SUBJECT: Carehouse Convalescent Hospital,

Petitioner,

Health Care Financing Administration.

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

The Health Care Financing Administration (HCFA) and Petitioner, Carehouse Convalescent Hospital, requested review of the January 16, 2001 decision of Administrative Law Judge (ALJ) Steven T. Kessel sustaining and reversing components of HCFA's determinations that Petitioner was not in substantial compliance with requirements for participation in the Medicare program for skilled nursing facilities.⁽¹⁾ Carehouse Convalescent Hospital, DAB CR729 (2001) (ALJ Decision). The ALJ found that HCFA was not authorized to terminate Petitioner's agreement to participate in Medicare or impose civil monetary penalties (CMPs) of $5,000 per day from May 20, 1999 through June 6, 1999 (and lower penalties until November 17, 1999) but that HCFA was authorized to impose CMPs of $100 per day for the period of May 20, 1999 through November 17, 1999.

Petitioner, a skilled nursing facility (SNF) located in Santa Ana, California, was surveyed by the California Department of Health Services during May, July and November 1999. The May survey found that Petitioner was not in substantial compliance with 15 different conditions for participation in the Medicare program, identified by numbered "tags" corresponding to specific requirements for SNFs provided by regulations at Part 483 of 42 C.F.R. Two of these deficiencies were deemed to pose immediate jeopardy to residents at Petitioner's facility. The July and November surveys determined that Petitioner was not in substantial compliance with 11 and three requirements of participation, respectively, none of which were at the immediate jeopardy level. Based on the May and July surveys and the recommendations of the state survey agency, HCFA imposed CMPs of $5,000 per day from May 20 through June 6 (the date upon which the state survey agency determined that the immediate jeopardy noted in the May survey had abated), of $1,000 per day from June 7 through July 15, and $100 per day thereafter. Based on the November survey, HCFA determined to terminate Petitioner's Medicare provider agreement, effective January 5, 2000, based on regulations requiring termination of any facility that remains deficient for a period of six months. 42 C.F.R. §§ 488.412(d), 488.450(d)(1).

Petitioner appealed HCFA's determinations, and the ALJ convened a hearing from June 26 - 29, 2000. In his decision following that hearing, the ALJ first addressed the termination resulting from the November survey, and then turned to the deficiency findings from the May and July survey that resulted in lesser penalties. The ALJ reversed all three deficiency findings from the November survey; sustained four deficiency findings from the May survey and reversed the remaining 11, including both deficiency findings deemed to pose immediate jeopardy to Petitioner's residents; and reversed seven of the 11 deficiency findings from the July survey and sustained the remaining four. As a result of his rulings on the various deficiency findings from the three surveys, the ALJ reversed the termination that had been based on the November survey, and reduced the CMPs to $100 per day, ending November 17, consistent with his determination that Petitioner was not out of substantial compliance as of the November survey. The ALJ based the reduction in the CMP amount on his reversal of the alleged immediate jeopardy deficiency findings from the May survey, and on his reversal of those deficiency findings from the May and July surveys which were at a level of seriousness greater than the lowest for which CMPs may be imposed. In other words, since he reversed those deficiency findings whose elevated levels of seriousness had been the basis of HCFA's decision to impose CMPs in excess of $100 a day up until the time of the July survey, he reduced the penalties accordingly.

Both parties requested review of the ALJ decision. HCFA disputed the ALJ's findings on the various deficiency findings, arguing that his determinations reversing HCFA's deficiency findings were erroneous and not supported by substantial evidence. Petitioner did not challenge any of the ALJ's determinations that Petitioner was not in substantial compliance with Medicare conditions of participation. Instead, Petitioner argued that because the ALJ had reversed those deficiency findings from the May survey which alleged immediate jeopardy and which were above the lowest level for which sanctions are permitted, HCFA was no longer authorized to impose CMPs. Alternatively, Petitioner argued that if the Board upheld the imposition of CMPs, then it should rule that the CMPs should have stopped accruing on the completion date contained in the plan of correction (POC) that Petitioner submitted after the July survey. Petitioner also raised constitutional arguments against the imposition of sanctions resulting from the three surveys.

Regarding the specific deficiency findings, only those that the ALJ reversed and to which HCFA excepted are at issue before us. As we explain below, we:

• sustain the ALJ's finding that Petitioner was in substantial compliance with two of the three requirements that it was alleged to have violated in the November survey, but reverse his determination that Petitioner was in substantial compliance with the third requirement;

• reverse the ALJ's finding reversing one of the eight deficiency findings from the May survey that HCFA appealed to the Board, and sustain the ALJ's reversal of the remaining seven; and,

• reverse the ALJ's finding reversing two of the six deficiency findings from the July survey that HCFA appealed to the Board, but sustain his finding reversing the remaining four deficiency findings that HCFA appealed.

Consequently, we find that HCFA was authorized to terminate Petitioner's Medicare agreement based on the results of the November survey and the existence of deficiencies for a period of six months, and we sustain his decision to impose CMPs of $100 per day from May 20 through the end of the CMP period. We reject Petitioner's arguments against the imposition of CMPs, and we sustain the ALJ's determination that he (like this Board) is without authority to rule on Petitioner's constitutional challenges.

Applicable Law and Regulations

Medicare is a federally-funded program of health insurance for the elderly and disabled under Title XVIII of the Social Security Act (Act). A SNF that participates in Medicare and receives federal payments as a provider of health care services under the program must enter into an agreement with the Secretary of the Department of Health and Human Services and comply with specific requirements set out in the Act and in the regulations at Subpart B of 42 C.F.R. Part 483. Sections 1819, 1866 of the Act. A SNF may participate in Medicare only so long as it continues to meet these requirements. 42 C.F.R. §§ 483.1(b), 488.20, 489.10(a).

A SNF's compliance with the requirements for participation is determined through periodic on-site surveys conducted by HCFA or by a state survey agency under contract with HCFA. See section 1864(a) of the Act; 42 C.F.R. §§ 488.10(a) and 488.20. Each SNF must be surveyed at least once every 12 months, and more often if necessary to ensure that identified instances of noncompliance with the regulations have been corrected. 42 C.F.R. § 488.20(a). Based on the survey, the surveyors prepare a report (referred to as a Statement of Deficiencies or HCFA Form 2567) that lists by regulatory category the instances of noncompliance found (referred to as deficiencies), the regulations to which they relate, the surveyors' findings as to the scope and severity of the deficiencies, and the specific findings that support each deficiency determination. In order to continue participation in Medicare, a SNF must be in substantial compliance with the requirements for participation specified in the regulations. Section 1866(b)(2) of the Act. "Substantial compliance" means a level of compliance with the requirements of participation such that any identified deficiencies pose no greater risk to resident health or safety than the potential for causing minimal harm. 42 C.F.R. § 488.301. Among the remedies that HCFA may impose on facilities not in substantial compliance are termination of the facility's agreement to participate in the Medicare program and the imposition of CMPs for the number of days that a facility is not in substantial compliance. 42 C.F.R. §§ 488.412(a), 488.430. Furthermore, the Secretary may not continue any payments to a facility for more than six months after findings of noncompliance unless substantial compliance with all applicable requirements for participation is demonstrated. Section 1819(h)(2)(C) of the Act; 42 C.F.R. §§ 488.412(d), 488.450(d)(1).

The regulations specify different ranges of CMPs, with an upper range of $3,050 to $10,000 per day to be imposed for deficiencies constituting immediate jeopardy to the facility's residents. 42 C.F.R. §§ 488.408, 488.438(a)(1)(i). "Immediate jeopardy" is defined in the regulations as a situation in which a provider's noncompliance "has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident." 42 C.F.R. § 488.301. 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; see also § 488.454. Absent immediate jeopardy, CMPs in the $50 to $3,000 per day range may be imposed for deficiencies that cause no actual harm but which pose the potential for more than minimal harm. Section 488.408(d)(2). Substantial compliance must be established by a resurvey or by credible written evidence produced by the facility (verifiable without an on-site visit). 42 C.F.R. § 488.454 (a)(1).

Standard of Review

Our standard of review of an ALJ decision on a disputed issue of law is whether the ALJ decision is erroneous. Our standard of 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. Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs. The bases for modifying, reversing or remanding an ALJ decision include the following: a finding of material fact necessary to the outcome of the decision is not supported by substantial evidence; a legal conclusion necessary to the outcome of the decision is erroneous; the decision is contrary to law or applicable regulations; a prejudicial error of procedure (including an abuse of discretion under the law or applicable regulations) was committed. Id.

The applicable burden of proof requires HCFA to come forward with sufficient evidence to establish a prima facie case that the facility is not complying with one or more participation requirements. The facility may rebut a prima facie case of noncompliance by showing, by a preponderance of the evidence, that it is in substantial compliance with participation requirements. Hillman Rehabilitation Center, DAB Nos. 1611 (1997), and 1663 (1998); aff'd, Hillman Rehabilitation Center v. United States, No. 98-3789(GEB) (D.N.J. May 13, 1999). Once HCFA has established a prima facie case, the provider may then offer evidence in rebuttal, both by attacking the factual underpinnings on which HCFA relied and by offering evidence in support of its own affirmative arguments. An effective rebuttal of HCFA's prima facie case would mean that at the close of the evidence the provider had shown that the facts on which its case depended (that is, for which it had the burden of proof) were supported by a preponderance of the evidence. Id.

Federal courts have long recognized that substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Under the substantial evidence standard, the reviewer must examine the record as a whole and take into account whatever in the record fairly detracts from the weight of the decision below. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). The reviewer does not, however, reweigh the evidence nor substitute his or her judgment for that of the initial decision-maker. Casias v. Secretary of Health & Human Services, 933 F.2d 799, 800 (10^th Cir. 1991). Thus, the reviewer must not displace a "choice between two fairly conflicting views," even though a different choice could justifiably have been made if the matter had been before the reviewer de novo. Universal Camera, 340 U.S. at 488. The reviewer must, however, set aside the initial conclusions when he or she "cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the [initial decision-maker's] view." Id. In addition, the Board has held that an ALJ need not "cite to everything in the record which supports" the findings, but that the "evidence that the ALJ does cite must support the findings made." Reconsideration of Wesley Hal Livingston and Shoals Medical Equipment and Supply Co., Inc., DAB No. 1406, at 3 (1993).

In hearing an appeal of an ALJ decision, the Board does not conduct a de novo review. St. Anthony's Hospital, DAB No. 1728 (2000). The purpose of our review is to determine if the ALJ's findings of fact are supported by substantial evidence, and if his conclusions of law are correct. In conducting this analysis, we do not examine the evidence independently and reach our own determination as to what may be shown by a preponderance of the evidence, and then compare our finding to the ALJ's decision. Rather, the ALJ decision is the framework that shapes and guides our review.

In addition to contending in its exceptions and reply brief that the ALJ made several errors of fact and law, HCFA made several overarching allegations concerning the procedures the ALJ used in reaching his decision. Rather than asking the Board to overturn any specific ALJ procedural ruling, however, HCFA's complaints were part of its contentions urging Board reversal of various ALJ factual findings or conclusions of law with respect to particular deficiency findings. HCFA asserted that the procedures used by this ALJ were not consonant with the requirements of the governing regulations and due process, and HCFA's briefs depicted the ALJ as incompetent, biased, and derelict in his duty to fully pursue the issues before him. We find HCFA's assertions to be baseless, and we deplore the overblown rhetoric employed by HCFA in making them. We discuss HCFA's procedural objections in connection with particular deficiency findings. Although we do not affirm in their entirety the results the ALJ reached in his decision, we conclude that the ALJ conducted a full and fair hearing on the issues before him, and produced a complete decision that fulfilled his duties under the regulations and the Administrative Procedure Act.⁽²⁾

I HCFA's exceptions to the ALJ's determinations on the deficiency findings

Below, we review those deficiency findings that the ALJ reversed and HCFA then appealed, in the order in which HCFA presented them in its request for review.

A. The November 1999 survey

Representatives of the California Department of Health Services surveyed Petitioner during November 16 - 18, 1999. The report of the survey alleged three separate deficiency findings. HCFA Exhibit (Ex.) 49. Based on that report and the recommendations of the state agency, HCFA determined to terminate Petitioner's agreement to participate in the Medicare program. The ALJ reversed all three deficiency findings, and HCFA appealed the reversals. As we explain below, we reverse the ALJ Decision with respect to one of the deficiency findings, and we determine that Petitioner was out of substantial compliance with the applicable requirement of participation. As to the other two deficiency findings, we sustain the ALJ Decision.

Tag 322

The deficiency findings

This deficiency centered on a resident identified for the purposes of the November survey as resident number 3 (R3).⁽³⁾ At the time of the survey, R3 was a 73-year-old man who was being fed by a gastrotomy tube (a feeding tube that enters the stomach through the abdomen rather than through the nose), following his readmission to the facility after a hospitalization from October 13 through October 15 for treatment of dehydration, pneumonia, sepsis, and other conditions. HCFA alleged that Petitioner's care of this resident violated the requirement in the quality of care regulation 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 . . . .

(g) Naso-gastric tubes. Based on the comprehensive assessment of a resident, the facility must ensure that--

(2) A resident who is fed by a naso-gastric or gastrostomy tube receives the appropriate treatment and services to prevent aspiration pneumonia, diarrhea, vomiting, dehydration, metabolic abnormalities, and nasal-pharyngeal ulcers and to restore, if possible, normal eating skills.

42 C.F.R. § 483.25(g)(2).

The deficiency finding centered on the amount of nutrition -- formula provided through the gastrotomy feeding tube and water periodically flushed through the tube -- that Petitioner provided the resident. HCFA Ex. 49, at 8-17. Upon R3's October 15 readmission, his physician prescribed tube feedings of 30 ccs of formula per hour for 22 hours, with water flushes (water flushed through the gastrotomy tube) of 100 ccs every eight hours. Petitioner Ex. 55, at 18, included in the ALJ record as part of HCFA Appendix (App.) H; HCFA Ex. 54, at 51. Petitioner's dietary services supervisor (DSS) assessed R3's nutritional status on October 19, and referred the resident to the registered dietician (RD) for a tube feeding assessment, which was conducted October 20. The RD recommended an increase in tube feedings to 85 ccs per hour for 22 hours per day, and water flushes of 250 ccs every eight hours; these recommendations were adopted by the resident's physician in orders issued on October 21.⁽⁴⁾ HCFA Ex. 54, at 28, 51. On November 4, the resident's physician ordered the water flushes increased to 300 ccs every shift, and a switch to a different tube-feeding formula, administered at the same rate as before. HCFA Ex. 54, at 29; Petitioner Ex. 55, at 36. Subsequently, on November 12, the physician declined a recommendation for a further increase in the water flushes. Petitioner Ex. 55, at 66.

HCFA alleged that the physician's initial feeding orders were inadequate and should have been challenged by the facility, and that Petitioner should have assessed R3's nutritional needs immediately upon his readmission instead of waiting until October 19 and 20. HCFA further alleged that after the physician ordered increased feeding on October 21, Petitioner failed to follow his instructions, and administered less formula and water than he had ordered. HCFA argued that clinical findings such as pressure sores and laboratory results such as the resident's blood-urea nitrogen (BUN) readings demonstrate that the amount of formula and water the resident received was inadequate for his needs.

The ALJ Decision

The ALJ found that Petitioner established by a preponderance of the evidence that it complied substantially with the requirements of 42 C.F.R. § 483.25(g)(2). He found that Petitioner had no duty under the regulation to challenge the initial physician's orders for nutrition and water, and that Petitioner timely assessed the resident, with nothing in the survey report to suggest that the passage of time between readmission and the assessment was due to some error or omission of Petitioner or its staff. Regarding the amount of formula and water administered after the physician ordered an increase in both, the ALJ discounted the facility's intake/output (I/O) records showing the administration of less nutrition and water than prescribed, finding that the records showing a shortfall were misrecorded and did not reflect the amount of food and water that Petitioner actually delivered to the resident. He also cited the resident's medication administration record and the weekly nursing summary as showing that the resident received nutrition and water consistent with his physician's orders. Other occasions where Petitioner did deliver less nutrition and water, such as the surveyor's report that she observed the tube disconnected on several occasions over a period of three hours, the ALJ deemed minor variations insufficient to support a contention that Petitioner systematically delivered inadequate quantities of nutrition and water.

The ALJ also found that the survey report failed to make explicit a finding that R3's medical problems and physical condition resulted from Petitioner's improper administration of nutrition and water, and that HCFA failed to give Petitioner notice that HCFA intended to make this argument. The ALJ noted that the deficiency was rated at the "D" level, meaning that only a potential for harm was alleged. The ALJ reiterated his finding that Petitioner was delivering the prescribed amount of nutrition, and attributed R3's medical problems to his overall condition, noting that he was convalescing from an acute illness that required hospitalization shortly before the survey, and that his condition improved after he began receiving antibiotics.

Arguments and analysis

Before the Board, HCFA disputed essentially every ALJ finding regarding the food and water provided to R3 and his well-being. HCFA argued that the ALJ erred in finding that there was no duty to assess the resident immediately upon readmission or to challenge the physician's orders, in dismissing records showing under-administration of formula and water, and in finding that the resident's condition improved.

As we noted above, the Board does not conduct a de novo review. In determining whether the ALJ's findings of fact are supported by substantial evidence, and if his conclusions of law are correct, we use the ALJ decision as the framework of our review.

With this construct in hand, with respect to R3's initial feeding orders, we find that the ALJ's conclusions that Petitioner was under no duty to challenge the physician's feeding orders and was not deficient by assessing R3's nutritional needs on October 19 and 20 instead of upon readmission were not erroneous. With regard to the period after R3's physician issued orders for increased feedings and hydration, however, we find that substantial evidence does not support the ALJ's findings that the facility's records were erroneous and that Petitioner properly implemented the physician's feeding and hydration orders.

• The ALJ did not err in concluding that Petitioner was not required to question the physician's initial feeding orders.

We find that the ALJ did not err in concluding that Petitioner was not required to challenge the initial nutrition orders given by the resident's physician upon the resident's readmission.

First, as the ALJ observed, the regulation under which HCFA cited this deficiency contains no requirement that a facility question the feeding and hydration orders issued by a resident's physician. Additional statements that HCFA cited, from preambles to regulations governing the requirements for long term care facilities participating in the Medicare and Medicaid programs, do not specifically support HCFA's argument. HCFA first cited preamble language to the effect that a facility must assume responsibility for the quality of services provided by physicians, who are essentially outside professional resources. However, that language does not directly address this situation. It relates instead to a subsection of the quality of care regulation forbidding the administration of unnecessary drugs, and responded to specific comments that it was not appropriate to hold facilities responsible for controlling drug use when it is physicians who, under state law, are the only parties authorized to prescribe drugs and control their use.⁽⁵⁾ 56 Fed. Reg. 48,826, 48,852 (1991).

While the cited language generally reflects the undisputed notion that a facility is responsible for the care and well being of its residents, it does not provide any particular guidance in explicating those situations in which an affirmative duty arises to question a physician's orders.

