Notre Dame Health System d/b/a Our Lady of Wisdom Health Care Center, DAB CR6871 (2026)

DECISION

Notre Dame Health System d/b/a Our Lady of Wisdom Health Care Center (Petitioner or facility) is a skilled nursing facility (SNF) that participates in the Medicare program.  The Louisiana Department of Health (state agency) conducted a Life Safety Code (LSC) survey of the facility and concluded that Petitioner failed to have documentation that it conducted both a required quarterly inspection and a specialized five-year inspection of its automatic sprinkler system.  Further, the survey found that the annunciator for one of its emergency generators was not energized and needed to be fixed.  The state agency informed Petitioner that the Centers for Medicare & Medicaid Services (CMS) would impose a denial of payment for new admissions (DPNA) if Petitioner did not return to compliance with Medicare participation requirements within three months.

Petitioner did not request a hearing to dispute the state agency’s findings, but it submitted a plan of correction (POC) indicating that it would correct the identified problems within approximately 45 days following the survey.  A couple of weeks before the planned date to make corrections, a hurricane hit the area where Petitioner’s facility is located.  Although Petitioner obtained a quarterly inspection of the sprinkler system shortly after the completion date provided in the POC, the sprinkler inspection company stated that it did not have the parts or manpower to complete the five-year inspection until a later time.

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Petitioner also could not obtain timely repairs to the annunciator for the generator.  When a state agency surveyor returned to the facility near the three-month anniversary of the original survey, Petitioner could not show a return to compliance concerning the five-year inspection of the sprinkler system or that the annunciator for one of the generators had been fixed.  In addition, the state agency conducted a complaint investigation and found that Petitioner failed to implement the care plans for two residents when facility staff failed to complete weekly assessment of the residents’ pressure ulcers.

Because Petitioner did not return to substantial compliance within three months, federal law required CMS to impose a DPNA.  Petitioner requested a hearing to appeal the imposition of the DPNA, alleging that Petitioner had returned to substantial compliance by the end of the three month period following the original survey because exigencies from the hurricane and the COVID-19 pandemic slowed Petitioner’s ability to complete the needed five-year inspection of the automatic sprinkler system and repairs to the generator’s annunciator.  Further, Petitioner argued that it did not receive proper notice of the deficiencies involving the allegations that two residents did not receive weekly skin assessments as ordered by physicians.

As set forth in more detail below, I conclude that Petitioner did not timely appeal the LSC deficiencies, making them, as a matter of law, final and binding.  I also conclude that, while Petitioner’s efforts to return to substantial compliance were impeded by a hurricane and, possibly, by the COVID-19 pandemic, CMS was statutorily required to impose a DPNA after three months of substantial noncompliance, and Petitioner cited no authority providing an exception to that requirement.  Even if the DPNA could be deferred beyond three months due to unusual circumstances, the results of the October 26, 2021 complaint investigation are sufficient to show that Petitioner had not returned to substantial compliance with all Medicare participation requirements.  A DPNA is a remedial measure meant to encourage SNFs to return to compliance with Medicare participation requirements as quickly as possible to ensure the health and safety of residents.  While an SNF remains noncompliant, there is a risk for more than minimal harm to residents.  Therefore, I affirm CMS’s imposition of a mandatory DPNA on Petitioner as well as the duration of that DPNA, which ended once Petitioner could show it returned to substantial compliance with Medicare participation requirements.

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 the age of 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).

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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).  If an SNF wants to participate in the Medicare program, it must enroll in that program.  42 U.S.C. § 1395cc(j).  Because an SNF is a “provider of services” for Medicare program purposes, each SNF participating 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).

A Medicare participating SNF must meet a variety of ongoing statutory requirements as to how it provides services, maintains the rights of its residents, and administers its facility.1  42 U.S.C. § 1395i-3(a)(3), (b)-(d).  Further, SNFs must comply with “such other requirements relating to the health, safety, and well-being of residents or relating to the physical facilities thereof as the Secretary may find necessary.”  42 U.S.C. § 1395i-3(d)(4)(B); see 42 U.S.C. § 1395i-3(c)(1)(xi), (f).  The Secretary promulgated regulations to implement the statutory requirements and to establish those “other requirements relating to health, safety, and well-being of residents.”  See 42 C.F.R. pt. 483, subpt. B.2

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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 also 42 U.S.C. § 1395i-3(h)(1).  “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.

“It is the duty and responsibility of the Secretary to assure that requirements which govern the provision of care in skilled nursing facilities . . . are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective and efficient use of public moneys.”  42 U.S.C. § 1395i-3(f)(1).  To do so, the Secretary contracts with state agencies to survey Medicare participating SNFs.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  Standard surveys are unannounced and occur at least once every 15 months.  42 U.S.C. § 1395i-3(g)(2)(A)(i), (iii)(I).  State agencies also investigate complaints made against SNFs.  42 U.S.C. § 1395i-3(g)(1)(C), (4).

