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CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
IN THE CASE OF  


SUBJECT: Barn Hill Care Center,

Petitioner,

DATE: September 24, 2002

             - v -
 

Centers for Medicare & Medicaid Services

 

Docket No. A-02-94
Civil RemediesCR902
Decision No. 1848
DECISION
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FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE D
ECISION

Barn Hill Care Center (Barn Hill) appealed the May 10, 2002 decision by Administrative Law Judge (ALJ) Carolyn Cozad Hughes sustaining the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a civil money penalty (CMP) of $5,000 per day for the period August 2 - 11, 1999. (1) CMS had imposed the CMP based on a complaint survey conducted by the New Jersey Department of Health and Senior Services, the state survey agency, which found Barn Hill not in substantial compliance with four Medicare participation requirements and further found that three of the four deficiencies posed immediate jeopardy to resident health or safety. As discussed in detail below, we sustain the ALJ Decision. Barn Hill attempted to cast this case as involving a CMP that was based on errors of a single nurse on a single day which, although serious, were corrected -- primarily by the nurse's departure -- before the period for which the CMP was imposed. This scenario, however, ignores the fact that there were systemic problems that resulted in Barn Hill's giving this nurse responsibilities for direct patient care that far exceeded her capabilities, without providing adequate orientation or any supervision. Accordingly, CMS was authorized to impose a CMP beginning on the date of the survey until the date it resurveyed the facility and determined that these systemic problems had been corrected.

Legal Background

The regulatory requirements for long-term care facilities are set forth at 42 C.F.R. Part 483. As relevant here, section 483.13(c) requires that the facility "develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse of residents and misappropriation of resident property." Section 483.20(k)(3)(i) requires that the services provided or arranged by the facility must "[m]eet professional standards of quality." Section 483.25(m)(2) requires that the facility ensure that "r]esidents are free of any significant medication errors." Section 483.75(a)(1) requires that the facility "employ on a full-time, part-time or consultant basis those professionals necessary to carry out the provisions of these requirements," and that professional staff "be licensed, certified, or registered in accordance with applicable State laws."

Compliance with these requirements is determined through the survey and certification process, set out at 42 C.F.R. Part 488, Subpart E. Surveys are generally conducted by a state survey agency under an agreement with CMS. Subpart F of Part 488 specifies the remedies that may be imposed by CMS based on a determination that a facility is not in substantial compliance with the requirements.

The regulations define "substantial compliance" as "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.

One of the available remedies is a CMP. Section 488.430(a) provides in relevant part that-

HCFA or the State may impose a civil money penalty for either the number of days a facility is not in substantial compliance with one or more participation requirements or for each instance that a facility is not in substantial compliance . . . .

For deficiencies that constitute immediate jeopardy, a CMP in the range of $3,050 - $10,000 per day of noncompliance may be imposed. 42 C.F.R. 488.438(a)(1)(i). For deficiencies that do not constitute immediate jeopardy, but either caused actual harm or caused no actual harm but have the potential for more than minimal harm, a CMP in the range of $50 - $3,000 per day may be imposed. 42 C.F.R. 488.438(a)(1)(ii). CMS may also impose a CMP ranging from $1,000 to $10,000 per instance. 42 C.F.R. 488.438(a)(2).

"Immediate jeopardy" is defined as -

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

42 C.F.R. 488.301.

The factors to be taken into account in setting the amount of a CMP are:

(1) The facility's history of noncompliance, including repeated deficiencies.

(2) The facility's financial condition.

(3) The factors specified in 488.404 [relating to the seriousness of the deficiencies].

(4) The facility's degree of culpability. . . .

42 C.F.R.  488.438(f) (italics in original).

A facility may appeal a certification of noncompliance leading to an enforcement remedy but may not appeal the choice of remedy. 42 C.F.R. 488.408(g). A determination with respect to the level of noncompliance may be appealed only if a successful challenge on this issue would affect the range of CMP amounts that CMS could collect. 42 C.F.R. 498.3(b)(13)(i) and 498.3(d)(10)(i). CMS's determination as to the level of noncompliance "must be upheld unless it is clearly erroneous." 42 C.F.R. 498.60(c)(2). (2) This includes CMS's finding of immediate jeopardy. Woodstock Care Center, DAB No. 1726, at 9, 38 (2000).

Standard of review

The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. The standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the record as a whole. Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs; see also South Valley Health Care Center, DAB No. 1691 (1999), aff'd South Valley Health Care Center v. HCFA, 223 F.3d 1221 (10th Cir. 2000); Lake Cook Terrace Center, DAB No. 1745, at 6 (2000) ("it is not our role to substitute our evaluation of the evidence for that of the ALJ, but only to determine whether his factual findings are supported by substantial evidence in the record as a whole").

Factual Background

The ALJ characterized the "basic and dispositive facts in the case" as undisputed, and summarized them as follows:

Petitioner employed temporarily Dawn Keady as a licensed practical nurse (LPN). Stipulation 1. Nurse Keady did not have a valid New Jersey LPN license. Stipulation 2; Tr. at 38. She worked in the facility six times without producing evidence of her license. On July 28, 1999, she was assigned to the Newtonian Unit of the facility, where four insulin-dependent diabetic individuals resided. That morning, she used the wrong type of syringes to administer insulin, and, as a result, administered overdoses of insulin to the four diabetic residents. Stipulations 3 - 6. At least three of the four experienced adverse effects. Stipulation 7. Shortly after receiving her overdose of insulin, Resident 3 became acutely ill and went into respiratory distress, which Nurse Keady observed. Nurse Keady called the resident's treating physician . . . .

