Park Place Manor, ALJ Ruling 2026-3 (HHS CRD November 21, 2025)

RULING

BACKGROUND

Petitioner, Park Place Manor, is a long-term care facility located in Belton, Texas, that participates in the Medicare program.  Based on a survey completed by the Texas Health and Human Services Commission (state agency) on August 18, 2023, the Centers for Medicare and Medicaid Services (CMS) determined that the facility was not in substantial compliance with Medicare program requirements and imposed remedies.  Specifically, CMS found that the facility was not in substantial compliance with the following program requirements:

• 42 C.F.R. § 483.10(e)(3) (Tag F558 – resident rights:  reasonable accommodation), cited at scope and severity level D (isolated instance of substantial noncompliance that causes no actual harm with the potential for more than minimal harm);
• 42 C.F.R. § 483.10(g)(14)(i)-(iv)(15) (Tag F580 – resident rights:  notification of changes), cited at scope and severity level K (pattern of substantial noncompliance that poses immediate jeopardy to resident health and safety);

Page 2

• 42 C.F.R. § 483.45(f)(2) (Tag F760 – pharmacy services:  medication errors), cited at scope and severity level K;
• 42 C.F.R. § 483.60(f)(1)-(3) (Tag F809 – food and nutrition services:  frequency of meals), cited at scope and severity level F (widespread substantial noncompliance that causes no actual harm with the potential for more than minimal harm); and
• 42 C.F.R. § 483.60(i)(1)(2) (Tag F812 – food and nutrition services:  food safety) cited at scope and severity level F.

CMS Exs. 1, 2.  CMS determined that the facility achieved substantial compliance on August 19, 2023.  CMS Ex. 1 at 1.

As enforcement remedies, CMS imposed civil money penalties of:

• $9,675 per day for two days of immediate jeopardy (August 2 through 3, 2023) (subtotal:  $19,350);
• $360 per day for one day of substantial noncompliance that did not pose immediate jeopardy (August 4, 2023);
• $9,675 per day for two additional days of immediate jeopardy (August 5 through 6, 2023) (subtotal:  $19,350); and
• $360 per day for 12 additional days of substantial noncompliance that did not pose immediate jeopardy (August 7 through 18, 2023) (subtotal:  $4,320).

Total:  $43,380.  CMS Ex. 1 at 1.

Issues

This case presents the following issues:

1. From August 2 through 18, 2023, was the facility in substantial compliance with Medicare program requirements;
2. If, from August 2 through 3, 2023, and August 5 through 6, 2023, the facility was not in substantial compliance with Medicare program requirements, did its deficiencies then pose immediate jeopardy to resident health and safety; and

Page 3

3. If the facility was not in substantial compliance, are the penalties imposed – $9,675 per day for four days of immediate jeopardy, and $360 per day for 13 days of substantial noncompliance that did not pose immediate jeopardy – reasonable?

EXHIBITS

Petitioner’s objections to CMS Exhibits.  CMS submitted 15 exhibits (CMS Exs. 1-15).  Petitioner objects, or partially objects, to six of those exhibits:  CMS Ex. 1 (notice letters); CMS Ex. 2 (statement of deficiencies); CMS Exs. 11, 12, and 13 (surveyors’ written declarations); and CMS Ex. 15 (surveyor notes).

For the most part, Petitioner seems to attack CMS’s legal positions in the guise of objecting to its exhibits, which may incorporate some of those legal positions. (Objections to CMS Exs. 1, 2, 11, 12, 13).  Petitioner is, of course, free to challenge CMS’s legal arguments and to present its own.  However, that Petitioner disagrees with legal conclusions contained in the documents does not make the documents inadmissible.

I have broad discretion to admit evidence.  The Federal Rules of Evidence do not apply to this administrative proceeding, and I may receive evidence that would be inadmissible under the federal rules.  42 C.F.R. § 498.61; Lifehouse of Riverside Healthcare Ctr., DAB No. 2774 at 9 (2017).  Moreover, I am required to inquire “fully into all of the matters at issue” and to admit any documents that are relevant and material.  42 C.F.R. § 498.60(b).

CMS Ex. 1 – CMS notice letters

Petitioner does not object to my admitting CMS Ex. 1 (CMS’s notice letters) but expresses concern about why they are being offered.  The notices are relevant and material and must be admitted.  If Petitioner disagrees with CMS’s use of the documents, it is free to make those arguments.

