Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
CSM Home Health Services, Inc.,
Petitioner,
- v. -
Health Care Financing Administration.
DATE: July 23, 1997
Civil Remedies CR440
App. Div. Docket No.
A-97-41
Decision No. 1622
FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION
The Health Care Financing Administration (HCFA) appealed
an October 11, 1996 decision by Administrative Law Judge
(ALJ) Steven T. Kessel. CSM Home Health Services, Inc.,
DAB CR440 (1996) (ALJ Decision). CSM Home Health
Services, Inc. (Petitioner) had sought a hearing before
the ALJ challenging HCFA's termination, pursuant to
section 1866(b)(2) of the Social Security Act, of CSM's
participation in the Medicare program for substantial
noncompliance with federal requirements for home health
agencies. The ALJ concluded that HCFA had failed to
establish a basis for terminating Petitioner's
participation. Specifically, the ALJ found that the
preponderance of the evidence is that Petitioner complied
with all four conditions of participation with which HCFA
had found it out of compliance.
On appeal, HCFA objected to the findings in the ALJ
Decision regarding what is required by the standards of
participation at 42 C.F.R. §§ 484.14(g) and 484.30(a).
In addition, HCFA objected to the findings in the ALJ
Decision that Petitioner did not fail to comply with the
conditions of participation of which these standards are
a part or with the conditions of participation at 42
C.F.R. §§ 484.18 and 484.52. 1/
Our standard for review of an ALJ decision on a disputed
issue of law is whether the ALJ decision is erroneous.
Our standard for review on a disputed issue of fact is
whether the ALJ decision as to that fact is supported by
substantial evidence on the record as a whole. As
discussed below, we conclude that any error in the ALJ's
legal conclusions is harmless. In addition, we find that
there is substantial evidence in support of the ALJ's
factual findings. Accordingly, we sustain the ALJ
Decision.
Below, we first set forth a factual summary of the case.
We then discuss four threshold issues: how the burden
of proof is to be allocated, what is the applicable test
for termination of a home health agency, whether the ALJ
considered together all of the deficiencies relating to
each condition of participation in determining whether
the condition was met, and whether the ALJ properly
excluded or limited the weight of the testimony of a HCFA
official and a surveyor on the meaning of the
regulations. We next discuss HCFA's challenge to the
ALJ's interpretation of the standards of participation
identified above. We then turn to a discussion of
whether factual findings disputed by HCFA in individual
cases are supported by substantial evidence. Finally, we
discuss whether termination is proper based on the
deficiencies which the ALJ found to exist.
We note preliminarily that HCFA contended that the ALJ
conducted the proceedings in violation of governing
regulatory provisions, by not providing the time allotted
by the regulations for various procedural steps. 2/
(According to HCFA, the ALJ proceeded in this manner in
order to minimize the potentially adverse financial
consequences to Petitioner of HCFA's termination action.)
In HCFA's view, it was prejudiced by the lack of
adequate time to prepare a thorough presentation of its
case.
We agree that an agency should as a general rule follow
its own procedural regulations. However, there is no
indication in the record that HCFA objected to any of the
deadlines set by the ALJ in this case. Since HCFA, as
the drafter of the regulations, clearly knew what the
allotted time should have been, HCFA can reasonably be
viewed as having consented to the ALJ's deviations from
the regulatory timeframes.
Moreover, we are not persuaded that there was any
prejudice to HCFA. The deadlines imposed by the ALJ
applied equally to both parties. In addition, at the
time it made the decision to terminate Petitioner's
participation in Medicare, HCFA clearly had assembled the
information which it believed supported its decision.
Not only was such information necessary in order for HCFA
to make this decision in the first instance, but it was
also necessary for HCFA to respond to Petitioner's
complaint seeking an injunction, litigated in federal
district court before the administrative appeal was
filed. Thus, HCFA should have been able to prepare for
the hearing before the ALJ on an expeditious basis.
Furthermore, HCFA had a full opportunity to brief the
legal issues on appeal to this Board.
Factual Summary
The following facts are not in dispute. Petitioner is a
home health agency that participated in the Medicare
program. On March 1, 1996, HCFA and the California State
survey agency conducted a compliance survey of
Petitioner. Based on that survey, Petitioner was found
not to be complying with eight conditions of
participation. HCFA notified Petitioner that it was
initiating action to terminate Petitioner's Medicare
provider agreement as a result of these survey findings.
However, HCFA also gave Petitioner "a period of time in
which to submit credible evidence regarding correction"
of the deficiencies documented in the first survey. June
26, 1996 letter from Moon to Murphy at 2. Following
Petitioner's "representations that all deficiencies had
been corrected," HCFA and the survey agency conducted a
second survey of Petitioner which was completed on May
30, 1996. Id. On June 26, 1996, HCFA notified
Petitioner that it had determined that Petitioner
remained out of compliance with four conditions of
participation. The four conditions of participation
relate to (1) organization, services, and administration
(42 C.F.R. § 484.14); (2) acceptance of patients, plan of
care, and medical supervision (42 C.F.R. § 484.18); (3)
skilled nursing services (42 C.F.R. § 484.30); and (4)
evaluation of the agency's program (42 C.F.R. § 484.52).
HCFA determined that Petitioner had deficiencies with
respect to one or more of the several standards of
participation included in each of these conditions of
participation. HCFA terminated Petitioner's
participation in Medicare effective July 25, 1996. (An
earlier effective date was delayed when Petitioner sought
an injunction against termination.) Petitioner sought
review of HCFA's determination to terminate its
participation as provided by 42 C.F.R. § 488.24(a) and
received a hearing before an ALJ as provided by 42 C.F.R.
§ 498.40 et seq.
A party dissatisfied with an ALJ's decision after the
hearing may seek review before the Departmental Appeals
Board, as HCFA has done in this case. 42 C.F.R. § 498.80
et seq.
Threshold Issues
1. Burden of proof
In his decision, the ALJ states that he "assigned to HCFA
the burden of proving its assertions by a preponderance
of the evidence," and finds that HCFA failed to meet its
burden. The ALJ goes on to say that he would find in
favor of Petitioner even if he had assigned the burden of
persuasion to Petitioner, since "[t]he preponderance of
the evidence is that Petitioner complied with all of the
conditions of participation that are at issue in this
case." ALJ Decision at 1, n.1.
The ALJ's assignment of the burden of persuasion thus did
not affect the outcome of his decision. We note,
however, that the Board subsequently held, in a provider
appeal in which this issue was squarely presented, that
the ALJ erred in determining that HCFA had the burden of
proof (in the sense of the ultimate burden of
persuasion). The Board reversed the ALJ's conclusion,
finding instead that:
o HCFA must set forth the basis for its determination
terminating a provider with sufficient specificity
for the provider to respond, including the basis for
any finding that a condition-level deficiency
exists. The provider must then identify which of
the findings material to the determination the
provider disputes, and must also identify any
additional facts the provider is asserting.
o At the hearing, HCFA has the burden of coming
forward with evidence related to disputed findings
that is sufficient (together with any undisputed
findings and relevant legal authority) to establish
a prima facie case that HCFA had a legally
sufficient basis for termination.
o At the hearing, the provider has the burden of
coming forward with evidence sufficient to establish
the elements of any affirmative argument or defense
which it offers.
o The provider bears the ultimate burden of
persuasion. To prevail, the provider must prove by
a preponderance of the evidence on the record as a
whole that it is in substantial compliance with the
relevant statutory and regulatory provisions.