ALJ Decision at 5-6. The ALJ noted, however, that the parties disagreed as to whether and to what degree Nurse Keady monitored Resident 3's condition "from 9:00 AM until 11:30 AM when staff happened upon her, near death." Id. at 6.

Barn Hill reported the July 28 incident to the survey agency, which conducted a complaint survey at Barn Hill on August 2, 1999. ALJ Decision at 1-2, citing CMS Ex. 8. The survey agency concluded that conditions at Barn Hill posed immediate jeopardy to resident health or safety, citing four areas of deficiency: Staff Treatment of Residents, 42 C.F.R. 483.13 (Tag 224); Resident Assessment, 42 C.F.R. 483.20 (Tag 281); Quality of Care, 42 C.F.R. 483.25 (Tag 333); and Administration, 42 C.F.R. 483.75 (Tag 499). Id. at 2, citing CMS Exs. 3, 4, and 5. The Statement of Deficiencies identified the first three deficiencies as level J deficiencies (isolated, immediate jeopardy) and the fourth deficiency as a level G deficiency (actual harm that is not immediate jeopardy). CMS Ex. 2; CMS Br. at 4, 11. CMS reviewed the survey agency findings and, by letter dated August 13, advised Barn Hill that its conditions constituted immediate jeopardy to resident health and safety, and that its provider agreement would therefore be terminated on August 25 if the immediate jeopardy were not removed. CMS also stated that it was imposing a denial of payment for new admissions effective August 21 and a CMP of $5,000 per day, effective August 2, to remain in effect until the facility achieved substantial compliance with program requirements or was terminated. ALJ Decision at 2, citing CMS Ex. 2.

Barn Hill had meanwhile submitted a plan of correction dated August 6. ALJ Decision at 2. The plan of correction alleged that Barn Hill was in compliance with the applicable requirements as of July 29, 1999. CMS Ex. 7, at 1. The survey agency conducted a revisit survey on August 12, and concluded that Barn Hill had achieved substantial compliance on the date of that survey. ALJ Decision at 2, citing CMS Ex. 6. After reviewing these findings, CMS, by letter dated September 24, advised Barn Hill that, because it had achieved substantial compliance, CMS was rescinding the denial of payment for new admissions. However, CMS stated that it was imposing the $5,000 per day CMP from August 2 through 11, and that Barn Hill was prohibited from conducting its own nurse aide training and competency evaluation for a period of two years. Id., citing CMS Ex. 1.

The ALJ's Findings of Fact and Conclusions of Law

The ALJ made the following numbered findings of fact and conclusions of law:

1. From August 2, 1999 through August 11, 1999, Petitioner was not in substantial compliance with program participation requirements, specifically 42 C.F.R. 483.13 (Staff Treatment of Residents), 483.20 (Resident Assessment), 483.25 (Quality of Care) and 483.75 (Administration).

a. The facility employed an unlicensed and unqualified nurse whose services did not meet professional standards of quality.

b. The facility did not insure that its residents were free of significant medication errors.

c. The facility failed to implement policies and procedures that prohibited the neglect of its residents.

1) The facility's residents were neglected.

2) The facility was out of compliance with 42 CFR 483.13(c).

2. Petitioner's level of noncompliance posed immediate jeopardy to resident health and safety.

3. The duration of the CMP is consistent with statutory and regulatory requirements.

4. The amount of the CMP imposed, $5,000 per day, is reasonable.

ALJ Decision at 5, 6, 10, 12, 17, 20, 21, and 22.

Barn Hill's Exceptions

Barn Hill did not dispute that it employed an unlicensed and unqualified nurse whose services on July 28, 1999 did not meet professional standards of quality or that it did not insure that its residents were free of significant medication errors on that date. Thus, Barn Hill did not take exception to the facts stated in FFCL 1.a. and 1.b. (3) However, Barn Hill excepted to the ALJ's conclusion in FFCL 1 that Barn Hill was out of compliance with four participation requirements from August 2 - 11, 1999 based on FFCLs 1.a., 1.b., and other facts found by the ALJ. Barn Hill stated that it would not have contested the imposition of a CMP if one had been imposed for July 28, the date on which the nurse in question administered overdoses of insulin to four residents of the facility. Barn Hill Br. at 3, 23. According to Barn Hill, however, the central issue in this case is whether the ALJ correctly found that there was continuing noncompliance after July 28. Barn Hill took the position that, contrary to FFCL 3, there was no basis for the imposition of any CMP beginning August 2. Barn Hill argued that the deficiencies which it conceded existed on July 28 were attributable solely to Nurse Keady and had been corrected by August 2. Barn Hill also argued that even if there was continuing noncompliance, it was not at the immediate jeopardy level, contrary to FFCL 2. In addition, Barn Hill argued that there was no evidence to support the ALJ's finding in FFCL 1.c.1) that Barn Hill's residents were neglected, and that, in any event, such a finding did not support the ALJ's conclusion in FFCL 1.c.2) that Barn Hill did not have the anti-neglect policies and procedures required by section 483.13(c). Finally, Barn Hill argued that the ALJ could not properly find the CMP amount reasonable (FFCL 4) since CMS had not offered any evidence addressing the factors which section 488.438(f) requires be taken into account in setting the CMP amount. (4)

