Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Glenview Terrace Nursing Center
Centers for Medicare & Medicaid Services.
Docket No. C-19-825
Decision No. CR6010
The Social Security Act (Act) mandates that each skilled nursing facility (SNF) participating in the Medicare program follow certain requirements and that the Centers for Medicare & Medicaid Services (CMS) employ state health agencies to survey SNFs to determine their compliance with those requirements. The Act authorizes CMS to periodically conduct special surveys, called validation surveys, within two months of a state agency survey to make sure that the state agency is properly conducting surveys. CMS also may survey an SNF whenever it believes there is a need to do so.
In this case, while the Illinois Department of Public Health (state agency) was conducting a standard survey at Glenview Terrace Nursing Center (Petitioner or facility), one of the facility’s boilers caused carbon monoxide to reach relatively high levels in a portion of the facility. This resulted in the transfer of 26 residents to the hospital for medical treatment. Petitioner took action to remedy the situation and did so by the time the state agency survey was concluding. Despite this significant event, the state agency’s survey document, the Statement of Deficiencies (SOD), did not mention the boiler situation.
A little more than a month later, CMS conducted what it referred to as a federal monitoring study of the facility and identified numerous deficiencies but did not mention in its SOD the situation caused by the boiler.
Later, CMS conducted a second federal monitoring survey and issued another SOD in which it found that the earlier boiler situation had immediately jeopardized the health and safety of Petitioner’s residents. CMS imposed a civil money penalty (CMP) on Petitioner for this deficiency. Petitioner requested a hearing to dispute the imposition of a CMP.
Petitioner moved for summary judgment arguing that CMS could not impose a CMP on Petitioner based on the boiler incident because the incident occurred and was resolved during the state agency standard survey. Petitioner asserted that CMS could only impose a CMP based on past noncompliance that occurred after the completion of the most recent state agency standard survey.
CMS replied that the second federal monitoring survey was directly connected to the most recent state agency standard survey and, in effect, modified that survey. CMS also stated that the second federal monitoring survey was a validation survey because it was conducted within two months of the state agency’s survey. In the alternative, CMS argued that even if the second federal monitoring survey were not a validation survey, the Act authorizes CMS to conduct surveys whenever CMS deems it appropriate and, therefore, the survey was valid.
Petitioner countered that CMS’s second federal monitoring survey was conducted one day beyond two months following the end of the state agency’s standard survey, and was, therefore, too late to qualify as a validation survey. Petitioner also argued that if the second federal monitoring survey were not a validation survey but a survey conducted under CMS’s general authority, CMS could not properly impose a CMP for noncompliance related to the boiler incident because that incident occurred and was resolved while the state agency standard survey took place. Therefore, it is past noncompliance that is ineligible to serve as the basis for a CMP because the only past noncompliance that CMS could consider was noncompliance that happened after the state agency standard survey had been completed.
I grant Petitioner’s summary judgment motion and reverse CMS’s determination to impose a CMP on Petitioner. Petitioner is correct that CMS’s second federal monitoring survey cannot be considered a validation survey because it was concluded two months and one day after the state agency completed the most recent standard survey. Therefore, it was not conducted within two months of the state agency standard survey. Further, Petitioner is correct that, if I do not consider the second federal monitoring survey to be a validation survey, but as a separate survey from the state agency’s standard survey, the incident involving the boiler is past noncompliance that can no longer be penalized.
I. Legal Framework
The Medicare program "provides basic protection against the costs of . . . related post‑hospital . . . care" for individuals over the age of 65 who are eligible for Social Security retirement benefits and for individuals under 65 who meet other criteria. 42 U.S.C. § 1395c. Post-hospital care includes extended care services provided at an SNF. 42 U.S.C. §§ 1395f(a)(2)(B), 1395x(h)-(i).
For Medicare program purposes, an SNF is an institution that is primarily engaged in providing skilled nursing care and/or rehabilitation services for its residents but is not primarily engaged in the care and treatment of mental diseases. 42 U.S.C. §§ 1395x(j), 1395i-3(a)(1). Because an SNF is a "provider of services" in the Medicare program, each SNF that participates in the program must file a provider agreement with the Secretary of Health and Human Services (Secretary). 42 U.S.C. §§ 1395cc(a), 1395x(u). Further, a participating SNF must meet a variety of ongoing requirements related to how it provides services, maintains the rights of its residents, and administers its facility. 42 U.S.C. § 1395i-3(a)(3), (b)-(d); 42 C.F.R. pt. 483, subpt. B.1
When an SNF fails to meet a statutory or regulatory participation requirement, then the SNF has a "deficiency." 42 C.F.R. § 488.301; see 42 U.S.C. § 1395i-3(h)(1), (2)(A). "Noncompliance" means "any deficiency that causes a facility to not be in substantial compliance." 42 C.F.R. § 488.301; see also 42 U.S.C. § 1395i-3(h)(3). To maintain "substantial compliance," an SNF’s deficiencies may "pose no greater risk to resident health or safety than the potential for causing minimal harm." 42 C.F.R. § 488.301.
Broadly, noncompliance that subjects an SNF to enforcement remedies is divided into two levels. One level is comprised of deficiencies that immediately jeopardize the health or safety of residents and the other level is composed of deficiencies that do not. 42 U.S.C. § 1395i-3(h)(1). "Immediate jeopardy" exists when "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.
The Secretary contracts with state agencies to conduct surveys to determine whether SNFs are in substantial compliance. 42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10. These surveys can be unannounced surveys that occur at least once every 15 months or can be in response to a complaint. 42 U.S.C. § 1395i-3(g). When the results of a survey show that an SNF is not in substantial compliance with program participation requirements, the Secretary may impose enforcement remedies on the SNF. 42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406. When CMS selects an enforcement remedy to impose on an SNF, it determines the scope (i.e., the number of residents
affected or potentially affected) and severity (i.e., the degree of harm or potential harm) for each deficiency. 2 See 42 C.F.R. § 488.404(a)-(b); see also 42 U.S.C. § 1395i‑3(h)(2)(B)(ii)(III)(bb).