Hillman Rehabilitation Center, DAB 1611, at 84 (1997).
Accordingly, the ALJ incorrectly determined that HCFA had
the burden of proof in the instant case. 3/ HCFA was
not prejudiced by the ALJ's error, however, since we
agree with the ALJ that substantial compliance with the
conditions of participation has been established by a
preponderance of the evidence.
2. The applicable test for termination of a home health
agency
In summarizing the applicable law and regulations, the
ALJ made the following statement:
Generally, a determination as to whether a provider
is complying with a condition of participation
depends on the extent to which that provider is
found not to be complying with the standards that
are components of the condition. 42 C.F.R. §
488.26(b). A provider may be found not to have
complied with a condition of participation where it
is shown that a provider has committed a pattern of
failures to comply with the standards that comprise
the condition. But, proof of a pattern of failures
to comply with a standard or standards may not be
the only basis to find that a provider has failed to
comply with a condition of participation. The
determinative issue in any case where noncompliance
is demonstrated is whether the failure to comply is
so egregious as to show that the provider is not
capable of providing care consistent with that which
is required by the Act and regulations.
ALJ Decision at 4. HCFA acknowledged that the
deficiencies in question here "might not always have been
`egregious' (although in some instances they were) . . .
." HCFA Appeal Br. at 14. However, HCFA argued that the
last sentence quoted "goes far beyond" the rationale for
termination that exists where "the deficiencies are of
such a character as to substantially limit the provider's
or supplier's capacity to furnish adequate care or which
adversely affect the health and safety of patients," 4/
citing 42 C.F.R. § 488.24(b).
On its face, the statement to which HCFA objected is
incomplete. A provider may be capable of furnishing
quality care yet may fail to do so for financial or other
reasons. Thus, the regulations require a certification
of noncompliance where deficiencies either substantially
limit the provider's capacity to furnish adequate care or
adversely affect the health and safety of patients. 42
C.F.R. § 488.24(b).
However, it is clear in context that the statement in
question is not the test which the ALJ applied here in
determining whether termination was justified. As
Petitioner pointed out, the statement does not purport to
be a self-contained statement of the applicable test, but
instead refers back to the Act and regulations. The
discussion which precedes this statement states that HCFA
may terminate where there is a failure to comply with a
condition of participation, and quotes section 488.24(b).
See ALJ Decision at 3. Moreover, there is nothing in
the ALJ's discussion of the deficiencies themselves which
indicates that the ALJ believed that the only relevant
inquiry in determining whether a provider should be
terminated is whether it is capable of providing the
requisite care, or that the ALJ was using "egregious" to
mean anything other than that, where this is the relevant
inquiry, the test is whether the deficiencies
substantially limit the provider's capacity to provide
adequate care. Thus, the statement to which HCFA
objected is harmless error.
As indicated above, both HCFA and the ALJ identified
section 488.24(b) as requiring that HCFA terminate a
provider if the provider has deficiencies that "are of
such a character as to substantially limit the provider's
capacity to provide adequate care or adversely affect
patient health and safety." HCFA also argued, however,
that there is a "separate and distinct basis for
termination" which permits HCFA, at its discretion, to
terminate a provider when the provider is not in
compliance with all standards if, in HCFA's view, the
cited deficiencies, in balance, place a condition of
participation out of compliance. HCFA Appeal Br. at 9.
HCFA relied for its assertion on sections 489.53(a)(1)
and (3), which provide that HCFA may terminate a provider
agreement if HCFA finds that any of the following
failings is attributable to that provider:
(1) It is not complying with the provisions of title
XVIII and the applicable regulations of this chapter
or with the provisions of the agreement.
* * *
(3) It no longer meets the appropriate conditions of
participation or requirements (for SNFs and NFs) set
forth elsewhere in this chapter.
HCFA also pointed to section 488.26, which states that
the--
decision as to whether there is compliance with a
particular condition of participation . . . will
depend upon the manner and degree to which the
provider . . . satisfies the various standards
within each condition.
Finally, HCFA pointed to section 488.24(c), which
provides:
If HCFA determines that an institution or agency
does not qualify for participation or coverage
because it is not in compliance with the conditions
of participation or conditions for coverage, or if a
provider's agreement is terminated for that reason,
the institution or agency has the right to request
that the determination be reviewed.
While we recognize that HCFA has programmatic expertise
and has been charged with making an initial determination
regarding whether to terminate a provider, we reject
HCFA's assertion that we should reverse the ALJ Decision
on the ground that HCFA has unreviewable discretion to
classify a deficiency or deficiencies as condition-level.
HCFA's regulations state that a provider has a right to
request review of a determination that its provider
agreement should be terminated. Where, as here, a
hearing results in many of HCFA's findings of
deficiencies being overturned, an administrative law
judge must necessarily make a judgment concerning whether
termination is justified, based on significantly
different facts from those on which HCFA relied (as well
as testimony relevant to the proper exercise of
professional judgment in evaluating the remaining
deficiencies). In this situation, HCFA's initial
determination that there were condition-level
deficiencies is no longer relevant. Moreover, in arguing
that the ALJ's findings of deficiencies were sufficient
to support HCFA's decision to terminate Petitioner's
Medicare participation, HCFA did not rely on a separate
discretionary judgment as a basis for termination but
referred only to the section 484.24(b) test.
In any event, we see nothing in the language of the
regulations cited by HCFA which directly supports HCFA's
assertion. Sections 489.53(a)(1) and (3) merely parallel
sections 1866(b)(2)(A) and (B) of the Social Security
Act, which authorize the Secretary to terminate a
provider agreement upon a determination that the provider
has either failed to comply substantially with the
Medicare statute and regulations thereunder or the
provisions of the agreement or has failed substantially
to meet the conditions of participation. 5/ The
statutory concept of "substantially meeting" the
conditions of participation is in turn linked to the
section 488.24(b) test by HCFA's State Operations Manual,
section 3012. 6/
Moreover, section 488.26(b), which provides that
evaluation of noncompliance with a condition of
participation involves considering the manner and degree
of compliance with the standards for a particular
condition, is reasonably read in conjunction with the
section 484.24(b) test. As this Board has previously
noted, the conditions are in effect Congress' statement
of what is required for patient health and safety and
quality of care, and the regulatory standards are HCFA's
more detailed statement of what is necessary to achieve
those goals. Hillman Rehabilitation Center at 25. Thus,
evidence about the manner and degree of noncompliance
with the standards is relevant in determining whether the
deficiencies substantially limit a provider's capacity to
provide adequate care or adversely affect patient health
and safety.
Finally, section 488.24(c) merely provides that, once
HCFA has terminated a provider agreement because the
provider is not in compliance with conditions of
participation, the provider may request review. The
section does not describe the circumstances under which a
provider is considered not in compliance with these
conditions.
Thus, the regulations cited by HCFA do not clearly commit
to HCFA unreviewable discretion to terminate based on
failure to comply with the conditions of participation
absent a determination that there are deficiencies which
substantially limit the provider's capacity to provide
adequate care or adversely affect patient health and
safety. We also note that there is no mention of a
separate basis for termination in the preamble to
proposed revisions to the home health agency
requirements, which states that the new requirements will
provide a more than adequate regulatory basis for
"termination of participation based on failure to correct
seriously deficient performance that can or does threaten
health and safety of patients, or seriously impairs the
[home health agency's] capacity to provide needed care
and services to patients." 62 Fed. Reg. 11004, 11008
(March 10, 1997).
