Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
Vv.

Oxxo Marketing Co.
d/b/a Texaco,

Respondent.

Docket No. C-13-971
FDA Docket No. FDA-2013-H-0807

Decision No. CR2906
Date: August 29, 2013
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Oxxo Marketing Co. d/b/a Texaco, that alleges
facts and legal authority sufficient to justify the imposition of a civil money
penalty of $500. Respondent did not timely answer the Complaint, nor did
Respondent request an extension of time within which to file an answer.
Therefore, I enter a default judgment against Respondent and assess a civil money
penalty of $500.

CTP began this case by serving the Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of

Dockets Management. The Complaint alleges that Respondent impermissibly sold
cigarettes to minors and failed to verify that a purchaser of cigarettes was 18 years
of age or older, thereby violating the Federal Food, Drug, and Cosmetic Act (Act),
21 U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and
Smokeless Tobacco, 21 C.F.R. Part 1140 (2012). CTP seeks a civil money
penalty of $500.

On July 10, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent should
pay the proposed penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), lam
required to “assume the facts alleged in the [C]omplaint to be true” and, if those
facts establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Texaco, an establishment that sells tobacco products and
is located at 2500 14th Street, Plano, Texas 75074. Complaint { 3.

e On April 7, 2012, at approximately 1:50 PM CT, an FDA-commissioned
inspector observed a violation of 21 C.F.R. Part 1140 at Respondent’s
establishment. The inspector observed a violation of 21 C.F.R.

§ 1140.14(a) when “a person younger than 18 years of age was able to
purchase a package of Marlboro Gold Pack cigarettes ... .’ Complaint
q 10.

e¢ On June 28, 2012, CTP issued a Warning Letter to Respondent regarding
the inspector’s observations from April 7, 2012. The letter explained that
the observations constituted a violation of a regulation found at 21 C.F.R.
§ 1140.14(a), and that the named violation was not necessarily the only
violation at the establishment. The Warning Letter further stated that if
Respondent failed to correct the violation, regulatory action by the FDA or
a civil money penalty action could occur. Finally, the letter informed
Respondent that it bore a responsibility to comply with the law. Complaint
q 10.
e Crystal Arredondo, a Shift Leader at Respondent’s establishment,
responded to the Warning Letter on Respondent’s behalf with a letter dated
November 5, 2012. In her letter, “Ms. Arredondo stated that corrective
action was taken against the employee responsible for the violation . . . and
that all employees have been instructed to request identification from all
customers attempting to purchase cigarettes regardless of age.” Complaint

qi.

e On December 8, 2012, FDA-commissioned inspectors documented two
additional violations of 21 C.F.R. Part 1140 at Respondent’s establishment.
The inspectors documented a violation of 21 C.F.R. § 1140.14(a) when “a
person younger than 18 years of age was able to purchase a package of
Marlboro Gold Pack cigarettes . . . at approximately 5:19 PM[.]” The
inspectors also documented a violation of 21 C.F.R. § 1140.14(b)(1) when
“the minor's identification was not verified before the sale...’ Complaint

qi.

e CTP issued a Notice of Compliance Check Inspection to Texaco on
December 18, 2012, due to the minor’s December 8, 2012 cigarette
purchase. The Notice stated that the violation described was not
necessarily the only violation reported. Complaint § 2.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if distributed or offered for sale in any state in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R

§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed.
Reg. 13,229 (Mar. 10, 2010). The regulations prohibit the sale of cigarettes to any
person younger than 18 years of age. 21 C.F.R. § 1140.14(a). The regulations
also require retailers to verify, by means of photo identification containing a
purchaser’s date of birth, that no purchasers of cigarettes are younger than 18
years of age. 21 C.F.R. § 1140.14(b)(1).

Taking the above alleged facts as true, Respondent had three violations of
regulations contained in 21 C.F.R. Part 1140 within an eight-month period.
Specifically, Respondent had a violation on April 7, 2012, and two violations on
December 8, 2012. Respondent’s actions on both occasions violated the
prohibition against selling cigarettes to persons younger than 18 years of age. 21
C.F.R. § 1140.14(a). Respondent’s actions on December 8, 2012, also violated the
requirement that retailers verify, by means of photo identification containing a
purchaser’s date of birth, that no purchaser of cigarettes or smokeless tobacco is
younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1). Therefore,
Respondent’s actions constitute violations of law for which a civil money penalty
is merited.

The regulations require me to impose a civil money penalty in the amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $500 for a third violation within an eight-month
period, 21 C.F.R. § 17.2, and CTP has requested a fine in that amount. Therefore,
I find that a civil money penalty of $500 is warranted and so order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

STEBPC LLC
d/b/a Blue Plate Cafe,

Respondent.

Docket No. C-13-963
FDA Docket No. FDA-2013-H-0802

Decision No. CR2904

Date: August 27, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an administrative complaint
(Complaint) against Respondent, STEBPC LLC d/b/a Blue Plate Cafe, alleging
facts and legal authority sufficient to justify the imposition of a civil money
penalty of $750. Respondent did not timely answer the Complaint, nor did
Respondent request an extension of time within which to file an answer.
Therefore, I enter a default judgment against Respondent and order that
Respondent pay a civil money penalty in the amount of $750.

CTP began this case by serving the Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent used a vending
machine to sell regulated tobacco products in a non-exempt facility and sold
misbranded tobacco products through the vending machine, thereby violating the
Federal Food, Drug, and Cosmetic Act (Act) and its implementing regulations
found at 21 C.F.R. Part 1140. CTP seeks a civil money penalty of $750.

On July 8, 2013, CTP served the Complaint on Respondent by United Parcel
Service (UPS), pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that, within 30 days, Respondent
should pay the penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that, if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision by default ordering Respondent to pay the
full amount of the proposed penalty. Respondent did not file an answer within the
time provided by regulation.

lam required to issue an initial decision by default if the complaint is sufficient to
justify a penalty, and the Respondent fails to answer timely or to request an
extension. 21 C.F.R. § 17.11(a). For that reason, I must decide whether a default
judgment is appropriate here, and I conclude that it is merited based on the
allegations of the Complaint and Respondent’s failure to answer them.

For purposes of this decision, I assume that the following facts alleged in the
Complaint are true. 21 C.F.R. § 17.11(a). Specifically:

e Respondent owns Blue Plate Cafe, a business that sells tobacco products
and is located at 180 Woodford Avenue, Plainville, Connecticut 06062.
Complaint § 2.

e¢ On April 25, 2012, an FDA-commissioned inspector observed a violation
of the regulations found at 21 C.F.R. Part 1140 while inspecting
Respondent’s establishment. Specifically, the inspector observed a
violation of 21 C.F.R. § 1140.14(c) because Respondent “us[ed] a vending
machine in a non-exempt facility.” Complaint § 10.

e¢ On August 23, 2012, CTP issued a warning letter to Respondent detailing
the inspector’s observations from April 25, 2012. The letter described the
violation and advised Respondent that the FDA may initiate a civil money
penalty action or take other regulatory action against Respondent if
Respondent failed to correct the violation. The letter also informed
Respondent that the inspector observed another potential violation of the
Act. Specifically, the establishment’s vending machine contained a
selection button marked “Marlboro Lights.” The letter explained that under
the Act, a package of cigarettes is deemed misbranded if the package
dispensed from a vending machine does not match the selection button on
the machine. Finally, the letter warned Respondent that it was
Respondent’s responsibility to comply with the law. Complaint § 10.

e The FDA did not receive a response to the warning letter, but the delivery
records show that “STEWART” received the warning letter on August 24,
2012. Complaint § 11.

e During a two-part inspection conducted on December 3, 2012, and
December 17, 2012, FDA commissioned inspectors documented additional
violations at Respondent’s establishment. The inspectors observed a
violation of 21 C.F.R. § 1140.14(c) because “the establishment ha[d] a
vending machine that s[old] cigarettes and [Respondent] permit[ted] minors
to enter [the establishment] when accompanied by an adult.” In addition,
the inspectors observed a violation of section 301 of the Act (21 U.S.C. §
331) when they noted that Respondent offered “misbranded tobacco
products [for sale] through a vending machine.” Specifically, the
establishment’s vending machine had “selection buttons marked ‘Marlboro
Lights[,]’ [but] [t]he cigarettes stocked to correspond with the ‘Marlboro
Lights’ buttons [were] not labeled as such.” Complaint §

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section
906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R § 1140.1(b). A tobacco
product is also misbranded under section 903 of the Act if its labeling is false or
misleading in any particular or if it is offered for sale and its advertising is false or
misleading in any particular. 21 U.S.C. § 387c(a)(1) and (a)(7)(A). The
regulations require a retailer to sell cigarettes and smokeless tobacco only in a
direct, face-to-face exchange without the assistance of any electronic or
mechanical device (such as a vending machine). 21 C.F.R. § 1140.14(c).
However, vending machines are permitted in facilities where the retailer ensures
that no person younger than 18 years of age is present, or permitted to enter, at any
time. 21 C.F.R. § 1140.16(c)(ii).

Here, FDA-commissioned inspectors observed Respondent use a vending machine
to sell cigarettes or smokeless tobacco while inspecting the establishment on April
25, 2012, and during a two-part inspection on December 3, 2012 and December
17, 2012. By using a vending machine to conduct these sales, Respondent
violated the regulation that requires retailers to sell cigarettes and smokeless
tobacco only in a direct, face-to-face exchange without the assistance of any
electronic or mechanical device. 21 C.F.R. § 1140.14(c). On those dates,
Respondent’s establishment was not exempt from this requirement because minors
were permitted to enter the establishment if accompanied by an adult. See 21
C.F.R. § 1140.16(c)(ii). Also, during the two-part inspection on December 3,
2012, and December 17, 2012, the inspectors noted that Respondent’s vending
machine contained a cigarette selection button marked “Marlboro Lights” that did
not dispense “Marlboro Lights” cigarettes. Therefore, Respondent’s vending
machine offered a tobacco product for sale using false or misleading advertising
on the selection button, in violation of section 301 of the Act. 21 U.S.C. § 331(k);
see also 21 U.S.C. § 387c(a)(7)(A). Respondent’s actions constitute violations of
law for which a civil money penalty is merited.