One such remedy is a CMP. 42 U.S.C. § 1395i-3(h)(2)(B)(ii). CMS may impose a per‑instance CMP for each instance of the SNF’s noncompliance or a per‑day CMP for the number of days an SNF is not in substantial compliance. 42 U.S.C. § 1395i‑3(h)(2)(A), (h)(2)(B)(ii)(I); 42 C.F.R. § 488.430(a). For CMPs assessed on or after October 11, 2018, and for deficiencies that occurred after November 2, 2015, the CMP amounts may range as follows: $2,140 to $21,393 for per-instance CMPs; $107 to $6,418 per day for less serious noncompliance; or $6,525 to $21,393 per day for more serious noncompliance that poses immediate jeopardy to the health and safety of residents. 45 C.F.R. § 102.3 (2019); 83 Fed. Reg. 51,369, 51,380 (Oct. 11, 2018); see 42 C.F.R. § 488.438(a)(1) (original CMP amounts before statutory inflation adjustments).
If CMS imposes a CMP based on a finding of substantial noncompliance, then the SNF may request a hearing before an administrative law judge (ALJ) to challenge CMS’s initial determination of noncompliance that led to the imposition of an enforcement remedy and/or the level of noncompliance (if a successful challenge to the level would affect the range of CMP amounts imposed on the SNF). 42 U.S.C. §§ 1320a-7a(c)(2), 1395i‑3(h)(2)(B)(ii); 42 C.F.R. §§ 488.330(e)(3)(ii), 488.408(g)(1), 488.434(a)(2)(viii), 498.3(b)(13)-(14), (d)(10); see also 5 U.S.C. §§ 554, 556. However, CMS’s choice of remedies is not reviewable. 42 C.F.R. §§ 488.438(e)(2), 488.408(g)(2), 498.3(b)(13).
If an SNF challenges the existence of a deficiency, CMS must make a prima facie case that the SNF failed to substantially comply with federal participation requirements and, if such a showing is made, the SNF must then prove substantial compliance by a preponderance of the evidence. Hillman Rehabilitation Ctr., DAB No. 1611 at 8 (1997); see 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). If
an SNF challenges CMS’s determination as to the level of noncompliance, CMS’s determination must be upheld unless it is clearly erroneous. 42 C.F.R. § 498.60(c)(2).
If an ALJ concludes that there was a basis for imposing a CMP on an SNF, then the SNF may dispute the amount of the CMP. The ALJ’s review of the CMP amount is limited to considering the statutory and regulatory factors for setting a CMP amount. 42 C.F.R. § 488.438(e)(3); see 42 U.S.C. §§ 1320a-7a(d), 1395i-3(h)(2)(B)(ii)(I); 42 C.F.R. § 488.438(f). The ALJ may not reduce a CMP to zero. 42 C.F.R. § 488.438(e)(1).
Either the SNF or CMS may request Departmental Appeals Board (DAB) review of an ALJ’s decision. 42 C.F.R. § 498.80.
II. Background and Procedural History
On January 18, 2019, the state agency completed an Emergency Preparedness Survey, an Annual Certification survey, and several complaint investigations. CMS Ex. 1. The state agency found Petitioner in compliance with emergency preparedness requirements at 42 C.F.R. § 483.73. CMS Ex. 1 at 1. However, the state agency issued a SOD finding that Petitioner was in noncompliance with the following requirements for SNFs:
- 42 C.F.R. § 483.45(f)(1) (Medication Error Rate More Than Five Percent) (Tag F-759 / scope and severity level D);
- 42 C.F.R. § 483.60(i)(1), (2) (Food Safety Requirements) (Tag F-812 / scope and severity level F); and
- 42 C.F.R. § 483.80(a) (Infection Prevention and Control Program) (Tag F-880 / scope and severity level D)
CMS Ex. 1.
On January 31, 2019, the state agency informed Petitioner that it must submit a plan of correction for the deficiencies found in the SOD. The state agency warned that a failure to return to substantial compliance with Medicare requirements within three months would result in a mandatory denial of payment for new admissions (DPNA). CMS Ex. 4 at 1-2.
From February 25, 2019 through March 1, 2019, the Centers for Medicare & Medicaid Services (CMS) conducted a federal monitoring survey (March 1 CMS Survey) in connection with the state agency January 18, 2019 survey. CMS Ex. 2. CMS found deficiencies in addition to those found in the January 18, 2019 survey and issued a SOD. Regarding the Emergency Preparedness Survey, CMS found a single level "C" deficiency. Regarding health issues, CMS found the following deficiencies:
- 42 C.F.R. § 483.10(c)(2), (3) (Right to Participate in Planning Care) (Tag F-553 / scope and severity level E);
- 42 C.F.R. § 483.10(c)(6), (8), (g)(12) (Right to Refuse/Discontinue Treatment and Formulate Advance Directives) (Tag F-578 / scope and severity level D);
- 42 C.F.R. § 483.15(a) (Admission Policy) (Tag F-620 / scope and severity level D);
- 42 C.F.R. § 483.15(c)(3)-(6), (8) (Notice Requirements Before Transfer/Discharge) (Tag F-623 / scope and severity level C);
- 42 C.F.R. § 483.15(d)(1), (2) (Notice of Bed Hold Policy Upon Transfer) (Tag F-625 / scope and severity level B);
- 42 C.F.R. § 483.20(g) (Accuracy of Assessments) (Tag F-641 / scope and severity level D);
- 42 C.F.R. § 483.20(k)(1)-(3) (PASARR Screening) (Tag F-645 / scope and severity level D);
- 42 C.F.R. § 483.20(k)(4) (MD/ID Significant Change Notification) (Tag F-646 / scope and severity level D);
- 42 C.F.R. § 483.21(b)(1) (Right to Participate in Panning Care) (Tag F-656 / scope and severity level E);
- 42 C.F.R. § 483.21(b)(2) (Comprehensive Care Plans) (Tag F-657 / scope and severity level D);
- 42 C.F.R. § 483.24(a)(2) (ADL Care Provided for Dependent Residents) (Tag F-677 / scope and severity level D);
- 42 C.F.R. § 483.24(c)(1) (Activities Meet Interests/Needs for Each Resident) (Tag F-679 / scope and severity level D);
- 42 C.F.R. § 483.25(a)(1), (2) (Treatment/Devices to Maintain Hearing/Vision) (Tag F-685 / scope and severity level D);
- 42 C.F.R. § 483.25(b)(1) (Treatment/Services to Prevent/Heal Pressure Ulcer) (Tag F-686 / scope and severity level D);
- 42 C.F.R. § 483.25(d)(1), (2) (Free of Accident Hazards/Supervision/Devices) (Tag F-689 / scope and severity level E);
- 42 C.F.R. § 483.25(g)(4)-(5) (Tube Feeding Management/Restore Eating Skills) (Tag F-693 / scope and severity level D);
- 42 C.F.R. § 483.25(k) (Pain Management) (Tag F-697 / scope and severity level D);
- 42 C.F.R. § 483.40(b)(3) (Treatment/Services for Dementia) (Tag F-744 / scope and severity level G);
- 42 C.F.R. § 483.45(g), (h) (Label/Storage of Drugs and Biologicals) (Tag F-761 / scope and severity level E);
- 42 C.F.R. § 483.80(a)(1), (2), (4), (e), (f) (Right to Participate in Planning Care) (Tag F-880 / scope and severity level E); and
- 42 C.F.R. § 483.80(d)(1), (2) (Influenza and Pneumococcal Immunizations) (Tag F-883 / scope and severity level D).
