CASE | DECISION |JUDGE | FOOTNOTES

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


SUBJECT:

Franklink Care Center

Petitioner,

DATE: April 04, 2003
                                          
             - v -
 

Centers for Medicare & Medicaid

 

Docket No.C-99-789
Decision No. CR1023
DECISION
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DECISION

I find that Petitioner, Franklin Care Center, failed to substantially comply with federal participation requirements during the period from April 8, 1999 to April 19, 1999, at the immediate jeopardy level. A civil money penalty of $5,000 at the immediate jeopardy level for each day of non-compliance from April 9, 1999 to April 19, 1999, is appropriate and reasonable.

BACKGROUND

Petitioner is a long term care facility that is located in Franklin Park, New Jersey. Petitioner participates in federally funded health care programs, including Medicare and New Jersey's Medicaid program. It is governed by federal statutes and regulations which govern participation of long term care facilities in these programs.

On April 7, 1999, the New Jersey Department of Health and Senior Services (State Agency) was notified by Petitioner that medication errors had occurred at its facility, and that apparently two residents inadvertently received exogenous insulin. (1)

As a result of the notification, a complaint survey was conducted at the Franklin Care Center on April 8, 1999 by the State Agency. At the conclusion of the survey the State Agency cited Petitioner for failure to substantially comply with two participation requirements (Tags F 333 and F 225) (2) at a level of noncompliance that was so egregious as to place residents of Petitioner in a state of immediate jeopardy.

The State Agency surveyor cited F 333 for failure to comply with Title 42 Code of Federal Regulations (C.F.R.) § 483.25(m)(2), based on her determination that Petitioner failed to assure that all residents were free from significant medication errors. Specifically, the surveyor determined that two residents on Petitioner's sub-acute unit were hospitalized on March 27, 1999 with symptoms of hypoglycemia, after receiving insulin instead of the heparin which their respective attending physicians had ordered.

The surveyor also cited F 225 for failure to comply with 42 C.F.R. § 483.13(c)(1)(ii), based on her determination that Petitioner failed to promptly conduct a full investigation of the hypoglycemia reactions experienced by the two residents on March 27, 1999. Further, the surveyor alleged that no steps were taken to assure the safety of other residents on the sub-acute unit, and that there were no corrective actions taken by Petitioner prior to April 8, 1999, when they notified the State Agency of the incident.

Based on the State Agency findings, CMS imposed civil money penalties against Petitioner, which included civil money penalties at the immediate jeopardy level of $5,000 per day for each day of the period that began on April 8, 1999, and which ran through April 19, 1999, for a total civil money penalty of $60,000

Petitioner requested a hearing and the case was assigned to me for hearing and decision. I held an in-person hearing in Newark, New Jersey on May 1 - 2, 2001, in which I heard the testimony of various witnesses.

I received into evidence exhibits offered by CMS consisting of HCFA Exhibits (HCFA Exs.) 1 - 21. I note that the exhibits offered by CMS were marked with the acronym "HCFA." In this Decision, I refer to these exhibits as they were identified at the hearing. I received into evidence exhibits offered by Petitioner consisting of Petitioner's Exhibits (P. Exs.) 1 - 10. Both parties were sent a copy of the transcript (Tr.) of the hearing.

At the end of the hearing I ordered the parties to submit post hearing briefs. CMS submitted a post hearing brief (CMS Br.) as did Petitioner (P. Br.).

APPLICABLE LAW

Petitioner is considered a long-term care facility under the Social Security Act (Act) and regulations promulgated by the Secretary of Health and Human Services (Secretary). The statutory requirements for participation by a long-term care facility are found at sections 1819 and 1919 of the Act and at 42 C.F.R. Part 483. Sections 1819 and 1919 of the Act vests in the Secretary the authority to impose civil money penalties against a long-term care facility for failure to comply substantially with participation requirements.