The regulations require me to impose a civil money penalty in the amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $250 for the second violation of 21 C.F.R. Part 1140
within a twelve-month period. 21 C.F.R. § 17.2. CTP has requested a civil money
penalty in that amount for the violations of 21 C.F.R. Part 1140. However, civil
money penalties for violations of section 301 of the Act are not governed by the
21 C.F.R. § 17.2. Retailers who have committed violations of section 301 of the
Act (21 U.S.C. § 331) that relate to tobacco products may incur a civil money
penalty up to $15,000 for each such violation, not to exceed $1,000,000 for all
such violations adjudicated in a single proceeding. 21 U.S.C. § 333(f)(9)(A).
CTP has requested a civil money penalty of $500 for the violation of section 301
of the Act (21 U.S.C. § 331).!? I conclude that a civil money penalty of $750 is
permissible under the Act and enter a default judgment against Respondent with
an order that Respondent pay a civil money penalty in that amount.

/s/
Steven T. Kessel
Administrative Law Judge

‘in paragraph one of the Complaint, CTP alleges that Respondent was “[s]elling misbranded tobacco
products through a vending machine, in violation of Section 301 of the Act (21 U.S.C. § 387c).” However,
section 301 of the Act is codified under 21 U.S.C. § 331. Throughout the rest of the Complaint, CTP cites
the violation for a sale of misbranded tobacco products as a violation of section 903 of the Act (21 U.S.C. §
387c). The text of 21 U.S.C. § 387c lists the ways in which “[a] tobacco product shall be deemed
misbranded,” while 21 U.S.C. § 331 prohibits certain acts and “the causing thereof.” Therefore, | conclude
that CTP meant to continue to cite that Respondent violated section 301 of the Act (21 U.S.C. § 331)
throughout the Complaint, not section 903 of the Act (21 U.S.C. § 387c).

7 In paragraph fourteen of the Complaint, CTP requests a “$500 [penalty] for two violations of section 903
[of the Act] . . .” However, based on the facts alleged in the Complaint, | find only one violation of section
301 of the Act has been proven.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Douglas Care Center,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-693
ALJ Ruling No. 2013-22

Date: September 11, 2013

ORDER OF DISMISSAL

The Centers for Medicare & Medicaid Services (CMS) determined that Petitioner,
Douglas Care Center (CCN: 535040), provided substandard quality of care and imposed
a remedy on Petitioner. Shortly thereafter, Petitioner achieved substantial compliance
with Medicare participation requirements and CMS rescinded the remedy imposed on
Petitioner. However, based on the substandard quality of care finding, Petitioner is
statutorily precluded from obtaining approval for a facility-based nurse aid training and
competency evaluations program (NATCEP) or a nurse aide competency evaluations
program (NACEP). Petitioner filed a request for hearing (RFH) before an administrative
law judge. However, because CMS rescinded the remedy it imposed on Petitioner and
Petitioner did not suffer the loss of an existing approved NATCEP or NACEP, Petitioner
does not have a right to a hearing. Therefore, I dismiss Respondent’s RFH.

I. Procedural History and Background

Petitioner is a skilled nursing facility (SNF) participating in the Medicare program. Ina
February 20, 2013 letter, CMS informed Petitioner of its initial determination to impose a
remedy on Petitioner based on a finding of substandard quality of care. Specifically,
CMS stated that the Wyoming Department of Health (WDOH) conducted a survey of

2

Petitioner on January 18, 2013, and found that Petitioner had deficiencies that included
immediate jeopardy and substandard quality of care. The letter indicated that the
immediate jeopardy situation was removed by February 17, 2013. However, CMS
decided to impose the remedy of the Denial of Payment for New Admissions (DPNA).
Further, if Petitioner did not achieve substantial compliance by July 18, 2013, CMS
would terminate Petitioner’s Medicare provider agreement. Finally, CMS advised
Petitioner that the Social Security Act required the denial or withdrawal of approval of
facility-based NATCEP/NACEP for Petitioner. CMS Exhibit (Ex.) 1.

In a March 27, 2013 letter, CMS advised Petitioner that WDOH conducted a follow-up
survey and verified that Petitioner achieved substantial compliance with Medicare
program requirements by February 25, 2013. Therefore, CMS rescinded the remedy
imposed on Petitioner and stated that CMS would not take any action to terminate
Petitioner’s Medicare provider agreement. CMS Ex. 2.

On April 18, 2013, Petitioner, through counsel, filed an RFH with the Departmental
Appeals Board, Civil Remedies Division (CRD), disputing CMS’s February 20, 2013
determination that Petitioner had not been in substantial compliance. The CRD Director
assigned this case to me and on May 6, 2013, I issued an Acknowledgment and Initial
Pre-hearing Order in which I established a schedule for the submission of pre-hearing
exchanges. On June 6, 2013, CMS filed motions to stay the pre-hearing submission
schedule and for dismissal of the RFH. CMS also filed a brief (CMS Br.) and eight
exhibits (CMS Exs. 1-8). CMS included Attachments A and B with CMS Ex. 7.
Petitioner filed a timely response to the motions (P. Br.) along with one exhibit (P. Ex. 1),
which included an attachment marked as Ex. A. CMS filed a reply brief (CMS Reply
Br.) along with two exhibits (CMS Exs. 9, 10). I accepted CMS’s reply brief and
afforded Petitioner the opportunity to file a surreply. I also stayed the pre-hearing
submission schedule pending a ruling on CMS’s motion to dismiss. Petitioner timely
filed a surreply (P. Surreply Br.) along with two exhibits (P. Exs. 2, 3). Petitioner
included four attachments to P. Ex. 2 marked as Exs. B-E, and one attachment to P. Ex. 3
marked as Ex. F.

The motion to dismiss is now ripe to adjudicate. In the absence of objection, I enter all of
the parties’ proposed exhibits into the record.

IL. Issue
Whether Petitioner has a right to a hearing before an administrative law judge when

Petitioner is prohibited from obtaining approval for a facility-based NATCEP/NACEP
due to CMS’s finding that Petitioner provided substandard quality of care.
III. Discussion’

Before adjudicating this case, I must determine whether I have jurisdiction to review
CMS’s determination that Petitioner provided substandard quality of care. Generally, an
administrative law judge has “no more jurisdiction or authority to hear and decide a case
than the Secretary [of Health and Human Services] has under [her] enabling statutes and
my jurisdiction is further subject to limits imposed by the Secretary’s regulations and the
delegations of authority specified therein.” Marion Citrus Mental Health Ctr., DAB
CR864 (2002). This means “there is no general right to appeal CMS’s administrative
actions.” Columbus Park Nursing & Rehab. Ctr., DAB No. 2316, at 6 (2010).
Therefore, a party that files a RFH must have a right to a hearing or the administrative
law judge may dismiss the request for hearing. 42 C.F.R. § 498.70(b).

In order for Petitioner to have a right to a hearing before an administrative law judge,
CMS must have “made an adverse ‘initial determination’ of a kind specified in 42 C.F.R.
§ 498.3(b).”? Columbus Park, DAB No. 2316, at 6; see also 42 C.F.R. § 498.3(a)(1).
Petitioner contends that it has a right to a hearing because it can no longer operate its
NATCEP/NACEP program after the substandard quality of care finding. See 42 C.F.R.

§ 498.3(b)(14)(ii), (16). CMS denies that Petitioner had an approved NATCEP/NACEP.
Therefore, the parties’ primary dispute is whether CMS’s substandard quality of care
finding resulted in the loss of a state approved facility-based NATCEP/NACEP or simply

' My findings of fact and conclusions of law are set forth in italics and bold font.

> Although CMS initially imposed the remedy of DPNA on Petitioner and warned that
CMS would terminate Petitioner’s provider agreement if Petitioner did not achieve
substantial compliance with program participation requirements, CMS later rescinded the
DPNA and stated it would not terminate the provider agreement. CMS Exs. 1; 2. When
CMS makes a finding that a SNF is noncompliant and CMS imposes a remedy under

42 C.F.R. § 488.406, the SNF has received an initial determination that is subject to
further review. 42 C.F.R. § 498.3(b)(13); see also 42 C.F.R. §§ 488.330(e)(3),
488.408(g)(1), 498.3(a)(3)(ii). Further, if CMS terminates a provider agreement with a
SNF based on a failure to meet program requirements, the SNF has also received an
initial determination that is subject to further review. 42 C.F.R. § 498.3(b)(8); see also
42 C.F.R. §§ 489.53(a)(3), (e); 498.5(b). Consistent with this, a SNF “has no right to an
[administrative law judge] hearing to contest survey deficiency findings where CMS has
not imposed any of the remedies specified in section 488.406 based on those findings, or
where CMS imposed, but subsequently rescinded such remedies.” Columbus Park, DAB
No. 2316, at 7. In the present matter, CMS rescinded the remedy it imposed and never
terminated the provider agreement. Therefore, Petitioner does not have hearing rights
based on the remedy originally imposed by CMS.
4

prohibited Petitioner from obtaining state approval of anew NATCEP/NACEP. If the
answer is the former, then Petitioner would have a right to a hearing. If the latter,
Petitioner has no such right.

A, Petitioner did not have a NATCEP or NACEP approved by WDOH on or
after January 18, 2013.

In an August 7, 2007 letter, CMS informed Petitioner that the results of a WDOH survey
of Petitioner revealed that Petitioner was not in substantial compliance with Medicare
program participation requirements. CMS Ex. 3. CMS informed Petitioner that it was
imposing the remedy of a DPNA effective August 22, 2007, and termination of
Petitioner’s Medicare provider agreement if substantial compliance was not achieved by
January 2008. CMS Ex. 3, at 1-2. CMS also informed Petitioner that due to the
extended/partial extended survey, effective July 19, 2007, Petitioner’s facility-based
NATCEP/NACEP was subject to denial or withdrawal of approval. CMS Ex. 3, at 2.
WDOH withdrew approval of Petitioner’s facility-based NATCEP/NACEP. CMS Ex. 7,
at 2. Ultimately, Petitioner became eligible to seek approval of a facility-based
NATCEP/NACEP on July 23, 2011. CMS Exs. 6, at 3; 7, at 2.

In 2009, Joyce L. Stapleton, RN, owner of Stapleton Consultants, received state approval
from WDOH to provide NATCEPs/NACEPs for SNFs. CMS Ex. 9. In the October 29,
2009 application, Ms. Stapleton indicated that her first class will be taught at Petitioner’s
facility. CMS Ex. 9, at 9. However, Ms. Stapleton was an independent contractor (P. Ex.
2, at 2) who did not exclusively teach classes at Petitioner’s facility. See CMS Ex. 10.
Ms. Stapleton appears to have taught “several classes” at Petitioner’s facility from 2010
through 2012. P. Ex. 2, Exs. B, C, D.