When the results of a survey or investigation show that an SNF is not in substantial compliance with Medicare program participation requirements, the Secretary may impose remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  All remedies imposed on SNFs are remedial in nature because they “ensure prompt compliance with [Medicare] program requirements” and “are applied on the basis of noncompliance found during surveys conducted by CMS or by the survey agency.”3  42 C.F.R. § 488.402(a)-(b); NMS Healthcare of Hagerstown, DAB No. 2603 at 8 n.6 (2014) (holding that, although the regulations use the term “civil money penalty,” the regulations also “make it clear that a CMP is not a punitive mechanism.”).  To assist a facility in returning to substantial compliance quickly, SNFs must file a plan of correction with the state agency/CMS.  42 C.F.R. § 488.402(d).

When CMS selects a 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.  See 42 C.F.R. § 488.404(a)-(b).  The highest level of severity occurs when the noncompliance immediately jeopardizes the health or safety of SNF residents.  See 42 U.S.C. § 1395i-3(h)(1)(A).  “Immediate jeopardy” exists when “the provider’s noncompliance with one or more requirements of participation has

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caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.”  42 C.F.R. § 488.301.

One enforcement remedy is a denial of payment for new admissions (DPNA).  CMS must impose a DPNA if an SNF fails to be in substantial compliance with Medicare requirements for three months.  42 U.S.C. § 1395i-3(h)(2)(D); 42 C.F.R. § 488.417(b).  CMS may also impose a DPNA whenever an SNF is noncompliant with Medicare requirements.  42 C.F.R. § 488.417(a).  If the SNF does not have repeated instances of substandard quality of care, CMS payments resume prospectively on the date that the facility achieves substantial compliance with Medicare requirements either based on a revisit survey or credible written evidence that is acceptable to CMS.  42 C.F.R. § 488.417(d).

An SNF may request a hearing before an administrative law judge to dispute the finding of noncompliance leading to the imposition of an enforcement remedy.  42 C.F.R. §§ 488.330(e)(3)(ii), 488.402(f)(1)(iv), 488.408(g)(1), 498.3(b)(13), 498.40; see Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 21 (2000) (holding that SNFs are entitled to review of any determination of substantial noncompliance with Medicare participation requirements whether termination or “some other remedy is imposed.”).  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 Rehab. Ctr., DAB No. 1611 at 8 (1997), aff’d, Hillman Rehab. Ctr. v. U.S. Dep’t of Health & Hum. Servs., No. Civ. A. 98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999); 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).  After an administrative law judge issues a decision, either the SNF or CMS may request review from the Departmental Appeals Board (DAB).  42 C.F.R. § 498.80; see also 5 U.S.C. § 557.

II.  Background and Procedural History

Petitioner is an SNF located in New Orleans, Louisiana.  CMS Ex. 3 at 1.  On July 27, 2021, the state agency completed a LSC and Standard Health Survey of Petitioner’s facility.  CMS Ex. 3 at 1; P. Ex. 4 at 1.  The state agency found that Petitioner was not in substantial compliance with the following LSC provisions:

• K-Tag 353 (Sprinkler System – Maintenance and Testing) (National Fire Protection Association (NFPA) 25) (scope and severity (S/S) = D).
• K-Tag 916 (Electrical Systems – Essential Electrical System) (NFPA 101) (S/S = D).

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CMS Ex. 3.

In an August 9, 2021 notice of initial determination, the state agency informed Petitioner that CMS authorized the imposition of a DPNA, effective October 29, 2021, unless Petitioner shows “substantial compliance with an acceptable plan of correction and subsequent revisit.”  P. Ex. 4 at 2.  The notice also advised Petitioner that, if it disagreed with the determination of noncompliance, Petitioner had until October 8, 2021, to request a hearing to dispute the findings of noncompliance.  P. Ex. 4 at 2.  Petitioner did not request a hearing by October 8, 2021.  However, on August 16, 2021, Petitioner submitted a POC.  P. Ex.

On October 25, 2021, the state agency completed a revisit survey at Petitioner’s facility and found Petitioner was not in substantial compliance with the LSC provisions identified during the survey that ended on July 27, 2021.  CMS Ex. 4.

On October 26, 2021, the state agency completed a complaint investigation/survey at Petitioner’s facility.  The state agency found two deficiencies, which it documented as follows:

• 42 C.F.R. § 483.21(b)(1) (F-Tag 656) (S/S = D) (Develop/Implement Comprehensive Care Plan).
• 42 C.F.R. § 483.35(a)(3)-(4), (c) (F-Tag 726) (S/S = D) (Competent Nursing Staff).

CMS Ex. 5.

Petitioner completed POCs related to the October 25, 2021 revisit survey and the October 26, 2021 investigation/survey.  P. Exs. 2-3.

In a December 3, 2021 notice, CMS summarized the results of the three surveys of Petitioner’s facility and notified Petitioner that the DPNA went into effect on October 29, 2021.4  CMS advised Petitioner that it could appeal the determination of noncompliance.  CMS Ex. 1.