Pursuant to the Act, the Secretary has delegated to CMS and the states the authority to impose remedies against a long-term care facility that is not substantially complying with federal participation requirements. 42 C.F.R. Part 483 provides that facilities which participate in Medicare may be surveyed on behalf of CMS by state survey agencies in order to ascertain whether the facilities are complying with participation requirements. 42 C.F.R. §§ 488.10-488.28.

The regulations contain special survey conditions for long-term care facilities. 42 C.F.R. §§ 488.300-488.335. Under Part 488, a state or CMS may impose a civil money penalty against a long-term care facility where a state survey agency ascertains that the facility is not complying substantially with participation requirements. 42 C.F.R. §§ 488.406, 488.408, 488.430. The penalty may start accruing as early as the date that the facility was first out of compliance until the date substantial compliance is achieved or the provider agreement is terminated.

The regulations specify that a civil money penalty that is imposed against a facility will fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of civil money penalties, of from $3,050 per day to $10,000 per day, is reserved for deficiencies that constitute immediate jeopardy to a facility's residents, and in some circumstances, for repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1), (d)(2). The term "immediate jeopardy" is defined under federal regulations to mean a situation in which a facility's noncompliance with one or more participation requirements has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301.

The lower range of civil money penalties, from $50 per day to $3,000 per day, is reserved for deficiencies that do not constitute immediate jeopardy, but either cause actual harm to residents, or cause no actual harm, but have the potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(2).

The regulations define the term "substantial compliance" to mean:

(1) 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.

In determining the amount of the civil money penalty, the following factors specified at 42 C.F.R. § 488.438(f) must be considered:

1. The facility's history of non-compliance, including repeated deficiencies;

2. The facility's financial condition;

3. The seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and

4. The facility's degree of culpability.

In a civil money penalty case, CMS must make a prima facie case that the facility has failed to substantially comply with participation requirements. To prevail, a long-term care facility must overcome CMS' showing by a preponderance of the evidence. Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd Hillman Rehabilitation Center v. HHS, No. 98-3789 (D.N.J. May 13, 1999)

Ruling on Petitioner's argument to dismiss F 225

Petitioner argues that CMS' citation for F 225 is defective, and thus should be dismissed. CMS alleges in the statement of deficiencies, or form 2567, (3) that Petitioner was out of compliance with 42 C.F.R. § 483.13(c)(1)(ii). That section refers to the staff treatment of residents and states as follows:

(1) [t]he facility must--(ii) [n]ot employ individuals who have been--(A) [f]ound guilty of abusing, neglecting, or mistreating residents by a court of law; or (B) [h]ave had a finding entered into the State nurse aide registry concerning abuse, neglect, mistreatment of residents or misappropriation of their property

CMS did not cite 42 C.F.R. § 483.13(c)(1)(ii) in its post hearing brief, nor explain the reason for the apparently erroneous citation in the form 2567. Rather, CMS argued at hearing and in its post hearing brief that Petitioner failed to comply with 42 C.F.R.§ 483.13(c), which states that:

(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.

Petitioner's argument was not fully articulated in its post hearing brief. Petitioner's argument appears to be as follows: CMS cited Petitio§ner in the form 2567 for noncompliance with subsection 483.13(c)(1)(ii). However, CMS did not argue or address that subsection at hearing or in its post hearing brief, but rather relied on a different subsection, 483.13(c). Thus, Petitioner reasons that F 225 is defective, and therefore, should be dismissed.

As previously noted, CMS did not discuss the citation of section 483.13(c)(1)(ii) in its post hearing brief. It is true that CMS did refer to a different subsection of 42 C.F.R.§ 483.13(c) at trial and in its post hearing brief than was cited in the form 2567. However, I consider this to be harmless error in this case. The real issue before me is whether or not Petitioner received sufficient notice of the allegations against it, so as not to be unfairly surprised or prejudiced.

