SUBJECT: Palm Garden of Gainesville,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Palm Garden of Gainesville (Palm Garden) appealed the decision of Administrative Law Judge (ALJ) Anne E. Blair sustaining the determination of the Centers for Medicare & Medicaid Services (CMS) to impose the remedy of Denial of Payment for New Admissions (DPNA) for the period May 18 - June 1, 1999. Palm Garden of Gainesville, DAB CR1088 (2003) (ALJ Decision). CMS had imposed the DPNA based on a series of three surveys conducted by the Florida Agency for Healthcare Administration (State survey agency). CMS determined that a DPNA was required because Palm Garden remained out of substantial compliance with Medicare participation requirements three months after the last day of the first survey, at which Palm Garden's noncompliance was identified. As discussed in detail below, we find no merit in Palm Garden's arguments on appeal and affirm the ALJ Decision.

Our decision is based on the record before the ALJ, the parties' written submissions to the Board, and a transcript (Tr.) of an oral argument held at Palm Garden's request. The Presiding Board Member denied Palm Garden's request that it be permitted to present the testimony of its medical director, finding that Palm Garden failed to show good cause for not producing the testimony during proceedings before the ALJ, as required by the Board's Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs (at http://www.hhs.gov/dab/guidelines/). Letter to parties dated 12/18/03, at 2-3. The ALJ Decision notes that Palm Garden had submitted a letter from the medical director which was entitled to very little weight since Palm Garden did not call him as a witness or submit an affidavit from him. ALJ Decision at 12, n.5.

Legal Background

Palm Garden is a skilled nursing facility that participates in the Medicare program. The regulatory requirements for skilled nursing facilities and other long term care facilities are set forth at 42 C.F.R. Part 483. The specific requirement at issue here is section 483.25(m)(1), which states that the facility "must ensure" that "it is free of medication error rates of five percent or greater."

Compliance with Medicare participation requirements is determined through surveys performed by state agencies under contract with CMS. Survey results are reported in a "Statement of Deficiencies." 42 C.F.R. § 488.325(a). A "deficiency" is a failure to a meet a participation requirement in 42 C.F.R. Part 483. 42 C.F.R. § 488.301. A facility becomes subject to remedial action when it is not in "substantial compliance" with one or more participation requirements. See 42 C.F.R. § 488.400. "Substantial compliance" means a "level of compliance with the requirements of participation such that any identified deficiencies pose no greater risk to resident health and safety than the potential for causing more than minimal harm." 42 C.F.R. § 488.301.

One of the available remedies where a facility is not in substantial compliance is a DPNA. 42 C.F.R. §§ 488.406, 488.408, 488.417. Section 488.417 provides in relevant part:

(b) Required denial of payment. CMS does or the State must deny payment for all new admissions when-
(1) The facility is not in substantial compliance, as defined in § 488.401, 3 months after the last day of the survey identifying the noncompliance . . .

* * * * *

(d) Resumption of payments . . . . under Medicaid, CMS payments to the State on behalf of the facility, resume prospectively on the date that the facility achieves substantial compliance, as indicated by a revisit or written credible evidence acceptable to CMS (under Medicare) or the State (under Medicaid).

Section 488.454(a), which is not limited in its application to DPNAs, similarly provides that "alternative remedies continue until"--

(1) The facility has achieved substantial compliance, as determined by CMS or the State based upon a revisit or after an examination of credible written evidence that it can verify without an on-site visit . . . .

Section 488.454(e) further states:

If the facility can supply documentation acceptable to CMS . . . that it was in substantial compliance . . . on a date preceding that of the revisit, the remedies terminate on the date that CMS . . . can verify as the date that substantial compliance was achieved . . . .

Factual Background

A February 18, 1999 complaint survey found that Palm Garden was not in substantial compliance with several requirements of participation. A second survey on April 7-8, 1999 found that Palm Garden remained out of substantial compliance with the requirement in section 483.25(m)(1) that a facility ensure that its medication error rate was less than five percent, as well as with two other participation requirements. Palm Garden submitted a letter concerning its "Written Credible Evidence of Compliance" dated May 13, 1999 alleging that it was substantially complying with all three requirements as of that date. A third survey on June 1, 1999 found that Palm Garden had returned to substantial compliance with the requirement at section 483.25(m)(1). ⁽¹⁾ CMS imposed a "mandatory DPNA" pursuant to section 488.417(b)(1) for the period May 18 - June 1, 1999 on the ground that Palm Garden was not in substantial compliance with federal requirements three months after the February 18, 1999 survey that identified the noncompliance.