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In a December 14, 2021 notice, CMS stated that Petitioner had returned to substantial compliance with Medicare program participation requirements on December 8, 2021.  As a result, the DPNA was in effect from October 29, 2021 through December 7, 2021.  CMS Ex. 2.

On December 18, 2022, Petitioner requested a hearing to dispute the findings of noncompliance and the imposition of the DPNA.  The Civil Remedies Division acknowledged receipt of the hearing request and issued my Standing Prehearing Order.  On March 21, 2022, CMS filed a prehearing brief and 25 proposed exhibits.  Three of the proposed exhibits (CMS Exs. 6, 7, 9) were written direct testimony from witnesses.  On April 25, 2022, Petitioner submitted a prehearing brief and 13 proposed exhibits.  One of the proposed exhibits (P. Ex. 5) was written direct testimony from a witness.  Petitioner also objected to CMS Exhibit 25 and requested to cross-examine CMS’s witnesses.  CMS then filed a request to cross-examine Petitioner’s witness.

On November 25, 2022, I notified the parties that I would hold a hearing for the purpose of permitting the parties to cross-examine witnesses.  I also admitted all of the proposed exhibits to the record except for CMS Exhibit 25, which I excluded as irrelevant.

On February 22, 2023, I held a hearing at which three witnesses were cross-examined.  Before the hearing, CMS withdrew one of its witnesses.  I excluded that witness’s written direct testimony (i.e., CMS Ex. 7) at the hearing.  Tr. 7.  The written direct testimony for the remaining witnesses (i.e., CMS Exs. 6, 9 and P. Ex. 5) was fully admitted into the record.  Tr. 133.  At the end of the hearing, I directed the parties to file post-hearing briefs with all arguments and issues that the parties wanted me to consider when rendering this decision.  Tr. 131; March 13, 2023 Notice of Receipt of Transcript and Post-Hearing Briefing Schedule at 1.  Both parties timely filed post-hearing briefs (CMS Br. and P. Br., respectively).  On May 26, 2023, CMS filed a reply brief (CMS Reply).

III.  Issue

Whether Petitioner was in substantial compliance with the Medicare program requirements for SNFs at 42 C.F.R.§§ 483.21(b)(1), 483.35(a)(3)-(4), (c), and/or 483.90(a) on or before October 29, 2021, the date on which the DPNA became effective.5

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IV.  Findings of Fact and Conclusions of Law

My findings of fact and conclusions of law are in bold and italics.

1. During the state agency survey that ended on July 27, 2021, Petitioner’s facility did not have documentation that either a quarterly inspection of its automatic sprinkler system was conducted or that a five-year Microbiologically Influenced Corrosion (MIC) inspection of the sprinkler system’s internal piping had been completed.  During the October 25, 2021 revisit survey, Petitioner’s facility provided documentation that the quarterly inspection of the sprinkler system had been conducted; however, Petitioner had not yet completed the five-year MIC inspection.  The five-year MIC inspection occurred on November 3, 2021.

On July 26, 2021, American Sprinkler Company, Inc. (American Sprinkler), provided Petitioner with a cost estimate “[t]o perform a 5 year Internal Investigation on 4 Wet Fire Sprinkler System and 4 Dry Fire Sprinkler System” at Petitioner’s facility.  P. Ex. 6; see also P. Ex. 5 ¶ 6(a).  The estimate included replacing “20 out of date gauges.”  P. Ex. 6.  American Sprinkler informed Petitioner that its sprinkler system was due for its five-year internal investigation.  P. Ex. 6.  American Sprinkler had a pre-existing relationship with Petitioner and Petitioner did not request this estimate.  Tr. 124.

On July 27, 2021, the state agency conducted an LSC survey and found that the facility failed to have documentation that a licensed sprinkler suppression agent completed a five-year MIC inspection of the sprinkler system’s internal piping.6  CMS Ex. 3 at 2; CMS Ex. 6 at 3; Tr. 69, 73.  Further, there was no documentation showing that quarterly inspections of the sprinkler system were completed.7  CMS Ex. 3 at 2; CMS Ex. 6 at 3.

Petitioner did not dispute that it failed to have a five-year MIC test or the quarterly sprinkler inspection completed by the July 27, 2021 survey.  Tr. 101.  Petitioner’s

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Administrator prepared and signed a POC on August 16, 2021, indicating Petitioner would have the five-year MIC inspection and the quarterly inspection of the automatic sprinkler system completed by September 11. 2021.8  P. Ex. 1 at 1-2; P. Ex. 5 ¶ 5; Tr. 101-102.  Petitioner’s Administrator picked September 11, 2021, as the date by which the deficiencies would be corrected because it was the latest date that the state agency permitted Petitioner to provide for correction.  Tr. 126.

On August 24, 2021, Petitioner accepted American Sprinkler’s proposal to perform the five-year MIC investigation for its sprinkler system.  P. Ex. 5 ¶ 6(a); P. Ex. 6; Tr. 103.

By September 11, 2021, neither the five-year MIC inspection nor the quarterly inspection was completed.  Tr. 102.

