$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Hospicio en el Hogar de Lajas,
Petitioner,
- v.-
Health Care Financing Administration.
DATE: March 31, 1995
Docket No. C-94-361
Decision No. CR366
DECISION
Petitioner requested a hearing on 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 scheduled a hearing to be held in
San Juan, Puerto Rico, beginning November 1, 1994. At the
commencement of the hearing, the parties advised me that neither of
them desired to offer in-person testimony. They agreed that they
would offer exhibits and briefs.
I have considered the applicable law and regulations, the exhibits,
and the parties' arguments. 1/ conclude that HCFA proved, by the
preponderance of the evidence, that Petitioner failed to comply
with a condition governing 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 in the
Medicare program when the provider is not complying with a
condition that governs its participation in Medicare. Pages 9, 21.
2. In a case where a provider requests a hearing on 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 6 - 8.
3. HCFA did not deny Petitioner due process when it
effectuated termination of Petitioner's participation agreement
after its May 2 - 3, 1994 resurvey of Petitioner without first
affording Petitioner the opportunity to correct deficiencies that
were identified at the resurvey. Pages 8 - 10.
4. HCFA proved, by the preponderance of the evidence, that
Petitioner failed to establish plans of care for its patients which
met the condition of participation established by 42 C.F.R.
418.58. Pages 17 - 20.
5. HCFA was authorized to terminate Petitioner's
participation in the Medicare program. Page 21.
II. Discussion
A. Background
Petitioner is a hospice, operating in Lajas, Puerto Rico. A
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. 2/
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. 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 March 8, 1994, Petitioner was surveyed on behalf of HCFA by the
Puerto Rico Department of Health. HCFA Exhibit (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 23, 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 April 6, 1994, Petitioner submitted a plan of correction to HCFA
in which it proposed to correct the deficiencies which the Puerto
Rico Department of Health had identified in its operations. HCFA
Ex. 16. On April 19, 1994, HCFA notified Petitioner that it had
found the plan to be not fully acceptable. HCFA Ex. 17. On April
28, 1994, Petitioner submitted a revised plan of correction to
HCFA. HCFA Ex. 18. HCFA did not send a response to Petitioner
advising it whether HCFA found the revised plan to be acceptable or
unacceptable.
Neither HCFA nor Petitioner offered evidence to show whether HCFA
found the revised plan of correction to be acceptable. Petitioner
has not contended that HCFA accepted the revised plan. Petitioner
has not argued that, if HCFA had accepted the revised plan of
correction, its relationship with HCFA would be governed by the
terms of that revised plan. Nor has Petitioner asserted that, by
virtue of HCFA's alleged acceptance of the revised plan of
correction, Petitioner would be entitled to a period of time in
which to conform its operations to the corrective actions it
pledged to take. Therefore, I make no findings in this decision as
to whether HCFA accepted Petitioner's revised plan of correction.
Furthermore, I make no findings as to whether acceptance of a plan
of correction by HCFA would entitle a provider to any rights
precluding HCFA from terminating its participation in Medicare. I
note however, that it is not HCFA's practice always to notify a
provider that it finds a plan of correction to be acceptable. HCFA
Ex. 28 at 27 - 28.
On May 2 - 3, 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
Petitioner continued to be noncompliant with regulations which
governed Petitioner's participation in Medicare. HCFA Ex. 20. The
regulations which HCFA found Petitioner to continue to contravene
are 42 C.F.R. 418.50 and 418.58. On May 20, 1994, HCFA
advised Petitioner of these findings, and advised it further that
it had affirmed its previous determination to terminate
Petitioner's participation in the Medicare program. Id.
In its notification to Petitioner of the results of the March
survey, HCFA had advised Petitioner that it had determined that
Petitioner was not complying with six regulations which state
conditions governing hospices' participation in Medicare. These
were: 42 C.F.R. 418.50 (general provisions); 418.58 (plan of
care); 418.62 (informed consent); 418.74 (general clinical
records); 418.92 (physical therapy, occupational therapy, and
speech language pathology); and 418.94 (home health aide and
homemaker services). HCFA does not contend that, as of May 2 - 3,
1994 (the dates of the second survey), Petitioner continued to fail
to comply with 42 C.F.R. 418.62, 418.74, 418.92, and 418.94.
This case addresses the issue of whether HCFA was authorized to
terminate Petitioner's participation in Medicare based on
Petitioner's failure to comply with conditions of participation
stated in 42 C.F.R. 418.50 and 418.58. Petitioner's alleged
previous noncompliance with other regulations is not an issue.
Furthermore, HCFA now argues that it derives its finding that
Petitioner failed to comply with 42 C.F.R. 418.50 from its
finding that Petitioner failed to comply with 42 C.F.R. 418.58.