CMS Ex. 2.
CMS issued a March 13, 2019 initial determination that referenced both the state agency January 18, 2019 survey and the March 1 CMS Survey. CMS Ex. 5 at 1. CMS informed Petitioner that it had ten days to submit an acceptable plan of correction related to CMS’s SOD and that CMS was imposing a discretionary DPNA, effective April 8, 2019, if Petitioner did not return to compliance by that date. CMS Ex. 5 at 2-4.
In a March 14, 2019 notice, the state agency indicated that it had received Petitioner’s plan of correction related to the state agency’s January 31, 2019 notice. The state agency stated that, following a review of plan, Petitioner was now in substantial compliance. CMS Ex. 6.
From March 18, 2019 through March 19, 2019, CMS conducted another "health Focused Concern Federal Monitoring Survey" (March 19 CMS Survey) related to the "complaint survey conducted on January 18, 2019." CMS Ex. 3 at 1. CMS issued a SOD in which CMS found the following deficiency:
- 42 C.F.R. § 483.90(d)(2) (Essential Equipment, Safe Operating Condition) (Tag F-908 / scope and severity level K).
CMS Ex. 3. CMS summarized this deficiency as follows:
The Federal survey resulted in an Immediate Jeopardy at F908. This was cited based on the facility’s failure to ensure that the boiler located on the third floor West Unit of the facility was in a safe operating condition. This resulted in an Immediate Jeopardy due to residents’ unnecessary exposure to high levels of Carbon Monoxide (CO) in the air caused by a leak from the boiler which resulted in 26 residents being transferred to area hospitals for emergency medical treatment. This failure by the facility posed the likelihood of exposure to high levels of CO that could result in CO intoxication or poisoning, brain damage or death to the 138 residents who resided in the West Units of the facility at the time of the incident.
The Immediate Jeopardy began on 1/16/19 when the residents who resided in the first, second and third floor west units of the facility were exposed to high levels of CO in the air. The Administrator, Director of Nursing and Assistant Director of Nursing were notified of the Immediate Jeopardy at 4:30pm on 3/19/19. The Immediate Jeopardy was removed, and the deficient practice corrected, on 1/18/19, prior to the start of this survey and, therefore, this deficiency is considered Past Noncompliance.
CMS Ex. 3 at 1.
In a March 29, 2019 initial determination, CMS indicated that it was imposing an additional remedy on Petitioner based on the survey cycle commencing January 18, 2019. CMS Ex. 7. Specifically, CMS stated that it was imposing the following:
Federal Civil Money Penalty of $21,393.00 per instance for the instance of past noncompliance at F0908 (S/S: K) identified in the CMS-2567 for the survey ending March 19, 2019.
CMS Ex. 7 at 2. CMS also stated that a DPNA would be imposed on April 8, 2019. CMS Ex. 7 at 1.
On May 10, 2019, Petitioner requested a hearing before an ALJ to challenge the findings related to the state agency’s survey that ended on January 18, 2019, and the March 1
CMS Survey. The Civil Remedies Division acknowledged receipt of the hearing request, docketed it under C-19-778, and issued my Standing Prehearing Order (SPO).
On May 24, 2019, Petitioner requested a hearing to challenge the CMP imposed by CMS following the March 19 CMS Survey. Petitioner requested consolidation of this hearing request with the case docketed as C-19-778. The Civil Remedies Division docketed the second hearing request as C-19-825. On May 29, 2019, I issued an order consolidating both of Petitioner’s hearing requests under C-19-825.
In a May 28, 2019 notice, the state agency informed Petitioner that a revisit to the facility on May 23, 2019, showed that Petitioner had returned to substantial compliance as of March 26, 2019. CMS Ex. 9 at 1. The notice identified that the survey cycle had commenced on January 18, 2019. Further, the notice stated that the DPNA that became effective on April 8, 2019, was rescinded. CMS Ex. 9 at 1.
In a May 30, 2019 notice regarding the "Disposition of Remedies," for the survey cycle starting on January 18, 2019, CMS indicated that the state agency’s May 23, 2019 survey found Petitioner had returned to substantial compliance as of March 26, 2019, and as a result, the DPNA did not take effect. Thus, the only enforcement remedy that was effective was the per-instance CMP of $21,393 for past misconduct (i.e., noncompliance with Tag F-908). CMS Ex. 10 at 1-2.