On September 16, 2021, American Sprinkler conducted an inspection of Petitioner’s sprinkler system and replaced 8 out of 20 gauges, leaving 12 gauges still to be replaced.  P. Ex. 8; Tr. 108, 118; see also P. Ex. 5 ¶ 10.  To perform the MIC test, American Sprinkler determined that it needed additional parts, which were back ordered because of the COVID pandemic-related supply chain issues and global shortages.  P. Ex. 5 ¶ 12.

Petitioner did not inform the state agency that American Sprinkler would be delayed in conducting the MIC inspection or request an extension of time to complete that inspection.  Tr. 108.

On October 25, 2021, the state agency conducted a revisit survey.  CMS Ex. 4.  The state agency found that Petitioner had an annual inspection certification from a licensed sprinkler agent; however, Petitioner did not have documentation that it completed the five-year internal obstruction MIC inspection.  CMS Ex. 4 at 2; CMS Ex. 6 at 6; Tr. 48, 80.  Petitioner was still awaiting American Sprinkler to return and complete the five-year MIC inspection.  CMS Ex. 4 at 3; CMS Ex. 6 at 7.

On November 3, 2021, American Sprinkler conducted the five-year MIC inspection, changed various gauges, and installed other items in the sprinkler system.  P. Ex. 2 at 1; P. Ex. 9; Tr. 103, 109.  Petitioner’s Administrator testified that American Sprinkler did not return to the facility until November due to “staffing issues.”  Tr. 108.

2. During the state agency survey that ended on July 27, 2021, the state agency surveyor pressed the buttons to test the remote annunciators for Petitioner’s four generators.  One of the buttons did not work because it was not energized.  On September 1, 2021, Petitioner engaged a company to repair the remote annunciator.  During the October 25, 2021

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revisit survey, the remote annunciator had not yet been repaired.  The remote annunciator was repaired on December 8, 2021.

On July 26, 2021, during the LSC survey, the state agency surveyor found that the facility’s “front entrance desk remote annunciator that communicates to the life safety generator was not energized at time of survey.”  CMS Ex. 3 at 4; CMS Ex. 6 at 5.  The state agency surveyor testified as to how he learned of the deficiency:  “[W]hen I pushed the test button, nothing happened, so there would be no power at all to it.  So I would say that if it did have a storage battery, it wasn’t energized.”  Tr. 45.

The state agency surveyor testified what a remote annunciator is:

Q.  [C]ould you just describe what the purpose of the remote annunciator is?

A.  It’s to monitor the generator.  So it’s supposed to be in a constantly attended location, such as a nurses’ station, somewhere where somebody’s sitting, so that if there is a 
problem with the generator, it can be promptly diagnosed and fixed, so that -- because we want the generator to be functional at all times, in case of an emergency.

Q.  And what kind of emergency are you talking about?

A.  With the power.  You know, of course, the power going out.  If -- you know, well, just the power, really.  Yeah.

Q.  So if the power goes out, does the remote annunciator also play a role in activating the generator?

A.  No, sir.  It’s just -- it doesn’t activate it.  It just simply kind of oversees or monitors its status at any given moment.

Q.  It’s a diagnosis tool.  Is that accurate?

A.  Yes, sir.  That’s a good way of putting --

Q.  And there’s a separate remote annunciator for each generator.  Correct?

A. There’s -- yes, sir.  There’s supposed to be a remote annunciator for each generator.

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Q.  And in this case, it’s your recollection that there were four generators and four remote annunciators.

A.  There were four, yes, sir.  And one was, at the time, not showing any light to it, or functioning like it – you typically would see with a remote annunciator.

Q.  But the other three were. Right?

A.  Yes, sir.

Tr. 43-44.

The facility maintenance director told the surveyor that Petitioner was in the process of having a qualified generator agent attempt to service the remote annunciator.  CMS Ex. 3 at 4; CMS Ex. 6 at 5.

Petitioner did not dispute that the front desk remote annunciator was not energized.  Tr. 104.  Petitioner’s Administrator prepared and signed a POC on August 16, 2021, indicating Petitioner would have the remote annunciator repaired by September 11, 2021.   P. Ex. 1 at 1-3; P. Ex. 5 ¶ 5; Tr. 116.

Petitioner called ARCCO Power Systems (ARCCO) to fix the remote annunciator.  Tr. 125.  On August 19, 2021, Petitioner obtained a cost estimate from ARCCO to replace an obsolete control panel and remote annunciator on an older generator.  P. Ex. 5 ¶ 6(b); P. Ex. 7; Tr. 103-104.  On September 1, 2021, Petitioner accepted ARCCO’s offer to repair the remote annunciator.  P. Ex. 5 ¶ 6(b); P. Ex. 7.

Following the loss of power at the facility due to the landfall of Hurricane Ida, the facility’s life safety generator ran from August 29, 2021 through September 9, 2021, without interruption.  P. Ex. 5 ¶ 17.