ANALYSIS
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Below, we first address Barn Hill's sole challenge to the factual predicate for the CMP - its exception to the ALJ's conclusion that Barn Hill was out of compliance with section 483.13(c). We then discuss Barn Hill's exception to the ALJ's finding regarding the duration of the deficiencies, followed by Barn Hill's exception to the ALJ's finding regarding CMS's determination that immediate jeopardy existed. Finally, we discuss Barn Hill's exception to the ALJ's finding that the CMP amount was reasonable.

The ALJ's finding that Barn Hill violated section 483.13(c) is supported by substantial evidence in the record.

In FFCL 1.c., the ALJ concluded that Barn Hill failed to implement policies and procedures that prohibited the neglect of its residents, in contravention of section 483.13(c). The ALJ reached this conclusion based on a two-part analysis, first addressing whether Barn Hill's residents were neglected as a matter of fact, and then addressing whether there was a deficiency under section 483.13(c) based on these findings.

In the first part of the analysis, the ALJ noted that there were three bases for CMS's finding of neglect: 1) the failure to complete the 9:00 a.m. medication pass as of 11:30 a.m. on July 28, where it was undisputed that standards of practice require that medications be administered within one hour of the time ordered; 2) the administration of overdoses of insulin to four residents on July 28; and 3) the facility's treatment of Resident 3 when she became acutely ill on the morning of July 28. (5) The ALJ stated that there was "no serious factual dispute" as to the first two bases. Id. The ALJ concluded that she need not resolve certain conflicting evidence in order to find that the third basis existed, (6) stating that-

under all scenarios, staff did not give Resident 3 her 9:00 AM medications, did not follow Dr. Casella's order for IV Lasix and Decadron, and allowed her condition to deteriorate to the point of "critical, death probable" before considering a life-saving transfer to a hospital.

ALJ Decision at 17. (7) The ALJ therefore concluded that a finding of neglect was supported by all three bases identified by CMS.

In the second part of her analysis, the ALJ concluded that these "significant instances of neglect, involving multiple residents

. . . evidence Petitioner's failure to implement an effective anti-neglect policy," in violation of section 483.13(c). ALJ Decision at 19. In reaching this conclusion, the ALJ relied on the Board's finding in Emerald Oaks, DAB No. 1800 (2001), that the ALJ made no error of law in drawing the inference that "sufficient examples of neglect can demonstrate lack of implementation of an anti-neglect policy." ALJ Decision at 19, quoting Emerald Oaks at 18.

On appeal, Barn Hill argued both that "there is no factual or legal support for a finding that Barn Hill neglected any of its residents at any time," and that, even if there was neglect, there was no evidence that it resulted from "the breakdown of Barn Hill's neglect prevention policy." Barn Hill Br. at 31, 34.

Although Barn Hill disputed generally that there was any basis for a finding of neglect, its specific arguments went to whether any Barn Hill nurse had contact with Resident 3 between 9:00 and 11:30 a.m. on July 28. Barn Hill Br. at 12-19. However, the ALJ determined that it was sufficient to establish neglect as to Resident 3 that this resident did not receive either her 9:00 a.m. medications or two medications ordered by a physician (Dr. Casella) who was called to her room when she was found unresponsive at 11:30 a.m., and that Barn Hill did not consider whether she should be hospitalized until Dr. Casella documented that her condition had deteriorated to "critical, death probable." (8) In upholding CMS's first two bases for finding neglect, the ALJ also found that the facility's failure to complete the 9:00 a.m. medication pass and its administration of insulin overdoses constituted neglect involving multiple residents. (9) Barn Hill did not explain why this constellation of facts did not establish neglect.

Barn Hill also argued that, even if there was neglect, the ALJ's conclusion that Barn Hill violated the requirement in section 483.13(c) to implement an anti-neglect policy was erroneous.

Barn Hill maintained that the ALJ was not justified in inferring that Barn Hill's neglect policies are ineffective "on the basis of evidence relating to one error by one nurse on one occasion

. . . ." Barn Hill Br. at 32 (emphasis in original). Barn Hill asserted that CMS never alleged that Barn Hill did not have a neglect prevention policy or that there was any inadequacy in the policy. Barn Hill noted that the only policy it modified pursuant to its plan of correction was its policy regarding changes in resident condition and that "neither CMS nor the ALJ has said what happened to cure the ineffectiveness of Barn Hill's neglect prevention policy between July 28 and August 12." Id. at 35.

We conclude that the ALJ reasonably inferred from the instances of neglect discussed above that Barn Hill had not implemented an anti-neglect policy. Although the instances of neglect relied on by the ALJ occurred on a single day, they involved a failure to provide necessary medications and medical services to numerous residents in addition to Resident 3. As the ALJ found, "the facility failed to administer, within acceptable time parameters, medications to 9 other residents and . . . administered insulin overdoses to 4 residents." ALJ Decision at 17. In addition, other staff were also implicated in the finding of neglect as to Resident 3. Specifically, the ALJ found that "staff did not follow Dr. Casella's orders for IV Lasix and Decadron." ALJ Decision at 17. By the time Dr. Casella wrote the orders for these medications, a second nurse, Nurse Witt, was caring for Resident 3. Tr. at 53. In addition, the Director of Nursing, Nurse Callahan, checked Resident 3 at the request of Nurse Witt. ALJ Decision at 15, citing P. Ex. 9. Thus, this instance of neglect was attributable to staff other than Nurse Keady.

