the staff with a warning signal in the
event that the resident attempted to get out of her chair unassisted. In February 2007 the
staff augmented the protections that they gave to Resident # 7 by equipping her with a
low wheelchair. CMS Ex. 12, at 12; Tr. 93-94, 167, 185.

The staff continued to classify the resident as being at a high risk for sustaining falls.
However, the seatbelt and chair alarm successfully protected Resident #7 against
attempts at self-transfers and unassisted ambulation from her wheelchair. CMS Ex. 12, at
17; P. Ex. 1, at 2.

On July 13, 2007 Petitioner’s staff, motivated by the resident’s apparent inability to
release the seatbelt, decided on a trial basis to discontinue using it. CMS Ex. 7, at 23. At
about the same time the staff discontinued the resident’s chair alarm. In discussing the
staff’s decision to remove the seatbelt and alarm Petitioner’s director of nursing
commented that:
I-team reviewed use of self-release seatbelt in her [wheelchair]. Noted that she
has not made attempts to transfer self from [wheelchair] per day/PM staff when
asked. [Wheelchair] positioning has been appropriate. Has [history] of leaning
forward in [wheelchair] to touch the floor, but this has not been observed. I-team
agreed to do a trial reduction without seatbelt.

CMS Ex. 7, at 23.

It is evident that the staff did not consider the possibility that removing the seatbelt and
chair alarm might put the resident at a serious risk for accidents. That is made obvious
from the director of nursing’s failure to discuss what could happen to the resident if,
contrary to the staff’s assumptions, the resident attempted to transfer herself from her
wheelchair after the seatbelt was removed. Nor did the staff consider the possibility that
the reason that the resident had not attempted self-transfers was that she had been
wearing a seatbelt. There was no discussion of the possible consequences of removing
the resident’s chair alarm.

Petitioner’s staff had ample reason — given the resident’s history of falls — to exercise
extreme caution when removing the resident’s seatbelt and chair alarm. Furthermore,
events occurring in the immediate wake of that decision should have been treated by
Petitioner’s staff as urgent evidence that the level of risk to Resident # 7 had increased
substantially as a consequence of removing these two assistance devices. Although, in
deciding to remove the seatbelt and alarm, Petitioner’s staff had assumed that the resident
was not leaning forward in her wheelchair to touch the floor, the resident engaged in such
behavior repeatedly immediately following the removal of these devices. She was
observed to do so by Petitioner’s staff on the evening of July 13, 2007, on the afternoon
of July 15, and again on the afternoon of July 16. CMS Ex. 6, at 12-14; CMS Ex. 7, at
23-26.

With the seatbelt and alarm removed Resident # 7 also began attempting to self-transfer
rom her wheelchair. On July 13, the day that the devices were removed, staff on three
occasions observed the resident attempting to stand, either by pulling on the back of a
chair, or by using a handrail in Petitioner’s hallway. CMS Ex. 7, at 94. On July 14a
nurse observed the resident making several attempts to stand up from her wheelchair
before and during supper. CMS Ex. 7, at 24. A nursing assistant also observed the
resident attempting to rise from her wheelchair on July 14. P. Ex. 25, at 1.

However, none of these observations — which directly contradicted the director of
nursing’s assumption that the resident’s seatbelt and alarm could be removed safely —
triggered any change in the way in which Petitioner’s staff dealt with Resident #7. At
the time that the devices were removed, Petitioner’s staff was instructed only to monitor
Resident # 7, without being given explicit instructions as to how monitoring was to be
accomplished. CMS Ex. 7, at 23, 64.

No plan was written that instructed the staff to monitor Resident #7 continuously or
systematically.* There were no explicit and detailed instructions given to individual
members of Petitioner’s staff as to how to monitor the resident. No changes were made
to the directive to monitor the resident in the days immediately following the removal of
the devices despite the resident’s attempts at self-transfer and her repeated episodes of
leaning forward from her wheelchair.

Members of Petitioner’s staff testified that they were told to monitor the resident
“closely”, or to “be on the lookout” for untoward events, or to be “especially watchful” or
to “pay special attention” to the resident. P. Ex. 14, at 1; P. Ex. 17, at 1; P. Ex. 23, at 1;
P. Ex. 27, at 1. But, these instructions were no substitute for a plan to keep the resident
under close surveillance. What was critically lacking from Petitioner’s approach to
caring for the resident was any plan designed to assure that the resident was being
directly supervised at all times when she was in her wheelchair. The need for such
supervision was made manifest by the resident’s clear proclivities for leaning forward or
attempting to rise out of her wheelchair unaided.