In sum, while we conclude that the ALJ may have erred
when he paraphrased the test to be applied, we further
conclude that he in fact applied the proper test. We
discuss at the end of this decision whether the
deficiencies found by the ALJ in fact constituted
condition-level deficiencies under this test. 7/
3. Whether the ALJ considered all of the deficiencies
relating to each condition of participation in
determining whether the condition was met
The ALJ found that "Petitioner was not deficient in
complying with standards of participation in providing
care to Patient #s 1, 3, 5, 6, 7, 8, 10, 11, 13, and 15."
Finding 6. HCFA objected to this finding on the ground
that "the ALJ examined the treatments rendered on a case-
by-case basis with respect to the individual patients
whose clinical records were reviewed by the surveyors,
rather than addressing each condition in its entirety as
is required by the applicable regulations. . . ." HCFA
Appeal Br. at 19-20.
As HCFA suggested, deficiencies which might individually
not be significant enough to constitute noncompliance
with a condition of participation might, when considered
together, constitute such noncompliance. Nevertheless,
we find no basis for HCFA's objection. Finding 6 merely
states that there were no deficiencies with respect to
any of the patients listed. This does not mean that, to
the extent that the ALJ found that deficiencies existed
with respect to other patients, he failed to weigh all of
the deficiencies relating to a particular condition of
participation in determining whether that condition was
met. Nor can it be inferred from the manner in which the
decision is organized that this was how the ALJ
proceeded. While Part III.C. of the ALJ Decision
discusses each patient separately, the ALJ's discussion
of the individual patients is organized so that each
standard with respect to which deficiencies were found is
addressed separately. 8/ There is no reason to believe
that the ALJ did not consider the totality of the
evidence bearing on each condition of participation in
question here.
In any event, the result would have been the same
regardless of which approach the ALJ took. The ALJ found
that Petitioner had only three deficiencies, two
involving one patient with respect to the condition of
participation at section 484.18, and one involving the
same patient with respect to the condition of
participation at section 484.30. Since the deficiencies
relating to a particular condition of participation
involved only a single patient, the same deficiencies
were involved whether the ALJ considered the deficiencies
on a patient-by-patient or condition-by-condition basis.
9/
4. Whether the ALJ properly excluded or limited the
testimony of a HCFA official and a surveyor on the
meaning of the regulations
HCFA objected to the ALJ's ruling that the proposed
testimony of a HCFA official concerning what HCFA meant
by the use of certain words in the regulations was
irrelevant. 10/ The official in question participated
in drafting the home health agency regulations. In
reaffirming his ruling in the ALJ Decision, the ALJ
stated in part that--
while it may be appropriate to use extrinsic
evidence, such as interpretive guidelines, a
regulation's preamble and comments, or an agency's
official statements of interpretation, as a means of
interpreting an unclear or arguably ambiguous
regulation, it is not appropriate to use the
opinions of agency employees who participated in
drafting a regulation to establish the meaning of a
regulation.
The purpose of a regulation is to provide a neutral
standard which can be read, understood, and applied
by those who are affected by it. Thus, the words in
a regulation must be defined based on their common
and ordinary meaning, or on any special meaning set
forth in a regulation's definition, or in the
legislative history to the regulation. The words in
a regulation cannot be defined after the fact by the
testimony of the employee who used the words in
drafting the regulation. If such were the case,
then the regulation would lose any pretense of
neutrality, and the concept of standards embodied in
a regulation would be meaningless.
ALJ Decision at 18-19. 11/
HCFA took the position that the testimony of the excluded
witness should have been permitted since "courts have
frequently admitted and considered testimony by agency
officials concerning the correct interpretation of the
regulations they administer." HCFA Appeal Br. at 27.
HCFA also challenged as improper the ALJ's statements at
the hearing regarding the testimony of a federal surveyor
witness. On one of the two occasions cited by HCFA, the
ALJ stated: "I'm not going to rely on anything the
witness [a nurse surveyor for HCFA] says in terms of her
interpretation of the regulation unless HCFA can prove to
me that that is a reasonable interpretation." Tr. at
210-211. On the other occasion, the ALJ stated, with
respect to the same witness, that "asking the employee to
tell me what they think the regulation means is of
extremely limited value. It does help me understand . .
. what was in the . . . surveyor's mind when the surveyor
found a deficiency. But it doesn't help me interpret the
regulation . . . ." Tr. at 318. 12/ HCFA contended
that, in refusing to hear testimony from those charged
with carrying out the regulation as to what HCFA's
interpretation of the regulation is, "the ALJ prevented
HCFA from fully developing the record as to the meaning
of the standards and conditions found to be deficient."
HCFA Appeal Br. at 29. HCFA asserted that, even without
this testimony, the record establishes a factual and
legal basis for reversal of the ALJ Decision, but stated
that, should the Board disagree, the Board should re-open
the record to hear the testimony.
HCFA did not establish that the ALJ erred in excluding as
irrelevant the testimony of the HCFA official regarding
the meaning of the regulations. Some of the court cases
cited by HCFA are not on point, and none of them involve
the testimony of a drafter of regulations. Such
testimony clearly would have little probative value since
there is no assurance that the drafter's interpretation
is the interpretation that was ultimately adopted by the
agency. Moreover, as the ALJ pointed out, HCFA did not
avail itself of the opportunity to establish the meaning
of the regulation through appropriate extrinsic material.
ALJ Decision at 19, n.7. Thus, HCFA does not appear to
have had an official interpretation of the regulation of
which Petitioner had notice.
Similarly, the ALJ's statements about the weight to be
accorded to the testimony of the federal surveyor nurse
concerning her interpretation of the regulations were
proper. Absent extrinsic evidence of an official
interpretation by HCFA, the nurse's testimony would not
be probative of anything more than her professional
opinion on what the regulation meant.
We note that the ALJ's ruling did not preclude expert
testimony regarding the meaning of medical terms or other
terms of art used in the regulations, or on application
of the regulations to specific facts where that
application requires professional judgment. Such
testimony would be relevant to show the understanding of
the regulations in the professional community, and is
clearly distinguishable from the testimony proffered here
of what HCFA meant by the regulations.
Objections to the ALJ's Interpretation of Standards
Whether the ALJ erred in finding that compliance with the
requirement for effective coordination of efforts which
support the objectives in the plan of care is not
dependent on the outcome of care provided to a patient
The ALJ found that--
[t]he standard of participation contained in 42
C.F.R. § 484.14(g) requires a home health agency to
assure that there is effective communication and
cooperation among its staff along with accurate
documentation of whatever communication and
cooperation . . . occurs. The standard does not
suggest that such communication and cooperation is
not attained simply because a home health agency is
unable to attain all of the goals and objectives it
establishes for the care of a patient.
ALJ Decision at 6 (Finding 3). The ALJ elaborated on
this finding later in the decision, stating:
I do not agree that compliance with the standard
depends on the outcome of care provided to a
patient. The standard requires liaison and
coordination of services in order to assure that the
patient attains the best possible outcome,
consistent with the goals established for that
patient by the patient's plan of care. But, the
regulation does not suggest that the degree of
liaison and coordination that is attained
necessarily may be measured by the home health
agency's success in providing care to the patient.
ALJ Decision at 13.
On appeal, HCFA disputed this finding on the ground that
"there is no meaningful way to determine whether the
efforts of agency staff to furnish home health services
to patients are effectively coordinated and support the
objectives outlined in the plans of care other than by
measuring the home health agency's `success in providing
care to the patient'. . . ." HCFA Appeal Br. at 32.
According to HCFA, the ALJ held that the provider's
compliance "will simply be measured by reference to the
provider's efforts . . . ," so that if the ALJ determines
that a provider made "sufficient efforts" to comply, the
provider will be found in compliance "regardless of how
ineffective those efforts may have been, and regardless
of the consequences to the patient." HCFA Appeal Br. at
43 (emphasis in original). 13/ In HCFA's view,
"[t]here must be some measurable result to the patient
and not simply a demonstration of `efforts' made by
staff." Id. at 25. At the same time, however, HCFA
stated that "this does not mean that in all instances the
patients' overall health situations must show improvement
as a result of the home health care they receive. . . ."
Id. at 31.
HCFA's objection to the finding in question here is
largely a matter of semantics, not substance. HCFA
clearly agreed with the ALJ that a patient's condition
need not necessarily improve in order for there to be
compliance with the requirement for effective
coordination of efforts which support the objectives in
the patient's plan of care. (Whether a patient's
condition improves is still of course some evidence of
whether there is compliance with this requirement,
however.) HCFA nevertheless objected to the ALJ's
statement that compliance is not necessarily measured by
the home health agency's "success in providing care to
the patient." HCFA appeared to read the ALJ's statement
as meaning that the home health agency need not actually
provide the care called for by the plan of care as long
as it makes some efforts to provide this care.
However, in context, it appears to us that the statement
in question refers instead to success in achieving the
objectives of the plan of care, which the ALJ found (and
HCFA agreed) was not necessary in order to meet the
standard. Moreover, there is no indication elsewhere in
the ALJ Decision that the home health agency need not
actually provide the care called for by the plan of care.
Thus, HCFA objected to a position which the ALJ never
took.
As noted above, HCFA also claimed that the ALJ
incorrectly decided that Petitioner was in compliance
with the standard where it merely made efforts to comply
regardless of whether those efforts were effective.
14/ We find, however, that, while the ALJ failed to
specifically refer in all instances to "effective"
coordination of efforts, there is substantial evidence of
effective coordination of efforts to support the
objectives in the plan of care in the case of each
deficiency which HCFA found under this standard (bearing
in mind that effective coordination need not result in an
improvement in the patient's condition).
HCFA's objection to Finding 3 may also be based in part
on a different view from the ALJ of what constituted the
objectives in the plan of care which were required under
the standard to be supported. We address this issue in
the section of this decision dealing with objections to
the ALJ's factual findings.
Whether the ALJ erred in finding that the requirement
that the registered nurse initiate the plan of care and
necessary revisions means that the nurse must begin to
implement and carry out all treatments that are ordered
in a patient's plan of care, but does not require the
nurse to write or revise the plan of care
The ALJ found that--
[t]he standard of participation contained in 42
C.F.R. § 484.30(a) requires that a registered nurse
initiate a plan of care, initiate necessary
revisions, and initiate appropriate rehabilitative
and preventive nursing procedures. This standard
means that a nurse must begin to implement and carry
out all treatments that are ordered in a patient's
plan of care. This standard does not impose on the
registered nurse the duty of writing a plan of care
or of making revisions to a plan of care.
ALJ Decision at 6 (Finding 5). HCFA objected to this
finding on the ground that this section "requires far
more of the registered nurse than simply carrying out the
treatments which are ordered by the physician." HCFA
Appeal Br. at 19. HCFA stated that the ALJ ignored the
plain language of the regulation requiring that the
registered nurse "initiate" the plan of care and
necessary revisions. HCFA agreed, however, that
"registered nurses are not charged with actually writing
plans of care or entering revisions on plans of care,"
which remain the responsibility of the patient's treating
physician. 15/ Id.
To the extent that Finding 5 suggests that section
484.30(a) requires only that the nurse implement and
carry out the physician's orders, we agree with HCFA that
this statement ignores other duties of the nurse.
Section 484.30(a) lists numerous other duties, including
the duty to "regularly [re-evaluate] the patient's
nursing needs" and the duty to "[inform] the physician
and other personnel of changes in the patient's condition
and needs." We note, however, that the ALJ's discussion
of Petitioner's alleged deficiencies in this area states:
"The regulation requires the registered nurse to:
assess a patient's problems and needs, to provide care to
the patient, coordinate the care provided by other care
givers, report to the physician any significant changes
in a patient's condition, and keep accurate records of
the care that the nurse provides." ALJ Decision at 16.
The ALJ also noted that a parallel provision, section
484.18(b), "requires that a home health agency's staff
notify a patient's physician about any changes in a
patient's condition which . . . might suggest a need to
alter a plan of care." ALJ Decision at 15. Thus, the
ALJ's decision as a whole is not based on the view that a
nurse's duty under the regulation consists only of
carrying out the physician's orders.
HCFA also maintained that the ALJ incorrectly
characterized its position as being that "the registered
nurse is charged with the independent responsibility to
make changes in the patient's plan of care and in the
treatments provided to the patient, where the plan of
care fails to prescribe the appropriate treatment, or
where there is a change in the patient's condition that
might require a change in treatment." ALJ Decision at
17. HCFA asserted that this is not its position but
"[r]ather, as section 484.30(a) provides on its face,
nurses are required to regularly re-evaluate [patients']
nursing needs, and, as required under another provision
of the regulation, to initiate changes in care plans when
necessary." HCFA Reply Br. at 114. HCFA further
asserted that the obligation "to initiate necessary
revisions to [patients'] plans of care . . . means that
the nurse, as a result of her ongoing, routine contact
with the patient in carrying out the care plan
directives, and her regular re-evaluation of the
patient's nursing needs, must inform the physician of
changed circumstances which, in her judgment as a nurse,
warrant revisions to the care plan." Id. at 120. Even
if the ALJ did not understand this to be HCFA's position,
however, there was no prejudicial error since this
position is consistent with the ALJ's view of the statute
and regulations, considered as a whole.
Objections to the ALJ's Factual Findings
The ALJ found that there were no deficiencies under the
standards of participation at 42 C.F.R. § 484.14(g),
484.18(a), and 484.30 in Petitioner's care of ten
patients included in the survey. Finding 6. HCFA
challenged the ALJ's finding regarding the lack of
deficiencies in Petitioner's care of these ten patients
on a number of factual grounds. The Board enunciated the
principles for determining whether the factual findings
in an ALJ decision are supported by substantial evidence
in Bernard J. Burke, M.D., DAB 1576 (1996):
"Substantial evidence" means more than a mere
scintilla of evidence; it means such evidence as a
reasonable mind might accept as adequate to support
a conclusion. Universal Camera Corp. v. National
Labor Relations Board, 340 U.S. 474 (1951).
In reviewing a decision to determine if the findings
are based on substantial evidence, the reviewer does
not reweigh conflicting evidence. Dodson v.
National Transportation Safety Board, 644 F.2d 647,
650 (7th Cir. 1981). The reviewer does not try the
case de novo, and he or she may not displace the
initial decision-maker's choice between fairly
conflicting views even if the reviewer would
justifiably have made a different choice had the
matter been before him or her anew. Universal
Camera at 488. However, the reviewer is not barred
from setting aside a finding if he or she cannot
conscientiously find that the finding, or the
decision as a whole, is supported by substantial
evidence, when viewed in the light that the record
in its entirety furnishes, including the body of
evidence opposed to the decision-maker's view.
Universal Camera at 488.
At 7. We have carefully examined the record with respect
to each of the alleged deficiencies, including all of the
evidence on which HCFA relied in support of its position.
We conclude that, even weighing this evidence, there is
substantial evidence in the record as a whole which
supports the ALJ's findings with respect to all of the
deficiencies. HCFA's objections to the ALJ's findings
were largely based on what HCFA inferred from the
patients' clinical records. While HCFA's inferences may
be reasonable, the ALJ could reasonably draw different
inferences. Thus, even if we might have ruled
differently with respect to some matters had they been
before us anew, reversal of the ALJ Decision is not
warranted. Accordingly, we sustain Finding 6 without
further discussion except with respect to the two matters
discussed below.
Whether the ALJ erred in finding that no deficiencies
existed because the discharge plan cited in the finding
of a deficiency was not an objective which the plan of
care was designed to support or was not a realistic goal
for discharge for which the plan of care should have
given instructions
HCFA challenged the ALJ's findings regarding the lack of
deficiencies under sections 484.14(g), 484.18(a), and
484.30(a) on the ground that the ALJ erred in determining
that the discharge plan was not an objective which the
plan of care was designed to support or was not a
realistic goal for discharge for which the plan of care
should have given instructions. Section 484.14(g)
requires that all home health agency personnel furnishing
services "maintain liaison to ensure that their efforts
are coordinated effectively and support the objectives
outlined in the plan of care." In a number of instances,
the ALJ found that no deficiency existed with respect to
this standard because the plan of care's discharge plan,
which HCFA found Petitioner failed to support, did not
"comprise a treatment objective in the plan of care."
See e.g., ALJ Decision at 33. The ALJ further found in a
number of instances that no deficiency existed with
respect to section 484.18(a), which requires in relevant
part that the plan of care give instructions for a timely
discharge of the patient, on the ground that the
physician did not view the discharge plan as "a realistic
treatment objective." See e.g., ALJ Decision at 45.
16/ In addition, the ALJ's finding in a number of
instances that no deficiency existed under section
484.30(a) depended on his determination that the
discharge plan was not an objective within the meaning of
section 484.14(g) or that no discharge instructions
relative to the discharge plan were required under
section 484.18(a). See e.g., ALJ Decision at 29.
Section 484.30(a) requires in relevant part that the
registered nurse regularly re-evaluate the patient's
nursing needs, initiate the plan of care and necessary
revisions, and initiate appropriate preventive and
rehabilitative nursing procedures.
The form used by Petitioner as its plan of care was the
HCFA-485, Home Health Certification and Plan of Care,
which contains a section 22 captioned
"Goals/Rehabilitation Potential/Discharge Plans." On
each of the plans of care in question, there was a
separate entry for each of these three topics. The ALJ
viewed the "objectives" referred to in section 484.14(g)
and the "instructions for a timely discharge" required by
section 484.18(a) as properly related to the "Goals" and
not to the "Discharge Plans."
HCFA argued that there was no basis for distinguishing
between the "Discharge Plans" and the "Goals." According
to HCFA, "[a]ll of the statements in the care plan
regarding how the patient is to be cared for, including
the state of mental and physical well being which is
hoped to be attained by the patient, and when the patient
might be discharged from home health services entirely,
are `objectives,' outlined in the plan of care," and
therefore covered by 42 C.F.R. § 484.14(g)." HCFA Appeal
Br., at 56-57, n. 19. HCFA argued further that "the
failure to include instructions for timely discharge is
not cured by a finding that the discharge goals stated in
the plan of care are unrealistic or unattainable." HCFA
Appeal Br. at 94. HCFA took the position that there was
no medical or program reason to include unrealistic
discharge plans in the plan of care, and asserted that,
if the discharge plans proved to be unrealistic, the plan
of care should have been revised to include more
appropriate discharge plans.
We do not find HCFA's arguments persuasive. Instructions
in HCFA's Home Health Agency Manual (HIM-11) for
completing item 22 of the HCFA-485, referring to the
three elements of this item, state: "Enter information
which reflects the physician's description of the
achievable goals [Goals] and the patient's ability to
meet them [Rehabilitation Potential] as well as plans for
care after discharge [Discharge Plans]." Petitioner's
Post Hearing Br., Attachment 2, at 4. 17/ HIM-11
further states that "[d]ischarge plans include a
statement of where, or how, the patient will be cared for
once home health services are not provided." Id. at 5.
This indicates that HCFA viewed the plan of care as
designed to meet only the goals identified in item 22 and
not the discharge plans identified in that item. Thus,
the ALJ properly read section 484.14(g) as requiring that
the efforts of home health agency personnel furnishing
services to a patient be effectively coordinated to
support these goals. Similarly, the requirement in
section 484.18(a) for instructions for timely discharge
can be read as relating to these goals since, even if
they are not intended to result in the patient's
discharge at the end of the certification period, they
should bring the patient closer to readiness for
discharge. Under HCFA's reading of these sections,
however, the services provided by the home health agency
and the instructions in the plan of care would somehow
have to be directed towards implementing long-range plans
for a discharge that might not occur until after the end
of the certification period, if ever. 18/ In finding
that the plan of care was not required to support or give
instructions to implement the discharge plans, the ALJ
was not necessarily dismissing the discharge plans as a
complete fiction, but rather recognizing that, given the
patient's condition, it was not reasonable to expect the
care provided by the home health agency during the
certification period to result in the patient's immediate
discharge. We do not disagree with HCFA that where
discharge plans are unrealistic, the plan of care should
be revised to include more appropriate discharge plans.
However, the fact that the discharge plans could not be
effectuated within the certification period was not a
reason to revise the plans, since the plans realistically
described what the patient's situation would be when
discharge was appropriate.
HCFA pointed out, however, that there was no testimony at
the hearing by any treating physicians that the discharge
plans were not goals which they sought to attain for
their patients. 19/ HCFA argued that there was
therefore no substantial evidence in support of the ALJ's
finding. As discussed above, however, the ALJ's view of
the significance of the discharge goals is consistent
with HCFA's Home Health Agency Manual. Moreover, looking
at the discharge plan in the context of other information
in a plan of care such as the patient's diagnosis and the
type of services ordered, the ALJ could reasonably have
concluded that the physician did not intend for the plan
to be realized during the certification period. Thus,
notwithstanding the absence of testimony regarding the
significance of the discharge plans, there is substantial
evidence which supports the ALJ's finding.
Whether the ALJ erred in finding that Petitioner did not
fail to conduct the management reviews and evaluations
required under 42 C.F.R. § 484.52
The ALJ found that Petitioner did not fail to conduct the
management reviews and evaluations required under 42
C.F.R. § 484.52 and that Petitioner was in compliance
with the condition of participation at section 484.52.