The other preamble language that HCFA offered is similarly uninstructive and only raises the same questions that the Board has already acknowledged are applicable in assessing a facility's duty to question the orders of a resident's physician. HCFA cited a portion of the following language, from a discussion of the proposed requirement at section 483.40 that residents remain under the care of physicians, who must approve recommendations for admission to a facility:

When a physician gives orders that the facility considers questionable, the facility's responsibility is to ensure that these concerns are, in fact, raised with the physician. We believe that the individual staff members' business and professional codes already require them to question any orders which they believe to be inappropriate. OBRA '87 reinforces this responsibility, by adding new sections 1819(d)(4)(A) (for Medicare) and 1919(d)(4)(A) (for Medicaid) to the Act. These sections require the facility to comply not only with applicable Federal, State and local requirements, but also with "accepted professional standards and principles which apply to professionals providing services in such a facility." We are modifying the applicable portions of the Administration requirement, § 483.75 (b) and (c), to reflect this. We will look to the written statements and codifications of recognized professional organizations when it is necessary to establish that a particular professional standard or principle is, in fact, "accepted."

54 Fed. Reg. 5316, 5340 (1989).

Thus, under this language, one must look to the recognized professional standards to divine whether there exists a duty to question the orders of a physician. In Beverly Health and Rehabilitation - Spring Hill, DAB No. 1696 (1999), the Board acknowledged a similar calculus when it upheld the ALJ's conclusion that HCFA had failed to show that the facility's nursing staff could have determined, "based on their professional training and expertise, that the treatment ordered was contraindicated by the patient's medical signs or that medication was prescribed in an erroneous dosage," and that the facility was under no duty to challenge a treatment order that is not on its face inappropriate for the diagnosis. Id. at 42. Both the language from the preamble and Spring Hill, however, raise but do not answer the question of whether the standards of professional nursing care required Petitioner to question the feeding and hydration orders of R3's physician. In the preamble to the physician services regulation, HCFA stated that it would look to the written statements and codifications of recognized professional organizations when it is necessary to establish accepted professional standards. 54 Fed. Reg. 5340 (1989). In Spring Hill, HCFA cited to the American Nurses Association Code for Nurses, which the ALJ there interpreted as requiring a challenge to only those decisions that a professional with the training and expertise of a nurse would be able to evaluate as incompetent and jeopardizing a patient, but not every subjective judgment of a physician. The Board in Spring Hill found no error in the ALJ's interpretation. In this case, HCFA did not present any evidence of a professional code of nursing that would have required Petitioner's nursing staff to have questioned the feeding and hydration orders issued by R3's physician.

In the absence of any evidence regarding a professional code of conduct, we apply the standard elucidated in Spring Hill, where the Board concluded that a facility had no duty to challenge a treatment order that was not on its face inappropriate for the diagnosis. Id. at 44; see also Lake Cook Terrace Nursing Center, DAB No. 1745, at 11 (2000). Here, while HCFA presented testimony to the effect that the initial feeding orders were less appropriate to the resident's nutritional needs than the revised orders that the physician issued on October 21, based upon the RD's recommendation, HCFA failed to show that the physician's feeding orders were inappropriate on their face.

Regarding the tube feedings, the ALJ could reasonably conclude that Petitioner had no duty to challenge the orders that the resident's physician issued upon R3's readmission from the hospital because they were consistent with the tube feeding that had been ordered during the resident's hospitalization from October 13 through October 15. The hospital tube feeding orders were for 30 ccs per hour of formula for 24 hours, and upon readmission to the facility, R3's physician ordered tube feedings of 30 ccs per hour for 22 hours. HCFA initially argued, mistakenly, that R3 had been receiving 70 ccs of formula an hour during his acute care hospitalization; however, as Petitioner noted, the record showed that 30 ccs were ordered at the hospital, with the 70 ccs being noted in the hospital's records as the hospital dietician's goal to which the tube feedings would be increased if tolerated. Petitioner Ex. 55, at 232, 244; Tr. at 183-84, 945. In response, HCFA argued that in the hospital R3 had been prescribed a formula richer in calories and protein than that prescribed at Petitioner's facility, and that the hospital feeding orders called for formula to be administered for 24 hours a day, instead of the 22 hours a day prescribed upon readmission, and referred to the goal of 70 ccs per hour noted by the hospital dietician. However, HCFA failed to demonstrate that these differences were so significant as to give rise to an inference that the physician's tube feeding orders were inadequate on their face.

Regarding the water flushes, HCFA accurately noted that in the hospital R3 had been prescribed water flushes of 100 ccs every four hours, twice the flushes of 100 ccs every eight hours that were ordered upon R3's readmission to Petitioner's facility. Petitioner Ex. 55, at 231. However, HCFA failed to establish that the water flushes ordered by R3's physician were so low or so clearly inadequate as to evoke an obligation to challenge the physician's order. While HCFA's expert, Dr. Feinsod, a physician qualified as an expert in geriatric medicine, expressed some surprise with the physician's hydration order, he did not indicate that these orders were erroneous on their face such that a duty to challenge them would arise.⁽⁶⁾

• The ALJ's finding that Petitioner appropriately assessed R3 following his readmission is not erroneous.
  

The ALJ also rejected HCFA's argument that, due to R3's frail condition and his diagnoses upon readmission, Petitioner was deficient for not assessing the resident's nutritional needs immediately upon readmission. HCFA has not demonstrated any error in his finding.

The regulations contain no specific requirement dictating the frequency of nutritional assessments. The comprehensive assessment referenced in the requirement of the regulation cited for this deficiency is a term of art referring to the comprehensive assessment that a facility is required to conduct within 14 days after admission under 42 C.F.R. § 483.20(b)(2)(i). It too does not establish any regulatory violation here. In any event, the record reflects that a nutritional assessment of the resident was conducted at the hospital on October 13, just two days before R3's readmission to Petitioner's facility.⁽⁷⁾ Petitioner Ex. 55, at 244.

• The ALJ's finding that Petitioner followed the physician's revised feeding orders is not supported by substantial evidence.

Having sustained the ALJ's conclusion that Petitioner had no duty to challenge the physician's readmission feeding orders, and having rejected HCFA's argument before the Board that the facility was required to assess the resident's nutritional needs sooner than it did, we now turn to the period of time following October 21, when the resident's physician issued a second set of feeding orders increasing the amount of formula and water flushes that the resident was to receive. Petitioner's I/O records for R3 reflect that on numerous occasions Petitioner administered less formula and water than what the doctor ordered. Specifically, these records, which reflect the quantities of water and formula administered during each eight-hour shift, show that during the period of October 22 through November 14, which comprised 72 shifts, Petitioner administered too little formula during 20 shifts, and too little water during 20 shifts. Petitioner Ex. 55, at 173-75; HCFA Ex. 54, at 37-39; Petitioner Ex. 55, at 171, included in the ALJ record as part of HCFA App. H.

The physician's increased tube feeding orders were for the administration of 85 ccs of formula per hour for 22 hours, in order to supply the resident with a total of 1870 ccs per day, beginning during October 22. HCFA Ex. 54, at 28; Petitioner Ex. 55, at 118; Tr. at 131. (An exception is noted for the first 24 hours of the increase, during which the facility was to have implemented the increase by administering 55 ccs per hour, or 440 ccs per shift. Petitioner Ex. 55, at 118; Tr. at 131.) This total could be met through the administration of 680 ccs per shift for two shifts each day (this is the amount reflected on many shifts) and of 510 ccs for the remaining shift. Indeed, the I/O records show that out of the 72 shifts in question, Petitioner administered 680 ccs of formula during each of 49 shifts; moreover, on nine days the resident received 680 ccs for each 8-hour shift, or 2040 ccs during the 24-hour period, more than the 1870 ordered by the physician. More relevant to our inquiry, however, is that the I/O records reveal 14 shifts from October 22 through November 14 during which the resident received only 240 ccs, the amount that he had been receiving under the physician's initial orders, which were increased on October 21. There were also six shifts during which the resident received more than 240 ccs but less than the amounts needed to provide the resident the ordered 1870 ccs during the given 24-hour time period. During the first 24 hours of the increase, when R3 was to have received 440 ccs per shift, the resident received 440 ccs for the last shift on October 21, consistent with the intermediate increase, but then only 240 ccs for the first shift on October 22. All told, the I/O records show R3 receiving less formula than prescribed on 13 of the 24 days during that time period, due to the recorded under-administration of formula during one or more shifts.

The I/O records also reflect the under-administration of water. During the period from October 22 (the day after the physician ordered an increase in water flushes from 100 to 250 ccs each 8-hour shift), though November 3 (the day before the physician ordered a further increase to 300 ccs), the I/O records show that Petitioner delivered only 100 ccs of water on 13 of 39 shifts. From November 4 through November 14, shortfalls of water were noted for eight of 33 shifts. Sixteen of the 21 shortfalls of water occurred during the 11 p.m. - 7 a.m. shift. Petitioner Ex. 55, at 173-75; HCFA Ex. 54, at 37-39; Petitioner Ex. 55, at 171, included in the ALJ record as part of HCFA App. H.

The ALJ found that the I/O records on their face showed that the resident was not receiving nutrition and water as had been prescribed, but he rejected this evidence. He found that most of the entries showing a shortfall were from the 11 p.m - 7 a.m. shift, and that it was more likely that the nurse working that shift "misread the pump calibration" and thus consistently under-recorded the amount of formula delivered on the I/O records, than it was that the nurse would have consistently reset the pump to deliver a lower amount of formula than prescribed, which, he found, was highly improbable. He based his finding on testimony of Ms. Redden, a senior vice president of clinical compliance for Petitioner's parent company, about the operation of the pump on a tube feeding machine, finding that the pump is preset to deliver nutrition and water to a patient at a calibrated rate of flow and must be reset by the operator to deliver at a lower rate. ALJ Decision at 10, citing Tr. at 950.

This determination is speculative and unsupported by substantial evidence. First, the ALJ's finding does not accurately represent Ms. Redden's testimony. She did not state that the pump on a tube feeding machine is preset to deliver water at a calibrated rate of flow; the cited testimony concerned only the tube feeding formula, and she did not address the administration of the water flushes the physician ordered. Before the Board, Petitioner did not dispute HCFA's description of water flushes as being administered by hand, rather than through the tube feeding pump. HCFA also cited medical literature showing water flushes as discrete events, rather than part of the continuous delivery of formula by feeding pump. HCFA Ex. 87, at 52-53, 297-99. Thus, the ALJ's finding that a nurse misread a preset pump does not explain why the nurse would have under-reported the amounts of the water flushes that were administered on her shift. That this theory cannot account for the recorded under-administration of water casts doubt on its validity as an explanation for the recorded under-administration of formula. The instances of under-recording in the I/O records, which for the most part reflect superseded feeding and hydration orders, suggest that one or more individuals were unaware that the resident's physician had ordered increases in the amounts of formula and water flushes to be administered. Given that formula and water flushes are administered differently, however, the evidence does not support a conclusion that it is more likely that a nurse or nurses would under-record what was actually being administered than it is that the nurse would have administered formula and water consistent with past physician's orders that the nurse remembered and believed were still in effect.⁽⁸⁾ Petitioner did not present any testimony from its nursing staff that would support a conclusion that they administered the amount of food and water that was ordered, but then failed to accurately record those amounts.

The medical record for R3 contains laboratory test values that support the accuracy of I/O records showing that he was not receiving adequate nourishment and hydration after October 21. On November 5, 1999, laboratory tests showed that R3 had a BUN to creatinine ratio of 63:1, as compared to a ratio of 40:1 upon admission. HCFA Ex. 109, at 89-90, 118. An elevated ratio indicates dehydration. Tr. at 188. In addition, the November 5 laboratory results showed that R3's serum albumin level was at 2.2, which was a decline from 2.7 noted on October 18. HCFA Ex. 109, at 118-19. Although the ALJ apparently reviewed these records, he considered them as proffered as evidence of actual harm to R3, which he appropriately rejected for not having been alleged explicitly prior to the hearing. ALJ Decision at 11. However, before the Board HCFA made it plain that, rather than alleging actual harm, it was citing these records as evidence of the physical results that confirmed the under-administration of nutrition and water that was indicated on the I/O records, and we accept them as such. HCFA Brief (Br.) at 22.

The surveyor's observations also cast doubt on the ALJ's finding that staff consistently administered the amount of formula and water ordered. The surveyor testified, and the survey report reflects, that on November 17 she observed the feeding pump turned off on three occasions from 8:10 to 11:30 a.m.; the pump was delivering formula when she next observed it at 12:45 p.m. HCFA Ex. 49, at 14; Tr. at 135-38. The ALJ found her observations credible. ALJ Decision at 11. The I/O record indicates that during that shift, the resident received 650 ccs of formula; however, the surveyor determined that due to the amount of time the pump was off, R3 could only have received 340 ccs of formula. Tr. at 158. Petitioner did not dispute her calculations. While we do not disagree with the ALJ's determination that minor deviations from the feeding orders prescribed by the resident's physician do not demonstrate that Petitioner systematically delivered inadequate quantities of nutrition and water to the resident, the surveyor's observations cast doubt on the reliability of Petitioner's evidence as establishing that it administered formula and water consistent with the orders of the resident's physician.

The ALJ also wrote that the medication administration record and the weekly nursing summary for the resident both show that the resident received nutrition and water consistent with his physician's orders. ALJ Decision at 11. However, the nurses' summaries contain only a range of intake for the week, and the medication administration records contain only check marks meant to indicate that the physician's orders were followed on a given day. Petitioner Ex. 55, at 94, 118. Neither of these records purport to record the amount of formula and water that was actually administered during each shift, as do the I/O records.

Few tasks entrusted to a facility are as essential as ensuring that the orders of a resident's physician are implemented faithfully. Here, the evidence does not show that Petitioner followed those orders and actually administered the prescribed quantities of formula and water. Petitioner therefore failed to demonstrate that it was in substantial compliance with the requirement that it provide appropriate treatment and services, in accordance with the comprehensive assessment and plan of care. We thus reverse the ALJ's determination that, with regard for this resident, Petitioner was not deficient in complying with participation requirements as of the November 1999 survey.

Tag 325

The deficiency findings

HCFA determined that the facility's care of resident number 5 (R5) violated the requirement of 42 C.F.R. § 483.25(i)(1) that a facility, based on a resident's comprehensive assessment, must ensure that a resident maintains acceptable parameters of nutritional status, such as body weight and protein levels, unless the resident's clinical condition demonstrates that this is not possible. At the time of the survey, R5 was an 86-year-old woman who had been admitted to the facility on October 5, 1999, with diagnoses including a fracture of the right femur, pressure sores, aspiration pneumonia, depression and dementia. HCFA alleged that the resident experienced a significant weight loss, and that the facility failed to adequately monitor, and take appropriate interventions to address, her weight loss. HCFA Ex. 49, at 17-25. It was not contested that the resident, who was sixty inches tall, weighed 162 pounds upon her admission on October 5, and 146 pounds at the time of the survey on November 17, 1999. Id.

The ALJ Decision

The ALJ found that the preponderance of the evidence established that Petitioner maintained adequate parameters of nutritional status for R5. The ALJ concluded that the regulation requires that a facility provide residents with adequate nutrition, not that it prevent them from losing weight, and that a facility that provides adequate nutrition is complying with the regulation even if a resident loses weight. Weight loss, the ALJ concluded, may be an important indicator of inadequate nutrition but may also be explained by non-nutritional factors and does not per se establish noncompliance with the regulation. The ALJ found that HCFA focused primarily on the resident's weight loss, and that the evidence did not establish that her weight loss was due to a failure by Petitioner to supply her with adequate nutrition. The ALJ found that the evidence did not establish that Petitioner paid inadequate attention to the resident's nutritional needs or failed to monitor or address the resident's weight loss.

The ALJ found that the facility assessed the resident's weight regularly, that her serum albumin levels were rising, and that she remained substantially above her ideal body weight. The ALJ noted that seven pounds of the resident's weight loss occurred during a period of hospitalization from November 3 - 8, 1999, that HCFA failed to account for the weight of a leg cast that was changed during the relevant time period, and that the evidence suggested that R5's weight loss was due to factors other than nutrition, such as the administration of a diuretic and agitation due to her dementia.

Arguments and analysis

HCFA argued that the ALJ applied an incorrect legal standard in discounting the significance of the resident's weight loss, and it disputed the ALJ's determinations that the facility provided adequate nutrition and monitored the resident's weight and that her weight loss could be explained by factors other than inadequate nutrition.

We find that substantial evidence supports the ALJ's determination that Petitioner was in substantial compliance with the regulation. We find that the ALJ correctly interpreted and applied the regulation, and that HCFA's case, including the testimony of an expert witness left unaddressed by the ALJ in his decision, was based on the resident's weight loss alone and did not establish that the facility failed to provide adequate nutrition.

• The ALJ applied the correct standard in reversing this deficiency finding.

HCFA argued that the ALJ's findings, which focus on whether the resident received adequate nutrition and whether her weight loss was thus due to other factors, demonstrated that he incorrectly applied the regulation. HCFA argued that the regulation does not require a facility simply to provide nutrition, but to ensure that residents maintain acceptable parameters of nutritional status, such as body weight. Where a facility fails to maintain a resident's weight, HCFA argued, then under the regulation it may avoid a deficiency finding only when the resident's clinical condition demonstrates that maintaining parameters of adequate nutrition (such as weight) is impossible, an exception which HCFA described as narrowly drawn and not applicable here.

We do not agree with HCFA's view of the regulation. The regulation does not require that a facility maintain a resident's weight at a fixed level, or hold a facility strictly liable for a resident's weight loss in all cases except where maintenance of the resident's weight is clinically impossible. By its language the regulation requires maintenance of weight only to the extent that weight is a parameter of nutritional status. Where a resident receives adequate nutrition and weight loss is due to non-nutritive factors, then weight may not be a parameter of nutritional status, and weight loss by itself does not provide a basis for a deficiency finding.

The ALJ's interpretation is consistent with the history of the regulation and testimony at the hearing. In promulgating the regulation, HCFA initially "proposed that a facility must ensure that a resident does not lose weight after entering the facility without justifiable cause and receives a special therapeutic diet when there is a nutritional problem." 54 Fed. Reg. 5316, 5335 (1989). In response to comments that the regulation "include other parameters of malnourishment besides weight loss," HCFA revised the regulation to its current wording, "replacing reliance on weight loss with reliance on maintaining acceptable parameters of nutritional status." Id. at 5335, 5336. This history supports the ALJ's determination that weight loss should not be the basis of a deficiency finding where it is not attributable to the failure to provide sufficient nutrition.

Petitioner's witness, Dr. Stone, a physician who was qualified without objection as an expert in geriatric medicine, stated that "[w]e're not dealing with weight loss in this patient in the sense of weight loss on nutritional parameters."⁽⁹⁾ Tr. at 1107. Petitioner's medical director, Dr. Glasgow, also a physician qualified without objection as an expert in geriatric medicine, testified that while it is important to supply a resident with protein, there are different types of weight loss (liquid, solid, equipment related) due to different factors, and that a loss of weight does not lead to an assumption of protein weight loss. Tr. at 1054, 1078. HCFA's expert witness, a dietician, also supported a distinction between weight loss based on loss of fat versus loss of protein, vitamins or minerals. Tr. at 299. We thus disagree with HCFA's position that the cause of the weight loss is not an issue in weighing this deficiency. See HCFA Reply Br. at 71. The ALJ could correctly find that the facility had demonstrated substantial compliance where it established, by a preponderance of the evidence, that it provided the resident with adequate nutrition.

