SUBJECT: Fairfax Nursing Home, Inc.,

Petitioner,

Health Care Financing Administration.

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Fairfax Nursing Home, Inc. (Fairfax) appealed a March 22, 2001 decision by Administrative Law Judge (ALJ) Jose A. Anglada affirming a determination by the Health Care Financing Administration (HCFA) ⁽¹⁾ to impose a civil money penalty against Fairfax. Fairfax Nursing Home, Inc., DAB CR753 (2001) (ALJ Decision).

For the reasons stated below, we uphold the ALJ Decision. We affirm and adopt his findings of fact and conclusions of law.

Legal Background

Requirements for long-term care facilities that seek to participate in the Medicare program as a skilled nursing facility under section 1819 of the Social Security Act (Act), or in the Medicaid program as a nursing facility under section 1919 of the Act, are set out at 42 C.F.R. Part 483. The general "quality of care" requirement at section 483.25 provides that --

Each resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, in accordance with the comprehensive assessment and plan of care.

More specifically, subsection 483.25(k) provides that the facility "must ensure" that residents receive proper treatment and care for "special services," including tracheostomy care, tracheal suctioning, and respiratory care.

Compliance with these requirements is determined through the survey and certification process, set out at 42 C.F.R. Part 488, Subpart E. Surveys are generally conducted by a state survey agency under an agreement with HCFA (although HCFA may itself conduct surveys and revisits). Subpart F of Part 488 specifies the remedies that may be imposed by HCFA (or a state where appropriate) based on a finding that a facility is not in substantial compliance with the requirements. Factors that must be considered in selecting what remedy to impose include the seriousness of the deficiencies, including whether the deficiencies constitute immediate jeopardy, and whether the deficiencies are isolated, constitute a pattern, or are widespread. 42 C.F.R. § 488.404. Other factors that may be considered include the relationship of one deficiency to other deficiencies. One of the available remedies is a civil money penalty (CMP). Section 488.430 provides that --

HCFA . . . may impose a civil money penalty for the number of days of past noncompliance since the last standard survey, including the number of days of immediate jeopardy.

"Immediate jeopardy" is defined to mean --

a situation in which the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.

42 C.F.R. § 488.301.

An upper range CMP, $3,050 to $10,000 per day, must be imposed for deficiencies constituting immediate jeopardy to the facility's residents. 42 C.F.R. §§ 488.408; 488.438(a)(1)(i). A per day penalty "may start accruing as early as the date that the facility was first out of compliance" and be computed for the "number of days of noncompliance until the facility achieves substantial compliance" or is terminated from the program. 42 C.F.R. §§ 488.440; 488.454.

A facility may appeal a certification of noncompliance leading to an enforcement remedy, but may not appeal the choice of remedy or the finding that deficiencies pose immediate jeopardy. 42 C.F.R. § 488.408(g); 498.3(b)(12); 498.3(d)(10). A determination with respect to the level of noncompliance may be appealed only if a successful challenge on this issue would affect the range of CMP amounts that HCFA could collect. 42 C.F.R. §§ 498.3(b)(13); 498.3(d)(10); 488.438(e). HCFA's determination as to the level of noncompliance "must be upheld unless it is clearly erroneous." 42 C.F.R. § 498.60(c). This includes HCFA's finding of immediate jeopardy. Woodstock Care Center, DAB No. 1726, at 9, 38 (2000).

Under 42 C.F.R. Part 498 procedures, there is a right to request a hearing by an ALJ assigned to the Departmental Appeals Board and a right to request review of an ALJ decision by the Board itself. A request for review of an ALJ decision must specify the issues, the findings of fact or conclusions of law with the party disagrees, and the basis for contending that the findings and conclusions are incorrect. 42 C.F.R. § 498.82(b).

HCFA's findings in this case were based on a survey performed by the Illinois Department of Public Health (IDPH), from April 1 through 8, 1997. HCFA determined to impose a penalty of $3050 per day for the 105-day period from December 20, 1996 through April 3, 1997, and a penalty of $50 per day for the period April 1 through May 14, 1997. Fairfax appealed the $3050 per day penalty (totaling $320,250), including the level of noncompliance, but did not appeal the remaining penalty (totaling $2,050). ALJ Decision at 2. HCFA's findings for the higher level penalty were based on alleged deficiencies in meeting the requirements of 42 C.F.R. § 483.25(k) at the immediate jeopardy level, based on findings with respect to facility residents identified as R10, R126, R127, R83, R68, R6, R11, and R130.

The ALJ Decision

In his decision, the ALJ made the following numbered findings of fact and conclusions of law:

1. Petitioner was not in substantial compliance with federal participation requirements from December 20, 1996 through April 3, 1997.
a. Petitioner failed to implement a policy concerning ventilator dependent residents, and, through its carelessness, brought about the premature demise of R10. This constitutes immediate jeopardy.
b. Petitioner failed to carry out the treating physician's orders and failed to properly document R126's medical charts. This had the potential for serious injury, harm, impairment or death to the resident and constitutes immediate jeopardy.
c. Petitioner failed to adhere to the guidelines it had developed in February 1997, and implemented at the beginning of March 1997 for ventilator dependent residents in respiratory distress by not monitoring or providing proper follow-up assessments to R127. This had the potential for serious injury, harm, impairment, or death to the resident and constitutes immediate jeopardy.
d. Petitioner failed to adhere to the guidelines it had adopted in March 1997 for ventilator dependent residents in respiratory distress by not monitoring or providing proper follow-up assessments to R83 & R68. This had the potential for serious injury, harm, impairment, or death to the resident and constitutes immediate jeopardy.
e. Petitioner failed to ensure that R6 and R11 received proper tracheostomy care. This had the potential for serious injury, harm, impairment, or death to the residents and constitutes immediate jeopardy.
f. The conduct of Petitioner with respect to R130 does not constitute a deficiency.