Findings 10 and 14. That section requires in relevant
part that a home health agency conduct an overall
evaluation of its program at least annually. The
evaluation must consist of an overall policy and
administrative review and a review of clinical records
which assesses "the extent to which the agency's program
is appropriate, adequate, effective, and efficient."
20/ Results of the evaluation must be reported to and
acted upon by those responsible for the operation of the
agency and be maintained separately as administrative
records.
The ALJ found "overwhelming evidence" that Petitioner
conducted the requisite evaluation. ALJ Decision at 62.
Specifically, the ALJ found that the annual management
review conducted by Petitioner on May 9, 1996 (documented
at Petitioner's Exhibit 22) "comprised a comprehensive
evaluation by Petitioner of its overall program" which
"identified problems which might affect adversely the
appropriateness, adequacy, effectiveness and efficiency
of the care that Petitioner gave to its patients." Id.
at 62-63. The ALJ found, moreover, that Petitioner
proposed solutions to these problems, and that its
proposals were subsequently adopted by the Board of
Directors.
HCFA took the position, however, that the program
evaluation materials in Petitioner's Exhibit 22 were
inadequate because they were merely a response to the
deficiencies identified during the first survey of
Petitioner and did not assess the adequacy, effectiveness
and efficiency of Petitioner's total program. HCFA
argued specifically that "[t]here is no determination as
to whether the agency had the capacity to overcome its
problems, or, most critically, whether the services being
offered accomplished the objectives of the agency and its
patients, or whether there had been a minimal expenditure
of resources to achieve the desired goals and anticipated
patient outcomes." HCFA Appeal Br. at 154. 21/
In response, Petitioner asserted that its annual program
evaluation for the year ending April 30, 1996 contained
reports on various aspects of its program, each of which
"evaluated the particular program for adequacy,
appropriateness, effectiveness and efficiency and
contained sections of problems identified,
recommendations for change and actions taken."
Petitioner's Br. at 130. Petitioner pointed out that the
minutes of a May 9, 1996 meeting of Petitioner's Quality
Management/Professional Advisory Committee show that the
committee analyzed each report and made recommendations
for actions to address problems identified. In addition,
Petitioner pointed out that each committee member made
specific recommendations in writing for certain aspects
of the evaluation. The Board of Directors adopted these
recommendations on May 13, 1996 after a package
consisting of the reports, minutes and individual
recommendations was presented by Petitioner's Executive
Director.
We conclude that there is substantial evidence in the
record to support the ALJ's finding that Petitioner
performed the requisite evaluation of its program. The
evaluation does not expressly discuss problems and
recommendations in terms of the adequacy,
appropriateness, efficiency and effectiveness of
Petitioner's program; however, Petitioner's in-depth
examination of its program necessarily entailed a
consideration of these basic factors. Moreover, while
the part of the evaluation entitled "Administrator's
Report" focuses on changes made as a result of the first
survey of Petitioner (on March 1, 1996), the evaluation
as a whole is not limited to a consideration of the
deficiencies found in that survey. Finally, we note that
a member of the survey team was unable to state how the
evaluation was deficient other than that it lacked "some
kind of recommendation to the agency about where they
stood in all areas and areas that needed to be changed in
one way or another . . . ." Tr. at 399. However, this
was clearly not the case, since, as indicated above, the
evaluation contains a wide range of recommendations for
improving Petitioner's program.
HCFA also argued that, even if Petitioner conducted the
requisite program evaluation, there was no evidence that
Petitioner acted upon the results of the evaluation.
Instead, according to HCFA, the record showed at most
that the recommendations made during the annual
management review were adopted by Petitioner's Board of
Directors. 22/ HCFA observed that the ALJ Decision
did not address whether the recommendations resulting
from the evaluation were acted upon.
Section 484.52 provides in relevant part that "[r]esults
of the evaluation are reported to and acted upon by those
responsible for the operation of the agency. . . ." The
ALJ found that Petitioner's Board of Directors adopted
the proposals resulting from the evaluation. This was a
necessary first step in "acting upon," or taking action
to implement, the proposals. The proposals were adopted
at the May 13, 1996 Board of Directors meeting, while the
second survey was completed on May 30, 1996. 23/ Any
lack of action on the proposals during the short time
between the adoption of the minutes and the survey would
not be significant since the regulation requires an
evaluation "at least once a year," and does not specify
when the results of the evaluation must be acted upon.
In any event, Petitioner had proceeded to implement some
of the action items identified by the evaluating
committee prior to the Board of Directors meeting. See
Petitioner's Ex. 22.
We therefore conclude that Findings 10 and 12 are
supported by substantial evidence in the record.
Whether there is a basis for termination
As noted above, the ALJ found that Petitioner failed to
comply with a standard of participation contained in
section 484.18 (requiring that care follow a written plan
of care established and periodically reviewed by a
doctor) in two instances. Specifically, the ALJ found
that Petitioner failed to assure that: (1) the plan of
care for Patient #12 was revised to address the patient's
fungal infection and (2) the nurses assigned to Patient
#12 assessed the patient's complaints of blurred vision.
In addition, the ALJ found that Petitioner failed to
comply with a standard of section 484.30 (requiring that
the home health agency furnish skilled nursing services
in accordance with the plan of care) when nurses failed
to assess Patient #12's complaints of blurred vision.
24/ Nevertheless, the ALJ found that Petitioner did not
fail to comply with either condition of participation.
Findings 12 and 13. The ALJ explained these findings
later in the decision as follows:
I do not find that the two instances of failures to
comply with requirements contained in 42 C.F.R. §
484.18 is evidence of a pattern of failures to
comply with these requirements, as is alleged by
HCFA. Nor do I find that these two failures to
comply show that Petitioner is incapable of
complying with participation requirements. I am not
downplaying the significance of Petitioner's failure
to comply with participation requirements in
providing care to Patient #12. However, it is
apparent from the total record of this case that
these examples of failures to comply are isolated
incidents which do not, in and of themselves,
establish Petitioner to be incapable of providing
care of the quality required under the Act and
regulations.
* * * * *
The evidence establishes one failure by Petitioner
to comply with participation requirements stated in
42 C.F.R. § 484.30. . . . However, that is the only
instance in which I find a failure by Petitioner to
comply with the requirements of the regulation. As
with the two instances of failures to comply with
the requirements of 42 C.F.R. § 484.18, this
instance is neither proof of a pattern of failures
to comply with the regulation nor is it proof that
Petitioner is incapable of providing care required
under the Act and regulations.
ALJ Decision at 64-65.
HCFA argued, however, that the ALJ's findings of
deficiencies, "standing alone or in combination, were
sufficient to support HCFA's decision to terminate
Petitioner's Medicare participation . . . ." because they
adversely affected patient health and safety. HCFA Reply
Br. at 160. As discussed earlier in this decision, the
regulations require that, in order for termination to be
justified, the manner and degree of the deficiencies must
be considered. Although the ALJ did not frame his
discussion in these terms, he clearly considered the
manner and degree of the deficiencies when he found that
there was no evidence of a pattern of failure to comply
with the regulations. Thus, we conclude that the ALJ did
not err in determining that termination was not justified
based on the remaining deficiencies.
HCFA pointed out elsewhere in its briefing that "[i]n
conducting its surveys of home health agencies, HCFA (or
the state agency) selects and examines a representative
sample of patient records . . . . [S]ince the selected
sample of patient records is only a small percentage of
the total number of patients being served by a home
health agency, if the surveyors document a particular
deficiency as occurring several times within the sample
review there is very likely a basis for finding that the
agency has a systemic problem which makes the deficiency
even more significant." HCFA Appeal Br. at 21, n. 11.
However, HCFA did not allege that the deficiencies
sustained by the ALJ were evidence of a systemic problem
due to the frequency with which they occurred in the
sample.
HCFA argued in addition that, under 42 C.F.R. § 488.28,
Petitioner was properly terminated even if the
deficiencies were not condition-level deficiencies
because the deficiencies were repeat deficiencies, i.e.,
identified in two successive surveys. Section 488.28
provides that a provider with deficiencies with respect
to one or more standards which do not jeopardize patient
health and safety or seriously limit the provider's
capacity to render adequate care may continue to
participate in the Medicare program if the provider
submits an acceptable plan of correction. It follows
from this provision that HCFA may properly terminate a
provider with standard-level deficiencies if the provider
does not submit an acceptable plan of correction or does
not implement a plan which is accepted.
Here, however, there were no findings that the
deficiencies that the ALJ sustained were repeat
deficiencies, and HCFA did not assert that the ALJ should
have made such findings on the record before him. The
deficiencies found by the ALJ pertained to patients in
the sample drawn for the second survey of Petitioner.
The surveyors had found deficiencies in the same
standards in the sample drawn for the first survey;
however, before the ALJ, HCFA relied solely on the
deficiencies found in the second survey. 25/ Thus,
the issue as presented at the hearing, due to HCFA's own
actions, was Petitioner's status at the time of the
second survey, and the ALJ made no findings on the
alleged deficiencies from the first survey. Accordingly,
HCFA cannot properly rely on the alleged deficiencies
from the first survey to show that there were repeat
deficiencies. 26/
Conclusion
For the reasons discussed above, we conclude that any
error in the ALJ's legal conclusions is harmless and that
there is substantial evidence in support of the ALJ's
factual findings. Accordingly, we adopt and affirm each
of the ALJ's findings of fact and conclusions of law,
based on which the ALJ decided that HCFA incorrectly
terminated Petitioner's participation in the Medicare
program.
__________________________
Judith A. Ballard
__________________________
Cecilia Sparks Ford
__________________________
Donald F. Garrett
Presiding Board Member
* * * Footnotes * * *
1. HCFA did not object to the following
findings: 1, 7, 8, 9, 15. Accordingly, we affirm these
findings without further discussion.
We note that, in its response to HCFA's request for
review, Petitioner objected to the following findings: 2,
7, 8, and 9. However, the regulations require that a
request for review must be filed within 60 days after
receipt of an ALJ decision. 42 C.F.R. § 498.82(a)(2).
Since Petitioner's objections were not timely raised and
it would not change the result here even if we were to
reverse these findings, we do not consider Petitioner's
objections to these findings here.
2. HCFA contended specifically that the ALJ
provided only one day's notice of the prehearing
conference, instead of ten days' notice, as required by
42 C.F.R. § 498.48(a); gave the parties only eight
working days to file objections to the prehearing order,
when section 498.50(b)(2) provides for ten days to file
objections; allowed only three weeks (and only five days
after HCFA's receipt of the hearing transcript) for the
filing of initial posthearing briefs, when section 498.63
provides for a "reasonable time" to prepare all written
submissions; and allowed only 11 days for the filing of
reply briefs, when section 498.17(b)(1) provides for 20
days for rebuttal statements. (HCFA admitted that its
allegation of a violation of section 498.50(b)(2)
depended on a construction of that section as referring
to working days rather than calendar days. In the
absence of any provision defining "days," however, the
ALJ could reasonably interpret the term as meaning
calendar days.)
3. As the appellant in the proceeding before
us, however, HCFA must establish that the ALJ's findings
of law are erroneous or that his findings of fact are not
supported by substantial evidence.
4. HCFA also asserted that the ALJ decision
"further suggests that all standards must be out before
non-compliance with a condition of participation may be
found." HCFA Appeal Br. at 11. Since the quoted
language is clearly to the contrary, we do not discuss
this assertion further.
5. Section 1866(b)(2)(A) authorizes
termination where the Secretary "has determined that the
provider fails to comply substantially with the
provisions of the agreement, with the provisions of this
title and regulations thereunder, . . . ." The
"provisions of this title" include section 1861, which
sets out the conditions of participation. Section
1866(b)(2)(B) authorizes termination where the Secretary
"has determined that the provider fails substantially to
meet the applicable provisions of section 1861 . . . ."
Even if section 1866(b)(2) is viewed as providing HCFA
with two separate authorities for terminating based on
failure substantially to comply with conditions of
participation, however, it does not necessarily mean that
HCFA can terminate without applying its own regulatory
test, set out in section 488.24(b).
6. Section 3012 is titled "TERMINATION
PROCEDURES--NONCOMPLIANCE WITH ONE OR MORE CONDITIONS OF
PARTICIPATION OR COVERAGE AND CITED DEFICIENCIES LIMIT
CAPACITY OF PROVIDER/SUPPLIER TO FURNISH ADEQUATE LEVEL
OR QUALITY OF CARE (MEDICARE) - EXCLUDING SNFs" and
states:
Failure to substantially meet one or more Conditions
is a cause for termination of participation.
"Substantially," for purposes of this section, is
defined as meeting the applicable Conditions of
Participation or Coverage. Any provider/supplier
that does not substantially meet the Conditions is
considered to be limited in its capacity to furnish
services at an adequate level or quality.
7. HCFA also asserted that termination is
justified under 42 C.F.R. § 488.28 where there are repeat
deficiencies (i.e., deficiencies found to exist during
the first survey as well as during the revisit survey)
which do not constitute condition-level deficiencies.
See HCFA Reply Br. at 11, n.2. (This is consistent with
the ALJ's view that "[w]here HCFA determines that there
is a deficiency, but that the deficiency is not so severe
as to constitute a condition-level deficiency, then HCFA
may not terminate the provider's participation in
Medicare without first affording the provider the
opportunity to correct the deficiency." ALJ Decision at
3.) However, as discussed later, this section is not
applicable here.
8. In our view, this is an eminently reasonable
approach, since it avoids repetition of the basic facts
regarding each patient.
9. The ALJ found that Petitioner did not fail
to comply with the conditions of participation in
question based on these limited deficiencies. Findings
12 and 13. We discuss HCFA's objections to these
findings later in this decision.
10. HCFA indicated that the testimony would
relate to the interpretation of sections 484.18 and
484.30. Tr. at 1063.
11. The ALJ also noted that he excluded
(presumably on the same basis) "an affidavit by a lawyer
who purports to be an expert in health care law and who
offered his opinion as to the meaning of some of the
relevant regulations," offered by Petitioner as Exhibit
3. ALJ Decision at 19, n.7.
12. On both occasions, the witness was
testifying concerning deficiencies found under the
standard of participation at section 484.14(g).
