Retama Manor Nursing Center/Victoria South, DAB CR6847 (2026)

DECISION

Retama Manor Nursing Center/Victoria South (“Petitioner” or “Facility”) challenges the determination by the Centers for Medicare & Medicaid Services (CMS) that it was not in substantial compliance with the Medicare program participation requirement at 42 C.F.R. 483.80(g)(1)-(2) (Tag F884).  Petitioner also challenged the imposition of two per-day civil money penalties (CMP) totaling $2,530.00.  For the reasons discussed below, I find that on January 17, 2022 and February 7, 2022, the Facility was not in substantial compliance with section 483.80(g), and the penalty amounts imposed are reasonable.  

I. Background and Procedural History

Petitioner is a long-term care facility (LTC) located in Victoria, Texas.  CMS Exhibit (Ex.) 2.  The Centers for Disease Control and Prevention (CDC) submitted data from its National Healthcare Safety Network (NHSN) to CMS regarding Petitioner’s COVID-19 reporting.  CMS Ex. 1 at 2, 4.  Upon review of this data, CMS determined that the Facility did not “report complete information to NHSN about COVID-19 in the standardized format and frequency as specified by CMS and the CDC.”  Id.  CMS found that this failure to report had “the potential to cause more than minimal harm to all

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residents residing in the facility.”  Id.  Based on this determination CMS found that Petitioner was not in substantial compliance, at the scope and severity level F, due to its failure on two occasions to report the required data at least once every seven days and imposed two one-day CMPs in the amount of $1,012.00 and $1,518.00.  CMS Ex. 2 at 1-2; CMS Ex. 3 at 1-2.  

Petitioner timely appealed.  The Civil Remedies Division of the Departmental Appeals Board (CRD) acknowledged receipt of Petitioner’s hearing request and issued a Standing Prehearing Order (SPO).1  In the SPO, the parties were directed to file a pre-hearing exchange and were also informed that a hearing in this matter is only necessary if a party submits admissible, written direct testimony as part of its pre-hearing exchange, and the opposing party requests cross-examination.  SPO ¶¶ 5, 13.  

Pursuant to the SPO, CMS filed its Prehearing Brief and Motion for Summary Judgment (CMS Br.) and four proposed exhibits (CMS Exs. 1-4).  Petitioner filed a Prehearing Brief (P. Br.) and six proposed exhibits, including the written direct testimony of two witnesses, Lara Cline, Director of Care Coordination (P. Ex. 3), and Tara Hayden, Director of Nursing (P. Ex. 6).  

In the absence of any objections, I admit into evidence CMS Exs. 1-4 and P. Exs. 1-6.  CMS did not request to cross-examine Petitioner’s witnesses and therefore an in-person hearing is not necessary, and I will decide this matter on the written record.  SPO ¶ 13.  There is also no need for me to address the legal criteria for summary judgment; I find that this case is ripe for adjudication based on the written record. 

II. Issues

The issues in this case are: 

1.  Whether Petitioner failed to substantially comply with 42 C.F.R. § 483.80(g) (Tag F884, Reporting) on January 17, 2022, and February 7, 2022;

2.  If Petitioner was not in substantial compliance with Medicare participation requirements, whether the CMP amounts imposed are reasonable. 

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III. Jurisdiction

I have jurisdiction to hear and decide this case.  Social Security Act (Act) §§ 1128A(c)(2), 1819(h)(2)(B)(ii) (codified at 42 U.S.C. §§ 1320a-7a(c)(2), 1395i-3(h)(2)(B)(ii)); 42 C.F.R. §§ 488.408(g), 488.434(a)(2)(viii), 498.3(b)(13). 

IV. Discussion

A. Statutory and Regulatory Framework

The Act sets requirements for skilled nursing facility (SNF) or LTC participation in the Medicare program.  Pursuant to the Act, the Secretary of Health and Human Services (Secretary) may promulgate regulations implementing those statutory provisions.  Act § 1819 (42 U.S.C. § 1395i-3).  To participate in Medicare, an LTC must maintain substantial compliance with program requirements.  When an LTC fails to meet a statutory or regulatory participation requirement, the LTC has a “deficiency.”  42 C.F.R. § 488.301; see 42 U.S.C. § 1395i-3(h)(1).  To be in substantial compliance, a facility’s deficiencies may pose no greater risk to resident health and safety than “the potential for causing minimal harm.”  42 C.F.R. § 488.301. 

If an LTC challenges the existence of a deficiency, CMS must make a prima facie case that the LTC failed to substantially comply with federal participation requirements and, if such a showing is made, the LTC must then prove substantial compliance by a preponderance of the evidence.  Hillman Rehab. 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).  