2. Beginning December 20, 1996 and continuing through April 3, 1997, Petitioner failed to comply with requirements of 42 C.F.R. § 483.25 at the immediate jeopardy level.

3. The amount of the penalty imposed by HCFA is reasonable.

Under each of his major findings and conclusions, the ALJ set out the survey findings, and then discussed his findings based on the evidence presented, stating which witnesses he found credible and why he rejected Fairfax's arguments.

We do not here repeat the detailed findings from the ALJ Decision, except to the extent necessary to address Fairfax's arguments on appeal.

Standard for Review

Under the guidelines for Board review under 42 C.F.R. Part 498, the standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the record as a whole. The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. See e.g., Woodstock Care Center, DAB No. 1726, at 8-9 (2000).

Issues on Appeal

On appeal, Fairfax raised a threshold issue regarding whether the ALJ applied the appropriate burden of proof.

Fairfax also alleged generally that the ALJ erred by --

• using the wrong legal standard for deciding whether a deficiency existed at all, substituting the facility's new respiratory care protocol (adopted after the death of R10) for the applicable standard of care;
• concluding that the mere "potential" or "risk" of harm is sufficient to warrant a finding of immediate jeopardy;
• linking unrelated incidents (alleged deficiencies occurring during the last 30 days of the 105-day period) to the deficiency that resulted in R10's accidental death on December 20, 1996, and assuming an unbroken period of immediate jeopardy during the intervening time; and
• affirming a total penalty that is improperly punitive, rather than remedial.
  

While not alleging that any of the ALJ's specific findings of fact were not supported by substantial evidence in the record, Fairfax set out its version of the facts with respect to each of the residents for which findings were made. Fairfax asserted, based on its version of the facts, that the "alleged deficiencies re R126, R127, R83, R68, R6, & R11 do not rise to the level of immediate jeopardy." Fairfax Appeal Brief (App. Br.) at 19-24. ⁽²⁾

Below, we first discuss the threshold issue regarding burden of proof. We then address each of the general allegations of error, discussing as necessary the more detailed arguments made related to each of the allegations. Finally, we state why we conclude that the ALJ's factual findings are supported by substantial evidence in the record and reject Fairfax's characterization of the incidents in question.

1. The ALJ applied the appropriate burden of proof.

In Hillman Rehabilitation Center, DAB No. 1611 (1997), this Board reversed an ALJ decision that had placed the ultimate burden of persuasion on HCFA to establish that a rehabilitation agency that had previously entered into a Medicare provider agreement no longer met the conditions for participation, and therefore could be terminated from the program. Based on the relevant statutory and regulatory language, prior administrative and court decisions, and the underlying purpose of protecting Medicare beneficiaries, this Board rejected the ALJ's rationale for placing the burden on HCFA. The Board concluded that the procedural concerns expressed by the ALJ could be addressed in a manner more consistent with the relevant provisions and underlying purpose. The Board held the following:

FFCL 1A. 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.

FFCL 1B. 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.

FFCL 1C. 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.

FFCL 1D. 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 at 8; see also Hillman at 9-10.

The Board decision was upheld in Hillman Rehabilitation Center v. United States, No. 98-3789 (GEB) (D.N.J. May 13, 1999). Subsequently, this Board determined in Cross Creek Health Care Center, DAB No. 1665, at 13, n.10 (1998),that the rationale in Hillman applies in the context of CMPs imposed on long-term care facilities.

Fairfax did not raise the issue of burden of proof before the ALJ. On appeal, however, Fairfax argued that placing the burden of proof on Fairfax was unconstitutional because it denied Fairfax due process. Fairfax also argued that the decision in Hillman constituted a substantive change in policy that the federal Administrative Procedure Act (APA) required to be promulgated through notice and comment rulemaking. In response to HCFA's argument that Fairfax had waived this issue by not raising it before the ALJ, Fairfax argued that its failure to raise the issue below should not be considered a waiver since an ALJ does not have the authority to invalidate a statute or regulation on constitutional grounds.

We first note that Fairfax misconstrues the nature of the Hillman decision. The applicable procedural regulations in 42 C.F.R. Part 498 are silent on burden of proof. The Board's decision in Hillman is thus in the nature of an order which, while establishing precedent for the ALJs hearing these cases, is not a "rule" under the APA.

Moreover, the Board's decision in Hillman was consistent with prior decisions on burden of proof issued by the Social Security Administration Appeals Council, the Board's predecessor for reviewing ALJ decisions in these cases. Thus, it did not represent any change in policy. If the Board were persuaded that our determination on the burden of proof was unconstitutional, nothing in the applicable statutes or regulations would preclude us from reaching a different conclusion in this case.

In any event, however, there is no merit to Fairfax's challenge to the ALJ Decision here based on its assertions about the burden of proof, for the following reasons:

• As we explained in Hillman, which party has the ultimate burden of persuasion becomes significant only if the weight of the evidence is in equipoise. That is not the situation here.



• Fairfax's constitutional argument lacks merit. Fairfax presented no citations to relevant case law to support the proposition that a Medicare provider has a due process right to have the ultimate burden of persuasion placed on HCFA. For the reasons explained in Hillman, at pages 20-22, and affirmed on appeal, we conclude that there is no such right.
  