On July 12, 2019, the parties stipulated that the following were the issues to be resolved in this case:
- Whether the deficiency citation at 42 C.F.R. § 483.90(d)(2) (Tag F908) as set forth in the Statement of Deficiencies for the March 19, 2019 survey demonstrates a lack of substantial compliance, including whether CMS’ immediate jeopardy determination (if reviewable) was clearly erroneous; and
- Whether the amount of the per-instance CMP imposed by CMS on Petitioner for the deficiency identified under Tag F908 during the March 19, 2019 survey is reasonable in light of the factors specified at 42 C.F.R. § 488.438(f).
Joint Stipulation ¶ 6.
Consistent with the SPO, CMS submitted its prehearing exchange, which included a prehearing brief and motion for summary judgment (CMS Br.), and 38 proposed exhibits
(CMS Exs. 1-38). Three of CMS’s exhibits were written direct testimony from CMS’s witnesses (CMS Exs. 24, 26, 28). Petitioner submitted its exchange, which included a prehearing brief and motion for summary judgment (P. Br.), and 14 proposed exhibits (P. Exs. 1-14). Two of Petitioner’s exhibits were written direct testimony from Petitioner’s witnesses (P. Exs. 12, 13). CMS filed a response to Petitioner’s summary judgment motion (CMS Response) with two additional exhibits (CMS Exs. 39-40). Petitioner filed a reply (P. Reply) related to the summary judgment motions.
CMS and Petitioner each requested to cross-examine the witnesses for the opposing party. CMS objected to five of Petitioner’s proposed exhibits.
I overrule CMS’s evidentiary objections. For purposes of deciding this matter on summary judgment, I admit all of the proposed exhibits into the record.
III. Summary Judgment
Summary judgment is appropriate if a case presents no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Bartley Healthcare Nursing & Rehab., DAB No. 2539 at 3 (2013) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)); Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009), and cases cited therein.
The moving party may show the absence of a genuine factual dispute by presenting evidence so one-sided that it must prevail as a matter of law or by showing that the non-moving party has presented no evidence "sufficient to establish the existence of an element essential to [that party’s] case, and on which [that party] will bear the burden of proof at trial." Livingston Care Ctr. v. Dep’t of Health & Human Servs., 388 F.3d 168, 173 (6th Cir. 2004) (quoting Celotex, 477 U.S. at 322). To avoid summary judgment, the non-moving party must then act affirmatively by tendering evidence of specific facts showing that a dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004). The non-moving party may not simply rely on denials but must furnish admissible evidence of a dispute concerning a material fact. Ill. Knights Templar, DAB No. 2274 at 4; Livingston Care Ctr., DAB No. 1871 at 5 (2003). In doing so, the non-moving party must show more than "some metaphysical doubt as to the material facts." W. Tex. LTC Partners, Inc., DAB No. 2652 at 6 (2015), aff’d sub nom. W. Tex. LTC Partners, Inc. v. U.S. Dep’t of Health & Human Servs., 843 F.3d 1043 (5th Cir. 2016); 1866ICPayday.com, L.L.C., DAB No. 2289 at 3 (2009) (quoting Matsushita, 475 U.S. at 587).
In examining the evidence for purposes of determining whether summary judgment is appropriate, I must draw all reasonable inferences in the light most favorable to the non-moving party. Heritage House of Marshall Health & Rehab., DAB No. 3035 at 8 (2021);
Brightview Care Ctr., DAB No. 2132 at 2, 9 (2007); Livingston Care Ctr., 388 F.3d at 172; Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); see also Brightview, DAB No. 2132 at 10 (entry of summary judgment upheld where inferences and views of non-moving party are not reasonable). However, drawing factual inferences in the light most favorable to the non-moving party does not require that I accept the non-moving party’s legal conclusions. W. Tex. LTC Partners, DAB No. 2652 at 6-7 ; cf. Guardian, DAB No. 1943 at 11 ("A dispute over the conclusion to be drawn from applying relevant legal criteria to undisputed facts does not preclude summary judgment if the record is sufficiently developed and there is only one reasonable conclusion that can be drawn from those facts."); see Green Valley Health Care & Rehab. Ctr., DAB No. 2947 at 8 (2019), quoting Johnson v. Perez, 823 F. 3d. 701, 705 (D.C. Cir. 2016) (noting that a genuine factual dispute does not exist "when a putatively disputed body of evidentiary material could not, even assuming a sympathetic factfinder, reasonably support a finding crucial to the nonmoving party’s legal position.").
Specifically, in relation to administrative proceedings involving Medicare, it is well-established that an ALJ is empowered to decide a case on summary judgment, without an evidentiary hearing. Shah v. Azar, 920 F.3d 987, 996 (5th Cir. 2019) (citing Cedar Lake Nursing Home v. U.S. Dep’t of Health & Human Servs., 619 F.3d 453, 457 (5th Cir. 2010)); see Fal-Meridian, Inc. v. U.S. Dep’t of Health & Human Servs., 604 F.3d 445, 449 (7th Cir. 2010). "All it means for a decision to be based on a grant of summary judgment is that there are no issues that would benefit from being resolved in an evidentiary hearing." Fal-Meridian, 604 F.3d at 449 (emphasis added).
In Fal-Meridian, the Seventh Circuit considered specifically the appropriateness of granting CMS summary judgment in an SNF case. The court sustained the ALJ’s grant of summary judgment in CMS’s favor because the petitioner/SNF did not tender "evidence that, if believed, would show that it had done everything possible (within the meaning of the regulation) to minimize the risks of an accident." Fal-Meridian, 604 F.3d at 451.
Finally, deciding a case on summary judgment does not mean that it is decided without a hearing. In reviewing administrative appeals decided on summary judgment, courts describe the case as having been decided without an "oral hearing" or without an "evidentiary hearing." They recognize that, by considering the evidence and applying the law, the ALJ has granted the petitioner a hearing. See CNG Transmission Corp. v. FERC, 40 F.3d 1289, 1293 (D.C. Cir. 1994) (holding that a "paper hearing" satisfies statutory requirements for "notice and opportunity for hearing."). Thus, granting summary judgment (or deciding a case on the written record) satisfies the hearing requirements of the Act.