The ALJ Decision

The ALJ upheld the imposition of the DPNA. The ALJ determined that she did not need to address Palm Garden's argument that it should not have been cited for a deficiency under section 483.25(m)(1) in the February survey since Palm Garden did not contest that survey's other deficiency findings and a DPNA could be imposed regardless of the type of deficiencies found at each survey as long as Palm Garden remained out of substantial compliance for three months. ALJ Decision at 10. The ALJ proceeded to find that "CMS made a prima facie case that Petitioner was not in substantial compliance with 42 C.F.R. § 483.25(m)(1)" at the April 1999 survey. Id. at 12. The ALJ found, based on the surveyor's testimony, that Palm Garden's failure to comply with section 483.25(m)(1) had the potential to cause more than minimal harm. Id. at 11-12. The ALJ noted that Palm Garden had not provided any "factual evidence that the alleged errors did not occur or had no potential for causing more than minimal harm . . . ." Id. at 12. The ALJ concluded that CMS's prima facie case was not rebutted by Palm Garden's arguments regarding the effect of allegedly improper survey procedures and of the State survey agency's reinstitution of Palm Garden's license. Id. at 12-14. Finally, the ALJ found that Palm Garden "failed to prove that it was back in substantial compliance [with section 483.25(m)(1)] on May 13, 1999, rather than June 1, 1999." Id. at 15. The ALJ noted Palm Garden's argument that, "even if it had been out of compliance on April 8, 1999, it was back in compliance by May 13, 1999, when it submitted 'written credible evidence' of its compliance." Id. The ALJ stated that "an ALJ has the authority to look at the facts and determine whether a facility has achieved compliance prior to the time CMS has determined." Id. The ALJ then reviewed the evidence that Palm Garden submitted regarding its return to compliance on May 13, but concluded that the evidence was not persuasive. ALJ Decision at 15-16.

Palm Garden's Exceptions

On appeal, Palm Garden took exception to two of the ALJ's numbered Findings of Fact and Conclusions of Law (FFCLs):

3. A preponderance of the evidence shows that Petitioner was not in substantial compliance with Federal requirements at the April 1999 survey.

3.c. Petitioner failed to prove it was back in substantial compliance on May 13, 1999, rather than June 1, 1999.

Since Palm Garden took no exception to the remaining FFCLs (FFCLs 1, 2, 2.a., 2.b., 3.a., and 3.b.), we affirm them without further discussion.

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, e.g., Fairfax Nursing Home, Inc., DAB No. 1794 (2001), aff'd, Fairfax Nursing Home v. Dep't of Health & Human Srvcs., 300 F.3d 835 (7th Cir. 2002), cert. denied, 2003 WL 98478 (Jan. 13, 2003).

On appeal, Palm Garden argued that the types of errors found at the April 1999 survey were not in fact medication errors within the meaning of section 483.25(m)(1). Palm Garden also argued that, even if they were medication errors, they did not pose a potential for more than minimal harm, so that there was no basis for finding Palm Garden out of substantial compliance. Finally, Palm Garden argued that, even if it was out of substantial compliance in April 1999, it returned to substantial compliance on May 13, 1999, less than three months from when it was first found out of substantial compliance, so that imposition of a mandatory DPNA was not warranted.

With respect to Palm Garden's first argument, we note that there is no indication in the record that Palm Garden argued before the ALJ that no medication errors occurred. ⁽²⁾ The Board's Guidelines provide that "the Board will not consider issues not raised in the request for review, nor issues which could have been presented to the ALJ but were not." Since Palm Garden did not argue that it could not have presented this issue to the ALJ, we see no reason why it should be given an opportunity to raise the issue now. See Ross Healthcare Center, DAB No. 1896 (2003).

Palm Garden took issue with the ALJ's finding that the medication errors posed a potential for more than minimal harm primarily on the ground that the surveyor on whose testimony the ALJ relied "was not qualified as an expert" to testify to this because it constituted a "medical opinion." Palm Garden Reply Br. at 2. ⁽³⁾ As the Board has previously observed, however, a surveyor does not need to be formally qualified as an expert in order for the ALJ to accord weight to his or her testimony. In Omni Manor Care Center, DAB No. 1920 (2004), the Board noted that "[n]either CMS nor Omni sought to have their witnesses officially 'qualified' as experts in the manner required by the procedural rules of some courts or administrative bodies. See, e.g., Rule 702 of the Federal Rules of Evidence." The Board continued: "The evidentiary test for opinion testimony by experts, however, is whether the witness is 'qualified as an expert by knowledge, skill, experience, training, or education . . . .' Id." Omni at 10, n.12; see also, Coquina Center, DAB No. 1860 (2002). In the instant case, the ALJ could reasonably infer from the witness's testimony regarding her education, training and experience that she was amply qualified to give an opinion as to whether the medication errors had the potential to cause more than minimal harm. See Tr. of hearing at 30-31.

