$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Arecibo Medical Hospice Care,
Petitioner,
- v. -
Health Care Financing Administration.
DATE: March 14, 1995
Docket No. C-94-363
Decision No. CR363
DECISION
Petitioner requested a hearing to oppose a determination by the
Health Care Financing Administration (HCFA) to terminate
Petitioner's participation in the Medicare program. The case was
assigned to me for a hearing and a decision. I conducted a hearing
in San Juan, Puerto Rico, on August 30 - 31, 1994. The parties
submitted posthearing briefs and posthearing reply briefs.
I have considered the applicable law and regulations, the evidence
which I received at the hearing, and the parties' arguments. I
conclude that HCFA proved, by the preponderance of the evidence,
that Petitioner failed to comply with a regulation which governed
its participation in Medicare. Therefore, HCFA was authorized to
terminate Petitioner's participation in Medicare.
I. Issues, findings of fact, and conclusions of law
The issue in this case is whether HCFA was authorized to terminate
Petitioner's participation in the Medicare program. In deciding
that HCFA was authorized to terminate Petitioner's participation,
I make specific findings of fact and conclusions of law. After
each
finding or conclusion, I cite to the page or pages of the decision
at which I discuss the finding or conclusion.
1. HCFA may terminate a provider's participation inthe
Medicare program when the provider is not complying with
regulations that govern its participation in Medicare. Pages 5 -
8.
2. HCFA did not deny Petitioner due process when itterminated
Petitioner's participation agreement after its May 5, 1994 resurvey
of Petitioner, when HCFA did not afford Petitioner the opportunity
to correct the deficiencies that were identified at the resurvey.
Pages 5 - 8.
3. In a case where a provider requests a hearingfrom a
determination by HCFA to terminate its participation in Medicare,
HCFA must come forward with evidence that the determination to
terminate the provider's participation agreement is authorized.
HCFA must prove, by a preponderance of the evidence, that the
determination to terminate the provider's agreement is authorized.
Pages 8 - 13.
4. A hospice which participates in the Medicareprogram is
required by regulation to establish a written plan of care for each
individual admitted under its care, which states a schedule for
review of the plan of care by the attending physician, the hospice
medical director or physician designee, and by the hospice's
interdisciplinary group. Pages 13 - 18.
5. HCFA proved, by the preponderance of theevidence, that
Petitioner did not establish plans of care for individuals admitted
under its care which specified the dates or events when the plans
of care would be reviewed by the requisite individuals or by
Petitioner's interdisciplinary group, and which were reviewed
according to schedules established in the plans. Pages 19 - 22.
6. HCFA proved, by the preponderance of theevidence, that
Petitioner did not comply with a regulation which governed its
participation as a hospice in the Medicare program. Pages 16 - 22.
7. HCFA was authorized to terminate Petitioner'sparticipation
in the Medicare program. Pages 25 - 26.
II. Discussion
A. Background
Petitioner is a hospice, operating in Arecibo, Puerto Rico. A
hospice coordinates and manages the medical and associated care
provided to terminally ill individuals. Transcript (Tr.) of
hearing August 30, 1994 (8/30) at 90 - 91. The term "hospice" is
described under section 1861(dd)(1) of the Social Security Act
(Act) as a Medicare provider which offers care and services to a
terminally ill beneficiary pursuant to a written plan of care
established and periodically reviewed by the beneficiary's
attending physician, the hospice's medical director, and its
interdisciplinary group. 1/
A hospice provides its care and services in the beneficiary's home,
on an outpatient basis, and in some instances, on a short-term
inpatient basis. Social Security Act, section 1861(dd)(2)(A)(ii).
Hospice services include: nursing care, physical and other
therapy, medical social services, home health aide services,
medical supplies, physicians' services, short-term inpatient care,
and counseling. Id., section 1861(dd)(1)(A) - (H). In addition,
a hospice provides bereavement counseling for the immediate family
of a terminally ill beneficiary. Id., section 1861(dd)(2)(A)(i).
On February 17, 1994, Petitioner was surveyed on behalf of HCFA by
the Puerto Rico Department of Health. HCFA Ex. 15 at 1. The
purpose of the survey was to determine whether Petitioner was
conducting its operations in compliance with the requirements of
the Medicare program. On March 11, 1994, HCFA advised Petitioner
that it had determined that Petitioner was not in compliance with
Medicare conditions of participation. Id. HCFA advised Petitioner
that it would terminate Petitioner's participation as a provider of
services in the Medicare program.
On March 24, 1994, Petitioner submitted a plan of correction to
HCFA, in which Petitioner proposed to correct the deficiencies that
the Puerto Rico Department of Health had identified in its
operations. HCFA Ex. 16. On May 5, 1994, HCFA conducted a second
survey of Petitioner in order to determine whether Petitioner was
complying with the requirements for participation in Medicare.
HCFA found that, notwithstanding the plan of correction, Petitioner
continued to be noncompliant with a regulation which governed its
participation in Medicare. HCFA Ex. 18. On May 23, 1994, HCFA
advised Petitioner of this finding. HCFA advised Petitioner
further that HCFA had affirmed its previous determination to
terminate Petitioner's participation in the Medicare program. HCFA
Ex. 19.
The regulation which HCFA found Petitioner to continue to
contravene is 42 C.F.R. 418.58 (1993). 2/ That regulation
governs the plans of care which hospices must create and maintain
for Medicare beneficiaries whose care they manage. The regulation
provides, as a condition for participation, that a hospice must
establish and maintain a written plan of care for each beneficiary
that it provides care to and that all care provided to a
beneficiary must be provided in accordance with that beneficiary's
plan of care. Id.
The regulation contains three subparts which establish standards of
participation under the plan of care condition. 42 C.F.R.
418.58(a) - (c). The standards set forth in these subparts are
captioned: "Establishment of plan," "Review of plan," and
"Content
of plan." Id. At the survey conducted on May 5, 1994, HCFA's
surveyor found that Petitioner was not complying with all three of
these standards. HCFA Ex. 18. 3/
B. Circumstances under which HCFA may terminate a
provider's participation in Medicare
Regulations contained in 42 C.F.R. Part 488 govern the way in which
HCFA monitors providers to assure that they comply with Medicare
participation requirements. Regulations contained in 42 C.F.R.