For the reasons explained below, I grant Petitioner’s summary judgment motion and deny CMS’s summary judgment motion. I grant summary judgment based on the narrow issue
as to whether CMS was legally precluded from imposing a CMP based on the deficiency identified in the Second Validation Survey. Because I grant summary judgment in Petitioner’s favor, I do not reach the merits of the alleged deficiency in this case.
A. Undisputed Facts
- The state agency performed an annual certification survey (i.e., a standard survey) and investigated several complaints at Petitioner’s facility from January 15, 2019 through January 18, 2019. CMS Ex. 1.
- Based on the survey ending on January 18, 2019, the state agency issued a SOD in which the state agency found three deficiencies. The SOD made no findings regarding several complaints. CMS Ex. 1.
- CMS conducted a "health comparative Federal Monitoring Survey" (i.e., the March 1 CMS Survey) from February 25, 2019 through March 1, 2019. The March 1 CMS Survey was related to the state agency standard survey that ended on January 18, 2019. CMS Ex. 2 at 2.
- CMS issued a SOD based on the March 1 CMS Survey in which CMS found numerous deficiencies. CMS Ex. 2.
- CMS conducted a "health Focused Concern Federal Monitoring Survey" (i.e., the March 19 CMS Survey) from March 18-19, 2019 "following a [state agency] complaint investigation survey conducted on January 18, 2019."
- According the SOD, on March 19, 2019, the CMS surveyor interviewed Resident 3, Resident 9, Resident 19, Resident 22, Licensed Practical Nurse 2, the Deputy Chief of the Glenview Fire Department, Petitioner’s Director of Nursing and Assistant Director of Nursing, Petitioner’s Director of Maintenance, and Petitioner’s Administrator. CMS Ex. 3 at 4, 6-7, 10-11, and 14-15.
- On March 19, 2019, at 4:30 p.m., the CMS surveyor notified the facility administrator that the survey revealed that immediate jeopardy began on January 16, 2019, but that "[t]he Immediate Jeopardy was removed, and the deficient practice corrected, on 1/18/19." CMS Ex. 3 at 1.
- CMS issued a SOD in which it found that Petitioner had been noncompliant with 42 C.F.R. § 483.90(d)(2) (Tag F-908). CMS Ex. 3 at 1-2.
- In the SOD, CMS characterized this deficiency as "Past Noncompliance" because the deficiency was corrected prior to the start of the Second Verification Study. CMS Ex. 3 at 1.
- In the SOD, CMS identified January 16, 2019, as the day on which the deficiency began. The SOD stated that Petitioner had failed to ensure that the boiler located on the third floor of the facility had been properly maintained, leading to resident exposure to unsafe levels of carbon monoxide emitted from the boiler. CMS Ex. 3 at 2.
- The SOD concluded: "The past noncompliance immediate jeopardy began on 1/16/19. The immediate jeopardy was removed and the deficient practice corrected by 1/18/19 after the facility implemented a systemic plan that included the following actions: CO detectors were installed throughout the facility, in common areas, dining rooms, hallways and all units on 1/17/19; the malfunctioning boiler was shut down and the back-up boiler was used until a new boiler was purchased and installed on 1/18/19. In addition, all staff members were given in-service education titled, "CO Detector Functioning" on 1/17/19 and 1/18/19. The corrective actions were verified prior to exit from this survey." CMS Ex. 3 at 18.
- On March 29, 2019, CMS issued an initial determination imposing a CMP on Petitioner based on the CMS Survey that was completed on March 19, 2019. The initial determination characterized the § 483.90(d)(2) (Tag-F908) deficiency as "past noncompliance." CMS Ex. 7 at 1-2.
- In a May 30, 2019 notice entitled "DISPOSITION OF REMEDIES Cycle Start Date: January 18, 2019," stated again that CMS was imposing a CMP on Petitioner for past noncompliance concerning § 483.90(d)(2) (Tag-F908). CMS Ex. 10 at 1.
B. The parties’ arguments concerning summary judgment.
The primary basis for Petitioner’s summary judgment motion is that CMS is precluded from imposing a CMP for past noncompliance that occurred before the end of the last (i.e., January 18, 2019) standard survey. Because this case presents a complicated scenario, I summarize the parties’ positions in the order in which they were presented.
In its prehearing brief, CMS acknowledged that the SOD and initial determination had characterized the deficiency found during the March 19 CMS Survey as "past noncompliance." CMS Br. at 2. CMS argued that it has the authority to impose a CMP
for past noncompliance that involves an immediate jeopardy level deficiency. CMS supported this position by quoting a response to a public comment in the final rule promulgating the regulation related to past noncompliance, which stated that a CMP may be imposed "whenever there is past noncompliance with the participation requirements between standard surveys." CMS also quoted Aase Haugen Homes, Inc., DAB No. 2013 (2006) that "both the statute and regulations unambiguously permit imposition of a CMP for past noncompliance which occurred after the last standard survey." CMS Br. at 2-3 n.1.
In its prehearing brief, Petitioner asserted that CMS could not impose a CMP based on the March 19 CMS Survey. Specifically, Petitioner argued that the cited deficiency had occurred on January 16, 2019, which was before the exit date (i.e., January 18, 2019) of the last state agency survey. Petitioner quoted the State Operations Manual (SOM) to show that past noncompliance could only serve as the basis for a CMP if "[t]he noncompliance occurred after the exit date of the last standard (recertification survey) and before the survey (standard, complaint, or revisit) currently being conducted." P. Br. at 19-20.
