Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Advanced Rehabilitation and Healthcare of Live Oak,
Centers for Medicare & Medicaid Services.
Docket No. C-17-702
Decision No. CR5867
Petitioner was not in substantial compliance with program participation requirements from February 20 through March 30, 2017. There is a basis for imposition of an enforcement remedy. A civil money penalty (CMP) of $405 per day for the period February 20 through March 30, 2017, is a reasonable enforcement remedy.
Petitioner participates in Medicare as a skilled nursing facility (SNF) and the state Medicaid program as a nursing facility (NF). Joint Stipulations, Statement of Issues, and Settlement Status Report (Jt. Stip.) ¶ II.1. On March 1, 2017, the Texas Department of Aging and Disability Services (state agency) concluded a Life Safety Code (LSC) inspection of Petitioner. The state agency completed a recertification survey and complaint investigation on March 3, 2017. The surveys began on February 28, 2017. The state agency found that Petitioner was not in substantial compliance with program
participation requirements, and that Petitioner's noncompliance posed immediate jeopardy from February 28 through March 1, 2017. Centers for Medicare & Medicaid Services (CMS) Exhibits (Exs.) 1, 3-4.
CMS notified Petitioner by letter dated March 27, 2017, that based on the noncompliance found by the surveys, CMS proposed to impose a CMP of $6,500 per day for two days of immediate jeopardy (February 28 and March 1, 2017), and a CMP of $300 per day beginning March 2, 2017, and continuing until further notice. CMS advised Petitioner that mandatory termination of Petitioner's provider agreement would occur on September 1, 2017, and a denial of payment for new admissions (DPNA) would be imposed effective April 1, 2017, if Petitioner did not return to substantial compliance before those dates. CMS Ex. 1 at 1-5.
CMS advised Petitioner on May 15, 2017, that based upon further administrative review CMS revised the CMPs set forth in the March 27, 2017 notice. The $6,500 per day CMP beginning February 28 through March 1, 2017, was revised to $14,609 per day beginning February 20 and continuing through March 1, 2017, and the $300 per day CMP beginning March 2, 2017, was revised to $405 per day beginning March 2, 2017, and continuing indefinitely. The other enforcement remedies remained unchanged. CMS Ex. 1 at 10-12.
CMS notified Petitioner on June 20, 2017, that a revisit survey found Petitioner returned to substantial compliance effective March 31, 2017. The $14,609 per day CMP beginning February 20 through March 1, 2017, was unchanged. Accrual of the $405 per day CMP that began on March 2, 2017, stopped accruing March 30, 2017. CMS advised Petitioner that the termination and DPNA were rescinded. CMS Ex. 1 at 17-19.
Petitioner requested a hearing before an administrative law judge (ALJ) on May 16, 2017 (RFH). The case was assigned to me for hearing and decision on May 25, 2017, and an Acknowledgment and Prehearing Order (Prehearing Order) was issued at my direction.
On March 5, 2019, a hearing was convened by video teleconference and a transcript (Tr.) of the proceedings was prepared. CMS Exs. 1 through 5, 18, and CMS Ex. 22 page 120 were admitted as evidence. Tr. 38-41. Petitioner's exhibits (P. Exs.) 1 through 4 were admitted as evidence. Tr. 42-53. CMS called Surveyor Michael Matson as a witness. Tr. 66-67. Petitioner called Carlton D. Hogan, director of environmental services and life safety for Petitioner's parent company. Tr. 139.
On June 18, 2019, CMS filed a post-hearing brief (CMS Br.). Petitioner filed its post-hearing brief (P. Br.) on June 19, 2019. Petitioner filed a post-hearing reply brief (P. Reply) on July 17, 2019. CMS filed no post-hearing reply brief.
Whether there is a basis for the imposition of an enforcement remedy; and
Whether the remedy imposed is reasonable.
B. Applicable Law
The statutory and regulatory requirements for participation of a SNF in Medicare are at section 1819 of the Social Security Act (Act) and at 42 C.F.R. pt. 483.2 Section 1819(h)(2) of the Act authorizes the Secretary to impose enforcement remedies against a SNF for failure to comply substantially with the federal participation requirements
established by sections 1819(b), (c), and (d) of the Act.3 The Act requires that the Secretary terminate the Medicare participation of any SNF that does not return to substantial compliance with participation requirements within six months of the date noncompliance began. Act § 1819(h)(2)(C). The Act also requires that the Secretary deny payment of Medicare benefits for any beneficiary admitted to a SNF, if the SNF fails to return to substantial compliance with program participation requirements within three months of the date noncompliance began – commonly referred to as the mandatory or statutory DPNA. Act § 1819(h)(2)(D). The Act grants the Secretary discretionary authority to terminate a noncompliant SNF's participation in Medicare, even if there has been less than 180 days of noncompliance. The Act also grants the Secretary authority to impose other enforcement remedies, including a discretionary DPNA, CMPs, appointment of temporary management, and other remedies such as a directed plan of correction. Act § 1819(h)(2)(B).
The Secretary has delegated to CMS and the states the authority to impose remedies against a long-term care facility that fails to comply substantially with federal participation requirements. "Substantial compliance means a level of compliance with the requirements of participation such that any identified deficiencies pose no greater risk to resident health or safety than the potential for causing minimal harm." 42 C.F.R. § 488.301 (emphasis in original). A deficiency is a violation of a participation requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary's regulations at 42 C.F.R. pt. 483, subpt. B. Noncompliance refers to any deficiency (statutory or regulatory violation) that causes a facility not to be in substantial compliance, i.e., a deficiency that poses a risk for more than minimal harm. 42 C.F.R. § 488.301. Therefore, even if a facility violates a statutory or regulatory requirement, CMS may not impose enforcement remedies if the deficiency does not pose a risk for more than minimal harm.
State survey agencies survey facilities that participate in Medicare on behalf of CMS to determine whether the facilities are complying with federal participation requirements. 42 C.F.R. §§ 488.10-.28, 488.300-.335.