The COVID-19 pandemic disproportionately affected this country’s nursing home population.  Responding to the crisis, on May 8, 2020, CMS published an interim final rule, amending its infection control regulation to add COVID-specific requirements.  85 Fed. Reg. 27,550, 27,601-02 (May 8, 2020).  Among other provisions, the new rule added COVID-19 reporting requirements.  Facilities were required to electronically report on a weekly basis to the CDC NHSN, “in a standardized format specified by the Secretary,” the following information: 

(i) suspected and confirmed COVID-19 infections among residents and staff, including residents previously treated for COVID-19;

(ii) total deaths and COVID-19 deaths among residents and staff;

(iii) personal protective equipment and hand hygiene supplies in the facility;

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(iv) ventilator capacity and supplies in the facility;

(v) resident beds and census;

(vi) access to COVID-19 testing while the resident is in the facility;

(vii) staffing shortages;

(viii) the COVID-19 vaccine status of residents and staff, including total numbers of residents and staff, numbers of residents and staff vaccinated, numbers of each dose of COVID-19 received, and COVID-19 vaccination adverse events; and

(ix) therapeutics administered to residents for treatment of COVID-19. 

42 C.F.R. § 483.80(g)(1), (2) (2001). 

Before it published the final rule, CMS issued a policy memorandum, QSO-20-29-NH (Interim Final Rule Updating Requirements for Notification of Confirmed and Suspected COVID-19 Cases Among Residents and Staff in Nursing Homes), dated May 6, 2020, addressing the new participation requirement.  CMS Ex 4.  The memorandum explains that federal (not state) surveyors would review, offsite, for facility compliance with the COVID-reporting rule.  After an initial grace period, CMS would “review for timely and complete reporting of all data elements.”  CMS Ex. 4 at 4.  CMS would cite a deficiency under section 483.80(g)(1)-(2) (Tag F884) on form CMS-2567 (statement of deficiencies) for facilities identified as not reporting.  The scope and severity level would be F (widespread substantial noncompliance that causes no actual harm with the potential for more than minimal harm).  CMS Ex. 4 at 4. 

Subsequently, CMS published another rule, authorizing CMS to impose CMPs for noncompliance with section 483.80(g)(1)-(2) and setting the amounts of those CMPs.  42 C.F.R. § 488.447; see 85 Fed. Reg. 54,820, 54,823-825 (Sept. 2, 2020).  The regulation sets a minimum penalty of $1,000, to which an additional $500 is added for each subsequent occurrence.  42 C.F.R. § 488.447(a)(1)-(2).  Compliance is assessed weekly. 42 C.F.R. § 488.447(c). 

In the instant case, CMS issued a notice, dated January 18, 2022, and advised Petitioner that it had reviewed the CDC’s NHSN system data for the Facility to determine whether it complied with section 483.80(g)(1)-(2).  CMS determined that the Facility was not in substantial compliance with that regulation because it failed to report complete information about COVID-19 in the standardized format and frequency required.  CMS

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Ex. 2 at 1; CMS Ex. 1 at 2.  Specifically, between January 10, 2022 and January 16, 2022, the Facility had not reported.  CMS Ex. 1 at 2. 

Additionally, CMS issued another notice, dated February 7, 2022, and advised Petitioner that it had reviewed the CDC’s NHSN system data for the Facility to determine whether it complied with section 483.80(g)(1)-(2).  CMS determined that the Facility was not in substantial compliance with that regulation because it failed to report complete information about COVID-19 in the standardized format and frequency required.  CMS Ex. 3 at 1; CMS Ex. 1 at 4.  Specifically, between January 31, 2022 and February 6, 2022, the Facility had not reported.  CMS Ex. 1 at 4.  

B. Findings of Fact, Conclusions of Law, and Analysis

i. The Facility was not in substantial compliance with 42 C.F.R. § 483.80(g)(1)-(2) on January 17, 2022, and February 7, 2022, because for the weeks of January 10 through 16, 2022 and January 31 through February 6, 2022, the Facility did not timely submit its COVID-19 data to the CDC as required.  

a. CMS has established a prima facie case of noncompliance. 

As noted above, section 483.80(g) requires facilities to electronically report their COVID-19 data “no less than weekly,” which CMS determined means “at least once every seven days.”  Each Monday, CMS reviews the data submitted from the previous week.  CMS Ex. 4 at 3-4.  On Monday, January 17, 2022, CMS reviewed the data from the week of January 10, 2022 through January 16, 2022.  Review of the data showed that Petitioner did not submit the required data from the week ending January 16th.  On Monday, February 7, 2022, CMS reviewed the data from the week of January 31, 2022 through February 6, 2022.  Review of the data showed that Petitioner did not submit the required data from the week ending February 6th.  In support of this finding of noncompliance, CMS submits two CMS Form 2567 explaining the results of the review of records submitted by the CDC.2   CMS Ex. 1.  

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b. Petitioner has not demonstrated substantial compliance. 