As HCFA noted, the regulation provides that the only circumstance under which a facility is not responsible for ensuring that a resident maintain adequate parameters of nutritional status is where the resident's clinical condition demonstrates that this goal is impossible. However, if a facility can demonstrate that it provided adequate nutrition such that a resident's weight loss is not a parameter of nutrition, then it has demonstrated substantial compliance with the regulation and is not required to show that this narrow exception applies. Because weight loss may be a parameter of nutrition under the regulation, a resident's weight loss may raise an inference of inadequate nutrition and support a prima facie case of a deficiency. A facility may then rebut a prima facie case based on weight loss by showing that it provided the resident with adequate nutrition, or that the weight loss is due to non-nutritional factors. 42 C.F.R. § 483.25(i)(1). It is only where a facility cannot establish that it provided adequate nutrition that it must demonstrate that the resident's clinical condition made such a goal impossible (for example, where the resident was suffering from throat cancer, and his family refused to consent to the use of a feeding tube). Libbie Convalescent Center, DAB No. CR589 (1999).

• Substantial evidence supports the ALJ's determination that Petitioner provided R5 with adequate nutrition.

Having found that the ALJ applied the correct legal standard in weighing this deficiency, we next review the record to determine whether substantial evidence supports his determination that the resident received adequate nutrition such that Petitioner was in substantial compliance with the regulation. The record demonstrates that the facility paid attention to the resident's nutritional status and supplied her with various nutritional supplements designed to ensure that she received a sufficient supply of protein. These included protein powder administered with eight ounces of non-fat milk at meals beginning on October 8, snacks to be given three times a day beginning October 18, a four-ounce nourishment supplement to be given beginning October 25, and a six-ounce supplement with meals beginning on November 17. Tr. at 306, 309; Petitioner Ex. 57, at 315, 318; HCFA Ex. 56, at 50. Dr. Stone testified that the resident was receiving adequate nutrition, and Dr. Glasgow attributed the weight loss to non-nutritional factors. Tr. at 1053-54, 1079, 1108-11. The record also demonstrates that the resident's albumin level was increasing, with readings of 2.5 noted prior to admission on September 30 and 2.9 on November 19, 1999. While both readings were low, they represent an increase despite her loss of weight and support the ALJ's finding. Petitioner Ex. 57, at 393, 671.

The evidence also supports the ALJ's finding that factors other than nutrition contributed to R5's weight loss. Petitioner's expert witnesses spoke about the role played by the administration of a diuretic, which was likely used to reduce the edema that was noted around her fractured right femur.⁽¹⁰⁾ Tr. at 1053-54, 1079, 1108-11. Both experts felt that the presence of a cast on her right leg artificially elevated her weight upon admission.⁽¹¹⁾ Tr. at 1053-54, 1109. The state surveyor acknowledged that the resident experienced a 7-lb. weight loss while absent from the facility, which is consistent with Petitioner's records indicating that she weighed 155 pounds on both November 1 and November 3, the day she was transferred to the hospital. Tr. at 53; Petitioner Ex. 57, at 115, 318. We agree with HCFA that a resident's absence from a facility does not relieve the facility of responsibility for the resident's overall nutritional state. However, in this case, that the weight loss occurred away from the facility is consistent with the ALJ's finding that weight loss was not shown to be due to any failure by the facility to provide R5 with adequate nutrition.

HCFA argued that the ALJ ignored indicia of compromised nutrition such as worsening pressure sores and poor meal intake; however, these characterizations of the evidence are not consistent with the record. HCFA's argument that R5 consumed only 30-60% of her meals fails to address evidence showing that her intake was variable and ranged higher than the 60% upper limit asserted by HCFA. HCFA Ex. 56, at 8, 37, 49; Petitioner Ex. 57, at 315. The medical records submitted by both parties show improvement of R5's pressure sores. Petitioner Ex. 57, at 289, 290-91, 293, included in the ALJ record as part of HCFA Appendix (App.) H; Petitioner Ex. 57, at 35, 682; HCFA Ex. 56, at 43, 49. HCFA appeared to acknowledge that there were fewer sores noted later on during her stay, arguing that the number of sores was "beside the point," but failed to support its claim that she suffered from poor skin condition as a result of inadequate nutrition. HCFA Reply Br. at 69-70. Moreover, as Dr. Glasgow noted, weight loss in an overweight individual (it was not contested that the resident weighed substantially more than her ideal body weight of approximately 116 pounds, Tr. at 68) may help improve pressure sores and in any event would not contribute to their worsening. Tr. at 1055-56.

The testimony of HFCA's expert, Ms. Pasquarella, a dietician, to the effect that Petitioner failed to provide adequate nutrition focused on the fact of the resident's weight loss, rather than on an analysis of the content and quantity of the food and nutritional supplements the resident received. Ms. Pasquarella did not attempt to show, as HCFA endeavored for tag 322 involving R3, that the meals and supplements failed to meet the resident's specific caloric needs. She also did not acknowledge certain evidence tending to support the ALJ's finding that the resident was adequately nourished. While Ms. Pasquarella noted the existence of pressure sores on admission, she did not address the progress of the pressure sores or the evidence indicating their improvement. Similarly, in discussing the resident's low albumin readings, Ms. Pasquarella mentioned only the earlier albumin reading but not the second, higher reading. Since the ALJ had concluded (correctly, we determine) that this deficiency finding would have to be based on the failure to provide adequate nutrition and not on weight loss alone, he could properly exclude mention of her testimony because it failed to address the specific question before him. His failure to discuss her testimony does not mean, as HCFA implied, that he did not find her to be a credible witness (and thus, HCFA argued, erred by not providing reasons underlying that credibility determination). In addressing expert testimony of another witness relating to a different deficiency, the ALJ indicated his decision would not contain findings relating to testimony not germane to the disposition of the matter at issue, and his omission of Ms. Pasquarella's testimony was consistent with that admonition. Tr. at 320-22. We do not agree with HCFA that because Ms. Pasquarella was a registered dietician, she was necessarily more qualified to opine on the resident's nutritional state than Dr. Stone (or Dr. Glasgow, for that matter), a physician expert in geriatric medicine.

HCFA also argued that Petitioner failed to adequately monitor this resident's weight loss. In particular, HCFA noted that Petitioner, pursuant to its own policies, should have referred the resident to its weight variance committee. However, monitoring and the maintenance of records and assessments is not a specific component of the regulation under which this deficiency finding was leveled. During the hearing, the ALJ cautioned HCFA's witness Ms. Pasquarella that testimony regarding these alleged shortcomings in the facility's efforts at monitoring and assessing the resident's weight loss was getting farther away from the basis of the deficiency. Tr. at 310.

We therefore conclude that the ALJ did not err in concluding that Petitioner demonstrated substantial compliance with this regulation, with respect to R5.

Tag 151

The deficiency findings

The survey alleged that Petitioner violated the regulations regarding resident rights by moving a resident identified in the November survey as resident number 8 (R8) to another room within the facility without first informing his family or obtaining their consent, and by allegedly coercing the resident into consenting to the move. The specific provisions that the facility was charged with violating provide that:

A facility must protect and promote the rights of each resident, including each of the following rights:
(1) Exercise of rights. The resident has the right to exercise his or her rights as a resident of the facility and as a citizen or resident of the United States.
(2) The resident has the right to be free of interference, coercion, discrimination, and reprisal from the facility in exercising his or her rights.

42 C.F.R. § 483.10(a)(1), (2).

The survey reported that the resident was moved three times: first, on November 15 to a different room on another unit. The next day, the resident's family complained to the surveyor that the facility had failed to notify them of the move as they had requested. They also reported that the resident's roommate in the new room was dying of terminal kidney disease, the resident had not slept during the night, and he was unhappy with the move. On November 16, after the family met with Petitioner's social services staff, the resident was moved to another room on the same unit as his original room, and then, later that day, back to his original room. The survey reported that a room change form had been signed by the resident on November 15, the day of the first move, and by the social services designee on November 16, but that the family told the surveyor that the resident told them that he was fearful of refusing to sign the consent form. The family later told the surveyor that on November 16, they visited the resident and witnessed a social services staff person bending over the resident and verbally prompting him to sign another document; the family felt that the staff person's manner was intimidating. The survey further alleged that during an interview with the resident and his family, the resident showed confusion as to time. The survey alleged that the facility violated its policy requiring that the consent of family members be obtained prior to a move. The survey described the resident as confused with regard to time, forgetful, and prone to difficulty in new situations. HCFA Ex. 49, at 1-7.

The ALJ Decision

The ALJ found that HCFA had not established a prima facie case that Petitioner failed to comply with 42 C.F.R. § 483.10(a)(1) and (2), because its case was based on unverified hearsay which he deemed unreliable. He found it not possible to tell whether the surveyors accurately reported the statements recited in the survey report, or, even if they did, whether those statements were unbiased and otherwise credible. The ALJ noted that HCFA had not called the resident's family members as hearing witnesses or taken other steps to bolster the reliability of the assertions in the survey report. ALJ Decision at 6-7.

Arguments and analysis

We sustain the ALJ's determination on this deficiency. HCFA's principal argument was that the ALJ erred in rejecting the hearsay reports of the resident's family's complaints. HCFA argued that the ALJ's observation that hearsay is inherently unreliable was contrary to judicial and Board precedent holding that hearsay statements are admissible in administrative proceedings and may constitute substantial evidence. HCFA Br. at 73-78. The ALJ's determination not to credit unverified and sometimes multiple-level hearsay statements is an overarching issue in HCFA's request for review of many of the ALJ's findings on the deficiencies cited in the surveys conducted in May and July 1999. In a subsequent section of this decision, we address HCFA's arguments on hearsay and explain why we decline to disturb the ALJ's decision not to sustain those deficiency findings that were based solely on hearsay reports. We do not address those arguments at this juncture, however, because our review of the record, including the hearsay evidence, largely does not support HCFA's descriptions of the evidence regarding this deficiency finding.

First, HCFA contends that "the facility failed to obtain the consent of either the resident or his spouse prior to the move." HCFA Br. at 70-71 (emphasis in original). However, the record provided by HCFA includes a room change form signed by the resident on November 15, stating that the resident agreed to the room change. HCFA Ex. 52, at 27. The form states that the room was needed for an isolation admission and that the resident had agreed to move to a different room. A follow-up visit notation on the form completed at 9:50 a.m. the next day states that the resident was not satisfied with the new room. Id. HCFA's record also contains a room change form for the second move, signed by the resident on November 16. HCFA Ex. 52, at 28. HCFA questioned the validity of the first room change form, asserting that the resident was pressured and browbeaten into signing the form, and that he "confided in the surveyor [Ms. Clay] that he was coerced into changing his room and then, only after the transfer had taken place, badgered into signing a consent form," an assertion not found in the survey report. HCFA Br. at 71. However, the totality of the surveyor's testimony lends support to the ALJ's decision to disregard the hearsay reports for this deficiency finding.

The surveyor testified that HCFA's allegation of coercion was based on the resident's reported statement that people kept putting pieces of paper in front of him to sign and that he did not know what he was signing, apparently made in the surveyor's interview with the resident and members of his family during which family members were talking at the same time and interjecting their own comments. Tr. at 89-90. Despite this interference, the surveyor reported being able to parse out that the resident reported that he felt pressure and was afraid not to sign pieces of paper. The ALJ could reasonably find that this testimony by the surveyor as to the resident's alleged statements failed to establish that the resident was coerced into signing the room change form for the move on November 15. The resident's statements were made during admittedly confusing circumstances, by a resident whom HCFA and the surveyor repeatedly characterized as confused and having cognitive deficits, after the resident had reportedly had a sleepless night, and referred generally to "pieces of paper" without substantiating that the resident was referring to the specific room change form that he signed consenting to the initial move on November 15. Tr. at 79-81, 85, 89-90, 117; HCFA Br. at 70-72. The surveyor also testified that the resident stated that he had not wanted to move; however, that he might not have wanted to have moved from his original room is not disputed and does not establish that he was coerced into consenting to that move. Tr. at 115; HCFA Ex. 52, at 27. Moreover, while HCFA's exhibits also include a room change form for the second move bearing the resident's signature and dated November 16, the day that the survey alleged that Petitioner's social services designee was seen bending over the resident in a supposedly intimidating manner, allegations that the resident would have been coerced into consenting to this move are at odds with the undisputed statements in the survey report and the testimony to the effect that the resident wanted another room change because he was not happy with the room to which he had been moved. Tr. at 85; HCFA Ex. 49, at 3-4; HCFA Ex. 52, at 28.

While arguing that the resident was sufficiently cogent to have accurately recounted the specific circumstances surrounding the initial move on November 15, HCFA also questioned his competence to have knowingly signed the room change form consenting to that move that HCFA submitted into the record. Questions as to the resident's competence also underlay the other basis alleged by HCFA for the deficiency, the facility's failure to obtain the family's consent to the room change, which was not contested by Petitioner. However, whatever the resident's mental state may have been during the time that he was interviewed by the surveyor, nothing in the exhibits that HCFA introduced indicates that the resident was not authorized to make his own decisions regarding care. A history and physical form for R8 completed shortly after his admission indicates that the resident, advised of his medical condition, was mentally capable of understanding, and a social service assessment completed on October 27 confirms that assessment. The surveyor's notes also record that the resident had been deemed mentally capable of making decisions. HCFA Ex. 52, at 3. Thus, the facility was justified in treating the resident as capable of consenting to the change of rooms, notwithstanding the report of the conference held by Petitioner with this resident's family after the room change controversy, which stated that the family questioned the doctor's assessment that the resident was capable of making his own decisions, and that the facility would recommended a psychiatric consultation to determine resident's cognition. Id. at 20. Thus, the ALJ was justified in disregarding HCFA's attack on the validity of the consent based on the fact that it was signed by the resident alone. Moreover, HCFA's contention that the facility was obliged to secure the consent of the resident's family to a change in rooms (which is not required by the specific regulation governing changes in resident room assignments) would impose on the facility an obligation to override the orders of a resident's treating physician with its own opinion.

Conclusions on the November 1999 Survey

Based on our review, we reverse the ALJ Decision with respect to tag 322 from the November 1999 survey, and sustain his decision on tags 325 and 151. We therefore revise the ALJ's FFCL No. 1 (ALJ Decision at 4) to read as follows:

Petitioner was not in substantial compliance with participation requirements as of the November 1999 survey. Therefore, there was a basis under 42 C.F.R. §§ 488.412(d) and 488.450(d)(1) to terminate Petitioner's participation in Medicare.

B. The May 1999 Survey

Representatives of the California Department of Health Services surveyed Petitioner during May 18 - 20, 1999. The report of the May survey alleged that Petitioner was out of compliance with 15 different conditions of participation in the Medicare program; two of these deficiencies were alleged to pose the threat of immediate jeopardy to Petitioner's residents. The ALJ sustained four of the deficiency findings and reversed the remaining 11, including both deficiency findings deemed to pose immediate jeopardy to Petitioner's residents. HCFA then appealed his reversal of eight of those 11 deficiency findings. We sustain the ALJ's reversal of seven of those eight deficiency findings that HCFA appealed to the Board, and reverse his finding reversing one deficiency finding. We first address the two deficiency findings that alleged immediate jeopardy.

Tag 224

The deficiency findings

The survey alleged that Petitioner's care of residents violated 42 C.F.R. § 483.13(c)(1)(i). The regulation states as follows:

(c) Staff treatment of residents. The facility must develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse of residents and misappropriation of resident property.

(1) The facility must -

(i) Not use verbal, mental, sexual, or physical abuse, corporal punishment, or involuntary seclusion; . . . .

The survey report alleged a number of instances of Petitioner failing to provide its residents with timely and appropriate assistance in toileting. The survey concerns 15 residents in particular, some of whom were unidentified. Many of the complaints referred to in the survey report were recorded during a group meeting with surveyors. As relevant to HCFA's appeal, six of the unidentified residents were reported to have complained during a group meeting about the time it took for Petitioner's staff to answer call lights, and three stated that they feared repercussions if they complained. Other unidentified residents, including one who requested anonymity, were reported to have said that facility staff had told them to go to the bathroom in their bed linens rather than offering them toileting assistance. Some of the findings involved identified residents: resident number 7 (R7) and his wife were reported to have complained that staff took "forever" to provide assistance in using the bathroom and to have related that R7 defecated in his bed linens after two staff members declined to provide assistance, after which he requested that staff diaper him to avoid a recurrence. The resident's wife was said to have stated that she had witnessed Petitioner's staff respond to a call light by turning the light off, and then not returning as they had promised, and on one occasion facility staff recorded her complaint about failure to answer call lights the previous night. The survey report stated that an unidentified family member or members of resident number 1 (R1) told the surveyor that Petitioner's staff was slow in dealing with the resident's frequent diarrhea and that Petitioner's staff had not helped the resident with the resident's bowel and bladder needs. A surveyor reported hearing resident number 6 (R6) yelling for help to use the bathroom, and observed that Petitioner's staff did not respond to the request for 15 minutes.⁽¹²⁾ The survey report rated this deficiency at the immediate jeopardy level. HCFA Br. at 83-84; ALJ Decision at 16-17.

The ALJ Decision

The ALJ found Petitioner in compliance with the regulation. He found that, in those "few instances" where HCFA had made a prima facie case, Petitioner had rebutted HCFA's showing by a preponderance of the evidence.⁽¹³⁾ ALJ Decision at 16. The most common basis for the ALJ's findings under this deficiency tag, and the overriding issue in HCFA's request for review, was the ALJ's rejection of those instances of noncompliance found by HCFA that were based solely on hearsay statements of residents and their relatives. The ALJ found that this hearsay was highly unreliable and of no probative value, principally because there was no way to test either the accuracy or the credibility of statements attributed to residents or their family members, problems, he said, that were worsened in the case of the "very large proportion" of hearsay complaints attributed to unidentified sources, to which a facility could not reasonably be expected to respond. ALJ Decision at 18. The ALJ found that HCFA could have, but did not, gather evidence to verify or confirm the hearsay allegations. In the case of R6, whom the surveyor observed wait 15 minutes to be helped to the bathroom, the ALJ found that it was not clear that the resident had a legitimate need that Petitioner's staff was late in meeting, finding that the resident was a demented individual who chronically cried out for help from Petitioner's staff as an attention-getting device.⁽¹⁴⁾ ALJ Decision at 18-19.

The ALJ noted that, in a ruling dated June 9, 2000, he had rejected as prejudicial HCFA's offer to identify anonymous declarants approximately three weeks prior to the start of the hearing and more than a year after the May survey. However, he also found that identification of these declarants would not have changed the fact that all of the allegations that are attributed to them were hearsay and uncorroborated. ALJ Decision at 18.