The regulations specify the enforcement remedies that CMS may impose if a facility is not in substantial compliance with Medicare requirements. 42 C.F.R. § 488.406. CMS is authorized to impose a CMP against a facility not in substantial compliance with program
participation requirements. The regulations specify that a CMP that is imposed against a facility on a per day basis will fall into one of two ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of CMPs, $6,394 per day to $20,965 per day, is reserved for deficiencies that pose immediate jeopardy to a facility's residents and, in some circumstances, for repeated deficiencies. 42 C.F.R. § 488.438(a)(1)(i), (d)(2); 45 C.F.R. § 102.3 (Table). "Immediate jeopardy means a situation in which the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident." 42 C.F.R. § 488.301 (emphasis in original). The lower range of CMPs, $105 per day to $6,289 per day, is reserved for deficiencies that do not pose immediate jeopardy, but either cause actual harm to residents, or cause no actual harm but have the potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii); 45 C.F.R. § 102.3 (Table).
The Act and regulations make a hearing before an ALJ available to a long-term care facility against which CMS has determined to impose an enforcement remedy. Act §§ 1128A(c)(2), 1866(h); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). A facility has a right to appeal a "certification of noncompliance leading to an enforcement remedy." 42 C.F.R. §§ 488.408(g)(1); 488.330(e), 498.3(b)(13). However, the choice of enforcement remedies or the factors CMS considered when choosing enforcement remedies are not subject to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the scope and severity level of noncompliance determined by CMS if a successful challenge would affect the range of the CMP that may be imposed or impact the facility's authority to conduct a nurse aide training and competency evaluation program. 42 C.F.R. § 498.3(b)(14), (d)(10)(i). The CMS determination as to the level of noncompliance, including the finding of immediate jeopardy, "must be upheld unless it is clearly erroneous." 42 C.F.R. § 498.60(c)(2); Woodstock Care Ctr., DAB No. 1726 at 9, 38 (2000), aff'd, Woodstock Care Ctr. v. Thompson, 363 F.3d 583 (6th Cir. 2003). The Board has long held that the net effect of the regulations is that a provider has no right to challenge the scope and severity level assigned to a noncompliance finding, except in the situation where that finding was the basis for an immediate jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB No. 1750 (2000). ALJ review of a CMP is subject to 42 C.F.R. § 488.438(e).
The hearing before an ALJ is a de novo proceeding, that is, "a fresh look by a neutral decision-maker at the legal and factual basis for the deficiency findings underlying the remedies." Life Care Ctr. of Bardstown, DAB No. 2479 at 33 (2012) (citation omitted).
The allocation of the burden of persuasion and the quantum of evidence required to meet the burden is not addressed by regulations.4 Rather, the Board has long held that the petitioner, the nongovernmental party, bears the burden of persuasion to show by a preponderance of the evidence that it was in substantial compliance with participation requirements or any affirmative defense. Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 F. App'x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800 (2001); Cross Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehab. Ctr., DAB No. 1611 (1997) (remand to ALJ), DAB No. 1663 (1998) (after remand), aff'd, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999). The Board has indicated that only when CMS makes a prima facie showing of noncompliance, is the facility burdened to show, by a preponderance of the evidence on the record as a whole, that it was in substantial compliance or had an affirmative defense. Evergreene Nursing Care Ctr., DAB No. 2069 at 7 (2007). The Board has not specified how much evidence CMS needs to present to meet its burden of making a prima facie showing. The Board has stated that CMS must come forward with "evidence related to disputed findings that is sufficient (together with any undisputed findings and relevant legal authority) to establish a prima facie case of noncompliance with a regulatory requirement." Id.; Batavia Nursing & Convalescent Ctr., DAB No. 1904. "Prima facie" means generally that the evidence is "[s]ufficient to establish a fact or raise a presumption unless disproved or rebutted." Black's Law
Dictionary 1228 (8th ed. 2004). In Hillman Rehab. Ctr., the Board described the elements of the CMS prima facie case in general terms as follows:
HCFA [now known as CMS] must identify the legal criteria to which it seeks to hold a provider. Moreover, to the extent that a provider challenges [CMS's] findings, [CMS] must come forward with evidence of the basis for its determination, including the factual findings on which [CMS] is relying and, if [CMS] has determined that a condition of participation was not met, [CMS's] evaluation that the deficiencies found meet the regulatory standard for a condition-level deficiency.
DAB No. 1611 at 8. CMS has the initial burden of coming forward with sufficient evidence to show that its decision to impose an enforcement remedy is legally sufficient under the statute and regulations. To make a prima facie case that its decision was legally sufficient, CMS must: (1) identify the statute, regulation, or other legal criteria to which it seeks to hold the provider; (2) come forward with evidence upon which it relies for its factual conclusions that are disputed by Petitioner; and (3) show how the deficiencies it found amount to noncompliance that warrants an enforcement remedy, i.e., that there was a risk for more than minimal harm due to the regulatory violation.
In Evergreene, the Board explained its "well-established framework for allocating the burden of proof on the issue of whether a SNF is out of substantial compliance" as follows:
CMS has the burden of coming forward with evidence related to disputed findings that is sufficient (together with any undisputed findings and relevant legal authority) to establish a prima facie case of noncompliance with a regulatory requirement. If CMS makes this prima facie showing, then the SNF must carry its ultimate burden of persuasion by showing, by a preponderance of the evidence, on the record as a whole, that it was in substantial compliance during the relevant period.
DAB No. 2069 at 4. The Board further noted that CMS makes a prima facie showing of noncompliance if the evidence CMS relies on is sufficient to support a decision in its favor, absent an effective rebuttal. A facility can overcome CMS's prima facie case either by rebutting the evidence upon which that case rests, or by proving facts that affirmatively show substantial compliance. "An effective rebuttal of CMS's prima facie case would mean that at the close of the evidence the provider had shown that the facts on which its case depended (that is, for which it had the burden of proof) were supported by a preponderance of the evidence." DAB No. 2069 at 7-8 (citations omitted).