As a consequence of the obvious failure to react to the resident’s propensity to engage in
extremely hazardous conduct she was left unprotected for a time on July 16, 2007 and she
was alone and unsupervised when she fell. Resident # 7 fell at about 4:00 p.m. on the
16th. It cannot be said definitively how the fall occurred because no member of
Petitioner’s staff was attending to the resident when she fell. However, it is clear that the
resident either fell after rising from her chair or fell directly from it, possibly after leaning
forward. CMS Ex. 7, at 24."

The fall occurred during a social event in the facility’s dining room. Tr. 53-55. The
resident had been present at the event but left it without being directly supervised.” The

> Tn fact, Petitioner’s staff also was directed to monitor the resident prior to July 13, the date
when the resident’s seatbelt and alarm were removed. CMS Ex. 7, at 75-76; 79. The care plans
and other documents generated by Petitioner’s staff for Resident # 7 do not suggest that the
monitoring that was ordered beginning with July 13 represented an increased level of
surveillance from that which had been ordered previously. See CMS Ex. 7, at 23, 64, 76.

4 Petitioner contends that the fall could not have been caused by an attempt by Resident # 7 to
transfer herself from her wheelchair because the resident “lacked the strength to simply stand up
by herself and there was no railing or piece of furniture in the vicinity of the fall which . . . [the
resident] might have utilized for that purpose.” Petitioner’s post-hearing brief at 6. However,
the resident had been observed attempting to rise out of her chair and even an unsuccessful
attempt to stand could have precipitated a fall. At bottom the argument about whether
attempting to stand caused the resident to fall is irrelevant. The manner by which the resident
may have fallen does not excuse Petitioner’s failure to provide her with adequate monitoring and
protection.

> At one point during the social event, twenty or more minutes before she sustained her fall, the
resident became agitated. CMS Ex. 25, at 2; Tr. 80-83.
staff member who responded to the fall was about 25 feet away when the incident
occurred and had her back turned to the resident at the moment of the fall. CMS Ex. 7, at
24, 94; P. Ex. 16, at 2; P. Ex. 34, at 3.° The fall was, in fact, brought to the staff’s
attention only by the loud noise caused by the incident. Id.

As a consequence of her fall Resident # 7 sustained, among other injuries, a broken neck
and a fractured bone in her right hand. CMS Ex. 7, at 24, 97-98. Her cervical fracture
was diagnosed as being unstable. Further displacement of the fracture could have caused
the resident to suffer from paralysis and/or could have caused her death. /d. at 111.
However, and as a consequence of the resident’s age and medical condition, it was
determined that Resident # 7 was not a candidate for surgical repair of her broken neck.
Id. Her physician decided to treat the resident conservatively by fitting her with a
cervical collar. The resident’s physician recognized that use of a collar in lieu of surgery
would inevitably lead to non-healing of the fracture, meaning that the resident would
always be at risk for further exacerbation of her injury, including paralysis and death. Id.
at 98.

I have considered Petitioner’s arguments which it makes to support its assertion that it
complied with regulatory requirements. I find them to be without merit.

Petitioner asserts that its duty pursuant to 42 C.F.R. § 483.25(h)(2) is only to protect its
residents against accidents that are foreseeable. It asserts that the risk which led to
Resident # 7’s accident was not foreseeable and, therefore, according to Petitioner, it is
not liable for contravening the regulation’s requirements.

The premise which underlies Petitioner’s argument that the resident’s accident was
unforeseeable is that the particular way in which the resident fell — arguably, by pitching
herself forward from her wheelchair — was unprecedented at Petitioner’s facility.
Petitioner’s post-hearing brief at 9. Moreover, according to Petitioner, the resident had
never fallen from her wheelchair previously by pitching forward from the chair.
Therefore, it asserts, it could not possibly have foreseen the accident that occurred on
July 16th.

