SUBJECT: Rosewood Care Center of Peoria,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Rosewood Care Center of Peoria (Rosewood) appealed the August 11, 2003 decision of Administrative Law Judge (ALJ) Carolyn Cozad Hughes sustaining the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a civil money penalty (CMP) on Rosewood of $300 per day for the period January 26 through April 25, 2001. Rosewood Care Center of Peoria, DAB CR1077 (2003) (ALJ Decision). CMS had imposed the CMP based on a complaint investigation survey by the Illinois Department of Public Health (State agency) that found that Rosewood was not in substantial compliance with the Medicare participation requirements at 42 C.F.R. §§ 483.10(b)(11) and 483.25(m)(2). On appeal, Rosewood did not dispute the ALJ's determination that Rosewood failed to substantially comply with these requirements; however, Rosewood challenged the ALJ's determination that the amount of the CMP imposed by CMS was reasonable and argued that the amount should be reduced to $50 per day. As discussed in detail below, we find no merit in Rosewood's position and sustain the ALJ's decision that a $300 per day CMP was reasonable.

Our decision is based on the record before the ALJ, Rosewood's appeal from the ALJ Decision, and CMS's response to the appeal. Rosewood chose not to file a reply, although it had the opportunity to do so.

Legal Background

Rosewood is a nursing facility that participates in the Medicare program. The regulatory requirements for nursing facilities participating in Medicare are set forth at 42 C.F.R. Part 483. Section 483.10(b)(11) provides in pertinent part:

Notification of changes. (i) A facility must immediately . . . notify the resident's legal representative or an interested family member when there is-

* * * * *

(B) A significant change in the resident's physical, mental, or psycho-social status (i.e., a deterioration in health, mental, or psychosocial status in either life-threatening conditions or clinical complications);

(C) A need to alter treatment significantly (i.e., a need to discontinue an existing form of treatment due to adverse consequences, or to commence a new form of treatment); or

(D) A decision to transfer or discharge the resident from the facility . . .

Section 483.25 contains the "quality of care" requirements, which share the same regulatory objective that "[e]ach resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, in accordance with the comprehensive assessment and plan of care." Section 483.25(m)(2) provides:

Medication Errors. The facility must ensure that-

* * * * *

(2) Residents are free of any significant medication errors.

Compliance with the participation requirements is determined through the survey and certification process, set out at 42 C.F.R. Part 488, Subpart E. Surveys are generally conducted by a state survey agency under an agreement with CMS. A survey's findings are presented in a Statement of Deficiencies (SOD).

A facility becomes subject to remedial action when it is not in "substantial compliance" with one or more participation requirements. See 42 C.F.R. § 488.400. A facility is not in substantial compliance with a participation requirement if a deficiency results in actual harm to a resident or poses a risk to resident health and safety greater than the potential for causing minimal harm. 42 C.F.R. § 488.301.

A CMP in the range of $50 - $3,000 per day may be imposed for deficiencies that do not constitute immediate jeopardy but that either cause actual harm or create the potential for more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii).

A CMP continues until either "(1) The facility has achieved substantial compliance, as determined by CMS or the State based upon a revisit or after an examination of credible written evidence that it can verify without an on-site visit" or "(2) CMS or the State terminates the provider agreement." 42 C.F.R.
§ 488.454(a); see also 42 C.F.R. § 488.440(h).

An ALJ may not "[c]onsider any factors in reviewing the amount of a [civil money] penalty other than those specified in paragraph (f) of" 42 C.F.R. § 488.438. 42 C.F.R. § 488.438(e)(3). The factors in paragraph (f) are --

(1) The facility's history of noncompliance, including repeated deficiencies.
(2) The facility's financial condition.
(3) The factors specified in § 488.404.
(4) The facility's degree of culpability.

"Culpability" for purposes of this paragraph includes, but is not limited to, neglect, indifference, or disregard for resident care, comfort or safety. The absence of culpability is not a mitigating circumstance in reducing the amount of the penalty.

(Italics in original.) Section 488.404, captioned "Factors to be considered in selecting remedies," lists "the seriousness of the deficiencies" (i.e., their scope and severity) as one factor. Section 488.404(a) and (b). Section 488.404(c) provides for consideration of:

(1) The relationship of the one deficiency to other deficiencies resulting in noncompliance.
(2) The facility's prior history of noncompliance in general and specifically with reference to the cited deficiencies.