Petitioner was very much aware of what CMS intended to plead and prove in this case. Indeed, CMS has consistently maintained that Petitioner was out of compliance under 42 C.F.R. § 483.13 Resident behavior and facility practices. CMS has maintained from the beginning of the case, throughout the hearing, and in post hearing argument that the basis for the deficiency allegations for F 225 was Petitioner's failure to report the medication error promptly and for the failure to safeguard the residents of the subacute unit. Tr. 41. Perhaps most importantly, Petitioner has never alleged that it was not given sufficient notice regarding the specific allegations of non-compliance. Nor, for that matter, has Petitioner alleged or attempted to prove that it was somehow prejudiced by the error in the citation of section 483.13(c)(1)(ii) in the form 2567.

Both parties fully litigated the issues in this case under F 225 as it relates to 42 C.F.R. §§ 483.13(c)(2)(3) and (4). Therefore, I deny Petitioner's request to dismiss F 225.

ISSUES, FINDINGS OF FACT, AND CONCLUSIONS OF LAW

A. Issues

The issues in this case are:

a. Whether the facility was complying substantially with federal participation requirements on the dates CMS determined to impose a civil money penalty; and .

b. Whether the amount of the penalty imposed by CMS is reasonable, if non-compliance is established.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separately numbered bolded heading. I discuss each Finding in detail.

1) Petitioner failed to comply substantially with 42 C.F.R. § 483.25(m)(2).

The applicable regulation at 42 C.F.R. § 483.25(m)(2) provides:

The facility must ensure that -

(1) It is free of medication error rates of five percent or greater; and

(2) Residents are free of any significant medication errors.

Based on interviews and record reviews during the course of the complaint survey at Franklin Care Center, the State Agency investigation revealed that on the morning of March 27, 1999, Licensed Practical Nurse (LPN) Lorenza Ramos administered medication injections to Resident #1 and Resident #2 as scheduled. The medication orders in the medical records called for each resident to receive heparin. HCFA Ex. 2.

Resident # 1

Resident #1 was a 80-year old woman originally admitted to Franklin Care Center sub-acute unit on March 11, 1999. She was diagnosed with dementia, lyme disease, gait disturbance, seizure disorders, and poor appetite. P. Exs. 1, 9.

At approximately 11:00 A.M. on March 27, 1999, Nurse Ramos observed that Resident #1 appeared to be flushed and was perspiring. HCFA Ex. 9. A blood test revealed that her blood sugar was low. Id. Petitioner's staff began a standard treatment protocol for hypoglycemia. (4) Tr. at 251-252. Resident #1's physician, Dr. Singh, M.D. was contacted. Upon arrival at Franklin Care Center, Dr. Singh observed that Resident #1's blood sugar was "kind of on the lower side." Tr. 252.

At approximately 4:45 P.M., Resident #1 appeared to have suffered a seizure, and at about 5:20 P.M. Dr. Singh had his patient transported to St. Peter's Medical Center (SPMC). Resident #1's glucose level was 30 mg/dl (milligrams of glucose per deciliter of blood). (5)

At SPMC, Resident #1 received intravenous fluids and medication, and gradually her blood sugar level returned to normal. Tr. at 255.

Resident #2

Resident #2 was a 85-year old woman originally admitted to Franklin sub-acute unit on February 3, 1999. She had a history of myocardial infarction, angioplasty, hypertension, esophageal dysfunction, and was admitted to the facility with a right below the knee amputation, amputation of two toes, skin graft, peripheral vascular disease, scleroderma, and anemia. P. Exs. 1, 9.

On March 27, 1999 at about 12:00 P.M., Resident #2 began exhibiting signs of hypoglycemia. Resident #2's physician Dr. Weisfogel, M.D. was notified. Seizure like activity developed, and a blood test indicated that her blood sugar was low. HCFA Ex. 2.

Dr. Weisfogel ordered Resident #2 to be transferred to SPMC at about 2:45 P.M.Upon arrival at SPMC, Resident #2's blood sugar was 31/mg/dl. HCFA Ex. 19. Several hours later, Resident #2's blood sugar level returned to normal.