One might conclude that if the preponderance of the evidence is required in these proceedings, that standard would also apply to the requirement for CMS to make a prima facie showing, that is, CMS should be burdened to present evidence sufficient to establish a fact as more likely true and to raise a presumption. However, the Board has never ruled that CMS must establish its prima facie case by a preponderance of the evidence. Indeed, it is unclear from prior Board decisions whether CMS can make a prima facie showing with little more than mere allegations or a scintilla of evidence.
C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold text followed by my findings of fact and analysis. I have carefully considered all the evidence and the arguments of both parties, though not all may be specifically discussed in this decision. I discuss in this decision the credible evidence given the greatest weight in my decision-making.5 I also discuss any evidence that I find is not credible or worthy of weight. The fact that evidence is not specifically discussed should not be considered sufficient to rebut the presumption that I considered all the evidence and assigned such weight or probative value to the credible evidence that I determined appropriate within my discretion as an ALJ. There is no requirement for me to discuss the weight given to every piece of evidence considered in this case, nor would it be consistent with notions of judicial economy to do so. Charles H. Koch, Jr., Admin. Law & Prac. § 5:64 (3d ed. 2013).
On February 28 and March 1, 2017, state agency surveyors conducted a survey of Petitioner to determine Petitioner's compliance with the LSC. CMS Ex. 3 at 3. The surveyors cited four violations of the LSC and alleged noncompliance with 42 C.F.R. § 483.90. CMS Ex. 3 at 1. State agency surveyors also conducted a recertification survey and complaint investigation that was completed on March 3, 2017, based on which the surveyors allege noncompliance with multiple participation requirements. CMS Ex. 4.
1. Petitioner waived review of the noncompliance cited by the recertification survey and complaint investigation as violations of 42 C.F.R. §§ 483.10(h)(1), (3)(i) and 483.70(i)(2) (Tag F164,6 scope and severity (s/s) D7 );
483.10(e)(3) (Tag F246, s/s E); 483.21(b)(3)(i) (Tag F281, s/s E); 483.21(b)(3)(ii) (Tag F282, s/s D); 483.20(e), (k)(1)-(4) (Tag F285, s/s E); 483.40(b)(1) (Tag F319, s/s E); 483.25(d)(1)-(2), (n)(1)-(3) (Tag F323, s/s E); 483.25(b)(2), (f), (g)(5), (h), (i), (j) (Tag F328, s/s E); 483.45(f)(2) (Tag F333, s/s E); 483.60(d)(3) (Tag F365, s/s E); 483.60(f)(1)-(3) (Tag F368, s/s F); 483.60(i)(1)-(3) (Tag F371, s/s E); 483.45(a), (b)(1) (Tag F425, s/s E); 483.45(b)(2)-(3), (g), (h) (Tag F431, s/s E); 483.70(i)(1), (5) (Tag F514, s/s E); and 483.90(a) (based on alleged noncompliance under Tag K325, s/s E; Tag K901, s/s F, and Tag K918, s/s F). CMS Exs. 3-4. These citations of noncompliance are administratively final, and the unchallenged citations of
noncompliance are bases for the imposition of enforcement remedies.
2. Petitioner did not request review of the reasonableness of the $405 per day lower-range CMP, based on the unchallenged allegations of noncompliance for the period of February 20 through March 30, 2017. The enforcement remedy is administratively final and not subject to further review for reasonableness.
In its notice of initial determination dated March 27, 2017, CMS advised Petitioner it was imposing enforcement remedies based on the noncompliance cited by the LSC survey and the recertification survey and complaint investigation. CMS Ex. 1 at 1-5; CMS Exs. 3-4.
Petitioner requested ALJ review of all the allegations of noncompliance. RFH; Petitioner's Prehearing Brief at 3. However, prior to hearing the parties filed a motion to limit the hearing to only address the noncompliance alleged by the LSC survey as a violation of "42 C.F.R. § 483.70(a)"8 cited in the Statement of Deficiencies (SOD) under Tag K222 (CMS Ex. 3 at 1-10). Joint Motion in Limine to Limit Scope of Hearing (Motion in Limine). At hearing Petitioner clarified that it requested ALJ review of only the noncompliance alleged under Tag K222 and no longer contested or sought review as to any other alleged noncompliance. Petitioner also clarified that it only challenged the reasonableness of the CMP in the higher range of authorized CMPs for the noncompliance alleged under Tag K222 to be immediate jeopardy. Petitioner agreed that the noncompliance for which review was not requested would support a CMP in the lower range and that no review was requested as to the reasonableness or duration of the
CMP proposed by CMS in the lower range of authorized CMPs for noncompliance not alleged to be immediate jeopardy. Tr. 21-23.
3. CMS made a prima facie showing that Petitioner was not in substantial compliance with 42 C.F.R. § 483.90(a) (Tag K222, s/s L).
4. Petitioner successfully rebutted CMS's prima facie showing of noncompliance as alleged under Tag K222 by a preponderance of the evidence.
5. There is no basis for the imposition of a CMP in the higher range of authorized CMPs because Petitioner has shown by a preponderance of the evidence that it was in substantial compliance contrary to the allegations of noncompliance by the surveyors under Tag K222 during the period February 20 through March 1, 2017.
6. The CMP of $14,609 per day for the period February 20 through March 1, 2017, has no basis and is not a reasonable enforcement remedy.
7. The declaration of immediate jeopardy alleged under Tag K222 is clearly erroneous because Petitioner has established it was in substantial compliance contrary to the allegations of noncompliance under Tag K222.
Pursuant to 42 C.F.R. § 483.90(a), Petitioner is obligated to ensure that its facility is "designed, constructed, equipped, and maintained to protect the health and safety of residents, personnel and the public." Under a subsection titled "Life safety from fire," the regulation requires:
(1) Except as otherwise provided in this section—
(i) The LTC facility must meet the applicable provisions and must proceed in accordance with the Life Safety Code (NFPA [National Fire Protection Association] 101 and Tentative Interim Amendments TIA 12–1, TIA 12–2, TIA 12–3, and TIA 12–4.)