HCFA's Brief at 18, n.4. Therefore, the evidence in this case
addresses only the question of whether Petitioner failed to meet
the requirements of 42 C.F.R. 418.58.
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 to whom it provides care 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. Based on the survey conducted on May 2 - 3, 1994,
HCFA found that Petitioner was not complying with all three of
these standards and with the condition for participation stated in
the regulation. HCFA Ex. 20. 3/
B. Discussion of legal arguments
This case involves legal issues concerning the interpretation and
application of the Act and relevant regulations. The parties'
arguments on these issues are similar to those raised by the
parties in Arecibo Medical Hospice Care, DAB CR363 (1995). 4/ reach
essentially the same conclusions of law in this case as I did in
the Arecibo case.
The legal issues, my analysis, and my conclusions are as follows:
1. Burdens of coming forward with evidence and
persuasion
HCFA argues that Petitioner should bear the burden of persuasion to
prove that HCFA's determination to terminate Petitioner's
participation in Medicare is not authorized. I am not persuaded by
HCFA's arguments. I conclude that HCFA bears the burdens of coming
forward with evidence and persuasion to establish that its
determination to terminate Petitioner's participation in Medicare
is justified. Arecibo at 8 - 13.
Neither Congress nor the Secretary has allocated the burdens of
coming forward with evidence and persuasion in a hearing involving
the propriety of a determination to terminate a provider's
participation in Medicare. The Act provides for a de novo hearing
in such a case, governed by section 205 of the Act. Act, sections
205(b), 1866(b)(2), 1866(h)(1). The Act does not state who shall
bear the burdens of coming forward and persuasion in an
administrative hearing concerning whether a determination to
terminate a provider's participation in Medicare is justified.
Regulations published by the Secretary to govern such a hearing do
not allocate the burdens of coming forward with evidence and
persuasion. See 42 C.F.R. Part 498.
However, the Secretary has reposed broad discretion in
administrative law judges to decide the manner in which evidence is
presented and received in such a hearing. 42 C.F.R.
498.60(b)(3). I do not read this regulation or the other
regulations in Part 498 as containing a statement by the Secretary
as to who should bear the burdens of coming forward with evidence
and persuasion in a provider termination hearing. I read the
regulations' silence on this question, coupled with the broad grant
of discretion conferred by 42 C.F.R. 498.60(b)(3), to constitute
a decision by the Secretary to give administrative law judges the
authority to allocate such burdens consistent with the requirements
of due process. Arecibo at 9.
In this case, as in most cases involving determinations by HCFA to
terminate providers' participation in Medicare, HCFA has obtained
the facts which justify its determination through a survey of
Petitioner's operations. HCFA thus knows the facts on which it
relies to support its determination and is in the best position to
prove those facts. Id. It is therefore both fair and efficient to
require HCFA to come forward with evidence sufficient to prove, by
a preponderance of the evidence, that its determination to
terminate a provider's participation in Medicare is justified under
the Act and regulations.
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. I conclude here, as I
did in Arecibo, that 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. Id. at 11. The consequence might
be to invite a massive and unfocused submission of evidence from
that provider. Id.
HCFA relies on the same arguments here as it did in Arecibo to
support its assertion that Petitioner bears the burden of
persuasion. HCFA asserts that a provider who challenges an adverse
determination by HCFA ought to bear the burden of showing that the
determination is not justified, inasmuch as the determination is
final if a hearing is not requested. This argument ignores the
fact that a hearing as to the propriety of a determination by HCFA
made under the authority of section 1866 of the Act is de novo.
HCFA argues also that, as a general principal of administrative
law, it is the applicant for relief, benefits, or privilege that
bears the burden of persuasion in a hearing to contest the denial
of those benefits. While I do not take issue with that general
principal, it is not applicable in this case. Petitioner is no
longer an applicant, but is instead an entity with an established,
quasi-contractual relationship with HCFA. As I observed in
Arecibo, a provider who has this quasi-contractual relationship
with HCFA will have made financial commitments and have established
business relationships based on that relationship. Id. at 11.
Although the quasi-contractual relationship does not establish an
unqualified entitlement to participate in Medicare, it would ignore
the reality of the provider's reliance on that relationship to
characterize the provider merely as an "applicant," in order to
impose on the provider the burden of proving that any determination
by HCFA is unreasonable. Id.
HCFA relies also on judicial decisions and on a decision by the
Office of Hearings and Appeals and Appeals Council of the Social
Security Administration to support its argument as to allocation of
the burden of persuasion. I discussed these decisions in Arecibo.
Id. at 12. I do not find them to be persuasive. The judicial
decisions simply restate the general rule as to allocating the
burden of persuasion to applicants for benefits, in cases
concerning denials of applications for benefits. I do not find
these decisions to be applicable here, for the reasons which I
explain above and in Arecibo. The Appeals Council decision does
not state expressly that the burden of persuasion falls on the
party whose participation in Medicare has been terminated by HCFA.