Furthermore, Barn Hill's argument that any neglect was attributable to Nurse Keady rather than to its failure to develop and implement policies and procedures prohibiting neglect is not persuasive. Notwithstanding Nurse Keady's inexperience and lack of familiarity with the facility, Barn Hill assigned her full responsibility for the medication pass for all 29 residents in the Newtonian Unit without giving her a thorough orientation and without making any arrangements to supervise her, leaving her the only nurse on the unit for several hours. (10) The ensuing problems were thus attributable not just to Nurse Keady but to Barn Hill's failure to follow policies and procedures that might have averted the medication errors and the overdue medication pass, or led to earlier discovery of these instances of neglect and better care for the residents who were adversely affected.

The ALJ's inference that Barn Hill had not implemented an anti-neglect policy is also supported by the fact that Barn Hill never established what its anti-neglect policy was and how it had been implemented. (11) The fact that the plan of correction required Barn Hill to add to its policy on change of resident condition two provisions that were clearly designed to prevent the type of neglect that occurred in this case shows that, to the extent Barn Hill had any policy prohibiting neglect, it was inadequate. (12)

Accordingly, we sustain FFCL 1.c.

The ALJ's conclusion that imposition of a CMP for the period August 2 - 11 is consistent with the statutory and regulatory scheme is not erroneous.

Barn Hill also excepted to FFCL 3, in which the ALJ concluded that the imposition of a CMP from August 2 - 11 was consistent with statutory and regulatory requirements. The ALJ stated that, contrary to what Barn Hill argued, "the facility's problems went well beyond a single nursing error." The ALJ noted that Barn Hill had acknowledged that agency nurses are "by definition, less familiar with a facility's residents and routines than are full-time staff." Id. at 21, quoting Barn Hill Reply Br. below. The ALJ then stated:

For this reason, if using an agency nurse, the facility needs adequate systems in place to monitor qualifications, and to provide orientation and supervision. None of these systems were in place on July 28, and the facility has not demonstrated adequate correction prior to August 12.

Id. The ALJ continued:

Moreover, under the regulatory scheme, any deficiency that has a potential for more than minimal harm is necessarily indicative of problems in the facility that need to be corrected. Lake City Extended Care Center, DAB No. 1658, at 14 (1998). Since I found that the incidents in question have the potential for more than minimal harm, I must also find that the facility was out of compliance "from the date of the completion of the survey in which this incident was cited until the date of the resurvey in which substantial compliance was established." Emphasis added; id. at 14 - 15. Substantial compliance means not only that the surveyors found no other incidents, but also that the facility has implemented a plan of correction designed to assure that no such incidents occur in the future. No findings that the facility violated the standard of care between these dates are required in order to find the facility out of substantial compliance, nor can evidence of other incidents in which the facility met the standard of care change the fact that it was out of substantial compliance.

ALJ Decision at 21-22.

On appeal, Barn Hill argued that "CMS must assert and prove that Barn Hill was noncompliant on the days for which it actually imposed the CMP." According to Barn Hill, there was no evidence of actual noncompliance on those days. Barn Hill Br. at 36. (13) Barn Hill argued, citing several ALJ decisions, that "CMS cannot impose a remedy through the date of a followup survey . . . if the facility can demonstrate that the error or deficiency was corrected prior to the survey." Id. at 39. Barn Hill disputed the ALJ's finding that the problems went beyond a single nursing policy, and asserted that "any medication or 'neglect' deficiency was cured when Nurse Keady left Barn Hill on July 28." Id. Barn Hill also noted that "[w]hen asked specifically what acts, omissions or practices by Barn Hill after July 28 were deficient, Surveyor Bennet recited only events that occurred on July 28," and testified that she was unaware that any of the facts alleged in the Statement of Deficiencies persisted after July 28. Id. Barn Hill pointed out that the surveyors had not cited any deficiency relating to the policies and procedures that Barn Hill was later required to correct in order to come into substantial compliance. Barn Hill took the position that the imposition of the CMP under these circumstances "represents a significant due process issue." Barn Hill Reply Br. at 2; see also id. at 5, 12, 14.