Part 489 describe the circumstances under which HCFA may terminate
its relationship with providers that do not comply with Medicare
participation requirements. When these regulations are read
together, they afford a deficient provider a limited opportunity to
cure deficiencies in order to avoid a termination by HCFA of the
provider's participation in Medicare.
The Part 488 regulations provide for periodic surveys of providers
by State survey agencies in order to assure that they remain in
compliance with Medicare participation requirements. 42 C.F.R.
488.11, 488.20. The regulations state that, if it is
determined during a survey that a provider is not in compliance
with one or more of the standards for participation in Medicare,
the provider will be granted a reasonable time to achieve
compliance. 42 C.F.R. 488.28(b).
HCFA may terminate a participation agreement with a provider if it
finds that the provider:
is not complying with the provisions of title XVIII and the
applicable regulations of this chapter or with the provisions of
the [participation] agreement.
42 C.F.R. 489.53(a)(1).
The regulations do not define the phrase "not complying with."
However, under 42 C.F.R. 489.53(a)(1), HCFA has at least the
authority to terminate a provider's Medicare participation
agreement where that provider substantially fails to comply with a
participation requirement that is stated in a regulation.
On its face, 42 C.F.R. 489.53(a)(1) authorizes HCFA to terminate
a provider agreement if it determines that a provider substantially
fails to comply with any participation requirement that is stated
in a regulation. Read in isolation, this regulation does not
impose a requirement on HCFA that it afford a deficient provider
the opportunity to correct deficiencies in order to avoid
termination of its provider agreement, nor does it give a deficient
provider any right to attempt to cure deficiencies.
However, 42 C.F.R. 488.28(b) requires HCFA to afford a deficient
provider the opportunity to correct a deficiency where that
deficiency consists of a failure to meet a "standard" for
participation in Medicare. The term "standard" has significance
here. The regulations that establish the criteria for
participation in Medicare generally state "conditions" for
participation as broad requirements for participation and
"standards" for participation as specific duties that providers
must perform in order to meet the general "conditions." For
example, the regulation which is at issue in this case, 42 C.F.R.
418.58, establishes as a general condition for participation in
Medicare that a hospice must establish plans of care for each of
its patients. It imposes specific requirements on hospices in the
creation and maintenance of plans of care as standards set forth in
42 C.F.R. 418.58(a), (b), and (c).
The requirement under 42 C.F.R. 488.28(b) that HCFA afford a
provider that is not complying with a standard of participation
with the opportunity to correct that deficiency is a limited
exception to the general rule that HCFA may terminate a deficient
provider's participation. For example, where deficiencies are so
severe as to rise to the level of a failure to meet a general
condition of participation, then HCFA is not obligated to afford
the deficient provider the opportunity to correct the deficiency
before effectuating termination of that provider's participation
agreement. Furthermore, I do not read 42 C.F.R. 488.28(b) as
requiring HCFA to allow a provider who remains deficient subsequent
to submitting a plan of correction to continue to participate as a
provider.
As I discussed above, Petitioner was surveyed on behalf of HCFA in
February 1994. Petitioner responded to HCFA's initial termination
notice with a plan of correction. HCFA resurveyed Petitioner on
May 5, 1994. HCFA determined from its resurvey that Petitioner had
not complied with a condition of participation in Medicare, and so
it effectuated its determination to terminate Petitioner's
participation agreement.
In this case, HCFA determined initially that Petitioner was not in
compliance with the conditions for participation in Medicare stated
in 42 C.F.R. 418.58 and 418.62. HCFA Ex. 15 at 1. As I
interpret 42 C.F.R. 488.28(b) and 489.53(a)(1), HCFA was not
obligated to afford Petitioner the opportunity to correct the
deficiencies that HCFA had determined to exist, before effectuating
termination of Petitioner's participation agreement, because these
deficiencies consisted of failure to comply with conditions of
participation. However, HCFA did afford Petitioner that
opportunity.
Petitioner notes that, based on the May 5, 1994 resurvey of
Petitioner, HCFA found Petitioner to be noncompliant with all three
subsections of 42 C.F.R. 418.58, whereas HCFA had previously
found Petitioner to be noncompliant with only two of the three
subsections of the regulation. See HCFA Ex. 16 at 5 - 7; HCFA Ex.
18. 4/ Petitioner argues that HCFA's determination at the resurvey
that Petitioner was not in compliance with an additional standard
contained in 42 C.F.R. 418.58(a), mandated HCFA to initiate a
new termination process, under which Petitioner should have been
afforded the opportunity to submit a new plan of correction.
Petitioner thus asserts that HCFA's determination to effectuate its
termination of Petitioner's participation agreement denied
Petitioner the right to correct the additional deficiency
identified at the May 5, 1994 survey before HCFA effectuated
termination.
I do not agree with this argument. First, the additional
subsection with which Petitioner was found to be noncompliant has
no bearing on my decision in this case. As I find at Part G of
this discussion, HCFA proved at the hearing of this case only that
Petitioner had failed to comport with the plain meaning of 42
C.F.R. 418.58(b), a subsection which was cited in the findings
from both the February 1994 survey and the May 1994 resurvey.
Based on the resurvey, HCFA would have had a reason to terminate
Petitioner's participation in Medicare even if it made no findings
at the resurvey as to Petitioner's compliance with 42 C.F.R.
418.58(a).
Second, I do not read the limited right created by 42 C.F.R.
488.28(b) for a provider to correct its noncompliance with a
standard as giving that provider unqualified additional
opportunities to correct additional deficiencies that HCFA may find
upon resurvey of that provider. A provider is not entitled to file
an additional plan of correction if, on a resurvey of that
provider, additional deficiencies are identified, and these
deficiencies are condition-level. 5/
Petitioner's argument would turn the limited opportunity for a
provider to correct a standard-level deficiency, stated in 42
C.F.R. 488.28(b), into a general right to correct
condition-level deficiencies which supersedes HCFA's authority,
under 42 C.F.R. 489.53(a)(1), to terminate the participation of
noncompliant providers. Taken to its logical end, Petitioner's
argument would mean that there could be some circumstances under
which HCFA would not be able to terminate a noncompliant provider's
participation in Medicare. Under Petitioner's theory, HCFA would
be required to afford a noncompliant provider the opportunity to
submit a plan of correction after each survey it conducted, so long
as that provider was noncompliant with a different condition of
participation at each survey. Conceivably, a provider could never
be in compliance with all of the applicable participation
requirements, and HCFA would be precluded from terminating that
provider's participation in Medicare, so long as each time HCFA
resurveyed it the provider was not in compliance with a different
participation requirement.
