CASE | DECISION | JUDGE

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


SUBJECT:

Shelby Nursing Center,

Petitioner,

DATE: April 16, 2003
                                          
             - v -

 

Centers for Medicare & Medicaid

 

Docket No. C-02-696
Decision No. CR1030
DECISION
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DECISION

I decide that Petitioner, Shelby Nursing Center, complied substantially with federal participation requirements on February 25, 2002. Consequently, the Centers for Medicare & Medicaid Services (CMS) is without authority to impose remedies against Petitioner, including a per-instance civil money penalty.

I. Background

Petitioner is a skilled nursing facility that is located in Shelby Township, Michigan. It participates in the Medicare program and, as a participant, is required to comply with federal participation requirements stated at 42 C.F.R. Part 483. On March 7, 2002, the Michigan Department of Consumer & Industry Services (Michigan State survey agency) completed a Medicare compliance survey of Petitioner's facility. This agency concluded that, on February 25, 2002, Petitioner failed to comply substantially with a Medicare participation requirement. The Michigan State survey agency recommended to CMS that it impose remedies against Petitioner. CMS concurred with this recommendation and determined to impose a $3,000 per-instance civil money penalty against Petitioner.

Petitioner requested a hearing in order to contest CMS's determination. The case was assigned to me for a hearing and decision. The parties decided to present their respective cases based on their written submissions. The parties requested an oral argument. Each party filed a brief and proposed exhibits. CMS submitted exhibits consisting of CMS Ex. 1 - CMS Ex. 12. Petitioner submitted exhibits consisting of P. Ex. 1 - P. Ex. 12. Petitioner submitted additional exhibits as attachments "A" through "E" to its brief. Neither party objected to my receiving the aforesaid exhibits into evidence.

On March 21, 2003 I held oral argument by telephone. At that time I received into evidence the parties' exhibits. A transcript was made of the oral argument and it has been supplied to the parties.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether a basis exists for CMS to impose a remedy against Petitioner for alleged noncompliance with Medicare participation requirements on February 25, 2002.

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 separate heading. I discuss each Finding in detail.

1. As of February 25, 2002, Petitioner complied substantially with the Medicare participation requirement that is stated at 42 C.F.R. § 483.70(f).

CMS's sole basis for its determination to impose a remedy against Petitioner is its allegation that, on February 25, 2002, Petitioner was not complying substantially with the requirements of 42 C.F.R. § 483.70(f). This section states that:

The nurse's station [of a skilled nursing facility] must be equipped to receive resident calls through a communication system from -

(1) Resident rooms; and

(2) Toilet and bathing facilities.

The facts which are the basis for the allegation are largely undisputed. Petitioner has an electronic call system which signals Petitioner's staff in two ways. Activation of the system by a resident triggers both an audible signal and a visual signal through lights.

On Friday, February 22, 2002, the audible portion of Petitioner's call system failed in three corridors of Petitioner's facility that house residents receiving Medicare benefits. CMS Ex. 7 at 2, 17. These three corridors have approximately 80 resident rooms and, as of February 22, 2002, these rooms housed about 75 residents. On that Friday Petitioner's staff called a repair service. Id. at 10. A repair person visited Petitioner's facility on Monday, February 25, 2002. Id. at 2. At about 1:00 p.m. on that date the repair person determined that a component of the call system known as the "flasher board" was defective. A new flasher board was ordered to be sent to Petitioner's facility by overnight delivery. Id.

At about 11:00 p.m. on the evening of February 25, 2002, the visual component of Petitioner's call system also failed in the three Medicare corridors. CMS Ex. 7 at 3, 11, 12. Petitioner's electronic call system thus became totally inoperative. Petitioner's management responded within about five minutes of this failure by posting nursing assistants in each of the three Medicare corridors to be on the alert for requests for help from the residents' rooms. CMS Ex. 7 at 12 - 15. Additionally, Petitioner's staff was instructed to make frequent rounds of each resident's room, to check on each resident at 15 to 30 minute intervals and more frequently if necessary, and, to attend immediately to any resident who called for help. CMS Ex. 1 at 20, 47.

At about 8:00 a.m. on Tuesday, February 26, 2002, Petitioner's management augmented the aforesaid measures by obtaining about 35 hand bells. The staff distributed them to residents whose rooms were in the affected corridors. CMS Ex. 1 at 20. Later during that day, the repair person returned to install the new flasher board and to make necessary repairs to the call system. The system was restored to full operating order by about 2:00 p.m. on the 26th of February. CMS Ex. 1 at 20; CMS Ex. 7 at 3 - 4.