We agree with the ALJ that imposition of the CMP for the period August 2 - 11 is consistent with the regulatory scheme (and thus the statutory scheme as well), which the Board described in Lake City Extended Care Center, relied on by the ALJ and quoted at greater length below. That scheme does not require that CMS provide affirmative evidence of continuing noncompliance, nor does it require that the surveyors identify the underlying problems giving rise to a deficiency finding as well as its factual basis. Instead, under the regulatory scheme, where there is a deficiency involving a potential for more than minimal harm-

the facility must submit a plan of correction which describes "1. How corrective action will be accomplished for those residents found to have been affected by the deficient practice; 2. How the facility will identify other residents having the potential to be affected by the same deficient practice; 3. What measures will be put into place or systemic changes made to ensure that the deficient practice is being corrected and will not recur, i.e., what program will be put into place to monitor the continued effectiveness of the systemic changes." State Operations Manual, section 7304; see also [42 C.F.R.] sections 488.401 (definition of "Plan of correction"), 488.402(d) and 488.408(f)(1). Even if the plan of correction is accepted, the facility is not regarded as in substantial compliance until HCFA determines, usually through a revisit survey, that the deficiency no longer exists. Section 488.440(b) and (h). [footnote omitted]

Lake City Extended Care Center, at 12-13. (14)

In that decision, the Board rejected Lake City's argument that it was out of substantial compliance only on the date of the incident on which the finding of noncompliance was based, finding that this was-

contrary to the regulatory scheme, which assumes that any deficiency that has a potential for more than minimal harm is necessarily indicative of problems in the facility which need to be corrected. If this were not the assumption, there would be no basis for requiring a plan of correction in the case of such a deficiency. Moreover, a plan of correction is required regardless of the scope of the deficiency, as long as the deficiency has a potential for more than minimal harm or involves actual harm. Section 488.402(d)(2). Since the ALJ found that the incident in question had a potential for more than minimal harm, he was required to find that Lake City was out of substantial compliance from the date of completion of the survey in which this incident was cited until the date of the resurvey in which substantial compliance was established. (Substantial compliance here meant not only that surveyors found no other incidents like the one at issue after the November survey but also that Lake City had implemented a plan of correction designed to assure that no such incidents would occur in the future.) No findings that Lake City violated the standard of care between these dates were required in order to find Lake City out of substantial compliance, nor can evidence of other incidents in which Lake City met the standard of care change the fact that it was out of substantial compliance.

Id. at 14-15. (15)

The foregoing conclusion fully applies to the facts of this case. Under the regulatory scheme set forth above, it is irrelevant that Surveyor Bennet did not identify a specific incident occurring after July 28 which involved a violation of the regulations with which Barn Hill was found out of compliance. The regulations presume that the problems which gave rise to the events of July 28 continued until Barn Hill implemented a plan of correction designed to prevent their reoccurrence. Barn Hill's plan of correction identified actions to correct each of the deficiencies cited in the Statement of Deficiencies. The corrective actions identified for the deficiencies under sections 483.13, 483.20, and 483.25 included the following: (16)

o The facility continues to provide agency orientation to all agency staff prior to their first tour of duty. The orientation includes review of policies, a med pass audit during the first tour of duty, and an evaluation after the first tour of duty. (See attached) Their licensure is verified prior to their first tour of duty. (17)

o The nursing supervisor on shift will assure the med pass audit is completed and will monitor performance throughout the shift to assure medications are passed . . . in the appropriate time frame.

CMS Ex. 7. The plan of correction identified the completion date for these actions as July 29, 1999. Barn Hill is correct that a resurvey is not necessarily required to establish that a facility has come into substantial compliance. Section 488.454(a)(1) states in relevant part that alternative remedies (which include a CMP) continue until "[t]he facility has achieved substantial compliance, as determined by HCFA or the State based upon a revisit or after an examination of credible written evidence that it can verify without an on-site visit." Barn Hill's plan of correction on its face is not however credible evidence of substantial compliance as of July 29 since it is unlikely that, one day after Nurse Keady's departure, Barn Hill had had the opportunity to put the procedures quoted above to the test with new agency staff. In any event, the Board has held that CMS could reasonably require a resurvey to establish that a facility has come into substantial compliance in a situation involving inadequate supervision. See Asbury Center at Johnson City and Cross Creek Health Care Center.

Moreover, the survey agency did not accept the plan of correction as adequate to correct the deficiencies. A letter from Barn Hill's Administrator to the survey agency dated August 10, 1999 refers to the survey agency's "position that compliance (and presumably removal of the Immediate Jeopardy) is determined by the completion of all in-service training." CMS Ex. 14. The letter continues: "In-services for the nursing staff on medication pass and Insulin administration will be completed on Wed. 8/11/99, as well as the nurses will be audited on their medication pass." Id. The record also includes several sign-in sheets dated August 10 for in-service training on Notification of Status Changes and Diabetic Protocol. P. Ex. 43, at 2-7. This in-service training related in part to additions to Barn Hill's policy regarding changes in resident condition that Barn Hill indicated it made "between July 28 and August 12" at the behest of the survey agency. Barn Hill Br. at 38. Thus, all of the actions which the survey agency determined were necessary to prevent the incidents of July 28 from occurring in the future were not completed by Barn Hill until August 11, the last day for which the CMP was imposed.

Barn Hill argued, however, that the actions it was required to take to come into substantial compliance bore no relationship to the deficiencies, so that the imposition of a CMP until these actions were completed was not justified. In particular, Barn Hill maintained that there was undisputed testimony that "the standard of practice in New Jersey is to staff each nursing unit with one licensed nurse" and that "an agency nurse ought to be able to work unsupervised." Barn Hill Br. at 28. Barn Hill also asserted that "any nurse--no matter how inexperienced or where licensed--should know how to administer insulin properly," and that Nurse Keady in fact knew how to administer insulin properly and simply used the wrong syringe by mistake. Barn Hill Reply Br. at 9-10. Barn Hill took the position that Nurse Keady's errors were "personal in nature rather than manifestations of some 'systemic' problem" which it could have corrected. Id. at 11.