C. HCFA's burdens of coming forward with evidence and
persuasion
HCFA argues that, in a hearing concerning a determination by HCFA
to terminate a provider's participation agreement, the provider has
the burden of proving that it is in compliance with participation
requirements. HCFA's argument suggests that it has no burden of
proving that its determination is reasonable. HCFA seems to be
asserting that its determination ought to be sustained, even if it
offers no evidence in support of that determination, if the
provider whose participation agreement has been terminated cannot
prove that the determination is incorrect.
I conclude that HCFA bears the burdens of coming forward with
evidence and persuasion. HCFA must establish by the preponderance
of the evidence that its determination is correct. Where HCFA
proves a prima facie case and a provider offers evidence to rebut
the evidence offered by HCFA, the question will be whether the
evidence offered
by the provider is sufficient to overcome the prima facie case
established by HCFA.
Holding HCFA to this standard of proof is both fair and efficient.
HCFA is in the best position to present facts which establish that
a provider is not complying with Medicare participation
requirements. For that reason, HCFA should be required to prove a
case supporting its determination. That case ought to be strong
enough to overcome evidence that a provider might offer in
opposition to HCFA's determination.
An administrative hearing involving a determination by HCFA to
terminate a provider's participation in Medicare is governed by
regulations contained in 42 C.F.R. Part 498. These regulations do
not state specifically which party has the burden of coming forward
with evidence or of persuasion in a hearing concerning a
determination to terminate a provider's participation. The
regulations impose broad discretion on the administrative law judge
to govern the manner in which evidence is received and weighed.
They state only that:
The ALJ [administrative law judge] decides the order in which
the evidence and the arguments of the parties are presented and the
conduct of the hearing.
42 C.F.R. 498.60(b)(3).
I do not read the Part 498 regulations as containing any statement
by the Secretary as to who should bear the burdens of coming
forward with evidence and persuasion in a hearing concerning
termination of a provider's participation in Medicare. The
regulations' silence on these issues, coupled with the broad
discretion which the regulations repose in the administrative law
judge to regulate the conduct of the hearing, suggest that the
Secretary has left open the issues of coming forward with evidence
and persuasion, to be resolved by the administrative law judge
based on the requirements of due process. 6/
HCFA relies on the process by which termination is effectuated to
support its argument that the provider has the burden of
persuasion. Under the regulations, a determination by HCFA to
terminate a provider's participation in Medicare becomes the
Secretary's final decision, unless the provider requests a hearing.
42 C.F.R. 498.25; see 42 C.F.R. 498.40. HCFA reasons that,
if the determination is final unless a hearing is requested, the
burden should fall on the provider requesting the hearing to prove
that the determination is incorrect. This analysis ignores the
fact that administrative hearings as to the propriety of
determinations by HCFA are de novo and not appellate reviews.
Given that, no special weight should apply to HCFA's determination
once that determination is challenged in the context of an
administrative hearing.
HCFA cites three sources of authority to support its argument that,
in a case involving termination of a participation agreement, the
provider should bear the burden of persuasion as to the
reasonableness of HCFA's determination. I have considered these
authorities. They do not provide substantial support for HCFA's
argument.
First, HCFA relies on a canon of administrative law which states
that, in an administrative proceeding, the general rule is that an
applicant for relief, benefits, or privilege has the burden of
persuasion. HCFA posthearing brief at 6. In the past, the
Secretary has applied this canon to require applicants for benefits
to prove that they are entitled to benefits. For example, the
general rule is that the burden of persuasion lies on the applicant
in a case in which an applicant argues that he or she is entitled
to Social Security disability benefits. 20 C.F.R. 404.1512(a).
7/ That makes sense, because the applicant is more likely to be in
possession of facts which support his or her contention that he or
she is entitled to benefits.
However, a different dynamic applies in the instance of a provider
whose participation agreement is terminated by HCFA after a survey
conducted by or for HCFA at which deficiencies have been
identified. In that instance, HCFA determines to end a
relationship that was established previously. HCFA makes the
determination based on facts in its possession which HCFA obtained
at the survey. Inasmuch as HCFA is relying on facts that it
obtained, it ought to be in the best position to prove those facts.
In contrast, it is not reasonable to expect a provider to prove a
negative proposition -- that it has not contravened provider
participation requirements -- in the absence of affirmative proof
that it has contravened those requirements. Imposing this burden
on a provider would inject a note of uncertainty into the
administrative hearing process, because the provider could never be
sure what or how much evidence it would be required to offer to
rebut HCFA's unsubstantiated determination. The consequence might
be to invite a massive and unfocused submission of evidence from
that provider.
Furthermore, it is not reasonable to characterize a provider whose
participation in Medicare has been terminated by HCFA as an
applicant for relief, benefits, or a privilege. The reality is
that such a provider is no longer an applicant, but, in fact, has
an established relationship with HCFA, based on the participation
agreement and the law and regulations which govern that agreement.
That provider will have made financial commitments and have
established business relationships in reliance on that agreement.
That reliance does not establish an unqualified entitlement to
participate in Medicare. However, it would ignore the reality of
that provider's ongoing business in reliance on the participation
agreement to characterize it merely as an "applicant," and to aver
from that characterization that the provider has a burden of
proving that any determination by HCFA is unreasonable.
Second, HCFA relies on judicial decisions which hold that, in
administrative hearings, the burden of persuasion rests upon the
party that files a claim with an administrative agency. HCFA
posthearing brief at 7. As with the general rule of administrative
law that HCFA relies on, these decisions address the situation
where an applicant for benefits or relief seeks redress for a
determination denying eligibility or entitlement. I do not find
the principle stated in these decisions to be applicable to the
case involving termination of participation in Medicare, for the
same reason that I do not find the general principle of
administrative law relied on by HCFA to be applicable.
Finally, HCFA relies on a decision by the Social Security
Administration Office of Hearings and Appeals Council in a case
involving termination of an entity's participation in Medicare.