Because of the symptoms and similarities in the cases, both attending physicians suspected that the residents had received insulin from a source at Franklin Care Center. The physicians requested a specialized test known as a C-Peptide test to determine if in fact the residents had received insulin from an external source. Tr. at 145-147.

On March 29, 1999, Deborah Hicks, assistant administrator at Franklin, initiated an investigation tdetermine what caused the Residents sudden change in physical condition. Hicks' investigation focused on Nurse Ramos since she had administered medication to both residents on the morning of March 27, 1999. Nurse Ramos vehemently denied any possibility of a medication error on her part, and maintained that she had properly injected the residents with 5,000 units of heparin as physician orders required. Tr. at 36; P. Ex. 9.

On April 6, 1999, Hicks received the results of the C-Peptide test which confirmed the presence of exogenous insulin in Resident #1. (6)

In her investigation report Hicks concluded that:

[a]fter fully reviewing the circumstances surrounding the hypoglycemia episodes of these two patients, neither of which had a previous history of hypoglycemia or diabetes it would appear they had inadvertently received insulin. Both patients were to have received SQ injections of Heparin in the morning. Upon inspection of the two bottles of medication, both are noted to be similar size and shape. The bottle of 50/50 Insulin has an orange metal ring around the top with black writing. The bottle of Heparin had a silver metal ring around the tip with orange writing. This writer believes that Humulin Insulin 50/50 was given by nurse Ramos, rather than the Heparin.

HCFA Ex. 9, at 2.

Nurse Ramos' employment at Franklin Care Center was terminated, and March 28,1999 was the last day she worked at Franklin Care Center. P. Ex. 9. On April 7, 1999, Petitioner reported the incident to the State Agency. HCFA Ex. 9.

Resident # 3

On April 9, 1999, Petitioner reported to the State Agency that Resident #3 (7) had experienced an overdosed of digoxin. Tr. at 108; HCFA Ex. 12. The overdose was caused by a transcription error by a Franklin Care Center nurse other than Nurse Ramos. The physician's order for the medication was not correctly placed on the medication administration record. As a result the resident did not receive the appropriate dose of medication as ordered for nine days, from April 1, 1999 through April 9, 1999. Tr. 62; HCFA Ex. 15. This medication error resulted in an overdose of digoxin and the resident was hospitalized for digoxin toxicity.

Petitioner argues that a facility cannot ensure that medication errors will never occur. P. Br. at 8. I agree. A facility is not required to, nor do the regulations mandate that a facility prevent all medication errors. Indeed, almost all skilled nursing facilities experience some medication errors. However, the regulations at 42 C.F.R § 483.25(m) make a distinction between relatively minor medication errors which occur at a unacceptable frequency (error rates of five percent or greater), and significant medication errors.

I find that Petitioner failed to comply with 42 C.F.R. § 483.30(m)(2) because Residents #1, #2, and #3 suffered serious medication errors which can only be described as significant. After an investigation, it was determined that on the morning of March 27, 1999, Nurse Ramos inadvertently injected Residents #1 and #2 with insulin instead of the prescribed heparin. As a result the residents suffered hypoglycemia reactions. Both residents were rushed to the hospital emergency room. After some difficulty, the residents blood sugar levels were stabilized. Without prompt intervention, Residents #1 and #2 would have died. Tr. at 39. Similarly, Resident #3's serious Digoxin overdose led to his hospitalization.

I find that CMS established a prima facie case that Petitioner failed to comply with 42 C.F.R. § 483.25(m)(2) in that Petitioner failed to ensure that residents are free of any significant medication errors. I also find that Petitioner did not rebut CMS's prima facie case by a preponderance of the evidence. The residents suffered serious actual harm as a result of Petitioner's significant medication errors. Therefore, I sustain CMS's deficiency finding on participation requirement 42 C.F.R. § 483.25 (m)(2); (F 333) at the immediate jeopardy level.