Arguments and analysis

HCFA argued that the ALJ erred by failing to credit the hearsay testimony of the complaints of residents and their family members regarding delays providing toileting assistance. That testimony, HCFA said, was consistent with a surveyor's personal observation of a delay in assisting R6, and established Petitioner's overall failure to implement a policy against neglect. As discussed below, we first find that the ALJ's decision rejecting those deficiency findings based solely on hearsay was supported by substantial evidence and not erroneous as a matter of law. We then address individual allegations that involved non-hearsay evidence.

While acknowledging that the ALJ was not required to give weight and credence to all hearsay testimony, HCFA argued that the ALJ was bound first to assess the probative value of hearsay by applying eight criteria employed in R.P. Carbone Const. Co. v. Occupational Safety & Health Review Com'n, 166 F.3d 815 (6^th Cir. 1998), citing Calhoun v. Bailar, 626 F.2d 145, 149 (9^th Cir. 1980), in turn citing Richardson v. Perales, 402 U.S. 389, 402-07 (1971).⁽¹⁵⁾

The analyses in Carbone and the other judicial decisions HCFA cited do not demonstrate any error in the ALJ Decision. Those cases centered on whether the hearsay on which an ALJ relied constituted substantial evidence such that his decision, if not arbitrary or capricious, could be upheld by a reviewing court, and, in making those determinations, the courts cited the eight factors or similar criteria. The courts did not direct that ALJs apply the eight Carbone factors in determining what weight to assign to hearsay. There is no indication in the decisions that the ALJs applied the eight factors in the administrative proceedings that were then appealed by the parties opposing the reliance on the hearsay evidence. None of those decisions entailed an ALJ's determination to disregard proffered hearsay because he found that it lacked reliability, and they do not compel a finding that the ALJ erred in rejecting unsubstantiated hearsay as the sole basis for sustaining the deficiency finding.

The Calhoun court deemed it important that ALJs examine the issues of fairness and reliability on the record so that reviewing courts can determine that this duty has been discharged, but held that there was "nothing magical in the number" of factors applied to indicate reliability (the Calhoun court was referring to nine cumulative situation-specific factors in Perales from which the eight factors for which HCFA cited Carbone derive). 626 F.2d at 150. Here, the ALJ provided reasons for deeming the hearsay testimony unreliable. Specifically, the ALJ pointed out that the surveyors did not take reasonable measures within their means to verify complaints that Petitioner did not provide timely toileting assistance. He noted that they could have inspected the residents and their bed linens and looked for accumulations of urine or feces at the facility, and that HCFA offered no evidence that the facility's residents as a whole experienced elevated rates of urinary tract infections or suffered pressure sores related to untimely toileting assistance. Both Dr. Jencks, an expert physician witness presented by HCFA, and Dr. Stone, Petitioner's expert in geriatric medicine, established that such consequences would likely attend a facility's systemic failure to attend to its residents' bowel and bladder needs. Tr. at 403-04, 1100. Under questioning by the ALJ, the survey team coordinator for the May survey confirmed that she was aware of no instances of surveyors observing a resident lying in his own feces or urine, a strong odor of urine or feces surrounding a resident, or a resident's soiled bed linens, and that she was not aware of any other observed evidence that a resident had been incontinent and had not been cleaned. Tr. at 573.

The absence of such corroborating evidence is especially significant because this deficiency implies a pattern of neglect, and requires more than a showing of isolated examples to provide required services. HCFA did not dispute the ALJ's conclusion that a deficiency under section 483.13(c)(1)(i) must be based on enough examples to establish a systemic failure by the facility to implement its policy against neglect. Thus, the ALJ could reasonably base his determination to decline to rely on the hearsay on the absence of the sort of evidence that expert testimony confirmed would likely exist if Petitioner had systematically failed to implement a policy against neglect by not providing timely toileting assistance to its residents.⁽¹⁶⁾ HCFA's argument that the ALJ's demand for corroborating evidence would require HCFA and state survey agencies to stage prohibitively expensive undercover surveillance operations to observe delays in toileting assistance surreptitiously was not supported by the evidence and does not demonstrate any error in the ALJ's analysis. Those measures would not be necessary to verify the presence of the soiled linens or the increased rates of sores and urinary tract infections that the experts confirmed would evince a pattern of failing to attend timely to residents' toileting needs.⁽¹⁷⁾

HCFA's citation of Oak Lawn Pavilion, Inc., DAB CR474 (1997), aff'd, DAB No. 1638 (1997), for the notion that the findings in the survey report alone may establish a prima facie case of a deficiency, is misplaced. Unlike here, the deficiencies in that case were based on the surveyor's personal observations, including observations of residents sitting or lying in their own urine for prolonged periods of time, some of whom were not changed until the surveyors intervened. DAB CR474, at 11-12, 16. The surveyors in Oak Lawn also observed that "the strong smell of stale urine was present on both floors of the facility even though windows had been opened and the rooms were cold from the outside air." Id. at 11. They noted a strong urine odor emanating from a resident in a wheelchair, and over the course of one hour observed members of the facility's staff walk past without stopping to investigate or assist this resident. Id. at 12. In another instance, the ALJ was able to discount the facility's argument, offered at the hearing, that a puddle of urine seen beneath a resident's chair was actually spilt lemonade, because one of the surveyors had put his finger in the liquid and smelled it. Id. at 19. Oak Lawn illustrates the probative value of the sort of evidence that the ALJ found missing here.⁽¹⁸⁾

We also agree with the ALJ that "[a] facility that is the target of anonymous hearsay complaints cannot reasonably be expected to be able to respond to those complaints." ALJ Decision at 18. While HCFA complained about the ALJ's rejection of its attempt to provide identifying information for the anonymous complainants three weeks prior to the hearing, it is not clear that HCFA sought reversal of the ALJ Decision on that basis. HCFA also argued that Petitioner possessed sufficient information to identify the anonymous residents, which Petitioner disputed. Our review of the record does not confirm HCFA's position. The ALJ was applying sound principles of due process in refusing to credit factual allegations that could not be challenged or investigated by Petitioner.

Having found legally sound the ALJ's decision to reject as grounds for a deficiency finding those incidents that were based on hearsay, we next turn to the one instance still at issue which entailed a surveyor's personal observation. The surveyor observed R6 calling out to use the bathroom for a period of 15 minutes before the staff provided assistance. Substantial evidence supports the ALJ finding that this resident was an individual suffering from dementia who chronically cried out for help from Petitioner's staff as an attention-getting device. Tr. at 525, 846-47, 893-94, 933, 1062-63; Petitioner Ex. 31, at 46, 55, 57, 92, 128, 136, 143. Moreover, the resident did not soil her bed, either on this or another occasion on which she stated that she would and was then assisted to the toilet by facility staff. Tr. at 509-10. Thus, it is clear that the ALJ was justified in determining that this resident might not have had a legitimate need that the facility failed to meet.

The surveyor also provided a personal observation regarding R1, a resident with frequent diarrhea whose daughter was reported to have said that Petitioner's staff was slow in dealing with his needs, making him wait as long as 45 minutes to be changed. The surveyor observed that a pressure sore in the sacral or coccyx region was worse than had been noted several days earlier in the facility's records. The records described a stage I sore, meaning that there was no break in the skin, whereas the surveyor observed breakage of the skin consistent with a stage II sore. Tr. at 426-27. However, HCFA did not argue before the ALJ that the worsening of the pressure sore that the surveyor observed was evidence of the deficiency. Instead, HCFA argued that the aggravation of the sore demonstrated actual harm resulting from the deficiency that HCFA attempted to establish through hearsay evidence. Similarly, the testimony of Dr. Jencks regarding the threat of psycho-social harm posed to R7 from wearing diapers did not go towards establishing the existence of the deficiency, i.e., that Petitioner had failed to implement its policy against neglect. Tr. at 389-91. Since the ALJ concluded that there was no deficiency, he could rightly decline to address Dr. Jencks' observations, which would have been germane only if a deficiency had been established.

Tag 353

The deficiency findings

Under tag 353, the survey alleged that Petitioner violated the nursing services requirement of 42 C.F.R. § 483.30(a)(1), (2):

The facility must have sufficient nursing staff to provide nursing and related services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident, as determined by resident assessments and individual plans of care.
(a) Sufficient staff. (1) The facility must provide services by sufficient numbers of each of the following types of personnel on a 24-hour basis to provide nursing care to all residents in accordance with resident care plans:
(i) Except when waived under paragraph (c) of this section, licensed nurses; and
(ii) Other nursing personnel.
(2) Except when waived under paragraph (c) of this section, the facility must designate a licensed nurse to serve as a charge nurse on each tour of duty.

The deficiency was based on instances of facility staff allegedly failing to provide appropriate care to residents. Some were cited under other tags and cross-referenced for this deficiency: an example cited under tag 224 alleging that residents and family members reported difficulties getting help with toileting needs, staff ignoring the requests for help or telling residents they did not have the time to help, and staff telling residents to go to the bathroom in their bed linens rather than providing them with toileting assistance; and two examples cited under tag 246, that a certified nursing assistant (CNA) did not know the name of a resident for whom she was assigned to care, and that a nurse had been given no orientation to the facility and was not aware of the state of a resident's pressure sores. The survey report also alleged that a resident complained about having to wait for assistance from nurses, and that an unidentified family member of a resident stated that a nursing assistant had attempted to clean fecal matter from the resident with a dry towel, which the family member stated was harsh to the skin. According to the survey report, the latter resident had a pressure sore in the coccyx region reported to be stage I in the resident's record but which was observed to be open with bloody drainage, and thus stage II. While this resident was unidentified under this deficiency, hearing testimony indicates that this was the resident identified as R1 under tag 224. Tr. at 379-81. The survey report rated this deficiency at the immediate jeopardy level. HCFA Br. at 83-84, 111; Petitioner Br. at 81; ALJ Decision at 20-21.

The ALJ Decision

The ALJ held that the survey report did not establish a prima facie case of noncompliance, because, as he found under tag 224, allegations based on hearsay statements were not credible, and, even if true, did not amount to a failure by Petitioner to comply with the requirements of the regulation, and because the survey report cited no evidence that the facility did not have "sufficient numbers" of nursing staff, as required by the regulation. Instead, the ALJ observed that the survey addressed examples regarding the quality of care or life at the facility, which he said did not establish a deficiency in the absence of a showing that such examples were due to inadequate numbers of staff. He noted that a facility may have adequate numbers of staff on board and be providing inadequate care and quality of life, and, conversely, that a facility with low numbers of staff might still provide excellent care. He rejected as prejudicial to Petitioner HCFA's arguments that Petitioner had insufficient numbers of staff as compared to the average for California facilities and that Petitioner's resident population had special needs that required additional staffing, concluding that these bases for the deficiency finding were not stated in the survey report and that HCFA did not make these arguments prior to the hearing. The ALJ also found that even if he accepted these arguments, Petitioner had demonstrated flaws in the analysis of Petitioner's staffing levels that a HCFA expert witness presented at the hearing, and, moreover, that Petitioner showed that its staffing exceeded the requirements of California law. ALJ Decision at 21-23.

Arguments and analysis

HCFA argued that the ALJ erred in rejecting hearsay evidence alleging poor quality of resident care, and in concluding that the allegations, even if true, would not make a prima facie case under this particular regulation because they did not show that Petitioner had an inadequate number of employees; in excluding evidence proffered by HCFA with respect to staffing levels as having been proffered too late in the process; and in accepting Petitioner's analysis showing that its staffing level complied with applicable state standards.

Under our discussion of tag 224, we addressed the ALJ's determination not to credit examples cited in support of deficiency findings that were based solely on hearsay statements. We found not erroneous the ALJ's determination questioning the reliability and probative value of the hearsay because of the absence of confirming evidence that, as expert testimony showed, would have existed in the presence of the alleged pattern of problems. We adopt and do not repeat that discussion here. As to the other cited examples, HCFA did not request review of the ALJ's decision that no deficiency had been established under tag 246 for the two examples of allegedly deficient care that were cross-referenced under tag 353. HCFA Reply Br. at 114.

The ALJ could correctly conclude that the examples of allegedly deficient care remaining at issue did not establish a prima facie case because the survey report failed to allege a link between the alleged deficiency and the number of staff that Petitioner provided to care for the residents, which is the essence of the regulation cited for this deficiency. Indeed, rather than indicating that Petitioner did not have sufficient staff to care for its residents as required by the regulation, some of the examples implied the opposite, i.e., that staff was available but unconcerned about resident comfort. We agree with the ALJ's interpretation of the regulation as requiring some showing that the level of staffing is the reason for the problems alleged. This regulation speaks of the number of staff being sufficient to provide needed care. HCFA did not demonstrate error in the ALJ's conclusion that a showing of poor care does not necessarily equate to insufficient staffing levels; HCFA's argument about the basis of the deficiency fails to account for the language of the regulation. HCFA cited its State Operations Manual (SOM) as instructing that a deficiency determination is based on the ability of staff to deliver needed care, and 42 C.F.R. § 488.26(c), which provides five principles for the conduct of surveys by state agencies, including section 488.26(c)(2), which states that the survey process uses resident outcomes as the primary means to establish compliance. The specific and thus more directly applicable regulation to which the facility was held in this deficiency couches its particular requirement in terms of the number of staff that a facility dedicates to providing services to its residents. While the SOM language is phrased in terms of the ability of staff to deliver appropriate care, it does not countermand the regulation's requirement of a nexus between a failure to deliver appropriate care and the number of staff that a facility provides to deliver care to residents. Other provisions of the quality of care regulations specifically address the individual examples that the surveyors cited in support of this deficiency, and indeed, many were cited under other tags.

Additionally, even under the standard argued by HCFA, where the determination of whether a facility has sufficient nursing staff may be based solely on the quality of care rendered, the ALJ's decision would not be erroneous. The ALJ rejected those deficiency findings under this tag that were based on hearsay, a determination that we have declined to disturb, and HCFA did not challenge the ALJ's decision under tag 246 that no deficiency was established for those examples that were cross-referenced for this deficiency. Thus, all that remains at issue is the surveyor's observation, also under tag 224, that R1's sacral pressure sore worsened. Without presuming to articulate a standard for determining when quality of care issues can give rise to an inference of insufficient numbers of nursing staff, we conclude that a limited example such as this does not permit such a conclusion.

We further find that the ALJ did not err in excluding, as prejudicial to Petitioner, arguments and evidence that HCFA did not present prior to the hearing. At the hearing, HCFA presented expert testimony to the effect that Petitioner had insufficient numbers of staff as compared to the average for California facilities, and argued that the special needs of Petitioner's resident population required additional staffing. Petitioner criticized the expert's calculations of its staff-to-resident ratio on the grounds that he inappropriately segregated and apportioned staff to residents on the basis of a superseded Medicare reimbursement methodology that did not accurately reflect the facility's true patient to resident ratio at the time of the survey.

HCFA has shown no error in the ALJ's holding on this point. Fairness dictates that facilities be apprised, prior to the hearing, of the basis for HCFA's decision, including the legal criteria and the facts; without such information, a facility cannot prepare properly for the hearing. Cross Creek Health Care Center, DAB No. 1665, at 9 (1998). Here, the survey report focused strictly on alleged quality of care problems, and not on the numbers of staff that Petitioner allotted to serve its residents. The mere citation of the regulation in the statement of deficiencies was not sufficient to give Petitioner notice of the expert's calculations, or of HCFA's theory that Petitioner's highly dependent population necessitated that Petitioner provide greater numbers of staff than required by state law or by any other measurement for assessing the adequacy of staffing levels. We have reviewed HCFA's final list of proposed witnesses, dated May 12, 2000 (ALJ case record part III), and we concur with the ALJ that it did not afford Petitioner notice that HCFA's expert witness testimony would present his calculations or otherwise address bases of the deficiency findings not advanced prior to the hearing. Because the ALJ Decision makes clear that the ALJ's finding that Petitioner managed to rebut the expert's calculations and demonstrate that its staffing levels conformed to California law was dicta, we will not discuss the parties' conflicting evidence on these points.

We therefore affirm and adopt the ALJ's FFCL No. 2, that Petitioner complied substantially with the participation requirements cited at tags 224 and 353 of the May 1999 survey. ALJ Decision at 14.

Tag 176

The deficiency findings

The survey alleged that Petitioner knowingly permitted a resident, identified as resident number 21 (R21), to keep at her bedside a bottle of Robitussin honey cough syrup without having conducted an interdisciplinary team (IDT) evaluation, in violation of 42 C.F.R. § 483.10(n). HCFA Ex. 1, at 1-2. Section 483.10 addresses resident rights generally and provides that a facility must protect and promote the rights of each resident, including, at 483.10(n), the right to self-administer drugs, if the IDT has determined that the practice is safe.

The ALJ Decision

The ALJ found no deficiency because he found no reliable evidence that the facility, through its staff, was aware that R21 had the bottle of cough syrup and knowingly permitted her to use it without IDT approval. He rejected allegations in the survey report that the resident had stated that staff was aware of the bottle, which she reported having had for two months, as unverified hearsay. The ALJ found that without knowledge of the cough syrup's presence, the facility had no duty to have the IDT review the resident's ability to self-administer drugs. The ALJ also found that HCFA had failed to make a prima facie case that Robitussin contains ingredients that might be harmful if misused, based on the testimony of Petitioner's expert, Dr. Stone, that the resident could have consumed the entire bottle of Robitussin without experiencing harm. Tr. at 1114; ALJ Decision at 24.

Arguments and analysis

HCFA argued that the ALJ erred in rejecting the surveyor's testimony about the resident's statements, and questioned how the facility, if it was properly monitoring the resident, could have overlooked a bottle of cough syrup for two months. Alternatively, HCFA argued that the regulation requiring IDT team evaluation for self-administration of drugs does not apply only to drugs that the facility knows about. HCFA also charged that the ALJ erred in relying on Dr. Stone's testimony as to the lack of harmful effects, citing a statement from the Physician's Desk Reference (PDR) to the effect that Robitussin cough syrup can cause nervousness and sleeplessness.

We find no error in the ALJ's decision. Elsewhere we have addressed the ALJ's determination not to rely on hearsay resident reports in the absence of other verifying evidence, and we decline to reverse that determination here, where the hearsay purported to reflect the state of mind of third parties, the members of the staff of the facility. The ALJ's assessment of the hearsay was reasonable, particularly considering that the surveyor testified that she asked two staff members, a CNA and a licensed nurse, if they were aware of the bottle of cough syrup, and they both denied knowledge of its presence. Tr. at 668, 679. The fact that another licensed nurse apparently joined the surveyor in a fruitless search through the resident's record for documentation of an IDT assessment regarding self-administration of the cough syrup does not demonstrate any awareness by this nurse that the resident had the cough syrup. There is no indication that this second licensed nurse knew about the bottle of cough syrup before the surveyor brought it to the nurse's attention, or that the surveyor ever asked this nurse about her knowledge of the cough syrup. HCFA's argument that the facility could not have missed the bottle of cough syrup for two months ignores the possibility that the bottle may not have been there for that period. Moreover, the ALJ was aware that the surveyors had cited as a violation of section 483.15(a) allegations that facility staff went through residents' dresser drawers without obtaining the residents' permission to do so.