In 2012, Ms. Stapleton retired and stopped serving as a contracted instructor. The
documents in the record are not consistent as to exactly when Ms. Stapleton completed
her last class with Petitioner. However, a report of a telephone contact between Ms.
Stapleton and a WDOH employee indicates that Ms. Stapleton stated the programs she
taught at “Douglas” “were terminated in February 2012.” CMS Ex. 10. Based on
Petitioner’s submission, it appears that Ms. Stapleton’s last class at Petitioner’s facility
was in March 2012. P. Ex. 2, at 2; P. Ex. 2, Ex. D. A letter dated July 10, 2013, that
purports to be from Ms. Stapleton does not state when she stopped teaching classes at
Petitioner’s facility. P. Ex. 2, Ex. B. However, a declaration of one of Petitioner’s
counsel’s employees states that Ms. Stapleton told the employee that “the last time she
taught a class at [Petitioner’s facility] was sometime in 2012, but she could not remember
the exact date.” P. Ex. 3, at 2. In any event, by July 9, 2012, Petitioner indicated on a
Long Term Care Facility Application for Medicare and Medicaid (Form CMS-671) that

5

Petitioner did not currently have an approved NATCEP/NACEP. CMS Ex. 7,
Attachment A, at 1.

In declarations submitted in this case, Petitioner’s Administrator asserts that it was not
until late 2012 that Ms. Stapleton informed them that she was planning on retiring. P. Ex.
1, at 2. Although the Administrator acknowledges that Ms. Stapleton was a contractor,
she avers that the NATCEP/NACEP program was Petitioner’s facility-based program and
not Ms. Stapleton’s program. She also stated that before the end of 2012, Petitioner
decided to have one of Petitioner’s employees replace Ms. Stapleton as the new instructor
for Petitioner’s NATCEP/NACEP. P. Ex. 1, at 2. Finally, Petitioner’s Administrator
asserted that by January 2013, Petitioner had begun preparing an application to have a
NATCEP/NACEP “re-approved”; however, because of the WDOH survey performed in
January 2013, Petitioner “held off on submitting [Petitioner’s] completed application to
have our program re-approved with a different instructor.” P. Ex. 1, at 2-3. Ultimately,
Petitioner filed its application with WDOH for the approval of a facility-based
NATCEP/NACEP on or about May 29, 2013.

Despite Petitioner’s Administrator’s perception that the NATCEP/NACEP provided by
Stapleton Consulting was actually Petitioner’s program, it is clear that the records of
WDOBH, the entity tasked with approving NATCEPs/NACEPs, show that Petitioner: has
not had an approved NATCEP/NACEP since approval was withdrawn from its program
on July 19, 2007; did not have an approved NATCEP/NACEP on the day of the survey
on January 18, 2013; is not listed on the list of state approved programs as of February
26, 2013; and does not currently have an approved NATCEP/NACEP. CMS Ex. 7, at 1-
2; CMS Ex. 7, Attachment B. The WDOH’s records are consistent with the fact that
Petitioner began hiring Stapleton Consulting in 2009 or 2010 while Petitioner was still
unable to obtain approval for a facility-based NATCEP/NACEP. See CMS Ex. 4, at 2; 6,
at 3. Petitioner provides no evidence to contravene WDOH records that show Petitioner
did not have an approved NATCEP/NACEP since 2007. Petitioner also provides no
evidence to show how Stapleton Consultants’ NATCEP/NACEP was transformed to
Petitioner’s NATCEP/NACEP after the statutory preclusion from having a facility-based
NATCEP/NACEP ended in 2011. Finally, it is clear from the Form CMS-671 that
Petitioner signed on July 9, 2012, that Petitioner did not believe it had a facility-based
NATCEP/NACEP on that date. CMS Ex. 7, Attachment A, at 1.

Therefore, I find that the record as a whole substantiates that Petitioner last had a WDOH
approved facility-based NATCEP/NACEP in 2007, and that on and after January 18,
2013, Petitioner did not have a WDOH approved facility-based NATCEP/NACEP.

6

B. An SNF that does not have an approved facility-based NATCEP or NACEP
at the time CMS determines it has provided substandard quality of care does
not gain hearing rights even though such a finding precludes the SNF from
later obtaining approval to conduct facility-based NATCEPs or NACEPs.

In its motion to dismiss, CMS argues that Petitioner does not have a right to a hearing
before an administrative law judge because hearing rights only attach when CMS
imposes a remedy on a SNF. CMS Br. at 4. CMS asserts that it withdrew the DPNA and
did not terminate Petitioner’s provider agreement. CMS Br. at 2,4. Although CMS
concedes that CMS’s finding that Petitioner provided substandard quality of care means
that Petitioner’s “loss of approval of NATCEP/CEP . . . remained,” CMS argues
Petitioner did not operate either program. CMS Br. 5. CMS’s position is that Petitioner
only has appeal rights if it had a pre-existing approved NATCEP or NACEP and the
finding of substandard quality of care led to the withdrawal of approval of that program.
CMS Br. at 5. However, CMS argues, merely losing the right to seek approval of a new
NATCEP or NACEP does not confer appeal rights on Petitioner. CMS Br. at 5-6.

Petitioner argues that it had an approved NATCEP/NACEP and that Ms. Stapleton, as a
contract employee, taught it. P. Br. at 5. Petitioner asserts that it meets “the required
arm element and thus is entitled to a hearing” because CMS’s determination of
substandard quality of care stopped Petitioner from being able to conduct its
NATCEP/NACEP. P. Br. at 5; P. Surreply Br. at 5-6. Petitioner also argues that an
administrative law judge has discretion not to dismiss a request for a hearing and urges
me to use this authority so that Petitioner may dispute CMS’s findings. P. Br. at 6.

SNFs may not employ individuals as nurse aides unless they have completed a state
approved NATCEP or NACEP, and SNFs “must provide such regular performance
review and regular in-service education as assures that individuals used as nurse aides are
competent to perform services as nurse aides... .” 42 U.S.C. § 1395i-3(b)(5)(A), (E).
Congress made each state responsible for approving NATCEPs and NACEPs. Id.

§ 1395i-3(e)(1). States may approve NATCEPs and NACEPs offered by SNFs. Id.

§ 1395i-3(f)(2)(B). However, the state must prohibit or withdraw approval of an
NATCEP and NACEP offered by or in a SNF if the SNF is subject to extended surveys.
Id. § 1395i-3(£)(2)(B)(iii); 42 C.F.R. § 483.151(b)(2)(iii), (f)(1). A SNF is subject to
extended surveys if it has been found to have provided substandard quality of care.

42 U.S.C. § 1395i-3(g)(2)(B). Ifa finding of substandard quality of care results in or
leads to “the loss of approval for the SNF . . . of its nurse aide training program,” then the
SNF is subject to an initial determination that is reviewable. 42 C.F.R. § 498.3(b)(14)(ii),
(16). Ifa finding of substandard care merely prohibits a SNF from obtaining approval for
a NATCEP or NACEP that was not already approved when CMS found the SNF to have
provided substandard care, then there is no initial determination that is subject to further

7

review. St. Charles Health Care, DAB CR1182 (2004) (“The plain language of the
regulations makes it clear that a substandard quality of care finding is appealable when it
results in a facility’s loss of a NATCEP/CEP currently in existence”); see also Benefits
Extended Care Ctr., DAB CR25839, at 5 (2012) (“[I]t is the loss of approval to conduct a
NATCEP that triggers the right to a hearing, not the ineligibility to be approved by the
state to conduct a NATCEP.”); Briarcliff Nursing & Rehab. Ctr., DAB CR1228 (2004);
64 Fed. Reg. 39,934, 39,935 (July 23, 1999) (explaining that appeal rights were given to
SNFs that lose their NATCEP/NACEP because of the hardship this causes on the SNF
and that the NATCEP/NACEP still must cease to operate its NATCEP pending an
appeal; however, no mention is made of granting appeal rights to SNFs that did not
operate a NATCEP/NACEP at the time of the substandard quality of care finding).

As I found above, in the present case, Petitioner did not have a WDOH approved
NATCEP/NACEP at the time WDOH conducted its January 18, 2013 survey. The
survey resulted in a finding of substandard quality of care and CMS informed Petitioner
that effective January 18, 2013, it was subject to denial or withdrawal of approval of any
facility-based NATCEP/NACEP for a two-year period. CMS Ex. 1, at 2. Therefore, I
conclude that under the regulations, Petitioner’s preclusion from obtaining approval for a
new NATCEP/NACEP is not an initial determination that creates appeal rights.
Therefore, Petitioner has no right to a hearing before an administrative law judge.

Finally, Petitioner requests that I deny CMS’s motion to dismiss because 42 C.F.R.

§ 498.70(b) does not require me to dismiss Petitioner’s RFH. Although the dismissal
regulation states that I “may” dismiss a RFH when the party who filed it has no right to a
earing, it would be an abuse of discretion for me to adjudicate a matter over which I do
not have jurisdiction.

IV. Conclusion

Because Petitioner does not have a right to a hearing, CMS’s motion to dismiss is
GRANTED and Petitioner’s RFH is DISMISSED. 42 C.F.R. § 498.70(b).

Within 60 days of receiving of this Order, either party may request that I vacate this
Order. 42 C.F.R. § 498.72.

It is so ordered.
/s/

Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Cedar Crest Nursing and Rehabilitation Center
(CCN: 555790),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-305
Ruling No. 2013-21

Date: August 29, 2013

ORDER OF DISMISSAL

This matter is before me on a motion to dismiss that the Centers for Medicare &
Medicaid Services (CMS) filed on February 22, 2013. Petitioner did not respond to the
motion. I conclude that Petitioner is not entitled to a hearing, and I grant the motion.

Petitioner is a skilled nursing facility in Sunnyvale, California, that participates in the
Medicare program. On November 16, 2012, the California Department of Public Health
(state survey agency) completed a recertification survey of the facility and found that it
was not in substantial compliance with federal program participation requirements.
Specifically, the state survey agency alleged that six deficiencies were found, all at the
scope and severity level of “D.” In a notice letter dated November 27, 2012, the state
survey agency informed Petitioner that it would impose a denial of payment for new
admissions (DPNA) effective February 16, 2013, unless Petitioner submitted an
acceptable plan of correction and demonstrated its substantial compliance at a
subsequent revisit survey. The state survey agency also stated that it would recommend
directed in-service training effective January 5, 2013, if substantial compliance was not
achieved by December 16, 2012. CMS Ex. 2.
Petitioner pursued a state informal dispute resolution (IDR) process and disputed five of
the six deficiency findings. Following the IDR process, the state survey agency notified
Petitioner on December 27, 2012, that it upheld Tag F226 (42 C.F.R. § 483.13(c)) at the
scope and severity level of “D,” and dismissed and deleted Tag F253 (42 C.F.R.

