Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Jn re CMS LCD Complaint:
Date: July 24, 2007
End-Diastolic Pneumatic Compression
Therapy (Circulator Boot), LCD Policy #
L99199 (Draft). Docket No. C-07-310
Decision No. CR1628
Contractor: First Coast Service Options,
Inc.

DECISION

The complaint is dismissed pursuant to 42 C.F.R. § 426.444(b)(3) because Complainant is
not an aggrieved party within the meaning of 42 C.F.R. §§ 426.110 and 426.320.

An appeal of this decision, as provided for by 42 C.F.R. § 426.465(a), must be filed
within 30 days of the date of this decision (42 C.F.R. § 426.465(e)) and satisfy the other
requirements of 42 C.F.R. § 426.465(f). Absent a showing of good cause, failure to
timely appeal waives the right to challenge any part of this decision and it becomes final
and not subject to further review. 42 C.F.R. § 426.468.

Pursuant to 42 C.F.R. § 426.410(c)(3), Complainant is precluded from filing again
regarding the same subject for six months from the date of this decision.

I. Background

Complainant submitted an undated request for administrative law judge (ALJ) review of a
local coverage determination (LCD) that was assigned to me on March 21, 2007. I
advised Complainant by letter dated April 4, 2007, that his complaint was not acceptable
because it appeared to challenge a draft LCD and because it did not appear that he was an
aggrieved party. I advised Complainant that he had one opportunity to file an amended
complaint that met the requirements of 42 C.F.R. § 426.400, and if he did not, I would be
compelled to dismiss the complaint. On May 7, 2007, I received Complainant’s response.
II. Discussion

A LCD, as defined by the Social Security Act (the Act), is “a determination by a fiscal
intermediary ora carrier . . . respecting whether or not a particular item or service is
covered” within the area covered by the contractor. Act, section 1869(f)(2)(B) (42 U.S.C.

§ 1395 ff(£)(2)(B)).

The Secretary promulgated regulations pursuant to sections 1102 and 1871 of the Act (42
U.S.C. §§ 1302 and 1395hh), implementing sections 1869(f)(1) and (f)(2) of the Act. 42
C.F.R. § 426.100. The regulations are found at 42 C.F.R. Part 426. An aggrieved party is
a Medicare beneficiary or the estate of a beneficiary who is (1) entitled to benefits under
Part A or B of Medicare; (2) is in need of coverage for a service that was denied based on
an LCD whether or not the service was actually received; and (3) has documentation from
a treating physician that shows the services are required. 42 C.F.R. § 426.110. Only an
aggrieved party may initiate review of an LCD by filing an acceptable complaint. 42
C.F.R. § 426.320(a). If an acceptable complaint is filed, the procedures for review of an
LCD are in 42 C.F.R. Part 426, Subpart D (42 C.F.R. § 426.400 et. seq.). The Act and
regulations provide for a two-level review process by the ALJ.

Before any review of an LCD may be undertaken by an ALJ, the ALJ must determine as a
threshold matter whether the complaint is adequate. 42 C.F.R. §§ 426.400; 426.410. If
the ALJ finds the compliant is not adequate, a Complainant is permitted one opportunity
to correct the complaint. 42 C.F.R. § 426.410(c).

In this case, Complainant indicates that he wants to challenge the failure of the contractor,
First Coast Service Options, Inc., and the Centers for Medicare and Medicaid Services
(CMS) to implement a draft LCD Number 99199, End-Diastolic Pneumatic Compression
Therapy (Circulator Boot). This draft LCD would have been applicable in the State of
Florida where Complainant resides. The draft would have permitted Medicare coverage
for the use of a circulator boot for chronic venous insufficiency (CVI) with venous stasis
ulcer of the lower extremities; diabetic ulcer of the lower extremities; or arterial ischemic
ulcers of the lower extremity in certain cases.'

' An LCD providing for such coverage is currently in effect for the State of
Pennsylvania. LCD Number L10034, End-Diastolic Pneumatic Compression Therapy,
Contractor: Highmark Medicare Services Pennsylvania Carrier, effective January 11,
2003, revised April 15, 2005.
3

According to the statement of his treating physician, Complainant suffered from diabetic
foot ulcers for many years with an amputation in 2003. Complainant’s physician indicted
that another partial amputation was being considered but it was avoided by the use of
circulator boot therapy. According to an October 12, 2006 decision of an ALJ with the
Office of Medicare Hearings and Appeals” submitted with the complaint, a claim for
coverage of 160 circulator boot system treatments was initially denied and then denied on
reconsideration, leaving the provider of the services responsible for payment.

The ALJ decided that the 160 circulator boot treatments were covered services that
should be paid by Medicare to the provider.’ Petitioner does not state in either his
original complaint or his amendment that he has received another initial denial based
upon an LCD subsequent to the ALJ decision granting him benefits. Complainant must
wait six months from the date of this decision to file an acceptable complaint to challenge
an LCD that is cited as the basis for denying him coverage for circulator boot treatments.

The facts alleged by Complainant and reflected by the documents submitted in support of
his complaint do not show that he is an aggrieved party within meaning of 42 C.F.R.

§ 426.110. Although Complainant was denied coverage initially and on reconsideration,
the ALJ declared coverage was appropriate. Thus, Complainant does not currently meet

> Appeals of denial of coverage for services are heard and decided by ALJ’s from
the Department of Health and Human Services, Office of Medicare Hearings and
Appeals. Benefits or coverage appeals are separate from LCD reviews. 42 C.F.R.
§ 426.310(a).

> The ALJ noted that there is a National Coverage Determination (NCD),
Publication Number 100-3, Manual Section Number 280.6, that specifies that pneumatic
devices are covered for treatment of lyphedema or for CVI with venous stasis ulcers if
certain coverage criteria are met. The NCD does not specifically preclude coverage for
treatment of other conditions such as diabetic ulcers. I note that in at least two regions
there are LCDs that specifically limit the use of pneumatic compression devices to only
lyphedema or CVI with venous stasis ulcers. LCD Number L1 1492, Pneumatic
Compression Devices, DME PSC: Electronic Data Systems Corp. and DME MAC:
Noridian Administrative Services; LCD Number L1 1503, Pneumatic Compression
Devices, DME PSC: TriCenturion and DME MAC: National Government Services.
According to the ALJ decision, Complainant’s claim was initially denied based on LCD
Number L5780, List of Medicare Non-covered Services, which the ALJ found
inapplicable. The ALJ decided coverage was appropriate based on NCD Number 100-3
and LCD Number L5780, Pneumatic Compression Devices, First Coast Service Options,
Inc.
4

the requirement that coverage for a service was denied based on an applicable LCD. I am
required to dismiss a complaint if it is not filed by an aggrieved party. 42 C.F.R.

§ 426.444(b)(3). Furthermore, the draft LCD Number 99199, End-Diastolic Pneumatic
Compression Therapy (Circulator Boot) is not subject to my review as only LCD’s that
are currently effective may be challenged. 42 C.F.R. § 426.325(a).

III. Conclusion

For the foregoing reasons, the complaint is dismissed as it is not acceptable.

/s/

Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Beverly Health Care Lumberton, ) Date: July 20, 2007
CCN: 34-5234 )
Petitioner, )
)
-V.- ) Docket No. C-06-20

Centers for Medicare & Medicaid ) Decision No. CR1626
Services. y
)

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
impose a Civil Money Penalty (CMP) against Petitioner, Beverly Health Care Lumberton,
for failure to comply substantially with federal requirements governing participation of
long term care facilities in Medicare and State Medicaid programs. Therefore, I sustain
the CMP of $3,050 per day but only for the period of April 9, 2005 through April 11,
2005. I also sustain a CMP of $1000 per day for the period of April 12, 2005 until
August 4, 2005. :

I. Background

This case came before me pursuant to a request for hearing filed by Petitioner on October
11, 2005. Petitioner is a long-term care provider located in Lumberton, North Carolina.

On August 17, 2005, the Centers for Medicare and Medicaid Services (CMS) informed
Petitioner that it was imposing the following remedies pursuant to a complaint
investigation completed on August 4, 2005, by the North Carolina State Survey Agency:
2

. CMP of $3,050 per day effective April 9, 2005, and continuing through April 14,
2005 (the surveyors found Petitioner out of compliance with three requirements, F
Tags 223, 225, and 226, at the scope and severity level J, constituting immediate
jeopardy).

. CMP of $1000 per day beginning April 15, 2005 through August 4, 2005.

. CMP of $50 per day effective August 5, 2005."

. Denial of payment for new admissions (DPNA) effective November 4, 2005.
CMS Ex. 6.

[held a hearing on July 18, 2006, in Raleigh, North Carolina. At the hearing, CMS
offered 15 exhibits, identified as CMS Exs. 1-15. I received CMS’s exhibits into
evidence without objection. Petitioner offered 23 exhibits, identified as P. Exs. 1-23.
I received these exhibits into evidence without objection. Transcript (Tr.) at 10, 11.

Subsequent to the hearing, the parties submitted post-hearing briefs (CMS Br. and P. Br.).
Petitioner filed a reply brief ( P. Reply), but CMS did not .

Based on the testimony offered at the hearing, the documentary evidence, the arguments
of the parties, and the applicable law and regulations, I find that Petitioner was not in
substantial compliance on the dates determined by the State survey agency and CMS,
subject to the exception noted below. | further find that CMS was authorized to impose a
CMP of $3,050 for non compliance from April 9, 2005 through April 11, 2005, and a
$1000 per day CMP thereafter until August 4, 2005.