Jefferson Memorial Hosp. Ass'n v. Health Care Financing
Administration, Docket No. PS-109, at 17 (1983). Indeed, that
decision may support my allocation of the burden of persuasion to
HCFA. Id.; Arecibo at 12.
2. Alleged denial of due process to Petitioner
As was argued by the petitioner in Arecibo, Petitioner asserts that
HCFA denied it due process of law by not permitting it the
opportunity to submit a plan of correction to address the
noncompliance which HCFA found as a consequence of the May 2 - 3,
1994 resurvey. Petitioner argues that, where HCFA finds a provider
to be deficient in complying with a standard contained in a
regulation, it is obligated to afford that provider the opportunity
to submit a plan of correction, prior to taking any action to
terminate that provider's participation in Medicare. 42 C.F.R.
488.28.
Petitioner points to the statement of deficiencies generated as a
result of the May 2 - 3, 1994 resurvey as evidence that, at the
resurvey, HCFA found Petitioner to be out of compliance with a
standard under 42 C.F.R. 418.58 which was not cited in the
statement of deficiencies generated as a result of the March 8,
1994 survey. HCFA Ex. 16 at 2 - 7; HCFA Ex. 19 at 2 - 8.
5/etitioner argues that, as a consequence of HCFA's determination
that Petitioner was not complying with an additional standard under
the regulation, Petitioner was entitled to submit a new plan of
correction to HCFA.
I am not persuaded that HCFA denied Petitioner due process. HCFA
was under no obligation to give Petitioner the opportunity to
submit a plan of correction to cure the deficiencies identified at
the May 2 - 3, 1994 resurvey of Petitioner. Arecibo at 5 - 8.
HCFA is not obligated to give a provider the opportunity to submit
a plan of correction where it identifies a failure by that provider
to comply with a condition of participation in Medicare. Here, the
deficiencies which HCFA identified in Petitioner's operations, both
at the March 1994 survey, and the May 1994 resurvey, constituted
failures to comply with conditions of participation. The
regulations authorize HCFA to terminate a provider's participation
in the Medicare program if the provider fails to comply with any
condition of participation. 42 C.F.R. 489.53(a)(1), (3).
Petitioner had no right to expect that HCFA would give it the
opportunity to submit plans of correction to correct the
condition-level deficiencies which HCFA identified at either
survey.
The regulations which govern participation of hospices in the
Medicare program state broad conditions of participation which
hospices must comply with in order to participate in Medicare. 42
C.F.R. Part 418. These regulations also contain standards of
participation, which constitute the criteria which a hospice must
meet under each condition of participation.
HCFA may determine that a hospice fails to comply with a standard
of participation under a given condition, and it may conclude also
that the severity of the noncompliance is not so great as to
constitute a failure to comply with the overall condition of
participation. In that event, HCFA must afford the provider the
opportunity to submit a plan of correction to HCFA to redress the
noncompliance. 42 C.F.R. 488.28. However, where HCFA finds
that the failure of a hospice to comply with standards of
participation is so egregious as to constitute a failure to comply
with the broad condition that encompasses those standards, then
HCFA is not required to give that hospice the opportunity to submit
a plan of correction to redress the noncompliance. Id.
In this case, HCFA found, both at the initial survey and the
resurvey which it conducted of Petitioner, that Petitioner was not
complying with conditions of participation in Medicare. HCFA was
not obligated, as a result of these findings, to give Petitioner
the opportunity to file plans of correction. The fact that HCFA
gave Petitioner that opportunity after the March survey did not
obligate HCFA to give Petitioner the same opportunity after the May
resurvey.
It is true, as Petitioner points out, that based on the May
resurvey, HCFA found that Petitioner failed to comply with all
three standards under the condition stated in 42 C.F.R. 418.58,
whereas, in the March survey, HCFA found that Petitioner failed to
comply with only two of the three standards under that condition.
However, in both the March survey and the May resurvey, HCFA found
that Petitioner's noncompliance with the standards stated in 42
C.F.R. 418.58 was so egregious as to amount to a failure to
comply with the overall condition of participation contained in the
regulation. Petitioner did not gain the right to submit a plan of
correction in response to the May survey by virtue of the fact that
HCFA found Petitioner to be deficient under an additional standard
of the regulation, inasmuch as HCFA's central finding was that
Petitioner was not complying with the overall condition of
participation expressed in that regulation.
C. Analysis of the plan of care requirement for
hospices
The regulation that is principally at issue in this case is 42
C.F.R. 418.58, which establishes the general condition of
participation for a hospice that it establish and maintain a plan
of care for each of its patients and that it provide treatment in
accordance with the plan of care. This general condition is
implemented in three subsections.