A facility may appeal a certification of noncompliance leading to an enforcement remedy. 42 C.F.R. § 488.408(g)(1). A determination with respect to the level of noncompliance may be appealed if a successful challenge on this issue would affect the range of CMP amounts that CMS could collect or would affect a finding of substandard quality of care that results in the loss of approval for a facility's nurse aide training program. 42 C.F.R. §§ 498.3(b)(14) and 498.3(d)(10)(ii). CMS's determination as to the level of noncompliance "must be upheld unless it is clearly erroneous." 42 C.F.R. § 498.60(c)(2).

Standard of review

The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. The standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the record as a whole. Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs (at http://www.hhs.gov/dab/guidelines/); see, e.g., Fairfax Nursing Home, Inc., DAB No. 1794 (2001), aff'd, Fairfax Nursing Home v. Dep't of Health & Human Srvcs., 300 F.3d 835 (7th Cir. 2002), cert. denied, 2003 WL 98478 (Jan. 13, 2003).

The ALJ Decision

The ALJ Decision was issued based on the written record after the ALJ gave notice to the parties of her intent to do so and received no objections. ALJ Decision at 2-3, citing Summary of Pre-Hearing Conference and Order Establishing Disposition of Case.

The ALJ made the following findings of fact and conclusions of law (FFCLs):

A. From January 26 through April 25, 2001, Petitioner was not in substantial compliance with program participation requirements, specifically 42 C.F.R. §§ 483.25 (Quality of Care) and 483.10 (Resident Rights).

1. The facility did not insure that its residents were free of significant medication errors.

2. The facility did not immediately inform the resident's family of a significant change in his status, the need to alter his treatment significantly, and its decision to transfer him from the facility.

B. The amount of the CMP imposed against Petitioner, $300 per day, is reasonable.

ALJ Decision at 5-8. The ALJ Decision described the underlying facts, which were undisputed, as follows:

Resident #1 was an 87-year old man who transferred from St. Francis Hospital and was admitted to the facility at 3:15 p.m. on December 28, 2000, for a rehabilitative stay following a laproscopic cholescystectomy (removal of his gall bladder). . . . He had had a stroke. At the time of his admission to the facility, his medication orders included the anti-coagulant drug, Coumadin, 4 mg. every day. . . . The medication discharge sheet from St. Francis Hospital indicates that he received his December 28, Coumadin at 3:00 p.m., prior to his discharge from St. Francis. . . . Nevertheless, at 8:00 p.m. on the same day, facility staff administered 4 mg. of Coumadin to him.

According to his progress notes, the following morning he exhibited disturbing symptoms. . . . He was transferred to the emergency room and subsequently admitted to the Intensive Care Unit with a diagnosis of retroperitoneal hematoma (internal bleeding in the area of the kidney, toward the rear of the abdominal cavity). . . . At 11:10 a.m. the facility received the results of his lab tests, showing what staff characterized as a "critical" prothrombin time of 43.7 (above 30 is considered "panic"). . . . The facility called the lab results in to the emergency room. . . .

The family learned of the change in Resident #1's condition and subsequent transfer to the emergency room when they arrived to visit [the resident] at about 12:30 p.m.

ALJ Decision at 5 (emphasis in original).

The ALJ noted that Rosewood had "raise[d] questions as to whether Resident #1's retroperitoneal hemorrhage was directly attributable to facility staff's administration of the Coumadin . . . ." The ALJ continued:

. . . I agree that the question is debatable, certainly based on the record before me. . . . However, I need not address this question because the regulations do not require any showing of actual harm. A facility is not in substantial compliance if its deficiencies create more than "the potential for causing minimal harm." 42 C.F.R. § 488.301. Here, staff more than likely gave Resident #1 a second dose of Coumadin on December 28, 2001, because they failed to review his transfer documents. This was a dangerous practice with potential for significant harm. As the parties agree, administering twice the amount of a prescribed medication has the "potential for more than minimal harm." See Summary of Prehearing Conf. I therefore find substantial noncompliance with the quality of care regulation.

Id. at 7.

The ALJ also noted that Rosewood had "point[ed] to . . apparent errors in the St. Francis medication administration record," and stated:

That St. Francis' medication records may contain errors does not justify the facility's ignoring those records and acting as though no medications were given. Further, no evidence suggests that the administering nurse reviewed St. Francis' medication discharge record, much less questioned its accuracy. At a minimum, staff should have reviewed the medication discharge sheet, and, if questions arose, should have verified whether the medication had already been administered. In the face of evidence that the dosage had already been administered, staff's administering an additional dose of a potentially dangerous medication was a serious deficiency.

Id. at 6-7.

