Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Orem Rehabilitation and Nursing Center,
Centers for Medicare & Medicaid Services,
Docket No. C-15-2607
Decision No. CR5113
As explained herein, I find in favor of the Centers for Medicare & Medicaid Services (CMS) against Petitioner, Orem Rehabilitation and Nursing Center (Orem), and sustain the imposition of an $8,750 per-instance civil money penalty.
Orem is a skilled nursing facility doing business in Orem, Utah, certified by and participating in the Medicare/Medicaid programs. As the result of a recertification survey initiated by the Utah Department of Health (UDOH) on February 17, 2015, CMS found Orem to be substantially noncompliant with Tag F323 (42 C.F.R. § 483.25(h) – accidents/hazards/supervision) at the ‘K’ scope/severity level.1
On March 25, 2015, CMS imposed a per-instance penalty of $8,750 for that deficiency, denied payment for new admissions (DPNA) as of May 23, 2015, and warned of termination of Orem’s Medicare provider agreement if it did not demonstrate substantial compliance by August 23, 2015 (CMS Ex. 17).2 On April 9, 2015, UDOH conducted a survey and concluded Orem had returned to substantial compliance with CMS’ conditions of participation as of March 15, 2015 (CMS Ex. 17, 18). CMS accepted UDOH’s finding and notified Orem that it was rescinding the DPNA and would take no further action to terminate Orem’s Medicare provider agreement (CMS Ex. 19).
On May 22, 2015, Orem timely requested a hearing to challenge CMS’ imposition of the civil money penalty indicated above. Administrative Law Judge Scott Anderson was originally designated to hear and decide this case, and on June 19, 2015, issued an Acknowledgment and Pre-hearing Order (APHO) that set forth deadlines by which the parties were required to file their pre-hearing exchanges, including briefs, exhibits, witness lists, and the direct testimony of any witnesses identified. APHO at 3.
Judge Anderson’s APHO also set a timeframe for the filing of a motion for summary disposition by either party, and specified that a hearing in this matter would only be deemed necessary if either party requested to cross-examine the opposing party’s witnesses. Id. at 4, 6. Specifically, Orem was obliged to identify CMS witnesses it wished to cross-examine in its pre-hearing brief, while CMS was obliged to identify any of Orem’s witnesses it wished to cross-examine within fifteen days of receiving Orem’s pre-hearing exchange. Id. at 6.
CMS timely filed its pre-hearing exchange as well as a combined pre-hearing brief and motion for summary judgment (CMS Br.), while Orem subsequently filed its pre-hearing exchange accompanied by a combined pre-hearing brief and response to CMS’ summary judgment motion (Orem Br.). Neither party objected to the opposing party’s witnesses or exhibits, nor did either party request cross-examination of the opposing party’s witnesses within the timeframe imposed by Judge Anderson’s APHO.
On January 12, 2017, this matter was transferred to me to hear and decide.
II. Admission of Exhibits
CMS filed 23 exhibits in its pre-hearing exchange, identifying them as CMS Exhibits 1 through 23. Petitioner filed nine exhibits in its pre-hearing exchange, identified as Petitioner’s Exhibits 1 through 9. There being no objection from either party, all exhibits are entered into the record.
III. A Decision on the Record is Appropriate
CMS’ motion for summary judgment is pending before me. However, neither party requested cross-examination of the opposing party’s witnesses in the timeframe outlined above.3 Therefore, a hearing is unnecessary and I will decide the matter based on the record. See APHO at 6; Civ. Remedies Div. Pro. § 19(d). As such, I need not consider the pending motion for summary judgment on its merits, and deny it as moot.