® Petitioner contends that the fall occurred within 20 feet of its nurses’ station and that a nurse
was in the hallway about 10-20 feet away from the resident and within a line of sight of the
resident when the fall occurred. Petitioner’s post-hearing brief at 5; P. Ex. 30, at 11; P. Ex. 34, at
3. But, none of these staff members were observing the resident when the resident fell. The
close proximity of one or more staff members to the resident at the time of the fall is simply
irrelevant if these staff members were not directly supervising her.

7 On two occasions the resident, in her demented state, removed her surgical collar. CMS Ex. 7,
at 37; CMS Ex. 9, at 14-15.
This argument is without merit for several reasons. First, Petitioner is speculating as to
how the accident occurred. No member of Petitioner’s staff observed the accident.

Furthermore, and despite Petitioner’s contention that there was no reason for the staff to
assume that the resident might fall forward from her wheelchair, Petitioner had ample
notice that precisely such an accident could occur. Indeed, one of the director of
nursing’s concerns when she participated in the staff’s decision to discontinue the
resident’s seatbelt and chair alarm was that the resident had a history of leaning forward
in her chair to touch the floor. CMS Ex. 7, at 23. That concern — which the director of
nursing dismissed on July 13 as being no longer a problem — proved to be prescient.
Between July 13 and July 16, 2007 the staff observed the resident on several occasions
leaning forward from her chair. The staff also had ample notice that the resident was
attempting to transfer herself out of the chair.

But, in the final analysis, how the accident occurred does not excuse Petitioner from
providing adequate supervision to Resident # 7. Indeed, Petitioner would have
contravened the regulation’s supervision requirements had no accident occurred on July
16. Whether an accident occurred or not the staff was on notice that the resident was
engaging in behavior that put her at great risk. And, despite that knowledge, the staff did
not enhance the supervision and protection it was giving to the resident. The potential for
arm resulting from that failure to supervise is in and of itself sufficient to establish a
violation of the regulation’s requirements.

Petitioner contends additionally that it provided adequate supervision and assistance
devices for Resident # 7. In support of this contention it argues that it had supplied the
resident with a backward-leaning low wheelchair without foot pedals which, Petitioner
asserts, kept the resident safely seated with her feet planted on the floor. Petitioner’s
post-hearing brief at 11.8

lam willing to accept Petitioner’s contention that the low wheelchair may have provided
enhanced stability for Resident # 7. But, the fact that Petitioner supplied this resident
with this device and that it provided her with some protection simply begs the question of
whether Petitioner needed to do more to protect her. Petitioner’s staff knew that the
resident was attempting to rise from the chair after her seatbelt was removed. They knew
that the resident was leaning forward from the chair. They knew, therefore, that the chair
was not in and of itself sufficient to protect the resident against obvious risks.

Next, Petitioner asserts that there is neither evidence nor law supporting a theory that
restraining a resident (as with a seatbelt) would be acceptable. Petitioner’s post-hearing
brief at 12. This argument is a red herring. CMS does not contend that Petitioner should
have restrained Resident #7. The question here is whether Petitioner should have

8 The wheelchair had been supplied to Resident # 7 at some point in time prior to removal of the
resident’s seatbelt and chair alarm. It was not given to her as an enhanced protection measure in
consideration of the removal of these devices.
provided Resident # 7 with enhanced supervision and protection after it removed the
resident’s seatbelt and chair alarm in light of the known risks to the resident. Contending
that the seatbelt had become an unacceptable restraint simply begs that question.

Petitioner then asserts that a tab alarm or lap buddy would have been ineffective
protective devices for Resident # 7 because the resident had easily removed these devices
when they had been supplied to the resident previously. Petitioner’s post-hearing brief at
13. That may be so, but the contention again begs the question of whether Petitioner was
providing adequate protection to Resident # 7. Other options were available to Petitioner
—such as enhanced supervision of Resident # 7 — even if a lap buddy or a tab alarm were
proven to be ineffective protective devices.

Moreover, a tab alarm is a different device from a pressure alarm. A tab alarm is a device
that connects to a resident’s garment and which is activated when it pulls free. By
contrast, a pressure alarm is activated by simple release of pressure. The alarm that
Petitioner discontinued at about the same time that it discontinued Resident # 7’s seat belt
was a pressure alarm and not a tab alarm

A pressure alarm, had it been present, might have given Petitioner’s staff warning that the
resident was shifting position in her wheelchair, either in an attempt to rise from the
chair, or in the course of leaning forward, and that warning, in turn, might have given the
staff a chance to react to the resident’s movement and to protect her. Petitioner has
offered no satisfactory explanation for its decision to remove the pressure alarm and,
indeed, it has offered no evidence to show that removal of the alarm was a considered
decision made by the staff after weighing carefully the pros and cons of keeping it.