We also find no error of law in the ALJ's conclusion that the facility could not be found deficient for having not assessed the cough syrup if staff were not aware of its presence. HCFA did not question the notion that the cough syrup had been provided by R21's family. Tr. at 667, 922. A facility cannot conduct an IDT assessment of self-administered medications if it is unaware of their presence. If lack of awareness of a medication possessed by a resident is HCFA's real concern here, then that concern is more appropriately addressed under the quality of care regulations concerning resident monitoring and the prevention of accidents. In light of the ALJ's finding that HCFA did not demonstrate that the facility was aware that the resident possessed the bottle of cough syrup, the surveyor's finding that the IDT failed to approve its use has no relevance.

Finally, HCFA has shown no error in the ALJ's finding that the cough syrup posed no harm to the resident (and that HCFA thus did not establish the potential for more than minimal harm to the resident, as required to terminate a facility or impose CMPs). The ALJ's determination to rely on Dr. Stone's opinion of the cough syrup's potential for harm, rather than the surveyor's, was eminently reasonable, given Dr. Stone's unchallenged credentials as a physician expert in geriatric medicine with experience in the nursing home arena as established in the record. HCFA's argument that the ALJ ignored a page from the PDR that it enclosed as part of 572-page exhibit of excerpts from medical and other literature does not provide a basis for demonstrating error in his decision, as neither the surveyor during her testimony nor HCFA in its post-hearing brief cited this page to the ALJ.⁽¹⁹⁾

In any event, HCFA did not establish how the references to sleeplessness and nervousness demonstrated the potential for more than minimal harm. Moreover, HCFA's contention that Dr. Stone failed to explain his opinion satisfactorily does not show any error in the ALJ's reliance on that opinion, as HCFA failed to cross-examine Dr. Stone on this issue.

Tag 225

The deficiency findings

The survey alleged that Petitioner failed to investigate an alleged instance of neglect, a minor resident injury and three reports of missing resident property, in violation of 42 C.F.R. § 483.13(c). In relevant portion, the regulation requires that--

(2) The facility must ensure that all alleged violations involving mistreatment, neglect, or abuse, including injuries of unknown source, and misappropriation of resident property are reported immediately to the administrator of the facility and to other officials in accordance with State law through established procedures (including to the State survey and certification agency).
(3) The facility must have evidence that all alleged violations are thoroughly investigated, and must prevent further potential abuse while the investigation is in progress.
(4) The results of all investigations must be reported to the administrator or his designated representative and to other officials in accordance with State law (including to the State survey and certification agency) within 5 working days of the incident, and if the alleged violation is verified appropriate corrective action must be taken.

The survey report described the five examples of noncompliance. The first involved an unidentified resident who was alleged to have complained to a CNA that another CNA had refused to take the resident to the bathroom; the surveyor spoke to the CNA who was reported to have received the complaint; he acknowledged the complaint and reported having informed the nurse in charge; administrative staff reported no record of the complaint, and no evidence that it was investigated. The survey report referenced example one of tag 224, which generally involved reports of staff failing to provide timely toileting assistance. The second example, abrasions to the shins of resident number 1 (R1), was noted by a May 12 physician's order. There was no documented cause of the abrasions and the facility's administrator reported that there was no written investigative report on the abrasions; however, a corporate staff member stated that the abrasions were due to the resident's disrobing. Nursing notes disclosed episodes of the resident disrobing or attempt to disrobe; no abrasions were noted in these episodes.

The remaining three examples involved loss of resident property that residents reported during a group meeting with the surveyor. Resident number 13 (R13) was missing dentures, as documented by notes from the DSS and the social services designee in late April. The survey report indicates that the resident reported having lost the dentures sometime before the beginning of the year, although the resident did not remember exactly when the loss occurred. The social services designee stated that he had not done any follow-up, the records showed no follow-up, and no report was initiated in the facility's theft and loss log. Resident number 30 (R30) stated that a new sweater was missing, and that she had reported it to staff but nothing had been done. Resident number 21 (R21) stated she had lost her eyeglasses and case containing $20; there was an entry for the loss of the glasses in the facility's theft and loss log dated December 8, 1998, with no mention of the $20 and no resolution shown. HCFA Ex. 1, at 10-16.

The ALJ Decision

The ALJ rejected the examples as establishing a deficiency under this regulation. As with other deficiency findings, the ALJ rejected all hearsay reports, finding them unreliable for establishing that the complaints were ever made; he found that the unreliability was compounded by anonymous hearsay in the case of the unidentified resident who was reportedly told to go to the bathroom in her bed linens. The ALJ noted that he had rejected HCFA's identification of the resident prior to the hearing as untimely and prejudicial, and in his decision he dismissed HCFA's identification of the staff members for the same reason. ALJ Decision at 26-27.

As to the missing property, the ALJ found that the facility had no duty under the regulation to investigate its disappearance because there was no evidence that the property was misappropriated. Regarding R1, the ALJ found that the facility had supplied a likely cause of the shin abrasions and thus had no obligation to conduct an investigation. The ALJ also observed that the regulation does not require that every minor accident or injury be treated as abuse, neglect, or mistreatment, or every loss or misplacement of property as a misappropriation or theft, requiring a full-fledged investigation, or that a facility investigate closely the possible causes of an injury where there is a reasonable basis for identifying the cause of that injury.

Arguments and analysis

We reverse the ALJ's decision on this deficiency. The ALJ's finding, that no reliable evidence established that the facility received complaints of the missing glasses or of a resident being told to go to the bathroom in her bed linens, does not accurately reflect the record, and thus was not based on substantial evidence.

With respect to the unidentified resident who complained of not being provided assistance to the bathroom, the record before the ALJ demonstrates that Petitioner, through its staff, was aware of the complaint at the time that it was made, and was further aware of the identities of the CNA who received the complaint and another staff member to whom the CNA conveyed the complaint. While the survey report does not identify the CNA who acknowledged taking the complaint of the resident, other evidence demonstrates that the facility knew who the CNA was and was aware of the complaint. The surveyor's notes, which were cited in HCFA's post-hearing brief, identify the CNA, and indicate that another staff member, also identified by name (and who was further identified in the surveyor's notes and hearing testimony as a nurse), recalled receiving the complaint from the identified CNA, and that she had informed her supervisor, who was also identified by name. HCFA Ex. 94, at 11, 13; Tr. at 58. Moreover, the facility's plan of correction, offered in response to this deficiency finding and recorded on the survey report, states that the administrator had spoken with "the C.N.A." regarding the allegation, and that the CNA did not recall the identity of the female CNA about whom the complaint was made. HCFA Ex. 1, at 12. Petitioner did not argue that the CNA did not report a complaint nor did it call the CNA as a witness to dispute the report that he had received the complaint.

Substantial evidence establishes that the facility was generally aware of the fact of the complaint and of the identity of, at the least, the CNA who acknowledged receiving the complaint. Thus, the ALJ's rationale for rejecting this item of the deficiency finding, which we have upheld in respect to other deficiency findings based on unverified hearsay reports of failure to provide toileting assistance, does not apply here.⁽²⁰⁾

The surveyor's testimony and her notes indicate that the nurse relayed the complaint to the Director of Nursing who, when questioned by the surveyor, did not recall the complaint; the plan of correction states that a charge nurse, not identified, as well as the RN supervisor had no knowledge of the CNA's allegation. Thus, the evidence establishes that the facility's chain of command failed to properly record and relay the complaint, which resulted in the facility not conducting the investigation required by the regulation.

Regarding the missing eyeglass case, the ALJ's finding that there was no credible evidence to show that the resident reported the loss of her eyeglass case to anyone does not accurately reflect the record which, as the ALJ noted earlier, showed that Petitioner had recorded the loss of the eyeglass case in its theft and loss records. Petitioner did not argue that this information was incorrect, or dispute the ALJ's observation that the loss was reflected in Petitioner's own records. The ALJ's rationale for rejecting HCFA's evidence of this example does not apply.

Moreover, we do not concur with the ALJ's application of the regulation. His observation that the regulation does not require a facility to treat every minor accident or injury that is suffered by a resident as abuse, neglect, or mistreatment, or to investigate closely the possible causes of an injury where there is a reasonable basis for identifying the cause of that injury, misses the point, as it addresses only accidents and injuries, and not complaints of misappropriation of property or neglect that do not result in injury. The plain language requires a facility to investigate "all alleged violations." Thus, a showing that the facility did not respond appropriately to established reports of the complaint of neglect of toileting needs was sufficient to trigger the regulatory requirement. As to lost property, while the regulation does refer only to misappropriation, and not, say, to a resident's own misplacement of his personal property, some level of investigation must be undertaken for the facility to determine if it is indeed a case of misappropriation. It should not be left to a facility's residents to make a specific allegation of theft, as opposed to a report that property is missing, to prompt a facility to attempt to determine the cause of the loss and the whereabouts of the missing property. Without such a preliminary investigation, there is no way for a surveying agency to determine whether the regulation's requirement of a more formal investigation into misappropriated property has been triggered. A facility that does look into reports of loss and then documents that there is no basis to conclude that the property had been misappropriated will be able to demonstrate that it complied with the regulation.

Petitioner did not dispute HCFA's evidence that failure to provide toileting assistance to residents has the potential for more than minimal harm. Tr. at 367-68, 461-65, 507, 526-27. Thus, we conclude that Petitioner did not comply substantially with the requirements of the regulation, and the noncompliance posed the potential for more than minimal harm.

Regarding the resident with shin abrasions, we concur with the ALJ that it is not necessary for a facility to conduct an investigation into minor injuries for which a likely cause has been established. However, in light of our discussion above, we reverse the ALJ's finding that there was no deficiency under this tag.

Tag 241

The deficiency findings

Under tag 241 in the May survey, HCFA alleged that Petitioner violated the requirement, in the quality of life regulation at 42 C.F.R. § 483.15(a), that a facility must promote care for residents in a manner and in an environment that maintains or enhances each resident's dignity and respect in full recognition of his or her individuality.

The survey report cited seven examples of allegedly deficient care, all of which were rejected by the ALJ; four were specifically disputed by HCFA and are at issue here: (1) three unidentified residents complained, during interviews with residents and family members, that facility staff told them to go to the bathroom in their bed linens rather than offering them assistance to the bathroom; and (2-4) unidentified residents complained, during group and individual interviews, about facility staff members speaking in foreign languages while providing care, which made them feel frustrated, insignificant, insufficient, and as if staff were talking about them. See HCFA Reply Br. at 112.

The ALJ Decision

The ALJ ruled that HCFA failed to establish a prima facie case, finding, as he did with other deficiency findings, that it was not possible to ascertain whether any of the complaints were true or reported accurately, since they were mostly based on unverified hearsay, and many on anonymous hearsay which, he found, further eroded their credibility. The ALJ found no evidence that staff refused to speak with the residents in English if the residents requested that they do so, and no reason to conclude that a resident's dignity was affronted because a staff member misunderstood the resident's request. He also found that the complaints of staff speaking foreign languages did not establish any affront to the residents' dignity, and that the mere use of non-English languages did not, by itself, establish any disrespect for Petitioner's residents. ALJ Decision at 28-29.

Arguments and analysis

HCFA disputed the ALJ's rejection of those findings based on hearsay reports. As to complaints that the facility failed to provide timely toileting assistance, HCFA referred to its arguments under Tag 224 of the May survey. In our discussion of that deficiency and elsewhere, we have upheld the ALJ's decision to reject as unreliable those findings that were based solely on unsubstantiated hearsay allegations for which the surveyors collected no independent verification. We adopt and do not repeat that discussion here.

Thus remaining at issue are the allegations that staff members spoke foreign languages while providing care. HCFA argued that the ALJ further erred in disregarding expert testimony that the psychological effect on nursing home residents of caregivers using foreign languages while providing care is to make them feel like "less than dirt, as not worthy of listening to, not an adult human." Tr. at 345. However, since the ALJ rejected allegations based on unidentified hearsay reports (which included the allegations that staff spoke in foreign languages), he was not required to address the expert's opinion. Since the expert was not a witness to the use of foreign languages, she could not address the ALJ's concerns about the specific factual circumstances in which the residents may have heard staff using foreign languages. Tr. at 343-44. HCFA's citation of several court cases for the proposition that legitimate business considerations may support English-only workplace rules have no bearing here, where there was no English-only rule or policy affecting Petitioner.

Tag 246

The deficiency findings

The survey alleged that Petitioner's care of residents violated 42 C.F.R. § 483.15(e)(1), which provides that a resident has the right to reside and receive services in the facility with reasonable accommodation of individual needs and preferences, except when the health or safety of the individual or other residents would be endangered.

The survey report cited six examples of allegedly deficient care, all of which were rejected by the ALJ; two were appealed by HCFA and are at issue here. First, the survey alleged that Petitioner failed to provide diabetes education and counseling to a resident identified as resident number 19 (R19), prior to the time that the resident was discharged. The surveyor reported being asked by the resident for information about monitoring her blood-sugar level, but that the facility did not take steps to provide information or teach the resident how to test herself until the surveyor asked facility staff about the request. Second, the survey alleged that Petitioner failed to assist resident number 6 (R6) in maintaining self-feeding skills. The resident's plan of care indicated that the staff would assist to prevent a loss of her self-feeding skills; however, during the survey, the surveyor observed that the facility did not encourage the resident to feed herself during lunch and breakfast the following day. HCFA Ex. 1, at 19-25.

The ALJ Decision

The ALJ found that Petitioner demonstrated substantial compliance with the regulation by a preponderance of the evidence. He found that while Petitioner had a duty to make reasonable efforts to prepare R19 for discharge and to give the resident training so she could learn to manage her diabetes, there was no duty to assure that R19 would actually be able to self-manage her diabetes after discharge. He noted that Petitioner's ability to train the resident was limited by her conditions including pneumonia, and also found that HCFA's argument that Petitioner failed to train the resident in managing her diabetes was based on the incorrect belief that her diabetes was newly diagnosed.

Regarding R6, the ALJ found the surveyor's observations that the resident was fed without being given encouragement did not mean that Petitioner's staff failed to accommodate her needs, given that she suffered from significant cognitive impairment, needed extensive assistance to perform activities, and at times had to be physically assisted to eat. ALJ Decision at 31.

Arguments and analysis

On appeal, HCFA did not take issue with the ALJ's statement of the extent of Petitioner's obligation to train R19 in diabetes management. HCFA argued instead that the ALJ misunderstood the basis for the deficiency finding, which was that the facility failed to make a meaningful effort to provide the resident with needed information and skills. HCFA disputed the ALJ's conclusion that the training that Petitioner did provide to the resident was adequate to comply with the regulation, in light of her conditions that, he found, limited her ability to receive instruction.

As we have stated above, the Board's role in reviewing an ALJ decision is to determine whether the ALJ's findings of fact are supported by substantial evidence, and whether his conclusions of law are correct. Here, there is substantial evidence in the record to support the ALJ's finding that the facility did not fail to provide adequate training. The survey report reflects that Petitioner provided training to the resident in monitoring her blood sugar, and the record contains evidence supporting the ALJ's findings as to the limitations imposed by the resident's physical condition. HCFA's expert witness, Dr. Feinsod, noted at the hearing that the facility did provide training in diabetes management to the resident. Tr. at 212. As the ALJ noted, Dr. Feinsod's opinion that this training was inadequate was clearly conditioned on his incorrect belief that she was a newly-diagnosed diabetic. Tr. at 209, 212-13, 262. Upon being informed that R19 had a history of diabetes, Dr. Feinsod opined that the resident presented "a wonderful opportunity" for the long-term care facility to "seize the moment" to educate the resident on diabetes. Tr. at 266. His testimony, however, does not establish that a facility's failure to seize "a wonderful opportunity" rises to the level of a violation of the regulation. Moreover, HCFA's arguments that the facility could have provided earlier and more thorough training do not establish a violation of the regulatory standard.

We also find no error in the ALJ's determination that HCFA failed to demonstrate that Petitioner was deficient in allegedly failing to adequately encourage R6 to feed herself. This deficiency was based on Petitioner's staff feeding the resident themselves, instead of providing her with "cuing" and direction so that she could feed herself; the survey also reported that the facility failed to use a plate guard.⁽²¹⁾ Substantial evidence supports the ALJ's findings that the resident needed assistance eating but could sometimes feed herself, and that she suffered from significant cognitive impairment. Tr. at 893-94; Petitioner Ex. 31, at 46, 55, 57, 92, 128, 136, 143. Thus, the ALJ did not err in concluding that the fact that the resident was observed to be fed on one occasion without being cued did not establish that Petitioner's staff failed to accommodate the resident's needs. Moreover, the surveyor testified that staff did provide some cuing at both meals she witnessed, with more cuing than feeding at one of the meals. Tr. at 516-18. HCFA did not establish that the requirement to accommodate the resident's needs, coupled with the care plan's references to cuing, required the facility to provide cuing exclusively and not offer other assistance with eating. As noted elsewhere, the facility is also required to assure that its residents receive adequate nutrition. We also find that the fact that the ALJ stated that the surveyor witnessed one meal, when she testified to witnessing two, is harmless error. ALJ Decision at 31.

Tag 281

The deficiency findings

Under tag 281, the survey alleged that services provided to three residents did not meet professional standards of quality, as required by 42 C.F.R. § 483.20(k)(3)(i).⁽²²⁾ At issue before the Board are allegations that, with respect to two residents, Petitioner--

• Failed to document that a registered dietician had assessed the dietary needs of R19, a diabetic who was also referenced under tag 241. While this resident was on a "1500 ADA calorie diet," the survey alleged that there was "no documented evidence that a registered dietician had ever assessed this newly diagnosed insulin dependent diabetic resident."
  
  
• Failed to follow its policy and procedure for a resident's refusal of medication. The survey alleged that Petitioner failed to notify R5's personal physician that this diabetic resident refused at least one of the two types of insulin he was receiving 30 times in March 1999, ten times in April 1999, and 14 times in May 1999, according to Medication Administration Records (MARs). The survey referred to a May 18 statement from a licensed nurse that the resident's attending physician should be notified of refusal to take a prescribed medication. The survey further reported that the facility's policy called for the director of nursing to be notified of three or more medication refusals, but that the director of nursing stated during an interview on May 20 that she had not been notified of the resident's refusal of medication; she described notifying the physician as a judgment call and indicated that the physician would be notified if the resident refused insulin.

HCFA Ex. 1, at 31-35.⁽²³⁾

The ALJ Decision

The ALJ found that the evidence established that Petitioner complied with the requirements of the regulation. The ALJ found that HCFA's position that R19 should have received a dietician's assessment was premised on the incorrect belief that the resident was newly diagnosed with diabetes, and he noted that the resident was receiving a 1500 calorie diet. Citing testimony from Petitioner's expert witness, Dr. Stone, the ALJ found that Petitioner's care of R5 was not deficient because R5's physician was aware of his behavior of refusing insulin, and that there was no need to notify the physician of each instance of refusal. ALJ Decision at 33-34.