In any event, Palm Garden admitted that as many as "two or three" of the eight medication errors observed by the surveyor at the April survey may have posed a potential for more than minimal harm. Tr. of oral argument at 19. As long as some of the errors posed a potential for more than minimal harm, it follows that the deficiency as a whole posed a potential for more than minimal harm. CMS did not need to establish that each of the errors individually posed the potential for more than minimal harm in order for the deficiency to be considered as involving this level of severity.

Palm Garden disputed most vigorously the ALJ's finding that it did not return to substantial compliance until June 1, 1999. According to Palm Garden, CMS accepted its "Written Credible Evidence of Compliance" dated May 13, 1999 as of that date since CMS did not notify Palm Garden that this allegation of compliance was rejected. Palm Garden asserted that CMS had accepted its allegation of compliance with the two other participation requirements as of that date without notifying Palm Garden of the acceptance. Palm Garden also argued that since there is no evidence in the record that CMS specifically determined that an on-site review was required to find substantial compliance in this case, the date of substantial compliance under the regulations is the date of Palm Garden's "Written Credible Evidence of Compliance."

Palm Garden's arguments have no merit. Under the applicable regulations, Palm Garden was entitled to submit evidence to CMS to establish that it was in compliance prior to the date of the survey. ⁽⁴⁾ See 42 C.F.R. §§ 488.417(d), 488.454(a), and 488.454(e). ⁽⁵⁾ However, there is nothing in the regulations that suggests that CMS must make a formal determination that any such evidence is unacceptable or that a survey is required. Moreover, the ALJ examined the evidence submitted by Palm Garden and gave a detailed explanation of her finding that the evidence did not establish that Palm Garden was in substantial compliance as of May 13. Since Palm Garden did not give any reasons why that finding was wrong, there is no basis for disturbing it.

Conclusion

For the foregoing reasons, we sustain the imposition of the DPNA for the period May 18 - June 1, 1999. In doing so, we affirm and adopt all the FFCLs made by the ALJ.

Judith A. Ballard

Cecilia Sparks Ford

Donald F. Garrett
Presiding Board Member

1. Palm Gardens contended before the ALJ that the two other deficiency findings had been deleted during informal dispute resolution proceedings with the State. The ALJ stated that she would make no findings respecting these two requirements because "the decision can be made in favor of CMS without finding Petitioner deficient under either of these tags . . . ." ALJ Decision at 7.

2. The Board asked Palm Garden to point to where in the record it had made such an argument, if it had. Tr. of oral argument at 5. Palm Garden did not do so, nor did it pursue this argument in its oral presentation.

3. Palm Garden also observed that there was no testimony that any "adverse effect had occurred" from the medication errors. Tr. of oral argument at 9-10. The lack of any such testimony has no bearing on whether the deficiency had a potential for more than minimal harm, however. Palm Garden further observed that the State agency ultimately "retracted" this deficiency finding. Id. at 10. This appears to raise again Palm Garden's argument before the ALJ that CMS should have dropped its deficiency finding in light of this State agency action. We agree with the ALJ, however, that the State agency's action has no effect on this case since the standards applied in the state licensing proceeding might not have been the same. Moreover, as the ALJ pointed out, the regulations provide that where there are differences of opinion about compliance between a State agency and CMS, CMS should prevail. See ALJ Decision at 14. In any event, since Palm Garden did not argue before the ALJ that it did not have any medication errors at the time of the April survey, it is precluded from raising this argument now.

4. CMS argued in its response brief that a facility may establish that it came into substantial compliance based only on a Plan of Correction, and not on a document such as Palm Garden's "Written Credible Evidence of Compliance." We see no such restriction in the regulations, however.

5. The ALJ Decision cites section 488.440(h), which concerns the duration of civil money penalties. ALJ Decision at 4. However, the language of that section is substantially the same as the language of section 488.417(d).