Jefferson Memorial Hosp. Ass'n v. Health Care Financing
Administration, Docket No. PS-109, at 17 (1983); HCFA posthearing
brief at 8 - 9. 8/ In that decision, the Appeals Council stated
that it rejected an administrative law judge's conclusion that the
Secretary had the burden of proving that "significant changes or
violation" of a participation agreement entitled the Secretary to
terminate the agreement. Id. The Appeals Council held that HCFA:
has the initial burden of coming forth with evidence of
statutory and/or regulatory violations showing that a provider's
agreement with the Secretary should be terminated. Once this
occurs, as in the instant case, the ultimate burden of
responsibility and the burden of proof for compliance remains with
the provider for it must show that it is still in continuing
compliance with the applicable conditions of participation.
Id. This is not an entirely clear statement of who actually has
the burden of persuasion in a case involving termination of a
provider's participation agreement. 9/ A fair reading of this
statement, however, is that HCFA bears the burden of coming forward
with evidence and proving a prima facie case for termination of a
provider's participation agreement. Thus, although the Appeals
Council rejected the administrative law judge's statement of the
parties' burdens, it imposed an order of proof and a burden of
persuasion which may be the same as that which I find to be
reasonable.
D. HCFA's arguments as to Petitioner's responsibilities under
the regulations
HCFA asserts that, when it resurveyed Petitioner on May 5, 1994,
Petitioner was not in compliance with any of the subsections of 42
C.F.R. 418.58, which governs plans of care that hospices
establish and maintain for individuals under their care. The
regulation at issue establishes as a condition for participation by
a hospice that:
[a] written plan of care must be established and maintained
for each individual admitted to a hospice program and the care
provided to an individual must be in accordance with the plan.
42 C.F.R. 418.58.
Each of the three subsections of 42 C.F.R. 418.58 contains
requirements that a hospice must comply with in creating and
maintaining plans of care for its patients. The subsection which
contains the standard entitled "Establishment of plan" states that,
for each patient:
[t]he plan must be established by the attending physician, the
medical director or physician designee and interdisciplinary group
prior to providing care.
42 C.F.R. 418.58(a). 10/
The subsection which contains the standard entitled "Review of
plan" states that, for each patient:
[t]he plan must be reviewed and updated, at intervals
specified in the plan, by the attending physician, the medical
director or physician designee and interdisciplinary group. These
reviews must be documented.
42 C.F.R. 418.58(b).
The subsection which contains the standard entitled "Content of
plan" states that, for each patient:
[t]he plan must include an assessment of the individual's
needs and identification of the services including the management
of discomfort and symptom relief. It must state in detail the
scope and frequency of services needed to meet the patient's and
family's needs.
42 C.F.R. 418.58(c).
HCFA's argument that Petitioner contravened all three of these
subsections rests heavily on its interpretation of the meaning of
the subsections and on its assertion that Petitioner was charged
with the duty to be aware of and comply with HCFA's interpretation.
HCFA admits that the language of these subsections may not "list
enormously detailed requirements for each condition, and were not
intended to do so." HCFA posthearing brief at 10. However, HCFA
argues that a broader meaning can be read into these subsections
than is encompassed by the literal wording of the subsections.
According to HCFA, the regulations subsume generally accepted
standards of practice for hospices. HCFA posthearing brief at 9.
Thus, HCFA argues that it is reasonable to read the three
subsections of 42 C.F.R. 418.58 as imposing obligations on
hospices which are consistent with generally accepted practices
among hospices, even if the subsections cannot be read
unambiguously to impose those obligations on hospices.
HCFA argues also that, in interpreting the regulations,
considerable deference must be paid to the judgment and expertise
of the individuals who serve as HCFA's agents to survey providers.
In this case, HCFA's representative is Ms. Marjorie S. Finnigan,
who conducted the May 5, 1994 resurvey of Petitioner. Tr. 8/30 at
70 - 242. Therefore, according to HCFA, Ms. Finnigan's
interpretation of the regulations should be accepted if it is
grounded on practices that are accepted generally by hospices.
1. The planning and documentation requirementswhich HCFA
argues are embodied in the plan ofcare regulation
HCFA interprets the plan of care regulation to impose specific
planning and documentation requirements on hospices which are not
necessarily encompassed within the literal words of the regulation.
According to HCFA, the three subsections of the regulations should
be interpreted to require the following:
The requirement contained in 42 C.F.R. 418.58(a)
that a plan of care must be established for a patient prior to
providing care to that patient means that any changes in a
patient's condition must be addressed and documented, either in a
new plan of care or in a revision to that plan. It is not
sufficient for a hospice to establish an overall plan of care for
a patient and then fail to establish additional specific plans to
deal with problems that a patient later develops. HCFA posthearing
brief at 11 - 12.
The requirement contained in 42 C.F.R. 418.58(a)
that a plan of care be established by the attending physician, the
medical director, and the interdisciplinary group, coupled with the
general requirement contained in 42 C.F.R. 418.58 that treatment
be provided to a hospice patient in accordance with a plan of care,
means that a member of the hospice staff may not treat a patient
for a problem without consulting the interdisciplinary group, and
without the interdisciplinary group documenting the consultation in
a plan of care. HCFA's post-hearing brief at 12.
The requirement contained in 42 C.F.R. 418.58(b)
that a plan of care must be reviewed and updated, at intervals
specified in the plan, by the attending physician, the medical
director or physician designee, and the interdisciplinary group,
and that review must be documented means that any change in a
patient's condition must be addressed and documented, either in a
new plan of care, or in a revision to an existing plan of care.
HCFA posthearing brief at 12 - 13.
The requirement contained in 42 C.F.R. 418.58(b)
that a plan of care must be reviewed and updated, at intervals
specified in the plan, means that the plan itself must specify when
it will be reviewed, and the plan must be reviewed according to the
established schedule. HCFA posthearing brief at 13.
The requirements contained in 42 C.F.R. 418.58(c)
that a plan of care contain an assessment of the patient's needs
and identification of the services, including the management of
discomfort and symptom relief, and that the plan state in detail
the scope and frequency of services needed to meet the patient's
and his or her family's needs, mean that the plan of care must
identify which discipline is responsible for the interventions and
treatments established in the plan. These requirements mean also
that the plan must identify the specific medicine to be
administered to a patient and the frequency of administration of
that medicine. HCFA posthearing brief at 13 - 14.