1. 42 C.F.R. 418.58(a)
The hospice's medical director or physician designee and the
hospice's interdisciplinary group must establish a plan of care for
each patient before the hospice provides care to that patient. 42
C.F.R. 418.58(a). On its face, the requirements of this
subsection are plain. A hospice may not provide care to a patient
until it has reviewed that patient's needs and problems and
established a plan of care to deal with them. The subsection
plainly envisions a plan of care as constituting an overall
blueprint of care to be provided to each hospice patient.
HCFA appears to interpret this subsection to impose additional
requirements on hospices which are not evident from the
subsection's plain meaning, but which may not necessarily be
unreasonable. HCFA appears to be arguing that this subsection
requires that a new or revised plan of care be created to deal with
each new problem manifested by a hospice patient as it arises. See
HCFA's Brief at 21 - 22 (In Arecibo, HCFA made this argument
explicitly.)
2. 42 C.F.R. 418.58(b)
Each plan of care must be reviewed and updated, at intervals
specified in the plan, by the patient's attending physician, the
hospice medical director or physician designee, and the hospice's
interdisciplinary group. These reviews must be documented. 42
C.F.R. 418.58(b). The unambiguous requirement of this section
is that in each plan of care that a hospice establishes for each of
its patients, it must establish a schedule by which it reviews that
plan of care. Furthermore, each review must be documented by the
appropriate individuals and by the hospice's interdisciplinary
group. Plainly, the intent of this subsection is to assure
regular, scheduled reviews of each hospice patient's condition
which are documented. The intent also is to assure that no hospice
patient receives sporadic or unsystematic treatment of his or her
problems.
The term "intervals specified in the plan" can be read reasonably
to require either that a hospice establish specified dates for
review of each patient's plan of care or specified events which
would trigger a review. The subsection appears to repose some
discretion on a hospice to choose the schedule by which it elects
to review each patient's plan of care.
3. 42 C.F.R. 418.58(c)
Each plan of care must include an assessment of the patient's needs
and must identify the services to be provided to address those
needs, including services to manage discomfort and symptom relief.
Furthermore, each plan of care must state in detail the scope and
frequency of services needed to meet the patient's and his or her
family's needs. 42 C.F.R. 418.58(c). As with the other
subsections of the regulation, this subsection contains unambiguous
requirements. It requires that a plan of care provide a specific
statement of the needs of the patient and a specific statement as
to how those needs will be addressed by the hospice and its
personnel.
In Arecibo and in this case, HCFA asserts an interpretation of this
subsection which would impose requirements on hospices which go
beyond the subsection's plain meaning. HCFA argues that this
subsection should be read to reinforce its interpretation of 42
C.F.R. 418.58(a) to require that a hospice create a new or
revised plan of care to address each new problem that a patient
develops.
HCFA argues also that 42 C.F.R. 418.58(c) means that a plan of
care must specify the specific discipline that will be providing
each service to a patient pursuant to the plan. Furthermore,
according to HCFA, the subsection should be interpreted to require
that a plan of care specify the name and frequency of
administration of each medication administered to a patient. 6/
find these interpretations also to be beyond the plain meaning of
the subsection.
D. HCFA's duty to communicate to providers its
interpretation of regulations
HCFA does not deny that its interpretations of the three
subsections of 42 C.F.R. 418.58 may go beyond the plain meaning
of these subsections. However, HCFA appears to be arguing that, as
the entity vested with the authority to implement the regulations,
it must be vested also with the authority to interpret these
regulations reasonably. 7/urthermore, according to HCFA, hospices
in general and Petitioner in particular have a duty to be aware of
and to understand and comply with HCFA's interpretation of
regulations. Thus, according to HCFA, a hospice may not use its
ignorance of HCFA's interpretation of the regulations as an excuse
to avoid its duty to comply with HCFA's interpretation.
I held in Arecibo, as I hold here, that HCFA certainly has the
authority to interpret regulations in a reasonable way to account
for and to address circumstances that may not fall within the plain
meaning of the regulations. However, HCFA is not entitled to make
its interpretation binding on any provider to which it has not
communicated that interpretation. Providers cannot be expected to
divine HCFA's interpretation of a regulation where that
interpretation departs from the plain meaning of the regulation or
where it addresses and resolves ambiguous language.
HCFA argues here, as it did in Arecibo, that providers have a duty
to be aware of and abide by HCFA's interpretation of regulations
where that interpretation comports with practices that are
generally accepted and followed by providers. HCFA can find
support for the reasonableness of its interpretation of regulations
where its interpretation comports with practices that are accepted
and followed by providers. But the fact that an interpretation of
a regulation comports with accepted practices does not excuse HCFA
from the duty of communicating its interpretation to providers,
where the interpretation is not apparent from the plain meaning of
the regulation.