IV. Statement of Issues
The issues presented are:
A. Whether Orem was in substantial compliance with 42 C.F.R. § 483.25(h) (Tag F323) at the time of the survey completed in February 2015; and
B. If Orem was not in substantial compliance, whether the civil money penalty imposed by CMS is reasonable.
V. Scope of Review
While the parties agree I must determine whether Orem was in substantial compliance during the February 2015 survey, Orem goes on to request review of CMS’ scope and severity determination at level “K,” which constituted a finding of immediate jeopardy to resident health and safety. Orem challenges CMS’ finding of immediate jeopardy, contending I should review that finding under the clear error standard. Orem Br. at 6-7. CMS argues I should not review its scope and severity finding because my authority to do so is predicated on whether a successful challenge could affect either the penalty range or the impact of loss of approval for the facility’s nurse aide training program. CMS Br. at 7-8, citing 42 C.F.R. § 498.3(b)(14).
In this case, CMS is correct. Orem did not have a nurse aide training program, and even if I found CMS’ determination of immediate jeopardy to be clearly erroneous, the range
containing the per-instance penalty amount selected by CMS would not change. 42 C.F.R. § 488.438(a)(2) (providing a range from $1,000 to $10,000 for per-instance penalties). Accordingly, CMS’ scope and severity determination, including the finding of immediate jeopardy, is not properly before me. I need not consider whether CMS clearly erred in finding immediate jeopardy here, nor do I need to address Petitioner’s arguments as to the same. My decision will be limited to determining whether Orem was in substantial compliance during the February 2015 survey.
A. CMS has established by preponderance of the evidence that Petitioner failed to substantially comply with 42 C.F.R. § 483.25(h), Tag F323.
CMS contends Petitioner violated Tag F323 by allowing water temperatures throughout the facility to become excessively hot, thereby putting residents at risk for harm from scalding. There is little doubt that excessively hot water temperatures in a skilled nursing facility pose a substantial risk of harm to its residents. CMS regulations direct a skilled nursing facility to maintain a resident environment that is as free of accident hazards as possible. 42 C.F.R. § 483.25(h)(1). CMS’ State Operations Manual (SOM) specifically identifies hot water as an environmental hazard that could violate Tag F323, and further provides a table of the time it would take for water temperatures exceeding 120 degrees to cause third-degree burns.4 CMS Ex. 20 at 15-16. Similarly, Utah’s own guidelines for resident facilities require hot water temperatures to be less than 115 degrees. CMS Ex. 22 at 4. Decisions from both the Departmental Appeals Board and other Civil Remedies Division judges addressing this issue have consistently found the presence of water temperatures varying from 110 to 120 degrees created a risk of harm. See, e.g., NMS Healthcare of Hagerstown,DAB CR3232 (2014) (noting temperatures over 120 degrees capable of producing severe scalding and burns), aff’d, NMS Healthcare of Hagerstown v. U.S. Dep’t of Health & Human Servs., No. 14-2307 (4th Cir. 2015); Heritage Healthcare & Rehab. Ctr., DAB CR2116 (2010) (finding temperatures over 115 degrees in resident rooms posed an accident hazard); Wisteria Care Ctr.,DAB CR964 (2002), aff’d, DAB No. 1892 (2003) (finding elevated water temperatures create an unreasonable risk of injury to elderly nursing home residents); Beechknoll Convalescent Ctr.,DAB CR813 (2001) (finding temperatures over 110 degrees create a risk of harm).
Here, CMS adequately established that temperatures in this range, creating a risk of harm, were discovered during the February 2015 survey. Water temperatures in the rooms of at
least five residents exceeded 120 degrees during the survey period. CMS Ex. 1 at 14; CMS Ex. 4; CMS Ex. 5 at 6, 7; CMS Ex. 6; CMS Ex. 7 at 2, 3. Notably, measurements taken at a sink in one common-use room known as the “Garden Dining Room” yielded temperatures from 147 to 175 degrees, temperatures that would cause third-degree burns to human skin in a matter of seconds.5 CMS Ex. 20 at 15. While the Garden Dining Room was not regularly used for resident dining, residents had free access to the room, and several residents in fact chose to take meals or sit in that room. CMS Exs. 1, 3, 4, 6. I have no difficulty finding the presence of water at these temperatures in residents’ rooms and the Garden Dining Room constituted a substantial risk of harm.