42 C.F.R. § 483.90(a)(1)(i). NFPA 101®, LSC (2012 ed., Aug. 11, 2011); Tentative Interim Amendment (TIA) 12-1 (Aug. 11, 2011); TIA 12-2 (Oct. 30, 2012); TIA 12-3 (Oct. 22, 2013); and TIA 12-4 (Oct. 22, 2013) were all incorporated by reference in 42 C.F.R. § 483.90(a)(1)(i) by publication in the Federal Register upon approval of the Director of the Office of the Federal Register. 42 C.F.R. § 483.90(j).
The provisions of NFPA 101® and the TIAs are not published in the regulations or the Federal Register but are available for free at https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?code=101. CMS did not offer the applicable sections of the LSC as evidence at hearing and should have done so to ensure that it met its burden to show the legal criteria to which it seeks to hold Petitioner. Hillman Rehab. Ctr., DAB No. 1611 at 8; Tr. 120-24. Petitioner argues that the allegations of noncompliance under Tag K222 are unclear as to what specific provisions of the LSC Petitioner violated. Petitioner also argues that until CMS filed its post-hearing brief, it was unclear what provision of the LSC CMS alleged Petitioner violated. P. Br. at 5; P. Reply at 1-2. The allegations of the SOD under Tag K222 and CMS arguments prehearing may have been confusing. However, it is discernable from the language of the allegations under Tag K222 in the SOD that the surveyors specifically alleged that the door locks of five of nine delayed-egress doors did not unlock when the fire alarm was triggered and that sections 184.108.40.206.1 and 220.127.116.11.4(2) of the LSC were applicable. CMS Ex. 3 at 1-2. Therefore, I conclude Petitioner's argument that CMS failed to sufficiently identify the legal criteria to which it seeks to hold Petitioner is not persuasive.
The specific requirement CMS alleges Petitioner did not meet is established by sections 18.104.22.168.1 and 22.214.171.124.4(2) of the LSC. Section 126.96.36.199.1 of the LSC requires that all locks on delayed-egress doors unlock in the direction of egress upon activation of the fire alarm system (including automatic sprinkler systems and automatic fire detection systems) or upon loss of power controlling the lock or locking mechanism. CMS Ex. 3 at 3; Tr. 58-60, 126; CMS Br. at 1.
The surveyors allege in the SOD and CMS argues before me that when tested on February 28, 2017, five of nine delayed-egress doors did not release on activation of the fire alarm system, specifically doors on the 600 and 700 halls, two doors in the main dining room, and the main entry door. CMS Ex. 3 at 3; CMS Br. at 1-2.
Petitioner argues that the surveyors did not properly operate Petitioner's fire alarm system when conducting testing on February 28, 2017. Due to their improper operation of Petitioner's fire alarm system, the surveyors incorrectly concluded that magnetic locks for five of nine delayed-egress doors did not unlock when the fire alarm was activated. Petitioner argues that it is impossible for five of nine delayed-egress door locks not to have unlocked because all are wired in a single circuit and the power goes off to all at the same time.9 P. Br. at 5-12.
On February 28 and March 1, 2017, surveyors Michael Matson and Deneen Carnathan conducted an LSC inspection at Petitioner's facility. Tr. 70. Surveyor Matson testified at the hearing but Surveyor Carnathan did not.
Surveyor Matson testified that he started with the state agency as an LSC surveyor on August 1, 2016. He completed surveyor training offered by the state agency and CMS, and also received his certification as a certified fire inspector from the NFPA on December 14, 2016. Tr. 68-69, 96-97. On cross-examination he testified that he was not certified by CMS as a surveyor until after the survey of Petitioner. Tr. 97. Prior to starting with the state as a surveyor, he worked for a company as an occupational safety professional for approximately 30 years. He had completed approximately 40 surveys prior to the survey of Petitioner. Tr. 70.
Surveyor Matson described the testing of the facility's fire alarm system. He explained that first he and Surveyor Carnathan visually inspected the fire alarm control panel in the electrical switch room with the facility maintenance manager. Then they tested the alarm system. To test the system, they had a staff member pull a fire alarm system pull-station to start the alarm, which triggered both the audible alarm and strobe lights. Surveyor Matson was outside the electrical switch room and observed the staff member pull the pull-station. He observed that both the facility fire alarm and strobe lights were activated. Surveyor Matson testified that he then ran down the halls to verify that the strobe lights were actually working. He observed the strobes in the 600 and 700 halls, physical therapy, and the main entry. Surveyor Carnathan made the observation of other strobe lights in the facility. After verifying the strobe lights worked, Surveyor Matson testified they wanted to silence the audible alarm as fast as possible. Surveyor Matson testified that Surveyor Carnathan hit the button on the fire alarm panel that silenced the alarm. Surveyor Matson testified he saw Surveyor Carnathan enter the electrical switch room, but he admitted that he did not actually see Surveyor Carnathan silence the alarm because he was in the hallway. He could not recall if there was anyone in the electrical switch room with Surveyor Carnathan when she silenced the alarm. He could not recall whether the strobe lights continued after the audible alarm was silenced. Surveyor Matson testified that he did not know whether it was possible with Petitioner's fire alarm system to silence the audible alarm but not stop the strobe lights. He testified that in his experience about one or two percent of fire alarm system strobes continue to flash after
the audible alarm is silenced, but he did not recall whether Petitioner's system was of that type. After the audible alarm was silenced, Surveyor Matson testified they checked to see whether the delayed-egress doors were locked or unlocked. He testified he tested the main entry door, and doors on the 500, 600, and 700 hallways. He testified that the main entry door and the doors on the 600 and 700 hallways would not open. I infer that he meant the doors were locked, i.e., the locks did not release. He knew that he tested at least one of the dining room doors and may have checked both and they also would not open. He recalled that all doors checked by Surveyor Carnathan did open, i.e., the magnetic locks on those doors had released. Surveyor Matson testified that Petitioner's maintenance manager was with him most of the time and participated in discussions with the surveyors. He testified that they decided to do another test. They put the system back in normal status. He recalled looking at the alarm panel and it was in normal operating status with a green light and no red light. The alarm was again activated by a facility staff member. Strobe lights were not checked again, and the audible alarm was silenced right away by Petitioner's maintenance supervisor. Surveyor Matson testified that he and Surveyor Carnathan did not touch the panel for the second test. He testified that it is state survey agency policy to have facility staff operate the fire alarm system panel and that Surveyor Carnathan should not have touched the panel during the first test. Surveyor Matson testified that he, Surveyor Carnathan, and the maintenance supervisor then checked the operation of all the doors together. He testified that on the second inspection they found that the main entry door, the 600 and 700 hallway doors, and the two main dining room doors had not released. He explained that even though the locking mechanisms for the doors had not released (unlocked) when checked, pushing on the panic bar for each door for 15 seconds allowed the door to open. Tr. 72-95, 98-103, 108-09, 116-17.