Rosewood did not specifically identify the FFCLs to which it excepted. Based on its arguments, however, we conclude that Rosewood excepted only to FFCL B. Accordingly, we uphold the remaining FFCLs without further discussion. Below, we discuss Rosewood's arguments regarding FFCL B.

The ALJ did not err in determining that the CMP amount was reasonable without making a finding that the medication error caused actual harm.

As noted above, the ALJ found it unnecessary to reach the issue of whether the medication error caused actual harm to Resident 1 since the undisputed fact that the medication error posed a potential for more than minimal harm was sufficient to establish noncompliance at the non-immediate jeopardy level. Rosewood argued, however, that the ALJ erred in determining that the CMP amount was reasonable without making a finding that the medication error caused actual harm (which Rosewood disputed was the case). According to Rosewood, since the SOD indicated that this deficiency posed actual harm and CMS alleged in its prehearing brief that the deficiency caused actual harm, CMS's determination that a $300 per day CMP was warranted in this case was "based on its determination that the extra dose of coumadin caused R1 actual harm. . . ." Rosewood Br. at 4. Rosewood took the position that "[w]hen both CMS and the facility agree that the determination of actual harm must be made in determining the appropriateness of the CMP, the ALJ should be required to make that determination." Id. at 6. In Rosewood's view, a reduction in the amount of the CMP was warranted since the ALJ not only did not make a finding of actual harm but also stated that "it was debatable that CMS could show actual harm." Id. ⁽¹⁾

Rosewood's argument is not persuasive. As the ALJ Decision states, the ALJ is "neither bound to defer to CMS's factual assertions, nor free to make a wholly independent choice of remedies without regard for CMS's discretion." ALJ Decision at 8, citing, inter alia, Community Nursing Home, DAB No. 1807, at 22 (2002), and Emerald Oaks, DAB No. 1800, at 9 (2001). Instead, the ALJ "is bound to follow the regulatory procedures to make an independent determination of whether the amount set by [CMS] is reasonable based on the evidence as fully developed in the hearing." CarePlex of Silver Spring, DAB No. 1683, at 18 (1999). Accordingly, the fact that CMS may have relied on its finding of actual harm in setting the $300 per day CMP is not determinative. As we discuss below, the ALJ articulated a sufficient basis for this CMP even without a finding of actual harm. ⁽²⁾

In evaluating the reasonableness of the amount of the CMP, the ALJ specifically noted that findings from earlier surveys showed that Rosewood had "a significant history of noncompliance;" that Rosewood had "not claimed that its financial condition makes the amount of the CMP unreasonable;" that Rosewood was "culpable in giving a medication . . . it should have known . . . had already been given;" and that Rosewood was found in the subsequent annual survey to have failed to substantially comply with Medicare participation requirements. ALJ Decision at 9. The ALJ did not specifically refer to her evaluation of the seriousness of the deficiency, one of the factors that the ALJ must consider in determining the amount of the CMP. We infer from her previous discussion, however, that she did not rely on the level of seriousness of the deficiency being actual harm in determining whether the CMP amount was reasonable. Based on the other regulatory factors, the ALJ found that the $300 per day CMP imposed by CMS, which she noted is at the lower end of the mandatory range for non-immediate jeopardy situations, was reasonable. Since there is substantial evidence to support this finding, the ALJ's decision that she did not need to address the issue of actual harm is not a basis for reducing the amount of the CMP.

The ALJ did not err in determining that Rosewood was culpable for the medication error and in determining the extent of Rosewood's culpability.

The ALJ found that Rosewood was culpable for the medication error because its staff failed to review Resident 1's "transfer documents," which showed that the hospital had already administered the resident's daily dose of Coumadin. Rosewood argued that the ALJ "failed to adequately consider the facility's culpability regarding R1" in determining the amount of the CMP. Rosewood Br. at 6. Rosewood observed that "[t]he ALJ found fault with the facility staff for not reviewing the hospital transfer sheet prior to administering the coumadin." Id. Rosewood did not dispute that its staff did not review any hospital transfer documents before administering the Coumadin, ⁽³⁾ that the standard of practice required review of such documents, or that its staff's failure to review such documents would ordinarily have satisfied the definition of culpability. Rosewood stated, however, that Resident 1's physician, Dr. Lee, had verified Rosewood's "physician order sheet" for Resident 1, which indicated that Coumadin should be given at 8 p.m., "after review of the transfer order." Id., citing CMS Ex. 16, at 18.