On October 25, 2021, the state agency conducted a revisit survey.  CMS Ex. 4.  The state agency found that the front desk annunciator that communicates with the life safety generator was not energized at the time of the survey.  CMS Ex. 4 at 4; CMS Ex. 6 at 8; Tr. 48.  The facility told the surveyor that it was still in the process of having the remote annunciator repaired.  CMS Ex. 4 at 3; CMS Ex. 6 at 8.

The parts to fix the remote annunciator were not available until December 8, 2021.  P. Ex. 5 ¶ 14; Tr. 104, 116.  The remote annunciator was fixed on December 8, 2021.  Tr. 104.

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3. Petitioner was not in substantial compliance with 42 C.F.R. § 483.90(a) because it did not meet the LSC’s requirements for inspection and testing of its automatic sprinkler system, and the requirements for the annunciator related to an emergency generator during both the July 27, 2021 survey and the October 25, 2021 revisit survey.

With exceptions not applicable in this case, “[a] skilled nursing facility must meet such provisions of such edition (as specified by the Secretary in regulation) of the Life Safety Code of the National Fire Protection Association [(NFPA)] as are applicable to nursing homes.”  42 U.S.C. § 1395i-3(d)(2)(B).

The regulations require that SNFs “must meet applicable provisions and must proceed in accordance with Life Safety Code (NFPA 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).  Further, SNFs must “[i]nstall an approved, supervised automatic sprinkler system in accordance with the 1999 edition of NFPA 13” and “[t]est, inspect and maintain an approved, supervised automatic sprinkler system in accordance with the 1998 edition of NFPA 25, Standard for the Inspection, Testing, and Maintenance of Water-Based Fire Protection Systems, as incorporated by reference.”  42 C.F.R. § 483.90(a)(6)(i)-(ii).  Compliance with NFPA 99 is also required by the regulations.  42 C.F.R. § 483.90(b).

The state surveyor found that Petitioner’s failure to have documentation of the five-year MIC inspection and the quarterly inspection of the automatic sprinkler system violated the following provisions of NFPA 25:

NFPA 25:  4.3.1 * Records shall be made for all inspections, tests, and maintenance of the system and its components and shall be made available to the authority having jurisdiction upon request.  
NFPA 25:  4.3.2 Records shall indicate the procedure performed (e.g., inspection, test, or maintenance), the organization that performed the work, the results, and the
date.  
NFPA 25:  4.3.3* Records shall be maintained by the property owner.  
NFPA 25:  14.2.1 Except as discussed in 14.2.1.1 and 14.2.1.4 an inspection of piping and branch line conditions shall be conducted every 5 years by opening a flushing connection at the end of one main and by removing a sprinkler toward the end of one branch line for the purpose of inspecting for the presence of foreign organic and inorganic material.

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NFPA 25:  14.2.1.1 Alternative nondestructive examination methods shall be permitted.  
NFPA 25:  14.2.1.2 Tubercules or slime, if found, shall be tested for indications of microbiologically influenced corrosion (MIC).  
NFPA 25:  14.2.1.3* If the presence of sufficient foreign organic or inorganic material is found to obstruct pipe or sprinklers, an obstruction investigation shall
be conducted as described in Section 14.3.  
NFPA 25:  14.2.1.4 Non-metallic pipe shall not be required to be inspected internally.  
NFPA 25:  14.2.1.5 In dry pipe systems and pre-action systems, the sprinkler removed for inspection shall be from the most remote branch line from the source
of water that is not equipped with the inspector’s test valve.  
NFPA 25:  14.2.1.6* Inspection of a cross main is not required where the system does not have a means of inspection.  
NFPA 25:  14.2.2* In buildings having multiple wet pipe systems, every other system shall have an internal inspection of piping every 5 years as described in 14.2.1.  
NFPA 25:  5.1.1.2 Table 5.1.1.2 shall be used to determine the minimum required frequencies for inspection, testing, and maintenance. (Quarterly inspections).

CMS Ex. 3 at 2-3; CMS Ex. 6 at 3-4.

Further, the state surveyor found that Petitioner’s failure to have an energized remote annunciator violated NFPA 101 (Electrical Systems – Essential Electric System Alarm Annunciator) and NFPA 110:5.6.5.2 (4).  CMS Ex. 3 at 3-4; CMS Ex. 6 at 4-5.

Petitioner did not request a hearing to dispute the August 9, 2021 initial determination, which informed Petitioner that a DPNA would be imposed if Petitioner did not return to substantial compliance with Medicare requirements by October 29, 2021, and that Petitioner had the right to request a hearing.  See P. Ex. 4.  If an SNF fails to timely request a hearing based on a state agency notice that informs the SNF of a CMS-authorized DPNA, then the SNF loses its right to challenge the deficiencies on which the DPNA is based even if the SNF later requests a hearing based on a subsequent CMS notice imposing other remedies.  Taos Living Ctr., DAB No. 2293 at 9-10 (2009).  In this case, Petitioner does not attempt to dispute the deficiencies found during the July 27, 2021 survey.  P. Br. at 6.  Therefore, I uphold the deficiencies under 42 C.F.R. § 483.90(a) because the initial determination is binding in this case.  42 C.F.R. § 498.20(b).

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When the state agency surveyor revisited the facility to confirm that Petitioner had carried out its POC and returned to substantial compliance with Medicare participation requirements, the surveyor found the same violations of the LSC concerning the five-year MIC inspection and the generator’s annunciator.  CMS Ex. 4; CMS Ex. 6 at 6-9.  Petitioner’s POC for the October 25, 2021 revisit survey stated that the five-year MIC inspection occurred on November 3, 2021, and that the annunciator would be fixed by December 17, 2021.  P. Ex. 2 at 1, 4.

In this proceeding, Petitioner does not dispute the findings of the October 25, 2021 revisit survey.  See P. Br. at 6.  Therefore, I uphold the finding of continued noncompliance with 42 C.F.R. § 483.90(a).

4. Petitioner was not in substantial compliance with 42 C.F.R. §§ 483.21(b)(1) and 483.35(a)(3)-(4), (c) because Petitioner did not dispute the existence of these deficiencies in its hearing request or subsequent briefing; therefore, those deficiencies are binding.

On October 26, 2021, the state survey agency conducted a complaint investigation/survey at Petitioner’s facility.  CMS Ex. 5.  The state agency survey found violations of 42 C.F.R. §§ 483.21(b)(1) and 483.35(a)(3)-(4), (c) based on the care provided to two residents, R1 and R5.  CMS Ex. 5.

Section 483.21(b)(1) requires SNFs to develop and implement a comprehensive person-centered care plan for each resident that meets a resident’s medical, nursing, and mental and psychosocial needs that are identified in a comprehensive assessment of the resident.  This regulation is based on a statute that requires SNFs to “provide services to attain or maintain the highest practical physical, mental, and psychosocial well-being of each resident, in accordance with a written plan of care which – (A) describes the medical, nursing, and psychosocial needs of the resident and how such needs will be met; (B) is initially prepared, with the participation to the extent practicable of the resident or the resident’s family or legal representative, by a team which includes the resident’s attending physician and a registered professional nurse with responsibility for the resident; and (C) is periodically reviewed and revised by such team after each assessment. . . .”  42 U.S.C. § 1395i-3(b)(2).

Section 483.35(a)(3)-(4) and (c) requires that SNFs must ensure that licensed nurses and nurse aides have the specific competencies and skill sets necessary to care for residents’ needs that are identified in assessments and described in the care plan.

Petitioner did not dispute the substance of these deficiencies.  CMS included the results of the October 26, 2021 survey as one of the bases for the DPNA going into effect.  CMS Ex. 1 at 1.  Despite this, Petitioner’s hearing request and brief only raise a procedural

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argument against the use of the October 26, 2021 survey results to support the DPNA.  Hr’g Req. at 6-7; P. Br. at 10-11.  Indeed, at the hearing, Petitioner’s Administrator admitted that the facility did not have any information that could refute the deficiencies found during the October 26, 2021 survey concerning R1.  Tr. 110-111.  Further, at the hearing, when Petitioner questioned the state surveyor who reviewed R5’s medical records during the October 26, 2021 survey, Petitioner only asked questions about the surveyor’s involvement in determining that Petitioner returned to compliance in December 2021.  CMS Ex. 9; Tr. 94-96.  Finally, CMS submitted documents from R1’s and R5’s medical records to establish the evidentiary basis for the deficiencies found during the October 26, 2021 survey (CMS Exs. 11-23), but Petitioner did not submit any exhibits or provide witness testimony concerning the deficiencies involving R1 and R5.

As discussed above, when an SNF does not dispute alleged deficiencies, CMS’s determination as to those deficiencies is binding.  42 C.F.R. § 498.20(b).  Therefore, I uphold the deficiencies under 42 C.F.R. §§ 483.21(b)(1) and 483.35(a)(3)-(4), (c).

5. CMS was required by statute to impose the DPNA on Petitioner on October 29, 2021, and to maintain that DPNA until Petitioner returned to substantial compliance with Medicare requirements on December 8, 2021.

Rather than challenging any of the deficiencies found by the state agency, Petitioner’s arguments in this case involve its efforts to complete its POC following the July 27, 2021 survey.  Petitioner asserts that it could not complete its POC either in the time-limit provided in the POC (i.e., September 11, 2021) or by the date that a DPNA would become effective (i.e., October 29, 2021), due to the exigencies created by Hurricane Ida and COVID-19.  Therefore, Petitioner’s legal theory focuses on why it should be deemed to have corrected the deficiencies from the July 27, 2021 survey by October 25, 2021, despite not having done so.  Petitioner’s legal theory is not consistent with the applicable statutory and regulatory provisions.