On cross-examination Surveyor Matson identified a picture of a magnetic lock device (P. Ex. 2 at 3) and testified that he did not see that type of lock very often as it was fairly new. He testified that when the fire alarm system is activated, the magnetic lock releases (unlocks). He testified that the magnetic lock operated by a relay, which is essentially a switch, and when the power goes off, the lock releases. He testified he did not know the type of relay system used at Petitioner. Tr. at 103-06. Surveyor Matson testified on cross-examination that he was pretty sure but not certain, that he was in the electrical switch room when the alarm was silenced by Petitioner's maintenance supervisor during the second test of the alarm system. He then testified that he did not see who actually operated the system during the second test; he agreed that he did not specifically state who operated the system in the citation of the deficiency in the SOD; and his surveyor notes were not placed in evidence. Tr. 110-13. He subsequently agreed that during the second test he was not in the electrical switch room when the alarm was silenced and did not see who silenced the alarm. Tr. 133. Surveyor Matson testified that during the second test he, Surveyor Carnathan, and the maintenance supervisor checked all designated egress doors together after the fire alarm was silenced. He agreed on cross-examination that during the second test the strobe lights operated, and all interior doors
(smoke doors) automatically released. Tr. 117. Surveyor Matson then testified that he and Surveyor Carnathan discussed that she knew she should not have touched the alarm panel during the first test and that she told him that she did not touch the panel during the second test. Tr. 132.
The SOD provides a different version of the surveyors' testing of Petitioner's fire alarm system on February 28, 2017. The SOD does not explain which surveyor was engaged in which action described related to the testing, but we know from Surveyor Matson's testimony that for all doors checked by Surveyor Carnathan, the door locks had released both times the alarm system was activated. Tr. 86-87. Examination of the SOD reveals the following:
The SOD does not state at what time the fire alarm was activated or who silenced the audible alarm;
At 9:40 a.m., the delayed-egress doors on the 600 and 700 halls were checked and the magnetic locks were not released, and Surveyor Matson confirmed his observation with Petitioner's maintenance manager who, I infer, was accompanying Surveyor Matson;
At 9:47 a.m., the two delayed-egress doors in the main dining room were checked by Surveyor Matson and the maintenance manager and the magnetic locks were not released;
At 10:04 a.m., the delayed-egress door at the main entry was checked by Surveyor Matson and the maintenance manager and the magnetic locks were not released;
At 10:10 a.m., the fire alarm panel reset to normal, by whom is not stated;
The fire alarm was triggered a second time and the SOD does not state who silenced the audible alarm; and
The SOD states that the surveyor, who I infer to be Surveyor Matson, and the maintenance manager again found the delayed-egress doors on the 600 and 700 halls, the two doors in the main dining room, and the main entry door had not released when the fire alarm was activated the second time, with the maintenance manager confirming the status of each of the doors.
At 10:37 a.m., Petitioner's administrator was advised by the surveyors that there was immediate jeopardy.
CMS Ex. 3 at 3-4. The SOD and surveyor notes in evidence as CMS Ex. 22 do not describe the activities of Surveyor Carnathan while Surveyor Matson and Petitioner's maintenance manager were checking doors during the second test.
Surveyor Matson's testimony is partially credible. His description of the testing of Petitioner's fire alarm system is not fully consistent with or supported by the description of the testing in the SOD and his surveyor notes are not in evidence. He also revealed by his testimony that he was not particularly familiar with Petitioner's alarm system or the installation configuration, particularly related to whether the delayed-egress doors were connected by a single relay. Although he initially testified that he knew Surveyor Carnathan did not operate the alarm system during the second testing, Surveyor Matson subsequently changed his testimony, stating that he did not see who operated the system, specifically, who silenced the audible alarm during the second test. Therefore, Surveyor Matson did not provide credible evidence that Surveyor Carnathan did not take some action during the second test that interfered with the proper operation of Petitioner's fire alarm system, specifically, the release of all magnetic locks on delayed-egress doors.
Petitioner presented the testimony of Carlton Hogan, director of environmental services and life safety for Advanced Healthcare (Petitioner's parent company for lack of clear evidence of the relationship between Petitioner and Advanced Healthcare) for the preceding 15 years. Tr. 139. He testified that he has responsibility for 41 Advance Healthcare facilities. Tr. 162, 170. Mr. Hogan testified that he was familiar with Petitioner's facility, which was only three or four years old at the time of the LSC survey. He participated in the first LSC inspection of the facility when it opened. Mr. Hogan testified there were no problems with Petitioner's fire alarm system during the initial survey and, to his knowledge, none thereafter. Tr. 139-41. He was contacted by Petitioner's administrator on February 28, 2017, when the LSC inspection began. Mr. Hogan testified that he was told by the administrator that the surveyors found that three doors did not open correctly when they tested the fire alarm. He testified he contacted David Fortner with the company that monitors and takes care of the fire alarm system. Mr. Hogan testified that Mr. Fortner informed him that if one door works correctly, all must work, as they are on a single, central relay.
