Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
Professional Nurses Home Health Services,
Petitioner,
- v. -
Health Care Financing Administration.
Date: October 30, 1995
FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION
Professional Nurses Home Health Services (Petitioner)
appealed a May 12, 1995 decision by Administrative Law
Judge (ALJ) Steven T. Kessel. See Professional Nurses
Home Health Services, DAB CR375 (1995) (ALJ Decision).
There, the ALJ sustained a determination by the Health
Care Financing Administration (HCFA) terminating
Petitioner's participation in Medicare. The ALJ
concluded that HCFA had proven by a preponderance of the
evidence that Petitioner had failed to comply with a
condition of participation in Medicare.
We have reviewed the law, the record before the ALJ, the
ALJ Decision and the parties' briefs on appeal. Based on
the following analysis, we sustain the ALJ Decision.
Background
A. Law
Certification requirements for a home health agency
wishing to serve as a Medicare provider are found at
sections 1861(o) and 1891 of the Social Security Act
(Act). The Department of Health and Human Services
(Secretary) is authorized to establish additional
participation requirements. See section 1861(o)(6) of
the Act.
Under the Medicare program, a home health agency is a
public agency or private organization which provides
health care services to a patient on a visiting basis in
a place of residence used by the patient as his or her
home. See sections 1861(m) and (o) of the Act. A home
health agency is primarily engaged in providing skilled
nursing services and other therapeutic services. Section
1861(o) of the Act. Section 1891(b) of the Act imposes
on the Secretary the duty and responsibility to enforce
conditions of participation applicable to home health
agencies. See 42 C.F.R. Part 484. Section 1864 of the
Act authorizes the use of state agencies to determine a
provider's compliance with conditions of participation.
If a state agency certifies that a provider is not in
compliance, HCFA then determines whether the provider
remains eligible to participate in Medicare. 42 C.F.R.
488.12.
B. Facts
The following facts are undisputed. Petitioner is a home
health agency located in Baton Rouge, Louisiana.
Surveyors from the Louisiana Department of Health and
Hospitals (state agency) conducted an annual compliance
survey of Petitioner on behalf of HCFA in January 1994.
The surveyors concluded that Petitioner was not complying
with various conditions of participation and issued a
statement of deficiencies. See Petitioner exhibit (P.
Ex.) 3. Petitioner submitted a plan of correction. Id.
Two subsequent visits, to ascertain whether Petitioner
had attained compliance with the conditions of
participation, were made on February 25, 1994 and April
22, 1994. After each visit, new statements of
deficiencies were issued. See P. Exs. 4 and 5. On the
basis of the January survey and the February and April
resurveys, the state agency recommended to HCFA that
Petitioner's Medicare agreement be terminated. The
recommendation was followed and, effective May 2, 1994,
Petitioner was terminated from the Medicare program.
The ALJ Decision sustaining Petitioner's termination
identified one issue with four supporting findings of
fact and conclusions of law (FFCLs). The ALJ determined
that the single issue was whether HCFA was authorized to
terminate Petitioner's participation in Medicare. In
deciding that HCFA was authorized to terminate
Petitioner's participation, the ALJ made the following
FFCLs 1/:
1. HCFA has the burden of proving, by the
preponderance of the evidence, that it was
authorized to terminate Petitioner's participation
in Medicare.
2. For HCFA to meet its burden of persuasion, it
had to prove that Petitioner failed to comply with a
condition of participation in Medicare.
3. HCFA proved, by the preponderance of the
evidence, that Petitioner failed to comply with the
condition of participation in Medicare governing
acceptance of patients, plan of care, and medical
supervision, set forth in 42 C.F.R. 484.18.
4. HCFA was authorized to terminate Petitioner's
participation in Medicare.
The issue on appeal
The sole issue raised by Petitioner on appeal is whether
the ALJ erred in relying on the April 22, 1994 statement
of deficiencies in finding that Petitioner had failed to
comply with a Medicare condition of participation. 2/
Petitioner argued that the ALJ could not properly rely on
the statement of deficiencies because the February and
April visits were "partial extended" and/or "extended"
surveys requiring supporting documentation that was not
produced by the State agency surveyor. According to
Petitioner, because the April survey was not properly
conducted, it should not serve as a basis for termination
from the Medicare program. Petitioner further argued
that the failure to document the survey properly meant
that Petitioner was precluded from challenging the
results of the survey in the same way that Petitioner was
able to challenge the results of the January survey.