2) Petitioner was in substantial compliance with 42 C.F.R. § 483.13(c)(2),(3),

and (4).

The applicable regulation at 42 C.F.R. §§ 483.13(c)(2), (3), and (4) states:

(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.

(2) [t]he facility must ensure that all alleged violations involving mistreatment, neglect, or abuse, including injuries of an 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 the State survey and certification agency).

(3) [t]he facility must have evidence that all alleged violations are thoroughly investigated, and must prevent further potential abuse while the investigation is in progress.

(4) [t]he 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.

CMS alleges that: (1) Petitioner's failure to ensure that Residents #1 and #2 were free from medication errors constituted neglect, and therefore should have been timely reported to the proper authorities pursuant to 42 C.F.R. § 483.13(c)(2); (2) Petitioner failed to immediately report to the proper authorities that Residents #1 and #2 suffered hypoglycemia reactions as a result of incorrectly receiving insulin injections from a Franklin Care Center nurse; (3) Petitioner failed to perform a prompt, thorough investigation of the Resident #1 and #2 medication errors; and (4) Petitioner failed to ensure the safety of the other residents in the sub-acute unit.

A. Petitioner's failure to ensure that Residents #1 and #2 were free from medication errors constituted neglect.

In addressing this issue, I will first consider whether the facility's action or inaction constituted neglect, and if so, whether such neglect constituted a deficiency under 42 C.F.R. § 483.13(c).

Under 42 C.F.R. § 488.301, neglect is defined as the failure to provide goods and services necessary to avoid physical harm, mental anguish, or mental illness. CMS argues that Residents #1 and #2 , who were not diabetic, were injected with insulin instead of heparin as ordered by the residents' respective attending physicians. The reactions were so severe, that both the nursing staff at Petitioner's facility and in the hospital emergency room had difficulty in stabilizing the residents. Both Residents #1 and #2 would have died without prompt intervention. Tr. at 39. Thus, CMS argues that the neglect of these two residents placed the two residents in immediate jeopardy. CMS cites Haverhill Care Center, DAB CR 521 (1998), aff'd Haverhill Care Center v. U.S., No. 98-3789 (GEB), (D.N.J. 1999), and Mediplex of Massachusetts, DAB CR584 (1999), to support their argument that Petitioner's failure to accurately administer medications constitutes neglect.

Petitioner argues that the cases cited by CMS can be distinguished from the facts of this case and asserts that events described in the form 2567 relate to medication error, not neglect. Further, Petitioner argues that CMS did not take Petitioner to task for failure to develop and implement written policies and procedures relating to neglect, but rather utilizes 42 C.F.R. § 483.13(c) because the section contains the reporting and investigation requirements which are the real gravamen of CMS's case. Petitioner further argues that it did indeed conduct a prompt and thorough investigation of the alleged medication error and appropriately reported the incident once it was definitively determined that a medication error occurred.

Petitioner's argument is persuasive relative to the thrust of CMS's case. CMS's argument and evidence focused on the reporting requirements of section 483.13(c) rather than written policies and procedures related to neglect. While written policies and procedures are not the focal point of CMS's case, the issue remains as to whether the mediation errors in this case constitute neglect. If neglect is found, then the issues are: (1) whether Petitioner complied with the reporting requirements of section 483.13; (2) whether Petitioner failed to perform a prompt, thorough investigation of Residents' #1 and #2 medication errors; and (3) whether Petitioner failed to ensure the safety of the other residents in the sub-acute unit.

Two of Petitioner's non-diabetic residents were hospitalized due to severe hypoglycemia reactions. It was subsequently determined that they suffered the hypoglycemia reactions because they were injected with insulin rather than heparin, the drug which had been ordered by their attending physicians. Tr. at 33-39; P. Ex. 3. The facts as established indicate that Nurse Lorenza Ramos administered the wrong medications to Residents #1 and #2.