Mr. Hogan testified that he arrived at the facility around 5:30 p.m. on February 28, 2017, after the surveyors had already departed. He tested the fire alarm system by first checking that all delayed-egress doors were locked; he then activated the fire alarm system using a pull-station, and he then checked all doors and found all delayed-egress doors were unlocked (the locks had released). Mr. Hogan testified he tested the system twice, the second time with Petitioner's administrator. Subsequently, Mr. Fortner arrived at the facility and he also tested the fire alarm system with the same results. Mr. Hogan advised Surveyor Carnathan by telephone during the evening of February 28, 2017, that the system was tested and working correctly, and she advised him she would return the next morning.
Mr. Hogan testified that he and Mr. Fortner met with Surveyor Carnathan the next morning, which would have been March 1, 2017. Mr. Hogan testified that he and Mr. Fortner tested the fire alarm system in Surveyor Carnathan's presence and the system worked without defect. Mr. Hogan testified that Mr. Fortner explained to Surveyor Carnathan that all the doors in the facility were on a single relay, so if the lock on one door in the facility released, all would release when the alarm system was activated. Mr. Hogan testified that the relay works by cutting all power to the magnetic locks for all doors when the fire alarm is activated, causing all delayed egress-doors to unlock and all inside fire doors to close. Mr. Hogan testified that he asked Surveyor Carnathan if it was possible that during the testing of the system on February 28, 2017, that someone hit the button resetting the fire alarm system rather than the button to silence the alarm, an error that he knew could occur as he had previously committed that error. Mr. Hogan pointed out that the photograph of the fire alarm panel in evidence (P. Ex. 4) shows that the reset and silence buttons are close together. He explained that the silence button is pushed to silence the audible alarm, not the strobe lights, and the system stays in alarm status. Mr. Hogan testified that Surveyor Carnathan denied that surveyors make such mistakes. Tr. 141-53. Mr. Hogan testified that he understood, based on his communication with the facility maintenance manager, that Surveyor Carnathan operated the fire alarm system panel during both tests on February 28, 2017, while the facility maintenance manager accompanied the other surveyor checking doors. He testified that he believed five of nine delayed-egress doors had not unlocked when checked because Surveyor Carnathan pushed the reset button rather than the silence button during each testing of the alarm system before all the doors were checked, i.e., doors checked before she hit the reset button would have unlocked but all would have locked after the reset button was pushed, which would have also ended the audible alarm and strobe lights. He based his opinion on the fact that the buttons are close together on the alarm panel and, due to all doors being on a single relay, it was not possible for some door locks to release and others not. Tr. 157-60, 177-80.
Much of Mr. Hogan's testimony is hearsay. However, his testimony about Petitioner's fire alarm is supported by P. Exs. 3 and 4,10 and he has first-hand knowledge of Petitioner's fire alarm system. I find Mr. Hogan's testimony about how Petitioner's fire alarm system is installed and how it operates is credible. I also find credible his testimony that he tested the system at least twice on February 28, 2017, and then again with Mr. Fortner that same evening and each time the system worked correctly. I also find credible his testimony that the system worked correctly the next morning when he and Mr. Fortner tested the system in the presence of Surveyor Carnathan. According to
Mr. Hogan, no repairs or changes were made to Petitioner's fire alarm system between the testing during the survey and the subsequent successful tests of the delayed-egress door magnetic locks. Tr. 145.
Petitioner is obligated to ensure that its physical environment is "designed, constructed, equipped, and maintained to protect the health and safety of residents, personnel and the public." 42 C.F.R. § 483.90(a). In order to comply with the regulation, Petitioner must meet the applicable LSC requirements published by the NFPA. The specific requirement CMS alleges Petitioner did not meet is established by sections 188.8.131.52.1 and 184.108.40.206.4(2) of the LSC. Section 220.127.116.11.1 of the LSC requires that all locks on delayed-egress doors unlock in the direction of egress upon activation of the fire alarm system (including automatic sprinkler systems and automatic fire detection systems) or upon loss of power controlling the lock or locking mechanism. CMS Ex. 3 at 3; Tr. 58-60, 126-27; CMS Br. at 1. The substantive legal standard to which CMS seeks to hold Petitioner is not disputed.11 The issues to be resolved are issues of fact.
I conclude that CMS presented a prima facie showing of noncompliance supported by at least a scintilla of the evidence. Because I have concluded that CMS made a prima facie showing of noncompliance by Petitioner, Petitioner must rebut CMS's prima facie showing by a preponderance of the evidence. In other words, Petitioner must show that it is more likely than not in this case that it did not violate 42 C.F.R. § 483.90(a), or that it has an affirmative defense which is not asserted in this case. I conclude that Petitioner has rebutted the CMS prima facie showing. I resolve, based on the credible evidence, the issues of fact in favor of Petitioner, concluding that Petitioner has shown by a preponderance of the evidence, i.e., it is more likely than not, that its fire alarm system was improperly tested, causing it to appear that there was a defect in system operation. The improper testing was more likely than not due to the improper operation of the fire alarm system by Surveyor Carnathan, rather than a defect in the system.
Petitioner argues that it is not possible for the surveyors to have found that five of nine magnetic locks on delayed-egress doors were not released when the fire alarm system was activated. Petitioner bases this argument on the fact that all the facility door locks were connected to the alarm system through a single relay so that when the fire alarm was triggered all door locks on delayed-egress doors released and all magnetic door holds on smoke doors were released at the same time. P. Br. at 7; P. Reply at 2. Petitioner
maintains that the SOD and CMS findings were erroneous because it is physically impossible for some doors to release and not others.
My review is de novo, which means I am required to take a fresh look at the evidence. I am responsible to determine the credibility of the witnesses' testimony.
The fully credible testimony of Mr. Hogan shows that Petitioner's fire alarm system had all doors in the facility wired to a single relay so that when the alarm was activated all doors were released, i.e., magnetic locks for delayed-egress doors unlocked and magnetic hold backs for interior fire doors released so that those doors closed. It is more likely than not that it was impossible in this case for the magnetic locks for some doors to be unlocked and others not unlocked while the fire alarm system was activated. CMS did not present evidence that rebutted the credible testimony of Mr. Hogan. Surveyor Matson testified that he did not know how the relay for Petitioner's fire alarm system was configured. Tr. 105. Based on my reconsideration of my ruling at hearing that CMS Ex. 24 was not admissible either on the merits or as rebuttal evidence, I conclude that the document is not admissible because its relevance has not been established and it does not rebut Mr. Hogan's testimony that all delayed-egress magnetic locks were wired on a single circuit. Further, it is undisputed and supported by the testimony of Surveyor Matson that Surveyor Carnathan attempted to operate the fire alarm system, specifically to silence the audible alarm during testing at least during the first test. According to Surveyor Matson, Surveyor Carnathan's attempt to operate the system violated a state survey agency policy or practice that surveyors avoid such actions to ensure no allegations that the surveyor interfered with the proper operation of the system. Although he initially testified that Surveyor Carnathan did not attempt to operate the system during the second test, he ultimately admitted he did not see and did not know who took action during the second test to silence the audible fire alarm.12 Tr. 110-13. Furthermore,
Mr. Hogan credibly testified that the fire alarm system was tested at least three times after the surveyors departed the facility and again the next morning in the presence of Surveyor Carnathan with no defects. The SOD specifically states, consistent with the testimony of Mr. Hogan, that when the alarm system was activated again about 7:30 a.m. on March 1, 2017, all the delayed-egress doors that failed to unlock during the surveyors' testing on February 28, 2017, did unlock upon activation of the alarm. CMS Ex. 3 at 8; Tr. 147. According to Mr. Hogan, no repairs or changes were made to Petitioner's fire alarm system between the testing during the survey and the subsequent successful tests of the delayed-egress door magnetic locks. Tr. 145. The SOD indicates that the surveyors reviewed invoices from the fire alarm company. The SOD states that the invoices state that '"when the fire alarm goes off it activates a relay which kills power to all smoke doors and all egress doors in the building' and the doors were checked for 15 second egress and the lock on the dining area was replaced." CMS Ex. 3 at 9. The statement in the SOD is misleading and inaccurate as it suggests that some repair was made to the fire alarm system or magnetic locks that corrected the defect the surveyors believed they identified. The invoices actually state that "[w]hen the fire alarm goes off it activates a relay which kills power to all smoke doors and all egress doors in the building." P. Ex. 3 at 2. The invoices indicate that all doors were checked, and all worked. The invoices state the 15-second egress was also checked. The invoices state that a lock was replaced in the dining hall, but the invoice does not state that the lock was a delayed-egress magnetic lock or why the lock needed to be replaced. P. Ex. 3 at 3. Based on the credible evidence of record, I find and conclude the preponderance of the evidence shows that the surveyors' findings that some magnetic locks on delayed-egress doors released or unlocked while others did not is inconsistent with the weight of the evidence.
I conclude that Petitioner successfully rebutted the CMS prima facie case by a preponderance of the evidence. Petitioner presented evidence that it used a single-relay alarm system which could not have opened only some of the doors. Thus, Petitioner did not violate 42 C.F.R. § 483.90(a), and there was no noncompliance as alleged under Tag K222 that provides a basis for the imposition of an enforcement remedy. I further conclude that, because there was no noncompliance under Tag K222, there was no immediate jeopardy. 42 C.F.R. § 488.301 (Immediate jeopardy means that noncompliance "caused, or is likely to cause, serious injury, harm, impairment, or death to a resident"). Because there was no noncompliance as alleged under Tag K222 and no immediate jeopardy, the proposed $14,609 per day CMP is not reasonable.
The regulations are clear that an enforcement remedy may be imposed only on the basis of noncompliance. 42 C.F.R. § 488.402(b).
For the foregoing reasons, I conclude that Petitioner was not in substantial compliance with program participation requirements from February 20 through March 30, 2017. There is a basis for the imposition of a $405 per‑day CMP from February 20 through March 30, 2017, and the CMP is reasonable.
Keith W. Sickendick Administrative Law Judge
1. Petitioner is also referred to in the record as Stonebrook Manor or Stonebrook Manor at Broadway.
- back to note 1 2. References are to the Code of Federal Regulations (C.F.R.) as revised effective November 28, 2016, unless otherwise indicated. 81 Fed. Reg. 68,688, 68,697 (Oct. 4, 2016). In Mark A. Kabat, D.O., DAB No. 2875 at 9-11 (2018), an appellate panel of the Departmental Appeals Board (Board), after reviewing prior Board decisions, expressed a preference for applying the regulations in effect at the time of the agency action rather than at the time of the events that were the basis for the agency action, at least in provider and supplier revocation cases. Other appellate panels of the Board have concluded it is appropriate in long-term care facility survey cases to apply the revision of the regulatory participation requirements in the revision of the C.F.R. in effect at the time a survey was conducted. Good Shepherd Home for the Aged, Inc., DAB No. 2858 at 1 n.1 (2018); Carmel Convalescent Hosp., DAB No. 1584 at 2 n.2 (1996). In this case, the event for which immediate jeopardy was alleged began in February and continued into March 2017, the surveys concluded in March 2017, and the CMS initial determination was issued on March 27, 2017. The regulations with which Petitioner was bound to comply during this period were in the 2016 revision of the C.F.R. as amended effective November 28, 2016. Effective November 28, 2016, 42 C.F.R. pt. 483 was extensively revised with many of the participation requirements established by the regulations being moved and renumbered. 81 Fed. Reg. 68,688, 68,697. I conclude that the new regulations effective November 28, 2016, apply under the Board's rationale in Good Shepherd, Carmel, and the cases cited therein. The new regulations are published in the 2017 revision of the C.F.R.
- back to note 2 3. SNFs and NFs are often referred to as long-term care facilities or nursing homes. Participation of a NF in Medicaid is governed by section 1919 of the Act. Section 1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply with their participation requirements established by sections 1919(b), (c), and (d) of the Act.