Petitioner concedes that its COVID reporting for the period of January 31-February 6, 2022 was not timely, and was submitted on February 11, 2022.  P. Ex. 3 at 2; P. Ex. 4.  However, Petitioner contends that the data was timely submitted by the Facility’s Director of Nursing for the January 10-January 16, 2022 reporting period.  P. Br. at 4.  In support of this assertion, Petitioner submitted the declaration of the Director of Nursing, Tara Hayden, in which she states that she “handled and performed the manual submission and reporting of the COVID related data” and that the reporting was timely.  P. Ex. 6 at 2.  She also notes that Petitioner’s Ex. 2 provides further evidentiary support.  Petitioner’s Ex. 2 includes screenshots of Petitioner’s reporting with a monthly and weekly calendar view of complete records.  P. Ex. 2 at 1-2.  Petitioner’s evidence fails to prove that it substantially complied.  None of the documentary evidence shows timely compliance that satisfies the weekly reporting requirement.  Specifically, the screenshots are dated January 24, 2022, and give no indication when the information was submitted.  Petitioner also asserts that CMS’s published COVID-19 public file confirms that it complied with reporting requirements.  See P. Ex. 1.  However, this file, dated July 19, 2022, fails to provide any specific support for reporting within the required time period.  

Petitioner also contends that a change in ownership challenged its ability to comply due to “technical difficulties” encountered during the transition period.  RFH at 4; P. Br. at 4-6.  Despite these challenges, Petitioner asserts that it “made many diligent and good faith efforts to comply.”  RFH at 4.  Unfortunately, Petitioner’s efforts are not enough to show substantial compliance with the reporting requirements.  Indeed, Petitioner presumably was able to timely submit complete data during other weeks after the ownership change. See P. Ex. 6 at 1 (“As part of my duties as a DON, during January 2022, I had access to and handled the required reporting of COVID related data to the National Health Safety Network (“NHSN”) through its online portal, as required under regulatory tag F 884.”). 

Finally, Petitioner asserts that the regulations do not “require absolute compliance or perfect care” and that it has in fact complied because the deficiencies found did not pose a greater risk to its residents than the potential for causing minimal harm.  P. Br. at 6-7. Congress mandates that LTCs “provide services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.”  42 U.S.C. § 1395i-3(b)(2) (emphasis added).  By failing to consistently report the required data, Petitioner did not provide information that could have been used to monitor the status of COVID-19 infections in the Facility and surrounding area and aid CMS’s response to the COVID-19 pandemic.  This could have resulted in the spread of COVID-19 amongst a fragile population.  As stated in CMS’s May 6, 2020 memorandum to State Survey Agency Directors, reporting data is “necessary to ensure the appropriate tracking, response, and mitigation of the spread and impact of COVID-19 on our most vulnerable citizens, personnel who care for them, and the general public.”  CMS Ex. 4 at 5

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Petitioner has not shown substantial compliance by a preponderance of the evidence because it has not produced evidence that establishes that the Facility timely submitted its COVID-19 data for the weeks of January 10, 2022 through January 16, 2022 and January 31, 2022 through February 6, 2022.  And while the record contains minimal evidence produced by CMS, the evidence in the record taken as a whole supports a finding that Petitioner was not in substantial compliance with 42 C.F.R. § 483.80(g)(1)-(2).  

ii. The CMP totaling $2,530.00 is reasonable.

CMS argues that based on 42 C.F.R. § 488.438, the penalties imposed are reasonable because they are well below the regulatory maximums.  CMS Br. at 7.  As noted above, that regulation sets a minimum of $1,000 for the first offense, to which $500 is added for each additional offense.  The amount has been inflation-adjusted.  According to the adjustment in place at the relevant time, the minimum penalty for the first occurrence was $1,012.  For each subsequent occurrence, according to the federal register, an additional $506 is added.  86 Fed. Reg. 62,938, 62,942 (November 15, 2021).  Petitioner asserts that the CMPs are “excessive and unreasonable” and exceed the maximum for F884 violations. 

Despite Petitioner’s assertion, the CMPs imposed in the instant case are the minimum for a first occurrence and subsequent occurrence.  However, even applying the regulatory factors, I find that the CMPs are reasonable.  Petitioner’s noncompliance was serious, and Petitioner was culpable for the noncompliance.  As stated in CMS’s May 6, 2020 memorandum to State Survey Agency Directors, reporting data is “necessary to ensure the appropriate tracking, response, and mitigation of the spread and impact of COVID-19 on our most vulnerable citizens, personnel who care for them, and the general public.”  CMS Ex. 4 at 5.  By failing to consistently report the required data, Petitioner did not provide information that could have been used to monitor the status of COVID-19 infections in the Facility and surrounding area and aid CMS’s response to the COVID-19 pandemic.  Petitioner failed to report from January 10, 2022 through January 16, 2022, and from January 31, 2022 through February 6, 2022.  This could have led to unchecked infections and ongoing spread of COVID-19 amongst an at-risk population.  Therefore, the seriousness of the noncompliance supports the CMPs. 

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V. Conclusion

For the reasons discussed above, I find that on January 17, 2022 and February 7, 2022, the Facility was not in substantial compliance with section 483.80(g), and the penalty amounts imposed are reasonable.