CMS's determination regarding what actions are required for a facility to correct deficiencies is a matter committed to its discretion, and we have no authority under 42 C.F.R. 498.3 to review it. Moreover, in response to Barn Hill's argument below that it should not be held accountable for problems that stem from human error, the ALJ wisely observed:

I am not aware of any "human error" exception to the regulatory requirements. Indeed, it is difficult to imagine any deficiency that is not, at its core, attributable to "human error." A facility, therefore, puts in place systems that minimize the chance for human error.

ALJ Decision at 10. The actions Barn Hill was required to take to come into substantial compliance put in place precisely the types of systems referred to by the ALJ. Contrary to Barn Hill's suggestion, it was not required to implement procedures for supervising nurses whenever they administer insulin or on a routine basis (which Barn Hill contended violated the standard of practice); the plan of correction appears to provide only for supervision of the medication pass during a nurse's first tour of duty. (18) Moreover, the evidence on which Barn Hill relied as showing that Nurse Keady knew how to administer insulin properly merely shows that she demonstrated proper technique on July 29 knowing that three of the patients to whom she had administered insulin the previous day had exhibited signs of hypoglycemia. Barn Hill Ex. 7, at 2. Barn Hill's argument also ignores the fact that, as discussed above, the deficiency under section 483.13 was attributable in part to facility staff in addition to Nurse Keady. Thus, Barn Hill did not provide any valid reason to question whether the actions it was required to take were appropriate to correct its deficiencies.

Accordingly, we sustain FFCL 3.

The ALJ's finding that the deficiencies were at the immediate jeopardy level from August 2 - 11 is supported by substantial evidence in the record.

Barn Hill also took exception to the ALJ's finding, in FFCL 2, that "Petitioner's level of noncompliance posed immediate jeopardy to resident health and safety." ALJ Decision at 20. (19) Pursuant to 42 C.F.R. 488.301, immediate jeopardy exists if the facility's noncompliance has caused or is likely to cause "serious injury, harm, impairment, or death to a resident." The ALJ observed that the deficiencies here "caused actual harm, and had the potential to cause even more serious harm," noting that "[a]mong other injuries, the residents suffered significant adverse reactions to the insulin overdoses." Id. (20) The ALJ described these adverse reactions as follows:

Resident 1 was found unresponsive and foaming at the mouth. Resident 2 was found slumped in her chair with blood sugar level of 31. Resident 3 was admitted to the hospital, with profound hypoglycemia. Resident 4 was found unresponsive in bed with a large skin tear caused by a fall against a door.

Id.

On appeal, Barn Hill asserted that the ALJ's immediate jeopardy finding "refers only to the results of Nurse Keady's insulin error." Barn Hill Br. at 35. Barn Hill then argued that this error did not pose immediate jeopardy, and that, even if it did, "CMS' assertion, and the ALJ's finding, that immediate jeopardy existed on one day, July 28, by itself does not, and cannot compel a conclusion that immediate jeopardy also existed on [the] ten other days [for which the CMP was imposed]." Id. at 36.

Barn Hill's arguments are not persuasive. Barn Hill did not explain why the insulin overdoses did not pose immediate jeopardy in view of the actual harm they caused. Moreover, the ALJ in fact based her finding regarding immediate jeopardy on all of the level J deficiencies since the ALJ Decision refers generally to "the significant nursing errors described above" and gives the adverse reactions to the insulin overdoses as an example of the injuries caused by Barn Hill's noncompliance, referring to "other injuries" as well. ALJ Decision at 20. The other two level J deficiencies - under sections 483.20 and 483.25 - were also based in part on the insulin overdoses and thus posed immediate jeopardy. In addition, these two deficiencies were based in part on the facility's failure to timely administer medications to nine residents. There is no dispute that this failure caused serious injury to Resident 3 (whose respiratory distress might have been alleviated by her 9:00 a.m. medications and whose condition might also have been improved by the two medications ordered for her later) in addition to posing a likelihood of serious injury to the other eight residents. It is also undisputed that, as a result of the deficiency under section 483.13(c), Resident 3's condition deteriorated to the point of "critical, death probable," clearly causing her serious injury.

Moreover, the ALJ correctly determined that these three deficiencies continued at the immediate jeopardy level throughout the period for which the CMP was imposed. Just as CMS need not provide affirmative evidence of continuing noncompliance, it need not provide affirmative evidence that the deficiencies continued at the immediate jeopardy level; instead, the facility must demonstrate that it has taken the corrective action necessary to remove the immediate jeopardy, even if it is not yet in substantial compliance. Barn Hill did not point to any evidence in the record showing that, prior to August 12, it corrected the level J deficiencies to the point where immediate jeopardy was no longer posed.

Accordingly, we sustain FFCL 2.

The ALJ's finding that a CMP of $5,000 per day was reasonable is supported by substantial evidence.