Petitioner stated that CMS had failed to include the deficiency cited during the March 19 CMS Survey with the March 1 CMS Survey. Having failed to do that, Petitioner argued that "CMS may only look back to the prior standard survey – the January 18, 2019 Annual Survey." P. Br. at 19. Petitioner also cited North Ridge Care Center, DAB No. 1857 (2002) for the proposition that CMS could not reach back further than the last standard survey to impose a remedy. P. Br. at 20. Petitioner argued as follows:
In North Ridge, CMS argued that the regulation was "not intended to limit [its] authority to impose remedies for past noncompliance uncovered during a complaint investigation, whose period of concern may overlap with the period covered by a previous standard survey." Id. at 10. CMS argued that this would create a "safe harbor" for facilities, such that a remedy could not be imposed for a deficiency that occurred before but was not investigated until after the last standard survey. Id. The [DAB] rejected CMS’s argument and concluded that there are "plausible reasons" to restrict CMS’s authority to impose remedies. Id. at 11. The [DAB] held,
Looking back no further than the last standard survey avoids potential problems with the quality and quantity of evidence available to support a deficiency finding. It also encourages state survey agencies to conduct complete and thorough standard surveys and to ensure that all
pertinent information about a facility is shared with the persons who conduct them. In addition, section 488.430(b)'s drafters might reasonably have thought that a penalty for noncompliance that was corrected long before the most recent survey does not serve the enforcement scheme’s chief remedial purpose, which is to detect deficiencies and bring noncompliant facilities into compliance as quickly as possible. A CMP for past noncompliance does not serve this purpose because the facility is already in compliance. Finally, a limitation on CMS's remedial powers regarding past noncompliance mitigates the unfairness, real or perceived, of a deficiency finding that should have been addressed — and may have been resolved in the facility's favor— during the last standard survey.
Id. at 11. The [DAB] went even further and provided an example in footnote 14 regarding CMS’s "safe harbor" argument, which provides "For example, if a complaint investigation performed one month after a standard survey identified a period of noncompliance that occurred only two months before the standard survey, CMS would be powerless to impose a CMP for that deficiency." Id. at 11 n. 14.
The instant case is analogous to North Ridge and squarely fits the "safe harbor." Here, the incident at issue occurred on January 16, 2019. [The state agency] was timely notified on January 17 and because [the state agency was] in the process of conducting Glenview Terrace’s Annual Health Survey, surveyors were in the facility on January 17 and 18. (CMS Ex. 16; P. Ex. 12, p. 3). Then, on March 19, 2019, after four (4) other surveys were conducted (Annual Health Survey, Annual Life Safety Survey, Life Safety Comparative Survey, Health Comparative Survey), Glenview Terrace underwent the Federal Monitoring Survey. On March 19, 2019, the surveyor exited and issued the Form CMS-2567, citing Glenview Terrace with an IJ deficiency and imposing a per instance CMP for past non-compliance. (CMS Ex. 3, p. 1; CMS Ex. 7, p. 2). This is exactly the situation the [DAB] ruled against because "a CMP for past noncompliance does
not serve this purpose [remedial measure] because the facility is already in compliance." Id. at 11.
P. Br. at 21-22 (emphasis omitted).
CMS responded to Petitioner’s argument. CMS asserted that: "In order to monitor [the state agency’s] performance during the January 18, 2019 surveys, CMS properly conducted the March 19, 2019 federal survey within two months." CMS Response at 5. CMS then cited to its authority to conduct validation surveys and, through that authority, to confirm or overturn previous state survey recommendations. CMS Response at 6. Specifically, CMS argued:
Under the Medicare statute and operative regulation, the findings of CMS’ March 19, 2019 federal monitoring survey replace [the state agency’s] certification of compliance related to [the state agency’s] surveys completed on January 18, 2019. 42 U.S.C. § 1395i-3(g)(3)(A), (D); 42 C.F.R. § 488.330(a)(1)(ii). Thus, CMS technically did not need to deem the noncompliance with Tag F908 as "past" noncompliance, since the noncompliance occurred (and was corrected) during the January 18, 2019 surveys. CMS imposed a per-instance CMP for the Tag F908 immediate-jeopardy level noncompliance in accordance with its statutory and regulatory authority.
CMS Response at 6. Therefore, CMS argued that the deficiency cited during the March 19 CMS Survey was not past noncompliance because that survey was a validation survey to review how the state agency performed during the original survey completed on January 18, 2019. As such, CMS was standing in the state agency’s place and able to modify the results of the state agency survey.
As an alternative argument, CMS stated that it had broad authority to impose CMPs even if the March 19 CMS Survey were not a validation survey. CMS Response at 7. CMS argued the following:
Glenview Terrace also maintains that the regulation at 42 C.F.R. § 488.430(b) and the [DAB’s] decision in North Ridge Care Center preclude CMS from imposing a CMP for past noncompliance in this case. Dkt. No. 12 at 19-23 (citing North Ridge Care Ctr., DAB No. 1857 (2002)). The [DAB] in North Ridge relied on section 488.430(b) to hold that CMS could not impose a per-day CMP for past noncompliance prior to July 18, 1996, the date of the last standard survey.
The facility argues that CMS is similarly precluded from imposing a per-instance CMP here because the January 16, 2019 boiler incident occurred before January 18, 2019, which it asserts is the date of the last standard survey, and which ignores that the CO leak occurred during [the state agency’s] January 18, 2019 annual and complaint surveys that were subject to federal review surveys.
Even if this Tribunal concludes that the Tag F908 noncompliance is properly deemed "past" noncompliance in the context of a federal validation survey, Glenview Terrace cannot prevail. As an initial matter, North Ridge is distinguishable because Glenview Terrace relies on the wrong date for the last standard survey. In this case, because the last standard survey ended on February 23, 2018, not January 18, 2019, there is nothing in the permissive language of section 488.430(b) that precludes CMS from imposing a per-instance CMP for past noncompliance occurring on January 16, 2019. Indeed, the entire statutory and regulatory scheme gives CMS the discretion to impose CMPs, including a per-instance CMP, for past noncompliance.
CMS Response at 8.
Finally, Petitioner replied to CMS’s arguments and disputed that the February 23, 2018 state agency survey was the last standard survey for determining whether the deficiency was past noncompliance. Petitioner argued that CMS’s argument ignored the statutory and regulatory definitions for "standard survey" and "validation survey." P. Reply at 4. Petitioner thought that when CMS performs a validation survey it was not able to put itself in the place of the state agency that performed the standard survey. P. Reply at 5. Further, Petitioner argued that the March 19 CMS Survey could not be a validation survey because it was not performed within two months of the state agency’s standard survey. P. Reply at 6. Petitioner quoted section 7205.1.1 of the SOM for the proposition that CMS counts months by simply going to the corresponding day in each month ("For example, if a survey ended on January 15, the 3-month effective date for the mandatory denial of payment for new admissions remedy is April 15.") P. Reply at 6. Following this method of counting, "CMS had until March 18, 2019 to perform a validation survey of the January 18, 2019 standard survey. CMS was 1 day late – by performing the validation survey on March 19, 2019, the survey is untimely, it therefore fails to meet the definition of validation survey. (See 42 C.F.R. § 488.301; 42 U.S.C. § 1395i-3(g)(3)(A))." P. Reply at 6.