Petitioner does not dispute the water temperature readings taken by the state surveyors. It also acknowledges maintenance of water temperatures in its facility to be an obligation under Tag F323. Nevertheless, Petitioner insists it was in full compliance. P. Br. at 7. Specifically, Petitioner argues that the malfunction that caused the excessive hot water temperatures, a defective mixing valve, was an isolated occurrence not susceptible to any temperature monitoring, and that it would be unreasonable to impose “strict liability” where a facility is otherwise taking reasonable steps to ensure compliance, including a weekly inspection schedule. Id. at 9-10.
The evidence of record does not persuade me that Petitioner made a systematic, reasonable effort to make its facility as free from this particular hazard as possible. Indeed, Petitioner’s own records contradict its assertion that it had an adequate system of weekly random water temperature measurements in place prior to the date of the survey in February 2015. Instead, Petitioner’s own temperature logs show no measurements prior to January 22, 2015, and less than weekly inspections from that date to February 16, 2015. P. Ex. 3 at 14-15. At least one inspection effort involved sampling only eight resident rooms. P. Ex. 3 at 14. During Petitioner’s February 2, 2015 inspection, one resident’s room yielded a reading of 117 degrees, in excess of the 115 degree limit mandated by the UDOH. Id. at 15; CMS Ex. 22 at 4. A second inspection on February 16, 2015 by Petitioner yielded another resident’s room with a temperature in excess of 115 degrees. P. Ex. 3 at 14. The record reveals no response from Petitioner to these excessive readings. Finally, it does not appear Petitioner measured water temperatures in the Garden Dining Room at all.
There is also no evidence of a system in place to address the routine replacement or maintenance of critical parts, such as the mixing valve in question. Petitioner’s own Director of Maintenance characterized the valve as “notorious” for allowing the unintentional mixing of hot and cold water. P. Ex. 2 at 2. A state surveyor opined that the failed valve in question was more prone to failure compared to other more expensive techniques for water temperature regulation, and likely to require replacement every few
years. CMS Ex. 8 at 2. Even if the surveyor’s observation is incorrect, it does not appear Petitioner had a system in place for the routine inspection or replacement of such parts (or at least, it has failed to submit evidence of any such system).
These facts lead me to conclude that whatever system Petitioner had in place prior to the February 2015 survey, if any, was inadequate. Petitioner’s claim that it was unfairly subjected to a strict liability standard because the defect could have occurred at any time, and was thus impossible to apprehend, is undercut by the fact that it was put on notice, despite its minimal inspection schedule, that at least some residents’ rooms had water temperatures in excess of 115 degrees.6 Despite discovering from its own inspections that its water heating system was producing temperatures in excess of those allowed by the state of Utah, Petitioner did not act.
In sum, I cannot say the facility’s approach in this instance was either systematic or thorough enough to show it took “all reasonable precautions against residents’ accidents.” Woodstock Care Ctr. v. Thompson, 363 F.3d 583, 590 (6th Cir. 2003). It is clear that Petitioner could and should have done more to ensure its water heating system did not pose a risk of harm to its residents. Accordingly, I find Petitioner was not in substantial compliance at the time of the February 2015 survey.
B. The $8,750 per-instance civil money penalty imposed by CMS was reasonable.
In determining the reasonableness of the penalty amount imposed by CMS, I look to the factors set forth at 42 C.F.R. §§ 488.438(f) and 488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)). These factors include the seriousness of the deficiency, the facility’s compliance history, its financial condition, and its degree of culpability. Id.
Neither CMS nor Petitioner argue compliance history or financial condition are factors affecting the penalty amount. Considering the remaining factors, I conclude, based on the record before me, that Petitioner’s noncompliance was very serious. At the time the deficiency was discovered, Petitioner housed residents with intellectual and developmental limitations, as well as psychiatric impairments including Alzheimer’s disease and dementia. CMS Ex. 2 at 3; CMS Ex. 23. Most residents received preventative skin care treatments. CMS Ex. 2 at 3.
Thus, Petitioner put mentally impaired residents and those with potentially fragile skin in a situation where they could suffer severe burns as a result of exposure to dangerously hot
water. Significantly, the sink in the Garden Dining Room, a common area accessible to all residents, measured temperatures beyond those even contemplated by the SOM.