I. Applicable Law and Regulations

Petitioner is a long-term care facility located in Lumberton, North Carolina that
participates in the Medicare and Medicaid programs. The statutory and regulatory
requirements for participation by a long-term care facility are found at sections 1819 and
1919 of the Social Security Act (Act), and at 42 C.F.R. Part 483.

' As result of a revisit survey conducted on September 21, 2005, it was determined
that the facility returned to substantial compliance on August 5, 2005. Thus, the $50 per
day CMP and the DPNA were rescinded.
3

Sections 1819 and 1919 of the Act invest the Secretary of HHS with authority to impose
remedies of CMPs and denial of payment for new admissions against a long-term care
facility for failure to comply substantially with participation requirements.

Facilities that participate in Medicare may be surveyed on behalf of CMS by state survey
agencies in order to determine whether the facilities are complying with federal
participation requirements. 42 C.F.R §§ 488.10- 488.28; 42 C.F.R. §§ 488.300 - 488.335.
Pursuant to 42 C.F.R. Part 488, CMS may impose either a per day CMP or a per instance
CMP against a long-term care facility when a state survey agency concludes that the
facility is not complying substantially with federal participation requirements. 42 C.F.R.
§§ 488.406, 488.408, and 488.430. The penalty may start accruing as early as the date
that the facility was first out of compliance until the date substantial compliance is
achieved or the provider agreement is terminated. 42 C.F.R. § 488.440.

The regulations specify that a per day CMP that is imposed against a facility will fall into
one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of
CMPs, of from $3,050 per day to $10,000 per day, is reserved for deficiencies that
constitute immediate jeopardy to a facility's residents, and in some circumstances, for
repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1), (d)(2). The lower range of CMPs, of
from $50 per day to $3,000 per day, is reserved for deficiencies that do not constitute
immediate jeopardy, but either cause actual harm to residents, or cause no actual harm,
but have the potential for causing more than minimal harm. 42 C.F.R.

§ 488.438(a)(1)(ii).

The regulations define the term “substantial compliance” to mean:
[A] level of compliance with the requirements of participation
such that any identified deficiencies pose no greater risk to
resident health or safety than the potential for causing
minimal harm.

42 C.F.R § 488.301.

“Immediate jeopardy” is defined to mean:
a situation in which the provider’s noncompliance with one or

more requirements of participation has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident.
4

The Act and regulations make a hearing available before an administrative law judge
(ALJ) to a long-term facility against whom CMS has determined to impose a CMP. But
the scope of such hearings is limited to whether an initial determination made by CMS is
correct. Act, section 1128A(c)(2); 42 C.F.R. §§ 488.408(g), 498.3(b)(12) and (13). The
hearing before an administrative law judge is a de novo proceeding. Anesthesiologists
Affiliated, et al, DAB CR65 (1990), aff'd 941 F2d. 678 (8" Cir. 1991).

IIL. Issues

A. Whether the facility was complying substantially with federal participation
requirements on the dates CMS determined to impose a CMP.

B. Whether CMS’s determination of immediate jeopardy was clearly erroneous.

C. Whether the amount of the penalty imposed by CMS is reasonable, if noncompliance
is established

IV. Findings and Discussion

The findings of fact and conclusions of law noted below in bolded italics are followed by
a discussion of each finding.

A, The facility was not in substantial compliance with federal participation
requirements from April 9, 2005 through August 4, 2005.

B. Abuse (Tag F223) CMS established that the facility failed to provide an
environment free from verbal, sexual, physical, and mental abuse, corporal
punishment, and involuntary seclusion as provided by 42 C.F.R. § 483.13(b).

Based on record review and staff interviews, the state surveyors found that Petitioner
failed to protect one of its residents [Resident 2 (R2)] from physical abuse. CMS Ex. 1, at
1-2. R2 was admitted to the facility on December 3, 2004, with diagnoses of dementia
and history of hip fracture. He had both long and short memory problems and impaired
decision making skills. The care plan dated December 21, 2004, noted that R2 was at risk
for behavioral decline related to dementia. When interviewed on August 4, 2005, Nurse 1
(Marylyn Marino) stated that on April 9, 2005, at approximately midnight, Nursing
Assistant 1(NA 1) (Charles Robinson) helped her and Nurse 2 (Octavia Taylor) control
R2 to keep him from falling after he removed a soft belt restraint and stood up in front of
his wheelchair. NA 1 held R2 by his arms while the nurses attempted to take the belt
away from R2. ‘After the belt was taken away from R2, one of the nurses suggested that
5

NA | take the resident to bed. NA | took R2 to his room and cleaned him up because he
was soiled, and then wheeled him back to the nurses’ station. At that time, it was noted
that R2 had red areas on his wrists and he was upset with tears in his eyes. On the
morning of April 10, 2005, the morning shift nurse reported that R2 had bruises on his
wrists. CMS Ex. 1, at 1.

When interviewed by the state surveyor on August 4, 2005, Nurse 2 stated that when R2
came out of his room after being cleaned by NA 1 on the night of April 9, 2005, he was
mad. CMS Ex. 1, at 2. When she saw the red marks on R2's arm she spoke with NA 1
and he said that R2 was fighting with him. NA 1 was suspended on April 11, 2005, and
terminated on April 14, 2005.

Discussion

42 C.F.R. § 483.13(b) provides that a long-term care facility must ensure that each
resident be free from verbal, sexual, physical and mental abuse, corporal punishment, and
involuntary seclusion. Abuse is defined as the willful infliction of injury, unreasonable
confinement, intimidation, or punishment with resulting physical harm, pain or mental
anguish. 42 C.F.R. § 488.301.

CMS contends that “physical abuse” (which includes controlling behavior through
corporal punishment), is the most applicable of the regulatory prohibitions to the situation
in the present case. Specifically, CMS posits that NA 1 reacted to the resident’s
combative behavior by forcibly restraining him, as opposed to speaking to him calmly and
gently in order to remove the restraint belt from his grasp. CMS Br. at xii.

Petitioner, on the other hand, maintains that CMS does not appear to allege that NA | hit,
slapped, pinched, kicked, or inflicted “Corporal punishment” on the resident, and the
evidence would not seem to support any finding of fact to that effect. Petitioner further
alleges that witnesses for both parties agreed that the incident involving R2 does not fall
into any of the categories of “physical abuse” (mentioned above) described in the State
Operations Manual (SOM) nor in Petitioner’s policy. P. Br at 14.

I find no basis or support for Petitioner’s arguments. When Petitioner alleges that
physical abuse did not occur in this case because there was no hitting, slapping, pinching,
or kicking, it overlooks the mandate of the applicable federal regulations. It is clear from
the federal regulation cited above that “abuse” is not limited to physical abuse such as
willful hitting, slapping, pinching, or kicking. Therefore, intentional actions such as
forceful grabbing and rough handling of a resident also constitute abuse. Moreover,
Petitioner misconstrues its own abuse policy. The facility policy defines abuse as the
6

“willful infraction (sic) of injury, unreasonable confinement, intimidation or punishment
that results in physical harm, pain or mental anguish.” The policy adds that physical
abuse includes hitting, slapping, pinching and kicking. It also includes controlling
behavior through corporal punishment. P. Ex. 7, at 7. Clearly, the actions by NA 1 to R2
would constitute “abuse” under any reading of the facility’s policy.

For my determination as to whether the forceful or rough handling of R2 as alleged by
CMS constitutes abuse under 42 C.F.R. § 483.13(b), I rely largely on the statement of
Marilyn Marino (Nurse 1), given to the Director of Nursing (DON), Roxanne Thompson,
on April 11, 2005. I find that contemporaneous statement to be the most complete and
reliable account concerning the incident with R2 on the night of April 9, 2005. See also
42 C.F.R. § 483.13(c)(1)(i); CMS Ex. 3, at 5-7. The statement was provided to the DON
in the form of nurses notes. Nurse Marino begins her account by stating that while she
and two other staff members (Nurse 2 and NA 1) were at the nurses station they observed
R2 nearby in his wheelchair, as he was in the process of removing his soft waist restraint.
Immediately, the three approached R2 to prevent him from falling or trying to get up out
of his wheelchair. NA 1 grabbed R2's right arm while he attempted to get the restraint out
of his left hand. R2 pulled away, but NA 1 grabbed him again. At that point, Nurse 1,
Marilyn Marino, who was on the left side of the wheelchair instructed NA 1 to “just let
go” of the resident while she persuaded him to give up the belt. R2 let her have the belt
when she assured him that it was his belt, but she would hold it for him. The two female
nurses proceeded to reapply the belt, and NA 1 grabbed both of the resident’s arms in a
manner described by Nurse Marino as “roughly.” After the two female nurses placed the
soft waist restraint around the resident’s waist and behind the wheelchair, NA 1 released
his hold and fastened the restraint. However, R2 reached around with his right hand and
unfastened the belt. When NA 1 attempted to grab R2's arms again, R2 started swinging
at him. NA 1 was able to grab both of the resident’s wrists and would not let go. At that
moment, Nurse Marino suggested that maybe R2 needed to go to bed because it was past
midnight. NA 1 angrily responded: “he’s not going to bed,” and proceeded to wheel R2
to his room on his own initiative. NA 1 re-emerged from R2's room about 10 minutes
later after having cleaned R2 up and put his gown on, and placed R2 by the nurses’
station. Nurse Marino noted the resident to be upset, eyes watery, and his lips quivering.
He looked at her, raised his arms and pointed to his wrist with his left hand. Marilyn
noticed redness and edema on the right wrist that stretched for approximately 3 to 4
inches up the forearm. His hand was also red and scratches were visible on the forearm.
After showing Ms. Marino the marks on his upper extremities, R2 uttered the following
words: “you broke my heart!” Nurse Marino did not notice marks on the resident’s upper
extremities nor did she describe him as shaken up until he re-emerged from his room with
NA 1. | infer that the substance of R2’s statements indicate he felt betrayed by Nurse
Marino because she allowed NA | to take him to his room alone and unobserved by
7

others. The angry demeanor and rough handling observed by Nurse Marino is sufficient
to establish a prima facie case that the facility failed to provide R2 an environment that
was free from abuse.