- back to note 3 4. Congress granted the Secretary authority to impose enforcement remedies for noncompliance. Act § 1819(h)(2). The Secretary is authorized to impose CMPs as an enforcement remedy by section 1128A of the Act. CMPs are imposed by CMS with delegated authority of the Secretary. 42 C.F.R. § 488.2. Pursuant to subsection 1128A(j) of the Act, section 205 of the Act is applicable to the imposition of CMPs, and that section is applicable to the imposition of CMPs by both the Secretary and the Commissioner of Social Security under the authority of section 1128A of the Act. The Inspectors General (IGs) for both HHS and the Social Security Administration (SSA) also exercise delegated authority to impose CMPs pursuant to section 1128A of the Act. Both IGs engaged in rulemaking to specify the allocation of the burden of persuasion and the quantum of evidence required when proceeding upon a case involving a CMP. Both the SSA IG and the HHS IG imposed upon the government in CMP cases the burden of persuasion on all issues other than affirmative defenses and mitigating factors for which the burden is upon the nongovernmental party. The regulations of the IGs for SSA and HHS provide that the burden of persuasion is to be judged by a preponderance of the evidence. 20 C.F.R. § 498.215(b), (c); 42 C.F.R. § 1005.15(b), (d). CMS failed to promulgate a regulation similar to those of the HHS and SSA IGs, and the Board has filled the gap with its interpretative rules allocating the burden of persuasion to the nongovernmental party, the party defending against the imposition of the CMP.
- back to note 4 5. "Credible evidence" is evidence that is worthy of belief. Black's Law Dictionary 596 (8th ed. 2004). The "weight of evidence" is the persuasiveness of some evidence compared to other evidence. Id. at 1625.
- back to note 5 6. This is a "Tag" designation as used in CMS Pub. 100-07, State Operations Manual (SOM), app. PP – Guidance to Surveyors for Long Term Care Facilities (http://www.cms.hhs.gov/Manuals/IOM/list.asp). The "Tag" refers to the specific regulatory provision allegedly violated and CMS's policy guidance to surveyors. The SOM is not promulgated in accordance with section 1871(a)(1)‑(2) of the Act and does not have the force and effect of law. Azar v. Allina Health Servs., 588 U.S. __, 139 S. Ct. 1804 (2019). Although the SOM does not have the force and effect of law, the provisions of the Act and regulations interpreted clearly do have such force and effect. Indiana Dep't. of Pub. Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991); Northwest Tissue Ctr. v. Shalala, 1 F.3d 522 (7th Cir. 1993). Thus, while the Secretary may not seek to enforce the provisions of the SOM, he may seek to enforce the provisions of the Act or regulations as interpreted by the SOM.
- back to note 6 7. CMS and the state agency use scope and severity levels when selecting remedies. The scope and severity level is designated by an alpha character, A through L, selected by CMS or the state agency from the scope and severity matrix published in SOM, chap. 7, § 7400.5.1 (rev. 161, eff. Sept. 23, 2016). A scope and severity level of A, B, or C indicates a deficiency that presents no actual harm but has the potential for minimal harm, which is an insufficient basis for imposing an enforcement remedy. Facilities with deficiencies of a level no greater than C remain in substantial compliance. 42 C.F.R. § 488.301. A scope and severity level of D, E, or F indicates a deficiency that presents no actual harm but has the potential for more than minimal harm that does not amount to immediate jeopardy. A scope and severity level of G, H, or I indicate a deficiency that involves actual harm that does not amount to immediate jeopardy. Scope and severity levels J, K, and L indicate a deficiency that constitute immediate jeopardy to resident health or safety. The scope and severity matrix, which is based on 42 C.F.R. § 488.408, specifies which remedies are required and optional at each level based upon the frequency of the deficiency.
- back to note 7 8. The surveyors correctly allege in the SOD that the LSC violations are a violation of 42 C.F.R. § 483.90(a) under the revision of the regulations that were effective November 28, 2016. 81 Fed. Reg. 68,688, 68,697. In its notice of initial determination dated March 27, 2017, CMS incorrectly cited the LSC violations under 42 C.F.R. § 483.70(a), the regulation in effect prior to November 28, 2016. The citation error in the CMS notice of initial determination and the Motion in Limine was harmless error, causing no prejudice to either party, because the substantive provisions of the regulation applicable in this case were unchanged by the change in numbering from 42 C.F.R. § 483.70(a) to 42 C.F.R. § 483.90(a). I conclude Petitioner had adequate notice of the substantive requirement of the regulation allegedly violated to defend the allegation of noncompliance. Further citations in this decision are to 42 C.F.R. § 483.90(a), which is the applicable regulation.
- back to note 8 9. Petitioner also argues that door keypads that allegedly did not work on the 300 and 600 halls of the facility are not part of the fire alarm system and not subject to the LSC. However, Surveyor Matson testified at hearing that problems with keypads were not the basis for the citation of immediate jeopardy. Tr. 72, 108.
- back to note 9 10. CMS did not object to my consideration of P. Exs. 3 and 4. Tr. 42-43, 52.
- back to note 10 11. I concluded, contrary to the arguments of Petitioner, that the SOD did provide adequate notice of the substantive legal standard. Petitioner was clearly adequately prepared to defend based on the notice provided by the SOD.
- back to note 11 12. In its post-hearing brief, CMS states:
- back to note 12
In part because Carnathan was the individual to silence the alarms on the first test, contrary to survey best-practices, Matson and Carnathan repeated the test. TR. 88:1 – 91:22. First, the alarm was reset. The alarm was then activated again, and silenced. TR. 88:10 - 19. Neither Carnathan nor Matson silenced the alarm. TR. 88:17 – 89:4; 132:2-12. Carnathan and Matson then re-checked the doors, and again found that while some doors unlocked, the doors on halls 600 and 700, the main dining room exit doors, and the facility's main exit doors remained locked. TR. 89:5 - 90:3.
CMS Br. at 5 (emphasis added). CMS fails to mention that Surveyor Matson subsequently testified that he did not see who silenced the alarm during the second test and he could not recall who silenced the system. Tr. 110-13.