In addition, Resident #3 suffered an overdose of Digoxin because of a transcription error in which the attending physician's order for the medication was not correctly placed on the medication administration record. As a result of this error, Resident #3 did not receive the appropriate dose of medication as ordered for nine days, from April 1, 1999 through April 9, 1999. Tr. at 62; HCFA Ex. 15. Because of the resulting overdose of Digoxin, Resident #3 required hospitalization.

As previously noted, neglect is defined as the failure to provide goods and services necessary to avoid physical harm, mental anguish, or mental illness. 42 C.F.R. § 488.13. The facts in this case establish that Petitioner failed to provide the appropriate medication to Residents #1 and #2, which resulted in physical harm and hospitalization. In addition, Petitioner failed to provide adequate services in the form of proper transcription of a medication order for Resident # 3, which resulted in physical harm requiring hospitalization. These medication and transcription errors involving three residents at Petitioner's facility constitute neglect.

3) Petitioner timely and properly reported to the authorities medication errors relating to Residents #1 and #2 pursuant to 42 C.F.R. § 483.13(c)(2).

The regulation at 42 C.F.R. § 483.13(c)(2) requires that alleged violations involving mistreatment, neglect, and abuse, be reported to the proper authorities. While I find that the medication errors involving Residents #1, and #2 constituted neglect, I do not find that Petitioner failed to report the medication errors relating to Resident #1 and #2 to the State Agency in accordance with 42 C.F.R. § 483.13(c)(2).

CMS argues that Petitioner should not have waited until April 7, 1999 to report the medication error to the State Agency. CMS asserts that the medication error should have been reported on March 27, 1999, or at the very latest March 29, 1999. According to CMS, Petitioner should have known on March 27, 1999, that their were medication errors because two non-diabetic residents exhibited symptoms of hypoglycemia on the same day. Further, Petitioner received information that both Residents #1 and #2 had received medication injections from the same nurse on March 27, 1999, and both patients were taken to the hospital at approximately the same time. CMS Br. at 22. In addition, CMS argues that a phone call from the vice president of the hospital where Residents #1 and #2 were taken, in which he indicated that the elevated insulin levels in both residents was "unusual", should have informed Petitioner that medications errors had occurred. CMS argues that all of these facts taken together should have given Petitioner reason to know that a medication error had occurred. Thus, CMS maintains that Petitioner should have reported the medication error by no later than March 29, 1999.

The evidence in this case establishes that Petitioner conducted a thorough investigation into the medication errors relative to Residents #1 and #2, considering the totality of the circumstances and various potential causes for the elevated blood sugars in the two residents. It was impossible on March 27, 1999 to determine what caused the sudden drop in Residents #1 and #2's blood sugar levels. Indeed, Dr. Singh, Resident #1's treating physician, testified that hypoglycemia could result from a number of different causes. Tr. at 254-255. Dr. Singh pointed out that both Residents #1 and #2 were very sick elderly individuals, with poor diets, each taking many medications Tr. at 252-253. By March 29, 1999, Petitioner had more information but no reason to know with reasonable certainty that a medication error was the cause of the hospitalization of Residents #1 and #2. In addition, when Nurse Ramos was questioned regarding the possibility of a medication error, she adamantly denied that she made any mistakes. Tr. at 182. Nurse Ramos was a well respected, experienced, LPN, therefore, Petitioner had no reason to doubt her denials at the time.

Because of the uncertainty as to the cause of the sudden drop in blood sugar in the two residents, C-Peptide tests were ordered. Based on the information before it at the time of the medication errors to Residents #1 and #2, Petitioner acted prudently to determine the cause of the sudden drop in blood sugar of the two residents. Once the results of the C-Peptide test determined conclusively that there had indeed been medication errors, Petitioner reported the incident to the State Agency the very next day.