CMS alleges that these facts are sufficient to establish that Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 498.70(f). It argues also that the facts support the $3,000 per-instance civil money penalty that is at issue in this case CMS contends that the regulation requires, as a matter of law, that Petitioner maintain both audible and visual call signals at all times. CMS's brief at 5. Thus, according to CMS, the failure of Petitioner's system on February 25, 2002 made Petitioner deficient per se under 42 C.F.R. § 498.70(f). According to CMS:

[W]hile a call monitoring system need not convey both audible and visible signals, if in fact it is designed to do so then the entire system must be in good working order.

Id. CMS predicates this argument on its reading of the regulation in tandem with language in the State Operations Manual (SOM), a document that CMS publishes as guidance for State survey agency surveyors. CMS relies on Appendix PP of the SOM, which states that the requirement that facility shall have a functioning call system is not met unless, "all portions of the system are functioning (e.g., system is not turned off at the nurses' station, the volume too low to be heard, the light above a room or rooms is not working)." CMS Ex. 8. CMS also refers to Appendix Q of the SOM which lists a "[n]on-functioning call system without compensatory measures" as a basis for triggering a deficiency investigation. CMS Ex. 9.

CMS's averred interpretation of 42 C.F.R. § 498.70(f) is decidedly punitive. As CMS would have it, any breakdown in a facility's communications system - regardless of cause and regardless of the facility's response to the breakdown - would justify imposition of penalties against that facility. I disagree with this analysis because it advocates an interpretation of the regulation that is inconsistent with the letter of 42 C.F.R. § 498.70, the overall intent of the regulations, and governing law.

As I read 42 C.F.R. § 498.70(f), it is intended to assure that a nursing facility has an effective system for residents to communicate with staff. It does not specify how such communications must be accomplished. The regulation certainly does not on its face require that both the audible and visible elements of an electronic call system be in perfect working order at all times.

The regulation is silent as to what are a facility's obligations in the event of a partial or total breakdown in its communication system. In the absence of any clearly articulated instructions in the regulation, a rule of reason, guided by the regulation's plain meaning, must apply. The regulation plainly requires a facility to have a communications system in place at all times. The regulation does not specify what type of system a facility must maintain - electronic versus mechanical, audible and visual signals versus just one type of signal - but requires only that there be a system. So long as a facility has some effective communication system in place it would not run afoul of the regulation. Implicitly, the regulation requires that the system be effective and operational. If the system installed by the facility breaks down, then it is the facility's obligation to assure that communications are maintained by whatever means are necessary, pending repairs to the system.

The regulation says nothing that would require that two alternative communication mechanisms must both be in working order so long as one of them is operational. The regulation does not mandate that a facility have both elements of a dual system (sound and lights) in perfect working order so long as one of those elements is operational and allows effective communications between residents and staff. But, where both mechanisms fail, the obligation of the facility is to restore one or both of them to working order as quickly as possible. In the meantime, the facility must implement some effective alternative means of communication.

I am not persuaded that the sections of the SOM relied on by CMS support CMS's interpretation of the regulation as creating a per se standard of liability. I note that the SOM is not a document that has been published pursuant to the notice and comment provisions of the Administrative Procedures Act and it does not serve as an authoritative interpretation of regulations. If there is a conflict between the language of a regulation and a statement in the SOM the regulatory language is controlling. But, more importantly here, the SOM language that CMS relies on does not support the conclusion that failure by Petitioner to maintain its communication system in full working order at all times amounted to a per se violation of 42 C.F.R. § 498.70(f).

Nothing cited by CMS in the SOM suggests a per se liability standard for failure of a facility's communication system. Indeed, the language relied on by CMS supports a contrary conclusion. Appendix Q of the SOM instructs State survey agencies to conduct an investigation of a facility where that facility's communications system is not functioning and where the facility has not implemented "adequate compensatory measures." CMS Ex. 9. The phrase "adequate compensatory measures" would be meaningless if a per se standard were imposed against a facility whose communication system failed.

Therefore, I find, contrary to CMS's assertions, that 42 C.F.R. § 498.70(f) imposes on a facility the following obligations:

• A facility must have an effective system for residents to communicate with staff. The regulation does not require any particular type of system so long as one is in place that is effective.

• The regulation does not make a facility liable, per se, if its communication system fails.

• A facility is under a continuing obligation to assure that its residents may communicate with staff at all times. If an established communications system fails then the facility is required to implement an effective alternative system immediately.