Petitioner provided evidence of its difficulty to correct the July 27, 2021 deficiencies.  The record shows that, on August 26, 2021, the governor of Louisiana declared a state of emergency from August 26, 2021 to September 27, 2021, due to Tropical Storm Ida.  P. Ex. 10.  On September 6, 2021, the governor amended the state of emergency, noting that Hurricane Ida made landfall in Louisiana on August 29, 2021, and that the damage resulting from the hurricane posed a threat to citizens and communities.  P. Ex. 11 at 1.  The governor suspended, until September 24, 2021, all deadlines in proceedings before courts, administrative agencies, and boards.  P. Ex. 11 at 2-3.  Also, because of the hurricane, the Louisiana Supreme Court closed, except for emergency matters, until September 20, 2021, and the United States District Court for the Eastern District of Louisiana suspended all matters for 30 days following August 26, 2021.  P. Exs. 12, 13.

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Petitioner’s Administrator testified that Hurricane Ida made landfall on August 29, 2021.  Tr. 118.  She further testified that the facility lost electric power and the facility had to operate using its generators until September 9, 2021.  P. Ex. 5 ¶ 17; Tr. 118.

Petitioner’s Administrator also testified that American Sprinkler and ARCCO experienced labor shortages and supply-chain issues during the time when Petitioner was seeking to correct its deficiencies.  P. Ex. 5 ¶¶ 9-10, 12, 14; Tr. 119.  She said that she asked American Sprinkler to complete the five-year MIC inspection as soon as possible; however, American Sprinkler could not provide a date and said they “would send out a work crew or a worker when they had some available.”  Tr. 119-120.

Petitioner’s Administrator also testified that the annunciator panel had to be replaced but the repair company said it needed to order the parts.  Tr. 120.  She said that the parts needed for the repairs were not available until December 8, 2021, at which time the annunciator was then fixed.  P. Ex. 5 ¶ 14; Tr. 121.

From this evidence, Petitioner asserts that it met its burden to show that the delays in completing the five-year MIC inspection and replacing the remote annunciator were due to circumstances beyond its control.  P. Br. at 5.  Citing Western Care Management Corp. v. Centers for Medicare and Medicaid Services, DAB No. 1921 (2004), Petitioner argues it should be considered to have timely corrected the deficiencies because, when alleged noncompliance was “due to circumstances beyond its control,” there is no prima facie case of noncompliance.”  P. Br. at 5.  But for the delays beyond Petitioner’s control, Petitioner would have completed the POC well before the survey on October 25, 2021, and the DPNA would never have taken effect.  P. Br. at 5-6.

Working from the argument that Petitioner should be deemed to have returned to substantial compliance before the DPNA took effect, Petitioner argues that it “did not receive any notice of imposition of remedies with respect to the October 26, 2021, survey until the December 3, 2021 Imposition of Remedies Letter.”  P. Br. at 10.  Petitioner argues next that, “[i]n the absence of immediate jeopardy, the State (not CMS) is required to provide fifteen days’ notice prior to the effective date of enforcement action” under 42 C.F.R. § 488.402(f)(2).  P. Br. at 10.  Petitioner asserts that CMS only provided notice as to the alleged deficiencies arising out of the July 27, 2021 survey, and that Petitioner was in substantial compliance with those deficiencies before the October 26, 2021 survey.  P. Br. at 11.  As a result, Petitioner posits that the October 26, 2021 survey “represents an entirely separate enforcement action to the July 27, and October 25 surveys.”  P. Br. at 11.

Petitioner misunderstands the ramifications of its choice not to dispute the deficiencies found during the July 27, 2021 survey.  Once a facility has been found to be out of substantial compliance, it remains so until it affirmatively demonstrates that it has achieved substantial compliance once again.  Ridgecrest Healthcare Ctr., DAB No. 2493

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at 2-3 (2013); Taos, DAB No. 2293 at 20; Premier Living & Rehab. Ctr., DAB No. 2146 at 3 (2008); Lake City Extended Care, DAB No. 1658 at 12-15 (1998).  The burden is on the SNF to prove that it is back in compliance, and not on CMS to prove that deficiencies continued to exist.  West Texas LTC Partners, Inc. v. Dep’t of Health & Human Servs., 843 F.3d 1043, 1049 (5th Cir. 2016); Asbury Care Ctr. at Johnson City, DAB No. 1815 at 19-20 (2002).

The regulations not only place the burden on the SNF to show a return to substantial compliance with Medicare participation requirements, but an SNF must show that it is capable of remaining in substantial compliance.

If the facility can supply documentation acceptable to CMS or the State survey agency that it was in substantial compliance and was capable of remaining in substantial compliance, if necessary, on a date preceding that of the revisit, the remedies terminate on the date that CMS or the State can verify as the date that substantial compliance was achieved and the facility demonstrated that it could maintain substantial compliance, if necessary.