§ 483.15(h)(2)), Tag F281 (42 C.F.R. § 483.20(k)(3)(i)), Tag F441 (42 C.F.R. § 483.65),
and Tag F465 (42 C.F.R. § 483.70(h)). CMS Exhibit (Ex.) 3. Petitioner did not contest
the deficiency citation at Tag F328 (42 C.F.R. § 483.25(k)), so that Tag remained
unchanged at the scope and severity level of “D.” The state survey agency sent Petitioner
a revised statement of deficiencies that reflected the results of the IDR decision. CMS
Ex. 4.

Petitioner submitted a plan of correction and a credible allegation of compliance, stating
that it had corrected the deficiencies at Tag F226 and Tag F328 as of December 5, 2012.
CMS Ex. 4. On December 6, 2012, the state survey agency conducted a revisit and
determined that Petitioner had returned to substantial compliance as of December 6,
2012. CMS Ex. 5.

On January 4, 2013, Petitioner requested a hearing. In its hearing request, Petitioner
requested review of Tag F226 only. The case was assigned to me for hearing and
decision. I issued an Acknowledgment and Initial Pre-Hearing Order on January 23,
2013.

On February 22, 2013, CMS filed its motion to dismiss Petitioner’s request for hearing on
grounds that no enforcement remedy was imposed, and therefore Petitioner had no right
to a hearing. CMS submitted five exhibits with its motion, marked as CMS Ex. | through
CMS Ex. 5. On March 26, 2013, via e-mail, Petitioner’s representative confirmed that
Petitioner did not file a response to CMS’s motion. Petitioner has not objected to my
consideration of CMS’s exhibits, and I admit them as evidence.

The hearing rights of a long-term care facility are established by federal regulations at
42 C.F.R. Part 498. A provider dissatisfied with CMS’s initial determination is entitled
to further review, but administrative actions that do not constitute initial determinations
are not subject to appeal. 42 C.F.R. § 498.3(d). The regulations specify which actions
are “initial determinations” and set forth examples of actions that are not. A finding of
noncompliance that results in the imposition of a remedy specified in 42 C.F.R.

§ 488.406 is an initial determination for which a facility may request a hearing.

42 C.F.R. § 498.3(b)(13). Unless the finding of noncompliance results in the actual
imposition of a specified remedy, the finding is not an initial determination. 42 C.F.R.
§ 498.3(d)(10)(ii). Remedies specified at 42 C.F.R. § 488.406 include termination of a
provider agreement, a DPNA, civil money penalties, and directed in-service training.
Here, CMS effectuated no remedies based on the November 16, 2012 survey. Therefore,
Petitioner no longer has a hearing right because the determination that is subject to a
hearing no longer exists. It is the final imposition of an enforcement remedy or sanction,
and not the citation of a deficiency, that triggers a facility’s right to a hearing pursuant to
42 C.F.R. Part 498. See, e.g., Golden Living Ctr.-Grand Island Lakeview, DAB No. 2364
(2011).

In this case, although CMS originally imposed the remedies of a DPNA and directed in-
service training against Petitioner based on the deficiencies found at the November 16,
2012 survey, these remedies were never effectuated because Petitioner returned to
substantial compliance with program requirements as of December 6, 2012. According
to the Post-Certification Revisit Report, the previously cited deficiencies at Tag F226 and
Tag F328 from the November 16, 2012 survey were corrected on December 6, 2012, the
date of the revisit survey. CMS Ex. 5. As a result, there were no deficiencies, and
Petitioner faced no remedies. I find that there is no remedy determination that Petitioner
may challenge and Petitioner has no right to a hearing under 42 C.F.R. Part 498.
Inasmuch as Petitioner did not file a response to CMS’s motion, it appears that Petitioner
does not dispute the administrative case law as described by CMS in its motion.

Because CMS did not impose any enforcement remedies, Petitioner has no right to a
hearing. An administrative law judge may dismiss a hearing request where a party has no
right to a hearing. 42 C.F.R. § 498.70(b). I therefore grant CMS’s motion to dismiss and
order this case dismissed. The parties may request that an order dismissing a case be
vacated pursuant to 42 C.F.R. § 498.72.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Heritage House of Marshall Health & Rehabilitation Center,
(CCN: 67-6187),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-11-809
Decision No. CR2902

Date: August 22, 2013

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) that
Petitioner, Heritage House of Marshall Health & Rehabilitation Center, was not in
substantial compliance with Medicare program participation requirements. I also sustain
CMS’s imposition of civil money penalties (CMPs), in the amount of $700 per day from
April 12, 2011 through June 15, 2011, for a total CMP of $45,500.

I. Background

The Social Security Act (Act) sets forth requirements for participation of a long-term care
facility in the Medicare program as a skilled nursing facility and the Medicaid program as
a nursing facility and authorizes the Secretary of Health and Human Services (Secretary)
to promulgate regulations implementing those statutory provisions. Act §§ 1819, 1919.
The Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the
Medicare program, a skilled nursing facility must maintain substantial compliance with
program requirements. To be in substantial compliance, a facility’s deficiencies may
pose no greater risk to resident health and safety than “the potential for causing minimal
harm.” 42 C.F.R. § 488.301.
The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act § 1864(a);
42 C.F.R. § 488.20. The regulations require that each facility be surveyed once every
twelve months and, more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.

In this case, surveyors from the Texas Department of Aging and Disability Services (state
agency) completed a recertification and complaint survey on May 26, 2011. CMS Ex. 2.
Based on their findings, CMS determined that the facility was not in substantial
compliance with multiple programs requirements, specifically:'

* 42C.F.R. § 483.10(b)(11) (Tag F157 — notify of changes), at scope and severity
level H ;

* 42C.F.R. § 483.25(c) (Tag F314 — pressure sores), at scope and severity level H;

+ 42C.F.R. § 483.25(g)(2) (Tag F322 —naso-gastric feeding), at scope and severity
level E;

+ 42C.F.R. § 483.65 (Tag F441 — infection control), at scope and severity level E;

+ 42C.F.R. § 483.75(f) (Tag F498 — nurse aide competency), at scope and severity
level E; and

* 42 C.F.R. 483.75(j)(2)(ii) (Tag F505 — promptly notify physician of lab results), at
scope and severity level E.

CMS Ex. 2.

CMS imposed against the facility CMPs of $700 per day for 65 days beginning April 12,
2011 and continuing through June 15, 2011 for a total penalty of $45,500. July 28, 2011
CMS Notice Letter.

' At the hearing, CMS removed the deficiency citations for 42 C.F.R. § 483.25(a)(3)
(Tag F312 — care provided for dependent residents), at scope and severity level E and 42
C.F.R. § 483.25(d) (Tag F315 — no catheterization), at scope and severity level E. Tr. at
279, 289.
Petitioner timely requested review. I conducted a hearing in this matter on June 18
through June 20, 2012, in Dallas, Texas, and a transcript (Tr.) of the proceedings was
prepared. CMS offered CMS Exhibits (Exs.) 1 through 22, which were admitted.
Petitioner offered P. Exs. | through 44. I admitted P. Exs. 1-37 and P. Ex. 42 and 43. Tr.
at 749. P. Ex. 44 was withdrawn. I did not admit P. Exs. 38-41. Tr. at 749.

CMS called two witnesses: Jennifer Wood, RN, and Pernishia Hunt, RN. Petitioner
called Jackie Stephens, Corporate Nurse Consultant for Petitioner, Pearl Merritt, RN,
MSN, Ed.D, as an expert witness, and Dr. Kim Barbolla, Medical Director for Petitioner.
The parties filed post-hearing briefs (CMS Br. and P. Br.) and post-hearing reply briefs
(CMS Reply and P. Reply).

IL. Analysis
A. Issues
Whether Petitioner failed to comply substantially with the Medicare requirements.

Whether the CMP of $700 per day for the period of April 12 through June 15, 2011, fora
total CMP of $45,500, is reasonable.

B. Factual background
Resident 1

Resident 1, a 91-year old female, had documented diagnoses of pressure ulcers, urinary
tract infections, Alzheimer’s disease, Clostridium difficile (C. Diffy, muscle weakness,
and dementia with behavioral disturbances. CMS Ex. 4 at 1, 2; Tr. 190. She was totally
dependent for activities of daily living and was on hospice. Resident 1 had many
pressure sores, was on a feeding tube, bedfast and required total assistance. CMS Ex. 16
at 3; Tr. 190-91. C. Diff: is very contagious and requires contact isolation. Tr. 192. She
had an isolation card in her room indicating that contact precautions should be used for
her. Tr. 190. Her C. Diff: infection began before January 2011 and she was on contact

> Clostridium difficile or C. Diff. is highly contagious and is a multi-drug resistant
organism. It is an anaerobic bacteria that can produce spores. If the resident has
diarrhea, large numbers of C. Diff: will be released. C. Diff: [italicized] can survive in
spore form for 6 months. CMS Br. at 3, n.1; State Operations Manual (SOM), CMS Pub.
100-07, App. PP, F411, § 483.65, Infection Control. C. Diff [italicized] can cause
watery loose diarrhea. Tr. 196.
precautions* since January 2011. CMS Ex. 16 at 16; Tr. 191; CMS Ex. 4 at 96; Tr. 194.
Resident 1 was always incontinent and known to smear feces and scratch herself
frequently. CMS Ex. 4 at 92, 99, 101. Her care plan placed her on standard precautions
and contact isolation; staff was to dispose of biohazards in her room. CMS Ex. 4 at 7; Tr.
191, 194. Under the facility’s policies for infection control, “standard precautions”
required staff to “wear gown to protect skin and clothing during procedures and resident
care that are likely to generate splashes or sprays of blood, body fluids, secretions or
excretions.” CMS Ex. 20 at 13; Tr. 194. The surveyor observed at least four staff
provide care to Resident 1 without wearing isolation gowns. Tr. 191, 195. The Licensed
Vocational Nurse (LVN) did not wear a gown, but wore just gloves. CMS Ex. 16 at 12.
She told the surveyor that the facility did not have any gowns. Tr. 195. The hospice
nurse also did not wear a gown. CMS Ex. 16 at 16. A Certified Nursing Assistant
(CNA) who had been working at the facility for almost seven months told the surveyor
that she had never seen yellow paper gowns. CMS. Ex. 16 at 27; Tr. 195. The CNA said
that she put on a regular hospital gown because she did not want to be touched by
Resident | because of the Resident’s habit of smearing feces. The Assistant Director of
Nursing (ADON) and the Director of Nursing (DON) told the surveyor that staff could
wear regular hospital gowns. CMS Ex. 16 at 29; Tr. 195. The surveyor testified that
regular cloth hospital gowns are insufficient as PPE because they can be saturated. Tr.
196. Since this Resident was known to smear feces, if the staff did not wear PPE and
they touched something with infectious material, that infectious material could be easily
transferred to another resident. Tr. 193. The surveyor testified that the facility therefore
needed to provide staff with proper training and appropriate PPE, specifically proper
isolation gowns which do not permit blood or other potentially infectious material to pass
through to or reach the employee’s work clothes, undergarments, skin, eyes, mouth or
other mucous membranes. Failure to follow proper infection control techniques could
result in the indirect transmission of infection to other residents. Tr. 196.