2. HCFA's arguments concerning Petitioner'sduty to be
aware of and comply with HCFA'sinterpretation of the regulation
governingplans of care
HCFA asserts that the statement of deficiencies which was sent to
Petitioner after the February 17, 1994 survey of Petitioner
provided Petitioner with ample notice of HCFA's interpretation of
the regulation which governs plans of care. HCFA posthearing brief
at 15 - 17; see HCFA Ex. 16 at 5 - 9. HCFA argues, alternatively,
that it had no duty to advise Petitioner of its interpretation of
the regulation, inasmuch as HCFA bases its interpretation on
practices which are generally accepted by hospices. HCFA
posthearing brief at 21. According to HCFA, Petitioner was
obligated to know what these practices are and to anticipate HCFA's
interpretation of the regulations. Id.
E. HCFA's contentions of fact
HCFA contends that, on May 5, 1994, when it resurveyed Petitioner,
Petitioner was noncompliant with all three subsections of 42 C.F.R.
418.58. HCFA premises its contentions on its interpretation of
the meaning of the three subsections (which I have described at
Part II D of this decision), coupled with the specific findings of
the surveyor who conducted the May 5, 1994 resurvey. To support
its contentions, HCFA offered the testimony of the surveyor, Ms.
Finnigan (Tr. 8/30 at 70 - 242), notes she made at the resurvey
(HCFA Exs. 26 - 30), the statement of deficiencies that she
prepared after completing the resurvey (HCFA Ex. 18), and excerpts
from treatment records of some of the patients cared for by
Petitioner that Ms. Finnigan reviewed during the resurvey (HCFA
Exs. 21 - 25).
HCFA makes the following contentions of fact:
Relying on its interpretation of 42 C.F.R. 418.58(a)
and 42 C.F.R. 418.58(b) that a revised or new plan of care must
be created to address any change in a patient's condition, HCFA
contends that Petitioner failed to revise plans of care or to write
new plans of care to deal with changes in the condition of patients
under its care. HCFA posthearing brief at 29 - 35. Relying also
on its interpretation of 42 C.F.R. 418.58(a) that practitioners
may not treat a patient of a hospice without first consulting the
hospice's interdisciplinary group, and that the consultation must
be documented, HCFA contends that practitioners treated
Petitioner's patients without prior consultation, and Petitioner's
interdisciplinary group failed to document these treatments. Id.
HCFA supports these contentions with references to excerpts of
treatment records of four patients who were cared for by
Petitioner. These are Patient # 9 (HCFA Ex. 21), Patient # 6 (HCFA
Ex. 24), Patient # 1 (HCFA Ex. 23), and Patient # 3 (HCFA Ex. 25).
With respect to these patients, HCFA contends that Petitioner
contravened 42 C.F.R. 418.58(a) as follows:
a. In the case of Patient # 9, the nurse whotreated that
patient failed to contact Petitioner's interdisciplinary group to
discuss an order by the patient's treating physician to administer
intravenous (IV) fluids. The records fail to document any review
by the interdisciplinary group of the need to administer IV fluids.
There is no plan of care in Patient # 9's records addressing the
administration of IV fluids. HCFA posthearing brief at 30 - 32;
see HCFA Ex. 21.
b. In the case of Patient # 6, this patientwas treated
for an ulcer involving the patient's left foot. The patient's
treatment records do not contain a plan of care addressing this
specific problem. HCFA posthearing brief at 32 - 33; see HCFA Ex.
24.
c. In the case of Patient # 1, there exists noplan of
care in the patient's treatment records addressing the bereavement
of the patient's family resulting from the patient's death. HCFA
posthearing brief at 33; see HCFA Ex. 23. HCFA asserts also that
the failure of Petitioner to create a bereavement plan of care for
the family of Patient # 1 violates 42 C.F.R. 418.88, which
governs the duty of a hospice to provide for the bereavement of the
families of individuals under the hospice's care. 11/
d. In the case of Patient # 3, there exist noplans of
care which address changes in the medications administered to this
patient, and no bereavement plan of care. HCFA posthearing brief
at 34 - 35; see HCFA Ex. 25.
Relying on its interpretation of 42 C.F.R. 418.58(b)
that a plan of care must specify the dates when it will be
reviewed, and that a plan must be reviewed according to the
established schedule, HCFA contends that none of the ten patient
records reviewed by Ms. Finnigan contained plans of care
establishing review schedules or documented reviews according to an
established schedule. HCFA posthearing brief at 35 - 36.
As specific examples, HCFA cites the records of Patient # 9,
Patient # 6, and Patient # 3. Id. HCFA contends also that none of
the patient records reviewed by Ms. Finnigan evidenced reviews by
Petitioner's interdisciplinary group to recertify patients for
hospice care. HCFA posthearing brief at 38 - 39. Furthermore, the
records fail to contain recertification forms which comport with
requirements governing recertification of patients stated in 42
C.F.R. 418.22.
Relying on its interpretation of 42 C.F.R.
418.58(c), that a plan of care must state which discipline is
responsible for each intervention identified in the plan, and must
state which medicine must be administered to a patient, and the
frequency of administration of medication, HCFA contends that none
of the treatment records identify the discipline responsible for
providing the interventions which are identified in the patient's
plan of care. HCFA posthearing brief at 40 - 42. To support this
contention, HCFA cites the failures of plans of care for patient #
9, Patient #6, and Patient # 1, to identify the disciplines
responsible for specific interventions.
F. Petitioner's arguments and contentions of fact
As I discuss at Part II B of this decision, Petitioner asserts that
HCFA has denied it due process of law by not giving it the
opportunity to correct the additional deficiencies which HCFA found
at its May 5, 1994 resurvey of Petitioner. Petitioner argues also
that HCFA's interpretation of 42 C.F.R. 418.58 is not
reasonable. Specifically, Petitioner asserts that 42 C.F.R.
418.58(a) and (b) cannot be read reasonably to require a hospice to
revise a plan of care, or to create a new plan of care, to address
every change in a patient's condition. Petitioner argues also that
42 C.F.R. 418.58(b) cannot be read reasonably to require that
each plan of care maintained by a hospice specify a review date.