CMS argues that their was no need to confirm everyone's suspicions that a medication error had been made before the incident was reported to the State Agency. I do not interpret the regulations to mean that a facility is required to hypothesize or speculate about the outcome of an investigation before it is completed. Petitioner conducted a thorough investigation of the medication errors under the circumstance and once it was determined by the results of a C-Peptide tests that a medication error was confirmed, Petitioner reported the incident as required by 42 C.F.R. § 483.13(c)(2). Prior to that determination, as Dr. Singh testified, the possibility of exogenous insulin in his patient was one of many diagnoses to be ruled out.

4) Petitioner did not neglect the other residents in the facility, nor did it fail to conduct a thorough investigation, or safeguard the residents in the sub-acute unit during the investigation. 42 C.F.R. § 483.13(c)(3).

I find that Petitioner did not fail to ensure the safety of the other residents in the sub-acute unit as CMS alleges. 42 C.F.R. § 483.13(c)(3). CMS argues that Petitioner should have completed an internal audit of the whole sub-acute unit after Residents #1 and #2 were hospitalized. Tr. at 106-107; Tr. at 142-143, 150. CMS maintains that the internal audit should have included a physical, hands on assessment of the residents in the sub-acute unit. Tr. at 61-62. CMS further asserts that Petitioner failed to safeguard the other residents in the subacute unit by allowing Nurse Ramos to work and pass medications the day following the hospitalization of Residents #1 and #2.

Deborah Hicks, Petitioner's assistant administrator, testified that each patient in the sub-acute unit has a skilled nursing need, and as such, by protocol, each patient is examined and vital signs are taken at least once a nursing shift. In addition, she testified that medications are administered to residents in the sub-acute unit two to four times per shift, which would provide assessments between shifts. Tr. at 185. Therefore, their was no need to conduct a review of every patient chart in the sub-acute unit.

Petitioner further argues that an internal audit of the medical charts of all of the other residents in the sub-acute unit would not have identified any other medication errors of the type experienced by Residents #1 and #2. Nor, according to Petitioner, would an internal audit conducted on March 27, 1999, or any time prior to April 1, 1999, have revealed the transcription error with respect to Resident #3, when the medications were transcribed for the new month.

Given the systematic care and observation received by the patients in the sub-acute unit, Petitioner had no reason to conduct a chart review and physical assessment of every patient. Tr. at 85. Therefore, I find that the routine physical examinations and care provided to the other residents in the sub-acute unit while the investigation into the hospitalization of Residents #1 and #2 were being conducted, to be sufficient under the circumstances to safeguard the health and safety of the residents. Tr. at 85.

CMS also argues that Petitioner failed to insure the safety of the residents by allowing Nurse Ramos to work the day after the medication errors. However, CMS' own expert witnesses had different opinions regarding this issue. Cynthia Drake-VanOrden, a Complaint Investigator at the State Agency, testified that Nurse Ramos should not have been allowed to work at the facility the day after Residents #1 and #2 were hospitalized. Tr. at 88. Jill Turner-Johnson, a Supervising Evaluator at the State Agency, opined that she would have allowed Nurse Ramos to work, but she would not have allowed her to administer medications. Tr. at 146.

I do not find the arguments advanced by CMS on this matter to be persuasive. Petitioner immediately interviewed Nurse Ramos, who adamantly denied that she made any mistakes. Tr. 182. Nurse Ramos was a well respected, experienced, LPN, and therefore, Petitioner had no reason to doubt her veracity at the time. This fact, coupled with uncertainty as to what caused the sudden illnesses of Residents #1, and #2, leads me to the conclusion that Petitioner acted reasonably under the circumstances.

REASONABLENESS OF THE CIVIL MONEY PENALTY

5) A civil money penalty at the immediate jeopardy level of $5,000 for each

day of non-compliance is reasonable. The total amount of civil money penalty is $60,000.

In determining the amount of the civil money penalty, the following factors specified at 42 C.F.R. § 488.438(f) must be considered: (1) the facility's history of non-compliance, including repeated deficiencies; (2) the facility's financial condition; (3) the seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and (4) the facility's degree of culpability.