Petitioner speculates that a pressure alarm would not have protected Resident # 7
because, if she fell as a result of being propelled forward, it would not have sounded until
it was too late for the staff to react. Petitioner’s post-hearing brief at 14. That is possible.
But, there were other scenarios where the alarm would have given the staff warning of
the resident’s actions. An attempt by the resident to rise out of her wheelchair, for
example, would have caused the alarm to sound.”

I do not mean to suggest that leaving the resident with a chair alarm after removing her
seatbelt would have sufficed to protect the resident adequately. At best, an alarm —
whether it is a tab or a pressure alarm — serves only to warn the staff of an impending
problem. Alarms never substitute for adequate supervision. In this case, leaving
Resident # 7 unsupervised, even for short periods of time, constituted a clear violation of

° Petitioner argues here, as it argues elsewhere, that the evidence shows that the resident fell by
“forward propulsion.” Petitioner’s post-hearing brief at 15. I reiterate that how the resident fell
is irrelevant to my decision. The issue is not precisely how the accident occurred, but whether
Petitioner failed to protect the resident from known or foreseeable risks. These may have
included falling by being propelled forward, but they also included falling as a consequence of
attempting to rise out of the wheelchair unsupervised.
the regulation’s requirement that the resident be provided with adequate supervision.
Removing the resident’s chair alarm served only to aggravate the problem caused by lack
of supervision.

Petitioner argues that it should have been allowed a “trial period” during which it could
have assessed whether it was providing adequate protection to Resident #7. Petitioner’s
post-hearing brief at 15. It contends that, in fact, it was providing the resident with
adequate supervision during the first days after the staff had removed her seatbelt given
what the staff knew about the resident, and that it should not be penalized if something
adverse happened during this “trial period.”

Notwithstanding Petitioner’s assertion the regulation allows no grace period for a facility
to disregard knowledge that what it has implemented is jeopardizing a resident’s safety.
Petitioner’s staff knew that the resident was engaging in highly risky behavior beginning
almost immediately after they removed the resident’s seatbelt and chair alarm. Whatever
the staff assumed before they implemented the decision to remove the seatbelt and chair
alarm became almost instantly obsolete. That should have caused them to change their
assessment and to modify the care they were providing to the resident.

Finally, Petitioner argues that Resident # 7’s fall was unavoidable because it happened so
quickly that staff— several of whom were within 10 to 25 feet of the resident at the time
of her fall — had no opportunity to react to it. Petitioner’s post-hearing brief at 15-17. I
find this argument to be unpersuasive for two reasons. First, whether or not there were
staff members in the vicinity of Resident # 7 at the time of her accident, no one was
supervising her at that time. Indeed, despite the relatively intimate presence of staff
members, no one saw the resident fall precisely because no one was paying attention to
her at that moment. The failure here lies not in the presence or absence of staff but in the
failure of the staff to supervise Resident #7. Second, the failure to supervise would have
been proof of noncompliance whether or not the resident fell and whether or not the fall
was avoidable. As I have discussed above, the deficiency in this case lies in the failure
by Petitioner to protect Resident # 7 against known and foreseeable risks and not in
finding whether any specific accident was preventable.

2. A per-instance civil money penalty of $10,000 is reasonable.

CMS is authorized to impose a per-instance civil money penalty, ranging in amount from
$1000 — $10,000, as a remedy for noncompliance with Medicare participation
requirements. 42 C.F.R. § 488.438(a)(2). The regulations contain criteria to be used in
deciding the amount of a per-instance civil money penalty. These criteria include: the
seriousness of a deficiency or deficiencies; a facility’s compliance history; its culpability;
and its financial condition. 42 C.F.R. §§ 488.438(f)(1)-(4); 488.404 (incorporated by
reference into 42 C.F.R. § 488.438(f)(3)).
10

In this case CMS determined to impose the maximum per-instance penalty of $10,000.
CMS argues that the primary evidence that supports this penalty amount relates to the
seriousness of Petitioner’s noncompliance. '°

I find that the seriousness of Petitioner’s noncompliance is in and of itself sufficient to
justify a $10,000 per instance penalty. The noncompliance in this case was extremely
serious. As I have discussed, there is no persuasive evidence that Petitioner’s staff made
a thorough analysis of the risks that might be encountered by Resident # 7 if the staff
removed her seatbelt and chair alarm. Instructions to the staff that they monitor the
resident were inadequate because they contained no comprehensive directions to assure
that the staff systematically and closely monitor her.