Resident 2

Resident 2 entered the facility on June 21, 2010. CMS Ex. 5 at 133. Tr. 55. Resident 2
developed a new hip wound as of February 25, 2011. CMS Ex. 5 at 1; Tr. 56. On
February 28, 2011, her physician ordered that her wound dressing should be changed
every three days. CMS Ex. 5 at 10. Her care plan dated March 24, 2011, required
physician notification of any signs or symptoms of skin breakdown. The care plan also

> Any resident who is a contact transmission risk requires the use of contact precautions
to prevent infections that are spread by person-to-person contact. Contact precautions
require the use of appropriate personal protective equipment (PPE) (a variety of barriers
used alone or in combination to protect mucous membranes, skin, and clothing from
contact with infectious agents), including a gown and gloves upon entering the contact
precaution room. Prior to leaving the contact precaution room, the PPE is removed and
hand hygiene is performed. SOM App. PP, F441, § 483.65.
provided for weekly skin assessments by a nurse and required that these skin assessments
must be documented. CMS Ex. 5 at 94. Her care plan had as a stated goal that her hip
wound should exhibit “progressive healing.” CMS Ex. 5 at 97. A weekly skin
assessment dated April 12, 2011, reflected that her hip wound had deteriorated and at that
point included “green necrotic tissue.” CMS Ex. 5 at 41; Tr. 58. There is no
documentation in Resident 2’s medical records indicating that her physician was notified
of the April 12 change. CMS Ex. 5 at 82; Tr. 58, 733 and 734. On April 12, 2011, the
hip wound measured 24 cubic centimeters. CMS Ex. 5 at 41. On April 20, 2011, staff
did not perform her scheduled dressing change. CMS Ex. 5 at 38. Her pressure ulcer risk
assessment dated April 21, 2011 indicated that she was at high risk for pressure sores
with a total score of 12. CMS Ex. 5 at 55. Again, her dressing was not changed as
scheduled on April 26, 2011 and April 29, 2011. CMS Ex. 5 at 38. And records indicate
that staff performed only one weekly body audit on Resident 2 during the month of April.
CMS Ex. 5 at 41. Resident 2’s pressure ulcer risk assessment proceeded to decline to a
score of 11 for the assessments performed on May 6, 2011, May 13, 2011, and May 20,
2011. CMS Ex. 5 at 52, 54, 55. The weekly skin assessment dated May 1, 2011,
documented further deterioration, noting that her wound had a “foul odor” and 2.8
centimeters of undermining. CMS Ex. 5 at 42; Tr. 59. The facility did not notify the
physician. Tr. 60. On May 1, 2011, the hip wound measured 33.66 cubic centimeters.
CMS Ex. 5 at 42. On May 19, 2011, Resident 2’s hip wound measured 40 cubic
centimeters and had two undermining instead of one. CMS Ex. 5 at 79; Tr. 60. A staff
member told the surveyor that the wound still had an odor as of May 19, 2011, but that
she did not notify the physician. CMS Ex. 19 at 13; Tr. 61. Records show that only two
weekly body audits were performed on Resident 2 during the month of May. CMS Ex. 5
at 42. The surveyors discovered a new sore on Resident 2’s heel on May 23, 2011. CMS
Ex. 19 at 26; Tr. 64, 65. From May 23 through May 25, 2011, at least six staff members
admitted to the surveyors that they did not notify the physician of changes to Resident 2’s
wounds. CMS Ex. 19 at 5, 6, 12, 13, 15, and 17; Tr. 61, 63, 66 and 67. The facility
finally cleaned Resident 2’s hip wound thoroughly, started the Resident on antibiotic, and
changed the treatment regimen on May 23-24, 2011. CMS Ex. 5, at 25, and 218; Tr. 72.
The facility transferred Resident 2 to the emergency room on May 24, 2011 fora

“

possible wound infection and to rule out sepsis.” CMS Ex. 5 at 216.

Resident 4

Resident 4’s care plan dated May 9, 2011 noted that the head of her bed was to be kept at
35 degrees during tube feeding to prevent aspiration. CMS Ex. 7 at 20. On May 23,
2011, the surveyor observed the CNA lowering the head of Resident 4’s bed to a flat
position while the tube feeding was infusing. CMS Ex. 17 at 13. The CNA told the
surveyor on May 26, 2011, that the nurse normally turned off the feeding-tube pump
before the head of the bed was lowered for care. CMS Ex. 17 at 20. There were six
other residents in the facility who also received tube feedings. CMS Ex. 2 at 92.
Resident 6

A laboratory report for a stool sample collected May 12, 2011, noted a positive result for
C. Diff: for Resident 6. CMS Ex. 9 at 1. There was no care plan addressing Resident 6’s
C. Diff: or isolation precautions, nor was there a sign or notice on Resident 6’s door
warning that precautions were required before entering the room. CMS Ex. 18 at 4.
Gowns were not available and only gloves were used when the staff cared for Resident 6.
CMS Ex. 18 at 4, 7. On May 23, 2011, the DON told the surveyor that any resident on
contact isolation should have a sign on the door to alert staff and visitors to use
precautions. CMS Ex. 18 at 11. The DON stated that protective gowns should have been
made available for the staff. CMS Ex. 18 at 11.

Resident 8

The surveyor observed Resident 8 at 9:06 am on May 23, 2011, in bed on her right side.
CMS Ex. 16 at 1. The feeding pump alarm was sounding, the head of the bed was
elevated, and there was a urine odor. Tr. 197. Resident 8 was 84 years old and suffered
from hypertension, Alzheimer’s disease, reflux irregularity, and urinary tract infection.
CMS Ex. 10. She was non-verbal and required total care. CMS Ex. 16 at 1; CMS Ex. 10
at 4. The surveyor observed staff perform incontinent care on Resident 8. CMS Ex. 16 at
7; Tr. 199. The surveyor observed that Resident 8 was saturated in urine. The CNA
lowered Resident 8’s bed and head in order to perform the incontinent care while the tube
feeding was infusing. CMS Ex. 16 at 7, Tr. 199. After the surveyor intervened, the CNA
turned the feeding pump to “hold.” Tr. 199. The facility’s incontinent care and G-tube
policies both state that a caregiver should not lower a G-tube feeding patient’s head
below 30 degrees until 30 minutes after infusing. CMS Ex. 20 at 1, 4; Tr. 200, 201. Both
the CNA and the DON told the surveyor that the CNA should not have turned the pump
to “hold” or lowered the Resident’s head; to do so put her at risk for aspiration. CMS Ex.
16 at 20; Tr. 201. The surveyor also observed that the CNA did not properly perform
incontinent care on Resident 8 as she did not separate and clean the labia or change her
gloves before touching a clean item. Tr. 202, 203. On May 12, 2011, urine samples for
this Resident were collected, sent to the lab, and the results reported back to the facility.
CMS Ex. 10 at 7, 3. The lab results were communicated to the physician who placed a
telephone order for Cipro on May 13, 2011 for the Resident. CMS Ex. 10 at 3. Resident
8 was on Cipro from May 13 to May 19, 2011. CMS Ex. 10 at 11; Tr. 205.

A May 14, 2011 lab report indicated that Resident 8 had £. coli in her urine which was
resistant to the Cipro she was prescribed. CMS Ex. 10 at 9; Tr. 205. Resident 8 was not
prescribed any other antibiotics between May 19 and May 24, 2011. The surveyor talked
to the LVN on May 24, 2011 about the need to do a recheck urine sample for this
Resident. The LVN admitted to the surveyor that she did not look back to see if the

bacteria was resistant to the medication prescribed. The LVN told the surveyor that if she
had looked back she would have faxed the results to the physician. Tr. 206. The facility
did not do a recheck until May 24, 2011. CMS Ex. 10 at 5; CMS Ex. 16 at 19. The new
labs showed Resident 8 still had bacteria in her urine. CMS Ex. 10 at 5; Tr. 206.

Resident 13

Resident 13 was a 51-year-old female with diagnoses of a cerebrovascular accident,
unable to perform activities of daily living, verbally abusive to staff, psychiatric
problems, delusional and incontinent. CMS Ex. 13 at 32, 38, 37; Tr. 208. During
incontinent care, the surveyor observed the following errors: CNA J used only a wet
wash cloth with no soap; she did not wipe the Resident’s labial area; the CNA removed
her gloves, left the room to get a clean pad, and did not wash her hands before leaving or
after returning to the room; she rolled Resident 13 over and CNA Q wiped the Resident
from back to front with a dry cloth and did not separate the buttocks to clean the anal
area; and CNA J did not clean the Resident’s buttocks or thighs. The ADON
acknowledged that a resident’s labia should be separated when performing incontinent
care, that wiping from back to front is improper, and that the staff should know to change
gloves. CMS Ex. 16 at 8; Tr. 209.

At the time of the survey, 54 residents were incontinent.
C. Findings of Fact and Conclusions of Law

1. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25(c) (Tag
F 314) relating to the prevention of pressure sores and the necessary treatment
and services to promote the healing of pressure sores and the prevention of
infection.

Program requirements. The introductory language in section 483.25 states: “Each
resident must receive, and the facility must provide, the necessary care and services to
attain or maintain the highest practicable physical, mental, and psychosocial well-being,
in accordance with the comprehensive assessment and plan of care.”