42 C.F.R. § 488.454(e) (Emphasis added); see also Ridgecrest Healthcare Ctr., DAB No. 2493 at 15 (2013) (“As the Board has recognized, a POC indicating a specific date of implementation is not sufficient evidence by itself to establish that the measures in the POC had been satisfactorily implemented.”); Oceanside Nursing & Rehab. Ctr., DAB No. 2382 at 20 (2011) (“Even if a POC is accepted, the facility is not regarded as in substantial compliance until CMS determines, ‘usually through a revisit survey,’ that the deficiency no longer exists.”).  The regulatory definition for the term “revisit survey” also shows that a return to substantial compliance includes both correcting the deficiencies found at a previous survey and showing substantial compliance with Medicare participation requirements.

Revisit survey means a survey performed with respect to a provider or supplier cited for deficiencies during an initial certification, recertification, or substantiated complaint survey and that is designed to evaluate the extent to which previously-cited deficiencies have been corrected and the provider or supplier is in substantial compliance with applicable conditions of participation, requirements, or conditions for coverage.  Revisit surveys include both offsite and onsite review.

42 C.F.R. § 488.30(a) (Emphasis added).

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These general requirements for a return to substantial compliance are consistent with the requirements for imposing and ending a DPNA.  Although CMS has the discretion to impose a DPNA when a survey determines there is a deficiency (42 C.F.R. § 488.417(a)), CMS must impose one if the deficiency lasts for three months:  “If a skilled nursing facility has not complied with any of the requirements in [42 U.S.C. § 1395i-3(b)-(d)] within 3 months after the date the facility is found to be out of compliance with such requirements, the Secretary shall impose [a denial of payment] for all individuals who are admitted after such date.”  42 U.S.C. § 1395i-3(h)(2)(D) (Emphasis added); see also 42 C.F.R. § 488.417(b).  Further, the denial of payment “shall terminate when the Secretary finds that the facility is in substantial compliance with all the requirements of subsections (b), (c), and (d).”  42 U.S.C. § 1395i-3(h)(3) (Emphasis added); see also 42 C.F.R. § 488.417(d) (Payments to the SNF will resume on the date the SNF “achieves substantial compliance, as indicated by a revisit or written credible evidence acceptable to CMS (under Medicare) or the State (under Medicaid).”  Therefore, an SNF is subject to a mandatory DPNA unless it shows it was in substantial compliance with all Medicare participation requirements before three months has elapsed since the survey that initially found noncompliance.

In the present case, the record is clear that Petitioner did not correct all of the deficiencies identified during the July 27, 2021 survey until December 8, 2021.  I must reject Petitioner’s argument that Western Care Management Corp. v. Centers for Medicare and Medicaid Services, DAB No. 1921 requires me to deem a return to substantial compliance by the October 25, 2021 revisit survey.  Western Care Management only serves to potentially limit the finding of a deficiency when circumstances beyond an SNF’s control have caused the deficiency in the first place.  In the current case, there is no evidence or argument that the deficiencies found during the July 27, 2021 survey resulted from the COVID pandemic, and they could not have been caused by Hurricane Ida, which was a month away from making landfall in Louisiana.  Rather, Petitioner failed to have the five-year MIC inspection completed on time and failed to repair the annunciator for one of its generators.  Once Petitioner is noncompliant, it is Petitioner’s responsibility to return to compliance even if Petitioner encounters difficulties.  As explained above, the statute and implementing regulations are clear and without exception - a DPNA must be imposed when a facility has been out of substantial compliance for three months.  Cary Health and Rehab. Ctr., DAB No. 1771 (2001) (“It follows that, in effect, passing the 90th day did not endow [CMS] with the authority to impose a DPNA, but rather removed from [CMS] the authority to decline to impose it.”).

In addition, had Petitioner corrected the deficiencies identified during the July 27, 2021 survey, the results of the October 26, 2021 survey could still have served as evidence that Petitioner remained noncompliant with Medicare participation requirements.  CMS rightly considered the October 26, 2021 survey results as additional evidence that Petitioner had not returned to substantial compliance.  Although Petitioner asserts that CMS failed to provide proper notice of the deficiencies related to the October 26, 2021

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survey, I note that Petitioner had the right to dispute the October 26, 2021 survey findings when CMS provided hearing rights in the December 3, 2021 notice.  CMS Ex. 1 at 2-3.  As indicated above, Petitioner did not provide any argument or evidence to show that the October 26, 2021 survey results were incorrect.

Based on the record in this case, December 8, 2021, was the earliest date that Petitioner achieved substantial compliance so that CMS could end the DPNA.  Petitioner’s POC related to the October 26, 2021 survey indicates that Petitioner was aware of the survey findings and planned to achieve compliance with 42 C.F.R. §§ 483.21(b)(1) and 483.35(a)(3)-(4), (c) by December 17, 2021.  P. Ex. 3 at 2, 6.  Petitioner achieved compliance sooner than that.  CMS Ex. 2 at 1.  Given that Petitioner did not provide evidence of a return to substantial compliance with participation requirements before December 8, 2021, I uphold CMS’s determination as to the duration of the DPNA.

V.  Conclusion

I affirm CMS’s determination to impose a DPNA on Petitioner commencing October 29, 2021, and CMS’s determination to end the DPNA as of December 7, 2021.