In both Arecibo and this case, HCFA asserts that its position as to
the duty of providers to be aware of and comply with HCFA's
interpretation of regulations is consistent with my holding in Long
Medical Laboratory, DAB CR334 (1994). In the Long Medical
Laboratory case I held that the petitioner had a duty to be aware
of its obligations to comply with provisions of the Clinical
Laboratories Improvement Amendments. But, what distinguishes the
Long Medical Laboratory case from the present case is that the Long
Medical Laboratory case involved a provider's failure to comply
with an unambiguous statutory requirement, whereas, in this case,
the alleged failure to comply is with interpretations of
regulations that depart from the plain language of the regulations.
The Long Medical Laboratory case did not involve any issue of
interpretation of the statutory requirement.
My analysis here is entirely consistent with my analysis in the
Long Medical Laboratory case. Petitioner is required to be aware
of, and to comply with, the unambiguous requirements of the Act and
regulations, as well as any reasonable interpretations of law which
HCFA has communicated to providers. However, that duty does not
extend to interpretations by HCFA which have not been communicated
to providers.
HCFA contends that, in any event, it communicated to Petitioner its
interpretation of the three subsections of 42 C.F.R. 418.58 in
the statement of deficiencies which was sent to Petitioner after
the March 8, 1994 survey. HCFA Ex. 16 at 2 - 7. I am not
persuaded from my review of this exhibit that it communicates
precisely to Petitioner HCFA's interpretation of the three
subsections of 42 C.F.R. 418.58. Nowhere does the statement of
deficiencies state explicitly the interpretation now advocated by
HCFA.
Arguably, a provider might be in a position to infer from the
specific deficiencies described in the statement that HCFA is
advocating an interpretation that imposes additional requirements
to those which are stated in the plain language of the regulation.
For example, the specific deficiencies which the statement
identifies under 42 C.F.R. 418.58(a) could lead a provider to
conclude that HCFA was interpreting the subsection to require at
least that a plan of care be amended to deal with new problems as
they arise. HCFA Ex. 16 at 3 - 5. However, where HCFA interprets
a regulation to impose requirements on providers that exceed those
which are stated in the plain language of the regulation, it owes
a duty to those providers to state its interpretation plainly and
directly. Giving providers a statement from which they might be
able to infer an interpretation will not suffice.
I conclude that HCFA did not prove that it communicated its
interpretation of the three subsections of 42 C.F.R. 418.58 to
Petitioner sufficiently to put Petitioner on notice that HCFA was
requiring it to comply with requirements that depart from the plain
meaning of the subsections. Therefore, I analyze HCFA's
contentions that Petitioner remained out of compliance with the
requirements of the regulation, using only the plain meaning of the
regulation.
E. Analysis of HCFA's allegations of noncompliance
I conclude from my review of the evidence that HCFA established by
a preponderance of the evidence that, as of the May 8, 1994
resurvey, Petitioner was not complying with plain and specific
requirements of 42 C.F.R. 418.58(b). I do not agree with HCFA's
assertions that Petitioner was not complying with the provisions of
42 C.F.R. 418.58(a) and (c).
The weight of the evidence supports HCFA's contentions of fact as
to the way in which Petitioner generated and reviewed its plans of
care. However, HCFA's assertion from these facts that Petitioner
was not complying with 42 C.F.R. 418.58(a) and (c) relies on its
interpretation of the requirements of these subsections. As I hold
above, HCFA's interpretation was not within the plain meaning of
the subsections' language. There is no evidence that HCFA
communicated its interpretation to Petitioner.
There were no witnesses called by either party. The parties agreed
to rely solely on the exhibits which are in evidence and their
analysis of those exhibits. The evidence which I find to be
relevant to my conclusion that Petitioner was not complying with 42
C.F.R. 418.58(b) consists of the following exhibits: HCFA Ex.
19 (the statement of deficiencies which was prepared after the May
2 - 3, 1994 resurvey); HCFA Exs. 21 - 24 (excerpts from records of
patients that were reviewed at the May 2 - 3, 1994 resurvey,
portions of which have been translated into English); HCFA Ex. 25
(notes made by one of the surveyors who participated in the May 2
- 3, 1994 resurvey); and HCFA Exs. 26 - 27 (the curriculum vitae of
the surveyors who conducted the May 8, 1994 resurvey). 8/
The statement of deficiencies which was prepared after the May 8,
1994 resurvey of Petitioner is an unsigned document. HCFA Ex. 19.
However, there is no dispute that this exhibit constitutes the
results of a survey conducted principally by Ms. Marjorie Finnigan,
a HCFA employee. Thus, the statement of deficiencies may be
considered as a statement by Ms. Finnigan in lieu of her in-person
testimony.
Petitioner has not challenged Ms. Finnigan's credibility, although
it has challenged the probative value of HCFA Ex. 19. I find Ms.