Subsection (c) of 483.25 specifies:

Pressure sores. Based on the comprehensive assessment of a resident, the facility
must ensure that-

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

(2) A resident having pressure sores receives necessary treatment and services to
promote healing, prevent infection and prevent new sores from developing.
42 C.F.R. § 483.25(c). The Board has well-established the application of this pressure
sore regulation. Citing the Secretary’s refusal to replace the word “ensure” with less
demanding language, the Board has held that a facility “should go beyond merely what
seems reasonable to, instead, always furnish what is necessary to prevent new sores
unless clinically unavoidable, and to treat existing ones as needed.” Koester Pavilion,
DAB No. 1750, at 32 (2000) (citing 56 Fed. Reg. 48,826, at 48,850 (Sept. 26, 1991)); see
also Clermont Nursing & Convalescent Ctr., DAB No. 1923, at 9-10 (2004)(citing
Koester and rejecting provider’s argument that a “standard of necessity appears nowhere
in the regulation”), aff'd, Clermont Nursing & Convalescent Ctr. v. Leavitt, 142 F. App’x
900 (6th Cir. 2005). Also, simply because a resident’s clinical condition may mean that
the development of pressures sores is unavoidable does not relieve the facility from the
second prong requirement of the regulation; it must ensure that any resident that has
pressure sores receives the necessary treatment and services to promote the healing of the
sores, to prevent infection of the sores and to prevent new sores from developing.
Woodland Village Nursing Ctr., DAB No. 2172 at 12 (2008); Golden Living Ctr. —
Truesville, DAB CR2634 at 6 (2012). Thus, Petitioner cannot merely claim
unavoidability. Even if the development of the sore was unavoidable due to the
resident’s clinical condition, the facility still must show that it furnished all necessary
treatment and services to promote the healing of the acquired sore and to prevent
infection. Jd. Moreover, merely because a resident has elected hospice care does not
mean that the facility is absolved from complying with Medicare requirements including
the prevention and treatment of pressure sores. A facility “cannot meet its burden of
proof on the issue of whether a pressure sore is unavoidable merely by establishing that
the resident’s clinical condition heightens the risk that pressure sores will develop.” Ivy
Woods Health Care and Rehab. Ctr., DAB No. 1933 at 9 (2004).

Whether it was clinically unavoidable or not, Resident 2 developed, according to the
ospice interdisciplinary notes, a new unstageable pressure sore with blackened eschar to
er the right hip. The note documenting this new sore is dated February 25, 2011 and
the record shows a physician’s order, dated February 28, 2011, directing the facility to
apply wound gel to the sore, to cover with Mepilex dressing and to change that dressing
every three days and as needed. CMS Ex. 5 at 1, 10. Resident 2’s comprehensive care
plan required, among other things, physician notification of any signs or symptoms of
skin breakdown, the performance of documented weekly skin assessments by a nurse,
completion of weekly skin grids to document the location, staging, size, any exudates,
and wound bed for each wound. CMS Ex. 5 at 94, 95, 97. The stated goal of her plan
was for progressive healing of the hip wound. CMS Ex. 5 at 97.

The contemporaneous documentary evidence shows that Petitioner failed to follow the
physician’s specific orders and failed to follow the directives of the Resident’s
comprehensive care plan. It is undisputed that Petitioner did not change Resident 2’s
dressing every three days as directed by the physician’s order; Petitioner failed to change
the dressing on April 20, April 26, and April 29, 2011. CMS Ex. 5 at 38. The facility
performed only one weekly body audit (on April 12, 2011) for the Resident for the entire
month of April and two weekly body audits (on May | and May 17, 2011) for the month
of May even though the comprehensive care plan required weekly body audits to be
performed by a licensed nurse and to be documented. CMS Ex. 5 at 41, 42, 94, 95. The
facility only had documentation of weekly skin grids titled Weekly Pressure Ulcer
Record for the wound to the right hip for May 2 and May 9, 2011. P. Ex. 6 at 1-2; CMS
Ex. 5 at 45-6. And, Resident 2’s records further establish that this new wound to her
right hip, discovered on February 25, 2011, changed in size and characteristics over the
course of 41 days, yet there is no evidence that the facility contacted Resident 2’s
physician as provided for in her care plan. CMS Ex. 5 at 95. The evidence shows that
initially Resident 2’s hip was documented as “unstageable” according to the March 24,
2011 care plan, but the “Weekly Body Audit” of the right hip wound on April 12, 2011
measures the wound at 2.4 cm depth by 2.5 cm length and 4 cm width with green necrotic
tissue to the wound bed. CMS Ex. 5 at 41. On May 1, 2011, the skin assessment then
indicates the wound is 3.4 cm long and 4.5 cm wide with 2.2 and 2.8 cm undermining
with a moderate amount of greenish slough and foul odor.* CMS Ex. 5 at 42. The only
other weekly assessment by the facility documenting this wound is dated May 17, 2011,
and it contains no measurements, staging, or description of any exudates or of the wound
bed. However, a May 19, 2011 Hospice Interdisciplinary Visit Note indicates that the
wound at that point measured 4 cm by 4cm with a depth of 2.5 cm and had undermining

* Petitioner contends that the weekly assessments for this time period confirm that no
odor was present, yet the medical records indicate otherwise. I can only surmise that
Petitioner is referring to the Weekly Pressure Ulcer Record for the dates May 2 and May
9 which indicate that no odor was present. P. Ex. 6 at 1. However, this document
directly contradicts Petitioner’s other records, its Weekly Body Audit, dated May 1,
2011, as well as a Nurse’s note from the Hospice Nurse on May 19, 2011 indicating there
was an odor. I must say that I find Petitioner’s brief somewhat disingenuous. As an
example, Petitioner makes a broad statement that skin assessments were done weekly in
accordance with the care plan and cites to three exhibits, P. Exs. 6, 15, 11, without
citation to specific page numbers. However, these exhibits do not support the statement
made. P. Exs. 11 and 15 are the Hospice Plan of Care and the plan of care from the
facility for Resident 2; while these documents outline what should be done for the patient
with respect to her skin integrity they do not document that the care is or was actually
given. As for P. Ex. 6, this exhibit by no means supports the statement that the facility
performed weekly assessments as directed by the care plan for the period of March 24
through May 23, 2011. I note that I have found several other statements made in its brief
contending that exhibits support the assertion made where, again, no page number is
cited, but the reference given is the exhibit number only, and upon poring through the
exhibit, I do not find that the exhibit actually fully supports the assertion made by
Petitioner. For example, there is no indication in P. Exs. 5 and 33 that either Dr. Barbolla
or her physician’s assistant saw Resident 2 on May 23.

10

in two locations. The hospice nurse also noted that there was a foul odor and yellow
drainage on dressing. P. Ex. 7 at 10. There is no documentation in the record that at any
time during the period of March 24 through May 19, 2011 the physician was notified and
consulted regarding the changes to this wound as directed by the Resident’s care plan. In
any event, the surveyor observed the wound herself on May 23, 2011. She also observed
an open area on Resident 2’s right heel that the LVN said was new. CMS Ex. 2 at 24; Tr.
62. The surveyor testified that immediately upon entering the room there was a
noticeable odor which the nurse confirmed was from the hip wound. The odor was so
bad that the Resident used her hospital gown to cover her nose. CMS Ex. 2 at 25; Tr. 62.
The fact that odor was detected on May 1 and then again on May 19, and that the
physician was not notified of this until the surveyor detected it during the survey on May
23, 2011 and insisted that the physician be consulted, is particularly egregious. Whether
the wound was finally determined to be infected or not, there is absolutely no reason why
the doctor was not informed and consulted regarding this change. It is of primary
importance in dealing with pressure sores and wounds that the wounds be accurately
documented on an ongoing basis and that any changes or worsening to the wound be
reported to the physician immediately so that the physician can make an informed
determination as to whether the current course of treatment should be continued or
whether new or additional treatments should be ordered.

The failures by Petitioner here in following the physician’s orders for treating and
changing the wound dressing, as well as its failures to follow the specific care plan
interventions amply establishes that Petitioner failed to substantially comply with the
Medicare requirements. Also Petitioner cannot claim as an affirmative defense that
Resident 2’s pressure sores were unavoidable. Woodland Village Nursing Ctr., DAB No.
2172 at 13. A facility cannot claim unavoidability as an affirmative defense unless it first
demonstrates it furnished all necessary treatment and services and clearly that is not the
case here where Petitioner failed to follow the specified care plan directives and
interventions prescribed as well as the physician’s orders for treatment and dressing
changes.”

2. Petitioner was not in substantial compliance with 42 C.F.R.

§ 483.10(b)(11) (Tag F 157) which requires Petitioner to consult with the
resident’s physician when there is a significant change in the resident’s status or
there is a need to alter a resident’s treatment.

Program requirement. Section 483.10(b)(11)(i) of 42 C.F.R. entitled, “Resident rights,”
requires:

> Since I find that Petitioner did not substantially comply with the requirements of 42
C.F.R. § 483.25(c) with respect to Resident 2, there is no need for me to consider whether
Petitioner also failed to comply with respect to Resident 12.
11

(11) Notification of changes. (i) A facility must immediately inform the resident;
consult with the resident’s physician; and if known, notify the resident's legal
representative or an interested family member when there is—

OK Kk
(B) 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);
(C) 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); or
(D) A decision to transfer or discharge the resident from the facility as specified in
Sec. 483.12(a).

The regulatory requirements are clearly stated, yet they are often misquoted and
misconstrued. Among the resident rights recognized by the regulation is that the facility
“must immediately .. . consult with the resident’s physician . . . when there is a
significant change in the resident’s physical, mental, or psychosocial status” (meaning a
deterioration in the resident’s condition). 42 C.F.R. § 483.10(b)(11)(emphasis added).
The requirement is not discretionary and it requires more than merely informing or
notifying the physician, which is evident from the plain language of the regulation. The
drafters chose the language carefully. The regulation is specific that the facility is
required immediately to “inform the resident; consult the physician; and . . . notify the
legal representative or an interested family member.” Jd. (emphasis added). The
preamble to the final rule indicates the drafters’ specific intention that the facility should
“inform the resident of the changes that have occurred but should consult with the
physician about actions that are needed.” 56 Fed. Reg. 48,826, at 48,833 (Sept. 26,
1991). Thus, it is clear from the language of the regulation and its history that the
requirement of the regulation to consult means more than to simply notify. Magnolia
Estates, DAB No. 2228 (2009).

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 simply to leave just a message for the physician. Also, the facility
must provide the physician with all the information necessary to properly
assess any changes to the resident’s condition and what course of action is
necessary. Failure to provide even one aspect of the change in a resident’s
condition can significantly impact whether the physician has been properly
consulted.

Id. at 9.
12

The regulation also requires consultation “immediately” upon discernment of a change in
condition of the resident. The use of the term “immediately” in the regulatory
requirement indicates that consultation is expected to be done as soon as the change is
detected, without any intervening interval of time. It does not mean that the facility can
wait hours or days before consulting with the physician. The preamble to the final rule
indicates that originally the proposed rule would have granted the facility up to 24 hours
in which to notify the resident’s physician and the legal representative or family.
However, after the drafters’ receipt of comments pointing out that time is of the essence
in such circumstances, the final rule amended that provision to require that the physician
and legal representative or family be consulted/notified “immediately.” 56 Fed. Reg. at
48,833. The point of using the word “immediately” was the drafters’ recognition that in
such situations a delay could result in a situation where a resident declines beyond
recovery or dies. Furthermore, when the relative inconvenience to a physician and the
facility staff to consult about a resident’s change in condition is weighed against the
possibility for dire consequences to the resident if the physician is not consulted, it seems
that any inconvenience certainly is inconsequential and outweighed by the potential for
significant harm if the facility fails to consult the physician.® This requirement is
included in the regulation entitled “Resident rights” and the requirements of this specific
regulation provide that every resident has the right to a dignified existence and access to
and communication with persons and services inside and outside the facility. Therefore,
e regulatory requirements clearly regard as inconsequential any inconvenience under
the regulation to the resident’s physician or to the facility staff when compared to the
protection and facilitation of the rights of the resident. See 56 Fed. Reg. at 48,834.

es

The Board has found that this regulation “directs the facility to consult with the physician
immediately not only where a resident’s ‘significant change’ is in a ‘life-threatening’
condition, but also when the change involves non-emergency clinical complications such
as the development of a stage II pressure sore... .” The Laurels at Forest Glenn, DAB
No. 2182 at 12 (2008). The Board further determined that a physician’s “awareness of a
significant change does not discharge the facility’s express obligation under section
438.10(b)(11)(i) to “consult” with the physician. Stone Cnty Nursing & Rehab. Ctr.,
DAB No. 2276 at 10 (2009) affirmed the ALJ finding that a simple factual description of
the pressure sore in the medical records without an indication that the physician was
actually consulted on the matter or that he or she gave new treatment instructions, does

° Tt hardly needs emphasizing that it is better to err on the side of consulting a physician
regarding a change in a resident’s condition rather than not or debating about whether the
change is significant, particularly since nursing home staff may not be qualified to
identify the significance of signs and symptoms.
13

not constitute a valid consultation. Stone Cnty Nursing & Rehab. Ctr, CR1918 at 11-12
(2009). Moreover, compliance with the physician consultation requirement “is not
contingent on how the physician might respond, but on the existence of facts requiring
notification.” NHC Healthcare Athens, DAB No. 2258 at 6-7 (2009).

Under this line of precedent, the fact that Resident 2’s hip sore increased in size, its
observed undermining, its noted drainage, and the remarkable presence of odor are all
sufficient to constitute a “significant change” that triggers the physician consultation
regulatory requirement. See Laurels at Forest Glenn, DAB No. 2182; Antelope Valley
Convalescent Hospital, DAB CR511 (1997). I find no instance in Resident 2’s medical
records indicating that at any time the facility did notify, but, most importantly, did
consult with Resident 2’s physician regarding the status of the right hip wound. Actually,
CMS correctly notes that the only documentation of any consultation between facility
staff and the physician regarding Resident 2’s right-hip sore occurred on the first days of
the survey on May 23 and May 24, 2011, and apparently was prompted by the surveyor’s
concern. CMS Ex. 5 at 84, 218; P. Ex. 6 at 10-12. I would expect that given Resident 2’s
care plan which required the physician to be notified of any change to the Resident’s
skin, as well as the regulatory requirement that a physician be consulted of any
significant changes, that the facility would have documented contacting her physician not
only to inform the physician of the change to the status of Resident 2’s right hip but also
to determine from the physician whether the current treatment should be continued or
whether new or additional treatments prescribed. I do not find that the after-the-fact
claims by Resident 2’s physician (that she was aware of Resident 2’s condition or that
she would not have changed the treatment) made after the survey and in response to the
surveyors’ findings to be as credible as documentation made contemporaneously with the
events. Petitioner contends that Resident 2 was seen by the doctor or her physician’s
assistant on April 13, April 28, April 29, and May 10, 2011, yet the annual exam notes by
the physician’s assistant dated April 13, 2011 fail to mention the presence of even one
pressure sore on this patient when she was known to have not only a Stage IV decubitus
ulcer to her coccyx but also the wound to her right hip. See P. Ex. 6 at 15, 16. As CMS
correctly pointed out, the fact that Resident 2’s wound to her right hip increased in size as
well as developed undermining, greenish discharge and odor was sufficient to constitute a
“significant change” that should trigger the physician’s consultation requirement under
42 C.F.R § 483.10(b)(11). Antelope Valley Convalescent Hospital, DAB CR511; The
Laurels at Forest Glenn, DAB No. 2182 at 12; Stone Cnty Nursing & Rehab. Ctr., DAB
CR1918 at 11-12 (2009).

Petitioner’s failure to consult immediately with the physician put Resident 2 in danger of
more than minimal harm; certainly it meant that the physician did not have the ability to
accurately monitor and assess whether the prescribed course of treatment worked. That
left this Resident at risk for not only increased pain and discomfort due to the worsening
condition of the wound but also at risk for other serious complications such as sepsis.
3. Petitioner wa:

14

s not in substantial compliance with 42 C.F.R.

§ 483.25(g)(2) (Tag F 322 — Naso-Gastric Tube feeding).

Program requirement, The quality of care requirement specific to naso-gastric and

gastronomy tube feedin;

Naso-gastric tub

g provides:

es: Based on the comprehensive assessment of a resident, the

facility must ensure that —

(2) A resident who is fed by a naso-gastric or gastronomy tube receives the
appropriate treatment and services to prevent aspiration pneumonia, diarrhea,
vomiting, dehydration, metabolic abnormalities, and naso-pharyngeal ulcers and to
restore, if possible, normal eating skills.

42 C.F.R. § 483.25(g)(2). During the survey, the surveyors observed two instances
where residents who were being tube fed had the head of their beds lowered to a flat

position by the CNA w!
Resident 4’s care plan d

at 20. On May 23, 201
bed to a flat position w

infusing. CMS Ex. 2 at
Feeding provided that t

been completed, unless

at least 30 degrees during the feedings and for at least 30 minutes after the

ile they were being fed.

lated May 9, 2011 stated that the head of this Resident’s bed

should be up at a 35 degree angle at all times to prevent her from aspirating. CMS Ex. 7

, the surveyor observed a CNA lower the head of Resident 4’s
ile the tube feeding was infusing. The surveyor also observed

that same day a CNA lower the head of Resident 8’s bed while her tube feeding was

41-2; CMS Ex. 16 at 7. Petitioner’s own stated policy for Tube
e head of the bed for a tube-feeding patient should be elevated to
eeding was
the resident were on continuous feeding and then the head of the

bed should be kept elevated at 30 degrees at all times. CMS Ex. 20 at 4. Although

Petitioner stated in its c
deficiency, there is no p

state that Petitioner would provide testimony to demonstrate that

osing brief that it would rely on its prior written briefing for this
rior written briefing on this particular deficiency other than to
the surveyor’s citation

of a deficiency has no regulatory basis because the facility provided proper care and

services to the residents

receiving parenteral nutrition. P. Prehearing Brief at 34. No

such testimony was provided. In fact, Petitioner provided no evidence either testimonial

or documentary to rebut the direct surveyor observations that sta:

in a flat position while tl

this should never be done. By putting the Residents’ head of bed

f placed two Residents
hey were being tube-fed despite the facility’s own policies that
in less than a 30 degree

angle, Petitioner staff placed the Residents in risk of serious harm of aspirating the
feeding formula. This failure not only placed these two Residents at risk for actual harm

but also put any other resident who received tube feeding at risk

were not aware of these

because the CNA staff
basic safety provisions applicable to tube feeding.
15

4. Petitioner was not in substantial compliance with 42 C.F.R. §483.65 (Tag F
441 - Infection Control).

Program requirement. The regulation provides that the facility must establish and
maintain an infection control program designed to provide a safe, sanitary, and
comfortable environment and to help prevent the development and transmission of
disease and infection. 42 C.F.R. § 483.65. The surveyors determined that Petitioner
failed to maintain an effective infection control program because it failed to ensure that
five of six staff, including a LVN and four CNAs, wore appropriate personal protective
equipment when they provided direct care for two Residents who were on contact
isolation for C. Diff: infections and to ensure that staff and visitors were aware that those
Residents were on contact isolation. CMS Ex. 2 at 45.

Resident | had C. Diff: and was on contact isolation. The surveyor observed her wound
care and noted that the LVN who cleaned Resident 1’s wounds wore gloves but not a
protective gown. CMS Ex. 16 at 12. The LVN told the surveyor that the yellow
disposable protective gowns were not available. Jd. CNA H told the surveyor that she
had never seen disposable isolation gowns at the facility but that she would put on a
regular hospital gown so Resident 1 couldn’t touch her because Resident 1 had feces
under her nails. CMS Ex. 16 at 27. The DON and ADON similarly told the surveyor
there were no disposable isolation gowns but that staff could wear regular hospital
gowns. CMS Ex. 16 at 29

According to the SOM, Appendix PP, Tag F441, a facility’s infection control practices
are important for preventing the transmission of infections. The SOM further provides
that infection control practices include two primary tiers: “Standard Precautions” and
“Transmission-based Precautions.” SOM, App. PP at 573.

According to the SOM, standard precautions are based upon the principle that all blood,
body fluids, secretions, excretions (except sweat), non-intact skin, and mucous
membranes may contain transmissible infectious agents. Jd. “Standard precautions are
intended to be applied to the care of all persons in all healthcare settings, regardless of the
suspected or confirmed presence of an infectious agent. Implementation of standard
precautions constitutes the primary strategy for preventing healthcare-associated
transmission of infectious agents among residents and healthcare personnel.” Id.