Arguments and analysis

Regarding R5, HCFA argued that the ALJ erred in concluding that Petitioner was in compliance because the resident's physician was aware of R5's refusals of insulin. HCFA argued that Petitioner's efforts to notify the resident's physician were inadequate in light of the frequency of, and potential harm from, the resident's refusal to take his insulin. The ALJ erred in relying on Dr. Stone's testimony that the physician would have been aware of the refusals, HCFA argued, because Dr. Stone was unfamiliar with the frequency of those refusals. Dr. Stone testified that the resident refused insulin at most twice a week, whereas HCFA introduced evidence that R5 refused insulin "about" 34 times in March, 16 times in April, and 18 times in May 1999.⁽²⁴⁾ HCFA Br. at 144, citing Petitioner Ex. 30, at 327, 337, 341, 351, 361, 365, 369, 377, 381, 393; Tr. at 201-02, 1152.⁽²⁵⁾

The survey report, like HCFA's request for review, indicates that the basis for the deficiency was Petitioner's alleged failure to notify the resident's attending physician of the resident's refusals of insulin. However, the record contains substantial evidence supporting the ALJ's finding that the physician was aware of the refusals. Facility records documenting each refusal of insulin (and R5's beliefs that on those occasions he felt that he did not need insulin or that his blood sugar was low) show that the facility notified R5's attending physician four times during May 16 through May 18, the first day of the survey, and that the physician was aware of the refusals. HCFA Ex. 13, at 61, 69; Tr. at 201-02, 258-59. The allegation in the survey report that the facility did not notify the physician was incorrect. Although, as HCFA argued, the records show only one notification of the attending physician prior to May, during March, they still establish that Petitioner on its own initiative recognized and corrected this basis for the deficiency finding prior to the survey, and supported the ALJ's conclusion that Petitioner demonstrated substantial compliance with the regulation. HCFA Ex. 13, at 58.

The ALJ's finding was also supported by Dr. Stone's testimony to the effect that the resident's treating physician would have been aware of the resident's behavior because treating physicians are required to see their patients monthly and review their records on a monthly basis. Tr. at 1122, 1152. Dr. Feinsod's testimony, that physicians would probably not look at the particular records documenting the refusals, was based on speculation as it did not indicate that the professional standards of practice for attending physicians would have been satisfied with a cursory review that omits the records at issue here. Tr. at 205-06. Consequently, we do not agree with HCFA that the ALJ's failure to address Dr. Feinsod's testimony, by itself, constitutes reversible error.

Dr. Stone's apparent unfamiliarity with the frequency of the resident's refusals of insulin also does not demonstrate error in the ALJ's reliance on his testimony. HCFA did not dispute Dr. Stone's opinion that there is a responsibility to notify physicians if there is a consistent pattern of refusals over several days (as opposed to a situation where the refusals are "an episodic issue"). Tr. at 1122. During May, the facility complied with that standard by informing the physician four times in the first two-and-a-half weeks of R5's refusals, which Dr. Feinsod characterized as intermittent, and not continuous. Tr. at 260-61. Substantial evidence supports the ALJ's finding that the physician was aware of the resident's practice of intermittently refusing his insulin.

Regarding R19, our analysis of the deficiency as to this resident under tag 246 informs our decision here. As there, we find that the ALJ could properly disregard the testimony of HCFA's expert dietician because it was premised on the incorrect belief that the resident was a newly-diagnosed diabetic. HCFA disputed that reasoning as a basis for finding that the facility adequately assessed the resident's dietary needs, arguing that the resident was actually a newly diagnosed insulin-dependent diabetic. HCFA Br. at 135, citing HCFA Ex. 15, at 29, 30, 38. However, the expert's reasoning made no such distinction, and assumed that the resident was newly diagnosed with diabetes, which was not the case.⁽²⁶⁾ Tr. at 209-10, 212-13, 262-66. Dr. Feinsod's testimony indicated that the need for dietary education and counseling is substantially greater in a patient who is "new onset" and "has never had diabetes before." Tr. at 263. Thus, the ALJ was justified in discounting the opinion of the dietician in finding that the facility was not deficient with respect to this resident's needs. The fact that the resident was on a "1500 ADA calorie diet" recommended for diabetics also tends to support the ALJ's determination that Petitioner was not out of substantial compliance with the regulation. HCFA Ex. 1, at 32; HCFA Ex. 15, at 27.

HCFA also argued that the ALJ failed to clarify with respect to R19 whether he found that HCFA had not established a prima facie case, or whether Petitioner had demonstrated substantial compliance with the regulation. While the ALJ found that HCFA had not made a prima facie showing of why additional involvement by a dietician was necessary, he also considered evidence and argument introduced by Petitioner and concluded that the weight of the evidence established that Petitioner complied with the requirements of the regulation. His use of the phrase "prima facie," though not technically accurate with respect to his ultimate conclusion on the deficiency allegation for this resident, was harmless error, in light of the ALJ's overall conclusion that Petitioner had demonstrated substantial compliance with the regulation.

Tag 316

The deficiency findings

The survey alleged that Petitioner's care of two residents identified for the May survey as resident number 25 (R25) and resident number 6 (R6) violated the requirement of 42 C.F.R. § 483.25(d)(2) that, based on the resident's comprehensive assessment, the facility must ensure that a resident who is incontinent of bladder receives appropriate treatment and services to prevent urinary tract infections and to restore as much normal bladder function as possible.

In both cases, the survey alleged that the facility failed to provide bladder retraining to two residents who had been assessed upon admission as capable of participating in a bladder retraining program. In the case of R25, who was diagnosed with terminal pancreatic cancer and was in the facility from February 1 - 23, 1999, the survey alleged that the resident remained incontinent and that no attempt at retraining was made. In the case of R6, the survey alleged that the facility's records differed over whether the resident was incontinent, with the resident being described as continent on minimum data set (MDS) assessments in 1998 and 1999 and a bowel and bladder assessment in February 1997, but as incontinent on an MDS dated March 17, 1999. Facility staff reported that the resident was mostly incontinent but would sometimes ask to be taken to the bathroom. HCFA Ex. 1, at 42-45.

The ALJ Decision

The ALJ found no deficiency because he found that bowel and bladder retraining would have been futile, and that Petitioner's care posed no potential for more than minimal harm to the residents. In both cases, he found that the facility's assessments of the residents as good candidates for retraining proved incorrect. He found no potential for harm in Petitioner's failure to enroll R25 in a bowel and bladder retraining program because the resident was terminally ill with pancreatic cancer and was suffering from severe pain, and that attempting to retrain the resident would have been cruel under the circumstances. He found that R6 was a demented individual suffering from psychosis and depression who constantly requested staff to assist her with use of the bathroom regardless whether the resident actually needed to use the bathroom, and who lacked the cognitive ability to participate in such a program. ALJ Decision at 37.

Arguments and analysis

In disputing the ALJ's finding that the residents would not have benefitted from bowel and bladder training, HCFA relied primarily on the testimony of its expert, Dr. Schnelle, a behavioral psychologist and expert in incontinence management. However, the substance of Dr. Schnelle's testimony does not support the deficiency or his conclusion on the ultimate legal issue, that Petitioner did not provide appropriate care and services to restore as much of the residents' normal bladder function as possible. Tr. at 599.

Dr. Schnelle testified about a technique for reducing urinary incompetence called a timed toileting (or timed voiding, prompted voiding, or scheduled toileting) program, which entails offering residents the opportunity to be assisted to the bathroom every two hours. For each resident, the program is initiated with a two-day assessment period to determine the ratio of instances of successful urination to episodes of incontinence; residents who urinate successfully two-thirds of the time are considered candidates who will likely benefit from the timed toileting program. Tr. at 584-89.

However, the survey cited a deficiency for failure to provide the retraining programs for which the residents had initially been assessed as likely candidates; a retraining program involves strengthening the muscles used to maintain continence and is not the timed toileting program which Dr. Schnelle addressed. HCFA Ex. 1, at 42-45; Tr. at 590. Dr. Schnelle's views on the treatment of urinary incontinence differed from those of the surveyor: while the survey report refers to the facility's failure to provide bladder retraining, and the surveyor testified that R25 should have been on a bowel and bladder retraining program, Dr. Schnelle testified that there is very little evidence that bowel and bladder retraining programs work in nursing homes. HCFA Ex. 1, at 42-45; Tr. at 546-47, 589. Dr. Schnelle clarified that his belief that all residents who are not comatose are appropriate candidates for a timed toileting program does not extend to bladder retraining programs. Tr. at 597-98. The ALJ could reasonably disregard his testimony because it did not address the cited circumstances underlying the deficiency or Petitioner's argument that the initial assessments of the residents as candidates for bladder retraining programs were mistaken.⁽²⁷⁾ The ALJ's failure to discuss Dr. Schnelle's testimony was not reversible error.

HCFA, citing its SOM and clinical practice guidelines of this Department's Agency for Health Care Policy and Research (AHCPR), argued that the timed toileting program discussed by Dr. Schnelle was incorporated into the regulatory requirement at section 483.25(d)(2). Since the survey and the surveyor's testimony instead addressed retraining programs, however, HCFA's argument does not demonstrate error in the ALJ Decision. Additionally, HCFA did not accurately represent Dr. Schnelle's testimony. HCFA cited language from the AHCPR guidelines for urinary incontinence referring to "habit training," defined as "toileting scheduled to match the patient's voiding habits," and then cited Dr. Schnelle's testimony as establishing that habit training, like the timed toileting program he discussed, consists of "offering assistance to someone on a regular basis." HCFA Br. at 153-54, citing HCFA Ex. 85, at 41; Tr. at 590. However, Dr. Schnelle did not mention or discuss any technique called habit training. The description of habit training in the HCFA exhibit -- providing assistance to match a resident's voiding habits -- more closely resembles prompt answering of call light requests for assistance than it does the techniques promoted by Dr. Schnelle. Here, aside from one surveyor's report of R6 waiting 15 minutes before being taken to the bathroom, which was the subject of a different deficiency finding, there were no allegations that toileting was not provided to these residents.

Additionally, the ALJ's determination that the two residents in question would not have been suitable candidates for bladder retraining was supported by substantial evidence. The evidence indicated that R6 indeed suffered cognitive deficits and chronically cried out for help from Petitioner's staff as an attention-getting device. Tr. at 525, 846-47, 893-94, 933, 1062-63. Moreover, the surveyors saw facility staff provide the resident with toileting assistance and did not state that they had seen evidence that she was urinating in the bed. Tr. at 509-10. Testimony from Petitioner's witnesses indicated that the facility's assessment of R25 as being a candidate for bladder retraining was not appropriate in light of her condition of terminal pancreatic cancer. Tr. at 932, 1063-64.

Conclusions on the May 1999 Survey

Petitioner did not challenge any of the ALJ's determinations that sustained four of HCFA's deficiency findings from the May survey. On appeal, we reverse the ALJ's finding reversing the deficiency noted under tag 225. Accordingly, we revise the ALJ's FFCL No. 3 (ALJ Decision at 23), to read as follows:

As of the May 1999 survey, Petitioner manifested five non-immediate jeopardy level deficiencies.

C. The July 1999 Survey

Representatives of the California Department of Health Services surveyed Petitioner during July 13 - 16, 1999. The report of the July survey alleged that Petitioner was not in compliance with 11 requirements for participation in the Medicare program. The ALJ sustained four of the 11 deficiency findings and reversed the remaining seven, and HCFA appealed six of those deficiency findings to the Board. We reverse the ALJ's decision as to two of those six deficiency findings and sustain his decision reversing the remaining four.

Tag 176

The deficiency findings

The survey alleged that Petitioner permitted a resident, identified as resident number 8 (R8), to keep at her bedside several medications, including a Vanceril inhaler; two types of eye drops (Refresh and Levobunolol), and antacid tablets, without having conducted an IDT evaluation, in violation of 42 C.F.R. § 483.10(n). HCFA Ex. 29, at 7-9. As noted above, section 483.10 addresses resident rights generally and provides that a facility must protect and promote the rights of each resident, including, at 483.10(n), the right to self-administer drugs, if the IDT has determined that the practice is safe.

The ALJ Decision

The ALJ found that HCFA had not made a prima facie case of a deficiency because, although Petitioner's staff initiated but did not complete a self-administration evaluation, there was no evidence to show that the resident could be harmed by improper self-administration of the medications in question. The ALJ found that the surveyor did not offer any opinion as to whether the particular medications at issue (which he listed as Vanceril, Refresh, or Levobunolol) could have harmful effects if overused or underused, nor did HCFA offer any other evidence supporting this position. ALJ Decision at 44.

Arguments and analysis

HCFA argued that the ALJ erred in finding that it had provided insufficient evidence about the potential for harm to this resident to establish a prima facie case for the alleged deficiency. HCFA quoted surveyor testimony about the potential for this resident to either overuse or fail to use the medications prescribed for her by her physician, as well as the potential for interactions if medications were not given correctly. Tr. at 706. In addition, HCFA noted that the surveyor cited the potential for other residents to obtain access to and misuse these bedside medications. Tr. at 708. HCFA contended that the ALJ erred in reading the regulation as requiring a showing of what particular harmful effects the medications in question might have, as it is implicit in the regulation that unassessed self-administration of a medication is potentially harmful either to the resident or to others. HCFA Br. at 157-58.

We conclude that the ALJ erred in determining that HCFA did not make a prima facie case with respect to this deficiency. Although we upheld the ALJ's determination that HCFA did not make a prima facie case with respect to this tag in the May survey, the situation presented by the July survey is materially different. In this instance, the presence of the medications found at bedside was certainly known by Petitioner, and some of the medications were prescription rather than over-the-counter medications. The fact that a medication is only available by prescription is a strong indication that its use should be closely monitored. In addition, one may infer from Petitioner's initiation of the evaluation process that Petitioner not only knew that the resident had these medications but that it considered itself required to comply with this regulation. Although it would be logical for the IDT to take into account in making its evaluation the potential harmful effects of the medication that is proposed for self-administration, neither the ALJ nor Petitioner provided a rationale for interpreting this regulation as requiring an IDT evaluation only when there are potential harmful effects. Moreover, the preamble to the final regulation makes it clear that the regulation as finally adopted includes a presumption against self-administration, despite the overall policy in favor of residents' rights to self-determination, because commenters pointed out the inherent potential danger to other residents in the facility. 56 Fed. Reg. 48,837-38 (1991).

As to whether Petitioner demonstrated substantial compliance with this regulation, Petitioner did not deny that an IDT evaluation as to the safety of these medications was initiated but not completed. Consequently, the failure to comply with the regulation was admitted. Finally, as to whether there was a potential for more than minimal harm as a result of this deficiency, we find that there were several potential risks to this resident that were cited by the surveyor. Among those potential harms were the risk of misadministration (there were instructions that the resident was to rinse her mouth after using the Vanceril) and lack of records of administration -- the prescribing physician would not know if the prescription eye drops for the resident's glaucoma or the Vanceril for her shortness of breath were effective because there was no record of whether they were being administered on the schedule prescribed or even being administered at all. Tr. at 706-07. Petitioner did not offer rebuttal evidence, as it did in the case of the Robitussin, that the unmonitored use of these medications did not have the potential for harm. We therefore reverse the ALJ's Decision and uphold the HCFA deficiency finding for tag 176 for the July survey.

Tag 202

The deficiency findings

The survey alleged that the facility violated 42 C.F.R. § 483.12(a)(3) by transferring resident number 16 (R16) to another facility without ensuring that the resident's physician was involved with and agreed with the transfer. HCFA Ex. 29, at 9-11. Section 483.12(a)(3) requires that when a facility transfers or discharges a resident for specified reasons (including, as applicable here, where the resident poses a threat to other residents), the clinical record must contain a physician's documentation that the transfer or discharge is necessary.

The ALJ Decision

The ALJ found that the preponderance of the evidence established that Petitioner complied with the regulation. He found that R16's record documented that the resident's physician was consulted and agreed with the decision to transfer the resident because the transfer was necessary for the resident's welfare and Petitioner's facility could not meet the needs of the resident, who needed to be in a dementia unit. The ALJ rejected HCFA's argument that the documentation was unreliable because the physician's signature was undated. ALJ Decision at 44-45.

Arguments and analysis

Substantial evidence supports the ALJ's determination. The record includes a "physician's discharge summary" bearing the physician's signature, and containing the information as described in the ALJ Decision. Petitioner Ex. 43, at 5. HCFA's argument that there is no evidence that the physician took part in evaluating the transfer is thus incorrect. HCFA Reply Br. at 123.

HCFA's request for review consists of assertions that the facility violated requirements that were not shown to be applicable here and that were not cited in the survey. HCFA pointed to the absence in the nurses' and social service notes of any record of the physician's involvement in the transfer decision, which otherwise reflected the facility's communications with the resident's daughter about the transfer. HCFA also argued that the physician's signature on the form was undated; the physician's consent was not discussed in the records of a psychiatrist's consultation, which did not refer to the transfer; and, the facility failed to give the resident's family 30 days advance notice of the transfer, as required by 42 C.F.R. § 483.12(a)(5)(i).

None of these concerns demonstrate any error in the ALJ's determination. The subsection of the regulation that Petitioner was charged with violating does not specify the form that the physician's documentation must take, nor does it require that the physician's consent be reflected in the nurses' notes, or even that his consent be dated. Thus, the ALJ's finding that the physician executed his statement "at or after the time of discharge" (based on his observation that the discharge summary records the dates of the resident's stay in Petitioner's facility) does not diminish its validity under the regulation or render his finding defective. As the ALJ observed, the timing of the statement suggests that the physician had an opportunity to review and assess all of the pertinent facts relevant to the resident's transfer. A statement in the social services notes on July 8, 1999, that the discharge order had been received, offers corroboration of the physician's involvement prior to discharge. Petitioner Ex. 43, at 271.

Petitioner was not charged with violating the separate requirement that it provide notice of the transfer. 42 C.F.R. § 483.12(a)(4). The record documents that the facility discussed with the resident's daughter the advisability of transferring R16 to a smaller facility specializing in Alzheimer care, due to her dementia-related behaviors, which included intrusions into other residents' rooms and yelling at other residents and staff, that the daughter agreed with the transfer more than a month in advance, and that the daughter was then involved in the effort to identify an appropriate facility and arrange financing. HCFA Ex. 36, at 13, 14, 16-22.

The regulation at issue simply requires that the reason for transfer should be documented in the medical record by the physician. Here, the physician's consent was documented. Thus, the ALJ's determination was supported by substantial evidence.

Tag 204

The deficiency findings

The survey alleged that the facility violated the requirement at 42 C.F.R. § 483.12(a)(7) that a facility must provide sufficient preparation and orientation to residents to ensure safe and orderly transfer or discharge from the facility, with respect to two residents, R16 and R15.

Regarding R16, whose transfer to another facility was also the subject of a deficiency finding under tag 202, the survey report details the communications between facility staff and the resident's family (daughter, nephew) concerning the facility's recommendation that the resident be transferred to a smaller Alzheimer facility because of her dementia-related behaviors, as well as the efforts to locate a suitable facility. The survey report also reflects a conversation between the surveyor and the daughter after the transfer, during which the daughter expressed surprise that the facility that received the resident, also owned by Petitioner's parent corporation, was not certified to receive Medi-Cal funding (California's Medicaid).