Finnigan's statement to be credible, in the absence of any
meaningful challenge to her credibility. Furthermore, Ms.
Finnigan's credibility is bolstered by her curriculum vitae, which
establishes that she has substantial experience conducting surveys
on behalf of HCFA, professional experience in nursing, and
professional education in public health administration. HCFA Ex.
26.
The statement of deficiencies asserts broadly that Petitioner was
not complying with the overall condition of participation expressed
in the regulation. HCFA Ex. 19 at 1 - 2. This assertion is
premised on the conclusions that, based on a review of ten patient
records, Petitioner failed to develop plans of care to meet all of
the needs of eight of ten of these patients and failed to establish
time frames for the review of the plans of care for all ten of
these patients. Id. at 2. It is premised also on findings that
Petitioner was not in compliance with each of the subsections of 42
C.F.R. 418.58. Id.
1. Allegations of Petitioner's noncompliance
with 42 C.F.R. 418.58(a)
The statement of deficiencies generated after the May 1994 resurvey
asserts that Petitioner's failure to comply with the requirements
of 42 C.F.R. 418.58(a) is supported by a review of ten patient
records. It concludes that this review shows that, in all ten
cases, Petitioner failed to consider all of the patients' needs and
problems. HCFA Ex. 19 at 3. Furthermore, in eight of the ten
cases, care plans were not developed to address the patients'
changing needs. Id. The statement recites specific examples to
support this latter conclusion. These involve patients who are
identified in the statement as Patients # 9, # 3, and # 7. Id. at
3 - 7.
A close review of the examples cited in the statement of
deficiencies leads me to conclude that the finding that plans of
care were not being developed to address patients' changing needs
emanates from HCFA's interpretation of 42 C.F.R. 418.58(a) to
require that a hospice create a new or revised plan of care to
address each new problem manifested by a patient. Thus,
Petitioner's failure to develop a specific plan of care to deal
with the consequences of Patient # 9's relocation is cited as a
deficiency under 42 C.F.R. 418.58(a). HCFA Ex. 19 at 4.
Similarly, Petitioner's failure to develop a specific plan of care
to address an episode of pain and vomiting which patient # 3
experienced on April 3, 1994 is cited as a deficiency under 42
C.F.R. 418.58(a). Id. at 4 - 5.
I am not persuaded that HCFA proved, by a preponderance of the
evidence, that Petitioner was not complying with the plain meaning
of 42 C.F.R. 418.58(a). Although the specific findings of
failures by Petitioner to develop plans of care may be factually
accurate (indeed, Petitioner has not offered persuasive evidence to
refute these findings, and they are supported by the excerpts of
treatment records which HCFA offered in HCFA Exs. 21 and 22), they
relate to an interpretation of the regulation which exceeds the
regulation's plain meaning and which HCFA has not communicated
precisely to Petitioner.
As I hold above, the plain meaning of 42 C.F.R. 418.58(a) cannot
be read to encompass the requirement that a new or revised plan of
care be prepared by a hospice to address each new problem
manifested by a patient under hospice care. The specificity which
HCFA reads into this subsection is more precise than is required on
its face. Thus, while I do not dispute the accuracy of the
survey's findings as to 42 C.F.R. 418.58(a), I conclude that
they do not describe a failure to comply with the plain
requirements of the subsection.
2. Allegations of Petitioner's noncompliance
with 42 C.F.R. 418.58(b)
The statement of deficiencies asserts that Petitioner was not
reviewing and updating plans of care in compliance with 42 C.F.R.
418.58(b). This assertion is based on the finding that, in the
records of ten patients that were reviewed by the surveyors, there
was no evidence that the plans of care specified the dates when
they were to be reviewed by Petitioner's interdisciplinary group.
HCFA Ex. 19 at 6 - 7. Furthermore, according to the statement of
deficiencies, the records did not contain evidence that plans of
care actually were being reviewed by Petitioner's interdisciplinary
group. Id.
The surveyors found specifically that, although plans of care in
patients' records did specify dates of review, they did not specify
that Petitioner's interdisciplinary group would be reviewing the
plans. Id. The surveyors found also that the review dates were
for reviews by specific disciplines and not by Petitioner's
interdisciplinary group. Id.
HCFA proved by a preponderance of the evidence that Petitioner
failed to comply with the requirements of 42 C.F.R. 418.58(b).
The excerpts of treatment records which are in evidence
substantiate the findings contained in the statement of
deficiencies concerning Petitioner's compliance with 42 C.F.R.
418.58(b). HCFA Exs. 21 - 24. The records contain documents which
are headed "interdisciplinary care plan" or "interdisciplinary
group care plan." See, e.g., HCFA Ex. 21 at 2, 4, 6, 8, and 10.
Each of these plans state a date which may be a planned review
date. For example, in HCFA Ex. 21, the plans contained on pages 2,
4, 6, 8, and 10 each recite a date at the bottom of the page which
may be a review date (although, from the context of the date, it
may also be the date when the plan itself was prepared). However,
none of the records in evidence, including the plans themselves,
show that a schedule for regular reviews has been established by
the hospice's interdisciplinary group or that the plans actually
have been reviewed by the interdisciplinary group.
Petitioner argues that there is no requirement in 42 C.F.R.
418.58(b) that a plan of care state the dates when it is to be
reviewed. As I have found above, the regulation permits a hospice
to schedule reviews of a plan of care according to intervals stated
in the plan. A review schedule does not necessarily have to be by
date, based on the plain language of the regulation.
However, a hospice cannot avoid the requirement that there be
periodic reviews of each plan of care based on a schedule (whether
governed by the calendar or changes in a patient's condition)
established in the plan of care itself. Nor can a hospice avoid
the requirement that reviews be conducted by, among others, the
hospice's interdisciplinary group, and that the reviews be
documented. These requirements are stated plainly in the
regulation. Here, the essentially unrebutted evidence is that
Petitioner was not reviewing its plans of care according to
schedules established in the plans, nor was it assuring that the
reviews be accomplished by the interdisciplinary group and
documented.
3. Allegations of Petitioner's noncompliance
with 42 C.F.R. 418.58(c)
HCFA's assertion that Petitioner was not complying with 42 C.F.R.
418.58(c) is based on the surveyors' finding that in none of the
ten records reviewed is there evidence that the plans of care
specified the discipline that would be responsible for the
interventions and care described in the plans. HCFA Ex. 19 at 7 -
8. It is based also on HCFA's interpretation that the subsection
requires each plan of care to identify the specific discipline that
is responsible for each intervention identified in the plan. Id.
Petitioner has not offered any evidence to controvert the evidence
offered by HCFA.
However, I cannot conclude that this evidence proves that
Petitioner was not in compliance with 42 C.F.R. 418.58(c). HCFA
grounds its assertion that Petitioner was not complying with this
subsection on an interpretation of the subsection which does not
fall within the plain meaning of the subsection's language. I do
not find that HCFA communicated its interpretation to providers.
I do not find that Petitioner is obligated to comply with HCFA's
interpretation absent evidence that HCFA communicated its
interpretation to providers.
F. Petitioner's failure to comply with a condition for
participation in Medicare
I conclude that HCFA proved that Petitioner failed to comply with
a condition for participation stated in 42 C.F.R. 418.58. I do
not conclude that HCFA proved that Petitioner also failed to comply
with a condition for participation stated in 42 C.F.R. 418.50.
1. 42 C.F.R. 418.58
The preponderance of the evidence establishes that, as of May 2 -
3, 1994, Petitioner remained out of compliance with the standard of
participation contained in 42 C.F.R. 418.58(b). Petitioner was
not scheduling reviews of its plans of care at intervals specified
in the plans. Nor was Petitioner's interdisciplinary group
conducting reviews according to a schedule or schedules of review.
Finally, Petitioner was not documenting any reviews that it may
have been conducting.
The fact that a provider may not be complying with one standard of
several contained in a regulation does not preclude a finding that
the egregiousness of the noncompliance is such as to constitute a
failure to comply with the overall condition for participation
contained in the regulation. I conclude that the level of severity
of Petitioner's noncompliance with 42 C.F.R. 418.58(b) is
sufficient to prove that Petitioner was not complying with the
condition for participation contained in 42 C.F.R. 418.58.
The circumstances where a failure by a provider to comply with
participation requirements constitutes a failure to meet a
condition of participation are defined in 42 C.F.R. 488.24(a).
That section specifies that a deficient provider will be found to
no longer comply with a condition of participation where the
deficiency is:
. . . of such character as to substantially limit the
provider's . . . capacity to render adequate care or which
adversely affect[s] the health and safety of patients; . . .
This definition of a condition-level deficiency implements the
Act's grant of authority to the Secretary to terminate a provider's
participation in Medicare where the Secretary determines that the
provider fails to comply "substantially" with the provisions of the
provider agreement, the Act, regulations, or a mandated corrective
action. Act, section 1866(b)(2)(A).
I am satisfied that Petitioner's failure to develop plans of care
in compliance with the requirements of 42 C.F.R. 418.58(b)
substantially limited Petitioner's capacity to render adequate care
to its patients and potentially affected adversely the health and
safety of Petitioner's patients. Thus, Petitioner's deficiency was
a failure to meet the overall condition of participation stated in
42 C.F.R. 418.58.
What is evident here is not simply a failure to comply with a
technical record keeping requirement. The evidence is that, in all
ten of the treatment records reviewed by the surveyors on May 2 -
3, 1994, there was no indication that plans of care were being
reviewed according to a schedule, that Petitioner's
interdisciplinary group was performing reviews, or that reviews
were being documented. This evidence proves a systematic failure
by Petitioner to fulfill its obligation to plan care according to
the requirements of the regulation.