2. The ALJ did not improperly substitute Fairfax's protocol for the applicable standard of care.

After the death of R10, Fairfax developed a new protocol for care of ventilator dependent residents in respiratory distress. Fairfax alleged that the ALJ erred by applying this protocol as a substitute for the applicable standard of care. According to Fairfax, use of the new protocol against Fairfax is contrary to public policy, as evidenced in Federal Rule of Evidence No. 407. That rule provides:

When, after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent measure is not admissible to prove negligence or culpable conduct in connection with the event. This rule does not require the exclusion of evidence of subsequent measures when offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.

Underlying this rule is the notion that use of corrective actions as evidence of negligence or culpable conduct could act as a disincentive to such measures and therefore jeopardize public health and safety.

Fairfax also pointed to this Board's decision in Lake City Extended Care Center, DAB No. 1658 (1998) for the proposition that failure to follow an internal protocol is not necessarily evidence of a failure to adhere to the standard of care. Fairfax App. Br. at 18-19.

We first note that this is not a question about the admissibility of evidence. Fairfax did not timely object to the ALJ admitting its protocol into the record. Indeed, Fairfax submitted the protocol as its Exhibit 10. Moreover, evidence that is inadmissible under the Federal Rules of Evidence may be received in a Part 498 proceeding. 42 C.F.R. § 498.61. The public policy underlying Rule 407 is inapplicable as well. The survey and certification regulations require corrective action for all deficiencies except isolated deficiencies with a potential for only minimal harm and no actual harm. 42 C.F.R. § 488.408(f). Thus, admitting evidence of what corrective actions facilities took would not have the unintended consequence of discouraging them from taking such actions. HCFA pointed out, and Fairfax did not deny, that an exception to Rule 407 is recognized where remedial action is mandated by superior governmental authority. HCFA App. Br. at 56, citing 2 Weinstein's Federal Evidence § 407.05[3], p. 407-27 (2^nd Ed. 2001).

Fairfax's substantive argument that the ALJ erroneously substituted Fairfax's policy for the applicable standard of care also lacks merit. Fairfax's assertions about the policy ignore not only statements in the ALJ Decision, but also testimony from Fairfax's own witnesses with nursing credentials confirming the testimony of HCFA's witnesses with like credentials. The ALJ Decision noted that the purpose of the protocol, called "Nursing Guidelines for Ventilator Dependent Residents in Respiratory Distress," was to ensure not only proper care and treatment of such residents, but also to provide monitoring of such patients. He further noted that Fairfax's own Director of Nursing (DON) had testified that the protocol "embodied good nursing practices," that R10 should have been monitored after apparently having been stabilized, and that such monitoring is good nursing practice that "should be done on every resident that goes into any type of distress." ALJ Decision at 7, quoting Tr. at 502. The DON also testified about the development of the policy and the accompanying charting form, based on textbooks and respiratory certification for nurses; she indicated that it was good nursing practice before being put into writing and that the form "was developed to make everyone more in tune with what needed to be embodied in the charting." Tr. at 505-507. The surveyor, who was an experienced nurse, also testified that the monitoring required by the protocol is standard nursing practice in the area. Tr. at 141 (Daniels); see also Tr. at 152-154 (Daniels); 394 (Lawrence); 420-21 (Casares).

Fairfax presented no convincing evidence that its policy did not represent the applicable standard of care. Fairfax presented some testimony to the effect that the requirement in the protocol to monitor the patient by charting the vital signs and other observations might not always apply if the nurse did "little things" that stabilized the resident or if the initial intervention worked because the problem was a mechanical one such as a kink in the ventilator tubing. See, e.g., Tr. at 349 (Lawrence); Tr. at 492, 509 (Benda). The ALJ could, however, properly discount this testimony in light of the facts that no qualification appears on the face of the written policy (which Fairfax's witnesses in effect admitted represented the standard of care) and that the policy applied to "any resident in distress." P. Ex. 10; Tr. at 502 (Benda). Moreover, even if the ALJ had credited this testimony, it would not be sufficient by itself to undercut the ALJ's findings with respect to the particular residents at issue here. Substantial evidence in the medical records of the residents to whom the ALJ applied this protocol as the standard of care, as well as in the testimony as a whole, supports his findings that the residents were in respiratory distress that required monitoring to ensure that they had in fact been stabilized.

In light of the testimony establishing the protocol as the standard of nursing care, the ALJ did not err by disregarding the opinion of a physician witness (Dr. Saltiel) that suggested, contrary to the protocol, that physician contact was not necessarily required in circumstances of repeated episodes of respiratory distress. Moreover, the ALJ found Dr. Saltiel's testimony not credible regarding the protocol because he was confused about it and his testimony was contradicted. ALJ Decision at 13-14.

Fairfax's reliance on Lake City is misplaced. In that case, the ALJ had concluded that the fact that Lake City's protocol directed staff to call a physician if a resident's temperature exceeded 101 degrees gave rise to a presumption that this was the standard of care, but that the facility had rebutted the presumption by presenting persuasive evidence that this was not required. In this context, the Board adopted the ALJ's conclusion that "failure by a facility to comply with a protocol is not a failure to comply with a participation requirement where the protocol does not comport with a professionally recognized standard of care and where the participation requirement does not direct a facility to follow each of its internal protocols." Lake City at 18. Fairfax, however, presented no evidence here to rebut the presumption that the protocol it adopted reflected the professionally recognized standard of care. Moreover, as discussed below, the deficiency found by HCFA (and the ALJ) here was Fairfax's failure to have a guideline/procedure/protocol on respiratory care (whether written or otherwise) that was effectively communicated to staff and applied by them in the care of the residents. Fairfax did not deny that it needed to do this in order to ensure that residents receive the special services they need, as required by 42 C.F.R. § 483.25(k). ⁽³⁾

Thus, we conclude that the ALJ did not err as alleged by Fairfax. The ALJ found that the policy merely articulated the applicable standard of care, and ample evidence in the record supports this finding.