Petitioner disputes also some of HCFA's contentions of facts. In
response to HCFA's contention that in its plans of care Petitioner
failed to specify the dates when the plans would be reviewed,
Petitioner argues that the treatment records in evidence show that
in fact these plans were reviewed. Petitioner contends that HCFA
did not prove that Petitioner failed to provide proper treatment to
any patient.
G. Analysis of the parties' arguments and contentions
HCFA proved that 42 C.F.R. 418.58(b) put Petitioner on notice
that each plan of care that it created for each of its patients
should have specified a schedule by which that plan would be
reviewed by the patient's attending physician, Petitioner's medical
director or physician designee, and Petitioner's interdisciplinary
group. The preponderance of the evidence is that Petitioner did
not comply with this requirement. The fact that Petitioner
actually may have reviewed some of the plans of care for some of
its patients does not constitute compliance with the requirement of
42 C.F.R. 418.58(b) that it establish a schedule for review of
each plan of care.
I find that HCFA did not prove that Petitioner failed to comply
with the requirements of 42 C.F.R. 418.58(a) and (c), or with
the requirements of 42 C.F.R. 418.58(b). HCFA's assertion that
Petitioner failed to comply with these subsections rests on an
interpretation that is not within the plain language of the
regulations, which HCFA did not communicate to Petitioner. Given
that, it would not be reasonable to expect Petitioner to have
complied with HCFA's interpretation.
1. Petitioner's failure to comply with therequirement
that it establish a schedule forreview of each plan of care and its
failure toconduct reviews in accordance with thatschedule
Although 42 C.F.R. 418.58 may not "list enormously detailed
requirements" for creation and maintenance of plans of care by
hospices, it does state some requirements unambiguously. See HCFA
posthearing brief at 18. The requirement contained in 42 C.F.R.
418.58(b) states that a hospice must review each plan of care that
it creates for a patient at intervals stated in the plan. That
requirement can only be read to require a hospice to establish a
schedule for review of each plan of care that it creates, and to
state that schedule in the plan itself. The regulation leaves it
to the discretion of the hospice to define the events or
circumstances which would mandate a review of the plan of care.
But there can be no doubt that for every plan of care, the
regulation requires that a review schedule be established and
stated in the plan.
A hospice does not meet the requirements of this subsection by
conducting reviews of its plans of care, without establishing a
schedule for a review in each plan. The regulation contains an
explicit directive to hospices by the Secretary that, for each plan
of care, a review schedule be established and that the schedule be
complied with.
The Secretary's purpose is apparent here. By definition, hospice
patients are in the last stages of their lives. The purpose of a
hospice is to manage these patients' care to assure that they are
made as comfortable as possible and that they die with dignity.
The Secretary's intent in requiring hospices to establish a
schedule for the review of each plan of care, stated in that plan,
is to assure that each hospice patient's needs are attended to
regularly. It is to assure also that, as each hospice patient
proceeds through the process of dying, that the care provided to
that patient is adjusted to address the patient's changing
condition.
Furthermore, a hospice cannot justify its failure to comply with a
specific requirement stated in a regulation by asserting that,
notwithstanding its failure to comply, it provided care which
addressed its patients' needs. The fact that a hospice may review
some patients' plans of care may demonstrate that the hospice is
attending to some of those patients' needs. But if that hospice
does not establish a schedule for review in each plan of care, and
follow that schedule, there can be no guarantee that the hospice is
attending to all of the needs of all of its patients with
regularity.
The preponderance of the evidence in this case is that Petitioner
did not comply with the requirement of 42 C.F.R. 418.58(b) that
it review the plans of care it created for its patients at
intervals specified in the plans. Ms. Finnigan testified that she
reviewed ten of Petitioner's patients' treatment records. She
testified credibly that none of them contained plans of care which
stated the intervals at which they would be reviewed. HCFA Ex. 18,
pages 5 - 6; Tr. 8/30 at 190.
The excerpts from patients' treatment records that HCFA offered as
evidence are consistent with Ms. Finnigan's testimony. HCFA Exs.
21 - 25. None of these excerpts contain a plan of care which
establishes a schedule for review of the plan.
Petitioner did not rebut this evidence. It did not offer plans of
care for the ten patients whose records Ms. Finnigan reviewed to
show that there exist plans which did establish review schedules.
Petitioner's President, Alejandro Perez, testified on behalf of
Petitioner. Tr. 8/31 at 7 - 9. He testified that Petitioner had
an interdisciplinary group, and that Petitioner prepared plans of
care for each of its patients. Id. However, he did not aver that,
generally, the plans of care established review schedules. Nor did
Mr. Perez deny Ms. Finnigan's testimony that none of the records
she reviewed contained plans of care with review schedules.
Petitioner contends that the patient records introduced into
evidence by HCFA contain plans of care, and that at least some of
these plans of care were reviewed by Petitioner's staff. However,
the fact that the records contain plans of care, or that some of
them may have been reviewed does not prove that Petitioner
established plans of care for its patients which established a
schedule for review, nor does it prove that the plans were reviewed
according to a schedule, as is required by 42 C.F.R. 418.58(b).
For example, HCFA Ex. 21 contains excerpts from the treatment
records of Patient # 9 that were reviewed by Ms. Finnigan at the
May 5, 1994 resurvey. Those excerpts include several plans of
care. HCFA Ex. 21 at 3 - 9. It is apparent from these plans that
they were created by Petitioner's staff or interdisciplinary group
to address specific problems which Patient # 9 manifested during
the period when she was cared for by Petitioner. Id. However,
none of these excerpts establish a schedule for review of Patient
# 9's problems, as the regulation requires.
HCFA Ex. 21 consists only of excerpts from Patient # 9's treatment
records. Similarly, HCFA Exs. 22 - 25 consist only of excerpts
from the treatment records of Patients # 5, # 1, # 6, # 4, and # 3,
respectively. Petitioner did not argue that portions of these
patients' records that were not offered by HCFA contain plans of
care which include schedules for review of the plans. Nor did
Petitioner offer as evidence portions of these patients' treatment
records that were not offered by HCFA, to rebut HCFA's contention
that the records did not contain plans of care that comported with
the requirements of 42 C.F.R. 418.58(b).