Furthermore, Petitioner knew almost from the inception of its staff’s decision to remove
Resident # 7’s seatbelt and chair alarm that the resident was engaging in behavior that put
her at grave risk for injury. That behavior should have been a red flag to Petitioner’s staff
that the resident was in jeopardy at any moment that she was not being observed. Yet,
the staff clearly did not react to the overwhelming evidence of increased risk to Resident
#7 by enhancing the protection that they provided to her.

Petitioner contends that CMS’s determination that its noncompliance with the
requirements of 42 C.F.R. § 483.25(h)(2) put Resident # 7 in a state of immediate
jeopardy is clearly erroneous and should not be a basis for deciding to impose a civil
money penalty against Petitioner. An “immediate jeopardy” level deficiency is defined at
42 C.F.R. § 488.301 to be a deficiency that is so egregious that it causes or is likely to
cause serious injury, harm, impairment or death to a resident.

Technically, it is not necessary that I make a finding of immediate jeopardy in this case
because such a finding is not a prerequisite for imposing a per-instance civil money
penalty of up to $10,000. However, all of the elements of immediate jeopardy are present
in this case and the evidence establishing the presence of those elements is strong support
for a maximum per-instance civil money penalty. The evidence establishes that Resident
#7, by virtue of her dementia and medical conditions, is an individual who is highly
susceptible to serious injury or death from falling. Failure to provide the resident with
the protections mandated by regulation created a high probability that she would fall and,
at the least, sustain serious injuries. And, in fact, the resident sustained life-threatening
injuries as a consequence of the fall she experienced while unsupervised by Petitioner’s
staff. Moreover, even if the fall had not occurred and the resident were uninjured, the

'° CMS also asserts that Petitioner’s compliance history supports the penalty. However, CMS
has offered no analysis to explain why previous findings of noncompliance would justify the
civil money penalty that it determined to impose here.
11

extreme level of risk — in and of itself — that Petitioner’s actions created would be enough
to support a finding of immediate jeopardy."

Petitioner also argues that its compliance history is not so egregious as to support a
$10,000 per-instance penalty. As I discuss above, I have not considered Petitioner’s
compliance history as a factor weighing against Petitioner. The seriousness of
Petitioner’s noncompliance, without regard to Petitioner’s history, is by itself sufficient to
justify the penalty amount. Furthermore, even if Petitioner’s compliance history were
benign, as is contended by Petitioner, the seriousness of its noncompliance would
nevertheless justify a $10,000 penalty.

/s/
Steven T. Kessel
Administrative Law Judge

'! The $10,000 per instance civil money penalty is equivalent to the maximum civil money
penalty that I may impose for a single day of immediate jeopardy level noncompliance. 42
C.F.R. § 488.438(a)(1)(i). As CMS notes, it would have been within its discretion to impose
daily penalties at the immediate jeopardy level for each day of Petitioner’s noncompliance,
which began on July 13, 2007 and which extended through at least the 16th of July.
Consequently, a penalty of $10,000 is actually a modest penalty when compared to what CMS
might have imposed.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Jeffrey N. Fadel, M.D., ) Date: March 13, 2009
)
Petitioner, )
)
-Vv.- ) Docket No. C-09-125
) Decision No. CR1925
The Inspector General. )
)
DECISION

Jeffrey N. Fadel, M.D. (Petitioner) appeals the decision of the Inspector General (1.G.),
made pursuant to section 1128(a)(4) of the Social Security Act (Act), to exclude him from
participation in Medicare, Medicaid, and all federal health care programs for a period of
five years. For the reasons discussed below, I find that the I.G. is authorized to exclude
Petitioner, and that the statute mandates a minimum five-year exclusion.