3. The ALJ applied the correct legal standard and did not misapply the definition of "immediate jeopardy".

As mentioned above, "immediate jeopardy" means --

a situation in which the provider's noncompliance with one or more requirements of participation has caused, or

is likely to cause, serious injury, harm, impairment, or death to a resident.

42 C.F.R. § 488.301.

Fairfax argued that the ALJ departed from this definition, by concluding that mere "potential" or "risk" of harm was sufficient for immediate jeopardy, and therefore employed the wrong legal standard. Fairfax pointed to language in the ALJ's numbered findings, stating that deficiencies had the "potential" for harm (FFCLs 1.b., 1.c., 1.d., and 1.e.), and to statements in his discussion referring to "risk" of harm.

In response, HCFA pointed to language in the ALJ Decision which HCFA said showed that the ALJ clearly understood the definition of "immediate jeopardy" and was applying it. HCFA cited certain court cases to support its position that the substance of the decision, rather than the wording, should control. Fairfax replied that "the ALJ failed to specifically find that the deficiencies related to FFCLs 1(b)-(e) were 'likely to cause' serious injury, harm, impairment or death" and that "the immediate jeopardy ruling for those findings, therefore, should be overturned." Fairfax Reply Br. at 2. Fairfax sought to distinguish the cases relied on by HCFA, arguing that, in this case, the problem is not merely a passing remark of the ALJ's or the sketchiness of the written opinion. Instead, Fairfax asserted, "Almost all of the ALJ's actual findings misstate the governing legal standard. The opinion is unambiguous on this point." Id. at 3 (emphasis in original).

We first note that the initial situation leading to HCFA's finding that Fairfax failed to comply with the requirement at 42 C.F.R. § 483.25(k) to ensure that residents receive special services such as respiratory care was with respect to R10. With respect to this resident, the ALJ found the following in
FFCL 1.a.:

Petitioner failed to implement a policy concerning ventilator dependent residents, and, through its carelessness, brought about the premature demise of R10. This constitutes immediate jeopardy.

ALJ Decision at 6. As Fairfax's argument seems to recognize, this finding is consistent with the definition of immediate jeopardy. In discussing this resident, the ALJ first stated that, in essence, the state surveyors had found that the staff caring for R10 "did not follow guidelines/procedures/protocols in the provision of respiratory care, and that lack of adherence directly caused the death of R10." Id. He then went on to discuss the evidence, concluding:

It is unequivocal, from the facts of this case, that Petitioner's carelessness was the direct cause of R10's death. Tr. at 489. The lack of due care is first evident from the act of turning the resident's ventilator off, and then from not monitoring the resident after she apparently had been stabilized. . . . Furthermore, Petitioner did not have a written policy for the protection of ventilator dependent residents in respiratory distress. It is evident that whatever non-written guidelines existed were either improperly communicated to the attending staff or were not diligently applied.

ALJ Decision at 8.

Second, the ALJ's FFCLs 1.b. to 1.e., to which Fairfax objected, not only refer to "potential" for harm, but also specifically state that each deficiency "constitutes immediate jeopardy." This at the very least undercuts Fairfax's contention that the specific findings are "unambiguous" and makes reference to the decision as a whole perfectly appropriate, as HCFA contended. An examination of the ALJ Decision as a whole indicates that the ALJ was aware of the definition of "immediate jeopardy" and intended to find that these situations were deficiencies with a likelihood of causing serious harm.

Moreover, while Fairfax is correct that mere potential or risk is insufficient to meet the definition of immediate jeopardy, the terms "potential" and "risk" are not inherently inconsistent with the concept of "likelihood" in that definition. See Woodstock Care Center, DAB No. 1726, at 38 (2000). The issue is whether the "potential" or "risk" are sufficiently great to constitute a "likelihood." The ALJ's statements that the deficiencies constituted immediate jeopardy imply that he thought the potential/risk did rise to a likelihood.

Moreover, a finding of immediate jeopardy is not contingent on a finding that each individual incident placed a resident at such a degree of potential or risk of serious harm that there was a likelihood of harm to that specific resident at that particular time. The more incidents with a potential for serious harm, the more likelihood there is that such harm will occur to some similarly situated resident, particularly when, as in this case, the incidents evidence a failure to have and consistently follow protocols to avoid the potential harm. Findings about incidents related to individual residents are not themselves the deficiencies that must be corrected - the deficiency is the underlying failure to meet a participation requirement evidenced by the incident. 42 C.F.R. § 488.301.

Fairfax's other general arguments related to the immediate jeopardy determination similarly lack merit, for the following reasons:

• Contrary to what Fairfax implied in describing the incidents here, the mere fact that actual harm did not occur to each of the residents is irrelevant. Immediate jeopardy encompasses situations where there is a likelihood of serious harm.



• Fairfax's reliance on a decision by a state ALJ reaching a somewhat different result is misplaced. The state ALJ did not have the same evidence before her, nor was she applying the same standards. See Fairfax Ex. B.
  