2. HCFA's failure to give Petitioner notice ofits
interpretation of the regulation governing plans of care
HCFA's interpretation of 42 C.F.R. 418.58 (a) and (c), and in
some respects, its interpretation of 42 C.F.R. 418.58(b), is not
within the plain meaning of these subsections. HCFA had an
obligation to communicate its interpretation to Petitioner as a
prerequisite to insisting that Petitioner comply with it. HCFA
failed to meet this obligation. Therefore, HCFA may not hold
Petitioner accountable for Petitioner's asserted failure to comply
with HCFA's interpretation of the regulation.
I reach no conclusions here as to whether HCFA's interpretation of
a hospice's obligations under 42 C.F.R. 418.58 is reasonable.
Nor do I make findings as to whether the evidence proves that
Petitioner failed to comply with HCFA's interpretation of its
obligations. It is not necessary for me to reach such conclusions
or make such findings in this case.
The regulations which the Secretary publishes governing the
participation of providers in the Medicare program do not address
and provide standards for every detail of those relationships. As
comprehensive as these regulations may be, there exist a myriad of
circumstances which the Secretary, or her delegate, HCFA, may find
a need to address, which are not addressed specifically in the
regulations. HCFA has authority to interpret the regulations and
to inform providers of its interpretations in order to assure that
providers comply. Furthermore, HCFA's reasonable interpretations
of regulations should be accorded deference.
Providers must comply with HCFA's reasonable interpretations of
regulations where HCFA communicates those interpretations to
providers. But having the authority to interpret regulations and
to insist that providers comply with reasonable interpretations
does not permit HCFA to interpret regulations in a way which
exceeds their plain meaning, not communicate its interpretations to
providers, and then insist that providers be held accountable if
they fail to divine HCFA's intent.
HCFA's interpretation of 42 C.F.R. 418.58(a) and (b) is that
these subsections require a hospice to create a new or revised plan
of care to deal with any change in a patient's condition. HCFA's
contention that Petitioner was not in compliance with 42 C.F.R.
418.58(a) is premised on this interpretation. Its contention that
Petitioner was not in compliance with 42 C.F.R. 418.58(b) is in
part premised on this interpretation. 12/ I do not find this
interpretation to be subsumed within the plain meaning of either 42
C.F.R. 418.58(a) or (b). On their face, these subsections
require that a hospice create a plan of care for each of its
patients that is reviewed pursuant to a schedule determined by the
hospice. While it may not be unreasonable to interpret these
sections to require that hospices create a plan of care for each
new problem that a patient develops, or to revise a global plan of
care to deal with each new problem that a patient develops, that is
not what the subsections call for specifically.
HCFA's interpretation of 42 C.F.R. 418.58(a) to require a
practitioner to consult the hospice's interdisciplinary group
before treating a patient's new problems, and to require that the
consultation and intervention be documented in a plan of care, is
not within the plain meaning of this subsection. The subsection
requires that the plan of care be established before care is
provided. It can be interpreted to mean what HCFA asserts it means
only if HCFA's interpretation that a new or revised plan of care
must be created to deal with every change in a hospice patient's
condition is a reasonable interpretation of the regulation. As I
find above, that interpretation is not within the plain meaning of
the regulation.
HCFA's interpretation of 42 C.F.R. 418.58(c) to require that
each plan of care identify the discipline that is responsible for
a particular intervention, to identify each medication that is to
be administered to a patient, and to state the frequency of
administration of each medication, is not within the plain meaning
of this subsection. The subsection plainly requires that the plan
of care include an assessment of the patient's needs and
identification of the services to be provided to a patient. It
requires also that the plan of care state in detail the scope and
frequency of services needed to meet the patient's needs and those
of the patient's family. It may not be unreasonable to interpret
this subsection as requiring the specificity which HCFA asserts is
required. However, on its face, the regulation does not require
the degree of detail which HCFA interprets it to require. The
subsection does not explicitly state that a hospice must identify
the particular discipline assigned to provide a particular type of
care. Nor does it explicitly require a hospice to identify each
medication to be provided to a patient or the frequency of
administration of that medication.
HCFA did not communicate to Petitioner its interpretation of the
subsections of 42 C.F.R. 418.58. There is no evidence in this
case that HCFA made any general announcement of its interpretation,
for example, in the form of a bulletin to hospices. Furthermore,
I am not persuaded that HCFA communicated its interpretation
specifically to Petitioner. Simply, I do not agree with HCFA's
assertion that the report of deficiencies which was provided to
Petitioner after the February 17, 1994 survey provided it with
adequate notice of HCFA's interpretation of the three subsections
of 42 C.F.R. 418.58. See HCFA Ex. 16 at 5 - 9.
HCFA Ex. 16 does not state HCFA's interpretation of 42 C.F.R.
418.58(a) and 418.58(b). Indeed, it does not assert that
Petitioner failed to comply with the requirements of 42 C.F.R.
418.58(a). It does not set out an interpretation of 42 C.F.R.
418.58(b) that deviates from the subsection's plain meaning. HCFA
Ex. 16 at 5. It states that Petitioner failed to comply with 42
C.F.R. 418.58(c) by not providing in its plans of care an
identification of the frequency of the services to be provided and
who is responsible for the plan's implementation. Id. at 6 - 7.
However, this does not support HCFA's interpretation that each plan
of care must identify precisely which discipline is responsible for
each intervention, the medications which are to be administered to
the patient, and the frequency of administration of each
medication.
I do not agree with HCFA's argument that a provider is charged with
knowing and complying with HCFA's interpretation of a regulation,
where HCFA's interpretation is other than the regulation's plain
meaning, and where HCFA has not communicated that interpretation to
providers. HCFA asserts that its interpretation of the subsections
of 42 C.F.R. 418.58 comports with standards that are accepted
generally by hospices. If so, that may support HCFA's argument
that its interpretation of the subsections is reasonable. However,
the fact that an interpretation of a regulation comports with
generally accepted practices does not excuse HCFA from the
obligation of putting providers on notice of its interpretation and
its expectation that providers comply with that interpretation.
It is true that the regulations governing hospices' participation
in Medicare state as a general requirement that hospices provide
services in a manner that is consistent with accepted standards of
practice. 42 C.F.R. 418.50(b)(3). However, I do not read this
section to require a hospice to be aware of and to comply with an
interpretation of a regulation by HCFA that is not apparent from
the regulation's plain meaning and which has not been communicated
to hospices.