13. HCFA also asserted that the ALJ,
incorrectly in its view, "held HCFA to the higher
standard of having to show that all of the goals and
objectives established in the care plan must be
established as not met in order to find that a home
health agency is deficient with respect to" the standard
at section 484.14(g). HCFA Appeal Br. at 17. This is
essentially a restatement of HCFA's argument that the
ALJ found that minimal efforts to provide care will
suffice to meet the standard.
14. Notwithstanding this argument, HCFA stated
elsewhere that, in determining whether the standard was
met, HCFA would look at the home health agency's
"efforts" to provide "the care that is called for." HCFA
Reply Br. at 20-21.
15. Section 484.18 requires that the plan of
care be "established" by a physician, not that it
literally be written by a physician. Thus, it would not
be inappropriate for a home health agency to actually
prepare a plan of care (or revision to a plan of care)
for the physician's review and signature.
16. As HCFA noted, the ALJ did not address
HCFA's finding of a deficiency under section 484.18(a)
for Patient #5. However, the ALJ's discussion of HCFA's
finding of a deficiency under section 484.30(a) for this
patient addresses the same issues raised by HCFA with
respect to section 484.18(a).
17. HCFA argued that the HCFA-485 was
originally developed to be used for reimbursement
purposes, and that the instructions in HIM-11 for
completing the HCFA-485 (dated 11-94) were not
"instructions regarding the requirements for
certification as a Medicare provider." HCFA Reply Br. at
56. However, the interpretive guidelines in HCFA's
State Operations Manual specifically state that the HCFA-
485 "fulfills the regulatory requirements for a plan of
care . . . ." Petitioner's Br., Ex. 3. Accordingly,
regardless of whether the form was developed as a billing
form, Petitioner could reasonably conclude that the
certification requirements would be met if the form were
completed pursuant to HCFA's instructions.
18. Indeed, HCFA appeared to recognize that
discharge might be a long-term goal rather than one to be
realized during the certification period when it stated
that the plans of care should have contained instructions
which allowed the patients to "[work] to achieve their
highest practicable functional capacity and eventual
freedom from needing home health services." HCFA Reply
Br. at 97 (emphasis added).
19. According to HCFA, moreover, Petitioner
never took the position before the ALJ that the discharge
plans should not be treated as objectives which were
required to be supported or for which instructions were
required in the plans of care. However, Petitioner
clearly did take this position. See Petitioner Post
Hearing Br. at 3-5, and citations to transcript and
exhibits therein.
20. The evaluation must be performed by
professional personnel, the agency's staff, and
consumers, or by professional personnel from outside the
agency working in conjunction with the agency. There is
no dispute that a properly constituted group performed
the evaluation in question here.
21. HCFA's Interpretive Guidelines for Home
Health Agencies provide in relevant part that an
assessment of the adequacy of a home health agency's
program consists of "[a] determination as to whether the
[home health agency] has the capacity to overcome or
minimize existing or potential problems;" that an
assessment of the effectiveness of its program consists
of a determination of whether "[t]he services offered
accomplish the objectives of the [home health agency] and
anticipated patient outcomes;" and an assessment of the
efficiency of its program consists of a determination
"[w]hether there is a minimal expenditure of resources by
the [home health agency] to achieve desired goals and
anticipated patient outcomes." HCFA Appeal Br.,
Attachment 3, at 2. HCFA did not allege that the
evaluation failed to address the appropriateness of
Petitioner's total program, i.e., whether "the area being
evaluated addresses existing or potential problems." Id.
22. HCFA argued that the ALJ erred in
admitting into evidence the minutes of the Board of
Directors meeting (Petitioner's Exhibit 30), which the
ALJ found showed that the recommendations resulting from
the evaluation were adopted. HCFA asserted that these
minutes were not available for review during the survey,
and argued that they were therefore irrelevant since the
issue is whether Petitioner was in compliance as of the
date of the survey.
It is clear that compliance with the applicable
requirements can be demonstrated with documents provided
after the date of the survey. The regulations governing
the conduct of hearings in cases such as this permit the
introduction of "relevant and material evidence . . .
which has not been presented at the hearing" at any time
before mailing of notice of the decision. 42 C.F.R. §
498.60(b)(2).
However, HCFA also questioned whether the minutes, which
are dated prior to the date of the survey, were in fact
in existence at the time of the survey. HCFA asserted
that, by admitting into evidence an exhibit which was not
produced during the survey or the pre-hearing exchange of
exhibits, the ALJ gave "an open invitation for any . . .
. [provider] whose documentation or records are found to
be deficient or inadequate (or, as in this case, non-
existent) during the survey, to supply any want thereof
at a later date. . . ." HCFA Appeal Br. at 150. HCFA
also faulted the ALJ for not inquiring why this exhibit
was not produced earlier.
While we agree with HCFA that the late submission of this
exhibit at least raises a question about its
authenticity, the ALJ could reasonably resolve that
question in Petitioner's favor since Petitioner did offer
an explanation of why the exhibit was not submitted
earlier (Tr. at 613-614), and there was corroborating
testimony by witnesses of both parties regarding the
Board of Directors meeting. Petitioner's Administrator
testified that she had presented the recommendations
resulting from the evaluation at the May 13, 1996 Board
of Directors meeting and had discussed with the Board at
that time "their response to these recommendation[s] and
which ones [she] could act on as administrator." Tr. at
978. In addition, the state surveyor indicated that, to
the best of his recollection, he examined the governing
body minutes to see if the recommendations from the
evaluation were passed on to the governing body. Tr. at
414-415.
We therefore conclude that the ALJ did not err in
admitting the minutes at the hearing and on relying on
them to show that the recommendations resulting from the
evaluation were adopted.
HCFA also suggested that the fact that the minutes were
not produced at the survey showed that Petitioner did not
comply with the requirement that the "[r]esults of the
evaluation" be separately maintained as administrative
records, as required by section 484.52. It is not clear
that "[r]esults of the evaluation" includes records of
actions taken on the recommendations made during the
evaluation in addition to the recommendations themselves,
given that HCFA's interpretive guidelines refer to the
"results of the evaluation" as what is reported to those
responsible for the operation of the home health agency.
See HCFA Appeal Br., Att. 3. In any event, all of the
materials relating to the evaluation other than the
minutes were produced at the survey. See Tr. at 398-99,
403, 414, 421. Thus, the ALJ could have reasonably
concluded that the absence of this one document was not a
sufficient basis for finding that Petitioner did not
comply with the standard.
23. HCFA pointed out that the ALJ mistakenly
identified the date of the minutes as May 30 rather than
May 13.
24. HCFA took the position that the ALJ should
have found a second deficiency under section 484.30 on
the same facts. The surveyors did not find any
deficiency under section 484.30 related to Patient #12's
fungal infection, however. See HCFA Ex. 4, at 26-28.
Accordingly, there was no basis for such a finding by the
ALJ.
25. HCFA thus retreated from the position in
its June 26, 1996 notice of termination, which indicated
that HCFA was relying on the findings in the first survey
as well as the second.
26. As HCFA noted, the procedures for
terminating based on repeat deficiencies, under which a
provider is permitted to submit a plan of correction
following the first survey, were not followed here since
HCFA found that Petitioner had condition-level
deficiencies. Instead, pursuant to section 3012 of the
State Operations Manual, HCFA offered Petitioner an
opportunity to submit "a credible allegation of
compliance," which it found upon the subsequent survey
not to be supported. See HCFA Appeal Br. at 10, n. 8.
(..continued)