For the reasons stated below, we reject Petitioner's
arguments and uphold the ALJ Decision.
Analysis
The standard for our review of an ALJ decision on a
disputed factual issue is whether the decision is
supported by substantial evidence in the record. The
standard of review on a disputed issue of law is whether
the ALJ decision is erroneous.
In finding that Petitioner did not comply with a
condition of participation, the ALJ relied on the report
of the surveyors generated at the April 22, 1994 resurvey
(referred to as the statement of deficiencies), and on an
affidavit of one of the surveyors. ALJ Decision at 9.
The ALJ rejected Petitioner's argument that the lack of
supporting documentation for these findings raised a
serious question about the truthfulness of the findings.
The ALJ noted that Petitioner did not directly deny the
findings made in the April 22 survey, nor offer any
evidence to refute those findings. Id.
Petitioner's argument, as clarified on appeal, goes not
to the truthfulness of the survey findings, but to the
propriety of relying on them. Petitioner maintained that
the surveyors did not meet provisions of what Petitioner
referred to as the "Certification Process" manual, and,
therefore, the surveyors failed to produce functional
assessment instrument modules, calendar work sheets, and
other federal forms which should have been used to record
the findings. 3/ Petitioner asserted that production of
these documents in support of the statement of
deficiencies was required because the January survey was
a "standard" survey under federal requirements and the
February and April "visits" were "partial extended"
and/or "extended" surveys.
Provisions concerning "standard" and "extended" surveys
were added as section 1891(c) of the Act by Public Law
No. 100-203. The purpose of these provisions was to
shift the emphasis of the survey and certification
process for home health agencies "away from a simple test
of compliance with administrative, procedural, and
structural requirements towards a meaningful evaluation
of the kind of care being provided and the effect of that
care on the beneficiaries being served." H.R. Rep. No.
391, 100th Cong., 1st Sess., pt. 1, at 418 (1987). The
new system provided for unannounced and unexpected
"standard" surveys to be conducted periodically. These
surveys are to include actual visits to beneficiaries in
their homes to evaluate, using a standardized assessment
instrument, the qualitative impact on their functioning
from the home health services delivered to them, and a
random survey of the quality of care, using indicators
developed as part of the survey protocol. A home health
agency found to provide inadequate care could be subject
to sanctions or to an "extended" survey. The "extended"
survey is to take place immediately (or no later than two
weeks later) and to review all of the Medicare conditions
of participation. Further, at the discretion of the
Secretary or the State or local surveying organization,
any home health agency may be subject to such an
"extended" survey (or "partial extended" survey).
Petitioner's argument, based on the guidelines for
"extended" or "partial extended" surveys, has no merit,
for the following reasons:
o The statutory provisions governing "extended" or
"partial extended" surveys were not intended to
preclude HCFA from taking action to terminate a
provider based on other types of findings.
Subparagraph 1891(c)(2)(E) of the Act specifically
provides that the provisions on "standard" and
"extended" surveys "shall not be construed as
requiring an extended (or partial extended) survey
as a prerequisite to imposing a sanction . . . on
the basis of the findings of a standard survey."
Paragraph 1891(e)(1) of the Act provides that
sanctions may be imposed if "the Secretary
determines on the basis of a standard, extended, or
partial extended survey or otherwise, that a home
health agency . . . is no longer in compliance" with
the requirements for participation. (Emphasis
added.)
o The April survey was performed in response to a
request by Petitioner, after deficiencies in meeting
conditions of participation had been found in the
February survey. See HCFA Ex. 4. This scenario
does not fit the statutory concept of "extending" a
standard survey (which implies adding on to a survey
being performed), nor does it fit the guidance on
when such an "extension" must occur. Moreover, the
Program Manager from the state survey agency
testified in a related proceeding that, under the
circumstances here, the April survey would be
considered a "follow-up" survey, and that the
decision to "extend" a standard survey is made by
the surveyors on-site during a standard survey.