HCFA asserts that my decision in Long Medical Laboratory, DAB
CR334, at 11 - 12 (1994), implicitly supports its argument that
HCFA has no duty to acquaint providers with generally accepted
standards of practice, where HCFA interprets those standards to be
incorporated within regulations. HCFA posthearing brief at 21.
HCFA's reliance on the Long Medical Laboratory decision is
misplaced. In that case, I found that the petitioner was obligated
to be aware of and to comply with a condition for participation in
Medicare that is stated explicitly in the Act. HCFA was not
obliged to communicate further to Petitioner the requirement that
it abide by this condition, inasmuch as the Act stated the
condition explicitly. The case did not involve an interpretation
of the Act or of a regulation that was not within the plain meaning
of the language of the Act or regulation and which HCFA had not
communicated to providers.
H. HCFA's authority to terminate Petitioner's participation
in Medicare
As I find in Part B of this discussion, HCFA may terminate a
provider's participation in Medicare where it establishes that the
provider is not complying materially or substantially with a
participation requirement stated in a regulation. HCFA is not
obligated to afford a provider the opportunity to correct its
deficiency before terminating that provider's participation.
Here, the preponderance of the evidence establishes that Petitioner
failed to comply with a participation requirement that is
explicitly stated in 42 C.F.R. 418.58(b). This failure was
substantial. The uncontroverted evidence is that Petitioner did
not establish nor comply with a schedule to review the plan of care
for all ten of the patients whose records were reviewed by HCFA.
Furthermore, this failure by Petitioner was not merely a technical
error. The Secretary has determined that the requirement for a
hospice to schedule and conduct reviews of each plan of care that
it creates for each patient is an essential element of the
relationship between that hospice and the Medicare program.
I find Petitioner's violation of 42 C.F.R. 418.58(b) to be so
substantial as to rise to the level of a violation of the condition
of participation stated in the regulation. The requirement that a
hospice plan the care of its patients and to regularly address,
and, if necessary, adjust that care, is an essential element of the
services which hospices provide. Tr. at 77 - 78. Integral to the
planning of a hospice patient's care is the requirement that the
appropriate individuals meet regularly to review, and if necessary,
adjust that care. Id. at 79. When a plan of care is not reviewed
regularly, there is a risk that the hospice will not attend to the
patient's needs. Id. at 79 - 80. Petitioner was utterly derelict
in meeting this requirement. By not attending systematically to
the needs of its patients, Petitioner violated the condition that
it establish and maintain plans of care for the individuals in its
care.
III. Conclusion
I conclude that HCFA proved by the preponderance of the evidence
that Petitioner failed to comply with a requirement for
participation in Medicare as stated in 42 C.F.R. 418.58(b).
HCFA was authorized to terminate Petitioner's participation in
Medicare, and I sustain HCFA's determination to do so.
________________________
Steven T. Kessel
Administrative Law Judge
1. Under the Medicare program, an individual is considered to
be "terminally ill" if that individual has a medical prognosis that
he or she is expected to live six months or less. Social Security
Act, section 1861(dd)(3)(A).
2. In its March 11, 1994 notification to Petitioner, HCFA
advised Petitioner that HCFA had determined that Petitioner was not
complying with two regulations governing hospices' participation in
Medicare. These were 42 C.F.R. 418.58 (plan of care) and 42
C.F.R. 418.62 (informed consent). HCFA does not contend that,
as of May 5, 1994 (the date of the second survey), Petitioner
continued to fail to comply with 42 C.F.R. 418.62. Thus, this
case involves only the issue of whether HCFA was authorized to
terminate Petitioner's participation in Medicare based on its
failure to comply with 42 C.F.R. 418.58.
3. Below, I discuss the contents and meaning of these
standards, HCFA's allegations about Petitioner's performance under
each of these standards, and my conclusions.
4. Based on the February 17, 1994 survey, HCFA found Petitioner
to be noncompliant with 42 C.F.R. 418.58(b) and (c). HCFA Ex.
16 at 5 - 7. Based on the May 5, 1994 resurvey, HCFA found
Petitioner to be noncompliant with 42 C.F.R. 418.58(a), (b), and
(c). HCFA Ex. 18.
5. As a matter of discretion, HCFA may afford providers
opportunities to correct condition-level deficiencies identified at
resurveys.
6. My conclusion that the Secretary has left it to the
administrative law judge in Medicare provider termination hearings
to decide who has the burden of proof, consistent with due process,
is not inconsistent with the Secretary's policy in other types of
cases. In regulations governing other types of cases, the
Secretary has explicitly conferred on administrative law judges the
authority to apportion burden of proof. Regulations which govern
hearings involving certain determinations by the Department of
Health and Human Services' Inspector General to exclude individuals
and entities from participating in Medicare and other federally
funded health care programs state that the administrative law judge
shall decide who bears the burden of proof in those hearings. 42
C.F.R. 1005.15(c).
7. That rule has exceptions, however. For example, courts have
held routinely that, where an applicant for disability benefits
proves that he or she is unable to perform his or her past work
activity, then the burden shifts to the Administration to prove
that there exist jobs that the applicant can perform.
8. This decision is attached to HCFA's posthearing brief as
Addendum 1.
9. The ambiguity in the Appeals Council's allocation of burden
may, in some respect, reflect the even greater ambiguity in the
administrative law judge's allocation of burden. I do not know
what the administrative law judge meant by the phrase "significant
changes or violations."
10. There is a separate regulation which governs the
composition and duties of a hospice's interdisciplinary group. 42
C.F.R. 418.68.
11. In either the statement of deficiencies it prepared after
the May 5, 1994 resurvey or in the notice it sent to Petitioner on
May 23, 1994, HCFA did not assert that Petitioner contravened this
regulation . See HCFA Exs. 18, 19.
12. As I find above, HCFA contends also that Petitioner was not
in compliance with the requirement of 42 C.F.R. 418.58(b) that
it create a plan of care for each of its patients which contains a
review schedule and that the plan of care be reviewed according to
that schedule. I have found that that requirement is stated
explicitly in 42 C.F.R. 418.58(b) and that
Petitioner did not comply with it.