Fairfax's arguments, however, raise the issue of what is the "legal standard" that a federal ALJ must apply in order to uphold a CMP at the immediate jeopardy level. As noted above, the regulations specifically state that HCFA's finding that a deficiency is at the immediate jeopardy level must be upheld unless "clearly erroneous." 42 C.F.R. § 498.60(c). ⁽⁴⁾ The ALJ recognized this as the standard, concluding that --

]Petitioner failed to show that HCFA's determination of immediate jeopardy was clearly erroneous. In fact, the preponderance of the evidence establishes the Petitioner's deficiency was at the immediate jeopardy level. . . . Petitioner did not prove by the preponderance of the evidence that it had eliminated the immediate jeopardy to its residents on any date prior to April 4, 1997.

ALJ Decision at 24. He based this on 1) the evidence discussed under his second major conclusion, including testimony by the surveyor that "after R10's demise, the lack of the facility's immediacy in initiating a protocol to prevent any further problems placed residents at severe risk for harm, if not death," 2) the evidence supporting his findings related to other residents, and 3) his finding that "it was not until April 4, 1997, that Petitioner initiated a comprehensive plan to address and abate the immediate jeopardy." ALJ Decision at 23-24.

4. The ALJ did not err in determining the duration of the penalty.

Fairfax argued: "Even if the record could sustain an immediate jeopardy finding for one or more deficiencies, it does not support a finding of 105 days of continuous immediate jeopardy." Fairfax App. Br. at 22. Fairfax referred to the incident with R10 as "an isolated tragedy" and likened it to the situation in Hermina Traeye Memorial Nursing Home, CR756 (2001). In that case, the ALJ concluded that "a single isolated episode of staff error in the remote past" was not "persuasive evidence of an ongoing failure to comply . . . at a survey that takes place six months after the occurrence of the episode." Fairfax App. Br. at 23, quoting Hermina Traeye, CR756, at 18-19. According to Fairfax, the evidence regarding the event of December 20, 1996 related to R10 "does not support an inference that a general state of immediate jeopardy existed over the next 70 days," and, instead, the IDPH surveyor who visited Fairfax on January 2, 1997 "found no deficiencies." Fairfax App. Br. at 23. If immediate jeopardy had existed at that time, Fairfax asserted, the surveyor was required under HCFA policy to take immediate steps to protect the residents. Fairfax App. Br. at 23-24, citing State Operations Manual, §§ 7307, 7308, and 7309. According to Fairfax, HCFA failed to make a prima facie case that Fairfax's residents were in a continuous state of immediate jeopardy for 105 days." Id. at 22.

These arguments have no merit. First, Fairfax's attempt to characterize the events regarding R10 as an "isolated event" simply is not supported by the record before us. HCFA's finding of a deficiency constituting immediate jeopardy was based on Fairfax's failure to have policies/guidelines/protocols that were communicated effectively to staff. Fairfax did assert that it had a protocol that prohibited unplugging a ventilator during an episode of respiratory distress such as that experienced by R10, but did not assert that it had any written or oral policy/guideline/protocol at the time of the incident regarding monitoring a ventilator dependent resident following respiratory distress. HCFA's further finding that the immediate jeopardy was not abated until April 4 was based on Fairfax's admitted failure

to put such a protocol in place prior to March 1997, and its failure thereafter to effectively communicate to staff the need to follow protocols on special services such as respiratory care, tracheostomy, and tracheal suctioning. This failure was evidenced by numerous incidents (up to and including the time of the survey) for which records showed a failure to follow protocols, particularly the protocol for residents suffering respiratory distress. The incidents were related in this respect. Contrary to what Fairfax asserted, the survey did not start on April 8, 1997. Rather, the record shows it started on April 1 and was completed on April 8. HCFA Exs. 1-6. The comprehensive steps that Fairfax took were after the surveyors had informed Fairfax that the state of immediate jeopardy might be found. HCFA Ex. 1, at 24. Thus, this case is distinguishable from the facts found by the ALJ in Hermina Traeye, where he found that HCFA was basing its finding that the immediate jeopardy continued solely on an inference from one episode.

Second, Fairfax also misrepresents what the record shows about the IDPH surveyor who visited the facility after R10's death. There is no evidence in the record that this surveyor ever found or informed Fairfax that it had "no deficiencies." Fairfax's DON testified that the surveyor said she made "no findings," but this is not the same as a finding of "no deficiencies." Tr. at 490 (Benda). Moreover Fairfax's administrator, whose testimony was more internally consistent, testified that, while the surveyor made a remark that turning off the ventilator for R10 appeared to be a "terrible mistake," she further indicated that her investigation of the incident was not yet completed. Tr. at 621-623 (Considine); compare Tr. at 503-504 (Benda). Indeed, there is evidence that the surveyor was still seeking information from the facility as late as March 24, 1997. Tr. at 680; P. Ex. 6. Moreover, it appears that her visit was merely an investigation, rather than a survey. There is no evidence in the record about when or whether this surveyor actually completed her investigation. Since it is not clear that she would have ever been obliged under the regulation to take the steps required when immediate jeopardy is found during a survey, it is not reasonable to infer from her failure to take those steps that she found no immediate jeopardy. Moreover, even if her investigation had been a survey resulting in a surveyor's finding that Fairfax was in substantial compliance, Fairfax could not rely on that finding. Under the regulations, surveyors make only recommendations with respect to compliance of Medicare facilities -- HCFA is not bound by those recommendations. 42 C.F.R. §§ 488.12, 488.330.

Fairfax is also mistaken in implying that it was entitled to prospective notice of a finding of noncompliance before a CMP may be imposed. The regulation at 42 C.F.R. § 488.454 makes clear that HCFA may impose a CMP based on a finding of a noncompliance occurring between surveys and that the duration of such a CMP is until the facility "achieves substantial compliance." Generally, this point is determined by a revisit or by submission by the facility of written, credible evidence that HCFA finds acceptable to verify that corrections have been made. HCFA here reduced the amount of the CMP at the point where it determined Fairfax had abated the immediate jeopardy, while the surveyors were on site performing the survey.

The fact that HCFA did not make findings about the care provided to specific residents during the first 70 days after R10's death is irrelevant. Fairfax witnesses admitted that in that period Fairfax had not taken even the minimal corrective step of putting in place its new protocol. Fairfax, moreover, did not present any credible evidence that it had taken other corrective action sufficient to ensure that it was meeting the applicable standard of care during this 70-day period. See ALJ Decision at 22-23. While Fairfax presented evidence that it did do some in-service training, other evidence indicates that the training focused on matters other than monitoring residents following an episode of respiratory distress and was not effective. See, e.g., P. Exs. 8, 10; Tr. at 488, 544-545. Thus, HCFA could reasonably conclude that the immediate jeopardy situation persisted throughout this period, particularly in light of what later records showed about Fairfax's failure to in fact provide the appropriate care to residents suffering from respiratory distress, despite adoption in March of a protocol based on the standard of care.

In sum, HCFA was not clearly erroneous in concluding that steps taken prior to April 4 were insufficient to abate the immediate jeopardy.

5. The ALJ did not impose a CMP that is punitive.

Fairfax argued that the CMPs recommended by HCFA and adopted by the ALJ are fatally flawed because they are punitive in nature, rather than remedial. Fairfax asserted that this rendered the CMPs contrary to the Constitution, the Medicare Act, and this Board's prior decisions. In support, Fairfax cited this Board's decision in CarePlex of Silver Spring, DAB No. 1627 (1997) and the ALJ decision on remand in CarePlex of Silver Spring, CR536 (1998). Fairfax App. Br. at 25. According to Fairfax, HCFA "admitted that the immediate jeopardy had ceased to exist a few days before the April 8 survey" and both parties "agreed that the alleged immediate jeopardy was abated because Fairfax had drafted and implemented its protocol for respiratory care prior to the date of the survey" prior to "any finding or hint from HCFA that a deficiency existed or that CMPs were accruing." Fairfax App. Br. at 27. Therefore, Fairfax asserted, "HCFA may not feasiblely argue that its recommended CMP served the necessary remedial purpose of 'induc[ing] the deficient facility to correct outstanding deficiencies promptly and effectively'," as required by the Board's decision in CarePlex.

Again, Fairfax's argument is predicated upon a misstatement of the facts. HCFA did not in fact admit that the immediate jeopardy was abated prior to the survey, nor agree that Fairfax had implemented its new protocol satisfactorily prior to the survey. The record shows that the survey in fact started on April 1 and that it was only after the surveyors had informed Fairfax that they considered immediate jeopardy to exist that Fairfax developed the comprehensive plan (outlined in the ALJ Decision) that HCFA found satisfactory to abate the immediate jeopardy. HCFA Ex 1. HCFA and the ALJ specifically found that the steps taken previously were inadequate. Substantial evidence in the record supports this finding, including the medical records for residents R126, R127, R83, R68, R6, and R11. The medical records show that the facility staff was not consistently following protocols Fairfax had developed, based on applicable standards of care, for providing special services such as respiratory care to residents.

As noted above, the regulations specifically permit imposition of CMPs for periods of past noncompliance since the last standard survey. This does not render the CMP punitive in nature. The threat of imposing the CMP led Fairfax to comply in this instance and the CMP will be an incentive in the future for Fairfax to maintain compliance. While some remedies may provide an incentive to correct existing deficiencies, the purpose is not so limited. As explained in the preamble to the 1994 regulations implementing sections 1819 and 1919 of the Act, Congress wanted to "discourage facility noncompliance that the Congress believed to be widely evident between surveys and thereby, to encourage lasting compliance." 59 Fed. Reg. 56,116; 56,175 (Nov. 10, 1994). The preamble further explained that Congress authorized imposing a CMP for past noncompliance, even if subsequently corrected, to create a "financial incentive for facilities to maintain compliance." 59 Fed. Reg. at 56,206, quoting H.R. Rep. No. 391, 100^th Cong., 1^st Sess. 473-6 (1987).

The suggestion by Fairfax that only if it knows in advance that a penalty will be imposed does it have sufficient notice that it should take steps to correct a deficiency is disingenuous. Even if HCFA had not yet made a noncompliance finding, the record shows that Fairfax clearly knew after the death of R10 that at the very least it needed to improve its care of residents experiencing respiratory distress by developing and implementing a protocol. Fairfax should have known, moreover, that adopting the protocol, but not taking sufficient steps to ensure it would be followed, would be inadequate to meet the regulatory requirement that it ensure that residents attain and maintain the highest practicable physical well-being, including by ensuring that residents receive special services, in accordance with their plans of care. In proposing this requirement, HCFA explained that it deliberately chose the word "ensure" with respect to treatment and care that the facility is responsible for providing "since this is the reason for the residents stay in the facility, as well as for program payment." 56 Fed. Reg. 48,826; 48,850 (Sept. 26, 1991).

We also note that the amount of the penalty imposed is the lowest amount under the regulations that could be imposed on a per day basis for an immediate jeopardy level of noncompliance. Thus, having concluded that HCFA was not clearly erroneous in determining that immediate jeopardy existed during the period from December 20, 1996 through April 3, 1997, we do not have the authority to reduce the amount of the penalty.