The essential requirement of 42 C.F.R. 418.58 is that each
patient who is being provided care by hospices be provided care
according to a plan of care that is created and maintained
specifically for that individual. By definition, hospice patients
are in the last stages of their lives. The critical role of
hospices is to manage the care provided to dying patients to
maximize their physical comfort and to relieve the patients and
their families, to the extent possible, of the emotional distress
caused by the patients' imminent deaths. I cannot envision how a
hospice can perform this role if it does not review its plans of
care according to an established schedule, if it does not assure
that plans are reviewed by those who are responsible for reviewing
the plans, and if it does not document the reviews. Because I
conclude that Petitioner failed to comply with the condition of
participation identified at 42 C.F.R. 418.58, HCFA was
authorized to terminate Petitioner's provider agreement.
2. 42 C.F.R. 418.50
I do not agree with HCFA's argument that Petitioner should also be
found to be noncompliant with the requirements of 42 C.F.R.
418.50. This regulation states the general conditions for
participation as a hospice. Subsection (a) requires hospices to
"maintain compliance with the conditions of this subpart." From
this, HCFA reasons that, if a provider is not complying with a
condition contained in a regulation governing hospices, then it
must also be found to be not complying with 42 C.F.R. 418.50.
It may be true literally that a provider who is not complying with
a condition for participation stated elsewhere in the regulation
governing hospices is also not complying with the requirement in 42
C.F.R. 418.50(a) that it comply with all conditions for
participation. However, I do not read 42 C.F.R. 418.50(a) as
directing a finding that a provider who is found to be noncompliant
with one condition of participation must therefore be found to be
noncompliant with two conditions, thus implying a higher degree of
noncompliance. Such a reading would suggest an intent by the
Secretary to make noncompliance with a condition of participation
appear to be more serious in every case than in fact it is.
The failure of a provider to comply with even one condition for
participation in Medicare provides HCFA with grounds to terminate
that provider's participation in Medicare. 42 C.F.R.
489.53(a)(1), (3). It would add nothing to the analysis of a
hospice's deficiencies under 42 C.F.R. Part 418 to find an
additional condition-level deficiency exists under 42 C.F.R.
418.50 each time a condition-level deficiency is found under one of
the other regulations in 42 C.F.R. Part 418 which establish the
conditions for participation by a hospice.
III. Conclusion
Under both the Act and regulations, HCFA may terminate a provider's
participation in Medicare where the provider is not complying with
a condition for participation in Medicare. Act, section
1866(b)(2)(A); 42 C.F.R. 489.53(a)(1), (3). The preponderance
of the evidence in this case is that, as of the May 2 - 3, 1994
resurvey of Petitioner, Petitioner was not complying with the
condition for participation stated in 42 C.F.R. 418.58. Based
on this, I conclude that HCFA had authority to terminate
Petitioner's participation in Medicare.
Steven T. Kessel
Administrative Law Judge
1. HCFA offered HCFA exhibits 1 - 29 as evidence. Petitioner
did not offer any exhibits. I afforded Petitioner the opportunity
to object to HCFA's exhibits. Petitioner did not object. I admit
into evidence HCFA exhibits 1 - 29.
2. 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. Act, section
1861(dd)(3)(A).
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. As in this case, Arecibo involved the propriety of a
termination by HCFA of a hospice's participation in the Medicare
program. Both this case and Arecibo present very similar facts and
involve the application of the same regulation. The same attorney
represented the petitioners in both Arecibo and the present case.
The briefs which HCFA submitted in the two cases presented
identical arguments regarding HCFA's position as to the legal
issues.
5. Based on the March 8, 1994 survey, HCFA found that
Petitioner was not in compliance with 42 C.F.R. 418.58(a) and
(b), whereas based on the May 2 - 3, 1994 resurvey, HCFA found that
Petitioner was not in compliance with 42 C.F.R. 418.58(a), (b),
and (c).
6. HCFA argued this identical interpretation in Arecibo.
Arecibo at 15 - 16, 23 - 24.
7. HCFA does not assert this position as explicitly here as it
did in Arecibo. Arecibo at 14 - 16, 22 - 23. However, it is clear
from the context of HCFA's arguments that it has not modified its
position.
8. I am not fluent in Spanish. Therefore, I draw no inferences
or conclusions from those portions of HCFA Exs. 21 - 24 which have
not been translated into English. I gave Petitioner the
opportunity to object to, or to offer supplements to, translations
that were offered by HCFA. Petitioner neither objected to HCFA's
translations nor offered supplements.