As to R15, the survey report primarily addresses the resident's acute care hospitalization on June 12, two days prior to R15's discharge, for complaints of pain upon breathing. Prior to the hospitalization, a facility nurse had noted the presence of a tube-like object under the resident's skin alongside the rib cage. The survey alleged that the facility failed to obtain information from the hospital about whether any follow-up was needed, and failed to document that facility staff informed the resident or family regarding follow-up with a physician or about any special precautions that the resident needed to take. HCFA Ex. 29, at 11-17.

The ALJ Decision

The ALJ found that HCFA failed to establish a prima facie case of a deficiency. He found that the survey report did not allege that Petitioner had failed to orient R16 for discharge and questioned whether the facility could have provided any useful orientation, given R16's dementia. He also found that the survey provided no evidence that Petitioner's staff failed to discuss the transfer with the resident's daughter, and no evidence that the transfer was not ultimately accepted by the daughter. As to R15, the ALJ found that the survey report failed to show that any follow-up with the physician was needed or that there were any special precautions that the resident needed to take. The ALJ cited testimony by Petitioner's witnesses that the tube-like object noted was related to surgical bypass clips that did not require any follow-up. ALJ Decision at 45-46.

Arguments and analysis

We conclude that, as to R15, the survey report and HCFA's evidence do not indicate any failure to comply with the regulation. The survey report seems geared toward the discovery of the tube-like object under the resident's skin; however, nothing in HCFA's evidence indicates that any particular follow-up was needed related to the tube-like object. While the resident was seen in a hospital emergency room during the afternoon and evening of June 12, 1999 and was diagnosed with pleuritic pain secondary to a "chest tube," the episode of pain was evidently resolved, and the resident had no further complaints of pain upon returning from the hospital or during the remaining two days until being discharged from the facility. HCFA Ex. 37, at 8, 15-18. As the ALJ noted, it appeared that the tube-like object was actually related to surgical "clips" from a coronary artery bypass graft operation the resident had undergone in 1978. Tr. at 980-81, 1057-58, 1060-61; HCFA Ex. 37, at 9. HCFA's evidence also establishes that the facility did provide orientation to the resident prior to discharge. Licensed nurses' progress notes show that discharge plans were discussed with the resident and his wife the day prior to discharge, and that on the day of discharge the facility provided teaching with respect to the resident's medications, and that the resident verbalized understanding and stated that his wife would help him. Additional teaching was provided to the wife when she arrived to pick up the resident. HCFA Ex. 37, at 18. Thus, the ALJ's finding that HCFA failed to show that the facility was deficient with respect to this resident is supported by substantial evidence.

Regarding R16, we find that the ALJ did not commit error in finding that HCFA failed to establish a prima facie case of a deficiency. The survey report for this deficiency (and the deficiency allegation regarding this resident under tag 202) seems to reflect a belief that the facility pressured the resident's family into agreeing to an inappropriate transfer; this implication was made by the surveyor, who testified that she determined through the social service notes that one of the family members (identified through the testimony and the record as the resident's daughter) "did not want to really transfer" the resident out of the facility. Tr. at 553-54; HCFA Ex. 29, at 12; HCFA Ex. 36, at 17. The survey details the contacts between the facility and the resident's daughter, the facility's belief that the resident would be better served in a smaller facility that specialized in Alzheimer treatment, the daughter's concern about finances, and her apparent surprise that the resident had been moved to a facility not certified for Medi-Cal. HCFA Ex. 29, at 11-15. However, the surveyor ignored social service notes indicating conversations with the resident's daughter stating that she would check with the state's department of social services about Medi-Cal funding and call the social services designee back; later that same day, the daughter called the facility and stated that it was okay to transfer the resident. HCFA Ex. 36, at 22. The survey fails to allege directly at any point that the facility failed to provide the resident with any orientation for the move. Psychosocial evaluation follow-up records among HCFA's exhibits show that on the day of discharge the social service designee and the activity director spoke to the resident with a communication board and that the resident was "fine" with the discharge. Id. Thus, substantial evidence supports the ALJ's determination.

Tag 241

The deficiency findings

Under tag 241 in the July survey, HCFA alleged that Petitioner failed to meet the requirement in the quality of life regulation at 42 C.F.R. § 483.15(a) that a facility must promote care for residents in a manner and in an environment that maintains or enhances each resident's dignity and respect in full recognition of his or her individuality.

The deficiency finding cited four examples. The first two are similar to those cited under this tag during the May survey: eight of 17 residents in a group interview complained that CNAs speak to each other in a foreign language while rendering care, making them, the residents, feel as if they were not in the room, and expressed frustration over CNAs not understanding them, with one resident reporting having asked for a toothpick and being given a cup. In the third example, an unidentified resident was observed calling for help from her room over a period of ten minutes; during that time, four CNAs passed by the resident's room without offering assistance and two licensed nurses were seen at the nursing station, which was twenty feet from the resident's room. When after ten minutes the CNA assigned to care for the resident asked the resident what she needed, the resident stated that her mouth was dry, and requested and received water. In the fourth example, when male resident R10's shoes were removed, the surveyor observed that he was wearing socks labeled with the name of a female resident. HCFA Ex. 29, at 17-19.

The ALJ Decision

The ALJ found that Petitioner complied with the regulation. As in the May survey under this tag, the ALJ rejected the two first examples, involving CNAs speaking foreign languages, as based on unverified hearsay and not credible. As he had earlier, the ALJ found no evidence that staff refused to speak with the residents in English if the residents requested that they do so, and no reason to conclude that a resident's dignity was affronted because a staff member misunderstood the resident's request.

The ALJ found that the resident who called out for ten minutes before being helped was an individual who cried out constantly for help, and that Petitioner's staff had developed a care plan for this behavior and were checking the resident at reasonable intervals to assure that the resident's needs were met. Finally, the ALJ found no persuasive evidence that Petitioner's staff affronted the dignity of the resident who was seen wearing socks with a woman's name, noting that the survey report did not allege that the name of the female resident was visible while the resident was wearing shoes, or that the resident complained about being given the wrong pair of socks. ALJ Decision at 47-48.

Arguments and analysis

We sustain the ALJ's decision on this deficiency.

Earlier in this decision, we addressed and declined to disturb the ALJ's determination to reject deficiency findings based on anonymous hearsay, as well as his determination that such complaints about staff members speaking in foreign languages did not establish a deficiency. We adopt our analysis on identical allegations under this deficiency tag in the May survey, and we do not repeat it here.

As to the third example, the resident whose calls for help went unanswered for ten minutes, HCFA argued that the ALJ's determination was discredited by his summary of the survey findings, which, HCFA argued, distorted what actually occurred. HCFA cited the surveyor's testimony that it was she, and not the facility staff, who spoke to the resident and determined that the resident wanted water, while, according to HCFA, facility CNAs stood by doing nothing. HCFA Br. at 169. HCFA also criticized the ALJ's finding that the resident often cried out for help as having been based on the testimony of a Petitioner corporate official without first-hand knowledge.

The surveyor's testimonial account of the interaction with the resident differs markedly from that recorded in the survey report. While the surveyor testified that it was she, and not a CNA, who asked the resident if she wanted a drink of water (because she noticed that the resident's mouth was dry), the survey report states that "[w]hen the CNA asked the resident what she needed, the resident was able to state her mouth was dry and requested water." Tr. at 686-87; HCFA Ex. 29, at 19. This is not an instance of a surveyor supplying details of an incident that was only summarized in the survey report; rather, her testimony contradicts the report. Because of this inconsistency, the ALJ could reasonably disregard the surveyor's hearing testimony and instead credit the contemporaneous account in the survey report.

HCFA also repeated the hypothetical question that the surveyor asked during the hearing as to what would have happened if this resident, when she called out for help, had been choking or was being choked. Tr. at 688. There is nothing in the surveyor's testimony or in the survey report to suggest that the surveyor, having heard the resident's call for help, had any apprehension that this resident was choking, was being attacked, or was in any other kind of acute distress. This speculation demonstrates no error in the ALJ Decision. HCFA's criticisms of the ALJ and Petitioner for "dismissing an elderly resident as a 'yeller'" also do not demonstrate any error in his decision on this point. HCFA Br. at 170-71. Substantial evidence in the record supports the ALJ's characterization of the resident, who was identified in the May survey as R6, as an individual suffering from dementia who repeatedly cried out for help as an attention-getting device. Tr. at 687. This evidence includes testimony of two witnesses that was verified by facility records, which refer to dementia with a history of psychosis, constant yelling, behavioral agitation, repetitive calling out for help, repetitive anxious complaints, and persistent attention seeking. Tr. at 525, 846-47, 893-94, 933, 1062-63; Petitioner Ex. 31, at 46, 55, 57, 92, 128, 136, 143. HCFA's allegation that one of the witnesses was biased because of her affiliation with Petitioner provides no basis for reversing the ALJ's determination.

A conflict between the testimony of the surveyor who wrote this deficiency finding and the actual allegation in the survey report pervades the fourth example, the resident who was observed wearing socks with a female name written on them. The survey report, as the ALJ noted, did not allege that the female name was visible, and instead stated that the socks labeled with the female name were seen when the resident's shoes were removed, after he requested being helped back into bed. HCFA Ex. 29, at 19. During the hearing, the surveyor stated that the female name was located on top of the resident's feet and was "more obvious" when the shoes were removed. Tr. at 684-85. Given the discrepancy between this surveyor's testimony and the observations she recorded in the survey report for both this example and the prior example, the ALJ was justified in discounting her testimony and assessing HCFA's case based on the allegations as contained in the survey report, in which the female name was not seen until the socks were removed. Moreover, the surveyor's contemporaneous notes do not report the socks with the woman's name until the resident was placed "back in bed," consistent with the survey report allegation that the name was seen only when the resident's shoes were removed. HCFA Ex. 39, at 5. Thus, the ALJ was justified in finding no violation of the regulation here.

Tag 316

The deficiency findings

The survey alleged that Petitioner's care of two residents identified for the July survey as resident number 5 (R5) and resident number 10 (R10) violated the requirement that, based on the resident's comprehensive assessment, the facility must ensure that a resident who is incontinent of bladder receives appropriate treatment and services to prevent urinary tract infections and to restore as much normal bladder function as possible. 42 C.F.R. § 483.25(d)(2). The survey alleged that the facility assessed both residents as candidates for bladder training but then failed to provide the training.

The survey alleged that R10 had been admitted on July 8, assessed as a candidate for bowel and bladder retraining July 9, and that a licensed nurse stated during an interview on July 14 that the resident was not on a retraining or toileting program and described the resident as having dementia and being disoriented and confused. On July 14, the resident was observed protesting being diapered, and was able to urinate in a bedpan when it was offered. The survey alleged that the facility failed to have a care plan that addressed R10's incontinence, and failed to take measures to assure that the resident received appropriate treatment and services to restore as much normal bladder function as possible. HCFA Ex. 29, at 28-30.

Regarding R5, the survey report alleged that the resident was admitted on June 18 and was deemed a candidate for bowel and bladder retraining, but that the records did not address a retraining program. The survey report alleged that a notation dated July 15 stating that the resident refused to participate in the retraining program was entered into the clinical record while the surveyor was interviewing the director of nursing. The survey report further alleges that the director of nursing "tried" to say that the resident had been placed on a retraining program, but had no documentation. HCFA Ex. 29, at 24-28.

The ALJ Decision

The ALJ found that Petitioner was not deficient, on the grounds that it would have been futile to attempt bladder retraining of the residents; he found that R5 refused bladder retraining when it was offered, and that R10 was too demented to have benefitted from bladder retraining. ALJ Decision at 50.

Arguments and analysis

We conclude that the ALJ's findings regarding R10 were not supported by substantial evidence. Consequently, we reverse his determination with respect to this resident.

The ALJ's findings were based on the testimony of Ms. Redden, Petitioner's senior vice president of clinical compliance, but do not reflect the entirety of her testimony regarding this resident. Ms. Redden testified generally that the facility's initial assessment that a resident may potentially benefit from bowel and bladder retraining is conducted within 14 days after admission and is sometimes proven incorrect by subsequent information obtained over the course of the resident's stay. Tr. at 931-32. She described R10 as having dementia with socially inappropriate behavior as well as long and short-term memory losses. However, she then confirmed that the resident did have the ability to be "toileted" and reported that the facility determined to give him an opportunity to be toileted on July 15, the day after he voiced displeasure over being diapered.⁽²⁸⁾ Her assessment was consistent with the bowel and bladder assessment conducted on July 9, which, based on factors including the resident's cognitive ability, determined him to be a candidate for retraining.⁽²⁹⁾ HCFA Ex. 39, at 8. Thus, her testimony does not support the ALJ's finding that the resident was too demented to participate in retraining. In light of this evidence, a June 10 entry in the resident's care plan stating that the facility was unable to retrain the resident due to cognitive problems does not support the ALJ's determination, as Petitioner argued. That entry was from a prior admission and does not contradict the subsequent findings that the resident was a candidate for retraining and able to participate in toileting. Because the ALJ's analysis does not reflect the totality of the testimony offered by Ms. Redden regarding R10, we reverse his determination.

Regarding R5, the ALJ's determination accurately reflects Ms. Redden's testimony. Ms. Redden testified that the resident refused retraining, and described the resident as uncooperative and refusing to leave his wheelchair. This is consistent with the clinical records, which report episodes of resistance to care, and of the resident wanting to stay up in his wheelchair for long periods of time. HCFA Ex. 32, at 16, 21, 25. The record also contains notes indicating that these behaviors continued subsequent to the survey and that the resident refused retraining. Petitioner Ex. 49, at 57, 120. The essential point of HCFA's request for review was that the facility's records did not document R5's refusal to participate in retraining prior to the survey. However, in light of the hearing testimony and the clinical record demonstrating an overall pattern of behavior consistent with that testimony, the ALJ could reasonably credit the testimony that the resident was resistant to retraining. His finding was supported by substantial evidence.

Tag 463

The deficiency findings

Under this tag, the July survey charged that Petitioner failed with respect to a resident identified as resident number 2 (R2) to comply with the requirement that the nurse's station must be equipped to receive resident calls through a communication system from resident rooms. 42 C.F.R. § 483.70(f).

The survey report alleged that Petitioner failed to ensure that the call light system provided to R2 was functioning properly. According to the survey report, the light did not come on when the resident pushed the call light button, and the resident reported that her call light did not work most of the time and that facility staff had done nothing in response to her complaint that the light was not functioning properly. However, the light worked when facility staff and then a maintenance staff person pushed the button, after which the staff member decided to change the call cord with one that had a button that protruded further, in case the resident had not been able to push the button far enough to activate the light. HCFA Ex. 29, at 31-32.

The ALJ Decision

The ALJ ruled that there was no deficiency because there was no basis to conclude that Petitioner was on notice that the resident was unable to operate the call light and had failed to do anything about it. He found that the resident was so argumentative and demanding that Petitioner's staff likely did not understand her assertion that she was unable to operate the call light to be a genuine complaint, and inferred that the resident may have contrived to demonstrate that she could not use the call light when in fact she could. He found that the resident had used the call light successfully on other occasions and had been counseled on many occasions by staff to use the call light when she needed assistance, but that she had problems interacting with staff and other residents, was at times hostile and argumentative, and preferred to yell out for help rather than to use the call light. Had he found that Petitioner had notice that R2 was unable to operate her call light button, the ALJ noted, he would have sustained a deficiency finding.

Arguments and analysis

HCFA disputed the ALJ's finding that Petitioner was not on notice that the resident was unable to use her call light, noting R2's prior complaint that the call light did not work, and an occupational therapy note of May 6, 1999 indicating that the resident had tremors in her hands that compromised her manipulation of objects, such as those used in feeding and grooming. HCFA Ex. 40, at 139. HCFA also criticized the ALJ's account of the resident's behavior, labeling as fabrication his theory that her complaints of being unable to operate the call light may not have been genuine.

We sustain the ALJ's determination. While the survey reports that the resident complained that the call light did not work, tests conducted by Petitioner's staff in front of the surveyor established that the call light functioned properly, and HCFA's presentation of its case indicates that the essence of the deficiency finding was that the resident was unable to operate the properly functioning call light, most likely due to her physical limitations. Tr. at 556-57. Substantial evidence supports the ALJ's finding that the facility was not on notice that the resident may have been unable to operate the call light. Licensed nurses' progress notes reflect one complaint from the resident, on June 15, that her call light did not work and that yelling for assistance was more effective. HCFA Ex. 40, at 114. However, the previous day and on three occasions during the subsequent nine days, the nurses reported that the call light was answered. Id. at 103, 105, 107, 113. Moreover, the nurses' notes also reflect that on three occasions subsequent to her complaint about the call light, the resident's roommate and other residents complained about the volume of the TV in the resident's room, and that on one of these occasions she turned the volume down, indicating that the resident possessed sufficient dexterity to operate the television controls. Id. at 104, 105, 112. Thus, the ALJ was justified in finding that the facility was not on notice that the resident may have been unable to successfully operate the call light.

Because we find that the record supports the ALJ's determination on the question of notice, we need not address his further observations that the resident may have contrived to falsely demonstrate that she was unable to operate the call light. However, the nurses' notes amply support his finding that the resident was hostile and argumentative and preferred to yell out for help rather than to use the call light. They are replete with mention of her yelling and screaming for assistance, of verbal abusiveness towards staff and other residents, and physical abusiveness towards staff. Id. at 99-114. HCFA's objections to the ALJ's characterization of the resident provide no basis for reversing his determination.

Conclusions on the July 1999 Survey

Petitioner did not challenge any of the ALJ's determinations that sustained four of HCFA's deficiency findings from the July survey. On appeal, we reverse the ALJ's decision as to two of the six deficiency findings that HCFA appealed and sustain his decision reversing the remaining four. We therefore revise the ALJ's FFCL No. 4 (ALJ Decision at 41) to read as follows:

As of the July 1999 survey, Petitioner manifested six deficiencies.

• Analysis of Petitioner's Exceptions
  

Petitioner also filed exceptions to the ALJ Decision, but rather than challenging the deficiency findings that he sustained, Petitioner excepted to the ALJ's conclusions concerning his authority to rule on certain constitutional issues and the duration and amount of the penalty. As we discuss below, we conclude that none of Petitioner's exceptions are meritorious.

• Constitutional issues

Petitioner contended before the ALJ that the HCFA provider regulations were unconstitutional under the Fourteenth Amendment to the United States Constitution and violated Petitioner's due process rights, were void for vagueness, were adopted ultra vires, and were arbitrarily and discriminatorily applied to Petitioner. The ALJ determined that he lacked authority to decide questions involving the lawfulness of regulations, and that he was required to assume that the regulations and procedures under which HCFA acts are lawful. ALJ Decision at 3.