6. The ALJ's findings regarding individual residents are supported by substantial evidence in the record as a whole.

As noted above, Fairfax did not take specific exception to the ALJ's factual findings made in his discussion of individual residents (as opposed to his general numbered conclusions). Instead, Fairfax argued generally that the incidents related to individual residents did not show immediate jeopardy and presented its version of the incidents, which differs in some respects from the ALJ's findings or which emphasizes different facts. We have addressed Fairfax's general arguments about immediate jeopardy above. We have reviewed the entire record and also conclude generally that the ALJ's findings are supported by substantial evidence. Below, we address the more specific arguments based on or implicit in Fairfax's version of the facts.

a. Substantial evidence in the record supports the ALJ's findings with respect to R10, and the facts emphasized by Fairfax are irrelevant.

Throughout its briefing, Fairfax characterized the death of R10 as an "accident" or an "isolated event" due to the failure of a respiratory therapist to follow Fairfax policy that a ventilator never be unplugged. Fairfax ignored the findings regarding its failure to have and to communicate to staff a protocol for monitoring ventilator dependent residents after an episode of respiratory distress to ensure that the resident is in fact stabilized and to evaluate the underlying cause of the distress. The ALJ found that this failure was a cause of R10's death since monitoring every 15 minutes for the first hour after the episode, per the protocol later adopted, would have revealed that R10's ventilator had been unplugged. Instead of directly challenging this finding, Fairfax presented a version of the events emphasizing that one of the respiratory therapists was with R10 until approximately 15 minutes before a nurse entered the room and found R10 dead at 1:15. The flaw in this approach is that the protocol (based on the standard of care) required nursing care to monitor the resident, so the presence of the respiratory therapist in the room is irrelevant. Indeed, the protocol is titled "Nursing Guidelines . . . ." P. Ex. 10. The record shows that the last nurse who was present left the room at approximately 12:50, about 25 minutes before any nurse returned. HCFA Ex. 12, at 8. ⁽⁵⁾ The record also shows that, when the nurse did return at about 1:15, the purpose was to change R10's gastric feeding tube, rather than to monitor R10 to ensure that she had stabilized. Id. By then it was too late to revive R10.

The fact that the police who investigated R10's death determined it was an "accident" is also irrelevant. As HCFA pointed out, a conclusion that there was no criminal intent in the unplugging of R10's ventilator is not tantamount to a finding that Fairfax was not deficient in its care of R10. Similarly, while the fact that the respiratory therapist who unplugged the ventilator had 20 years' experience may be relevant to show that Fairfax could have expected that he would know to never unplug a ventilator, it does not excuse Fairfax's deficiency in providing nursing care to R10.

b. Substantial evidence in the record supports the ALJ's findings about R126.

The ALJ thoroughly discussed the evidence and arguments regarding R126, finding that Fairfax failed to carry out the treating physician's orders, given after an episode of respiratory distress, and that R126's medical records fail to show that Fairfax took steps to increase his oxygen level, which was dangerously low. ALJ Decision at 8-11. The ALJ concluded that Fairfax was "woefully inadequate in its treatment and care of R126, in violation of 42 C.F.R. § 483.25(k)" and that such conduct "caused or was likely to cause serious injury, harm, impairment or death to the resident." Id. at 9.

On appeal, Fairfax argued as it had before the ALJ that the record shows that R126 died within hours after the orders were given and that in fact the doctor's orders were being carried out. Fairfax App. Br. at 6.

The testimony relied on by Fairfax to show that the orders were being carried out was found by the ALJ to be vague, replete with generalities, and not credible in light of the complete failure of Fairfax to produce the results of the tests and x-ray the physician ordered, or a record entry showing the dispensing of the antibiotic he ordered. We agree and see no reason to disturb that credibility finding here.

Moreover, as the ALJ recognized, the deficiency was not only in failing to carry out the orders, but in failing to chart what was done, "inasmuch as responsible and meaningful follow-up treatment would have been at peril, absent such vital information." ALJ Decision at 11; see Tr. at 157.

Fairfax's citations to R126's medical record to show that he was in extremely poor condition, died shortly after the orders were given, and was in a "do not resuscitate" status are also unavailing, even if true. Fairfax provided nothing to indicate that any of these factors affected the duty of care that Fairfax owed to R126, nor that anything that the ALJ found was expected of Fairfax under the circumstances was inconsistent with the plan of care for this resident. Thus, we agree with the ALJ that it is irrelevant that R126 would have expired in spite of treatment.

c. Substantial evidence in the record supports the ALJ's findings about R127, R83, and R68.

The ALJ found that Fairfax "failed to adhere to the guidelines it had adopted in March 1997 for ventilator dependent residents in respiratory distress by not monitoring or providing proper follow-up assessments to" R127, R83, and R68. ALJ Decision at 11-18.

Fairfax cited the record to show that R127 was also extremely ill and that the family's instructions were to provide only "comfort care." Fairfax App. Br. at 7-8. According to Fairfax, it was cited for deficiencies "where treatment and care were given with good results, but where documentation regarding subsequent monitoring was allegedly deficient according to Fairfax's new guidelines." Id. at 8. Similarly, with respect to R83, Fairfax asserted that "it is undisputed that Fairfax successfully treated this resident, but Fairfax was cited because it should have charted more frequently." Id. at 9.

As noted above, however, failure to document monitoring is a failure to meet the standard of care embodied in Fairfax's protocol and can have negative outcomes for the resident. The mere fact that the residents did not have negative outcomes in these particular instances is irrelevant. The records related to R127, R83, and R68 support the ALJ's conclusion that HCFA was not clearly erroneous in determining that the immediate jeopardy caused by Fairfax's failures had not been abated. The evidence shows (and indeed Fairfax does not dispute) that Fairfax was not consistently following its new protocol (based on the standard of care) for ventilator dependent residents suffering from respiratory distress.