CMS Ex. 2 – CMS’s Statement of Deficiencies (Form CMS-2567)

Petitioner objects to my admitting the statement of deficiencies because it “contains surveyor findings and opinions that certain regulatory violations occurred, and that the facility was out of compliance with certain regulations.”  Inasmuch as the statement of deficiencies is (in part) a notice document, it would be truly odd (and not very useful) if it did not specify which regulations were allegedly violated and why.

As noted above, I am required to inquire fully into the matters at issue and to admit any documents that are relevant and material.  This necessarily includes the statement of deficiencies.  A statement of deficiencies sets out the survey findings on which CMS bases its enforcement actions that are the subject of the appeal and, for that reason, is

Page 4

“unquestionably relevant and material evidence.”  Avalon Place Trinity, DAB No. 2819 at 38 (2017); see Oxford Manor, DAB No. 2167 at 2 (2008) (holding that a statement of deficiencies may function both as a notice document and as evidence of facts asserted therein); Magnolia Estates Skilled Care, DAB No. 2228 at 30 n.15 (2009); Jennifer Matthew Nursing & Rehab. Ctr., DAB No. 2192 at 4 n.2 (2008) (holding that CMS need not present evidence in support of a finding in a statement of deficiencies that is not disputed); Guardian Health Care Ctr., DAB No. 1943 at 12 (2004) (characterizing the statements of deficiencies as a “contemporaneous record of the survey agency’s observations and investigative findings.”).

Without providing support or specifics, Petitioner argues generally that administrative law judges are not allowing facilities to present “fact or expert testimony on the issue of whether a regulatory violation occurred.”  Petitioner concludes that “CMS cannot have it both ways – in that the agency cannot offer a report containing findings of regulatory violations and then object when Petitioner attempts to offer fact or expert testimony in direct contravention of those findings.”  I reject this strawman of an argument.  CMS has not objected to “Petitioner’s attempts to offer fact or expert testimony.”  Nothing in my standing order suggests that Petitioner was not free to present whatever evidence and argument it deemed appropriate.

Indeed, the parties must address the question of whether the regulations have been violated, and I am not aware of – and Petitioner does not cite – any instance in which a party was barred from presenting relevant evidence or opinions as to whether a facility complied with program requirements.  My standing order directs the parties to submit, as a proposed exhibit, the complete written direct testimony of any proposed witness.  “Witness testimony may be submitted to establish the qualifications of the witness, offer evidence that is relevant, explain the contents of other exhibits, and render opinions.”  Standing Order at 5, ¶ 8 (emphasis added).

My standing order also points out that “I am not bound by a state agency surveyor’s or any other witness’s legal conclusions” and advises against cross-examining witnesses for the sole purpose of challenging legal conclusions.  “Legal arguments are more appropriately presented in the parties’ written arguments.”  Standing Order at 6, ¶ 10.  Such instructions hardly prevent a party from presenting factual evidence and opinion testimony.

CMS Exs. 11, 12, 13 – surveyor declarations.

Petitioner objects to the written declarations of CMS’s surveyors for the same reason:  they contain legal conclusions regarding the existence of a deficient practice, “which invades the sole province of the ALJ’s de novo review.”  Again, Petitioner’s objections are general and do not point to any specific testimony it deems objectionable.  For the

Page 5

reasons discussed above, I reject Petitioner’s assertions.  So long as their testimony is relevant and material, it will be admitted.

Moreover, surveyors “are professionals who use their judgment, in concert with Federal forms and procedures, to determine compliance.”  CMS provides them with “comprehensive training” in multiple areas, including applying and interpreting regulations, survey techniques and procedures, and techniques for auditing resident assessments and care plans.  Surveyors are perfectly capable of making and reporting their observations.  In fact, that is their job.  42 C.F.R. §§ 488.26(c)(3); 488.314(b); Omni Manor Nursing Home, DAB No. 1920 (2004) (finding that a registered nurse surveyor is qualified to explain how underlying facts constitute program deficiencies); see Lakeport Skilled Nursing Ctr., DAB No. 2435 at 5-7 (2012) (describing registered nurse surveyors’ qualifications to opine on the potential harm posed by staff failing to follow physician orders in caring for diabetic residents).

And, even if their opinion testimony required significant, specialized expertise, the testimony would be admissible, although the weight it merited would depend on the witness’s qualifications to render the opinion.  See Copperas Cove LTC Partners, Inc., DAB No. 3049 at 16 (2021); River City Care Center, DAB No. 2627 at 13-16 (2015); Golden Living Center, DAB No. 2296 at 6-8 (2009).