• An effective alternative is one that enables residents to communicate with staff consistent with the requirements of 42 C.F.R. § 498.70(f).

The question, then, is whether Petitioner failed to provide adequate compensatory measures to protect its residents beginning with the evening of Monday, February 25, 2002, when the visual component of its call system failed. CMS argues that Petitioner's alleged failure to provide adequate compensatory measures can be adjudged by what Petitioner did not do between February 22, when the audible component of Petitioner's system failed and February 25, when the visual component failed. According to CMS:

• Petitioner could have implemented compensatory measures as early as Friday, February 22, 2002, by securing or attempting to secure the services of a repair company that was willing to evaluate Petitioner's system on that Friday or over the weekend.

• Petitioner could have attempted to purchase handbells or another audible replacement device on Friday, February 22, 2002, when the audible component of Petitioner's system failed.

CMS's brief at 7. I find these assertions not to be persuasive. First, the issue here is not whether Petitioner should have foreseen that the visual component of its system might fail based on failure of the audible component. That is irrelevant to the issue of whether Petitioner adequately compensated for the failure of its audible component once that happened. Moreover, I do not find that failure of the visual component was foreseeable based on failure of the audible component.

CMS has not offered prima facie proof that Petitioner would have had reason to know that the visual component of its system would fail. CMS has offered nothing to show that it was unreasonable for Petitioner to assume that the visual component of the system would continue to function effectively when the audible component failed.

In fact, Petitioner had reason to believe that the visual component of the system would not fail. It called a repair service for the express purpose of servicing the system. The repair person examined Petitioner's system on Monday, February 25, 2002, hours before the visual component failed. The repair person did not conclude that the visual component of the system was in jeopardy nor did that person advise Petitioner that it needed to make repairs to the visual component of the system. The only concern that was raised by the repair person was the need to replace a flasher board that controlled the audible component of the system. Petitioner promptly responded to this concern by ordering a replacement flasher board.

Petitioner clearly had reason to rely on the advice that it was given by the repair person. The communication system employed by Petitioner was electronic and it needed to be serviced by a competent technician. Petitioner had no obligation that it - or its staff - acquire the technical expertise to service and repair the communication system.

I find that Petitioner took reasonable steps to replace its non-working electronic system, temporarily, with adequate compensatory measures. The measures that Petitioner took included:

• Stationing staff in the affected corridors so that they could hear any calls for assistance emanating from residents' rooms. Petitioner assigned a total of 11 of its staff to sit in the affected corridors during the night of February 25, 2002 and the early morning of February 26, 2002 and to conduct checks of resident rooms during this period. P. Ex. 5 at 1.

• Having staff make rounds of residents' rooms at 15 - 30 minute intervals to assure that the residents were not in need of assistance.

• Having staff check more frequently than once every 15 - 30 minutes on those residents who needed more frequent assistance.

• Purchasing handbells for the residents' rooms on the morning of February 26, 2002.

CMS speculates that there might be circumstances where a resident might not have been able to communicate with Petitioner's staff with the use of a handbell or where the resident might have been out of sight of Petitioner's staff - and therefore, out of contact - when a mishap occurred. For example, according to CMS a resident might have suffered an accident in a bathroom while out of sight of and out of verbal contact with Petitioner's staff. That certainly is possible. But, as Petitioner points out, there is no requirement in the regulation that a communication system be perfect. There are possible gaps in even the most effective communication system. For example, even with a perfectly functioning electronic system a resident could sustain a fall that left him or her out of reach of a pull cord.

In fact, there is no reason for me to infer that the emergency system that Petitioner devised as a temporary replacement for its electronic system offered residents of Petitioner's facility any less security or ability to communicate with Petitioner's staff than the system it replaced. The evidence introduced by Petitioner satisfies me that it was aware of its residents need to be able to communicate with the staff and that it took reasonable measures to assure that this need was met.

2. There is no basis for CMS to impose remedies against Petitioner.

CMS's authority to impose remedies against a skilled nursing facility, including a per-instance civil money penalty, derives from findings that the facility failed to comply substantially with one or more Medicare participation requirements. 42 C.F.R. § 488.402(b). There is no basis to impose remedies against Petitioner effective February 25, 2002, as Petitioner was complying substantially with 42 C.F.R. § 483.70(f) on that date and CMS has not asserted that remedies may be predicated on Petitioner's alleged noncompliance with other regulations.

JUDGE
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Steven T. Kessel

Administrative Law Judge

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