Because the March 19 CMS Survey could not be a validation survey, Petitioner asserted that it had to be simply a federal survey. Because of this, the last standard survey was the January 18, 2019 survey. If that is the case, a CMP cannot be imposed based on the January 16, 2019 deficiency because it occurred before, and not after, the completion of the January 18, 2019 survey. P. Reply at 7-8.
C. The March 19 CMS Survey was not a validation survey as defined in the regulations.
The Act provides for a variety of types of surveys to be done at SNFs participating in the Medicare program to ensure compliance with Medicare requirements.
State agencies must conduct a "standard survey" at each SNF at least every 15 months after the date of the previous standard survey. A standard survey considers the quality of care provided to SNF residents, reviews written plans of care, audits the assessments of the SNF’s residents, and reviews the SNF’s compliance regarding resident rights. 42 U.S.C. § 1395i-3(g)(2)(A); 42 C.F.R. §§ 488.301 (definition of Standard survey), 488.305, 488.308.
When a state agency determines, during a standard survey, that an SNF has provided substandard quality of care, the state agency must conduct an "extended survey." An extended survey requires a broader and deeper review of the SNF to determine compliance with Medicare requirements. 42 U.S.C. § 1395i-3(g)(2)(B); 42 C.F.R. §§ 488.301 (definition of Extended survey), 488.310.
State agencies may conduct an "abbreviated standard survey," which is a survey that gathers information of SNF compliance with Medicare requirements primarily through resident-centered techniques. Abbreviated surveys may be premised on a complaint that the state agency received. 42 C.F.R. § 488.301 (definition of Abbreviated survey); see also 42 U.S.C. § 1395i-3(g)(2)(A)(iii)(II).
Apart from the abbreviated standard survey, state agencies are also tasked with investigating complaints that SNFs have violated Medicare participation requirements. 42 U.S.C. § 1395i-3(g)(4); 42 C.F.R. § 488.332.
Finally, CMS must conduct periodic "validation surveys" in order to determine the adequacy of each state agency’s ability to conduct standard and extended surveys. If, based on a validation survey, CMS disagrees with a state agency determination that an SNF was in compliance with Medicare requirements, then CMS’s determination of noncompliance supersedes the state agency survey results. 42 U.S.C. § 1395i-3(g)(3)(A); 42 C.F.R. § 488.330(a)(1)(ii). However, the Act and regulations require that a validation survey be conducted "within 2 months" of the survey to be reviewed. 42 C.F.R. § 488.301 (definition of Validation survey); see 42 U.S.C. § 1395i-3(g)(3)(A).
The full regulatory definition for a "validation survey" is:
Validation survey means a survey conducted by the Secretary within 2 months following a standard survey, abbreviated standard survey, partial extended survey, or extended survey for the purpose of monitoring State survey agency performance.
42 C.F.R. § 488.301 (emphasis added).
In the present case, CMS asserted that the March 19 CMS Survey was a timely validation survey. Petitioner argued otherwise. I agree with Petitioner that the March 19 CMS Survey cannot be considered a validation survey because, while it was commenced on March 18, 2019, it was not completed until March 19, 2019. CMS Ex. 3. The surveyor conducted many interviews on March 19, and it was not until 4:30 p.m. on March 19 that the surveyor notified the facility that immediate jeopardy had occurred on January 16, 2019. CMS Ex. 3 at 1, 4, 6-7, 10-11, and 14-15.
As indicated above, a validation survey must be "conducted . . . within 2 months following" a qualifying state agency survey. While part of the March 19 CMS survey was conducted within two months of the January 18, 2019 state agency survey, the entire survey did not meet the required time limitation. In fact, CMS was unable to determine there had been immediate jeopardy until the end of March 19, following many interviews. Therefore, the March 19 CMS Survey was not conducted "within" two months of the January 18, 2019 survey.
It is also worth noting that CMS did not previously identify the March 19 CMS Survey as a validation survey. Further, CMS expressly stated that it was conducting the survey based on the state agency "complaint investigation survey conducted on January 18, 2019." CMS Ex. 3 at 1. Neither the statute nor the regulations indicate that a validation survey may be employed following a complaint investigation unless the complaint investigation was included in an abbreviated standard survey. 42 C.F.R. § 488.301 (definition of Validation survey); see 42 U.S.C. § 1395i-3(g)(3)(A). The SOD does not indicate that an abbreviated standard survey was performed. CMS Ex. 3. Therefore, the March 19 CMS Survey is not a validation survey under the regulatory definition.
D. CMS was not authorized, based on the March 19 CMS Survey, to impose a CMP on Petitioner for a deficiency that occurred during the state agency survey that ended on January 18, 2019.
As CMS asserts, there is no doubt that CMS has authority to conduct surveys of SNF facilities whenever CMS has reason to question an SNF’s compliance with Medicare participation requirements. 42 U.S.C. § 1395i-3(g)(4). However, a CMS survey under
§ 1395i-3(g)(4), unlike one under (g)(1), does not expressly provide CMS with the authority to review or modify the findings of a previous state agency survey. Rather, this provision appears to simply give CMS discretion to conduct its own surveys of SNFs when necessary. Therefore, if the March 19 CMS Survey were categorized as a survey under § 1395i-3(g)(4), it appears that the regulatory limitations on imposing CMPs for past noncompliance would be applicable.
The statute authorizing CMPs allows CMS to impose CMPs for deficiencies that occurred during a "previous period."