Standard precautions

include but are not limited to hand hygiene, safe injection practices, the
proper use of PPE (e.g., gloves, gowns, and masks), resident placement,
and care of the environment, textiles, and laundry. . . . In addition to proper
hand hygiene, it is important for staff to use appropriate protective
16

equipment [PPE] as a barrier to exposure to any body fluids (whether
known to be infected or not). For example, in situations identified as
appropriate, gloves and other equipment such as gowns and masks are to be
used as necessary to control the spread of infections. Standard precautions
are also intended to protect residents by ensuring that healthcare personnel
do not carry infectious agents to residents on their hands or via equipment
used during resident care.

Id.

Transmission-based precautions are used for residents who are known to be, or suspected
of being, infected or colonized with infectious agents, including pathogens that require
additional control measures to prevent transmission. SOM, App. PP at 575. The SOM
also states that when transmission-based precautions are in place, PPE should not only be
used but should be readily available. Jd. at 576. The SOM also provides that

“contact transmission risk” requires the use of contact precautions to prevent infections
that are spread by person-to-person contact. “Contact precautions require the use of
appropriate PPE, including a gown and gloves upon entering the contact precaution room.
Prior to leaving the contact precaution room the PPE is removed and hand hygiene is
performed.”’ SOM, App. PP at 576.

Here the facility had a policy for “Infection Control, Standard Precautions” that provided
staff should “wear a gown to protect skin and prevent soiling of clothing during
procedures and resident care activities that are likely to generate splashes or sprays of
blood, body fluids, secretions or excretions” and that staff were to remove a soiled gown
as promptly as possible and wash hands to avoid transfer of microorganisms to other
residents or environments. CMS Ex. 20 at 13. Yet, as they were providing routine care
to Resident 1, the surveyor observed five staff members who wore only gloves and no
PPE gowns. This Resident was on isolation and contact precautions. She had C. Diff:
which is highly transmittable; Resident | as a routine matter smeared her feces and often

7 The SOM states that indirect transmission involves the transfer of an infectious agent
through a contaminated intermediate object and that the following are examples of
opportunities for indirect contact: Clothing, uniforms, laboratory coats, or isolation
gowns used as PPE may become contaminated with potential pathogens after care of a
resident colonized or infected with an infectious agent, (e.g., MRSA, VRE, and
Clostridium difficile). SOM, Appendix PP at 571. Yet, Petitioner’s expert witness
disagreed that indirect transmission of C. Diff: [italicized] could occur through clothing of
acaregiver. Tr. 621. She also stated that only gloves were necessary in providing care to
a resident such as Resident 1. I find overall then her testimony less than credible in light
of these SOM provisions which state that indirect transmission of C. Diff: [italicized] is
indeed a problem particularly where these SOM provisions are based in large part on
CDC and other medical research into infection control.

17

had feces under her nails. Under these circumstances, it is highly likely that Resident 1
could reach out and touch the staff member providing care or their clothing or that fecal
matter could be transferred unknowingly to the clothes of the staff member. It is this
very type of situation that requires transmission-based precautions which would require
the use of at least gowns and gloves. No such policy was provided; only a copy of the
“standard precautions” policy was provided. And at no time did the surveyors observe
that PPE gowns were used.

The surveyor found that even though lab results for Resident 6 noted a positive result for
C. Diff: for this Resident from a sample collected on May 12, 2011, Resident 6’s care
plan failed to address her C.Diff: or to provide for isolation precautions for this Resident.
Moreover, there was no sign on Resident 6’s door indicating that any precautions were
required before entering the room. Petitioner’s own Infection Control Policy requires a
sign informing visitors to please report to the Nurses’ Station before entering the room.
In this situation, where Resident 6 was now known to be infected by C. Diff: which
requires particular control measures to prevent transmission, the SOM states that
pertinent signage for isolation precautions is necessary to help minimize the transmission
of the infection. SOM, App. PP at 575. Petitioner does not present any evidence that
such signage was posted.

I therefore find that Petitioner has not rebutted CMS’s prima facie case that Petitioner
was not in substantial compliance with this requirement.

5. Petitioner was not in substantial compliance with 42 C.F.R. § 483.75(f) (Tag
F 498 - Nurse Aide Competency).

Program requirement. This regulation provides—

Proficiency of Nurse aides. The facility must ensure that nurse aides are able to
demonstrate competency in skills and techniques necessary to care for residents’
needs, as identified through resident assessments, and described in the plan of
care.

42 C.F.R. § 483.75(f). The surveyors found Petitioner deficient with this requirement
after observing three CNAs providing care to the residents, particularly Residents 8 and
13. In this case, the surveyors found that Petitioner failed to ensure that its CNAs
displayed competency in techniques of incontinent care. Petitioner argues that each of
the aides observed providing improper care was certified by the State of Texas, had
passed a written test together with a hands-on skills exam. Petitioner contends that even
if the surveyor observed the aides incorrectly performing a task on one occasion that does
not mean that it failed to meet this requirement. P. Br. at 27. Rather Petitioner contends
that these lapses were isolated instances and in all likelihood the aides were nervous
because the surveyors were watching them perform resident care tasks. Petitioner cites
18

my decision in Mabee Health Care Center, DAB CR2525 (2012) to support its
arguments, but I find the circumstances here a little more problematic because there was
a very real likelihood of harm. Moreover, incontinent care is not difficult to perform
properly, yet the consequences of failure to follow appropriate protocols can easily result
in urinary tract infections. Here Resident 8 was known to be prone to urinary tract
infections; proper incontinent care therefore was critical. As for Resident 13, it is a basic
of incontinent care to never wipe a female patient from back to front; to do so is to risk
contamination. Nevertheless, CNAs were observed doing just that, as well committing
five other errors during the incontinent care of Resident 13. Petitioner does not dispute
the surveyor’s observations, rather it merely claims that these actions did not cause harm
to any resident. I disagree. These are basic skill sets and that fact that three CNAs were
observed to be deficient in them is enough to support a finding that Petitioner was unable
to ensure that its nurse aides demonstrated competency in skills and techniques necessary
to care for residents’ needs.

6. Petitioner was not in substantial compliance with 42 C.F.R. § 483.75(j)(2) (ii)
(Tag F 505 - Promptly notify Physician of Lab Results)

Program requirement. This requirement provides that the facility must promptly notify
the attending physician of laboratory findings. 42 C.F.R. § 483.75(j)(2)(ii). The
surveyors found that Petitioner failed to promptly notify Resident 8’s attending physician
of her abnormal lab results. The first lab urine samples were drawn on May 12 and those
results were communicated to the physician who called in an order for Cipro on May 13.
CMS Ex. 10 at 3; Tr. 204. Resident 3 was prescribed to be on and was taking Cipro from
May 13 through May 19, 2011. However, a May 14, 2011 lab report showed that she had
E. coli in her urine that was resistant to Cipro. CMS Ex. 10 at 9. There is no evidence
from the facility records reviewed by the surveyor that this lab report or its findings were
sent or communicated to Resident 8’s attending physician.’ Moreover, Resident 8 was
not prescribed any other antibiotic between May 19, when she finished the course of
Cipro, to May 24, 2011, when the surveyor discovered and communicated the results to
Petitioner’s staff. Tr. 206; CMS Ex. 16 at 24. Petitioner then performed a recheck on
May 24, 2011, and the new labs showed Resident 8 still had bacteria in her urine. CMS
Ex. 10 at 5. As CMS stated, the failure to promptly notify Resident 8’s physician of these
lab results meant that a change in the course of treatment and the care plan for Resident 8
for this infection was significantly delayed: first, she was prescribed a useless antibiotic
for a week; and then another week passed without any treatment whatsoever. Clearly, if

® T note that P. Ex. 32 at 3 appears to be a report from the lab regarding the E.coli and the
resistant antibiotics. It has a stamp “Faxed” on it but there is no copy of the fax
transmission record which typically is kept as proof of transmission. See, e.g., CMS Ex.
10 at 6, which is a copy of the type of fax transmission report usually kept. Since the
physician did not change Resident 8’s prescription for Cipro, I can only surmise that this
report was not in fact received by the physician.
19

the surveyor had not found the lab results in Resident 8’s records, and questioned the
staff about whether the results had been sent to her physician, Resident 8 would not have
received the appropriate treatment for the infection at all. Petitioner does not dispute
these facts other than to state that Petitioner faxed to the attending physician immediately
upon its receipt of the results. P. Ex. 32. Even if it had been, Petitioner bears some
responsibility when it did not receive an order to change the antibiotic for Resident 8 to
again notify the physician to make sure the May 14 results had been received and to learn
what course of treatment the physician wanted to pursue. This was not done. While
Petitioner is dismissive in suggesting that there was no actual harm to the Resident as a
result of this, I find that if a patient is prescribed an antibiotic which is meant to clear an
infection and that the facility receives information that the antibiotic prescribed by the
doctor is resistant against the particular infection, but does not inform the physician of
this, there is actual harm to the resident because the infection is not treated.

7. The CMP of $700 per day for the period of April 12 through June 15, 2011,
for a total CMP of $45,500, is reasonable.

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

Unless a facility contends that a particular regulatory factor does not support the CMP
amount, the ALJ must sustain it. Coquina Ctr., DAB No. 1860 (2002). In its pre-hearing
and post-hearing briefs, Petitioner simply argues that the CMP is not reasonable because
it contends that “the facility’s actions did not cause any resident harm.” P. Pre-hearing
Br. at 37; P. Br. at 28. Petitioner does not contest the length of time during which CMS
imposed the CMP or claim that its financial condition affects its ability to pay.

I sustained each of the deficiencies cited here, and contrary to Petitioner’s assertions, I do
find that Petitioner’s failures did result in actual harm to residents or posed a strong
likelihood of actual harm. Taken as a whole, I find that the failures here support the $700
per day CMP imposed from April 12 through June 15, 2011.

I note that the $700 per day penalty is at the lower end of the lower range of penalties,
which varies from $50 - $3,000. 42 C.F.R. § 488.438(a)(1)(ii). For the reasons set forth
above, I find that the remedy imposed is reasonable.
20

III. Conclusion

For the foregoing reasons, I conclude that Petitioner, Heritage House of Marshall Health
& Rehabilitation Center, was not in substantial compliance with Medicare program
requirements during the period at issue. I also sustain as reasonable CMS’s imposition of
a $700 per day CMP for the period of April 12, 2011 through June 15, 2011.

/s/
Richard J. Smith
Administrative Law Judge