The DON testified that she obtained a more complete explanation of the incident from
Nurse Marino by telephone several months after the incident occurred and, in that
explanation, Nurse Marino indicated that she did not believe that R2 had been the victim
of abuse.’ Tr. at 111. Other than the DON’s brief testimony, there is no record or
evidence of this much later alleged conversation. Additionally, Nurse Marino was not
presented as a witness during the hearing, nor does the record reflect any attempt to
summon her as a witness. Consequently, | find that the statement made by Nurse Marino
contemporaneously with the incident (see CMS Ex. 3, at 5-7, Nurse Marino’s written
nurses notes dated April 9, 2005) is the most complete and reliable account of the
incident. It is also worthy of note that the other staff member (Nurse 2) that could shed
additional light as to what occurred on the night of April 9, 2005, with respect to R2, also
was not called as a witness. I conclude, therefore, that the April 9, 2005, report of the
incident submitted to the DON on the afternoon of April 11, 2005, remains unrebutted
and unequivocally demonstrates that R2 was denied an environment free from abuse.

Clearly, the conduct displayed by NA 1 constitutes “abuse” as defined in 42 C.F.R

§ 488.301 and violates 42 C.F.R. § 483.13(b). The angry manner in which this staff
member handled R2 was not accidental nor necessary in providing care and services to
the resident. In fact, it was intentional and retaliatory. Nurse Marino described the
incident unequivocally as abuse. Her statement surrounding the incident does not lend
itself to any other reasonable interpretation. Roughly handling in anger an 87 year-old,
fragile resident cannot be considered a mere inappropriate care technique, as suggested by
Petitioner. P. Br. at 7, 16. R2 was not merely humiliated; he was physically and
emotionally harmed. As was noted earlier, when NA 1 emerged from R2’s room,
wheeling R2 back to the nurses station, the resident was quivering, teary-eyed, and
exhibiting scratches, redness and edema on his hands and arms. What the resident felt
after being put in his place by NA 1, he himself best summed up when he exploded with
resonating emotion: “you broke my heart!” Moreover, the DON and the administrator
acted correctly at the time of the incident by suspending and eventually dismissing the

> The Administrator and the DON acted correctly in suspending and eventually
dismissing NA 1 for having handled R2 roughly and in anger as a response to the
resident’s combativeness. I am puzzled by the DON’s as well as the Administrator’s
change of heart, however, during this proceeding.
8

perpetrator of the abuse. That action was based on the facility’s finding and recognition
that abuse of a resident took place. P. Ex. 14. I cannot give credence to the version of the
event devised by Petitioner for hearing purposes over its own contemporaneous account
provided when litigation was not contemplated. Consequently, it is my finding that CMS
has established a prima facie case that Petitioner was in violation of Tag F223. Petitioner
has not overcome that showing by a preponderance of the evidence.

C. Staff treatment of residents (Tag F225) CMS established that the facility
failed to report all violations involving mistreatment, neglect or abuse. 42
CF.R. § 483.13(c).

Section 483.13 (c)(2) of 42 C.F.R. provides that all alleged violations of mistreatment,
neglect or abuse must be immediately reported to the facility administrator and to other
officials in accordance with State law, including the State survey and certification agency.

Section 483.13 (c)(4) of 42 C.F.R. provides that the results of all investigations into
allegations of abuse must be reported to the Administrator or his designated
representative and to other officials in accordance with State law (including to the State

survey and certification agency) within 5 working days of the incident, and if the alleged
violation is verified, appropriate corrective action must be taken.

Based on record review and staff interviews, the surveyors found that the facility failed to
immediately notify the facility administrator of an abuse allegation for | of 5 residents.
(Resident 2 (R2)); the facility failed to report 2 of 3 staff-to-resident abuse allegations to
the State Agency within 24 hours of discovery; and failed to report the investigative
findings in 2 of 5 staff-to-resident abuse allegations to the State Agency within 5
workings days of discovery (Residents 1 (R1) and 3 (R3)). CMS Ex. 1, at 2-5

Discussion
R2

Petitioner acknowledges that there is a regulatory requirement for facility staff to
immediately report to the administrator and to other officials in accordance with state law,
including the State survey and certification agency, all alleged violations of mistreatment,
neglect or abuse of a long term care resident. Petitioner also asserts that its abuse
reporting policy provides that “any associate (employee) who suspects that a resident has
been abused must immediately notify the executive director (administrator) and
appropriate state agencies in accordance with law.” P. Br. at 21-23.
9

Petitioner maintains that the premise and plain language of the regulation is that someone
must actually believe, and articulate, that abuse has occurred, as the trigger for
investigation and reporting obligations.

The Departmental Appeals Board (Board) has held that “the salient question is not
whether any abuse in fact occurred or whether [a facility] had reasonable cause to believe
that any abuse occurred, but whether there was an allegation that facility staff had abused
a resident.” Cedar View Good Samaritan, DAB No. 1897, at 11 (2003), citing 56 Fed.
Reg.48843-48844 (Sept. 26, 1991).

I have already determined that based on a staff report describing an allegation of abuse in
great detail, the facility DON and the Executive Director found that the abuse was
substantiated, and in keeping with its policy, the facility suspended and eventually
dismissed the perpetrator of the abuse.

Nurse Marino, who observed the abusive conduct, failed to immediately notify the
Executive Director or the DON. The incident here under scrutiny unequivocally involves
an allegation of abuse that required immediate reporting according to the regulation as
well as the facility policy. P. Ex. 11, at 1. A review of the pertinent facts reveals this
clearly. Nurse Marino was aware that R2 would be responsive if approached in a calm
way. That is why she instructed NA | to let go of the resident when she noticed that he
was grabbing his “arms roughly.” In fact, when she told the resident: “I know that’s your
belt, I just want to hold it for you,” R2 gave her the belt. CMS Ex. 3, at 5. The DON,
who was familiar with the resident, confirmed the nurse’s action at that moment to be the
proper approach. That is evident from the surveyor’s interview of the DON on July 27,
2005. At that time, in reference to R2, she stated: “if you approach him in a calm way, he
is nice.” CMS Ex. 1, at 3. “If you are aggressive with him, he is combative.” Jd. It is,
thus, surprising that when the resident removed the belt again and held on to it, the nurse
allowed NA 1 to grab the resident’s wrists again (and would not let go), instead of
making use of the approach known to her to be effective with R2. Nonetheless, to defuse
the situation, Nurse Marino suggested that maybe the resident needed to go to bed,
because it was past midnight. To her suggestion, NA 1 retorted angrily, “he’s not going
to bed,” and pushed R2's chair into his room. The question remains, if NA | was not
taking the resident to bed, what was he going to do with him? It was noted that R2 was
soiled, but the response did not seem to address the need to be cleaned up. No doubt, NA
1 was angry’ because R2 had taken swings at him. Even in the presence of two nurses, he
treated R2 roughly and did not conceal his anger. Yet, he was allowed to be alone with
the resident when he told the nurses that he was taking R2 to his room, but not to put him
to bed. It is worthy of note here that NA 1 indicated in his statement that when he took
R2 back to his room, the resident was still combative, and struck him several times. CMS

10

Ex. 3, at 8. It takes no stretch of the imagination to infer that this made NA | even
angrier. That may explain Nurse Marino’s description of R2 when he emerged from his
room in the company of the NA 1. With quivering lips and watery eyes, he exhibited his
bruises, and scratches. She examined his arm and he complained of pain when she
touched the radial aspect. CMS Ex. 3, at 6.

Ms. Marino’s description of R2 exhibiting the visible result of the rough manner in which
he was handled, telling the nurse that it was “bad,” and adding, that his heart had been
broken, leaves no room for doubt that she was making an allegation of abuse that required
immediate reporting. Moreover, there were two other staff members involved who also
should have known that facility policy required that they report the incident immediately.
However, no report was made and the perpetrator of the abuse was allowed to continue
working and caring for the resident.

The following day, R2 re-emphasized his complaint of ill treatment by telling Nurse
Marino, in reference to NA 1 that he was a “bad, bad man.” Here, Nurse Marino passed
up another opportunity to report the allegation of abuse. And nothing was done; NA 1
was allowed to continue caring for residents. The DON asserted that had she been
informed of the situation when it occurred, she would have sent NA 1 home. CMS Ex. 1,
at 3. However, what is obvious is that staff members who should have been aware of a
duty to report, failed to do so.

Nurse Marino began to draft the report of abuse after the incident occurred and completed
it on Sunday April 10, 2005. However, she did not deliver it to the DON until April 11,
2005 at 3:00 p.m, when she slipped it under the DON’s door. She was aware that an
abuse upon a resident had occurred in her presence, but failed to provide the immediate
notification to the facility administrator, as required by the regulations and the facility
policy. As has been previously stated, when the DON and the Executive Director’ read
her account they concluded that abuse had been substantiated. Although notification to
State authorities may not have been possible on the weekend, nothing prevented reporting
the matter to the Executive Director who is available any day of the week for such
matters.

* Executive Director is the title employed by the facility to refer to its
administrator.
11

R1 and R3

According to the SOD, a facility grievance dated March 22, 2005, noted that a family
member of RIcalled to report that another resident reported that staff had been verbally
abusive to R1. The report indicated that a nursing assistant (NA 3) told the resident: “she
better not turn the call light back on” again because they were short and there were only
two of them. CMS Ex 1, at 17.

Surveyor Patrick Campbell testified that in the case of R1, although the facility was
required to submit to the State Agency a report of the investigation within five business
days, a report was not submitted until two months had elapsed. Tr. at 46, 47. A review of
the facility records revealed an undated 24-hour report of an allegation of verbal abuse
against R 3. Although the incident was noted to occur on April 8, 2005, the report of
investigation was not submitted to the State Agency until April 19, 2005, well over 5
business days after the occurrence of the incident. CMS Ex. 1, at 4. It was also noted
that the alleged perpetrator of the abuse (NA 2) was terminated by the facility on April
14, 2005.

Petitioner’s defense for the failure to timely file a report of the investigation of these
allegations of abuse is that they were later determined to be unsubstantiated. However,
as I have stated earlier, consistent with the Board’s clear expression on the matter, what
triggers the reporting requirement is not whether an allegation of abuse is substantiated,
but whether such an allegation exists. With respect to R1 and R3, Petitioner failed to
provide the results of the investigation regarding allegations of abuse to the State survey
and certification agency within five working days of the incident as required by 42 C.F.R.
§ 483.13(c)(4).

In view of the foregoing, I find that CMS has established a prima facie case that the
facility staff failed to notify its administrator of the existence of an allegation of abuse
regarding R2. CMS has also established that the facility failed to submit a report to the
State survey and certification agency of the results of the investigations into allegations of
abuse as to R1 and R3 within 5 working days of the incident. Petitioner has not overcome
CMS’s showing by a preponderance of the evidence.

* In both circumstances here, there is no evidence that the DON “immediately”
notified the facility administrator of the incidents in addition to the failure to timely report
the incidents to the State agency.
12

D. Staff Treatment of Residents (Tag F226) CMS established that the
facility failed to develop and implement policies and procedures that
prohibit mistreatment, neglect, and abuse of residents and
misappropriation of resident property. 42 C.F.R. § 483.13(c).

Based on record review and staff interviews, the surveyors found that the facility
failed to follow the facility abuse policies and procedures related to immediately
reporting to the administrator and providing protection for 1 of 1 resident who was
physically abused (R2) and it also failed to follow its abuse policies and procedures
related to investigating and reporting to the State Agency abuse allegations for 2 of
5 residents (R1 and R3). CMS Ex. 1, at 19-30.

Every facility is required to develop and implement policies and procedures that
prohibit mistreatment, neglect, and abuse of residents. But the facts of this case
show that the facility staff from the Administrator and DON down to the nurses and
nursing assistants were aware of particular events and allegations of abuse but
failed to immediately report them or to take appropriate action as required by the
policies. In previous cases, it has been determined that whether actual abuse
occurred is not necessarily relevant to citations under Tag 225. Rather under this
citation, an allegation of abuse is enough to require immediate action by all staff
under the facility’s policies and a failure to do so can illustrate a systemic problem
in the facility. West Point Community Living Center, DAB CR1473, at 7 (2006);
Cedar View Good Samaritan, DAB CR997 (2003); see also Beverly Health and
Rehabilitation Center - Williamsburg, DAB No. 1748 (2000). The preponderance
of the evidence here indicates a failure by Petitioner’s staff on every level to
recognize potentially abusive situations and allegations of abuse, and to
appropriately and immediately investigate and report them as required to the
Executive Director of the facility. CMS Ex. 1, at 6-7.

The discussion as to Tag F225, above, serves as a basis for establishing that
Petitioner failed to implement its abuse policies by failing to immediately report
alleged abuse to the facility administrator and to other officials in accordance with
State law, including the State survey and certification agency and by failing to
provide the State survey and certification agency the results of all investigations
into allegations of abuse in two instances, within five business days of the incident,
as required by 42 C.F.R. § 483.13 (c)(2). There is certainly no question that Nurse
1 and Nurse 2 should have recognized NA 1's actions towards R2 as abuse. Yet
they failed to immediately report the incident. As for the two incidents of suspected
verbal abuse, while a grievance was filed on March 22, 2005
13

with respect to suspected abuse towards R1, no action was taken at all by the
facility until April 8" and the 5-day report was not sent to the State until May 24,
2005. In the situation with R3, the incident occurred on April 8, 2005 which was
promptly reported to the Assistant DON. The DON indicates, however, that she
was made aware of the incident on April 11, 2005, but the 5-day report to the State
was not filed until April 19, 2005. Jd. Petitioner’s lax implementation of the
facility policy for investigating and reporting abuse indicates a wider systemic
problem in the facility. Moreover, it shows a real lack of understanding as to the
reasons for not only developing policies but also the requirement for making sure
those policies are actually implemented. The failure to actually implement facility
policy against abuse and neglect leaves the residents at real risk for serious harm.
See West Point Community Living Center, DAB CR1473, at 8 (2006). However,
the “best policies and procedures are worthless if they are not being implemented
and understood by each and every employee.” /d.

Therefore, I find that Petitioner has not overcome CMS’s prima facie showing of a
violation of the deficiency under this Tag by a preponderance of the evidence.

E. CMS’s finding of immediate jeopardy was not clearly erroneous.

I have already found that CMS has established a prima facie case that Petitioner
was not in substantial compliance with federal requirements for skilled nursing
facilities participating in the Medicare/Medicaid programs regarding Tag F-223,
255, and 226. Petitioner has not overcome CMS’s showing by a preponderance of
the evidence. Furthermore, I sustain CMS’s finding that Petitioner’s level of non-
compliance for each of these three deficiencies constitutes immediate jeopardy.

The regulations define immediate jeopardy as a situation in which a provider’s non-
compliance with one or more requirements of participation has caused, or is likely
to cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R.

§ 488.301. A finding of immediate jeopardy does not require “a finding of present
harm, but also encompasses a situation that is [likely to cause] harm.” Britthaven,
DAB No. CR1259 (quoting Hermina Traeye Memorial Nursing Home, DAB No.
1810 (2002)). CMS’s determination of immediate jeopardy must be upheld unless
it is clearly erroneous. 42 C.F.R. § 498.60(c)(2). The burden rests on the provider
to prove that CMS’s determination of immediate jeopardy is clearly erroneous.
Petitioner has not met that burden here.
14

Petitioner contends that the immediate jeopardy is not warranted because there is no
reliable evidence to support the conclusion that its actions caused or were likely to
cause serious harm to one or more of its residents. P. Br. at 30. As I have
discussed earlier, Petitioner caused actual physical and emotional harm to one of its
residents (R2). When that occurred, nothing was done to immediately protect the
harmed resident as well as other residents from similar harmful conduct. The abuse
was so unequivocal that the DON stated to the surveyor that had she been notified
immediately, she would have sent the perpetrator home at that very moment. CMS
Ex. 1, at 3. Moreover, when she received the report of the allegation of abuse, the
wrongdoer was immediately suspended and eventually terminated. Unfortunately,
he was allowed to tend to R2 and other residents after the occurrence of the abuse
incident. From a careful reading of Nurse Marino’s report of abuse (CMS Ex. 3), it
is clear that the nurses knew how to care for R2 in a calm and dignified manner, but
allowed NA 1 to insert himself in the situation.’ In the first instance he was
allowed to unnecessarily intervene when the nurses were taking the lap belt from
the resident and secondly, when he was allowed to determine what would be done
with the resident after the belt was taken from him. Petitioner knew that R2 was
responsive to care when treated calmly and spoken to gently, and that he would
become combative when treated roughly. Furthermore, Petitioner should have
foreseen that serious harm could come to R2, who was frail and elderly, if
forcefully subdued.

Also, a requirement for a facility to develop and implement a policy against abuse
and neglect it not a mere formality. The requirement has multiple purposes: it
provides specific notice to facility employees regarding what is considered “abuse
and neglect” and that “abuse and neglect” will not be tolerated; it informs and
directs all employees of their obligation to report any suspicion of abuse that they
might witness or become aware of; it directs the facility to initially and continually
train all employees to recognize abuse and how to take appropriate action to report
it; it protects residents from potential harm, especially because they may not be able
to protect themselves from abuse and to ensure that residents feel safe and secure.
Petitioner’s failure to implement its policies against abuse as evidenced by the
incidents with R1, R2, and R3 also caused or was likely to cause serious injury or
harm to these residents.

° Contrary to Petitioner’s assertion. P. Br. at 30. When the resident was observed
to be removing the soft waist restraint, Charles immediately joined the two other nurses
and began to subdue the resident without being asked to intervene in order to overpower a
frail, 87 year old resident. CMS Ex. 3, at 5.
15

F. The amount of the penalty imposed by CMS is unreasonable.

Petitioner contends that CMS failed to specifically provide any basis for a finding
of immediate jeopardy that justifies the imposition of a $3,050 penalty from April
9, 2005 through April 14, 2005. I agree, as more amply discussed below.

[have already addressed the basis for a finding of noncompliance and sustained
CMS’s finding that Petitioner’s level of noncompliance for each of the three
deficiencies, Tag F223, Tag F225, and Tag F226, constituted immediate jeopardy.
Although the state survey agency recommended that the CMP at the immediate
jeopardy level be imposed until August 4, 2005, based on the facility’s submission
of a credible allegation of compliance, CMS determined to assess the facility at the
immediate jeopardy level only until April 14, 2005. Tr. at 68-71; CMS Ex. 1, at 1;
CMS Ex. 6, at 2. Petitioner maintains that CMS’s evidence is conspicuously bare
of any rationale as to why “immediate jeopardy began, and, [more] notably, when it
ended.” Petitioner adds that even if I were to find that it committed some
“immediate jeopardy,” on April 9, 2005, there is nothing in the record to show that
severe noncompliance was abated six days later. P. Br. at 30.

I conclude that Petitioner has not met its burden of showing that CMS’s
determinations of immediate jeopardy were “clearly erroneous” for the period April
9, 2005 through April 11, 2005. The imposition of a CMP of $3050 per day for this
period, imposed for noncompliance at the immediate jeopardy level, is the
minimum permissible monetary penalty, and is therefore reasonable. I find that the
failure of Petitioner to implement its procedures and policies against abuse
demonstrates a systemic problem within the facility. The Board has stated that the
burden is on the facility to prove.that it has resumed complying with program
requirements, not on CMS to prove that the deficiencies continued to exist after
they were discovered. Hermina Traeye Memorial Nursing Home, DAB No. 1810
(2002).

I find, however, that the record shows that immediate jeopardy was abated on April
12, 2005, not on April 14, 2005. Therefore, | conclude that CMS’s determination
of immediate jeopardy was clearly erroneous for the period April 12, 2005 through
April 14, 2005.
16

A close look at the evidence of record shows that the incident relied upon by CMS
to conclude that abatement of the immediate jeopardy was the termination of NA 1
(Charles Robinson) on April 14, 2005. It is unequivocal that CMS reasoned that it
was as of that date that the abuser had no access to R2 as well as other residents
with whom he may come in contact in the process of providing care. I note,
however, that NA 1 was suspended and removed from the facility premises on
April 12, 2005, pending the outcome of the investigation that resulted in his
termination on April 14. P. Ex. 15, at 1; P. Ex. 14, at 3. Thus, in accordance with
CMS’s reasoning, the residents were no longer exposed to abuse by NA 1 as of
April 12, 2005, when he was suspended, and not as of April 14, when he was
terminated. That is, the residents were no less protected on April 12, when NA 1
was suspended than they were on April 14, when he was terminated. Abatement of
the immediate jeopardy, therefore, took place on April 12. Consequently, it was
clearly erroneous to extend the immediate jeopardy period until April 14, 2005.

It is true that other conditions in the facility still created a status of non compliance.
However, CMS deemed those lingering violations to be at the less than immediate
jeopardy level. It is my finding, therefore, that the period of non compliance at the
less than immediate jeopardy level commenced on April 12, 2005, and ended on
August 4, 2005.

Petitioner also maintains that CMS has offered no evidence regarding the regulatory
factors to be considered in establishing the amount of the CMP (42 C.F.R.

§§ 488.404 and 488.438(f) and that such penalty would not have the effect of
deterring deficient conduct on the part of the facility. Petitioner also asserts that
CMS has offered no rationale for its choice of remedies. P. Br. at 32. Petitioner’s
arguments have no support in the law or regulations.

The regulations clearly establish that “/a] facility may not appeal the choice of
remedy, including the factors considered by CMS or the State in selecting the
remedy, specified in § 488.404.” 42 C.F.R. § 488.408(g)(2). Furthermore, the onus
is upon Petitioner to offer evidence concerning the reasonableness of the CMP even
in the absence of such evidence in CMS’s presentation of its prima facie case.
Coquina Center, at 32-33, DAB 1860 (2002). Petitioner makes a broad, but
unsubstantiated challenge, to the CMP imposed by CMS. Thus, it is my finding
that the CMP in this case is reasonable.
17

As stated above, there is no discussion needed regarding the CMP of $3,050 for the
immediate jeopardy violation, inasmuch as that is the lowest permissible penalty for
a deficiency at that level of scope and severity. Concerning the CMP of $ 1,000 per
day for the deficiencies that are less than immediate jeopardy, I note that such
penalty is at the lower end of the maximum permissible amount of $3,000. I find
that the penalty is appropriate and within a reasonable range, given the
circumstances of this case, where Petitioner’s systemic failure to implement its
policies and procedures against abuse placed its residents’ health and safety at risk.
I further find that it served the purpose of driving the facility back into compliance.
Had the facility taken no action at all, the per day penalty would have continued for
a greater number of days, resulting in a higher dollar amount.

CMS correctly determined that the facility returned to substantial compliance after
all staff, including the DON and Nurse 2, were inserviced on August 3 and 4, 2005.
Additionally, all grievances from January 1, 2005 through August 4, 2005, were
reviewed to verify that all allegations of abuse had been reported and investigated.
Petitioner has not satisfied its burden of showing that it eliminated the non-
compliance on any date prior to August 4, 2005. Thus, a per day CMP of $ 1,000
for the less than immediate jeopardy deficiencies is appropriate through August 4,
2005.

V. Conclusion

Based on the testimony offered at the hearing, the documentary evidence, the
arguments of the parties, and the applicable law and regulations, I find that
Petitioner was not in substantial compliance for the period of April 9 through
August 4, 2005. [also find that Petitioner was not in compliance at the immediate
jeopardy level from April 9, 2005 through April 11, 2005, and that the imposition
of a $ 3,050 per day CMP for the period of the immediate jeopardy is reasonable.
I also sustain the CMP of $1,000 per day for the period of April 12, 2005, until
August 4, 2005.

/s/

Jose A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Hugo Health and Rehabilitation Center )
(CCN: 37-5492), ) Date: July 18, 2007
)
Petitioner, )
)
“Vv. ) Docket No. C-06-492

) Decision No. CR 1625
Centers for Medicare & Medicaid )
Services. )
)

DECISION

For reasons set forth below, the Centers for Medicare & Medicaid Services’s (CMS)
Motion to Dismiss the request for hearing filed by Petitioner, Hugo Health and
Rehabilitation Center, is granted.

I. Background

Hugo Health and Rehabilitation Center (Petitioner), a skilled nursing facility (SNF)
located in Hugo, Oklahoma, was certified as a Medicare provider in April 1995. CMS
Ex. 1. Petitioner’s Medicare provider agreement was involuntarily terminated on
December 1, 2000, by CMS due to Petitioner’s failure to maintain substantial compliance
with Medicare participation requirements for skilled nursing facilities. CMS Ex. 2.
Petitioner was unsuccessful in its appeal of CMS’s decision to terminate its provider
agreement. See Homestead of Hugo, DAB CR819 (2001).

Petitioner sought re-entry into the Medicare program and was dissatisfied with the re-
certification date established by CMS. Petitioner now appeals the re-certification date of
November 17, 2005. Petitioner’s request for hearing, dated June 5, 2006, was docketed
as C-06-492 and assigned to me for hearing and decision. In its request for hearing,
Petitioner asserts that it was entitled to reinstatement at the close of the second reasonable
2

assurance survey, April 12, 2001, rather than the date when CMS found compliance,
November 17, 2005. Additionally, Petitioner challenges the effect of certain survey
findings that had been cited by CMS as its rational for establishing an effective date later
than April 12, 2002, and CMS’s denial of an opportunity to present oral arguments and
briefs with respect to Petitioner’s objection to the initial determination at the time of
reconsideration.

Pursuant to my Order of June 20, 2006, Petitioner filed a Report of Readiness and CMS
filed its Notice of Issues. Following review of the written submissions, I directed the
parties to brief the issue outlined by CMS in connection with matters appealable pursuant
to 42 C.F.R. Part 498 which governs appeal procedures for determinations that affect
Medicare program participation.

On September 19, 2006, CMS filed its Motion to Dismiss and its Brief in Support of the
Motion accompanied by five exhibits (Exs.) marked CMS Ex. 1- CMS Ex. 5. On October
23, 2006, Petitioner filed a response brief accompanied by six exhibits. | have marked
these exhibits as P. Ex. 1 - P. Ex. 6 to conform to Civil Remedies Division procedures.
Both parties filed reply briefs. CMS’s reply brief was accompanied by two additional
exhibits marked CMS Ex. 1 and CMS Ex. 2, which I have remarked as CMS Ex. 6 and
CMS Ex. 7.

Il. Issue

The sole issue before me is whether Petitioner is entitled to a hearing to challenge CMS’s
decision to reinstate it as a Medicare provider effective November 17, 2005.

IL. Relevant Authority

Under section 1866(b)(2) of the Social Security Act (Act) and 42 C.F.R. § 489.53(a)(3) of
the regulations, the Secretary of Health and Human Services (Secretary) may terminate an
agreement with any skilled nursing facility if CMS finds that the provider no longer meets
the appropriate conditions of participation or requirements. Section 1866(c)(1) of the Act
provides that: “[w]here the Secretary has terminated or has refused to renew an
agreement under this title with a provider of services, such provider may not file another
agreement under this title unless the Secretary finds that the reason for the termination or
non-renewal has been removed and that there is reasonable assurance that it will not
recur.”
3

When CMS terminates a provider agreement pursuant to section 489.53 of the
regulations, a new agreement with that provider will not be accepted unless CMS finds:

(a) That the reason for termination of the previous agreement has been removed
and there is reasonable assurance that it will not recur; and

(b) That the provider has fulfilled, or has made satisfactory arrangements to fulfill,
all of the statutory and regulatory responsibilities of its previous agreement.

42 C.F.R. § 489.57.

Therefore, before a provider can be reinstated in the Medicare program following an
involuntary termination of its provider agreement, it must apply for re-entry and must
satisfy CMS that the reason or reasons for termination of the previous agreement have
been removed, and that there is reasonable assurance that the reason or reasons would not
recur. Act § 1866(c)(1); 42 C.F.R. § 489.57. Consequently, a provider attempting to re-
enter the Medicare program has to establish its ability to maintain substantial compliance
with Medicare requirements by successfully completing a reasonable assurance process.

The reasonable assurance process requires the provider seeking re-entry to undergo two
surveys, one at the beginning and one at the end of a specified reasonable assurance
period. See State Operations Manual § 7321 B. Reinstatement is granted only if the
results of these surveys show that the facility was in substantial compliance with the
nursing home requirements at the beginning and the end of the reasonable assurance
period. /d.

There is no statutory or regulatory reasonable assurance period imposed by states, thus a
provider can seek immediate re-entry as a Medicaid-only facility following acceptable
findings from the state survey. State Operations Manual § 7321 B. CMS does have
discretion to accept the Medicaid re-entry survey as the initial reasonable assurance
survey; however, if the facility is not found to be in substantial compliance during either
reasonable assurance survey, the re-entry is denied and the provider’s Medicaid provider
agreement is subject to termination. /d.

The regulations at 42 C.F.R. Part 498 implement the appeals provisions of the Act that are
relevant in this case. Section 498.5 of the regulations addresses appeal rights of providers
and prospective providers.
IV. Discussion

I make findings of fact and conclusions of law to support my decision in this case. I set
forth each finding below, in bold, as a separate heading.

A. CMS’s determination to re-certify Petitioner as of the November 17, 2005
survey date was not an initial determination subject to my review.

It is undisputed that on December 1, 2000, Petitioner’s provider agreement to participate
in the Medicare program was terminated. CMS Ex. 2; CMS Brief (Br.) at 2; P. Br. at 3.
Thereafter, Petitioner appealed the initial determination to the Departmental Appeals
Board (DAB) and an unfavorable decision was rendered in Homestead of Hugo, DAB
CR819 (2001).

On December 15, 2000, Petitioner applied for reinstatement. Although Petitioner avers
that at the time it thought it was applying for re-entry into the Medicare and Medicaid
programs, it is clear from the record before me that Petitioner applied for re-entry into the
Medicaid program only. CMS Ex. 7.

Pursuant to a December 21, 2000 Medicaid re-certification survey, Petitioner was
readmitted into the Medicaid program as a provider. CMS Ex. 7. On February 16, 2001,
Petitioner underwent a Medicaid complaint investigation survey which resulted in a
finding of immediate jeopardy. CMS Ex. 3. On April 19, 2001, Petitioner entered into a
settlement agreement with the Oklahoma State Health Department (Department) agreeing
that the Department would not recommend to CMS an extension of a period of reasonable
assurance. /d. at 2-3.

On June 29, 2005, Petitioner underwent an annual Medicaid recertification survey which
found Petitioner not in substantial compliance with the requirements for skilled nursing
home facilities at 42 C.F.R. Part 483. CMS Ex. 4. Petitioner submitted a plan of
correction to CMS, after which a review was conducted and CMS then accepted the plan
as credible evidence of corrective action. /d. CMS determined that Petitioner had
achieved substantial compliance with applicable program requirements as of August 1,
2005, thus satisfying the first part of the reasonable assurance period. CMS Br. at 3, n.3.
On November 17, 2005, Petitioner underwent another survey where it was found to be in
5

substantial compliance with the requirements at 42 C.F.R. Part 483. CMS Ex. 5.
According to CMS, the reasonable assurance period was therefore satisfied and under the
governing regulations of 42 C.F.R. § 489.13, the effective date of Petitioner’s
reinstatement was November 17, 2005. P. Ex. 1.

Petitioner disagrees and asserts that it should have been found to be in substantial
compliance as of the December 21, 2000 (the first Medicaid survey) and again as of April
12, 2001 (the second Medicaid survey). Petitioner states that since no plan of correction
was needed at that time, CMS was not faced with an issue of using its discretion to
determine if a reasonable assurance period had been met. P. Br. at 2. Therefore,
according to Petitioner, CMS’s decision as to the effective date of its reinstatement into
the Medicare program was an “initial determination.”

Petitioner further states that, acting in good faith that its provider agreement was in good
standing based on representations from its fiscal intermediary, it billed for services
provided to Medicare beneficiaries in residence during a period of time CMS is now
asserting that Petitioner’s provider status was not approved. Petitioner states that it is
now faced with CMS demanding an overpayment refund of $2,502,787.02 for payments
to Petitioner made prior to the Medicare recertification date of November 17, 2005, and it
seeks relief through this appeal. /d. at 3.

CMS argues that its decision is not an initial determination and therefore Petitioner does
not have a right to a hearing. Petitioner asserts that the determination made by CMS as to
Petitioner’s qualification to be a provider as of a particular effective date was an initial
determination subject to appeal pursuant to the regulations at 498.3(b)(1) and (15).

I find Petitioner’s assertion unavailing. The provision Petitioner relies on pertains only to
the effective date of an agreement sought by a “prospective provider” and has no
application in the case of a provider, such as Petitioner, that has been involuntarily
terminated as a Medicare provider. This point is clarified in the Notice of Proposed
Rulemaking (NPRM) which was published on October 8, 1992. The NPRM explains that
the change to the regulation at 42 C.F.R. Part 498, was intended to “specifically provide
the appeal rights specified in sections 498.3(b)(1) and (4) and 498.5(a) and (b) to
prospective providers and suppliers who are dissatisfied with a finding of noncompliance
...as of the date of the initial survey.” 57 Fed. Reg. 46363 (Oct. 8, 1992). In the matter
before me, Petitioner is not a prospective provider, rather, Petitioner is a provider that had
its provider agreement terminated, and was required to successfully undergo a reasonable
assurance period before being certified to re-enter the Medicare program.
6

The situation of the petitioner in Heartland Manor is analogous to the present case.
Heartland Manor at Carriage Town, DAB No. 1664 (1998). The appellate panel in
Heartland Manor recognized that CMS determinations concerning reasonable assurance
and readmission are considered not to be initial determinations subject to reconsideration
and appeal. The appellate panel held that CMS’s notice to petitioner, stating that
petitioner did not meet the criteria for re-entry into the Medicare program, was an
administrative action within the meaning of 42 C.F.R. § 498.3(d)(4), and was not an
initial determination under 42 C.F.R. § 498.3(b). Jd. at 24. Accordingly, the appellate
panel concluded that the petitioner in Heartland Manor was not entitled to a reconsidered
determination from CMS or a hearing before an ALJ on the action. Jd. The appellate
panel thus dismissed petitioner’s hearing request since no review rights attached to
CMS’s determination. /d.

B. Petitioner does not have a right to a hearing.

In Heartland Manor, CMS treated petitioner’s requests to participate in the Medicare
program as requests by a once terminated facility attempting to re-enter the program.
Thus, as with the present case, there arose no issue in Heartland Manor concerning
prospective providers, and Heartland Manor’s hearing request was dismissed.
Determinations regarding reasonable assurance periods related to a provider’s
reinstatement into the Medicare program are classified as administrative actions over
which CMS retains discretionary authority. Heartland Manor at Carriage Town, DAB
No. 1664, at 4 citing 498.3(d)(4). Consequently, under section 498.3(d)(4) providers
whose Medicare provider agreements have been terminated for failing to comply with the
applicable participation requirements have no right to challenge CMS’s denial of an
application for reinstatement. Section 1866(h)(1) of the Act does not grant a provider a
right to a hearing where CMS determines that the reason for the termination has not been
removed or where CMS finds that there is no reasonable assurance that it will not recur.

Additionally, if an ALJ review of the denial of an application for reinstatement is not
permitted, clearly an ALJ lacks jurisdiction to adjudicate the sub-issue of the effective
date of reinstatement. The high level of scrutiny imposed on providers seeking re-entry is
integral to the compliance scheme envisioned by Congress when it reformed the
compliance and certification requirements for skilled nursing facilities in the late 1980s.
See House Report on the legislation H.R. Rep. No. 100-391(I), 100th Cong., Ist Sess.
(1987).
7

Accordingly, I reject Petitioner’s arguments that it is entitled to a hearing. The findings
made by CMS under section 1866(c)(1) of the Act to deny Petitioner re-entry to the
Medicare program until November 17, 2005, are not subject to review in this forum. 42
C.F.R. § 498.3(d)(4). I conclude that Petitioner has no right to a hearing to challenge the
Medicare certification effective date as set forth by CMS, or the effect of the findings that
had been cited by CMS as its rationale for establishing an effective date later than April
12, 2001. 42 C.F.R. § 498.70(b).

Petitioner states that it reasonably relied upon the representations of the fiscal
intermediary, Mutual of Omaha, that it qualified as a Medicare provider and that it then
provided care for, billed for, and received reimbursement for services it provided to
Medicare beneficiaries for several years. As a result, and to its detriment, it is now faced
with having to repay Medicare for items billed and funds received when it was an
uncertified provider with the Medicare program.

Here, Petitioner’s assertions are essentially an estoppel argument. I cannot provide
Petitioner with the relief it seeks as I do not have the authority to hear and decide claims
based on equitable estoppel as the regulations at 42 C.F.R. Part 498 limit my authority to
hearing and deciding only initial determinations. 42 C.F.R. §§ 498.3; 498.5; see also
Everett Rehabilitation and Medical Center, DAB No. 1628 (1997); Oasis Behavioral
Health Center, Inc., DAB CR1085 (2003); Lackawanna Medical Group Laboratories,
DAB CR957 (2003); Danville HealthCare Surgery Center, DAB CR892 (2002); Marion
Citrus Mental Health Center, DAB CR864 (2002); Palm Grove Convalescent Center,
DAB CR858 (2002).
V. Conclusion

For the reasons discussed above, the regulation at 42 C.F.R. § 498.3(d)(4) explicitly
establishes that CMS’s determinations concerning reasonable assurance and reinstatement
do not trigger appeal rights. Therefore, CMS’s decision to reinstate a provider following
an involuntary termination is discretionary and not subject to my review. | find that I lack
jurisdiction over Petitioner's hearing request and | therefore grant CMS’s Motion to
Dismiss pursuant to 42 C.F.R. § 498.70(b).

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Mariner Health Care of Toledo ) Date: July 16, 2007

(CCN 36-5070), )
)
Petitioner, )
)

-Vv.- ) Docket No. C-04-197

) Decision No. CR1623
Centers for Medicare & Medicaid )
Services. )
a )

DECISION

I summarily affirm the imposition of a per-instance civil money penalty (CMP) of $1,800
against Petitioner, Mariner Health Care of Toledo, by the Centers for Medicare &
Medicaid Services (CMS).

I. BACKGROUND

Petitioner is a long-term care facility located in Toledo, Ohio, participating in the federal
Medicare program as a skilled nursing facility. On November 25, 2003, the Ohio
Department of Health (state agency) completed a complaint survey of Petitioner’s facility.
The survey resulted in a citation for past noncompliance with the requirements of 42
C.F.R. § 483.13(b), Tag F 223, which provides that a resident of a facility has the right to
be free from verbal, sexual, physical, and mental abuse, at the scope and severity level of
“G” (actual harm). The state agency recommended a per-instance CMP of $1,800, which
CMS adopted by notice to Petitioner on December 13, 2003.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
February 9, 2004. On February 24, 2004, the request was docketed and assigned to me
for hearing and decision. On July 3, 2004, CMS submitted a Motion for Summary

Judgment, along with six proposed exhibits designated as CMS Ex. 1 - CMS Ex. 6. On
2

August 23, 2004, Petitioner submitted its Reply to the Motion for Summary Judgment,
along with five proposed exhibits designated as P. Ex. 1 - P. Ex. 5. On September 13,
2004, CMS submitted a Reply Brief. In the absence of any objections, I admit all of
CMS’s and Petitioner’s exhibits into the record.

II. APPLICABLE LAW

The statutory and regulatory requirements for participation by a long-term care facility
such as Petitioner are found at sections 1819 and 1919 of the Social Security Act (the
Act) and at 42 C.F.R. Part 483. Sections 1819 and 1919 of the Act vest the Secretary of
the Department of Health and Human Services, with authority to impose CMPs against a
long-term care facility for failure to comply substantially with federal participation
requirements.

Pursuant to the Act, the Secretary has delegated to CMS and the states the authority to
impose remedies against a long-term care facility that is not complying substantially with
federal participation requirements. Facilities that participate in Medicare may be
surveyed on behalf of CMS by state survey agencies in order to determine whether the
facilities are complying with federal participation requirements. 42 C.F.R. §§ 488.10-
488,28, 488.300-488.335. Pursuant to 42 C.F.R. Part 488, CMS may impose a per-
instance or per day CMP against a long-term care facility when a state survey agency
concludes that the facility is not complying substantially with federal participation
requirements. 42 C.F.R. §§ 488.406; 488.408; 488.430. The regulations in 42 C.F.R.
Part 488 also give CMS a number of other remedies that can be imposed if a facility is not
in compliance with Medicare requirements. /d.

The regulations specify that a CMP that is imposed against a facility on a per day basis
will fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The
upper range of CMP, of from $3,050 per day to $10,000 per day, is reserved for
deficiencies that constitute immediate jeopardy to a facility’s residents, and in some
circumstances, for repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1)(i), (d)(2). The
lower range of CMP, from $50 per day to $3,000 per day, is reserved for deficiencies that
do not constitute immediate jeopardy, but either cause actual harm to residents, or cause
no actual harm, but have the potential for causing more than minimal harm. 42 C.F.R.

§ 488.438(a)(1)(ii). There is only a single range of $1,000 to $10,000 for a per instance
CMP, which applies whether or not immediate jeopardy is present. 42 C.F.R. §§
488.408(d)(1)(iv); 488.438(a)(2).

The Act and regulations make a hearing before an ALJ available to a long-term facility
against whom CMS has determined to impose a CMP. Act, section 1128A(c)(2); 42
C.F.R. §§ 488.408(g); 498.3(b)(13). The hearing before an ALJ is a de novo proceeding.
3

Anesthesiologists Affiliated, et al, DAB CR65 (1990), aff'd, 941 F2d. 678 (8" Cir. 1991).
A facility has a right to appeal a “certification of noncompliance leading to an
enforcement remedy.” 42 C.F.R. § 488.408(g)(1); see also 42 C.F.R. §§ 488.330(e) and
498.3. However, the choice of remedies by CMS or the factors CMS considered when
choosing remedies are not subject to review. 42 C.F.R. § 488.408(g)(2). A facility may
only challenge the scope and severity level of noncompliance found by CMS if a
successful challenge would affect the amount of the CMP that could be collected by CMS
or impact upon the facility’s nurse aide training program. 42 C.F.R. §§ 498.3(b)(14) and
(d)(10)(i). CMS’s determination as to the level of noncompliance “must be upheld unless
it is clearly erroneous.” 42 C.F.R. § 498.60(c)(2). The Departmental Appeals Board (the
Board or DAB) has long held that the net effect of the regulations is that a provider has no
right to challenge the scope and severity level assigned to a noncompliance finding,
except in the situation where that finding was the basis for an immediate jeopardy
determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB
No. 1750 (2000). Review of a CMP by an ALJ is governed by 42 C.F.R. § 488.438(e).

III. ISSUES
The issues presented in this matter are:
1, Whether summary judgment is appropriate here;

2. Whether there is a basis for the imposition of an enforcement remedy;
and,

3. Whether the remedy imposed is reasonable.

IV. FINDINGS OF FACT AND CONCLUSIONS OF LAW

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

1. Summary judgment is appropriate under the circumstances of this
case.

Iam deciding this case on CMS’s motion for summary judgment. An ALJ may decide a
case on summary judgment, without an evidentiary hearing, if the case presents no
genuine issue of material fact. Crestview Parke Care Center v. Thompson, 373 F.3d 743,
750 (6" Cir. 2004); Livingston Care Center v. Dep't. of Health & Human Services, No.
4

03-3489, 2004 WL 1922168, at 3 (6" Cir. Aug. 24, 2004). By interpretive rule, this
tribunal has established a summary judgment procedure “akin to the summary judgment
standard contained in Federal Rule of Civil Procedure 56.” Crestview Parke Care
Center, 373 F.3d 743, 750. Under that rule, the moving party may show the absence of a
genuine factual dispute by presenting evidence so one-sided that it must prevail as a
matter of law, or by showing that the non-moving party has presented no evidence
“sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.” Livingston Care Center, No. 03-
3489, 2004 WL 1922168, at 4, citing Celotex Corp. v. Catrett, 477 U.S. 317, at 322
(1986). The nonmoving party must then act affirmatively by tendering evidence of
specific facts showing that a dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, at 586 n.11 (1986). See also Vandalia Park, DAB No. 1939 (2004);
Lebanon Nursing and Rehabilitation Center, DAB No. 1918 (2004). A mere scintilla of
supporting evidence is not sufficient. “If the evidence is merely colorable or is not
significantly probative summary judgment may be granted.” Livingston Care Center, No.
03-3489, 2004 WL 1922168, at 4, quoting Anderson v. Liberty Lobby, 477 U.S. 242, at
249-250 (1986). In deciding a summary judgment motion an ALJ may not make
credibility determinations or weigh conflicting evidence but must instead view the entire
record in the light most favorable to the non-moving party, all reasonable inferences
drawn from the evidence in that party’s favor. Innsbruck HealthCare Center, DAB No.
1948 (2004); Madison Health Care, Inc., DAB No. 1927 (2004).

In evaluating the parties’ submissions, I find that even if I construe the entire record in the
light most favorable to Petitioner, as discussed below, I would find that Petitioner was out
of substantial compliance in this instance. Moreover, Petitioner has tendered no specific
facts to support that a material fact is in dispute, and CMS has made a prima facie case
that it is otherwise entitled to judgment as a matter of law. See Carrier Mills Nursing
Home, DAB No. 1883, at 3-4 (2003). In fact, Petitioner joined in a Joint Stipulation of
Facts, dated July 23, 2004, in which it assented save for a few minor details, to the
accuracy of all the facts set forth in Statement of Deficiencies, leaving no material facts in
dispute.

2. Petitioner was not in substantial compliance with the requirements set
forth in 42 C.F.R. § 483.13(b).

A resident in a facility participating in the Medicare program has —

the right to be free from verbal, sexual, physical, and mental abuse, corporal
punishment, and involuntary seclusion.

42 CFR. § 483.13(b).
5

The statement of deficiencies (CMS Ex. 1) identified findings by the state agency of two
incidents which involved two different State Tested Nurse Aides (STNAs). The CMS
motion for summary judgment focused solely on an incident that took place on either the
night of October 20, 2003, or the early morning of October 21, 2003, in which a nurse
aide (STNA #1) employed by Petitioner allegedly struck a resident (CR #1) in the back,
resulting in bruises to the resident. On October 23, 2003, CR #1 informed another aide
that STNA #1 punched her in the back. CMS Ex. 4, at 3. The aide caring for the resident
notified Petitioner’s Administrator and Director of Nursing of the incident involving
STNA #1. /d. The Administrator began an investigation, directing the Director of Social
Services and another nurse to interview the resident. In a number of interviews, CR #1
was consistent in her account of how she was punched by STNA #1. CR #1 later
identified STNA #1 in a photo array as the person who struck her. Jd. The Administrator
immediately suspended STNA #1, who was later terminated. While the investigation was
continuing, Petitioner’s staff conducted a head-to-toe assessment of CR #1, with the
assessment revealing two bruises on the resident’s left side. P. Ex. 1, at 3.

Petitioner maintains that CMS is applying what is in effect a strict liability standard by
finding that Petitioner is liable for the acts of an employee who Petitioner had no reason
to expect would abuse residents. Petitioner insists that it immediately corrected the
problem once it was identified, and that CMS’s imposition of a CMP would have a
chilling effect on facilities who self-identity and self-report problems. Petitioner argues
that facilities will fear that the results of internal investigations will be used to punish
them for acts that they were not aware even existed. Petitioner asserts that, as
contemplated by the regulations, it identified the potential for abuse, reported the
incident, and immediately implemented corrective action to ensure that its residents were
free from abuse or neglect. Petitioner refers to Interpretive Guidelines issued by CMS to
state surveyors (P. Ex. 2) and other ALJ decisions as support for its position that a facility
should not be held responsible for an isolated act of abuse committed by one of its
employees.

Petitioner’s arguments are unavailing. This matter is not about whether Petitioner acted
expeditiously once it discovered that one of its residents had been injured allegedly at the
hands of one of its employees. That is undisputed. Nor is this matter about whether
Petitioner took corrective action. That too is undisputed. Rather, this matter is solely
about whether there is convincing evidence that one of Petitioner’s employees, acting in
the scope of her employment, abused one of Petitioner’s residents in violation of 42
C.F.R. § 483.13(b). I find that there is convincing evidence that STNA #1 abused CR #1.
6

CR #1 complained about being hit by a nurse’s aide. CR #1 was consistent in her
description of the event. CR #1 identified STNA #1 in a photo array. A physical
examination of CR #1 revealed bruises on her back. Petitioner’s own internal
investigation confirmed the event. Petitioner terminated STNA #1 as an employee. None
of these facts are disputed. I find this to be convincing evidence that the resident suffered
physical abuse.

Moreover, I do not find that CMS is applying here, as Petitioner alleges, a strict liability
standard. The plain language of 42 C.F.R. § 483.13(b) states that a resident has the right
to be free from physical abuse. This language iterates the Act’s provision at section
1819(c)(1)(A)(ii) that a resident has the “right to be free from physical or mental abuse.”
There is nothing in either the statutory or regulatory language qualifying that right.
Petitioner’s position is essentially that it should not be held responsible for the acts of its
employees. This flies in the face of explicit statutory language. Section 1819(h)(2)(B)(ii)
of the Act, which gives the Secretary of the Department of Health and Human Services
the authority to imposes CMPs, incorporates the provisions of section 1128A(a) of the
Act, which states at subpart (1), “A principal is liable for penalties . . . for the actions of
the principal’s agent acting within the scope of the agency.” Here, the nurse aide was
acting within the scope of her employment by providing resident care when the incident
involving the resident occurred. To follow Petitioner’s argument to its logical end would
mean that any aberrant behavior by an employee that physically or mentally harmed a
resident would be excusable. It is doubtful that that was the intent of Congress when it
enacted the provisions of the Act cited above.

Furthermore, decisions of the Board have consistently held that the doctrine of
respondeat superior applies to determine whether a facility is in compliance with a
Medicare requirement. See, e.g., Cherrywood Nursing and Living Center, DAB No.
1845, at 10 (2002).

Petitioner’s reliance on the ALJ decisions it has cited is misplaced, as those cases are
readily distinguishable from this matter. Petitioner refers to Life Care Center of
Hendersonville, CR542 (1998), where, according to Petitioner, the ALJ concluded that
actual harm cannot be attributed to abuse absent evidence that the injury was inflicted
willfully. Petitioner’s Reply at 10. Here the evidence demonstrates that the nurse aide
did assault the resident willfully. Petitioner also cites Life Care Center of Hendersonville
for the argument that “a facility that can demonstrate that it has done whatever is within
in its control to prevent abuse from occurring should not be cited with a violation of
Section 483.13, even if there is evidence of actual abuse.” /d. at 10-11. As CMS
correctly points out, this proposition was taken from a discussion by the ALJ fora
deficiency found under 42 C.F.R. § 483.13(c), not under 42 C.F.R. § 483.13(b) as is the
case here.
7

Similarly, Petitioner’s reference to Hermina Traeye Memorial Nursing Home, CR757
(2001), where the ALJ rejected the imposition of a strict liability standard on a facility, is
irrelevant to this matter. In Hermina Traeye, the ALJ was discussing a deficiency
assessed for accidents under 42 C.F.R. § 483.25(h), not resident abuse under 42 C.F.R.

§ 483.13(b).

Lastly, Petitioner’s reliance on Interpretive Guidelines issued by CMS and a January 13,
2000 letter from CMS’s predecessor (Health Care Financing Administration) to a private
attorney in Ohio (P. Ex. 3) is misplaced. First, the Interpretive Guidelines cited by
Petitioner (P. Ex. 2) concern 42 C.F.R.§ 483.13(c), not 483.13(b). The other Interpretive
Guidelines cited by Petitioner (P. Ex. 4) concern the quality assessment and assurance
committee a facility must have pursuant to 42 C.F.R. § 483.75(0). Petitioner asserts that
as its quality assessment and assurance procedures discovered and corrected the
underlying incident, it should not be sanctioned, in the form of a CMP, for discovering
and reporting the incident. Again, I do not find the provisions of section 483.75(0)
relevant to the facts of this matter. As to the January 13, 2000 letter, the ALJ in Greenery
Extended Care Center, CR707 (2000), explicitly rejected the argument that the letter
prevented the imposition of a CMP for resident abuse, finding that CMS’s predecessor
agency’s interpretation of the Act and 42 C.F.R. § 483.13 as mandating the imposition of
a CMP was reasonable and consistent with the anti-abuse provisions of the Act, and
therefore entitled to deference. I see no reason to disturb that holding.

Accordingly, I find that Petitioner was not in substantial compliance with the
requirements set forth in 42 C.F.R. § 483.13(b).

3. The remedy imposed is reasonable on the facts of this case.

If a facility is not in substantial compliance with program requirements, CMS has the
authority to impose one or more of the enforcement remedies listed in 42 C.F.R. §
488.406, including a CMP. CMS may impose a CMP for the number of days that the
facility is not in compliance or for each instance that a facility is not in substantial
compliance. 42 C.F.R. § 488.430(a). The minimum amount for a per-instance CMP is
$1000 and the maximum is $10,000. CMS imposed a per-instance penalty here of
$1,800, which is at the low end of the range. I must consider whether the proposed CMP
is reasonable.

In determining whether the amount of the per-instance CMP is reasonable, the following
factors specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility’s history
of non-compliance, including repeated deficiencies; (2) the facility’s financial condition;
(3) the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and (4) the
facility’s degree of culpability.
8

Petitioner has not argued that the proposed CMP is unreasonable, but focused upon
whether there is a basis for imposing such a remedy. The CMP amount is at the low-end
of the range. Petitioner has not argued or submitted any evidence that it is unable to pay
the CMP. CMS has offered no evidence of past noncompliance for me to consider. The
deficiency is serious and supports the proposed CMP. Petitioner has not contested that
one of its residents suffered actual harm at the hands of one of its employees. While
Petitioner did act quickly to initiate immediate corrective action to prevent further harm to
any of its residents, the fact remains that Petitioner bears ultimate responsibility for the
actions of its employees while they are acting within the scope of their employment, as
was the case here. Therefore, ] conclude that, given all the factors, a per-instance CMP of
$1,800 is reasonable.

Vv. CONCLUSION

I conclude that Petitioner was out of substantial compliance with federal participation
requirements in that a resident suffered physical abuse by one of Petitioner’s employees.
I further find that the amount of the CMP imposed is reasonable.

/s/

Alfonso J. Montano
Administrative Law Judge