The Board has previously addressed the issue of an ALJ's and the Board's authority to rule on challenges to the constitutionality of statutes and regulations, in Sentinel Medical Laboratories, Inc., DAB No. 1762, at 9 (2001):

It is well established that administrative forums, such as this Board and the Department's ALJs, do not have the authority to ignore unambiguous statutes or regulations on the basis that they are unconstitutional. A legislative rule is binding on the agency that issues it. 1 Kenneth Culp Davis and Richard J. Pierce, Jr., Administrative Law Treatise, § 6.5 (3^rd ed. 1994), citing U.S. v. Nixon, 418 U.S. 683 (1974) (where the court noted that the executive branch was bound by the terms of a regulation it had issued, even though it was within its power to change that regulation). Federal courts have refused "to recognize in administrative officers any inherent power to nullify legislative [or executive] enactments because of personal belief that they contravene the [C]onstitution." Gibas v. Saginaw Mining Co., 748 F.2d 1112, at 1117 (6^th Cir. 1984) (citation omitted). Thus, courts have noted that challenges to the constitutionality of an agency regulation lie outside the cognizance of that agency, and that generally, an ALJ is bound by the regulations promulgated by his administrative agency. Howard v. FAA, 17 F.3d 1213, 1218 (9th Cir. 1994); Stieberger v. Heckler, 615 F.Supp. 1315, 1386 (S.D.N.Y. 1985), citing D'Amico v. Schweiker, 698 F.2d 903 (7th Cir. 1983). Challenges to the constitutionality of a statute or a regulation promulgated by an agency are generally beyond the power or the jurisdiction of an agency. Gilbert v. National Transportation Safety Board, 80 F.3d 364, at 366-67 (9^th Cir. 1996); Howard v. FAA, supra.

For the same reasons, we uphold the ALJ's determination regarding his authority in this case.

• The imposition of penalties based on the May and July surveys
  

Petitioner did not contest the ALJ's findings that it was out of substantial compliance with four regulatory requirements at level D at the time of the May survey. Instead, Petitioner contended that, based on the application of the SOM, no penalties would have been imposed on it as a result of the May survey if the surveyors had properly reached the same result as the ALJ ultimately did. According to Petitioner, absent the immediate jeopardy level findings and given its past performance record, the state agency would have used the following procedures: set a "date certain" on which remedies would be imposed if Petitioner had not achieved substantial compliance; required Petitioner to submit a POC as a credible allegation of compliance, which the state survey agency could have accepted without a revisit or with the provision that a revisit would occur later; and, since Petitioner's POC allegedly addressed all of the deficiency findings satisfactorily, abstained from the July survey in which further deficiency findings were made. Petitioner Request for Review at 4, citing SOM §§ 7304, 7317 (1999). Thus, under Petitioner's interpretation of the SOM, no CMPs would have been imposed for the May survey findings if the survey agency had come to the same conclusions that the ALJ did, and no CMPs would have been imposed for the July survey findings because the July survey would not have taken place. Petitioner contended that the Board should rule that, once the ALJ found that the deficiencies were only at level D, he should not have upheld the imposition of CMPs starting in May and extending until November, because "[t]o do so would discourage state survey agencies from conducting the most accurate survey possible and discourage providers from challenging erroneous findings." Petitioner Request for Review at 6.

The specific ALJ finding that Petitioner challenged is that "[t]here is a basis to impose civil money penalties against Petitioner for its noncompliance with participation requirements as of the May and July 1999 surveys." FFCL No. 5, ALJ Decision at 51. The ALJ is correct, since 42 C.F.R. § 488.402(b) provides that HCFA may impose remedies, including CMPs, on the basis of noncompliance found during surveys conducted by the survey agency. Petitioner's contentions are based upon assumptions that the SOM dictates leniency in survey agency and HCFA treatment of facilities found to be deficient at a less than immediate jeopardy level, and that HCFA would have exercised its discretion in setting penalties so as to apply to Petitioner the most favorable provisions available. However, all of the provisions cited by Petitioner concerning follow-up surveys are couched in permissive, rather than mandatory language, and the scenario envisioned by Petitioner is neither mandated nor even likely under the policies applicable at the time. For example, neither the opportunity to submit a POC nor the acceptance of that POC as evidence of compliance without a survey is required by the SOM or regulations. In fact, HCFA is authorized under 42 C.F.R. § 488.412 to terminate a provider agreement anytime a facility is found not to be in substantial compliance. See Beverly Health and Rehabilitation-Spring Hill, DAB No. 1696 (1999). In addition, HCFA's policy at the time stated that revisits were almost always necessary to ascertain whether deficient practices had been corrected. SOM App. P, § VI; See Careplex of Silver Spring, DAB No. 1683 (1999). As we stated in Spring Hill, "[t]he speculation that HCFA might have acted differently had circumstances been different does not imply that HCFA was compelled to alter its choice of remedy because some of the deficiencies were overturned on appeal." Id. at 16-17.

Finally, Petitioner's argument about the policy implications of sustaining the CMPs where several survey findings are overturned implies that surveyors somehow reap some benefit from the imposition of CMPs on a facility. Petitioner did not explain what benefit would inure to surveyors to encourage them to cite deficiencies that they knew were baseless, especially since they know that they may be called as witnesses in proceedings challenging those findings. Since there were several deficiency findings sustained by the ALJ, and Petitioner did not except to those findings, it is evident that these CMPs were authorized by the applicable regulations.

• The imposition of CMPs until the November survey
  

Petitioner contended that, if the Board rejected its contention that no CMPs should have been imposed on the basis of the May and July surveys, the Board should determine that such CMPs should have stopped accruing on the completion date contained in the POC submitted after the July survey. Petitioner maintained that since the ALJ determined that it was in substantial compliance as of the first day of the November 1999 survey, the ALJ should have applied 42 C.F.R. §§ 488.454(a) and 488.440(h) and held that Petitioner established that it was in substantial compliance as of the date the POC stated all deficiencies had been corrected -- August 6, 1999.

The regulations provide that CMPs may be imposed for each of the days a facility is not in substantial compliance. 42 C.F.R. § 488.430(a). As we have overturned the ALJ's determination that Petitioner was in substantial compliance in November 1999, Petitioner's argument is now moot.

III Remedies

Our determination that Petitioner failed to comply substantially with participation requirements with respect to the allegations made under tag 322 of the November 1999 survey, coupled with the determinations by the ALJ for tags 250, 309, 319, and 324 during the May 1999 survey, lead to the conclusion that Petitioner failed to achieve substantial compliance within six months of the last day of the survey in which it was found to be out of compliance. Consequently, HCFA was required to terminate Petitioner's participation in Medicare following the November 1999 survey, even though none of the deficiencies were at the immediate jeopardy level. Section 1819(h)(2)(C) of the Act; 42 C.F.R. §§ 488.412(d), 488.450(d)(1). The only remaining question as to remedies thus is the appropriate amount of the CMPs, if any, to be imposed for the period May 20 through the termination of Petitioner's Medicare participation agreement.

We have previously addressed and rejected Petitioner's contentions that no CMPs should be assessed, and, if CMPs are assessed, then they should end with the date of substantial compliance alleged in Petitioner's POC. HCFA did not make any arguments specifically as to the amount of CMPs. However, it is evident from its contentions that all of the ALJ's determinations of Petitioner's compliance should be overturned, that it took the position that the CMPs initially proposed should be reinstated. Those CMPs were $5,000 per day for the period between May 20, 1999 through June 6, 1999; $1,000 per day for the period between June 7, 1999 and July 15, 1999; and $100 per day for the period from July 16, 1999 until the termination. The ALJ concluded, after examining the factors at 42 §§ 488.438(f) and 438.404, that $100 per day was a reasonable amount.

Since we have reversed only three of the ALJ's 18 findings that Petitioner was in substantial compliance with respect to the two surveys upon which HCFA based the imposition of CMPs, and since those three deficiency findings were not at the immediate jeopardy level, we conclude that $100 per day is a reasonable amount of the CMP in this case. The $5,000 per day for the first period is not authorized in any event because that amount would be appropriate only if we sustained any finding of deficiency at the immediate jeopardy level. See 42 C.F.R. § 488.438(a)(1)(i). We also decline to impose the $1,000 per day amount for the intermediate period, as it was based upon HCFA's findings of actual harm to residents, which have been overturned. As the ALJ noted in his decision, all of the deficiencies manifested by Petitioner were at the lowest level of seriousness at which remedies may be imposed, and $100 per day was the amount chosen by HCFA for the period of time for which it concluded deficiencies at this level existed. We therefore sustain the ALJ's determination that CMPs of $100 per day be imposed on Petitioner for the period of noncompliance. We affirm and adopt the ALJ's FFCLs Nos. 5 and 6, that there is a basis to impose CMPs against Petitioner for its noncompliance with participation requirements as of the May and July 1999 surveys, and CMPs in the amount of $100 per day are reasonable for each day of Petitioner's noncompliance. ALJ Decision at 51-52.

Conclusion

For the reasons set out above, we sustain the ALJ Decision in part and reverse it in part. We affirm and adopt the ALJ's FFCLs Nos. 2, 5 and 6, and we revise FFCL Nos. 1, 3 and 4 as set out above. We thus conclude that HCFA was authorized to terminate Petitioner's Medicare agreement and impose CMPs of $100 per day from May 20 until the termination.

Donald F. Garrett

Marc R. Hillson

M. Terry Johnson
Presiding Board Member

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

2. Throughout our discussion, we cite examples of HCFA's arguments concerning procedural issues. Our failure to exhaustively list all of HCFA's arguments in this vein should not be taken as an indication that we did not consider each and every one of them in reaching our conclusion that the ALJ procedures and decision were fundamentally sound.

3. To safeguard the privacy of residents, we use numbers or other identifiers, rather than names, to refer to residents.

4. The facility implemented the increase to 85 ccs per hour by first increasing the formula administration to 55 ccs per hour for 24 hours. Petitioner Ex. 55, at 118; Transcript (Tr.) at 131.

5. An "unnecessary drug" is any drug when used:

(i) In excessive dose (including duplicate drug therapy); or

(ii) For excessive duration; or

(iii) Without adequate monitoring; or

(iv) Without adequate indications for its use; or

(v) In the presence of adverse consequences which indicate the dose should be reduced or discontinued; or

(vi) Any combinations of the reasons above.

42 C.F.R. § 483.25(l).

6. Moreover, Petitioner's expert witness, Dr. Stone, also a physician qualified without objection as an expert in geriatric medicine, testified that there existed reasons for restricting the resident's water intake upon admission. He indicated that the resident was receiving a diuretic, a medication designed to remove fluid. Tr. at 1107-08, 1147. While HCFA dismissed the role played by the diuretic on the grounds that there was no contemporaneous care plan to address diuretic therapy, it did not dispute that R3 was receiving a diuretic, or Dr. Stone's testimony as to a diuretic's purpose.

7. It was this assessment that resulted in the physician's order at the hospital for the administration of 30 ccs of formula per hour for 24 hours.

8. Ms. Redden's testimony as to how the pump operates did not suggest that setting the pump is either difficult or non-routine. Another possibility, raised by Ms. Redden but not addressed by the ALJ, is that one or more nurses disregarded what was being administered and wrote down amounts consistent with the previous physician's orders. Tr. at 950. However, Petitioner did not present any evidence that nurses routinely wrote down on the I/O records amounts based on their recollection of physician's orders, rather than what was actually administered.

9. Before the Board, HCFA assailed Dr. Stone's credibility, arguing that he was a paid witness, addressed many of the deficiency findings at issue, and reached different conclusions based on the evidence than did HCFA's witnesses. We decline to consider these arguments because HCFA did not attack Dr. Stone's credibility in its brief before the ALJ, or object to or question Dr. Stone's qualification as an expert in geriatric medicine. Any concerns that HCFA had regarding this witness's credibility should have been raised before the ALJ. While HCFA did examine Dr. Stone as to whether he was being paid for his service as an expert witness (which, we note, is so common a practice in litigation as to be unremarkable), HCFA failed to raise this or any other issue relating to his credibility before the ALJ.

10. HCFA's argument that the connection between weight loss and the administration of a diuretic was "doubtful" was based on the absence from the medical records of any attribution of weight loss to the diuretic outside of a note from the dietary services supervisor, whom HCFA argued was not professionally qualified under California law to render such an opinion. HCFA Br. at 62, n.47; HCFA Reply Br. at 70, 71, n.70. However, HCFA did not deny the testimony that a diuretic may contribute to weight loss. Tr. at 1107.

11. The surveyor's testimony that the cast was changed from a "splint" with an "ace wrap" to a "full cast" suggests a belief that the cast became heavier and thus would not have contributed to the resident's weight loss. Tr. at 72-73. However, more definitive testimony indicated that the resident was initially placed in a full-length plaster cast that was then split open and secured with bandages to accommodate her edema, and that this cast was then changed to a fiberglass cast which was lighter. Tr. at 957-58, 1054-55.

12. In its request for review, HCFA did not continue to press allegations that an unidentified resident in the group meeting complained that her roommate had to wait all night in wet diapers before being changed, that the staff becomes disgusted with the residents for needing so much help, and that a personal property inventory list form had not been completed for R8 some eight days after his admission.

13. The ALJ observed that the survey did not allege abuse of residents or the absence of a policy against neglect. He concluded, however, that sufficient examples of neglect of residents could raise an inference that a facility had failed to implement a policy designed to prevent neglect, and thus establish a prima facie case of a violation.

14. The ALJ did not specify the instances for which HCFA made a prima facie case; however, given his characterization of the hearsay testimony for this deficiency as unreliable, we conclude that he was referring to HCFA's allegations concerning R6 and R8, where HCFA's case included other evidence. Of these, only the allegations regarding R6 are before us under this deficiency tag.

15. These factors are: (1) the independence or possible bias of the declarant, (2) the type of hearsay material submitted, (3) whether the statements are signed and sworn to as opposed to anonymous, oral, or unsworn, (4) whether the statements are contradicted by direct testimony, (5) whether the declarant is available to testify and, if so, (6) whether the party objecting to the hearsay statements subpoenas the declarant, or whether the declarant is unavailable and no other evidence is available, (7) the credibility of the declarant if a witness, or of the witness testifying to the hearsay, and finally, (8) whether the hearsay is corroborated. Carbone, 166 F.3d at 819. Both parties analyzed the hearsay testimony under the eight Carbone factors, and reached opposing conclusions as to its probative value and reliability.

16. HCFA also disputed as an incorrect statement of the law the ALJ's observation, in his discussion of the November 1999 survey, that "hearsay evidence is inherently unreliable in most instances." ALJ Decision at 7. However, at least one court has observed that "[t]he basis for excluding hearsay evidence is the notion that statements made while not under oath and while not subject to cross-examination are inherently unreliable." U.S. v. Godinez, 110 F.3d 448, 456 (7^th Cir. 1997), citing U.S. v. Lindemann, 85 F.3d 1232, 1238 (7th Cir. 1996). While these were criminal cases of limited applicability here, they demonstrate that the ALJ's comment does not provide a basis for reversing his decision. As we noted above, the ALJ provided reasons for deeming as unreliable to support a deficiency finding the particular instances of hearsay (in some cases second- and third-hand hearsay), as required by the court in Calhoun.

17. The survey report disclosed one instance of hearsay in the form of a May 11, 1999 note by a social services designee indicating that R7's wife voiced concern about call lights not being answered timely the previous night. HCFA Ex. 6, at 26. Even if credited as establishing one instance of failure to answer care lights, this report standing alone does not establish proof of a systemic failure to implement a policy against neglect.

18. The description of urine odors in Oak Lawn may be contrasted with the evidence here, where the surveyor's testimony indicated that the odors were not constant and would resolve, and one of the surveyors denied detecting a strong odor of urine or feces surrounding a resident. Tr. at 464, 571-73.

19. The ALJ specifically indicated to the parties at the beginning and at the end of the hearing that they should identify to him in their briefs key items of evidence in what had become an extremely voluminous record. Tr. at 28-29, 1256. Whereas HCFA decried this statement as an abdication of the ALJ's obligation to consider fully the issues before him, we conclude that this statement is better read as the ALJ's warning that he may not resolve issues that have not been identified by the parties. 42 C.F.R. § 498.60(b)(1).

20. Moreover, before the ALJ and the Board, HCFA contended, and Petitioner did not dispute, that the statements of facility staff to the surveyor were admissions by a party exempt from the definition of hearsay under rule 801(d)(2) of the Federal Rule of Evidence. The notes to the federal rule indicate that when uttered by a party's agent, the admission must have been made by the agent acting in the scope of his employment; there can be little doubt that responding accurately to the questions of an authorized state surveyor is within the scope of a CNA's employment.

21. From the surveyor's testimony, it appears that cuing refers to providing the resident some tactile or other guidance in the location of items of food on her tray, so that she could feed herself. Tr. at 515-17.

22. The survey report and the parties' submissions cited 42 C.F.R. § 483.20(d)(2) as the source of this requirement. However, section 483.20(d) was redesignated as section 483.20(k) in a final rule published December 23, 1997. 62 Fed. Reg. 67,174, 67,211 (1997).

23. HCFA did not request reconsideration of the ALJ's findings with respect to another example cited in the survey report under this deficiency tag.

24. HCFA also provided information about refusals during January and February. Those months were not addressed in the survey report and are not at issue here.

25. The cited pages from Petitioner's Exhibit 30, described in Dr. Feinsod's testimony and the survey report as MARs, are not in the record. HCFA Ex. 1, at 34; Tr. at 201-02, 204-06. They are not in the record apparently because Petitioner, at the hearing, submitted for inclusion in the record less than one out of the approximately seven boxes of documents it provided HCFA during the initial, pre-hearing exchange of exhibits, having, in its words, winnowed down its initial submission to those documents on which it intended to rely. Tr. at 40-44, 890. The cited pages were likely among those Petitioner submitted initially but did not make part of the record. Tr. at 197. However, MARs showing insulin refusals during March, April and May consistent with HCFA's request for review and Dr. Feinsod's testimony do appear in the record as HCFA Exhibit 13, at 50-69. Petitioner did not specifically dispute the number of refusals that HCFA alleged, which is higher than the number of refusals reported by the survey.

26. The record casts some doubt on the accuracy of the surveyor's description of the resident as insulin-dependent. Dr. Feinsod agreed that R19 had type II diabetes, which is generally controlled by diet, and that she received only one dose of insulin while at the facility. Tr. at 265-66. The surveyor's description of the resident as insulin-dependent appears to have been based on a statement by the resident. Tr. at 465.

27. The other expert witness HCFA cited in its request for review of this deficiency finding, Dr. Jencks, discussed the psychological effects of incontinence generally but did not address these two residents.

28. Our analysis of this deficiency under the May survey reflects our consideration of Petitioner's arguments that the survey report did not allege that Petitioner failed to provide the residents in question with the timed toileting program discussed by HCFA's expert, Dr. Schnelle. Under this deficiency, however, Petitioner did not argue that its failure to offer R10 the opportunity to be "toileted" prior to the survey was not encompassed within the specific deficiency allegation.

29. Although this form was not dated, Petitioner did not dispute its date and significance as represented by HCFA before the ALJ.