CMS determined to impose civil money penalties of $5,000 a day from April 8, 1999 through April 19, 1999. CMS made its determination to impose these penalty amounts on the following considerations. On April 6, 1999, Petitioner received the results of the C-Peptide test from the hospital which confirmed the presence of exogenous insulin. On April 7, 1999, Petitioner reported the incident to the State Agency Tr. at 40. On April 8, 1999, the State Agency conducted a complaint survey at Franklin Care Center. Petitioner was cited for non-compliance with F 225 at the immediate jeopardy level. On April 9, 1999, a medication error involving Resident #3 occurred. Tr. at 43. As a consequence of the medication error, the State Agency conducted another survey at Franklin Care Center on April 14, 1999. Petitioner was cited for non-compliance with F 333 at the immediate jeopardy level. CMS Ex. 14. On April 14, 1999, Petitioner submitted a plan of correction to the State Agency that was determined to be unacceptable. Tr. at 43 On April 15, 1999, Petitioner submitted a revised addendum to the plan of correction. CMS Ex. 16. On April 20, 1999, Petitioner was found to have achieved substantial compliance, and a plan of correction was ultimately accepted by the State Agency on April 20, 1999.

I have considered what civil money penalties would be reasonable for Petitioner's noncompliance with participation requirements from April 8, 1999, through April 19, 1999, at the immediate jeopardy level. I conclude that $5,000 per day is a reasonable penalty for each day of Petitioner's noncompliance. I make my decision based on the factors cited at 42 C.F.R. §§ 488.438(f) and 488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)). I have considered the following:

• Petitioner's history of non-compliance. Although Petitioner stated that the facility had no history of non-compliance, neither party offered evidence to show that Petitioner had a history of non-compliance that justified either adjusting the civil money penalty upward or downward;

• Petitioner's financial condition. Neither party offered any evidence to establish that Petitioner's financial condition was a bases for either sustaining or reducing the civil money penalty amounts; and

• The seriousness of the deficiencies, and Petitioner's culpability for it's deficiencies.

The deficiencies that were present at the facility caused serious actual harm to Residents #1, #2, and #3. Therefore, I find that an immediate jeopardy penalty is warranted for the period imposed by CMS. I have found that Petitioner did not ensure that Residents #1, #2, and #3 were free of significant medication errors. I find the deficiencies to be serious in nature as was the harm cause to Residents #1, #2, and #3 because of Petitioner's noncompliance. There was no evidence presented which persuaded me that Petitioner was not culpable, nor were their facts that indicate that its culpability is in any way diminished, which would warrant the reduction of the civil money penalty amount in this case. Consequently, I find that a civil money penalty in the amount of $ 5,000 per day is reasonable.

CONCLUSION

Based on my review of the entire record in this case, I find that Petitioner failed to comply substantially with federal participation requirements for the period of April 8, 1999, through April 19, 1999, at the immediate jeopardy level. A civil money penalty of $5,000 at the immediate jeopardy level for each day of non-compliance is appropriate and reasonable.

JUDGE
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Alfonso J. Montano

Administrative Law Judge

FOOTNOTES
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1. Exogenous insulin is insulin that comes from an outside source, it is not manufactured by the human body.

2. "F-Tag " is the term CMS and the State agencies that perform the surveys use to describe deficiencies in specific requirements set forth in 42 C.F.R. Part 483, Subpart B.

3. A written document detailing the allegations of non-compliance by a facility.

4. Hypoglycemia, or low blood sugar, occurs when blood levels of glucose drop too low to fuel the body's activity.

5. The normal range for blood sugar is about 60 mg/dl to 120 mg/dl, depending on when a person last ate .

6. Resident #2's blood specimen coagulated, and as a result the test was unable to confirm the presence of exogenous insulin.

7. The form 2567 does not identify this resident, however, for purposes of this Decision, I identify this resident as Resident #3.

CASE | DECISION | JUDGE | FOOTNOTES