We take this to be an argument that the ALJ's finding of culpability was unwarranted since Dr. Lee determined that it was appropriate to give the Coumadin at 8 p.m. after reviewing the hospital transfer orders. ⁽⁴⁾ This argument is not persuasive, however. The document on which Rosewood relied, a form with the column headings "Medication" and "Physician's Orders," contains a handwritten note, signed by a nurse who was Rosewood's ward clerk, ⁽⁵⁾ that reads:

12-28-00 Admit to Rosewood Care Center. PT/OT to evaluate [and] initiate tx [with] clarification to follow. Medication as ordered on left. Signed transfer orders verified per Mary/Linda/Dr. Lee

Although the "Medication" column on Rosewood's form was filled in (apparently by the nurse who wrote the note) to show that Coumadin should be given at 8 p.m. each day starting on December 28, the note does not state that Dr. Lee reviewed these orders, which were not signed by him. Instead, the note appears to refer to the hospital's Physicians Orders dated 12/28/00 and signed by a Dr. Perks at 3:18 p.m. This document includes the instructions "D/C to N.H." and "PT & OT to see & tx @ N.H." and contains an order for Coumadin "4 mg po Qday" (4 milligrams by mouth every day) without any indication as to the time this medication should be given. CMS Ex. 15, at 33. Thus, there is no evidence that Dr. Lee verified anything other than that there was an order for Coumadin once a day. This does not undercut the ALJ's conclusion that, before determining that Coumadin should be given at 8 p.m. on December 28, Rosewood's staff should have checked the hospital transfer documents. In addition to the Physicians Orders, the transfer documents included Medication Discharge Instructions showing that the hospital had given Coumadin to Resident 1 at 3 p.m. on December 28. CMS Ex. 15, at 66. ⁽⁶⁾

Rosewood further argued both before the ALJ and on appeal that the ALJ failed to take into consideration the fact that Rosewood's staff took the initiative to call Resident 1's physician to obtain an order for a protime test prior to the resident's experiencing any problems and that the facility thus "was able to provide critical data to the hospital about R1's condition." Rosewood Br. at 6. ⁽⁷⁾ Rosewood asserted that "[t]his should be considered as a mitigating factor." Id.

Rosewood's argument has no merit. In essence, Rosewood seeks a reduction in the CMP amount on the ground that it lessened its culpability by getting orders for a test that proved helpful in diagnosing the bleeding that followed the overdose of Coumadin. However, nothing about the facility's action changes the fact that, at the very least, Rosewood showed disregard for resident health and safety when it gave Coumadin to Resident 1 without first checking the hospital transfer documents to see if she had already had her dose for the day.

Accordingly, Rosewood did not establish that any reduction in the CMP was warranted on the ground that the ALJ erred in determining that Rosewood was culpable or in determining the extent of its culpability.

Conclusion

For the reasons stated above, we affirm all of the ALJ's FFCLs and uphold the ALJ's determination imposing a CMP in the amount of $300 per day for the period January 26 through April 25, 2001.

Cecilia Sparks Ford

Donald F. Garrett

Judith A. Ballard
Presiding Board Member

1. Rosewood argued in the conclusion of its brief that the CMP should be reduced to $50 per day. Rosewood Br. at 7. Rosewood did not specify what reduction it thought was warranted based on each of the arguments it raised on appeal.

2. Contrary to what Rosewood argued, CMS did not agree that the ALJ needed to make a determination of actual harm. Instead, CMS stated that "the regulations expressly prohibit review of a deficiency's scope and severity" except in "very limited circumstances." CMS Br. at 7. We need not decide here, however, whether the ALJ was precluded from reviewing CMS's determination of actual harm.

3. The SOD stated that, in an interview, the staff person who administered the Coumadin said she did not see the transfer sheet that showed that the resident had received Coumadin prior to coming to Rosewood. CMS Ex. 1, at 4.

4. CMS responded that "[t]he fact that others also may have had the opportunity to review these records did not relieve . . . staff members' independent responsibilities to monitor care that falls within their professional ambit." CMS Br. at 14. For the reasons discussed in the text, however, we need not address this issue.

5. See CMS Ex. 13, at 12.

6. The hospital's Medication Administration Record for 12/28/00 to 12/29/00 also shows that Coumadin had been given at 3 p.m. It is not clear whether this document was provided to Rosewood at the time of the transfer, however.

7. Before the ALJ, Rosewood asserted that these facts showed that "Rosewood was aware that [Resident 1] might have problems with the Coumadin and took the necessary steps to test for a Coumadin overdose." Rosewood Care Center of Peoria's Pre-Hearing Brief at 5. Prothrombin time, or protime, is a test that measures the clotting time of plasma (the liquid portion of the blood). Merck Health Library, http://www.mercksource.com.