Petitioner also objects specifically to CMS Ex. 13 (written declaration of Surveyor Mandy Blaylock) because it purportedly includes hearsay statements made by the facility’s Medical Director.1  As noted above, the Federal Rules of Evidence do not apply to this administrative proceeding.  I may receive evidence, including hearsay, that would be inadmissible under the federal rules.  42 C.F.R. § 498.61; Lifehouse of Riverside Healthcare Ctr., DAB No. 2774 at 9 (2017).  I admit hearsay “consistent with procedural ‘integrity and fundamental fairness.’”  Omni Manor Nursing Home, DAB No. 1920 (quoting Richardson v. Perales, 402 U.S. 389, 410 (1971)); Britthaven, Inc., DAB No. 2018 at 3 (2006) (“In administrative proceedings generally, and in Chapter 498 proceedings expressly, hearsay is admissible and can be probative on the issue of the truth of the matter asserted, where sufficient indicia of reliability are present.”).

And, even under the federal rules, statements made by an agent of the opposing party who is acting within the scope of the agent’s authority are not hearsay and are admissible.  Fed. R. Evid. 801(d)(2)(D).

Page 6

The facility could have questioned the medical director and offered rebuttal, which it has chosen not to do.  See Beatrice State Developmental Ctr., DAB No. 2311 at 17, 18 (2010) (pointing out that the facility could have but did not present employee testimony that refuted the statements the surveyors claimed they made); Omni Manor Nursing Home, DAB No. 1920 at 11 (holding that statements of facility employees to the surveyors may be admitted in an administrative proceeding and may constitute substantial evidence); see Richardson v. Perales, 402 U.S. 389, 410 (1971).

CMS Ex. 15 – Surveyor Blaylock’s notes.

Petitioner complains that Surveyor Blaylock’s notes include the names of residents and tag numbers not specifically mentioned in the Statement of Deficiencies.  Petitioner asserts, again without providing support, that the information is irrelevant and “likely to lead to confusion under [Federal Rules of Evidence] 401-403.”  Again, Petitioner does not identify which portions of the notes it finds objectionable.  See Standing Order at 3 (¶ 4c1) (instructing parties to cite the exhibit and page number if its argument relies on a particular exhibit).

It is well-settled that CMS is not limited to the specific allegations included in a Statement of Deficiencies.  The Board has repeatedly explained that the statement of deficiencies is not intended to “lay out every single detail in support of a finding that a violation has been committed.”  Alden Town Manor Rehab. & HCC, DAB No. 2054 at 17 (citing Pac. Regency Arvin, DAB No. 1832 at 9-10 (2002)).  So long as the facility knows what it must answer to – which, as here, was accomplished through record development – the facility had sufficient notice.

Contrary to Petitioner’s assertion, the Federal Rules of Evidence support my admitting the exhibit.  Rules 401 and 402, make admissible any relevant evidence, defined as evidence that “has any tendency to make a fact more or less probable” and “is of consequence in determining the action.”  Rule 403 gives the adjudicator the authority to exclude relevant evidence “if its probative value is substantially outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.”  Petitioner has not explained how these notes would lead to confusion.

Finally, the notes represent the surveyor’s recorded recollections, which are admissible under Rule 803 of the Federal Rules.

For all of these reasons, I admit into evidence CMS Exs. 1-15.

CMS’s objections to Petitioner’s exhibit.  Petitioner submitted 20 exhibits (P. Exs. 1-20).  CMS objects to one of those exhibits, P. Ex. 16 (Informal Dispute Resolution (IDR) Summary and Recommendations), claiming, without further explanation, that it is

Page 7

irrelevant.2  42 C.F.R. § 488.331.  I agree that I am not bound by the results of the IDR proceeding and that CMS ultimately determines whether a facility is in substantial compliance.  Britthaven of Chapel Hill, DAB No. 2284 at 7-9 (2009).  Nevertheless, the IDR proceedings are not irrelevant.  They involve the same survey, the same basic facts, and the same issues.  I will therefore admit P. Ex. 16.

For all of these reasons, I admit into evidence P. Exs. 1-20.

Pre-hearing Conference.

We will schedule a pre-hearing conference within the next month, at which time we will schedule the hearing (which will be conducted by video conference).  At the pre-hearing conference, the parties will confirm which witnesses must be produced for cross-examination.