P.Ex.7, at 161-164. 4/ Petitioner pointed to
nothing specific in the wording of the statute, the
regulations, or HCFA or State guidance to support
Petitioner's view that the April survey should be
considered an "extended" or "partial extended"
survey. Instead, Petitioner asserted that the April
survey was the first time that the surveyor inquired
into certain matters and that new patient charts
were reviewed. The mere review of additional
requirements and charts, however, does not
necessarily mean that the April visit should be
viewed as an extension of a standard survey, within
the meaning of the applicable provisions.
o Even if the April visit should be considered an
"extended" or "partial extended" survey, Petitioner
did not explain how the documentation guidelines on
"extended" and "partial extended" surveys would
apply in the circumstances here. Those guidelines
refer to functional assessments of patients and to a
type of clinical record review to determine quality
of care; this type of comprehensive review is not
necessarily required for a surveyor to determine
whether a provider has corrected deficiencies
previously found.
o Petitioner did not argue that it did not have
sufficient notice of the basis for the survey
findings on the plan of care requirements. Thus,
even if there was a failure by the surveyors to meet
applicable documentation requirements (a failure
which we do not find here), we see no harm to
Petitioner from such a procedural deficiency.
o Petitioner's argument suggesting that it was
prejudiced by not being able to attack the findings
in the April survey in the same way Petitioner
attacked findings in the January survey is specious.
Those attacks were on the basis of alleged
contradictions and inconsistencies in the
documentation of the January survey. P. Appeal
Brief at 7. A surveyor should not be required to
create additional, unnecessary documentation merely
to increase the likelihood that such issues could be
raised. The specific finding here--that patient
records lacked documentation showing that treatment
was provided as required by the plan of care--can
easily be understood without the type of
documentation that might be necessary to understand
a surveyor's evaluation and judgment of the quality
of care provided. 5/
We note, moreover, that the ALJ relied not only on the
statement of deficiencies, but on the affidavit of one of
the surveyors. Thus, even if Petitioner were correct
that the ALJ should not have relied on the statement of
deficiencies, the ALJ Decision would have been supported
by substantial evidence in the record since Petitioner
offered nothing to rebut the affidavit.
Conclusion
Accordingly, we uphold the ALJ Decision. We affirm and
adopt each of the FFCLs in the ALJ Decision.
Cecilia Sparks Ford
Norval D. (John) Settle
Judith A. Ballard
Presiding Board Member
1. Citations to the pages in the ALJ Decision that
discuss the FFCLs have been omitted.
2. HCFA argued in its brief that Petitioner had
failed to comply with the Guidelines for Appellate Review
of ALJ decisions in this type of case. The Guidelines
state that an appellant must submit a brief specifying
the FFCLs in an ALJ decision which it contends are
erroneous and the basis on which it claims that each
finding or conclusion is unsupported or incorrect. HCFA
argued that Petitioner had made only generalized
allegations and that this placed an unreasonable burden
on HCFA to respond. As Petitioner noted, however, the
ALJ Decision does not specifically address the issue
raised by Petitioner, even though Petitioner made it
below. Thus, there is no specific FFCL on this point to
which Petitioner could object. Moreover, we consider the
issue raised by Petitioner to have been sufficiently
clear so that HCFA could adequately address it.
3. The manual provisions on surveying and certifying
home health agencies are part of HCFA's "State Operations
Manual." P. Ex. 9.
4. Petitioner pointed to nothing in the record
rebutting this testimony. Instead, Petitioner attacked
this testimony because the Program Manager testified that
the decision to extend a "standard" survey would be made
by the surveyors either by themselves or after consulting
with the Program Manager by telephone, without
documenting that such a decision had been made.
Petitioner argued that reading the guidelines to permit
state surveyors to intensify their investigations using a
phone conversation and without recording its occurrence
was not consistent with the guidelines, suggesting that
this testimony was not credible. P. Appeal Brief at 6-7.
We see nothing in the guidelines which precludes
telephone consultation, however; to the contrary, the
guidelines appear to require the surveyors to extend
their survey if they find substandard care. P. Ex. 9, at
15.
5. We note that HCFA regulations at 42 C.F.R.
488.26 contemplate that state surveyors will use
federal forms "to ensure proper recording of findings and
to document the basis for the findings." Here, the state
survey agency did use the federal statement of
deficiencies form, and that form records the finding at
issue here and documents the basis for the finding.