In FFCL 4, the ALJ determined that a $5,000 per day CMP was reasonable. The ALJ rejected Barn Hill's argument that she lacked the authority to make this finding de novo, citing the Board's holding in Emerald Oaks that the ALJ's resolution of the issue of whether the amount of the CMP fell within a reasonable range based on the applicable law is "de novo in the sense that the determination is based on the evidence as it is developed before the ALJ and not on how CMS evaluated the evidence as it stood at whatever point CMS made its assessment." ALJ Decision at 23, quoting Emerald Oaks at 13. Thus, according to the ALJ-

in reaching a decision on the reasonableness of the CMP, I may not look into CMS' internal decision-making processes. Instead, I consider whether the evidence presented on the record concerning the relevant regulatory factors supports a finding that the amount of the CMP is at a level reasonably related to an effort to produce corrective action by a provider with the kind of deficiencies found and in light of the other factors involved (financial condition, facility history, and culpability).

ALJ Decision at 23. The ALJ noted that $5,000 per day is at the lower end of the mandatory range ($3,050 to $10,000) for immediate jeopardy situations. The ALJ stated that "the record is silent as to the facility's compliance history and financial condition," but that two of the factors in sections 488.438(f) which must be considered in determining the amount of the CMP - the seriousness of the deficiencies and the facility's culpability - "justify the imposition of a penalty above the minimum." Id.

On appeal, Barn Hill took the position that Emerald Oaks was inapposite here because in the present case, unlike Emerald Oaks, CMS failed to provide any evidence that directly addressed the regulatory factors. Barn Hill also argued that its case is "strikingly similar" to CarePlex of Silver Spring, DAB No. 1627 (1997), where the Board sustained the ALJ's decision to reduce the CMP to the lowest amount permitted by regulation ($50 per day) because the facility had begun to take corrective action even before the survey. Barn Hill Br. at 42.

Barn Hill's arguments are based on the mistaken premise that there is no evidence in the record regarding any of the regulatory factors. Evidence of both the seriousness of the deficiencies and Barn Hill's culpability lies in the course of events that led to the deficiency findings. As discussed above, three deficiencies continued at the immediate jeopardy level throughout the period for which the CMP was imposed. Barn Hill did not explain why we should not regard these deficiencies as serious enough to warrant a CMP in an amount which is at the lower end of the range of CMP amounts set by the regulation for cases of immediate jeopardy.

We agree with the ALJ, moreover, that Barn Hill's culpability provided some justification for the CMP amount. Under section 488.438(f), the term "culpability" "includes, but is not limited to, neglect, indifference, or disregard for resident care, comfort or safety. . . ." In this instance, Barn Hill exhibited blatant disregard for resident care when it gave an unlicensed and inexperienced agency nurse responsibility for the 9:00 a.m. medication pass to the 29 patients on the Newtonian Unit without providing a thorough orientation or any supervision, and did not follow policies and procedures that would have better addressed the changes in resident condition that resulted from this nurse's errors.

Barn Hill's argument that the per diem amount of the CMP should have been reduced because corrective action had been taken must also fail. As discussed above, Barn Hill did not complete the actions required to correct the immediate jeopardy deficiencies until the end of the CMP period. Thus, we need not consider this argument further.

Accordingly, we sustain FFCL 4.

Conclusion

For the reasons discussed above, we sustain the ALJ Decision. In doing so, we affirm and adopt all the FFCLs made by the ALJ.

JUDGE
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Judith A. Ballard

M. Terry Johnson

Donald F. Garrett
Presiding Panel Member

FOOTNOTES
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1. CMS was previously named the Health Care Financing Administration (HCFA). See 66 Fed. Reg. 35,437 (July 5, 2001). We use "CMS" in this decision unless we are quoting from documents that refer to HCFA.

2. We cite to the regulations as they appeared prior to their amendment in April 2000, when some of the sections cited were redesignated.

3. Barn Hill did take issue with the ALJ's statement in the discussion that followed FFCL 1.a. that "Nurse Keady's licensure status is inextricably intertwined with her performance" (ALJ Decision at 6). Barn Hill disputed the implication that, if it had known that Nurse Keady lacked a New Jersey license, it could have foreseen her poor performance. However, the ALJ did not in any event rely on Nurse Keady's licensure status as a basis for finding that Barn Hill was not in substantial compliance with sections 483.13, 483.20, and 483.25. Indeed, the ALJ stated elsewhere that she was not "convinced that a facility is entitled to notice of staff incompetence before it can be held accountable for their errors." ALJ Decision at 8, n.6.

4. It is unnecessary for us to identify or address Barn Hill's disagreement with points made by CMS in its response to Barn Hill's exceptions and on which the ALJ did not rely.

5. The ALJ noted that "neglect" is defined in section 488.301 as "failure to provide goods and services necessary to avoid physical harm, mental anguish, or mental illness." ALJ Decision at 12.

6. The ALJ strongly suggested, however, that the conflicting evidence should be resolved in CMS's favor. See e.g., ALJ Decision at 12-13, 17.

7. We see no basis for Barn Hill's suggestion that the standing orders for Lasix, Theodur, Prednisone, and a nebulizer treatment to be given to Resident 3 at 9:00 a.m. might have been superseded by orders given by her physician at about 9:30 a.m. for a CBC [complete blood count], chest x-ray, sputum culture, and IM injection of Rocephen (an antibiotic). Certainly the Barn Hill nurse who reported that she administered one of the medications that had been due at 9:00 a.m. when she arrived in Resident 3's room at about 11:30 a.m. did not regard the standing orders as superseded. See CMS Ex. 15, at 1.