Moreover, while emphasizing that only comfort care was to be provided for R127, Fairfax pointed to no evidence that comfort care would not include providing the care described in the protocol. The protocol on its face applies to any respiratory distress and indicates that one of the purposes of monitoring is to determine whether the resident is comfortable. P. Ex. 10.

d. Substantial evidence in the record supports the ALJ's findings about R6 and R11.

The ALJ found that Fairfax failed to ensure that R6 and R11 received proper tracheostomy care. ALJ Decision at 19-20.

Fairfax made the point with respect to these residents that there is no evidence that they were ventilator dependent. This fact is relevant in determining whether the new protocol for ventilator dependent residents in respiratory distress applied to these residents. It does not, however, undercut the finding that, by failing to follow its own protocols (based on the standard of care) for residents needing special services, Fairfax was deficient in meeting the requirement at 42 C.F.R. § 488.425(k). The particular special services at issue for these residents were tracheostomy care and tracheal suctioning. Part of one of Fairfax's protocols for such care may have been more important for ventilator dependent residents, specifically, oxygenating a patient before removing and cleaning a trach tube. However, the deficiencies found in Fairfax's care to these residents also related to other parts of its protocols, such as the need to use sterile technique.

Fairfax disputed the surveyor's testimony that its policy required use of hydrogen peroxide, rather than distilled water, as part of the sterile technique required. Fairfax App. Br. at 10, citing Tr. at 295. In support, Fairfax cited to HCFA Exhibit 21, which refers to sterile water, not hydrogen peroxide. The surveyor's finding, however, was based on a different Fairfax protocol, identified in the survey findings as "Procedure for Trach Care with Inner Cannula" and described as instructing the staff person to "clean outside of trach tube and surrounding skin area with hydrogen peroxide and normal saline using cotton tipped applicators." HCFA Ex. 1, at 27; see also Ex. 1 to HCFA App. Br. HCFA Exhibit 21 is titled "Sterile Suctioning of a Tracheostomy Tube." Fairfax did not dispute that it also had the policy on tracheostomy care described in the survey findings. Nor did Fairfax present any evidence to contradict the surveyor's testimony that the standard of care for cleaning the tracheostomy site is to use hydrogen peroxide. Tr. at 292-302.

Also, contrary to what Fairfax implied, it is irrelevant that the surveyor admitted that she never determined whether R6 and R11 contracted any disease or infection as a result of the care given. As the definition of "immediate jeopardy" indicates, a showing of actual harm is not required.

We also note that the findings regarding these residents, while supportive, are not needed in order to uphold the conclusion in the ALJ Decision that Fairfax did not take adequate steps to abate the immediate jeopardy until April 3. As late as April 3, 1997, Fairfax was failing to meet the standard of care for monitoring R68, a ventilator dependent resident, after an episode of respiratory distress. See ALJ Decision at 17-18, and evidence discussed therein.

Conclusion

For the reasons explained above, we uphold the ALJ Decision. We affirm and adopt the ALJ's FFCLs.

Donald F. Garrett

Marc R. Hillson

Judith A. Ballard
Presiding Board Member

1. Although HCFA has been renamed the Centers for Medicare & Medicaid Services (CMS), we continue to use "HCFA" below since that acronym was used to refer to the agency at the time that the actions at issue here were taken and that the testimony discussed was given. See 66 Fed. Reg. 35,437 (July 5, 2001).

2. Fairfax also objected to the change of administrative law judges that occurred prior to the hearing in this case. Fairfax provided an affidavit attesting that the first judge had told counsel that if IDPH "had conducted an investigation on January 2, 1997 to investigate the incident of December 20, 1996, he would rule that Immediate Jeopardy could not be imposed on Fairfax from December 20, 1996 through April 3, 1997." Exhibit (Ex.) C. Fairfax asserted that the "unilateral reassignment of judges by HCFA" was a violation of due process. Id. at 28. We agree with HCFA that Fairfax did not timely raise this procedural issue. We note, however, that HCFA has no control over assignment of Departmental Appeals Board (DAB) judges. The DAB is independent of HCFA and assigns or reassigns cases to judges based on their availability to hear and decide cases.

3. We do not here adopt HCFA's position that the State Operations Manual (SOM) interprets section 483.25(k) as incorporating a facility's internal policies by reference into the regulation. HCFA relied on a SOM section that merely directs surveyors to determine whether facility staff is following the facility's own protocol and/or written procedures for ventilators. HCFA Br. at 52, quoting SOM Appendix P at PP-112. HCFA cannot reasonably rely on this as a basis for applying an internal policy as though it had been incorporated by reference into the regulation, especially in light of the outcome-oriented approach in the long-term care requirements and Federal Register requirements for incorporation by reference. We also note that the decisions on which HCFA relied for the proposition that we must uphold any HCFA interpretation are inapposite to Part 498 cases, in which the Board renders the final decision on behalf of the Department.

4. This standard was explained in the preamble to this regulation as follows: "Survey team members and their supervisors ought to have some degree of flexibility and deference in applying their expertise in working with these less than perfectly precise concepts." 59 Fed. Reg. 56,116; 56,179 (Nov. 10, 1994).

5. During the approximately 45 minutes between the onset of the respiratory distress at 12:30 and the time the nurse returned, no vital signs were charted. HCFA Ex. 1, at 20; P. Ex. 7. The surveyor testified that such monitoring was even more critical for R10 because she had been given Ativan, which would make her appear calm, even if she had not been stabilized. Tr. at 146.