In response, Petitioner argues that this situation does not meet the standard for immediate jeopardy because there was no probable risk of serious harm. P. Br. at 10-11. But as I have already explained, because CMS imposed a per-instance penalty, it is irrelevant for my purposes to determine whether the record supports a finding of immediate jeopardy. In any event, Petitioner would be unlikely to prevail with such an argument.
I must also consider culpability; I do not believe Petitioner intended neglect, indifference, or disregard for its residents. Nevertheless, some level of culpability is apparent here, as Petitioner did not have an adequate system of monitoring, maintenance, or repair.
I have already explained why Petitioner’s sporadic monitoring of water temperatures and failure to inspect or schedule replacement of critical parts were inadequate to secure its residents from risk of serious harm. But to the extent there is any merit to the notion that Petitioner was the victim of poor timing because the defect happened to occur in close proximity to the survey, I note that the first survey date took place on February 17, 2015, and that Petitioner was not actually deemed to have returned to compliance until March 15, 2015. Thus, given the existence of a condition that posed a risk of harm to residents for up to nearly a month, CMS could easily have imposed a per-day penalty regime, under which Petitioner would have faced a much higher penalty.
Instead, despite finding immediate jeopardy, CMS chose to employ the per-instance penalty regime, which arguably takes into account the circumstance of which Petitioner complains. Put another way, if it is true that Petitioner was indeed caught off-guard by a chance occurrence of equipment failure, it appears CMS accommodated that circumstance by imposing a much lower per-instance fine rather than penalizing Petitioner for every day it took to correct the deficiency. Accordingly, I find CMS’ imposition of an $8,750 civil money penalty to be reasonable.
Bill Thomas Administrative Law Judge
1. CMS subsequently re-designated this regulation as 42 C.F.R. § 483.25(d). 81 Fed. Reg. 68,688, 68,860 (Nov. 28, 2016). CMS now associates accidents with Tag F689. State Operations Manual Appendix PP at 111, available at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/GuidanceforLawsAndRegulations/Downloads/Appendix-PP-State-Operations-Manual.pdf (last rev. Nov. 22, 2017). There is no substantive change in either the regulation or the tag. Therefore, for simplicity’s sake, I will continue to refer to Tag F323 and the regulation in effect at the time of the survey and the request for hearing.
- back to note 1 2. CMS also notified Orem it denied or withdrew approval for any facility-based nurse aide training program, as required by statute when a facility has been subject to an extended survey. Because Orem had no such program, this aspect of CMS’ imposition of penalties will not be further discussed outside of the issue of scope of review below.
- back to note 2 3. Petitioner purported to “reserve the right to cross examine all witnesses listed by Respondent.” Pet. Proposed Witness List. However, the APHO plainly required the parties to “affirmatively state” their intention to cross-examine witnesses. See APHO at 6. Petitioner failed to do so and thus waived its right to cross-examine CMS’ witnesses.
- back to note 3 4. The SOM describes third-degree burns in graphic detail, presumably to highlight the profound risk to residents when facilities fail to adequately monitor water temperatures: “Third-degree burns penetrate the entire thickness of the skin and permanently destroy tissue. These present as loss of skin layers, often painless (pain may be caused by patches of first- and second- degree burns surrounding third-degree burns), and dry, leathery skin. Skin may appear charred or have patches that appear white, brown, or black.” CMS Ex. 20 at 15-16.
- back to note 4 5. The table in the SOM does not even contemplate water temperatures exceeding 155 degrees, which would cause a third-degree burn in one second. Id. at 15.
- back to note 5 6. I do not impose UDOH’s specific temperature requirement or use it as sole evidence of lack of substantial compliance. Instead, I note Petitioner had a parallel obligation to the state of Utah to keep its water temperatures below 115 degrees. Its failure to act when it discovered this deficiency prior to the survey at issue here undermines Petitioner’s claim it had an adequate and sufficient system in place to monitor water temperatures that kept resident as free from harm as possible.
- back to note 6