8. Barn Hill stated that "CMS pressed no deficiency" in regard to Barn Hill's failure to carry out some medication orders given by Dr. Casella for Resident 3 after 11:30 a.m. Barn Hill Br. at 20. However, the Statement of Deficiencies on which CMS relied for the CMP states under Tag 224 (the finding of a deficiency under section 498.13(c)) that a physician who was on the unit after 11:30 a.m. "ordered Decadron Stat." which was "not provided," and CMS presented undisputed testimony that Nurse Witt did not follow orders for IV Lasix and Decadron. CMS Ex. 3, at 2; Tr. at 53. Moreover, Barn Hill did not specifically except to the ALJ's finding that its failure to provide these medications constituted part of the basis for finding neglect as to Resident 3.

9. These facts were the basis for the deficiency findings under sections 483.20(k)(3)(i) and 483.25(m)(2) as well. ALJ Decision at 10-12.

10. The ALJ Decision indicates that Nurse Keady came on duty at the 7:00 a.m. staff change and that no other nurse was on the Newtonian Unit until around 11:30 a.m. ALJ Decision at 13, 15. The record indicates that, during Nurse Keady's shift, aides discovered two of the patients who suffered adverse reactions to the insulin overdoses. Barn Hill Ex. 10, at 1-2.

11. Barn Hill seemed to suggest that it had such a policy, although it acknowledged that it is not in the record. Barn Hill Br. at 34.

12. These provisions were:

8. Residents exhibiting assessment findings in the notification parameters of vital signs, hypoglycemia, alternation in mental status, bleeding, shortness of breath and seizures will be monitored at least every thirty (30) minutes until condition stabilizes or the resident is transferred to an acute care facility.

9. Documentation in nursing notes will reflect ongoing assessment, intervention, and physician notification.

Barn Hill Ex. 43, at 25. (The "notification parameters" are set out on the following two pages of the exhibit.) See also Tr. at 55.

13. Barn Hill argued that the ALJ misunderstood its argument as being that CMS must impose a CMP beginning with the first date of noncompliance or not at all, rather than as disputing the ALJ's finding of continuing noncompliance. The ALJ Decision clearly responds to the latter argument, however. The ALJ also rejected "the proposition that CMS' failure to impose the penalty at the earlier time precluded it from imposing any remedy at all," correctly noting that "CMS might have imposed a CMP starting July 28, when the actual harm occurred . . . ." ALJ Decision at 21, n.19. The fact that CMS imposed a CMP beginning August 2 does not mean that it regarded the noncompliance as beginning on that date.

14. Section 7304 of the State Operations Manual was revised after the period of time in question in the instant case.

15. The Board reached a similar conclusion in other cases cited by the ALJ: Asbury Center at Johnson City, DAB No. 1815 (2002); Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002); and Cross Creek Health Care Center, DAB No. 1665 (1998).

16. It was appropriate to require the same actions to correct each of these deficiencies since the deficiencies under sections 483.20 and 438.25 were predicated on facts which the ALJ found also constituted neglect under section 483.13.

We do not discuss the corrective actions for the non-immediate jeopardy deficiency under section 483.75 since there would be ample support for the CMP even if that one deficiency was corrected before August 2.

17. A form captioned RN/LPN Agency Orientation Checklist was attached to the Plan of Correction. CMS Ex. 7, at 9. Although it is undisputed that Barn Hill's staff development nurse provided an orientation to Nurse Keady, the orientation did not address all of the matters on the orientation checklist. Compare CMS Ex. 7, at 9, with Tr. at 41-42, 84.

18. It is unclear from the record whether Barn Hill was also required to audit each nurse's medication pass following the in-service training. Even if this was the case, however, routine supervision was not required.

19. In the discussion following this numbered finding, the ALJ stated that CMS's finding of immediate jeopardy was not clearly erroneous.

20. The ALJ also stated that "immediate jeopardy can exist regardless of the scope and severity of the deficiency, so long as the deficiency involves a potential for more than minimal harm." ALJ Decision at 20, citing Lake City Extended Care Center at 17. (See also ALJ Decision at 3.) Lake City correctly stated that immediate jeopardy can exist regardless of the scope of the deficiency. This is so because there are some deficiencies that, even though not widespread or even a pattern, are so egregious that they meet the definition of immediate jeopardy at 42 C.F.R. 488.301. Lake City also separately stated that immediate jeopardy can exist regardless of the severity of the deficiency. This statement is not correct because it is inconsistent with the definition of immediate jeopardy in section 488.301 as noncompliance that causes, or is likely to cause, serious injury, harm, impairment, or death to a resident. A provider is not in "substantial compliance" if it has deficiencies that pose a risk to resident health or safety greater than "the potential for causing minimal harm"; however, "the most serious deficiencies are those determined to constitute immediate jeopardy." Beverly Health and Rehabilitation-Spring Hill, DAB No. 1696, at 2 (1999). The ALJ's analysis here identified the correct level of severity for immediate jeopardy, however, as did Lake City. Moreover, as we discuss subsequently in the text of this section of our decision, there is no question that the three immediate jeopardy deficiencies here were at a level of severity which met the regulatory definition of immediate jeopardy.

CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES