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Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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| IN THE CASE OF | |
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Hermina Traeye Memorial Nursing Home, |
DATE: March 29, 2001 |
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- v - |
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Health Care Financing Administration
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Docket No.C-99-595 Decision No. CR757 |
| DECISION | |
I enter the following decisions in these two
cases.
I. Background Petitioner, Hermina Traeye Memorial Nursing Home, is a
long-term care facility that is located on Johns Island, South Carolina.
Prior to its termination from participating in Medicare, Petitioner was
owned and operated by the Sea Island Comprehensive Health Care Corporation
(Sea Island). Petitioner participated in the Medicare program until May
16, 1999, when HCFA terminated its participation. These two cases involve
remedy determinations made by the Health Care Financing Administration
(HCFA) based on the outcomes of compliance surveys conducted of Petitioner
by the South Carolina Department of Health and Environmental Control (South
Carolina State survey agency). The remedies that are at issue include
HCFA's determination to impose civil money penalties against Petitioner
in both of the cases and to terminate Petitioner's participation in Medicare
in Docket No. C-99-595. In 1998, the South Carolina State survey agency conducted
compliance surveys of Petitioner which were completed on June 4, 1998
(June 1998 survey), August 5, 1998 (August 1998 resurvey), and September
10, 1998 (September 1998 resurvey). Petitioner was found not to be complying
substantially with federal participation requirements at both the June
1998 survey and the August 1998 resurvey. Petitioner was found to be in
compliance with federal participation requirements at the September 1998
survey. Based on the findings of noncompliance, HCFA determined to impose
civil money penalties against Petitioner in the amount of $450 per day
for each day of a period that began on June 4, 1998 and which ran through
September 17, 1998. The total amount of these civil money penalties is
$47,700. Petitioner requested a hearing from this determination. The case
was docketed as Docket No. C-99-165 and assigned to me for a hearing and
a decision. In 1999, the South Carolina State survey agency conducted
a compliance survey of Petitioner which was completed on April 23, 1999
(April 1999 survey). Petitioner was found not to be complying substantially
with federal participation requirements. In four instances, the South
Carolina State survey agency concluded that Petitioner's noncompliance
was so egregious as to constitute immediate jeopardy to Petitioner's residents.
Based on these findings, HCFA determined to impose civil money penalties
against Petitioner in the amount of $10,000 per day for each day of a
period that began on April 23, 1999 and which ran through May 15, 1999.
The total amount of these civil money penalties is $230,000. Additionally,
HCFA determined to terminate Petitioner's participation in Medicare. Petitioner
requested a hearing. The case was docketed as Docket No. C-99-595 and
it was assigned to me for a hearing and a decision. My normal practice is to consolidate two cases which involve
remedy determinations pertaining to the same facility. I would have followed
this approach here. However, the Office of General Counsel assigned different
teams of attorneys to each of the cases. As a courtesy to HCFA's counsel,
I agreed not to consolidate the cases. I held the hearings sequentially
in Columbia, South Carolina, on August 21 - 23, 2000. I have elected to
consolidate my decisions in the two cases into a single document because
it is more efficient for me to do so than to issue two separate decisions. In Docket No. C-99-165, I received into evidence from
HCFA exhibits that are identified as HCFA Ex. 1 - HCFA Ex. 62. In Docket
No. C-99-595, I received into evidence from HCFA exhibits that are identified
as HCFA Ex. 1 - HCFA Ex. 10 and HCFA Ex. 12. HCFA offered an additional
exhibit in this case, HCFA Ex. 11, but I declined to receive it into evidence.
In order to avoid confusion, I refer in these decisions to any HCFA exhibit
that is in evidence in Docket No. C-99-165 as "165 HCFA Ex. (exhibit number)
at (page number)." I refer in these decisions to any HCFA exhibit that
is in evidence in Docket No. C-99-595 as "595 HCFA Ex. (exhibit number)
at (page number)." I received into evidence some exhibits from Petitioner
which it offered as exhibits only in Docket No. C-99-165. I also received
some exhibits from Petitioner which it offered as exhibits only in Docket
No. C-99-595. Finally, I received some exhibits from Petitioner which
it offered as exhibits in both cases. I refer in these decisions to any
of Petitioner's exhibits that is in evidence as an exhibit only in Docket
No. C-99-165 as "165 P. Ex. (exhibit number) at (page number)." I refer
in these decisions to any of Petitioner's exhibits that is in evidence
as an exhibit only in Docket No. C-99-595 as "595 P. Ex. (exhibit number)
at (page number)." I refer in these decisions to any of Petitioner's exhibits
that is in evidence in both cases as "165-595 P. Ex. (exhibit number)
at (page number)." I received into evidence the following exhibits from
Petitioner: 165 P. Ex. 1; 165 P. Ex. 2; 595 P. Ex. 3; 595 P. Ex. 4; 165-595
P. Ex. 5; 165-595 P. Ex. 6; 595 P. Ex. 7; 165 P. Ex. 8; 595 P. Ex. 9;
595 P. Ex. 10; 595 P. Ex. 11; 595 P. Ex. 12; 595 P. Ex. 13; 595 P. Ex.
14; 165-595 P. Ex. 15; 165-595 P. Ex. 16; 165-595 P. Ex. 17; 165-595 P.
Ex. 18; 165-595 P. Ex. 19; 165-595 P. Ex. 20; 595 P. Ex. 21; 165 P. Ex.
22; 595 P. Ex. 23; 165-595 P. Ex. 24; 165-595 P. Ex. 25; 165-595 P. Ex.
26; and, 165-595 P. Ex. 27. II. Threshold legal issues, issues, findings of fact and conclusions of law
Petitioner filed several motions prior to the in-person
hearings in these cases which, in part, addressed issues of law that were
common to both cases. On August 14, 2000, I issued rulings on these motions.
I restate in relevant part those rulings here and incorporate them into
my final decisions in these cases. My rulings are as follows:
B. Issues
The issues in this case are whether:
The issues in this case are whether:
I make findings of fact and conclusions of law (Findings) to support my decisions in these cases. I set forth each of my Findings below as a separately numbered heading. In each heading I identify which of the cases the Finding applies to. I discuss each Finding in detail.
A basis exists in law for HCFA to impose civil money penalties
against a long-term care facility which participates in the Medicare program
or a State Medicaid program if the facility fails to comply substantially
with one or more federal requirements governing Medicare or Medicaid participation.
Social Security Act (Act), sections 1819(h)(2)(B)(ii), 1919(h)(3)(C)(ii);
42 C.F.R. §§ 488.406(a)(3), 488.430. A facility fails to comply substantially
with a participation requirement where that facility is deficient in meeting
that requirement and the deficiency poses a potential for causing more
than minimal harm to the health and safety of the facility's residents.
42 C.F.R. § 488.301. In Docket No. C-99-165, the South Carolina State survey
agency found that Petitioner was not complying substantially with federal
participation requirements beginning on June 4, 1998. 165 HCFA Ex. 5.
The report of the June 1998 survey alleges that Petitioner was deficient
in complying with 24 separate participation requirements. Id. In
one instance, reported at Tag 253 of the survey report, the scope and
severity level of the deficiency found by the surveyors was not so high
as to constitute an alleged failure by Petitioner to comply substantially
with a participation requirement. Id. at 22 - 24. In another instance,
reported at Tag 224 of the survey report, the surveyors found, and HCFA
initially agreed, that Petitioner manifested a failure to comply substantially
with a participation requirement. However, HCFA withdrew its determination
as to this tag shortly prior to the hearing of this case. Petitioner has challenged four of the remaining 22 alleged
episodes of failure to comply substantially with participation requirements.
Petitioner asserts that HCFA failed to establish a prima facie case of
noncompliance with respect to allegations of deficiencies that are cited
at Tags 157, 174, 248, and 324 of the report of the June 1998 survey.
But, Petitioner has not challenged specifically the remaining 18 findings
of deficiencies. See Petitioner's posthearing brief in Docket No.
C-99-165. These 18 deficiencies are established in the absence of any
specific challenge to them by Petitioner. Consequently, Petitioner was
not complying substantially with participation requirements as of June
4, 1998, and a basis exists to impose civil money penalties against Petitioner
for a period of days which begins on June 4, 1998.
Generally, a civil money penalty may fall within an upper
range of from $3,050 to $10,000 per day for each day of noncompliance
where a facility fails to comply substantially with a participation requirement
or requirements if its noncompliance puts its residents in a state of
immediate jeopardy. 42 C.F.R. § 488.438(a)(1)(i). I discuss what constitutes
an immediate jeopardy level deficiency below at Finding 5.a. A civil money
penalty may fall within a lower range of from $50 to $3,000 per day for
each day of noncompliance where a facility fails to comply substantially
with a participation requirement or requirements but its noncompliance
does not put its residents in a state of immediate jeopardy. 42 C.F.R.
§ 488.438(a)(1)(ii). The regulations establish the criteria to be used for determining the appropriate amount of a civil money penalty to be imposed within the upper and lower ranges of civil money penalties. These criteria are stated at 42 C.F.R. §§ 488.438(f) and 488.404 (which is incorporated by reference into 42 C.F.R. § 488.438(f)(3)). The relevant criteria are as follows:
A long-term care facility against whom HCFA has determined
to impose a civil money penalty is entitled to a hearing before an administrative
law judge at which the facility may contest HCFA's determination. Act,
section 1128A(c)(2); 42 C.F.R. §§ 488.408(g), 498.3(b)(12), (13); see
42 C.F.R. § 488.438(e). A hearing before an administrative law judge is
not confined to a review of the propriety of HCFA's remedy determination.
It is a de novo hearing in which the administrative law judge determines
independently what is the appropriate amount of a civil money penalty.
The regulations make it explicit that, where an administrative law judge
finds that a basis for a civil money penalty exists, then the administrative
law judge must consider and apply the factors which I have discussed above
in deciding the amount of a civil money penalty. 42 C.F.R. § 488.438(e)(3). In Docket No. C-99-165, HCFA determined to impose lower
range civil money penalties of $450 per day against Petitioner based on
HCFA's acceptance of the findings of noncompliance that the South Carolina
State survey agency made at the June 1998 survey of Petitioner. I conclude
that penalties in this amount are unreasonable and that penalties of $250
per day are reasonable based on the following considerations:
As I discuss above, the South Carolina State survey agency
originally found that Petitioner manifested 24 deficiencies as of June
4, 1998. Of these 24 alleged deficiencies 23 of them allegedly constituted
failures by Petitioner to comply substantially with participation requirements.
HCFA accepted these findings and based its determination to impose civil
money penalties of $450 per day in part on its conclusion that Petitioner
manifested 23 distinct failures to comply substantially with federal participation
requirements as of June 4, 1998. In fact, Petitioner actually manifested fewer deficiencies
than was found to be the case by the South Carolina State survey agency
and accepted by HCFA. Petitioner failed to comply substantially with participation
requirements in 19 instances rather than the 23 instances alleged by HCFA.
HCFA withdrew its allegations concerning one of these 23 alleged deficiencies.
In three other instances I conclude that there is no basis to conclude
that Petitioner was not complying substantially with participation requirements. On the eve of the hearing HCFA withdrew its determination that Petitioner was deficient under Tag 224 of the report of the June 1998 survey. Petitioner challenged four additional deficiency findings that were made in the report of the June 1998 survey. These findings are cited at Tags 157, 174, 248, and 324 in the survey report. I agree with Petitioner that HCFA failed to establish a prima facie case of failure by Petitioner to comply substantially with participation requirements with respect to allegations made under two of these deficiency tags, Tags 157 and 174. The weight of the evidence establishes that Petitioner was complying substantially with the participation requirement that is the basis for the allegations made under Tag 324. I find that HCFA did establish a prima facie case of noncompliance under Tag 248, which Petitioner did not rebut with the preponderance of the evidence.
The report of the June 1998 survey alleges at Tag 157
that Petitioner did not comply substantially with the requirements of
42 C.F.R. § 483.10(b)(11). 165 HCFA Ex. 5 at 1 - 4. The regulation requires,
in relevant part, that a facility must: immediately inform a resident;
consult with the resident's physician; and, if known, notify the resident's
legal representative or an interested family member when there is a significant
change in the resident's physical, mental, or psychosocial status. The
surveyors who conducted the June 1998 survey alleged that "on the days
of the survey, based on a record review" Petitioner failed to immediately
inform a resident's treating physician when there was a need to alter
a resident's treatment significantly. Id. at 2. The fact allegations that underpin this conclusion all
relate to the care that Petitioner allegedly gave to a resident who is
identified in the survey report as Resident # 2. The surveyors alleged,
in effect, that Petitioner's staff failed to notify the resident's physician
of a developing infection. This resident was being fed via a surgically
implanted feeding tube (PEG tube). The survey report alleges that, on
January 4, 1998, a nurse observed that the skin around the PEG tube was
very irritated and that a brownish fluid was draining around the tube.
165 HCFA Ex. 5 at 3. According to the survey report, the nurse failed
to notify the resident's physician of this alleged change in the resident's
condition. However, on January 13, 1998, the nurse placed a call to the
resident's physician to inform the physician that the resident was now
draining "dark, thick, foul smelling fluid." Id. Subsequently,
the resident was hospitalized for treatment of the infection around the
tube. These allegations do not establish a prima facie case
that Petitioner failed to comply with the requirements of 42 C.F.R. §
483.10(b)(11) as of June 4, 1998. Assuming the allegations to be true,
they establish a single episode of a failure by Petitioner's staff to
notify a resident's physician of a significant change in the resident's
medical condition in January 1998, approximately six months prior
to the June 1998 survey. I do not find that a single isolated episode
of staff error in the remote past is persuasive evidence of an ongoing
failure by Petitioner to comply with a participation requirement at a
survey that takes place six months after the occurrence of the episode.
The episode documented by the surveyors is too remote
in point of time to allow for meaningful inferences to be drawn from it
concerning Petitioner's compliance with participation requirements in
June 1998. Notwithstanding the surveyors' assertions that Petitioner was
deficient on the days of the survey, HCFA produced no evidence that Petitioner's
staff was failing to provide necessary notification to physicians of changes
in residents' medical conditions as of the days of the June 1998 survey. I find also that the preponderance of the evidence establishes
communication between Petitioner's staff and Resident # 2's physician
concerning the resident's medical condition, including the condition of
the resident's PEG tube. The resident's treatment records do not describe
a specific communication between Petitioner's staff and the resident's
physician concerning the nurse's observations of the resident's PEG tube
on January 4, 1998. But, that does not mean that there was no communication
about possible complications arising from use of the tube and any significant
changes in the resident's condition. The regulation does not require that a nursing note be
written to document each and every communication between a facility's
staff and a resident's physician. It requires only that communications
be made where circumstances warrant them. I do not infer from the absence
of a specific entry in the nursing notes that records a contact between
Petitioner's staff and Resident # 2's physician on or about January 4,
1998, that there was no communication between Petitioner's staff and the
physician concerning the resident's condition on that date. The resident's
records suggest that there was close communication between Petitioner's
staff and the resident's physician in early January 1998 concerning the
resident's condition and possible complications concerning the resident's
PEG tube. On January 6, 1998 the resident's physician ordered that the
tube be changed. 165 HCFA Ex. 56 at 11. I infer from this order - which
was made only two days after the nurse's January 4, 1998 observations
- that it must have reflected the physician's concerns about the resident's
condition including his concern that an infection might be developing
at the site of the tube.
The report of the June 1998 survey alleges at Tag 174 that Petitioner did not comply substantially with the requirements of 42 C.F.R. § 483.10(k). 165 HCFA Ex. 5 at 7 - 8. The regulation provides that a resident of a facility has a right to have reasonable access to use of a telephone where the resident may make calls without being overheard. The surveyors who conducted the June 1998 survey alleged that Petitioner failed to provide its residents with reasonable access to a telephone where calls could be made in privacy. Id. at 7. The survey report cites that a resident who is identified
as Resident # 5 averred that there was no place in Petitioner's facility
where it was possible to talk privately on the telephone. 165 HCFA Ex.
5 at 7. The resident is alleged to have asserted that a telephone was
available for use at Petitioner's nurses' station but that it was noisy
at that location and, furthermore, on one occasion the resident had to
discontinue a call because a physician needed to use the phone. Id.
at 7 - 8. The survey report also avers that four residents complained
at a group meeting that there was no place in the facility where they
could use the telephone. Id. at 8. Finally, Petitioner's social
services director was reported to acknowledge that there was "a problem
of telephone availability" at Petitioner's facility. Id. I am not persuaded by these allegations that HCFA made
a prima facie showing that Petitioner failed substantially to comply with
the requirements of 42 C.F.R. § 483.10(k). The allegations in the survey
report rest exclusively on hearsay. The surveyors did not determine independently
what sort of telephone access was available to residents of Petitioner's
facility. Most rules of evidence bar admission of hearsay as evidence
because of its inherent unreliability. I admit hearsay at hearings involving
HCFA because these hearings are not jury trials and I am not going to
be influenced by unreliable evidence. In most cases it is more efficient
to admit hearsay at the hearing and to rule on its probative value at
a later time. But, the fact that I admit hearsay does not mean that I
find it to be reliable. Generally, hearsay is unreliable absent some evidence
which shows that, in the circumstances of the case, it may be relied on. Here, HCFA has not offered any corroborative evidence
that would substantiate the hearsay complaints that are the basis for
the allegations in the survey report. I find these complaints not to be
reliable proof of a deficiency in the absence of any corroboration. Moreover, the surveyors' allegations were to some extent
undercut by the testimony offered at the hearing by one of the surveyors,
Helen Jenkins. Ms. Jenkins acknowledged during her cross examination that
residents could make private telephone calls from offices in Petitioner's
facility. Tr. at 441 - 442. She attempted to qualify this admission by
asserting that the offices were locked at nights and on weekends. Id.
However, she acknowledged also that residents could make calls from Petitioner's
nurses' station on nights and weekends, when the
facility was likely to be less busy than at other times, and when noise
and traffic were less likely to intrude on residents' privacy. Finally, I conclude that the surveyors' allegations, even
assuming their truth, fail to establish that Petitioner created a potential
for more than minimal harm to its residents. HCFA offered no proof to
show that residents were actually denied use of telephones when they needed
to use them. And, HCFA did not show that residents who demanded privacy
when making telephone calls were denied such privacy.
The report of the June 1998 survey alleges at Tag 324
that Petitioner did not comply substantially with the requirements of
42 C.F.R. § 483.25(h)(2). 165 HCFA Ex. 5 at 43 - 44. This regulation requires
a facility to ensure that each of its residents receives adequate supervision
and assistance devices to prevent accidents. The survey report alleges
that Petitioner failed to provide adequate supervision to a resident who
had a history of sustaining falls. Id. The fact allegations that are the basis for this assertion
all relate to a resident who is identified in the survey report as Resident
# 21. The survey report recites that the resident had a history of eight
documented falls within the nine month period which predated the June
1998 survey. 165 HCFA Ex. 5 at 43. The survey report alleges that the
resident sustained two additional falls on June 1, 1998 and again on June
3, 1998. According to the survey report, the resident fell out of a wheelchair
on June 1, 1998 and out of bed on June 3, 1998. The survey report alleges
that there was no "documented evidence" that Petitioner had attempted
to identify the causes of these falls, or that it had made any attempts
to prevent the resident from falling. Id. at 44. The preponderance of the evidence proves that Petitioner
provided Resident # 21 adequate supervision. Consequently, Petitioner
was complying with the requirements of 42 C.F.R. § 483.25(h)(2) as of
the June 1998 survey. A facility is not required by 42 C.F.R. § 483.25(h)(2)
to assure that its residents never sustain accidents. The regulation does
not impose a strict liability standard on a facility. Rather, the regulation
requires that the facility provide "adequate" supervision and assistance
devices to its residents as a safeguard against accidents. A facility
satisfies the requirements of the regulation if it takes reasonable precautions
to protect the health and safety of its residents
against accidental injuries. A facility is not deficient if an accident
occurs despite the fact that it has taken reasonable precautions. Here, the weight of the evidence establishes that Petitioner
took reasonable precautions to prevent Resident # 21 from sustaining falls.
The falls that the resident sustained in June 1998 occurred despite those
precautions and not in the absence of precautions. As the survey report notes, Resident # 21 had a history
of falls. However, the survey report omits to state that, beginning in
March 1998, Petitioner gave training and advice to its staff that was
designed to assure that residents did not sustain preventable falls. 165
HCFA Ex. 36 at 1, 3, 5. These efforts succeeded in the case of Resident
# 21. The resident sustained no falls for a four month period prior to
June 1998. Resident # 21 suffered from Alzheimer's Disease and dementia,
along with other medical problems. In the days prior to June 1, 1998,
the resident exhibited combative behavior. 165 HCFA Ex. 48 at 8, 10. In
late May 1998, Petitioner's staff consulted with the resident's treating
physician concerning whether the resident should receive Haldol. This
was a medication which would be administered to deal with the resident's
combative behavior. Id. at 10 - 11. On June 1, 1998, the resident's
physician ordered that Haldol be administered to the resident. Id.
at 10. The resident sustained a fall later that afternoon, approximately
two and one-half hours after being medicated with Haldol. The medication
was discontinued for a day after the resident sustained her June 1, 1998
fall. However, it was restarted on June 2, 1998 at a reduced dose on the
orders of the resident's physician. Id. at 9. On the following
morning, the resident fell from her bed. Id. at 8. Petitioner contends, and I agree, that the resident's
two falls on June 1, 1998 and June 3, 1998 were most probably the consequence
of administration of Haldol to the resident. The evidence shows that the
resident was being monitored on both June 1 and June 3, 1998. On June
1, the resident was seated at Petitioner's nurses' station when she fell.
165 HCFA Ex. 48 at 10. On June 3, the resident had been checked by a nurse
only 25 minutes prior to falling from her bed. Id. at 8. There is nothing in the record of the care that was given
by Petitioner to Resident # 21 to suggest that Petitioner failed to provide
adequate supervision to the resident. The resident fell despite
being supervised by Petitioner's staff. The circumstances of the resident's
two June 1998 falls suggest that no degree of observation would have prevented
the resident from falling. That is evident from the fact that the resident
was seated at Petitioner's nurses' station on June 1, 1998 when she sustained
her first fall. Possibly, the resident might not have fallen had she been
physically restrained, but that course of care had not been ordered by
the resident's physician.
The report of the June 1998 survey alleges at Tag 248
that Petitioner did not comply substantially with the requirements of
42 C.F.R. § 483.15(f)(1). 165 HCFA Ex. 5 at 11 - 16. The regulation requires
a facility to provide an ongoing program of activities designed to meet,
in accordance with each resident's comprehensive assessment, the interests
and the physical, mental, and psychosocial well-being of that resident.
The survey report alleges that Petitioner failed to provide such a program
to several of its residents. The assertion of noncompliance in the survey report is
based in large measure on observations that the surveyors made of several
of Petitioner's residents during the survey period. Essentially, the report
asserts that these residents all were supposed to be participating in
a variety of activities. However, these residents were observed to be
largely confined to their beds or chairs during the survey without participating
in any activities. The report contends that Petitioner failed to offer
satisfactory explanations for these residents' status. Petitioner's response focuses on the care that it provided
to one of these residents who is identified in the survey report as Resident
# 1. This response explains why Petitioner was not involving the resident
in group activities at the time of the survey, and why Petitioner's staff
were occupying the resident with one-on-one activities that were more
suitable for the resident given the resident's limitations. The explanation
is persuasive. However, Petitioner has not explained why it apparently
failed to provide similar measures to other residents whose circumstances
were cited in the survey report. For that reason, I conclude that Petitioner
did not rebut the prima facie case of noncompliance that HCFA established
under Tag 248. For example, the surveyors observed that, during the survey,
Resident # 14 was in bed with the blinds drawn and the television and
radio in the resident's room turned off. Yet, the resident's assessment
provided that the resident should be participating in activities from
1/3 to 2/3 of the time. 165 HCFA Ex. 5 at 13. Petitioner offered no explanation
for its failure to provide activities for Resident # 14 during the survey.
Resident # 15 was also observed to be inactive during the course of the
survey, notwithstanding entries in the resident's record indicating that
the resident should be participating in activities from 1/3 to 2/3 of
the time.
The surveyors who prepared the report of the June 1998
survey assigned scope and severity ratings to all of the deficiencies
that they identified at the survey. HCFA accepted these ratings and based
its civil money penalty determination on them. The scope and severity rating for each deficiency is expressed
as a letter of the alphabet in the left hand margin of the survey report
next to each deficiency tag heading. The scope and severity ratings for
the June 1998 survey range from a rating of "B" for the deficiency identified
at Tag 253 of the survey report to ratings of "G" for the deficiencies
that are identified at Tags 157, 224, and 324 of the survey report. I
take notice that these letter ratings correspond to specific categories
of scope and severity. See 595 HCFA Ex. 6. Ratings of "A," "B,"
and "C," are the lowest ratings and do not indicate a potential for more
than minimal harm. A deficiency that is assigned one of these ratings,
therefore, is not indicative of a failure by Petitioner to comply substantially
with participation requirements. Ratings of "D," "E," and "F," indicate
that no actual harm resulted from the facility's noncompliance with participation
requirements, although a potential for more than minimal harm resulted
from the noncompliance. Ratings of "G" or higher involve findings of actual
harm. The report of the June 1998 survey asserts that, as of
June 4, 1998, Petitioner manifested three "G" level deficiencies which
allegedly caused actual harm to Petitioner's residents. HCFA based its
determination to impose civil money penalties of $450 per day against
Petitioner on these assertions. In fact, however, Petitioner manifested
no "G" level deficiencies as of June 4, 1998. HCFA withdrew its allegations
concerning Tag 224, one of the "G" level tags. I find at subpart a.i.
of this Finding that HCFA failed to establish a prima facie case of noncompliance
under Tag 157, another of the "G" level tags. And, I also conclude at
subpart a.iii. that the preponderance of the evidence proves that Petitioner
complied substantially with the requirements that are the standards for
compliance under Tag 324, the third "G" level tag. Thus, Petitioner manifested no deficiencies as of June 4, 1998 which posed more than a potential for harm to Petitioner's residents. Although Petitioner failed to comply substantially with participation requirements as of that date, its noncompliance was not so egregious as is alleged by HCFA.
I find civil money penalties of $250 per day to be reasonable
in Docket No. C-99-165 because none of the deficiencies manifested by
Petitioner as of June 4, 1998 caused harm to any of Petitioner's residents.
My penalty finding also takes into account that there were fewer deficiencies
as of June 4, 1998 than HCFA asserted to be the case. HCFA provided only a brief analysis of its rationale for imposing civil money penalties of $450 per day against Petitioner:
HCFA's posthearing brief in Docket No. C-99-165 at 38. Its arguments essentially are that Petitioner manifested deficiencies which are the basis for civil money penalties in the lower range, and that civil money penalties of $450 per day are justified because "at least two" of the deficiencies caused actual harm to residents of Petitioner. HCFA's rationale for penalties in the amounts that it determined to impose evaporates if Petitioner manifested no deficiencies that cause its residents to experience actual harm. And that is the case here. As I discuss above, at subpart b. of this Finding, Petitioner's deficiencies only potentially were harmful to Petitioner's residents. There were fewer deficiencies than HCFA contended, and the deficiencies were less serious than HCFA asserted. Therefore, the civil money penalty amounts need not be so high as HCFA originally determined. 42 C.F.R. §§ 488.438(f)(3), 488.404.In reaching this conclusion, I take into account the findings that were made at the August 1998 resurvey of Petitioner. HCFA now asserts that one of the deficiencies that Petitioner manifested at the August resurvey caused Petitioner's residents to experience actual harm. That deficiency is stated at Tag 241 of the report of the August 1998 survey. 165 HCFA Ex. 8 at 7 - 10. Originally, HCFA also asserted another "actual harm" deficiency at Tag 224 of the report of the August 1998 survey. However, it has dropped this assertion. Below, at Finding 3, I explain my reasons for concluding that Petitioner was in fact not deficient under Tag 241 as of August 1998. Therefore, no "actual harm" deficiencies persisted in Petitioner's facility at any time after June 4, 1998 up until the date when Petitioner corrected all of the deficiencies that were identified at the June 1998 survey. In both Docket No. C-99-165 and Docket No. C-99-595, Petitioner asserted that it lacked the financial wherewithal to pay the civil money penalties that HCFA determined to impose. I address the parties' arguments as to Petitioner's financial status below at Finding 8. It is sufficient for me to say here that I find that Petitioner did not prove that it lacked the ability to pay the civil money penalties that I have decided to impose in the two cases.
HCFA asserts that Petitioner did not attain substantial
compliance with participation requirements until September 18, 1998. Petitioner
argues that it attained substantial compliance prior to that date. I conclude
that Petitioner attained substantial compliance by August 21, 1998. Civil
money penalties did not accrue against Petitioner after August 20, 1998,
the last date of Petitioner's failure to comply substantially with participation
requirements in Docket No. C-99-165. I base these conclusions on the following
considerations.
HCFA argues that its determination to impose civil money
penalties against Petitioner was, in part, based on Petitioner's failures
to comply with the Life Safety Code as of June 3, 1998. 165 HCFA Ex. 7.
Therefore, according to HCFA, civil money penalties should accrue until
September 18, 1998, the date when the South Carolina State survey agency
determined that Petitioner had attained compliance with the Life Safety
Code. Petitioner asserts that Life Safety Code violations were not an
element of HCFA's original remedy determination. Petitioner argues also
that HCFA never gave it notice that civil money penalties would accrue
until Petitioner corrected Life Safety Code deficiencies. It asserts that
to now base the duration of civil money penalties on the date Petitioner
corrected these deficiencies denies Petitioner due process. There is no evidence in this case which suggests that
HCFA based its determination to impose civil money penalties against Petitioner
on Life Safety Code violations along with Petitioner's failures to comply
with Medicare participation requirements. I conclude that Petitioner's
compliance with the Life Safety Code was not an element that HCFA considered
in determining to impose civil money penalties against Petitioner. Moreover,
if HCFA did consider Life Safety Code violations as part of its penalties
determination, it failed to give Petitioner notice of its determination. HCFA offered no exhibits which show that Petitioner's
failure to comply with elements of the Life Safety Code was a part of
HCFA's determination to impose civil money penalties. It produced no witness
who testified that HCFA considered Life Safety Code violations as an element
of its civil money penalty determination. And, it produced no notices
to Petitioner which show that HCFA told Petitioner, prior to or at the
time that HCFA made its determination to impose penalties, that Life Safety
Code violations were an element of that determination. Petitioner was not advised until August 12, 1998 that
civil money penalties might be imposed against it. On that date the South
Carolina State survey agency notified Petitioner that, based on findings
of enumerated deficiencies made at the August 1998 resurvey, the State
survey agency had determined that Petitioner remained out of compliance
with participation requirements. 165 HCFA Ex. 6 at 20. But, although the
letter identified the specific alleged failures by Petitioner to comply
with Medicare participation requirements that were found at the August
1998 resurvey, it did not mention Life Safety Code violations as being
among those deficiencies. On August 13, 1998 HCFA notified Petitioner that it had
determined to impose civil money penalties against Petitioner. 165 HCFA
Ex. 6 at 17 - 19. As was the case with the August 12, 1998 letter from
the South Carolina State survey agency, HCFA's August 13, 1998 notice
to Petitioner contained nothing to suggest that civil money penalties
would accrue against Petitioner until Petitioner corrected Life Safety
Code deficiencies. The entire thrust of the August 13, 1998 notice to
Petitioner was that civil money penalties would accrue until Petitioner
attained compliance with the Medicare participation requirements that
were identified in the reports of the June 1998 survey and the August
1998 resurvey. There were other communications between either HCFA and
Petitioner or the South Carolina State survey agency and Petitioner. Only
one of these communications mentions Life Safety Code violations, that
being a letter from the South Carolina State survey agency dated September
14, 1998. 165 P. Ex. 2 at 68. In that letter - which was sent to Petitioner
weeks after HCFA had determined to impose civil money penalties against
Petitioner - the South Carolina State survey agency mentions that "a life
safety code follow up will be done to determine LSC compliance." Id.
But the letter does not assert or suggest that civil money penalties would
accrue against Petitioner pending correction of Life Safety Code violations. It is plain from the notices that HCFA and the South Carolina
State survey agency sent to Petitioner that the basis for the civil money
penalties that HCFA determined to impose was Petitioner's noncompliance
with participation requirements governing long-term care facilities. Life
Safety Code violations were simply not part of HCFA's determination to
impose civil money penalties and, therefore, the duration of those penalties
may not depend on the date that Petitioner corrected its Life Safety Code
violations. Moreover, the failure to give notice to Petitioner that the duration of civil money penalties would depend on the date that Petitioner corrected Life Safety Code violations raises a serious due process issue. It is hard to understand how civil money penalties could be remedial if a facility is not made aware of the basis for those penalties.
On July 14, 1998, Petitioner advised the South Carolina
State survey agency that it had corrected all of the deficiencies that
were identified at the June 1998 survey. The South Carolina State survey
agency responded to this assertion by conducting the August 1998 resurvey
of Petitioner. The purpose of the August resurvey was to determine whether
Petitioner had attained compliance with Medicare participation requirements. Daily civil money penalties would cease to accrue against
Petitioner no later than August 5, 1998, the date of the August 1998 resurvey,
if Petitioner was complying substantially with Medicare participation
requirements as of that date. If there is compliance then there no longer
exists a basis to impose civil money penalties. However, penalties could
continue to accrue past the date of the resurvey if Petitioner was not
complying substantially with all Medicare participation requirements
as of the date of the resurvey. Even one failure by Petitioner to comply
substantially with participation requirements as of the date of the resurvey
would be a basis for daily civil money penalties to continue to accrue
until Petitioner corrected that failure to comply. The surveyors who conducted the August 1998 resurvey found
that Petitioner manifested seven failures to comply substantially with
participation requirements as of the completion of the resurvey. 165 HCFA
Ex. 8. HCFA initially accepted these findings. However, it subsequently
rescinded its determination of noncompliance as to one of the alleged
deficiencies, which is stated at Tag 224 of the report of the August 1998
resurvey. See Id. at 5 - 7. HCFA continues to assert that
Petitioner manifested six failures to comply substantially with participation
requirements as of the August 1998 resurvey. Petitioner contests these
noncompliance determinations. I have reviewed each of the determinations and the parties' evidence and arguments concerning them. I find that Petitioner was not complying substantially with two participation requirements as of the August 1998 resurvey. As a consequence of this noncompliance, daily civil money penalties against Petitioner continue to accrue beyond August 5, 1998.
Petitioner did not comply substantially with the participation
requirement that is the basis for findings made at Tag 159 of the survey
report. The report of the August 1998 survey alleges at Tag 159 that Petitioner
did not comply substantially with the requirements of 42 C.F.R. § 483.10(c)(2)
and (3). 165 HCFA Ex. 8 at 1 - 5. However, it is apparent from the text
of the survey report that the surveyors actually found that Petitioner
did not comply substantially with the requirements of 42 C.F.R. § 483.10(c)(4).
This section provides that a facility must establish and maintain a system
that assures a full and complete and separate accounting, according to
generally accepted accounting principles, of each resident's personal
funds entrusted to the facility on the resident's behalf. The survey report alleges that Petitioner failed on behalf of five of its residents to establish and maintain a system that assures full and complete accounting of the residents' personal funds according to generally accepted accounting principles. The report cites several specific examples of Petitioner's alleged failure to do so based on a review of the residents' funds ledger. These include the following.
These discrepancies and omissions are, for the most part,
relatively minor. But when they are viewed as a group they suggest an
overall sloppiness by Petitioner in its maintenance of resident accounts.
I find that this sloppiness is prima facie evidence that Petitioner failed
to maintain its residents' accounts in accordance with generally accepted
accounting principles. There is a potential for harm to residents in Petitioner's
failure to keep accurate financial records. That failure creates a risk
that residents will be deprived of access to funds that belong to them. As I discuss above, the resurvey report refers to 42 C.F.R.
§ 483.10(c)(2) and (3) when, in fact, the allegations of deficiency actually
are based on alleged noncompliance with the requirements of 42 C.F.R..§
483.10(c)(4). Petitioner contends that this misstatement in the resurvey
report deprived it of adequate notice of the report's allegations. I am not persuaded that Petitioner was denied adequate
notice of the allegations at Tag 159 in the resurvey report. I do not
find that any reasonable facility would be misled or confused by the allegations
at that tag. Any confusion caused by mis-citation of the relevant regulation
is dispelled by the report's accurate citation to the text of 42 C.F.R.
§ 483.10(c)(4) as the basis for the deficiency finding. Moreover, the
referenced text is not an obscure part of the regulations. In the regulations
it is printed directly after the text of 42 C.F.R. § 483.10(c)(2) and
(3). Petitioner argues that HCFA presented no evidence to support the allegations in the resurvey report. It is true that HCFA did not present corroborating evidence of these allegations. But, the resurvey report is in evidence for the truth of its contents. I find that the allegations in the survey report in this instance - although hearsay - are reliable prima facie evidence of noncompliance by Petitioner with participation requirements. I find these allegations to be more reliable than statements attributed to residents and staff because they consist of the surveyors' personal observations based on their review of Petitioner's records. Petitioner offered no affirmative evidence to rebut the allegations that were made under Tag 159. For example, it did not offer copies of its records as evidence that the surveyors' observations were inaccurate.
The report of the August 1998 resurvey alleges at Tag
386 that Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.40(b). 165 HCFA Ex. 8 at 12 - 16. The regulation provides,
in relevant part, that a resident's treating physician must sign and date
all orders for a resident. 42 C.F.R. § 483.40(b)(3). The resurvey report alleges that, in two instances, residents'
treating physicians failed to issue orders for changes in residents' medication.
Specifically, the report alleges that, in one instance, a physician signed
and dated a pharmacist's recommendation to reduce administration of medication
to a resident with the accompanying phrase "o.k. to reduce." 165 HCFA
Ex. 8 at 14. In another instance, a physician allegedly countersigned
a pharmacist's recommendation to change the dosage of a medication to
be administered to a resident without dating the signature. Id. In the first instance, which addresses the care that was
given to a resident who is identified as Resident # 7 in the resurvey
report, the physician plainly issued an order that complied with all of
the regulation's requirements. The physician made a statement ("o.k. to
reduce") which, when read in context with the pharmacist's recommendation,
was easy to understand. The pharmacist recommended reducing the medication
and the physician approved the recommendation. The physician signed and
dated the order. However, in the second instance, which addresses the care
that was given to a resident who is identified as Resident # 14 in the
resurvey report, there was a failure by Petitioner to assure compliance
with the requirements of the regulation. In this instance, the undisputed
facts are that a physician signed, without dating, a pharmacist's recommendation
to reduce the dosage of a medication that was being given to the resident.
That action clearly can be interpreted as a physician's order. But, the
physician had also issued a separate written order which directed that
a different dosage of the same medication be given to the resident. The
pharmacist's order, with the undated physician's signature on it, was
dated by the pharmacist as July 13, 1998. The physician's written order
was dated August 1, 1998. Thus, there were arguably two orders from the
resident's physician, one dated, and one undated, which gave conflicting
directions concerning administration of medication to the resident. Petitioner was remiss in not assuring that the resident's
physician properly dated both of the orders. Had the physician done so,
it would have become clear which order superseded the other. In the absence
of proper dating it was not possible for Petitioner's staff to know which
dosage of medication the physician actually wanted to administer to Resident
# 14. I conclude that this oversight failure by Petitioner posed a potential
for more than minimal harm to the resident. I would be reluctant to find a failure by Petitioner to comply with the requirements of the regulation based on a single isolated error by Petitioner's staff to obtain a dated physician's order. As I have held on many occasions, deficiencies generally are not based on single errors or omissions, but on the underlying practices of facilities. Here, however, the evidence is that Petitioner's practice in obtaining physicians' orders may have contributed to the error that was identified by the surveyors. I find that mis-communication between Petitioner's director of nursing and its staff resulted in a poor understanding by the staff as to what their obligations and duties were. In this case, Petitioner's staff asserted to the surveyors that it was a staff practice to accept a physician's countersignature on a pharmacist's recommendation as an order by the physician. However, Petitioner's director of nursing asserted to the surveyors that this was not, in fact, Petitioner's policy.
I do not find Petitioner to be deficient in other respects as of the August 1998 resurvey. HCFA failed to establish a prima facie case as to some of the allegations of noncompliance that were made in the resurvey report. In other instances Petitioner established by the preponderance of the evidence that it was complying substantially with participation requirements. This means that Petitioner manifested only two substantial deficiencies as of the August 1998 resurvey, which I discuss above at subpart b. of this Finding. And, it means also that Petitioner came into compliance with participation requirements when it corrected those deficiencies.
The report of the August 1998 resurvey alleges at Tag
241 that Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.15(a). HCFA Ex. 8 at 7 - 10. The regulation requires
a facility to promote care for each resident in a manner that maintains
or enhances that resident's dignity in full recognition of the resident's
individuality. The report of the resurvey asserts that Petitioner failed
to comply with this regulation in providing care to one of the 17 residents
whose cases were examined by the surveyors. The resident whose dignity allegedly was affronted is
identified in the report of the resurvey as Resident # 12. The report
asserts, essentially, that this resident was removed, against her will,
from a location outside of an activity room where residents had just begun
to sing hymns. The report alleges further that the resident was taken,
against her will, to Petitioner's lunch room thereby depriving the resident
of an opportunity to participate in a religious service. The resident
then allegedly waited in the lunch room for 25 minutes before lunch was
served to the resident. I find no affront to the dignity of Resident # 12 in the
way in which Petitioner's staff dealt with the resident on August 5, 1998.
Resident # 12 was not arbitrarily removed from an ongoing activity. She
was taken to lunch at the end of the activity. Nor was she made to wait
unreasonably for lunch. The delay in serving lunch to the resident on
August 5, 1998 was not the fault of Petitioner. The assertions in the report of the August 1998 resurvey, if considered in a vacuum, might be construed as evidence of an affront to the dignity of Resident # 12. However, the account omits facts which change the picture considerably. First, and contrary to what the resurvey report alleges, the religious services in question had not just begun at the time that the resident was taken to the lunch room. Rather, they were ending. The incident which is recounted in the survey report occurred at about 11:20 a.m. on August 5, 1998. 165 HCFA Ex. 8 at 8. As explained in Petitioner's response to the surveyors' findings the incident occurred at the end and not at the beginning of the religious services as described in the survey report. Id. at 9. The resident had been present at the religious services for approximately 20 to 30 minutes before being taken to the lunch room. Id. at 8. Furthermore, the resident was not made to wait for lunch at Petitioner's behest. The delay in serving lunch on the date in question was occasioned by the surveyors who were checking the temperature of the meals that were being served to the residents. Id. at 9 - 10.
The report of the August 1998 resurvey alleges at Tag
309 that Petitioner did not comply substantially with the requirements
of 42 C.F.R. § 483.25. 165 HCFA Ex. 8 at 11 - 12. This regulation requires
that a facility provide to each resident, and that each resident receives,
the necessary care and services to attain or maintain the highest practicable
physical, mental, and psychosocial well being, in accordance with the
resident's assessment and plan of care. The fact allegations that are made under Tag 309 all relate
to the care that Petitioner gave to a resident who is identified in the
report of the August 1998 resurvey as Resident # 11. This resident wore
a pacemaker. However, according to the resurvey report, there was no physician's
order in the resident's records for the care and monitoring of the pacemaker.
Nor, according to the resurvey report, had Petitioner's staff written
a care plan for the care and monitoring of the resident's pacemaker. 165
HCFA Ex. 8 at 11 - 12. The resurvey report seems not to focus on the care and
services that Resident # 11 received from Petitioner's staff - which is
what is addressed by 42 C.F.R. § 483.25 - but, on whether care was adequately
documented. Thus, the resurvey report cites as specific examples of Petitioner's
alleged deficiencies the failure of Petitioner to receive from Resident
# 11's physician a written order concerning the resident's use of a pacemaker
and the failure of Petitioner's staff to write a care plan concerning
the resident's use of a pacemaker. These allegations - assuming their truth - do not describe
failures by Petitioner to comply with 42 C.F.R. § 483.25. The issue under
the regulation is not whether Petitioner's staff adequately documented
or planned the care of the resident's pacemaker absent some prima facie
showing that a failure of documentation or planning resulted in a failure
adequately to monitor the resident's use of a pacemaker. Documentation
and planning deficiencies are addressed elsewhere in the regulations which
govern long-term care facilities. The question here is whether Petitioner
gave Resident # 11 adequate care and services for his pacemaker. Put simply,
did Petitioner's staff monitor the resident's pacemaker to ensure that
the pacemaker operated effectively and safely? Furthermore, a failure by a physician to write a treatment
order for a resident is not, per se, a deficiency under the regulation.
The regulation addresses the care that a facility is to provide
to a resident and not the care that a resident's physician must provide. It would be a violation of 42 C.F.R. § 483.25 for a facility
to fail adequately to monitor a resident's use of a pacemaker. It became
apparent at the hearing of this case that the alleged failure by Petitioner's
staff to check Resident # 11's pacemaker was a concern that underlay the
inartfully written allegations at Tag 309 of the August 1998 resurvey
report. Tr. at 325 - 326. But, the evidence in this case establishes that Petitioner
provided services to its residents to ensure that their pacemakers functioned
properly. Resident # 11 received adequate monitoring from Petitioner's
staff of his pacemaker. After the June 1998 survey Petitioner undertook remedial measures that were designed to ensure that those of its residents who wore pacemakers received adequate monitoring and care. It listed all of its residents who wore pacemakers on a single document and instructed its charge nurses to record pacemaker checks for each of these residents. 165 HCFA Ex. 5 at 37. Furthermore, the evidence shows that Petitioner's staff monitored the pacemaker that was being worn by Resident # 11. Petitioner's staff checked the resident's pacemaker on July 16, 1998, just three weeks prior to the August 1998 resurvey. 165 HCFA Ex. 8 at 12; Tr. at 323.
The report of the August 1998 resurvey alleges at Tag
387 that Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.40(c). 165 HCFA Ex. 8 at 16 - 17. The regulation provides
that a resident must be seen by his or her treating physician at least
once every 30 days for the first 90 days after admission and at least
once every 60 days thereafter. The resurvey report alleges that Petitioner
failed to comply with this requirement in several instances. HCFA did not address Petitioner's alleged failure to comply
under Tag 387 in its posthearing brief regarding the August 1998 resurvey.
But, it appears that HCFA's position is that a facility is liable per
se if a resident's physician fails to make the requisite visits. I do
not find that this is a reasonable application of the regulation. The regulation governs the duties of a facility
and not that of the physicians who visit a facility's residents. The physicians
are not employees of the facility and the facility is not in a position
to force physicians to see residents on any schedule. All that a facility
can do is to make every reasonable effort to ensure that residents' physicians
comply with a patient visit schedule. Here, Petitioner made such efforts. As the resurvey report notes, on July 11, 1998, Petitioner sent a letter to each of its residents' physicians urging those physicians to comply with the requirements of 42 C.F.R. § 483.40(c). 165 HCFA Ex. 8 at 17. HCFA has offered no explanation as to why these efforts were not reasonable, nor has HCFA suggested what else, under the circumstances, Petitioner could have done. Given that, I find that Petitioner complied substantially with the requirements of the regulation.
The report of the August 1998 resurvey alleges at Tag
502 that Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.75(j). 165 HCFA Ex. 8 at 17 - 18. This regulation requires
a facility to provide or obtain laboratory services to meet the needs
of its residents. It makes the facility responsible for the quality and
timeliness of laboratory services. The surveyors examined the treatment records of 17 residents
at Petitioner's facility. Their report alleges that in one instance Petitioner
failed to comply substantially with the requirements of the regulation.
According to the report, on June 26, 1998, a physician issued a telephone
order that laboratory tests be made for a resident who is identified as
Resident # 3. However, the resident's record was devoid of any evidence
that the tests were conducted. According to the resurvey report, Petitioner's
staff acknowledged that the tests must not have been done. Petitioner notes that the identical tests were done on
July 22, 1998. 165 HCFA Ex. 8 at 18. Petitioner argues that HCFA has failed
to make even a prima facie showing that there was a potential for harm
to the resident from its failure to ensure that the tests that were ordered
on June 26, 1998 were performed. I disagree with Petitioner that a failure to perform laboratory
tests for a resident does not on its face cause a potential for harm to
the resident. I infer from the fact that the resident's physician ordered
the tests that the physician was concerned enough about the resident's
medical condition to believe that the tests might show some underlying
problems. Failure to produce the results of these tests timely could conceivably
have concealed those problems. That is a potential for harm. But, I do not find that Petitioner was deficient as of the August resurvey. HCFA has identified only a single error by Petitioner's staff which occurred weeks prior to the resurvey. It offered no evidence that this error was repeated subsequently. Nor did it offer any evidence that Petitioner was failing to ensure that residents received the laboratory services that had been ordered for them at the time of the survey. I do not infer that the single error identified by the surveyors describes an ongoing problem at Petitioner's facility in the absence of any evidence to show that the problem recurred or was current as of the August 1998 resurvey.
The only substantial deficiencies that Petitioner manifested
as of the August resurvey were those that were identified at Tags 159
and 386 of the August resurvey report. See Finding 3.b.i., ii.
Petitioner averred, credibly, that it corrected each of these two deficiencies
by August 21, 1998. 165 HCFA Ex. 8 at 1 - 2, 12, 14. HCFA offered no evidence
to show that Petitioner failed to correct these deficiencies by August
21, 1998. Consequently, I conclude that Petitioner attained compliance
with participation requirements by August 21, 1998. Civil money penalties
accrued through August 20, 1998, the last day on which Petitioner was
not complying substantially with participation requirements. Petitioner submitted a detailed plan of correction in
response to the August 1998 resurvey in which it explained how it would
address the deficiencies that were identified at the resurvey. 165 HCFA
Ex. 8. The proposed corrections that Petitioner offered under Tags 159
and 386 appear on their face to be reasonable. The South Carolina State
survey agency plainly found them to be reasonable or it would not have
scheduled a second resurvey to ascertain whether Petitioner had attained
substantial compliance with participation requirements. Petitioner averred
credibly that it would correct the deficiencies at Tags 159 and 386 by
August 21, 1998. The September 1998 resurvey identified no deficiencies
in Petitioner's operations. The surveyors did not provide any detailed
explanation of what it was that they reviewed. The surveyors made no findings
as to the precise date when Petitioner attained compliance with participation
requirements. Their only finding was that Petitioner was in compliance
as of the September 1998 resurvey. For example, there is no indication
in the record whether they reviewed the records that Petitioner maintained
of patients' funds between August 1998 and September 1998 to ascertain
when these records were brought into compliance with participation requirements. Thus, Petitioner's credible assertions that it came into
compliance as of August 21, 1998 are not refuted by any evidence to show
that they came into compliance as of a later date. I conclude that Petitioner
did attain compliance by August 21, 1998 in the absence of any credible
evidence to refute that assertion. HCFA's only argument at this time in support of its assertion that daily civil money penalties should continue to accrue until September 18, 1998 is that Petitioner was not found to be complying with the Life Safety Code until that date. At subpart a. of this Finding, I explain why Petitioner's compliance with the Life Safety Code is not a relevant consideration in deciding when daily civil money penalties ceased to accrue. I note, moreover, that Petitioner submitted a plan of correction to address those Life Safety Code violations that had been identified on June 3, 1998. 165 HCFA Ex. 7. In that plan of correction Petitioner averred credibly that it would correct all Life Safety Code violations by no later than August 20, 1998. HCFA has offered no evidence to refute Petitioner's statement that it corrected its violations by that date. As was the case with the September resurvey for compliance with participation requirements, the Life Safety Code resurvey simply determined that Petitioner had come into compliance as of the date of the resurvey without determining when actual compliance was attained by Petitioner.
At the April 1999 survey of Petitioner, the South Carolina
State survey agency surveyors found that Petitioner was not complying
with more than 50 Medicare participation requirements. 595 HCFA Ex. 2
at 1 - 116. The surveyors found that some of these deficiencies did not
constitute failures by Petitioner to comply substantially with participation
requirements. However, the surveyors concluded that the great majority
of the deficiencies that were manifested by Petitioner as of the April
1999 survey were substantial. Id. Subsequently, HCFA rescinded two of the deficiency findings
that were made at Tags 223 and 224 of the April 1999 survey report. It
concurred with the South Carolina State survey agency as to all of the
other deficiency findings. Petitioner challenged five of these findings
of substantial noncompliance. The challenged findings are at Tags 241,
248, 252, 314, 441, and 490 of the April 1999 survey report. But, Petitioner
did not challenge the more than 40 additional findings of substantial
noncompliance that HCFA accepted. As I discuss above, at Finding 1, even one failure by Petitioner to comply substantially with a participation requirement gives HCFA a basis to impose remedies against it. Here, Petitioner has not refuted allegations that it failed to comply substantially with numerous participation requirements. A basis exists to impose remedies against Petitioner beginning with April 23, 1999, the completion date of the April 1999 survey, based on the more than 40 findings of substantial noncompliance that were made at the April 1999 survey which Petitioner did not challenge. These deficiency findings are established in the absence of any challenge to them by Petitioner. Moreover, and as I discuss in detail below, at Finding 5, in two instances Petitioner failed to show that HCFA's findings of immediate jeopardy level deficiencies were clearly erroneous.
As I discuss above, at Finding 1, HCFA is authorized to impose civil money penalties for each day that a facility fails to comply substantially with federal participation requirements. HCFA is authorized to impose civil money penalties against Petitioner for a period of days which begins on April 23, 1999 inasmuch as it is established that Petitioner was not complying substantially with participation requirements beginning on that date.
The remedies that HCFA may impose for failure by a facility
to comply substantially with participation requirements include termination
of that facility's participation in the Medicare program. Although termination
is frequently imposed where a facility manifests immediate jeopardy level
deficiencies, such deficiencies are not a precondition for imposition
of the remedy. HCFA may terminate a facility's participation in Medicare
based on any failure by a facility to comply substantially with participation
requirements whether or not that failure rises to the immediate jeopardy
level. 42 C.F.R. § 488.456(b)(1)(i). Petitioner argues that the sole basis for HCFA's
determination to terminate Petitioner's participation in Medicare was
its conclusion that Petitioner manifested immediate jeopardy level deficiencies.
Petitioner contends that there would be no basis for HCFA to impose termination
as a remedy if I were to find that Petitioner did not manifest immediate
jeopardy level deficiencies. However, as I discuss at Finding 5.a., Petitioner
did manifest immediate jeopardy level deficiencies as of April 23, 1999.
Consequently, HCFA was authorized to terminate Petitioner's participation
in Medicare based either on the presence of immediate jeopardy level deficiencies
or on the presence of other deficiencies which, while substantial, were
not at the immediate jeopardy level of scope and severity. Furthermore, I do not agree with Petitioner's assertion
that the sole basis for HCFA's determination to terminate Petitioner's
participation in Medicare was the presence of immediate jeopardy level
deficiencies. In the notices that HCFA sent to Petitioner concerning the
imposition of remedies, HCFA told Petitioner that the determination to
terminate Petitioner's participation in Medicare was predicated on all
of the deficiency findings that were made at the April 1999 survey and
not just on immediate jeopardy level deficiency findings. That is evident from the language of the notices. On April 29, 1999, HCFA sent a notice to Petitioner. On May 7, 1999, HCFA sent an amended version of its notice to Petitioner (the amended notice also is dated April 29, 1999). 595 HCFA Ex. 3; 595 P. Ex. 3 at 60 - 63, 84 - 88. Both of these notices contained identical relevant language:
595 HCFA Ex. 3 at 1; 595 P. Ex. 3 at 60. Both notices told Petitioner that remedies, including "involuntary termination of your provider agreements" had been recommended by the South Carolina State survey agency "based on these survey findings." Ids. I find the phrase "based on these findings" to refer to all of the findings of deficiencies that are stated in the report of the April 1999 survey and not just the four findings of immediate jeopardy level deficiencies.
The notices that HCFA sent to Petitioner on April 29 and May 7, 1999 invited Petitioner to submit a plan of correction which addressed the findings of deficiencies that were identified at the April 1999 survey. 595 HCFA Ex. 3 at 2; 595 P. Ex. 3 at 61. The notices told Petitioner that:
Id. The clear implication of these notices is that if Petitioner submitted an "acceptable plan of correction," termination of participation would not be imposed. Petitioner submitted a plan of correction to the South Carolina State survey agency on May 10, 1999. 595 P. Ex. 13 at 1 - 268. On May 17, 1999, HCFA rejected Petitioner's plan of correction. 595 P. Ex. 3 at 141 - 142. HCFA told Petitioner that it had rejected the plan because:
Id. at 141. I do not have the authority to adjudicate the question
of whether HCFA abused its discretion in deciding not to accept a plan
of correction. The regulations reserve to HCFA the authority to accept
or reject a plan of correction. See 42 C.F.R. § 488.456(b)(1)(ii). However, I do have the authority to decide when a facility
attains compliance with participation requirements. If Petitioner had
attained compliance with all participation requirements prior to May 16,
1999, then HCFA would not have had the authority to terminate Petitioner's
participation in Medicare as of that date. That is because there would
exist no legal basis to terminate Petitioner's participation in Medicare
if it was, in fact, complying with all participation requirements prior
to the date on which HCFA elected to impose termination. Petitioner did not prove that it attained compliance with all participation requirements by May 16, 1999. That is made evident by Petitioner's plan of correction. Although Petitioner alleged that it had corrected "all" deficiencies as of May 10, 1999, its plan of correction acknowledged that, in many instances, corrections were "ongoing" as of that date. Thus, the plan of correction itself avers that corrections were in progress and not complete as of the date that Petitioner submitted it. That is true with respect to many of the deficiency findings that Petitioner did not challenge. And it is also true with respect to both of the findings of immediate jeopardy level deficiencies that are at issue in this case and which I sustain below, at Finding 5.a. 595 P. Ex. 13 at 22 - 23, 24 - 25.
HCFA determined to impose civil money penalties of $10,000
for each day of the period which begins on April 23, 1999 and which runs
through May 15, 1999. Penalties in the amount of $10,000 per day are the
highest that are permitted by law and are reserved for the most egregious
immediate jeopardy level deficiencies. HCFA based its determination to
impose these penalties on its conclusion that, during the period in question,
Petitioner manifested four immediate jeopardy level deficiencies, some
of which caused serious harm to residents of Petitioner. I conclude that penalties in the amount of $10,000 per day are unreasonable. I find that civil money penalties in the amount of $3,050 per day are reasonable. I so find because Petitioner's deficient conduct was substantially less egregious than HCFA determined it to be. I base this conclusion on the following analysis.
An immediate jeopardy level deficiency is:
42 C.F.R. § 488.301. It is not necessary that a resident be harmed or die in
order for there to be immediate jeopardy. A situation which poses a likelihood
for causing serious injury, harm, impairment, or death to a resident is
sufficient to constitute immediate jeopardy even if actual harm has not
yet occurred. Id. The regulations require that deference be paid to HCFA in determining when immediate jeopardy exists. If there is a failure by a facility to comply substantially with a participation requirement, and HCFA determines that the level of noncompliance is immediate jeopardy, then HCFA's determination as to the level of noncompliance must be sustained unless it is established to be clearly erroneous. 42 C.F.R. § 498.60(c)(2).
The report of the April 1999 survey alleges at Tag 441 that Petitioner failed to comply with the requirements of 42 C.F.R. § 483.65(a)(1) - (3) to the extent that residents of Petitioner were at immediate jeopardy. 595 HCFA Ex. 2 at 92 - 97. The regulation requires that a facility must establish an infection control program under which it: investigates, controls, and prevents infections; decides what procedures, such as isolation should be applied to an individual resident; and, maintains a record of incidents and corrective actions related to infections. The report alleges that Petitioner was deficient in complying with this regulation at the immediate jeopardy level in the following respects.
I am not persuaded that the alleged breaches of contact
isolation protocol in the care that Petitioner gave to Resident # 4 constitute
persuasive prima facie evidence that Petitioner was not complying with
the requirements of 42 C.F.R. § 483.65(a)(1) - (3). First, HCFA failed
to show that some of the conduct of the nurse who was observed caring
for the resident actually violated isolation protocol. For example, it
is not clear that the nurse needed to wear a mask in the presence of the
resident because HCFA did not offer prima facie evidence showing that
the nurse came close enough to the resident so that the resident potentially
could infect the nurse through respiratory discharges. Second, there is
no persuasive prima facie evidence that the nurse disposed of biohazardous
materials improperly. Third, although it is clear that the nurse breached
infection protocol by failing to remove a gown prior to exiting the resident's
room and wearing the gown in a corridor of Petitioner's facility, that
breach constitutes, at most, an isolated error. HCFA failed to show any
systemic breach of infection control protocol by establishing this single
error. However, HCFA offered additional prima facie evidence
which shows that Petitioner was not implementing an effective infection
control program. The failure of Petitioner's staff to make efforts to
identify the source of infection of Resident # 21 meant that the resident
may have had a potentially dangerous and contagious infection that had
not been identified. Petitioner's staff had no way of knowing - without
establishing whether the resident was infected or the possible infectious
agent - whether the resident could spread infection and whether precautions
such as isolation needed to be taken with respect to the resident. Petitioner's
attempt to rebut this evidence consists mainly of arguing that Petitioner
was not responsible for altering or questioning the care that was ordered
by the resident's physician. I do not disagree with this assertion but
it begs the question of what constituted Petitioners' responsibility.
Petitioner had a duty to make reasonable efforts to find out the source
of the resident's infection. There is no evidence to show that Petitioner
made such efforts. For example, Petitioner has not offered any evidence
to show that Petitioner's staff queried the resident's physician about
the nature of the resident's infection. Moreover, HCFA established a prima facie case of an overall
failure by Petitioner to track adequately those residents who had infections,
in violation of the requirements of 42 C.F.R. § 483.65(a)(1) - (3). HCFA's
assertions are supported by evidence that the surveyors obtained at the
April 1999 survey and the testimony that HCFA elicited from Timothy Holtz,
M.D. Tr. at 46 - 191. In addition to being a licensed physician, Dr. Holtz
is employed as an epidemic intelligence officer for the Centers for Disease
Control. Id. at 47. I find Dr. Holtz to have been a highly persuasive
and credible expert witness. Residents of nursing facilities are vulnerable to a range
of contagious and life threatening infections. Tr. at 65 - 66. These infections
may be bacterial, viral, or parasitic in nature. Id. Some of them
may be spread by facility staff. Id. at 66. Others may be spread
by resident to resident contact. Id. It is necessary to track infections effectively given
the susceptibility of nursing facility residents to infections and given
further the dangers that infections pose to nursing facility residents.
Effective tracking of infections means identifying each resident who has
or who is likely to have an infection, determining the cause of any infection,
and establishing the date when the resident became infected. Tr. at 55;
see Attachment to Petitioner's posthearing brief. The causes of
infection in a facility must be identified in order to prevent infections
from spreading. Id. at 57. Surveillance of residents in a nursing
facility is necessary in order to establish the presence of possible clusters
of infection. Id. Poor surveillance of infections by a facility
is likely to facilitate the spread of infections among residents. See
Id. at 70 - 71, 82. The surveyors asked Petitioner to provide them with documentation of the way in which it tracked infections. In response, Petitioner's staff provided the surveyors with two documents consisting of lists of residents who were suffering from infections. 595 HCFA Ex. 2 at 93. However, these lists for the most part failed to identify the residents' infection causing agents and in several instances they failed to verify the status or severity of the infections from which the residents were suffering. Petitioner would not have been able to identify the sources of infections from these lists. Tr. at 59 - 60. Nor would Petitioner have been able to contain clusters of infection using just these lists as surveillance mechanisms. Id. As Dr. Holtz noted:
Id. at 70 - 71. Not only did HCFA present a prima facie case that Petitioner
was not complying substantially with the requirements of 42 C.F.R. § 483.65(a)(1)
- (3) in that it failed to track infections, but HCFA presented prima
facie evidence that Petitioner's failure to track infections put residents
of Petitioner in a state of immediate jeopardy. As Dr. Holtz observed,
a failure by Petitioner to track infections would likely result
in the spread of infectious organisms within Petitioner's facility. Tr.
at 70 - 71. Residents likely would contract serious or life-threatening
infections as a consequence. Petitioner has not offered persuasive affirmative evidence
to challenge the proposition that residents' health and safety would be
jeopardized if it failed to track infections. Instead, Petitioner asserts
that it was tracking infections adequately. Petitioner offered two types
of records as documentary proof of its alleged infection tracking efforts.
165 - 595 P. Ex. 27 at 167 - 175, 180 - 185. I have examined these records
closely. I do not find that they rebut by the preponderance of the evidence
HCFA's prima facie case of Petitioner's noncompliance with the requirements
of 42 C.F.R. § 483.65(a)(1) - (3). Nor do they prove to be clearly erroneous
HCFA's determination that Petitioner's noncompliance placed residents
of Petitioner in immediate jeopardy. One of the records that Petitioner offered to prove its
infection tracking efforts is entitled the "1999 Infection Control Tracking
Record" for Petitioner's Units A, B, and C. 165 - 595 P. Ex. 27 at 167
- 175. This document contains entries for the months of February, March,
and April 1999. I infer from these entries that the document was being
maintained by Petitioner throughout the early part of 1999 and was being
updated monthly. The 1999 Infection Control Tracking Record, although it
is certainly a more detailed listing of residents' infection status than
the documents that the surveyors obtained, is not in and of itself proof
that Petitioner maintained an effective infection tracking system. The
document does not contain enough information so as to allow a facility
to perform adequate infection surveillance. This document contains a list
of residents of Petitioner by resident name. 165 - 595 P. Ex. 27 at 167.
Next to the list of names are columns of spaces arranged vertically by
month and horizontally by resident. The document is organized so that,
by reading across the page, one can ascertain whether a resident suffered
from an infection in any given month. Id. The document also contains
information concerning the types of infections that residents were suffering
from. However, it does not, for the most part, identify the specific organisms
that were causing infections. Nor does it describe the treatments that
were being given to the residents to deal with their infections or the
precautions that were being taken to prevent the spread of infections. The other record that Petitioner offered as evidence that
it was tracking infections adequately is a document that is entitled "Infection
Surveillance Form." 165 - 595 HCFA Ex. 27 at 180 - 185. The Infection
Surveillance Form contains much more detailed information than is contained
in the Infection Control Tracking Record or in the lists of names that
Petitioner's staff gave to surveyors during the April 1999 survey. It
lists: the name of each resident; that resident's date of admission; the
date of onset of the resident's infection; the pertinent diagnosis; the
type of culture taken to confirm the diagnosis; the organism that caused
the resident's infection; whether re-cultures were taken of the resident;
the treatment or antibiotic that the resident is receiving for his or
her infection; the type of isolation that is being utilized as part of
the resident's care; whether the infection was acquired at Petitioner's
facility; and the date of resolution of the infection or discharge of
the resident along with pertinent comments. Id. Unlike the other documents that are of record, the Infection
Surveillance Form is an effective tool for tracking infections. Tr. at
161. I would find that Petitioner overcame HCFA's prima facie evidence
of failure by Petitioner to implement an infection tracking system were
I to conclude that the Infection Surveillance Form was evidence of the
state of Petitioner's infection tracking system as of the April 1999 survey. However, I do not conclude that the Infection Surveillance
Form is proof that Petitioner was effectively tracking infections as of
the April 1999 survey. Petitioner has not shown that it actually was utilizing
this form in April 1999. I infer from the appearance and contents of the
form that it was created after completion of the April 1999 survey and
reflects post-survey efforts by Petitioner to demonstrate that it was
tracking infections. The form was completed at one sitting. The April 1999
form was prepared no earlier than early May 1999. The entries on the form
were not made contemporaneously with events as they occurred. I base my
conclusion that the form was prepared in one sitting on the facts that
all of the entries in the form are in the same handwriting and appear
to have been made with the same pen. 165 - 595 P. Ex. 27 at 180 - 185.
I base my conclusion that the form could not have been prepared sooner
than early May 1999 on the fact that several of the entries in the April
form are dated at the end of April 1999 and, in one instance, May 2, 1999.
Id. at 180 - 182. There is additional evidence from which I infer that the
Infection Surveillance Form was not being used by Petitioner as of the
April 1999 survey. Petitioner's plan of correction for the April 1999
survey, which Petitioner did not submit until May 10, 1999, does not allege
that this form had been implemented prior to the survey. See 595
P. Ex. 13 at 25. However, it alludes to development of "new forms to enable
appropriate tracking of residents with infections." Id. I infer
that the "new forms" that the plan of correction refers to as having been
developed by Petitioner after completion of the April 1999 survey include
the Infection Surveillance Form. I might have concluded that Petitioner was effectively tracking infections as of the April 1999 survey had Petitioner offered an Infection Surveillance Form completed for the month of March 1999. A form that was completed at the end of March 1999 likely would have satisfied me that Petitioner's staff was tracking infections as part of its regular duties and summarizing its tracking activities in a form that was generated at the end of each month. I would then have concluded that the form for April 1999 - even though it was prepared after the end of April and after completion of the April 1999 survey - reflected the activities that were taking place at Petitioner as of the date of the survey. However, in the absence of a March 1999 form, I can conclude only that some one at Petitioner's facility decided after completion of the April 1999 survey, and after Petitioner had been told that it was not tracking infections, that it would be in Petitioner's interest to complete a form showing that it was tracking infections in the month of April 1999. That is not enough to satisfy me that Petitioner was indeed tracking infections satisfactorily as of the April 1999 survey.
The report of the April 1999 survey alleges at Tag 490
that Petitioner failed to comply substantially with the requirements of
42 C.F.R. § 483.75 to the extent that residents of Petitioner were at
immediate jeopardy. 595 HCFA Ex. 2 at 103 - 104. The regulation requires
that a facility be administered in a manner that enables it to use its
resources effectively and efficiently to attain or maintain the highest
practicable physical, mental, and psychosocial well-being of each resident. It is apparent from the face of the tag that the surveyors
based their conclusion that Petitioner manifested an immediate jeopardy
level failure to comply with 42 C.F.R. § 483.75 entirely on their conclusion
that Petitioner was not complying with other participation requirements
that govern resident care and well-being. The examples of alleged failures
to comply with 42 C.F.R. § 483.75 that are recited in the survey report
say no more than to incorporate by reference allegations stated elsewhere
in the report that Petitioner failed to comply with regulations dealing
with resident abuse, infection control, and quality of care. 595 HCFA
Ex. 2 at 104. And, the surveyors based their conclusion that Petitioner
manifested an immediate jeopardy level deficiency at Tag 490 entirely
on their reliance on other alleged immediate jeopardy level deficiencies. Petitioner has challenged all of the deficiency findings
that form the basis for the surveyors' conclusion that Petitioner failed
to comply with 42 C.F.R. § 483.75. It is unnecessary for me to review
each of Petitioner's arguments, however, or to look at all of the deficiency
tags that are the basis for the surveyors' conclusions about Petitioner's
compliance under Tag 490. A basis exists to find an immediate jeopardy
level deficiency under Tag 490 in Petitioner's immediate jeopardy level
deficiency under Tag 441, which I have discussed above, at subpart a.i.
of this Finding. Furthermore, had I not found an immediate jeopardy level
deficiency under Tag 441, then I would have had no basis to find an immediate
jeopardy level deficiency under Tag 490. Having said that, however, I conclude also that Petitioner's deficiency under Tag 490 does not suggest any greater degree of overall noncompliance with participation requirements by Petitioner than is established by Petitioner's failure to comply with the requirements that are the basis for the deficiency findings that are made under Tag 441. In this instance, Petitioner's failure to comply with the requirements of 42 C.F.R. § 483.75 represents double counting of Petitioner's failure to comply with other participation requirements. Thus, saying that Petitioner failed to comply with the requirements of 42 C.F.R. § 483.75 on the basis of the allegations that are elsewhere in the report of the April 1999 survey says nothing about the overall extent of Petitioner's noncompliance with participation requirements.
The report of the April 1999 survey alleged that Petitioner manifested four immediate jeopardy level deficiencies. HCFA based its determination to impose civil money penalties of $10,000 per day against Petitioner based on the alleged presence of four immediate jeopardy level deficiencies. In fact, and as I find above at subpart a. of this Finding, Petitioner manifested only two immediate jeopardy level deficiencies. Furthermore, one of those deficiencies - stated at Tag 490 of the survey report - merely repackages deficiencies found elsewhere in the report, including the immediate jeopardy level deficiency that is stated at Tag 441. Thus, there was in fact only one circumstance in this case in which acts or omissions by Petitioner or its staff placed residents of Petitioner at immediate jeopardy. That was the failure by Petitioner to track infections.
Three of the four immediate jeopardy level deficiencies
that were cited in the report of the April 1999 survey were given scope
and severity ratings of "L" by the surveyors who conducted the survey.
595 HCFA Ex. 2 at 18, 20, 103; see 595 HCFA Ex. 6. These alleged
deficiencies were cited at Tags 223, 224, and 490 of the report of the
survey. The fourth immediate jeopardy level deficiency, cited at Tag 441,
was given a lower scope and severity rating of "K" by the surveyors. 595
HCFA Ex. 2 at 92; see 595 HCFA Ex. 6. HCFA has withdrawn its allegations
concerning two of the "L" level deficiencies (Tags 223 and 224). And,
the actual scope and severity of the deficiency at Tag 490 cannot be higher
than the scope and severity of the remaining immediate jeopardy level
deficiency at Tag 441. Therefore, both remaining immediate jeopardy level
deficiencies have scope and severity ratings of "K." The scope and severity
ratings for the established immediate jeopardy level deficiencies are
lower than what was originally alleged for the deficiencies that have
been rescinded. There is a meaningful difference between the seriousness
of what was alleged and what was established. The April 1999 survey report
alleges, at the now-rescinded Tags 223 and 224, that Petitioner tolerated
conduct that directly harmed certain residents. However, the principal
immediate jeopardy deficiency that Petitioner actually manifested, at
Tag 441 of the April 1999 survey report, only caused a likelihood
for very serious harm to residents of Petitioner. There is no persuasive
evidence of record that residents of Petitioner were actually harmed
by Petitioner's failure to track infections adequately. That Petitioner's failure to track infections posed the likelihood for serious harm, but did not actually cause residents to experience harm was made explicit by Dr. Holtz. Dr. Holtz concluded that Petitioner's failure to track infections resulted in a likelihood of serious harm or even death to residents. Tr. at 70 - 71. However, he did not find the presence of actual harm resulting from Petitioner's failure to track infections. See Id. Dr. Holtz found that there was no evidence of an epidemic or a cluster infection problem at Petitioner notwithstanding Petitioner's failure to maintain adequate infection tracking. Id. at 106 - 107, 109.
HCFA premised its determination to impose civil money
penalties against Petitioner, beginning April 23, 1999, on its conclusion
that, as of that date, Petitioner manifested four immediate jeopardy level
deficiencies, three of which resulted in very serious actual harm to residents.
In fact, Petitioner manifested only two immediate jeopardy level deficiencies
as of April 23, 1999. One of these deficiencies, at Tag 490, is merely
a restatement of the deficiency that Petitioner manifested at Tag 441.
The immediate jeopardy level deficiency that Petitioner manifested at
Tag 441 did not actually harm any residents but posed a likelihood of
serious harm or death for residents. The $10,000 per day civil money penalties that HCFA determined to impose against Petitioner for its noncompliance, beginning on April 23, 1999, are the highest civil money penalties that the law permits. Penalties in these amounts are reserved for the most egregious violators of Medicare participation requirements. However, the evidence in this case shows that Petitioner's noncompliance - while very serious - does not approach the level of seriousness that was found originally by HCFA. I am reducing the civil money penalties that were imposed, beginning on April 23, 1999, to $3,050 per day. That reflects the greatly diminished seriousness of Petitioner's actual immediate jeopardy level deficiencies.
Petitioner explicitly challenged certain additional non-immediate
jeopardy findings of deficiency that were made in the report of the April
1999 survey. These other findings are at Tags 241, 248, 252, and 314 of
the survey report. For several reasons, I conclude that it is unnecessary
for me to address the parties' arguments about these tags.
First, HCFA would have a basis to impose remedies against
Petitioner, including termination of participation, whether or not Petitioner
was deficient under the challenged tags. Deciding in Petitioner's favor
as to the remaining challenged tags would in no respect invalidate HCFA's
authority to impose termination as a remedy. That is because Petitioner
was not complying substantially with more than 40 other participation
requirements and because Petitioner manifested two immediate jeopardy
level deficiencies. Second, I have not based my decision to impose upper range
civil money penalties of $3,050 per day against Petitioner on the presence
or absence of lower range deficiencies. I could not reduce the civil money
penalties imposed against Petitioner below $3,050 per day even if Petitioner
successfully challenged some of the non-immediate jeopardy level deficiency
findings. And, I would not increase the civil money penalties above $3,050
per day were I to conclude that the challenged non-immediate jeopardy
level deficiency findings should be sustained. I conclude that, as a matter of law, I may not base the amount of immediate jeopardy level deficiencies on the presence of additional non-immediate jeopardy level deficiencies. The regulation which governs upper level civil money penalties provides that:
42 C.F.R. § 488.438(a)(1)(i) (emphasis added). I read
this language as saying that only immediate jeopardy level deficiencies
may be considered in deciding the appropriate amounts of civil money penalties
that are imposed within the upper range. The presence of additional lower
level deficiencies is not relevant to deciding the appropriate amount
of an upper range penalty. HCFA now argues that Petitioner's compliance history coupled
with the large number of non-immediate jeopardy level deficiencies that
were present as of April 23, 1999, in addition to the immediate jeopardy
level deficiencies, militates in favor of civil money penalties at the
maximum level. I disagree with this analysis. The regulation does not
suggest that upper range civil money penalties may be increased beyond
what is merited for upper level deficiencies based on the presence of
additional lower level deficiencies or a facility's poor compliance history.
The regulation does contain an exception for repeat lower level deficiencies.
In that instance, civil money penalties may be imposed in the upper range.
42 C.F.R. § 488.438(a)(1)(i) (incorporating 42 C.F.R. § 488.438(d)(2)).
However, that circumstance is not applicable here inasmuch as HCFA did
not determine to impose civil money penalties in the upper range against
Petitioner based on its alleged history of compliance or on the alleged
presence of repeated deficiencies. See 42 C.F.R. § 488.438(a)(1)(i).
Until now, HCFA has never made such a contention. HCFA has always argued
that it was imposing civil money penalties of $10,000 per day based on
the alleged presence of several immediate jeopardy level deficiencies. Third, my decision to impose civil money penalties of $3,050 per day takes into consideration the seriousness of the immediate jeopardy level deficiencies that Petitioner manifested. I do not find it reasonable to increase these penalties based on the presence of other, non-immediate jeopardy level deficiencies. These deficiencies are less serious by an order of magnitude than the immediate jeopardy level deficiencies that Petitioner manifested. No remedial purpose would be served by increasing civil money penalties beyond what I have decided is reasonable.
I have found that civil money penalties in the amount of $3,050 per day are reasonable. Finding 5. I also have found that Petitioner did not prove that it attained compliance with participation requirements, including those requirements pursuant to which Petitioner was found to be deficient at the immediate jeopardy level of noncompliance, prior to May 16, 1999, the date on which Petitioner's participation in Medicare was terminated. Therefore, Petitioner is liable for civil money penalties in the amount of $3,050 per day for each day of the period that begins on April 23, 1999 and which runs through May 15, 1999.
The civil money penalties that HCFA determined to impose
in Docket No. C-99-165 total $47,700. In that case, I am sustaining civil
money penalties which total $19,500. The civil money penalties that HCFA
determined to impose in Docket No. C-99-595 total $230,000. In that case,
I am sustaining civil money penalties which total $70,150. The sum total
of the civil money penalties that I am sustaining in the two cases is
$89,650, less than 1/3 of the $277,700 in total civil money penalties
that HCFA determined to impose. In both cases, Petitioner argued strenuously that HCFA
failed to consider its financial situation in determining the amounts
of civil money penalties to impose and that the civil money penalties
that HCFA determined to impose are unreasonably high in light of Petitioner's
actual financial condition. HCFA opposed these arguments. Petitioner asserts that in neither Docket No. C-99-165
nor in Docket No. C-99-595 did HCFA take Petitioner's actual financial
condition into consideration in determining the civil money penalty amounts
to be imposed in those cases. Petitioner argues that the appropriate remedy
for me to order in the absence of any evidence that HCFA actually took
Petitioner's financial condition into account is to impose a minimum civil
money penalty. I do not agree with Petitioner that the consequence of
a failure by HCFA to fully review Petitioner's financial condition prior
to making a determination to impose civil money penalties is that I should
impose a minimum civil money penalty amount in each of these cases. The
possibility that evidence offered by Petitioner as to its financial condition
was not fully reviewed by HCFA is not a relevant consideration in deciding
the amounts of civil money penalties to be imposed if I give Petitioner
the opportunity to present such evidence as part of its case before me.
My authority to hear and decide these cases is de novo. My obligation
is to review evidence independently from what HCFA may have done with
that evidence and to make my own decision as to appropriate civil money
penalty amounts. Here, each side was given the opportunity to present
evidence for my de novo consideration. Petitioner contends that I should consider reducing the
civil money penalties in C-99-595 down to as low as $50 per day based
on evidence concerning Petitioner's financial condition. It argues that
I should not be bound by the $3,050 minimum civil money penalty amount
for an immediate jeopardy level deficiency but should reduce the penalties
in Docket No. C-99-595 below that amount based on Petitioner's ability
to pay the penalties. I do not have the authority to reduce a civil money penalty
below the minimum upper range penalty of $3,050 per day in a case in which
I find an immediate jeopardy level deficiency. The penalty amount of $3,050
per day, and the total civil money penalties of $70,150, are the lowest
civil money penalty amounts that I may impose in Docket No. C-99-595 regardless
of the conclusions I might reach about Petitioner's financial condition.
Thus, in Docket No. C-99-595, I do not have authority to reduce the civil
money penalties below the minimum upper range penalty amount of $3,050
in light of my conclusion that Petitioner manifested immediate jeopardy
level deficiencies. There is no provision in the regulations which permits
a civil money penalty of less than $3,050 per day in an immediate jeopardy
situation. The regulations provide only that a civil money penalty of
between $3,050 and $10,000 per day may be imposed for each day in which
a facility manifests one or more immediate jeopardy level deficiencies.
42 C.F.R. § 488.438(a)(1)(i). A penalty amount of $3,050 per day constitutes
a floor beneath which I may not go if I sustain a finding of an immediate
jeopardy level deficiency. Petitioner does not deny that the regulations fail to
contemplate civil money penalties of less than $3,050 per day in a case
involving immediate jeopardy level deficiencies. Petitioner argues that
"the statute trumps the regulations in the event of an inconsistency."
Petitioner's posthearing brief in Docket No. C-99-595 at 94 - 95, n.57.
Petitioner claims that HCFA's determination in this case is inconsistent
with the requirements of the Act even if it arguably might be consistent
with the regulations. Id. Petitioner asserts that the Act requires
that a civil money penalty be reduced - arguably down to as low as $50
per day - even where an immediate jeopardy level deficiency is present,
where a facility's financial condition precludes payment of higher penalty
amounts. I am not persuaded by this argument. The regulations constitute
the Secretary's application of the Act and I must apply them as they are
written. Here, the Secretary has concluded that the minimum civil money
penalty in an immediate jeopardy situation is $3,050 per day. I am required
to follow that application of the Act. Moreover, I find nothing in either
section 1819 of the Act, which confers authority on the Secretary to impose
civil money penalties in cases involving long-term care facilities, or
in section 1128A of the Act, which contains general guidelines for the
imposition of civil money penalties, which is inconsistent with applicable
regulations governing civil money penalties in long-term care cases. There
is nothing in either section 1819 or section 1128A which states that a
civil money penalty may be reduced below the $3,050 minimum amount for
an immediate jeopardy level deficiency where a facility's financial condition
warrants further reduction of the penalty amount. Petitioner argues that its financial condition is precarious and that it may very well be forced into bankruptcy if it is required to pay the full civil money penalty amounts that HCFA determined to impose. For reasons that I have just explained, I have no authority to consider these arguments in Docket No. C-99-595 inasmuch as I have imposed the minimum civil money penalty amounts in this case. I do not find Petitioner's arguments to be persuasive in Docket No. C-99-165. In that case I have substantially reduced the civil money penalty amounts from what HCFA determined to impose based on my findings that Petitioner's deficiencies were not so numerous or so egregious as HCFA contended them to be. The total penalties that I am imposing in Docket No. C-99-165 are only a small percentage of what HCFA determined to impose. The evidence that Petitioner offered concerning its financial condition does not warrant further reduction of the civil money penalties. Petitioner argued that its financial condition would preclude it from paying the entire amount of the civil money penalties that HCFA determined to impose. It did not attempt to show that it was unable to pay the fraction of that amount that I imposed in Docket No. C-99-165. |
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| JUDGE | |
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Steven T. Kessel Administrative Law Judge
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