If the Secretary finds, or pursuant to the recommendation of the State under paragraph (1) finds, that a skilled nursing facility meets such requirements but, as of a previous period, did not meet such requirements, the Secretary may provide for a civil money penalty under subparagraph (B)(ii) for the days on which he finds that the facility was not in compliance with such requirements.
42 U.S.C. § 1395i-3(h)(2)(A)(ii). However, the Secretary, when implementing this statutory authority to impose CMPs for past noncompliance, decided to limit how far back in time CMS or a state agency could go when imposing CMPs. The regulation provides:
CMS or the State may impose a civil money penalty for the number of days of past noncompliance since the last standard survey, including the number of days of immediate jeopardy.
42 C.F.R. § 488.430(b) (emphasis added). Therefore, when imposing a CMP for past noncompliance, the noncompliance must arise after the most recent standard survey. The final rule promulgating this provision made it clear that a CMP can only be imposed on past noncompliance that occurs between standard surveys.
Response: We revised this paragraph of the rule and redesignated it as § 488.430(b). It now provides that [CMS] or the State may impose a civil money penalty for the number of days of past noncompliance since the last standard survey, including the days of immediate jeopardy. We believe that this revision implements sections 1819(h) and 1919(h) of the Act, which state that if a facility meets the requirements of subsections (b), (c), and (d), but as of a previous period did not meet such requirements, a civil money penalty could be imposed for the days in which the facility was not in
compliance with the requirements. We believe this statutory provision permits a civil money penalty to be imposed whenever there is past noncompliance with the participation requirements between standard surveys. The following example illustrates one application of this provision: A facility had a survey on July 1, 1993, and it was in substantial compliance with all of the participation requirements. During the orientation tour at the next survey, June 15, 1994, surveyors observed questionable infection control procedures. This observation prompted the surveyors to further examine records and the facility’s infection control program. This examination indicated that the facility was out of compliance with infection control requirements (§483.65) from October 15 to October 30, 1993. However, at the time of the June 15, 1994, survey, the facility was again in substantial compliance with participation requirements. The number of days of noncompliance would be 16, which is the number of days between (and including) October 15 and October 30. This noncompliance existed for 16 days, but it did not exist at the time of either survey.
59 Fed. Reg. 56,116, 56,199 (Nov. 10, 1994) (emphasis added).
I agree with Petitioner that the DAB has already concluded that a CMP may only be imposed on an SNF for a deficiency occurring after the exit date of the previous survey.
Given these circumstances, we find that the 1996 standard survey of North Ridge ended on July 18, 1996, the date of the exit conference. In addition to being consistent with the above-cited regulations and guidelines, our finding is consistent with the regulations establishing enforcement timetables based on the last day of a survey. See, e.g., 42 C.F.R. § 488.412 (allowing a noncompliant facility in a non-immediate-jeopardy case to continue to participate for six months "from the last date of the survey"); 42 C.F.R. § 488.310 (requiring survey agency to perform an "extended survey" within two weeks after completion of the standard survey).
Because the last standard survey ended on July 18, 1996, CMS may, in accordance with section 488.430(b), impose a CMP only for days of past noncompliance after July 18, 1996.
North Ridge Care Ctr., DAB 1857. Petitioner is correct that North Ridge is sufficiently analogous to the present case.
In the present case, CMS imposed a CMP on Petitioner for noncompliance that occurred on January 16, 2019, with a return to substantial compliance on January 18, 2019. CMS Ex. 3 at 1. The duration of this noncompliance was nearly identical to a state agency standard survey and complaint investigation at Petitioner’s facility, which took place from January 15, 2019 through January 18, 2019. CMS Ex. 1.
It is impossible to conclude that the January 16, 2019 noncompliance occurred after the January 18, 2019 state agency survey was completed. However, under 42 C.F.R. § 488.430(b), the only past noncompliance found by the March 19 CMS Survey that could subject Petitioner to a CMP is one that occurred after the state agency concluded its standard survey on January 18, 2019. Because there is no such past noncompliance, the March 19 CMS Survey does not provide a basis on which to impose a CMP on Petitioner.3
I grant Petitioner’s motion for summary judgment and conclude that CMS was not authorized under the regulations to impose a CMP on Petitioner for noncompliance that occurred during the previous state agency standard survey. Therefore, I reverse CMS’s March 29, 2019 initial determination.
Scott Anderson Administrative Law Judge
1. All citations to the Code of Federal Regulations are to the version in effect at the time of the survey unless otherwise indicated.
- back to note 1 2. CMS or the state agency designates the scope and severity level using a letter from A through L based on a scope and severity matrix published in the State Operations Manual, Ch. 7, § 7400.3.1 (Rev. 185, Eff. Nov. 16, 2018). Levels A, B, or C indicate a deficiency that presents no actual harm but has the potential for minimal harm, which means the facility remains in substantial compliance. 42 C.F.R. § 488.301. Levels D, E, or F indicate a deficiency that presents no actual harm but has the potential for more than minimal harm that does not amount to immediate jeopardy. Levels G, H, or I indicate a deficiency that involves actual harm that does not amount to immediate jeopardy. Finally, levels J, K, and L indicate a deficiency that constitutes immediate jeopardy to resident health or safety.
- back to note 2 3. As mentioned above, CMS argued that, while use of a per-day CMP may be limited as to past noncompliance, the current case involves a per-instance CMP. This distinction, if valid, would likely result in CMS being unable to impose per-instance CMPs for past noncompliance. Section 1395i-3(h)(2)(B) is a grant of authority to the Secretary to impose CMPs for past noncompliance. To the extent CMS reads per-instance CMPs as not implicated by this statute or by 42 C.F.R. § 488.430(b), then CMS has no authority to impose a per-instance CMP in a case involving past noncompliance. However, because CMS interpreted the statutory provision that authorized per-day CMPs to also authorize per-instance CMPs (although a per-instance CMP is not expressly mentioned in the statute), see 64 Fed. Reg. 13,354, 13,355-56 (Mar. 18, 1999), there is no reason to conclude that per-instance CMPs may be used more broadly (or narrowly) than per-day CMPs regarding past noncompliance.
- back to note 3