I. Background

The I.G. has excluded Petitioner from program participation for five years because
Petitioner was convicted of a felony offense relating to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance. I.G. Exhibit (I.G. Ex.)
. Petitioner timely requested review. The parties agree that an in-person hearing is not
required and that the matter may be resolved based on written submissions. I.G. Br. at 4;
P. Br. at 2. The I.G. has submitted his brief with six exhibits attached (I.G. Exs. | - 6).
Petitioner filed his brief (P. Br.) with three exhibits (P. Exs. 1-3). The LG. filed a reply
rief. In the absence of any objections, I admit into evidence I.G. Exs. 1-6, and P. Exs.
-3.

II. Issue

The sole issue before me is whether the I.G. had a basis for excluding Petitioner from
participation in the Medicare, Medicaid, and all federal health care programs. Because an
exclusion under section 1128(a)(4) must be for a minimum period of five years, the
reasonableness of the length of the exclusion is not an issue.
Il. Discussion

A, Petitioner was convicted of a felony relating to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance, within the
meaning of section 1128(a)(4) of the Act.'

Section 1128(a)(4) of the Act requires that any individual or entity convicted of a felony
criminal offense that occurred after the date of the enactment of the Health Insurance
Portability and Accountability Act (August 21, 1996) “relating to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance” be
excluded from all federal health care programs.

On August 29, 2006, Petitioner pled guilty in a Kentucky criminal court to sixteen counts
of obtaining a controlled substance by fraud or deceit, in violation of Kentucky Revised
Statutes section 218A.140, Uniform Offense Reporting Code (UOR) 25013. LG. Exs. 2,
3, 6. The court accepted his plea and sentenced him to three years in the penitentiary, but
withheld rendition of that judgment, and placed him on probation for five years. I.G. Exs.
4,5.

Petitioner concedes that he was convicted of a felony, and does not dispute that his crime
was related to the unlawful distribution, prescription, or dispensing of a controlled
substance. He complains, however, that the I.G. delayed implementing the exclusion for
twenty-five months, and that the exclusion should run from the date he entered his guilty
plea (August 29, 2006) or, at the latest, the date the criminal court issued its judgment of
conviction (February 14, 2007). Petitioner also points out that since the time of his
conviction, he has complied with all the terms of his probation, voluntarily agreed not to
practice medicine until the Kentucky Board of Medical Licensure reinstated his license,
was permitted to resume practice on August 11, 2007, and “fully addressed the root
problem that led to the licensure and criminal actions.” P. Br. at 4.

It is well-settled that an administrative law judge is without authority to change the
effective date of an exclusion, no matter how inexplicable and unfair the delay. Asa
matter of law, an exclusion becomes effective 20 days after the date of the I.G.’s notice of
exclusion. 42 C.F.R. § 1001.2002. An administrative law judge has no authority to
review the timing of the I.G.’s determination to impose an exclusion or to alter

' My findings of fact and conclusions of law are set forth, in italics and bold, in
the discussion captions of this decision.

> “Federal health care program” is defined in section 1128B(f) of the Act as any
plan or program that provides health benefits, whether directly, through insurance, or
otherwise, which is funded directly, in whole or in part, by the United States Government,
or any State health care program.
3

retroactively the date of the imposition of the exclusion. Tanya A. Chuoke, R.N., DAB
No. 1721 (2000); Samuel W. Chang, M.D., DAB No. 1198 (1990); Susan Malady, R.N.,
DAB CR835 (2001), aff’d on other grounds, DAB No. 1816 (2002); Larry B. Shuster,
R.Ph., DAB CR872 (2002); Kathleen E. Talbot, M.D., DAB CR772 (2001); see also 42
C.F.R. § 1005.4(c)(1) (ALJ has no authority to find invalid or refuse to follow federal
statutes or regulations).

B. The statute mandates a five-year minimum period of exclusion, and
mitigating factors may not be considered to reduce that period of
exclusion.

An exclusion under section 1128(a)(4) must be for a minimum mandatory period of five
years. As set forth in section 1128(c)(3)(B) of the Act:

Subject to subparagraph (G), in the case of an exclusion under subsection
(a), the minimum period of exclusion shall be not less than five years... .

When the I.G. imposes an exclusion for the minimum mandatory five-year period, the
reasonableness of the length of the exclusion is not an issue. 42 C.F.R.
§ 1001.2007(a)(2).

IV. Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid, and all other federal health care programs, and I sustain the five-
year exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge