$05:Civil Money Penalty
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Guaynabo Hospice Care, Inc.,
Petitioner,
- v.-
Health Care Financing Administration.
DATE: May 8, 1995
Docket No. C-94-362
Decision No. CR374
DECISION
This action was brought by the Guaynabo Hospice Care, Inc.
(Petitioner), to challenge the actions of the Health Care Financing
Administration (HCFA) to terminate Petitioner's participation in
the Medicare program, effective June 9, 1994. I have reviewed the
arguments of the parties as well as the evidence I received into
the record during an in-person hearing in Puerto Rico.
ISSUE
The issue in this case is whether HCFA was authorized to terminate
Petitioner's participation in the Medicare program after having
conducted a survey on March 11, 1994 and a resurvey on June 6,
1994.
FINDINGS
Based on the record as a whole, 1/ I find as follows on the issues
of law and fact presented by the parties: 2/
1. HCFA has placed only one condition of participation
("physician services") in issue. (My reasons are set forth at p.
10.)
2. In this administrative hearing, the correct evidentiary
standard is proof by the preponderance of the evidence, and HCFA
has the burden of establishing the correctness of its findings and
conclusions. (My reasons are set forth at 11 - 14.)
3. Based on only the March 1994 survey results, HCFA's
determination of Petitioner's noncompliance with the physician
services condition is sustainable.
A. The manner in which HCFA conducted the initial survey
of March 1994 is valid, as are HCFA's reasons for conducting that
survey.
B. HCFA reached valid factual findings and legal
conclusions as a result of the March 1994 survey.
C. Petitioner's defenses are not sufficient to rebut the
validity of HCFA's conclusions based on the March 1994 survey.
(My reasons are set forth at pp. 14 - 24.)
4. Based on the results of the June 6, 1994 revisit survey,
I set aside HCFA's determination that Petitioner was out of
compliance with the requirements of the Medicare program, and I
find no basis for terminating Petitioner's provider agreement.
A. After issuing the termination notice dated April 7,
1994, HCFA acted within its discretion to solicit and approve a
plan of correction from Petitioner and to conduct a revisit survey
to ascertain Petitioner's success in implementing its plan of
correction.
B. After approving the revised plan of correction from
Petitioner on May 20, 1994, HCFA was obligated to conduct its
revisit survey and make determinations in a manner consistent with
the terms of the approved plan and in accordance with its usual
practices.
C. HCFA's findings from the June 1994 revisit survey
concerning the plans of care for patients do not justify
terminating Petitioner's provider agreement.
D. HCFA's findings from the June 1994 revisit survey
concerning the failure of Petitioner's doctors to meet the general
medical needs of patients do not justify terminating Petitioner's
provider agreement.
E. HCFA selected inappropriate records for review
during the revisit survey and reached conclusions concerning
patient discharges, certifications, and recertifications that do
not justify terminating Petitioner's provider agreement.
(My reasons are set forth at pp. 24 - 37.)
DISCUSSION
I. OVERVIEW OF RELEVANT LAWS AND REGULATIONS
Title XVIII of the Social Security Act (Act) established a national
health insurance program which is now commonly known as Medicare.
The Secretary of Health and Human Services (Secretary) is
responsible for administering the Medicare program, and she is
authorized to prescribe such regulations as may be necessary to
implement the requirements of the law. Section 1871(a)(1) of the
Act. By regulation, the Secretary has delegated certain
enforcement responsibilities under the program to HCFA. 49 Fed.
Reg. 35,247 - 49 (1984).
Title A of the Medicare program entitles its beneficiaries to have
payments made on their behalf to cover certain types of health care
costs incurred when, for example, they are hospitalized, receive
home health services, or receive hospice care. 3/ See generally
sections 1811 and 1812 of the Act. Section 1861 of the Act
specifies those services that are "covered," for which payments may
be made by the Medicare program. See 42 C.F.R. 418.1,
418.301.
Those entities qualified to provide the covered health care
services may participate in the Medicare program and become
eligible to receive payments thereunder by filing an agreement with
the Secretary to abide by certain terms specified by the Act.
Section 1866(a)(1) of the Act. 4/ However, the Secretary may
refuse to enter into, refuse to renew, or terminate an agreement
with a provider upon reasonable notice to the provider after the
Secretary has determined that the provider ". . . fails to comply
substantially . . . with the provisions of this title [i.e., Title
XVIII] and regulations thereunder . . . [or] . . . fails
substantially to meet the applicable provisions of section 1861 .
. . ." Section 1866(b)(2) of the Act; 42 C.F.R. 488.28,
489.53.
As applicable to providers of hospice services, the Secretary's
implementing regulations explain that, in order to be approved for
participation in the Medicare program, a provider seeking
participation (i.e., a prospective provider) must meet the
applicable statutory definition contained in section 1861 of the
Act and be in compliance with the applicable conditions prescribed
in part 418 of the Secretary's regulations. 42 C.F.R. 488.3(a).
5/ After the provider has entered into a participation agreement
under Medicare, HCFA has the authority to terminate the agreement
for any one of the reasons enumerated by regulation, including
where the provider is not complying with the provisions of Title
XVIII and the applicable regulations of 42 C.F.R. Chapter IV, or
when the provider no longer meets the appropriate conditions of
participation. 42 C.F.R. 489.53(a)(1), (3).
To provide "hospice care" under Medicare, a provider must satisfy
the definition of a "hospice program." Section 1861(dd)(1) of the
Act. The Act defines a "hospice program" in terms of "hospice
care" and "terminally ill." "Hospice care" denotes
only the eight
statutorily enumerated types of services provided to a "terminally
ill" Medicare beneficiary. Section 1861(dd)(1)(A) - (H) of the
Act; 42 C.F.R. 418.202. A Medicare beneficiary is considered
"terminally ill" for purposes of receiving hospice care if he or
she has a medical prognosis that his or her life expectancy is six
months or less. Sections 1861(dd)(1) and (3)(A) of the Act. Thus,
a "hospice program" is a public agency or private organization (or
a subdivision thereof), which is primarily engaged in providing
those hospice care and services covered by the program. Section
1861(dd)(2) of the Act.
The Secretary's regulations which implement the hospice care
provisions of the Act's section 1861 are codified at Part 418 of 42
C.F.R. 42 C.F.R. 418.1. According to the Secretary's
interpretations, section 1861 of the Act specifies the services
covered as hospice care and the conditions that a hospice program
must meet in order to participate in the Medicare program. Id.
Part 418 underscores also the requirement that a hospice under the
Medicare program must be primarily engaged in providing care to
terminally ill individuals. 42 C.F.R. 418.3.
Even though a hospice may arrange for another entity to deliver
certain covered services, it retains its participatory status under
Medicare only if it ". . .
routinely provide[s] directly substantially all of each of the
services described in subparagraphs (A), (C), (F), and (H)" of
section 1861(dd)(1) -- i.e., nursing services, medical social
services, physician services, and counseling services. Section
1861(dd)(2)(A)(ii)(I) of the Act. The Secretary refers to these
four types of services as "core services" in her regulations, and,
pursuant to her authority to administer the Medicare program, she
has interpreted the manner in which these core services must be
provided and designated them as "conditions of participation" for
hospices. 42 C.F.R. 418, subpart F; section 1866(b)(2) of the
Act.
The Act expressly prohibits Medicare payments for any hospice item
or service that is not reasonable and necessary for the palliation
or management of a terminal illness. Section 1862(a)(1)(C) of the
Act. To receive payment for reasonable and necessary services to
a terminally ill Medicare beneficiary, a hospice provider also must
submit the necessary documentation concerning the certification of
terminal illness, the creation of a written plan of care and the
periodic review of such a plan, and the delivery of care pursuant
to the plan of care. Section 1814(a)(7) of the Act; 42 C.F.R.
418.200 - 418.311. The Secretary's regulation summarizes these
requirements thusly:
(1) the service must be reasonable and necessary for the
palliation or management of the terminal illness as well as related
conditions;
(2) before the service is provided, the individual must elect
hospice care in accordance with 42 C.F.R. 418.24 and a plan of
care must be established as set forth in 42 C.F.R. 418.58;
(3) the service must be consistent with the plan of care; and
(4) a certification that the individual is terminally ill must
be completed as set forth in 42 C.F.R. 418.22.
42 C.F.R. 418.200.
II. RELEVANT PROCEDURAL HISTORY
In the foregoing statutory and regulatory context, HCFA accepted
Petitioner's application to participate in the Medicare program as
a provider of hospice services, effective March 13, 1992. P. Ex.
1. Also, HCFA notified Petitioner that its facility would be
surveyed on a regular basis by HCFA's agent, the Puerto Rico
Department of Health, 6/ to determine the status of Petitioner's
compliance with Medicare requirements. P. Ex. 1. With respect to
any deficiencies that may be found pursuant to the surveys, HCFA
informed Petitioner that:
[a]ny deficiencies cited at the time of the
. . . [survey] visits, that have not been completely
corrected, are expected to be corrected as stated in your plan of
correction.
P. Ex. 1.
On March 10 and 11, 1994, HCFA surveyed Petitioner's compliance
under the program. HCFA Ex. 15; HCFA Ex. 54 at 12 - 13. The HCFA
surveyors reported their findings and conclusions in a "Statement
of Deficiencies" (SOD), which was sent to Petitioner on or about
April 7, 1994. HCFA Ex. 15.
By letter dated April 7, 1994, HCFA notified Petitioner that it was
found to be out of compliance with these four conditions of
participation:
42 C.F.R. 418.50 -- general provisions;
42 C.F.R. 418.62 -- informed consent;
42 C.F.R. 418.80 -- core services;
42 C.F.R. 418.86 -- physician services.
HCFA Ex. 15. HCFA informed Petitioner that HCFA was also
terminating Petitioner's Medicare contract effective June 9, 1994
because Petitioner was out of compliance with the above-cited four
conditions of participation. Id. However, HCFA gave Petitioner an
opportunity to continue participating in the program by providing
HCFA with an acceptable plan of correction. Id.
Petitioner sent a plan of correction to HCFA on April 18, 1994.
HCFA Ex. 16. HCFA did not find Petitioner's initial plan fully
acceptable and explained its reasons to Petitioner by letter dated
April 26, 1994. HCFA Ex. 17.
On May 11, 1994, Petitioner submitted a revised plan of correction.
HCFA Ex. 18. 7/ On May 20, 1994, HCFA informed Petitioner by
telephone that its plan of correction had been approved. HCFA Ex.
19.
On May 25, 1994, Petitioner submitted a request for hearing to
challenge HCFA's determination that Petitioner had been out of
compliance with four conditions of participation. Hearing Request.
Petitioner contended, inter alia, that there was no evidence in
HCFA's findings that Petitioner had failed to comply with 42 C.F.R.
418.86 (physician services). Hearing Request.
On June 6, 1994, HCFA conducted a resurvey visit. HCFA Ex. 20.
The purpose of the revisit survey was, according to HCFA, "to
evaluate the facility's success in implementing its plan of
correction." HCFA Ex. 21.
On June 7, 1994, HCFA notified Petitioner of the outcome of the
June 6th resurvey. HCFA Ex. 21. HCFA determined that Petitioner's
provider contract must be terminated effective June 9, 1994 because
Petitioner had remained out of compliance with the following
conditions of participation:
42 C.F.R. 418.50 -- general provisions;
42 C.F.R. 418.80 -- core services;
42 C.F.R. 418.86 -- physician services.
HCFA Ex. 21.
III. RULING ON HCFA'S MOTION TO CORRECT TRANSCRIPT
Before discussing the merits of the case, I will first rule on
HCFA's motion to correct the transcript. 8/
I rejected the first set of proposed changes contained in a 14-page
handwritten document from HCFA, and I directed HCFA to refrain from
unnecessarily increasing proceedings by submitting changes that
were immaterial or not attributable to transcription errors. Order
dated October 26, 1994. Subsequently, HCFA again submitted 152
proposed changes. Petitioner does not object to most of these
proposed changes. Petitioner's actions in this regard are
consistent with my directive to the parties that they avoid
unnecessary proceedings and controversies. For the reasons that
follow, I have decided to deny HCFA's motion to alter the
transcript, except with respect to correcting the caption of this
case to show that HCFA (and not the Inspector General) is the
Respondent.
HCFA's proposed changes included many that were immaterial to the
issues in this case. For example, HCFA proposed changing the title
of HCFA's attorney from "Assistant Regional Attorney" to "Senior
Trial Attorney;" changing "changed" to "changes;" inserting
"that"
after "mental status." HCFA Motion and Memorandum in Support of
Corrections To the Guaynabo Transcript. There were other proposed
changes that altered the meaning of the testimony I heard during
hearing, such as HCFA's request to change "conditions" to
"provisions;" to change "provisions" to "Physician
Services;" to
change "[19]94" to "[19]93" at four places; and to insert
"of time
given his natural course" after "period." Id. Some of the blanks
in the transcript which HCFA attempts to fill in with its proposed
words (e.g., substituting "____" with "Survey Protocol")
may have
been due to transcription error or equipment malfunction. However,
and there was other evidence of record introduced also by HCFA
(e.g., patient records and surveyors' written reports) which gave
meaning to some of the incomplete sentences.
I have read the transcript of hearing with and without the proposed
changes, and I did not arrive at different conclusions concerning
the meaning of the testimony or the credibility of witnesses.
Neither parties' arguments posthearing turned on any change
proposed by HCFA. Moreover, some of HCFA's proposed changes
reflect only HCFA's efforts to supplement or modify its witnesses'
testimony when there was no longer an opportunity for
cross-examination and after I had directed HCFA to refrain from
proposing changes that were not attributable to transcription
errors. Such proposed changes would also impact adversely on the
opportunity I had to hear, observe, and request clarifications from
HCFA's witnesses during the hearing. Additionally, having reviewed
the record as a whole, I did not find those blanks in the
transcript HCFA is seeking to fill in posthearing to have
substantially effected the weight or substantive meaning of the
testimony. In sum, I do not find it appropriate or necessary to
set aside the court reporters' certification that a full, true, and
correct transcription of the hearing had been made. I grant only
the change in case caption to correctly identify HCFA as the
respondent.
IV. ANALYSIS OF FACTS AND ARGUMENTS
A. HCFA has placed only one condition of participation in issue.
I find as a preliminary matter that the issue of Petitioner's
compliance with 42 C.F.R. 418.62 (informed consent) has become
moot. HCFA did not find any problems relating to informed consent
during the revisit survey. HCFA Ex. 20. In terminating
Petitioner's provider agreement on June 9, 1994, HCFA did not rely
on any asserted deficiencies under 42 C.F.R. 418.62. HCFA Ex.
21. Therefore, it is not necessary for me to review the evidence
on informed consent.
I find also that two of the regulations cited in HCFA's June 7,
1994 notice -- 42 C.F.R. 418.50 (general provisions) and 418.80
(furnishing of core services) -- do not provide independent bases
for terminating Petitioner's provider agreement.
To the extent 42 C.F.R. 418.50 (general provisions) applies at
all to HCFA's theory of the case, it is because said regulation
incorporates the other two regulations cited by HCFA in its
termination notice (42 C.F.R. 418.86 (physician services) and
418.80 (core services). See HCFA Exs. 15, 9/ 20; HCFA Memo at 5,
n.2. As HCFA explained at hearing, "[i]f any condition is out,
then General Conditions is out as a cross reference. So, General
Conditions will be out for the same reason as the Provisions are .
. . ." Tr. at 17. Similarly, HCFA alleges that Petitioner was out
of compliance with 42 C.F.R. 418.80 (core services) during the
June 1994 survey only because HCFA had determined that Petitioner
has failed to provide the core physician services specified in 42
C.F.R. 418.86. The SOD from the June survey does not even
mention 42 C.F.R. 418.80 (core services) or any finding outside
those the surveyors have attributed to physician services. HCFA
Ex. 20.
In sum, the essence of HCFA's determination before me is that
Petitioner was noncompliant with a single condition of
participation -- the one for physician services at 42 C.F.R.
418.86, which states:
[i] In addition to palliation and management of terminal
illness and related conditions, physician employees of the hospice,
including the physician member(s) of the interdisciplinary group,
must also meet the general medical needs of the patients to the
extent that these needs are not met by the attending physician.
B. HCFA has incorrectly stated the evidentiary standards and
burdens for this administrative hearing: the correct standard is
proof by the preponderance of the evidence, and HCFA must prove the
correctness of its determination.
HCFA contends that "Petitioner is, in effect, asking for the
benefit or privilege of being a Medicare provider entitled to
federal funds to reimburse costs associated with the provision of
services to patients in a hospice program who are eligible for
Medicare hospice services." HCFA Memo at 23. HCFA notes that, in
a long line of cases involving individuals applying for retirement
or disability benefits under Title II of the Act, it has been held
that those seeking to establish their entitlement to payments have
the burden of establishing their eligibility to benefits. HCFA
Memo at 23. HCFA therefore concludes that the burden of proof must
be placed on Petitioner in this administrative hearing to
demonstrate its entitlement to the privilege of receiving Medicare
reimbursements for providing hospice services to program
beneficiaries. HCFA Memo at 23 - 24.
HCFA seeks also to assign to itself the burden of introducing only
substantial evidence in support of its position at hearing. It
contends that the only issue in this case is whether HCFA's
determinations are supported by substantial evidence. HCFA Memo at
5.
By contrast, HCFA seeks to have Petitioner bound by a much heavier
evidentiary burden. HCFA argues that, because HCFA surveyors work
within the framework set up by the survey and certification
procedures of 42 C.F.R. Part 488, Petitioner must prove that the
surveyors' interpretations of noncompliance are clearly erroneous.
HCFA Memo at 29.
I find that HCFA has incorrectly stated the evidentiary standards
and burdens for this administrative hearing. The correct standard
is proof by the preponderance of the evidence -- not by substantial
evidence for HCFA nor by the quantum of evidence necessary for
Petitioner to establish HCFA's commission of clear error. HCFA
must show the correctness of its contract termination action. The
burden is not on Petitioner to prove entitlement to a benefit under
the Act in this case.
Contrary to HCFA's view, Petitioner is not a prospective provider
applying to form a contract with HCFA, and
there is no request before me by Petitioner for any Medicare
reimbursement. In March of 1992, HCFA had already determined that
Petitioner met all requirements to participate in the program. P.
Ex. 1. HCFA, as an administrator for our national health insurance
program, entered into a contract with Petitioner under which HCFA
agreed to reimburse Petitioner for the delivery of covered services
to eligible Medicare beneficiaries. Pursuant to the laws and
regulations discussed above, HCFA agreed to maintain such a
contract with Petitioner so long as Petitioner continues to meet
the requirements of law. This case arose only because HCFA
determined that Petitioner breached a condition of participation
under the contract and HCFA initiated contract termination
proceedings. Contrary to HCFA's arguments, the situation that gave
rise to the disputes in this case is not at all analogous to one
where an individual files an application with the Secretary in
order to prove that she is entitled to receive monthly retirement
or disability benefits.
I agree with Judge Kessel's opinions on the allocations of the
burdens of coming forward with evidence and persuasion in cases
where HCFA has terminated existing provider agreements. See
Hospicio en el Hogar de Lajas, CR366 at 6 - 8, (1995); Arecibo
Medical Hospice Care, CR363 at 8 - 13, (1995). I, too, emphasize
that this is a de novo hearing, wherein an independent adjudicator
(an administrative law judge) decides whether to affirm, modify, or
reverse HCFA's termination decision based on the evidence presented
by the parties. Section 1866(h)(1) of the Act (incorporating
section 205(b) of the Act). HCFA, as agent for the Secretary, is
supposed to have made findings of fact in reaching its decision to
terminate a provider agreement. See id. The hearing rights
conferred on the provider is only "with respect to such decision"
made by HCFA. Id. In the hearing process, the administrative law
judge's right to affirm, modify, or reverse is over HCFA's
"findings of fact and . . . decision." Section 205(b)(1) of the
Act. In other words, the correctness of HCFA's findings and
determination are at the center of each case that is heard pursuant
to section 1866(h)(1) of the Act. Therefore, it is both fair and
consistent with the Act that HCFA should have the burden of
persuasion and of coming forward with evidence to show that its
findings and conclusions are correct.
In the context of conducting a de novo evidentiary hearing
specified by the Act, I reject also HCFA's argument that it need
support its position with only "substantial evidence." Substantial
evidence is a reviewing standard the federal courts must apply in
considering the factual basis of those final decisions issued for
the Secretary after a de novo administrative hearing. 10/ In such
court reviews of the record from the evidentiary hearing below, the
findings of fact made by or for the Secretary are "conclusive" if
they are supported by substantial evidence. Section 205(g) of the
Act (incorporated by section 1866(h)(1)). In contrast, hearings
before administrative law judges are held in accordance with
section 205(b) of the Act, which does not contain any reference to
a "substantial evidence" standard of proof for either party. The
conduct of hearing under sections 205(b) and 1866(h)(1) of the Act
rest generally within the discretion of the presiding
administrative law judge. Richardson v. Perales, 402 U.S. 389, 401
(1971).
The usual standard of proof in de novo evidentiary hearings is the
preponderance of evidence. Neither the Act nor the Secretary's
regulations implementing the Medicare statutes state otherwise.
Moreover, there is no case precedent supporting HCFA's argument
that it is entitled to prevail at hearing based on only substantial
evidence; nor is there any case involving breach of contract
allegations wherein the substantial evidence standard was applied
at trial or at hearing to determine which party prevails.
Therefore, in the absence of regulations, laws, or legal precedents
specifying otherwise, I conclude that the truth of any material
proposition in issue must be proven by a preponderance of the
evidence.
For the same reasons, I reject also HCFA's contention that, in
order for Petitioner to successfully refute the surveyors'
interpretations of fact and law that have resulted from their use
of professional judgment, Petitioner must show that the surveyors'
interpretations are clearly erroneous. HCFA Memo at 29. This
argument is legally untenable even if one of HCFA's two surveyors
from the June 1994 revisit survey had not testified that she became
employed as an inspector for the Puerto Rico Department of Health
only on May 2, 1994; that she was receiving on-the-job training
from May 2 until the end of June 1994; that she had conducted no
surveys prior to May 2, 1994; and that her only experience with
hospices was in inspecting them during her training period. E.g.,
Tr. at 331 - 34, 356 - 59. 11/ In addition, every professional
witness can legitimately claim to have exercised professional
judgment. The correctness of any professional's conclusions or
findings can be ascertained only in light of the total evidentiary
record, including what he considered, what he should have
considered, and what he failed to consider, together with the laws
that are applicable. Petitioner cannot be required to establish
that HCFA's determinations are clearly erroneous when HCFA's
determinations carry no presumption of correctness and may not be
proven correct by a preponderance of the evidence.
In provider termination cases such as this, HCFA must at least show
that all material conclusions it formulated in order to terminate
the provider agreement are supported by a preponderance of the
evidence and are based on a correct interpretation of the laws and
regulations. Where, as here, HCFA has found a plan of correction
acceptable and has conducted a resurvey visit to ascertain the
provider's success in implementing that plan (HCFA Ex. 21), HCFA
must establish also that the provider failed to implement that plan
or failed to implement that plan in accordance with its stated
terms. If HCFA's evidence establishes the prima facie validity of
its position, then the burden of moving forward shifts to
Petitioner to put on evidence in support of its arguments.
C. Based on only the March 1994 survey, HCFA's determination of
Petitioner's noncompliance with the physician services condition
was sustainable.
HCFA bases its termination action on the theory that Petitioner
continued to violate the physician services condition from prior to
the initial survey until the time of the resurvey, despite
Petitioner's contention that it had implemented a plan of
correction acceptable to HCFA. See Tr. at 50.
If HCFA had not accepted a revised plan of correction from
Petitioner and if HCFA had not conducted the resurvey in June of
1994, I would affirm HCFA's determination to terminate Petitioner's
provider contract.
1. The manner in which HCFA conducted the initial survey of
March 1994 was valid, as were HCFA's reasons for conducting that
survey.
I especially note the context in which HCFA decided to conduct the
survey in March 1994 because, as discussed herein, HCFA had valid
reasons for not following the letter of the regulation applicable
to most surveys. The Secretary's regulations on surveys provides
as follows in relevant parts:
(b) [t]he State agency must adhere to the following principles
in determining compliance with participation requirements:
(2) [t]he survey process uses resident outcomes as
the primary means to establish the compliance status of facilities.
Specifically surveyors will directly observe the actual provision
of care and services to residents, and the effects of that care, to
assess whether the care provided meets the needs of individual
residents;
...........
(4) [f]ederal procedures are used by all surveyors to
ensure uniform and consistent application and interpretation of
[f]ederal requirements.
...........
(d) The survey agency must ensure that a facility's actual
provision of care and services to residents and the effects of that
care on residents are assessed in a systematic manner.
42 C.F.R. 488.26.
In this case, even though the Puerto Rico Department of Health was
under contract to perform surveys for HCFA, HCFA conducted the
survey of Petitioner due to fiscal considerations. HCFA Ex. 54 at
10, 12.
HCFA decided to survey all 46 hospice providers in Puerto Rico
because, over an extended period of time, HCFA and its agents had
received complaints about the services and "nonservices" rendered
in Puerto Rico. HCFA Ex. 54 at 13 - 14. The complaints were
primarily in areas that included hospices' failure to provide
required services, the lack of terminal diagnosis, the inaccurate
certification and recertification for benefits, the falsification
of records, the payments made for referrals by doctors and others,
and the "stealing and luring away" of patients from home health
associations and other hospices. HCFA Ex. 54 at 14 - 16.
There is no complaint against Petitioner in evidence. However,
HCFA considers all of the surveys it conducted in Puerto Rico to be
"complaint surveys;" that is, the surveys were supposed to focus on
specific areas within the conditions of participation that
correlated with the complaints received by HCFA. HCFA Ex. 54 at
21. HCFA instructed its surveyors to select records from the
Puerto Rico hospice providers with groupings of diagnosis that have
been referenced in the complaints. HCFA Ex. 54 at 22. 12/ Also,
HCFA told its surveyors that, due to time constraints and the
number of facilities to be surveyed, the surveyors should limit
their review of patient records. Tr. at 36, 45. According to a
written "Modified Hospice Survey Protocol" issued by HCFA, those
surveying Puerto Rican hospices with less than 200 patients were
instructed to review 10 active patient records, to select active
patient records containing certain specified diagnoses, and to
visit 3 of the aforementioned active patients at home. HCFA Ex.
12; Tr. at 45.
On March 10 and 11, 1994, HCFA surveyors surveyed Petitioner by
using the instructions and criteria issued by their office. They
chose a total of 10 records of active patients who had a diagnosis
of Alzheimer's disease and had been receiving Petitioner's services
since 1992, or who had a diagnosis of cancer and had been receiving
Petitioner's services for at least the first two election periods.
13/ Tr. at 45. In addition, the surveyors randomly selected for
review the records of two recently discharged patients to evaluate
the reasons for their discharge. Tr. at 45.
Marilyn Stephens, the lead surveyor, reviewed 7 of the 10 active
files and 2 of the discharge files; Nyda Del Moral, who assisted
Ms. Stephens during the survey, reviewed the records of the 3
remaining active patients and visited them at home. Tr. at 36, 45.
Ms. Stephens testified that the surveyors reviewed records in March
1994 by focusing on whether the patients met the regulatory
criteria for receiving hospice services, on the information written
by physicians concerning the patients' terminal illness, on the
nature and extent of information that was made available to
physicians when they formed their assessments, on whether pain
management or palliative types of treatment were provided by
physicians, and on whether physicians ordered restorative or
aggressive treatment for the sampled patients. Tr. at 25 - 29.
Petitioner has not challenged the validity or reasonableness of the
instructions and criteria applied by HCFA. Nor has Petitioner
challenged the size of the sample patients surveyed. I find that
HCFA issued and implemented its instructions and criteria for the
March 1994 survey within the proper exercise of its discretion to
enforce the requirements of Medicare.
2. HCFA reached valid factual findings and legal conclusions
as a result of the March 1994 survey.
In their SOD, the surveyors concluded, inter alia, that Petitioner
was out of compliance with a standard for "Central clinical
records" (42 C.F.R. 418.74(a)) because, of the 10 active
patients' records reviewed, there were documentation problems
associated with the physicians' recertification of all 10 patients'
terminal illness. HCFA Ex. 15. The surveyors used the
documentation problems in nine of the same 10 patients' cases to
explain their finding that Petitioner was out of compliance with 42
C.F.R. 418.86 (physician services) because hospice doctors were
providing palliative and management care to nine patients in the
sample who did not meet the regulatory criteria (42 C.F.R.
418.20, 418.22) for a terminal illness. HCFA Ex. 15 at 8. 14/ In
concluding that the patients who were receiving palliative or
management care from Petitioner's doctors do not meet the criteria
for terminal illness, the surveyors cited two regulations that are
titled "Eligibility requirements" and "Certification of terminal
illness," respectively. Id. The surveyors found, however, that
the care provided by the doctors were of the palliative and
management nature. HCFA Ex. 15 at 8.
In order to be eligible to elect and receive hospice services under
the Medicare program, the individual must not only be a Medicare
beneficiary, but he or she must also be certified as being
terminally ill in accordance with 418.22. 15/ The hospice must
obtain written certification of the terminal illness for each of
the beneficiaries' election periods. 42 C.F.R. 418.22. For the
initial 90-day election period, the hospice must obtain the written
certification from the beneficiary's attending physician and the
hospice's medical director or the physician member of the hospice's
interdisciplinary group. Id. For subsequent election periods, the
certification must be made by the hospice's medical director or the
physician member of the hospice's interdisciplinary group. Id.
Each certification must specify that the beneficiary's prognosis is
for a life expectancy of six months or less if the terminal illness
runs its normal course. Id.
In addition, the hospice must establish and maintain a clinical
record for every individual receiving care and services in
accordance with accepted principles of practice. 42 C.F.R.
418.74. 16/ Each clinical record is supposed to be a comprehensive
compilation of information, which should include entries for all
services provided, the initial and subsequent assessments of
patients, the plan of care for patients, the patients' pertinent
medical history, and complete documentation for all services and
events such as evaluations, treatments, progress notes. 42 C.F.R.
418.74(a). The hospice is charged with safeguarding the clinical
records against loss or destruction. 42 C.F.R. 418.74(b).
The evidence concerning the March survey establishes that, out of
the 10 active records selected for review, Petitioner's
documentation for nine patients' prognosis, life expectancy,
history, progress, course of treatment, or reasons for receiving
care from a hospice were inadequate, not present, contradictory, or
otherwise fraught with problems. E.g., HCFA Ex. 15 at 3 - 13; Tr.
at 58, 61. As summarized by HCFA's witness, "the paperwork was
there" in most cases, but there was not enough assessment
information to explain or substantiate that the nine active
patients surveyed had terminal conditions within the definition of
the Act that warranted their receiving hospice services, as opposed
to other levels of Medicare covered services. Tr. at 40, 41, 58.
In one example cited by HCFA during hearing, Petitioner's records
at the time of survey contained no indication of the patient's
history, and no reasons were given on the physician referral form
to explain why the doctor believed the patient to be terminally
ill. Tr. at 61. In another sample patient's case, none of the
forms signed by physicians to recertify the patient for the
continued receipt of hospice care contained any indication of the
patient's potential life expectancy at the time of recertification.
HCFA Ex. 15 at 8. Even though the life expectancy of Petitioner's
Medicare patients should be six months or less from the time of
initial certification and each recertification, the available
records on nine of the 10 patients reviewed by HCFA in March of
1994 showed that all nine patients had been receiving hospice care
for more than six months, and some for two or more years. HCFA Ex.
15 at 3 - 13. In addition, instead of containing notations of the
decline typical of people with six months or less to live from the
time of admission to or recertification for hospice care, the
patient records reviewed by the surveyors contained notations that
one patient showed improvement after the doctor placed him on
physical therapy for ambulation and to strengthen him; five
patients had routine tests done repeatedly on physicians' orders
with no indications of deterioration or changes; and the
physician's progress notes for one patient described his condition
as "stable." HCFA Ex. 15 at 8 - 13; see Tr. at 26 - 29.
Because 10 active patients' records were sampled and nine contained
the serious and extensive problems discussed herein, HCFA's
evidence on the March survey gives rise to the strong and
reasonable inference that, in many different ways, Petitioner was
not providing hospice services to Medicare beneficiaries in
accordance with the letter or intent of the law. Dr. Alma Rivera,
an expert witness for HCFA, specifically testified that it is a
common practice in the medical field to write down everything that
forms a basis of an opinion. Tr. at 406 - 08. Petitioner did not
present any evidence to contradict Dr. Rivera's opinion.
Therefore, I find it reasonable and proper for HCFA to conclude
from the very poor and incomplete documentation it reviewed in
March 1994 that Petitioner's doctors were providing palliative or
management care to Medicare beneficiaries without having applied
the assessment criteria specified in the Secretary's regulations.
See HCFA Ex. 15 at 8.
I infer from HCFA's finding of a condition-level deficiency for
physician services based on its March survey that HCFA believes
that Petitioner's doctors were providing palliative and management
care also to other similarly situated patients who cannot be
considered to have met the criteria of terminal illness within the
meaning of the Act; therefore, either Petitioner was substantially
limited in its ability to render adequate care to patients, or the
actions of Petitioner's doctors had adversely affected the health
and safety of patients. As specified in the Secretary's
regulations, the decision as to whether there is compliance with a
particular condition of participation depends on the manner and
degree to which the provider satisfies the various standards within
each condition. 42 C.F.R. 488.26. A provider is considered to
be out of compliance with the conditions of participation where its
deficiencies are of such character to substantially limit the
provider's capacity to render adequate care or which adversely
affect the health and safety of patients. 42 C.F.R. 488.24.
Since a hospice provider under the Medicare program must be engaged
primarily in caring for those who are terminally ill within the
meaning of the law -- e.g., section 1861(dd)(2) of the Act and 42
C.F.R. 418.3, Petitioner's failure to be in possession of
adequate or necessary documentation on its Medicare patients'
prognosis and life expectancy is persuasive proof that Petitioner
has been substantially limited in its capacity to render the care
required for participation in the Medicare program. Also, as
discussed above, the Act and regulations contain a complex system
of coverage or reimbursement restrictions to discourage hospices
from providing medically unnecessary or unreasonable services to
Medicare beneficiaries who should be receiving a different or more
aggressive level of care under the Act. E.g., 42 C.F.R. 418,
subpart F. The obvious intent of such restrictions is to ensure
the health and safety of Medicare patients. Where, as here, the
evidence shows that Petitioner's doctors have been giving Medicare
beneficiaries hospice level care for extended periods of time on
the basis of improperly or inadequately documented prognosis and
life expectancies, such evidence logically implies significant
health risks for the Medicare beneficiaries. As Dr. Alma Rivera
testified, physicians need complete information on patients in
order to plan properly for their care. Tr. at 423. In addition,
proper and thorough documentation of the patients' past and present
conditions enables other health care professionals to form opinions
for reasons other than those gathered from personal examinations of
the patients. Tr. at 408.
3. Petitioner's defenses are not sufficient to rebut the
validity of HCFA's conclusions based on the March 1994 survey.
The totality of evidence relevant to the March 1994 survey,
including Petitioner's defenses discussed below, convinces me that
HCFA correctly cited Petitioner for failure to comply with the
physician services condition of participation pursuant to the March
1994 survey.
a. HCFA countered Petitioner's challenges to the
surveyors' qualifications to make medical diagnosis or prognosis.
Petitioner has pointed out consistently that HCFA's surveyors are
nurses, and, therefore, they are not qualified to make medical
diagnoses, determine whether a patient is terminally ill, or decide
what kind of treatment a patient should receive. E.g., Tr. at 34
- 35. I agree. Moreover, Petitioner's patients were never
examined by the nurse surveyors or the physician HCFA called as an
expert to testify at hearing. Tr. at 34, 428. Even HCFA's
termination notice contains no allegation concerning the true
medical conditions of those receiving hospice level care from
Petitioner's doctors. In fact, HCFA merely had suggested as
follows in its April 7, 1994 notice to Petitioner:
. . . there are indications that Medicare beneficiaries may be
receiving inappropriate services.
HCFA Ex. 15 at 2.
However, I find also that the true medical conditions of those
patients surveyed in March 1994 should not be in controversy before
me. It was an illusory issue unnecessarily interposed by counsel
for both sides during the hearing process. For example, HCFA
appears to have misinterpreted evidence such as its surveyors'
reference to "patients . . . who do not meet the criteria of having
a terminal illness as defined in CFR 418.20 [Eligibility
requirement] and CFR 418.22 [Certification requirement]." HCFA Ex.
15 at 8. Noting that HCFA may look behind certifications and
recertification to determine whether, in fact, Petitioner's
patients needed or received palliative care for the treatment of a
terminal illness, HCFA's counsel contends incorrectly that HCFA
has demonstrated conclusively that Petitioner's doctors were
treating patients who were not, in fact, terminally ill. HCFA Memo
at 5, 10, 25.
HCFA has not demonstrated conclusively or by a preponderance of the
evidence that Petitioner's doctors were treating patients who were
not, in fact, terminally ill at the time of certification or
recertification. Nevertheless, the validity of HCFA's
determination under physician services does not turn on whether
HCFA has succeeded in proving that, at the time of each
certification or recertification, Petitioner's patients had life
expectancies of more than six months if their terminal illnesses
ran their normal course. Even though attorneys for both parties
attempted to cast the surveyors' conclusions as diagnoses of
medical illnesses during hearing, I note that Ms. Stephens, the
lead surveyor, specifically explained that she and other surveyors
were not auditing the physicians' medical determinations during the
survey. Tr. at 320.
The surveyors were questioning the assessment system used by
Petitioner's physicians and its interdisciplinary team, which must
have a physician member. Tr. at 320; 42 C.F.R. 418.68. Ms.
Stephens testified that she could not find evidence in the record
concerning why Petitioner's doctors made the terminal illness
decisions; therefore, she questioned the assessment procedure that
was used by the hospice and its physicians. Tr. at 318, 319. She
disagreed with the doctors' prognosis on life expectancy of six
months or less based on the absence of documentary support and, as
in one example she used, because the patient has been receiving
Petitioner's services for 18 months. Tr. at 319.
Ms. Stephen's explanations are consistent with HCFA's
correspondence with Petitioner concerning appropriate corrective
actions after the March 1994 survey. For example, HCFA informed
Petitioner in writing that it needed to give assurances concerning
the implementation of systems and criteria. HCFA Ex. 17. Later at
hearing, Ms. Stephens explained also that she and HCFA expected
Petitioner to analyze its systems and procedures which caused HCFA
to determine deficiencies in the first instance. Tr. at 94.
b. HCFA countered Petitioner's defense that it
maintained poor records.
In essence, the problems determined by HCFA under physician
services in March 1994 were that Petitioner's doctors failed to
apply the evaluation and documentation systems required by law
prior to delivering palliative and management care to Medicare
beneficiaries. After receiving the SOD, Petitioner conceded that
its documentations were poor and informed HCFA that "due to
incomplete documentation the hospice criteria was not specified in
these [nine] cases." HCFA Ex. 16 at 11. In response to the
deficiencies cited in individual cases, Petitioner then summarized
its physician's reasons for having found eight of the nine patients
with a terminal illness or life expectancy of six months or less.
Id. at 11 - 17. (Petitioner's doctor found that one patient, #
120, did not have a terminal prognosis. Id. at 14.)
Petitioner's responses in individual cases were not accompanied by
the types of documentation missing from the March 1994 survey.
Moreover, these summaries of Petitioner's doctors addressed only
the eight patients' status or life expectancy during the most
recent recertification. Therefore, I agree with HCFA that
Petitioner's responses were inadequate for addressing the
deficiencies cited, which included the doctor's enabling Medicare
beneficiaries to begin receiving hospice level care without proper
certification and then allowing these beneficiaries to continue
receiving hospice care during various election periods without a
proper assessment of their continued eligibility to receive such
care. I reject the defense that Petitioner was at fault merely for
having maintained poor records in March of 1994.
c. I reject the distinction drawn by Petitioner between
the physician services condition of participation and the
requirements for certification of a Medicare beneficiary's
eligibility.
Petitioner alleges further that HCFA has incorrectly equated a
violation of a provider's condition of participation in the program
with a patient's eligibility to receive hospice services under the
program. P. Br. at 8. Petitioner notes, for example, that the
certification and recertification requirements discussed by HCFA
are not contained in any subpart listing a provider's conditions of
participation. P. Br. at 6. The requirements for Petitioner's
doctors to provide certifications and recertification are contained
in subpart B, titled "Eligibility, Election and Duration of
Benefits." 42 C.F.R. 418.20. By contrast, all conditions of
participation are listed in subparts C, D, and E of 42 C.F.R. Part
418.
I reject the distinction drawn by Petitioner, for several reasons.
First, HCFA was not limited to using a condition of participation
to terminate Petitioner's provider agreement. HCFA was authorized
also to terminate Petitioner on the basis of Petitioner's
substantial failure to comply "with the provisions of Title XVIII
and the applicable regulations of this chapter [Chapter IV] . . .
." 42 C.F.R. 489.53(a)(1). 17/ This section of the regulation
is consistent with section 1866(b)(2) of the Act, which states that
the Secretary may terminate agreements when a provider "fails to
comply substantially . . . with the provisions of this title [i.e.,
Title XVIII] and regulations thereunder . . . [or] . . . fails
substantially to meet the applicable provisions of section 1861 .
. .." Section 1866(b)(2)(A), (B) of the Act. If, as suggested by
Petitioner's affirmative arguments, HCFA may terminate provider
agreements only if the violation corresponds to a condition of
participation listed in the regulations, then 42 C.F.R.
498.53(a)(1) would become superfluous.
The requirement for Petitioner's doctors to certify and recertify
terminal illnesses as defined by the Act and regulations is
contained in section 1814(a)(7) of the Act; this requirement is
implemented by the Secretary's regulations at 42 C.F.R. 418.22
(certification of terminal illness). In addition, other
regulations are relevant, including 42 C.F.R. 418.66 (condition
of participation--quality assurance) and 418.74 (condition of
participation--central clinical records). 18/ The evidence showing
the substantiality of Petitioner's failure to comply with these
provisions of the Act and regulations are the same as those that
led HCFA to determine the deficiencies related to physician
services. Thus, even if HCFA had incorrectly concluded that
Petitioner was out of compliance with the physician services'
requirement as opposed to other requirements or criteria of the
law, Petitioner has not proven that the March 1994 survey findings
are inadequate to support the contract termination action.
I conclude that HCFA also reasonably linked the certification and
recertification problems to the ensuing delivery of physician
services under 42 C.F.R. 418.86. Each regulation does not
correspond to only one requirement specified in the Act. The Act
provides that, when a Medicare beneficiary makes an election for
hospice care, he does so at the exclusion of all other types of
Medicare covered services. Section 1812(d)(1) of the Act.
Therefore, for the health and safety of the beneficiary, it is
incumbent upon the provider to ensure, through the certification
process and the documentation requirements encompassed by the
certification process, that this program beneficiary is indeed
terminally ill within the meaning of the law and that, moreover,
hospice services are medically reasonable and necessary to the
individual's condition. E.g., section 1862(a)(1)(C) of the Act.
While certification is listed as an eligibility criterion for
program beneficiaries under 42 C.F.R. 418.20, Petitioner's
doctors are the only ones who can make a Medicare beneficiary
legally eligible for hospice care. 42 C.F.R. 418.20, 418.22.
Petitioner and its doctors have no one to blame except themselves
for their subsequent delivery of physician services to people whom
they have not properly determined to meet the Medicare criteria for
receiving palliative and management services. Petitioner is wrong
in drawing lines between the various regulations which, in their
totality, implement the interrelated statutory requirements for the
participation of a hospice in the program.
D. Based on the results of the June 6, 1994 revisit survey, I set
aside HCFA's determination that Petitioner was out of compliance
with the requirements of the Medicare program, and I find no basis
for terminating Petitioner's provider contract.
1. After issuing the termination notice dated April 7, 1994,
HCFA acted within its discretion to solicit and approve a plan of
correction from Petitioner and to conduct a revisit survey to
ascertain Petitioner's success in implementing its plan of
correction.
HCFA was not required by the Act or the Secretary's regulations to
offer Petitioner an opportunity to submit and implement a plan of
correction acceptable to HCFA following the March 1994 survey. Nor
was HCFA required by law to conduct another survey after it
approved a plan of correction. The regulation cited by Petitioner,
42 C.F.R. 488.28, applies to situations where HCFA finds that a
provider has deficiencies in one or more standards. 19/ See P. Br.
at 4. The regulation does not state that, when HCFA finds
noncompliance with a condition of participation, HCFA must also
grant the provider a reasonable time to achieve compliance. 42
C.F.R. 488.28.
Nevertheless, HCFA did offer Petitioner an opportunity to submit a
plan of correction, and HCFA accepted a revised plan of correction
from Petitioner on or about May 20, 1994. HCFA Exs. 15 - 19. HCFA
then conducted a revisit survey on June 6, 1994 in order to
evaluate Petitioner's success in implementing its plan of
correction. HCFA Ex. 20.
HCFA explained that its usual survey process includes the
solicitation and review of a plan of correction to remedy
condition-level noncompliance. HCFA Ex. 54 at 11, 26 - 31; Tr. at
311. If HCFA finds the plan unacceptable in whole or in part, HCFA
gives its reasons for having found the plan unacceptable. HCFA Ex.
54 at 28. Before the date set by HCFA for terminating a provider
agreement, HCFA will generally work with a provider to bring about
an acceptable plan of correction; in some cases, HCFA has "gone
back" to providers three or four times concerning a plan of
correction. HCFA Ex. 54 at 29.
If HCFA receives a plan of correction that it finds acceptable,
HCFA will schedule a revisit survey after the last date for
correction under the plan but prior to the date of termination
itself. HCFA Ex. 54 at 29; Tr. at 311. According to HCFA, it
would never terminate a provider's participation agreement before
such a revisit survey. Id. In some cases, HCFA has "pushed back"
the termination date to accommodate the revisit surveys. HCFA Ex.
54 at 29, 30.
According to HCFA's explanations of its usual practices, a revisit
survey is not a full survey. HCFA Ex. 54 at 30. The surveyors
conducting the revisit surveys are supposed to examine only those
conditions cited in the earlier notice of deficiencies. HCFA Ex.
54 at 30. If the surveyors discover that the provider is now in
compliance with the conditions cited earlier by HCFA -- but the
provider is now out of compliance with other conditions -- HCFA
would need to rescind its earlier initiated termination action and
begin the foregoing process anew based on its new findings. HCFA
Ex. 54 at 30.
HCFA states that, in Petitioner's case, it followed its usual
procedures for soliciting and reviewing plans of correction and for
conducting a revisit survey. HCFA Ex. 54 at 30 - 31. I find
HCFA's solicitation, review, and acceptance of a plan of correction
from Petitioner, as well as HCFA's use of revisit surveys in
general, to be permissible exercises of HCFA's authority to enforce
those requirements providers must satisfy to maintain participation
in the Medicare program. Before actually terminating a provider's
Medicare participation agreement, HCFA has the discretion to
enforce the various conditions of participation in a manner it
deems appropriate. Even though the regulations do not require HCFA
to make available to providers the opportunity to remedy
condition-level noncompliance, neither do the regulations bar HCFA
from offering such opportunities or implementing generally
applicable procedures for the effectuation of its enforcement
goals. It is reasonable for HCFA to encourage providers to remedy
their problems. It is reasonable also for HCFA to cooperate with
providers in their efforts to avoid termination of their
participation agreement.
2. After approving Petitioner's revised plan of correction on
May 20, 1994, HCFA was obligated to conduct its revisit survey and
make determinations in a manner consistent with the terms of the
approved plan and in accordance with its usual practices.
HCFA contends that it conducted the June 6, 1994 revisit survey and
provided notice of the problems in accordance with its usual
practices, as discussed above. HCFA Ex. 54 at 30, 31. HCFA has
presented also no legitimate reason which would justify treating
Petitioner differently than HCFA treats similarly situated
providers. Therefore, I find that HCFA was required to conduct the
revisit survey and provide notice of problems in accordance with
its usual practices, as explained by HCFA.
I find also that HCFA is bound by the terms of the revised plan it
approved. The correctness of HCFA's reasons for finding
Petitioner's revised plan acceptable is not reviewable since
Petitioner has no hearing rights on that issue. 42 C.F.R.
498.3. However, the provider agreement HCFA wishes to terminate in
this case is the equivalent of a contract between HCFA and
Petitioner. HCFA and Petitioner had the right to reach agreements
on the supplementation of those contractual terms that are required
by law, and the parties had the right to stipulate to the methods
for correcting alleged breaches and for verifications of such
corrections. The supplemental agreements discussed herein, which
were reached after the initial survey by HCFA, are not prohibited
by law, and they were reached by the parties voluntarily.
The evidence establishes that, in addition to HCFA's claim to have
followed its usual practices discussed above, HCFA informed
Petitioner repeatedly that it would be resurveyed on the basis of
its plan of correction that HCFA found acceptable. When initially
notifying Petitioner that its application to become a Medicare
provider had been accepted, HCFA stated the following term to
Petitioner:
[a]ny deficiencies cited at the time of the
. . . [survey] visits, that have not been completely
corrected, are expected to be corrected as stated in your plan of
correction.
P. Ex. 1. Thereafter, when HCFA was notifying Petitioner of the
findings from the March survey and the date on which the provider
agreement would terminate, HCFA again told Petitioner:
[s]hould your Plan of Correction provide reasonable assurance
that condition level compliance will be attained, a follow up
survey will be conducted . . .
HCFA Ex. 15. Even after HCFA had completed the revisit survey and
decided to terminate the provider agreement, HCFA again told
Petitioner that the purpose of the revisit survey had been:
. . . to evaluate the facility's success in implementing its
plan of correction.
HCFA Ex. 21.
Petitioner has never objected to or refused to follow the process
outlined by HCFA. Prior to HCFA's terminating its provider
contract on June 9, 1994, Petitioner took certain actions based on
HCFA's representations. For example, on April 15, 1994, Petitioner
submitted a plan of correction, which HCFA did not find fully
acceptable. HCFA Exs. 16, 17. With respect to physician services,
HCFA stated the following to Petitioner:
1) The POC [plan of correction] is unacceptable because it
does not identify the primary systems breakdown in admission
assessments and certification of patients with non-terminal
diagnosis. What system and criteria will be implemented to ensure
that hospice services are provided only to those who have a
terminal diagnosis which will result in death within 6 months based
on the normal progress of the disease?
2) Use of a voluntary program as identified in addendum 1 does
not meet hospice regulation because patients in the indefinite
period should be a rarity and not a common occurrence[.]
[T]herefore, the establishment of specific criteria for hospice
admission is a necessity.
HCFA Ex. 17 at 2.
In response to the foregoing criticisms, Petitioner submitted a
revised plan, which HCFA found acceptable. HCFA Exs. 18, 19.
With respect to physician services in the revised plan found
acceptable by HCFA, Petitioner represented that, in order to ensure
that hospice services are provided only to those patients who have
a terminal diagnosis that will result in death within six months
based on the normal progress of the disease, Petitioner has now
included the hospice eligibility requirements in its Administrative
Manual, and Petitioner is now using those requirements in its
referral and admission procedures. HCFA Ex. 18 at 3, 5. 20/
Petitioner then went on to identify in its revised plan of
correction the important aspects of the referral and admission
procedures it has placed into effect on May 5, 1994. HCFA Ex. 18
at 3 - 4. Petitioner stated, for example, that its
interdisciplinary group "will meet" to establish and revise plans
of care, and "the group will monitor" the status of the patients'
terminal illness and deterioration of their condition during the
recertification process; the attending physician "is included" more
actively in the evaluation process, so that the physician "will"
confirm the terminal diagnosis in accordance with Petitioner's
recertification procedure; and after the patient "is admitted," the
patient's clinical record "is audited" by quality assurance
personnel, and if there are insufficient findings of a terminal
condition, the information "will be" brought to the attention of
the interdisciplinary group for decision on recertification or
discharge. HCFA Ex. 18 at 4 - 5, 11 - 16.
In the revised plan of correction accepted by HCFA, Petitioner made
no commitment to revise or alter the certifications or other
documents already in existence prior to May 5, 1994, when it placed
its new procedures into effect. Nothing of record shows that HCFA
had conditioned its acceptance of Petitioner's plan based on
Petitioner's reevaluating all patients admitted, referred, or
certified prior to May 5, 1994. Petitioner's revised plan states
on its face that Petitioner had instituted certain policy changes
on May 5, 1994, and, by using the future tense of verbs -- e.g.,
"will meet," "will monitor," "will be confirmed,"
(HCFA Ex. 18 at
5) -- Petitioner indicated that those changes would be carried out
with respect to patients who were admitted, referred, certified, or
recertified on and after May 5, 1994.
For the foregoing reasons, I find that the terms of the revised
plan are binding on both parties on the issue of whether Petitioner
was in compliance with the condition of physician services by the
time of the revisit survey, and HCFA was required to follow its
usual procedures with respect to the revisit survey.
3. HCFA improperly terminated the provider agreement with
Petitioner pursuant to the June 6, 1994 revisit survey results.
On June 6, 1994, HCFA reviewed the records of six active patients
and six recently discharged patients. HCFA Ex. 20 at 2. Based on
such a review, the surveyors concluded that Petitioner's physicians
were not involved in assessing, planning, or providing for the
medical needs of eight patients. HCFA Ex. 20 at 2. HCFA surveyors
further concluded that some of these same eight patients' records
also show that Petitioner's physicians were not evaluating and
recommending them for certifications of eligibility based on the
regulatory definition of terminal illness. HCFA Ex. 20 at 4. HCFA
classified all these problems under physician services and notified
Petitioner by letter dated June 7, 1994 that the revisit survey
conducted "to evaluate the facility's success in implementing its
plan of correction" showed that Petitioner remained out of
compliance with 42 C.F.R. 418.86 (physician services). HCFA Ex.
21. Therefore, HCFA was to terminate Petitioner's participation in
the Medicare program effective June 9, 1994. HCFA Ex. 21.
a. HCFA's findings concerning the plan of care are
without basis.
I agree with Petitioner that, where Petitioner's doctors were
allegedly not planning for patients' care, HCFA is not permitted to
conclude that Petitioner was out of compliance with physician
services during the revisit survey and terminate the provider
agreement as a consequence. P. Br. at 5.
In the first place, HCFA's notice letter and SOD from the first
survey never mentioned problems with physicians' participation in
the plan of care. There is also a separate condition of
participation for plan of care (42 C.F.R. 418.58), which was not
cited pursuant to the first survey. Even though Petitioner's
revised plan of correction did mention plan of care, Petitioner's
words cannot be read fairly as meaning that Petitioner was on
notice for or intended to correct the type of planning problems
listed in HCFA's resurvey visit SOD. See HCFA Exs. 18, 20.
Even more importantly, a plan of care is not established by the
hospice physicians alone; it is established by the hospice
physicians, the patient's attending physician (who may not be an
employee of the hospice), and the hospice's interdisciplinary team.
42 C.F.R. 418.58(a). Problems with patients' plans of care
cannot be fairly or properly placed under a provider's obligation
to provide physician services as a core service. If the plan of
care problems discerned during the revisit survey were substantial,
then HCFA would need to rescind its prior notice of termination
based on physician services and proceed under plan of care, in
accordance with the normal process described by HCFA. HCFA Ex. 54
at 30.
b. HCFA's findings concerning the failure of
Petitioner's doctors to meet the general medical needs of patients
are without basis.
I find untenable as well HCFA's argument that Petitioner violated
physician services because the regulation states in part that
"physician employees of the hospice . . . must also meet the
general medical needs of the patients to the extent that these
needs are not met by the attending physician." 42 C.F.R.
418.86; HCFA Memo at, e.g., 12, 16. In contending that
Petitioner's doctors failed to meet the general medical needs of
patients, such as one patient's one-arm pain, another patient's
obstetrical/gynecological problems, and another patient's decubitus
ulcer (HCFA Memo at 12, 16), HCFA introduced no evidence to show
that attending physicians were also not meeting such problems.
There is no indication, for example, that the attending doctors of
hospice patients were even contacted by the surveyors on this
issue.
Moreover, HCFA's position under physician services appears to be
that, even though HCFA does not consider a hospice patient to be
truly terminally ill, the hospice doctors must meet that
individual's "general medical needs" nonetheless. Tr. at 398. I
find this position to be flawed. By definition, the hospice must
be primarily engaged in providing palliative and management care.
See 42 C.F.R. 418.3, 418.86. In addition, treatment should be
provided only by a hospice if the hospice level of care is
medically reasonable and necessary for the patient's terminal
condition. See 42 C.F.R. 418.200. When HCFA believes that the
hospice doctor has misdiagnosed or has not adequately assessed
whether their patients have a terminal illness in the first
instance, it does not follow logically that certain medical
problems should then be designated as the patients' "general
medical needs," which the hospice doctor must meet "[i]n addition
to palliation and management of terminal illness and related
conditions[.]" 42 C.F.R. 418.86. Interpreting the regulation
as HCFA does can raise concerns for the health and safety of those
patients who have not been properly evaluated by the hospice doctor
for the existence of a terminal illness and related condition, as
distinguished from their other "general medical needs."
c. HCFA conducted the revisit survey in an invalid
manner.
Finally, I find that HCFA failed to conduct the revisit survey in
a manner consistent with its obligation to ascertain whether
Petitioner had implemented the plan of correction approved by HCFA.
As already discussed, Petitioner represented that it had put into
place on May 5, 1994 certain procedures for evaluating the
patients's medical condition for admissions, certifications, and
recertification. These procedures were devised to especially
address HCFA's requirement for identification of "the primary
systems breakdown in admission assessments and certifications of
patients with non-terminal diagnosis." HCFA Ex. 17 at 2.
All of the procedures described in the approved plan of correction
have prospective application only. The manner in which Petitioner
receives referral of patients from other sources and admits them
under its new procedures cannot be applied retrospectively. (That
is to say, admissions and receipt of referrals can happen only once
in time; once the referral is accepted and the patient is admitted,
the patient stays admitted until discharged.) The certifications
and recertification for terminal illness must take place at the
times and with the intervals set by law. 42 C.F.R. 418.21,
418.22. In its revised plan of correction, Petitioner specified,
for example, that its interdisciplinary group "will collect
recertification dates on each patient on a monthly basis," and all
recertified patients "will continue receiving services until the
next evaluation date . . .." HCFA Ex. 18 at 14, 16.
When HCFA was reviewing Petitioner's plan of correction, HCFA did
not require Petitioner to redo any certification or recertification
that existed or should have existed prior to Petitioner's
implementation of its plan. HCFA approved Petitioner's plan
without any such commitment by Petitioner. The tense of verbs used
repeatedly by Petitioner establishes that Petitioner was seeking to
remedy its prior noncompliance by applying its new procedures to
admissions, referrals, and certifications that occur on and after
May 5, 1994. HCFA Ex. 18.
Yet, when HCFA resurveyed Petitioner on June 6, 1994, it looked at
records of only those people who were admitted or referred during
prior years. E.g., HCFA Supp. Br. at 6. Similarly, nearly all of
the certifications and recertifications reviewed by HCFA predated
May 5, 1994, the date on which Petitioner implemented its approved
plan of correction. E.g., HCFA Memo at 12 - 22; HCFA Ex. 20. A
few of the patients were discharged prior to or shortly after May
5, 1994, but HCFA cited these discharges as evidence of
Petitioner's noncompliance with physician services as well. HCFA
Ex. 20 at 4 - 6.
As I noted earlier, during this revisit survey, one surveyor was
receiving "in-service training" by reviewing five patients' records
and interviewing one patient; most of the deficiencies listed on
the SOD corresponded to the patient records reviewed by this
trainee surveyor. HCFA Ex. 20; Tr. at 298, 299, 331 - 59; see also
n.10. HCFA's witnesses did not testify as to why they chose to
review the records they did on June 6, 1994. Nothing of record
indicates that, in providing in-service training to the new
surveyor by allowing her to review records and help formulate
findings, HCFA informed her of the approved plan of corrections or
how the plan's contents should correspond to the manner in which
the revisit survey is conducted and the conclusions that were to be
drawn.
After I raised these and like problems posthearing and directed
counsel to submit supplemental briefs on the issues, HCFA's counsel
argued that the surveyors used these four document-selection
criteria on June 6, 1994:
1) active records of new patients who were admitted after the
March 1994 survey;
2) active patients who were admitted in late 1993 who have
been recertified at least once between the March 1994 survey and
the June 1994 revisit survey;
3) patients who were admitted following the March 1994 survey
and were revoked or discharged before the revisit survey in June
1994, or patients who revoked their hospice election or were
discharged between March and June 1994 regardless of whether they
were admitted;
4) patients who had been recertified in the extension period
of unlimited duration since January 1994 with diagnoses that were
questionable as terminally ill.
HCFA Supp. Br. at 5.
There is no witnesses' testimony concerning such criteria. I do
not construe counsel's arguments to be evidence, and I do not
consider the use of such criteria to be proven facts. Moreover,
these criteria are specious, and even the application of these
criteria would not render the resurvey results valid.
(1). HCFA's arguments concerning the selection of active
records of new patients who were admitted after the March 1994
survey are not persuasive.
With respect to the first criterion, HCFA asserts without any
evidentiary foundation that Petitioner did not provide HCFA with
active records of anyone who was admitted after March of 1994
because there was no such admissions. HCFA Supp. Br. at 6. Even
assuming that admissions records from prior to May 5, 1994 would be
relevant, the mere absence of new admissions records from March
until June 6, 1994 shows that HCFA lacked certain essential facts
for proving that Petitioner failed to implement its new admissions
and referral criteria in accordance with its plan of correction.
There is nothing improper to be inferred from the absence of new
admissions between March and June of 1994. I note, for example,
that HCFA's April 7, 1994 letter "strongly urged" Petitioner to
refrain from admitting any new Medicare patients "effective with
the date of receipt of this letter, until such time as this office
has determined that all Conditions of Participation are met." HCFA
Ex. 15 at 2.
(2). HCFA's arguments and evidence concerning the records of
patients who were admitted following the March 1994 survey and were
revoked or discharged before the revisit survey in June 1994, or
patients who revoked their hospice election or were discharged
between March and June 1994 regardless of whether they were
admitted are not persuasive.
With respect to the third selection criterion alleged by HCFA, HCFA
contends that the criterion was applied to ascertain whether the
discharges resulted from the interdisciplinary group's
implementation of the revised plan of correction and determination
of nonterminal illness, or whether the discharges occurred for
other reasons, such as the patient's revocation of his election or
insistence by the family. HCFA Supp. Br. at 6. Whether or not
records were selected on this basis, the reasons for the discharges
do not support HCFA's decision to terminate Petitioner's provider
agreement.
HCFA reviewed discharge records in the first survey but found no
problems with physician services in those discharge records. HCFA
Ex. 15 at 3 - 11. Yet in citing Petitioner for noncompliance with
physician services after the June 6, 1994 revisit survey, HCFA's
SOD listed at least three instances where patients were discharged.
HCFA Ex. 20. There was no evidence that the discharges were
inappropriate or in contravention of the plan of correction.
In addition, HCFA has never explained its reasons for
differentiating between discharges based on the medical diagnosis,
the patients' revocation of their elections, or the family's
insistence for another type of care. All are permissible reasons
for a hospice to discharge a patient. There is no showing by HCFA,
for example, that patients revoked their election or the family
removed the patients from the hospice shortly after Petitioner's
doctors had certified them as eligible under the revised plan of
correction.
HCFA uses the evidence from these discharged patients' records to
draw conclusions which I do not find to be appropriate. I note as
an example the situation of one patient (# 5 or # 308) 21/ whose
records were placed into evidence by HCFA. After the date on which
Petitioner was to have implemented its revised plan of correction,
the physician's progress notes of June 4, 1994 indicated that the
patient had improved and had a life expectancy of more than six
months. Tr. at 135 - 36. This patient's recertification was
scheduled for June 7, 1994; but, as of June 4, 1994, Petitioner had
learned that the patient's family wished to move him out of Puerto
Rico. HCFA Ex. 41 at 12. HCFA did not allege that this patient's
subsequent discharge proved noncompliance on its SOD. HCFA Ex. 20.
However, HCFA's surveyor described the foregoing events, including
the circumstances concerning the patient's discharge, to support
the conclusion that Petitioner was out of compliance with physician
services, because the patient was not terminally ill. Tr. at 135.
I do not agree that the foregoing evidence establishes
noncompliance as of the revisit survey date. If anything, the
evidence shows that after Petitioner was supposed to have
implemented its revised plan, Petitioner's doctor began evaluating
this patient properly and this patient was discharged based on the
family's decision made prior to the scheduled date for his
recertification.
HCFA states also in its supplemental brief that patient # 1f was
discharged on April 4, 1994 because Petitioner determined him not
to be terminally ill. HCFA Supp. Br. at 15. However, instead of
conceding that Petitioner acted correctly in discharging him, HCFA
takes the position that this patient's discharge proves Petitioner
understood the Medicare requirement of terminal illness in April
and Petitioner should have "taken measures to correct this problem
through the recertification process of each patient to determine
whether they were terminally ill." See HCFA Supp. Br. at 14 - 15.
HCFA's attribution of fault is unfounded when it has not shown when
all patients of the hospice were due for recertification and, as
discussed below, it cited Petitioner for having improperly
recertified patients before Petitioner even submitted its revised
plan for approval.
I conclude on the record as a whole that HCFA's evidence concerning
the discharge of patients between March and June 6, 1994 does not
support the conclusion that Petitioner's provider contract was
properly terminated.
3. HCFA's arguments and evidence concerning active patients
who were admitted in late 1993 and have been recertified at least
once between the March 1994 survey and the June 1994 revisit
survey, and patients who had been recertified in the extension
period of unlimited duration since January 1994 with diagnosis that
were questionable as terminally ill are not persuasive.
With respect to the second and fourth selection criteria, HCFA
contends that they were used to assure that Petitioner "had
corrected the existing systemic problem and had established new
on-going procedures to assure the systemic problems would not
recur." HCFA Supp. Br. at 6. HCFA contends that correcting
existing problems means that Petitioner must take actions such as
recertifying each of its patients to determine whether they were
terminally ill. HCFA Supp. Br. at 14. The fundamental flaw in
these arguments is that when HCFA accepted the revised plan of
correction, HCFA agreed for Petitioner to correct the existing
systemic problems through the prospective application of certain
specified new procedures.
HCFA's letter dated April 7, 1994 required only a plan that
provides "reasonable assurances that conditional level compliance
will be attained . . .." HCFA Ex. 15 at 2 (emphasis added).
During the hearing, I asked HCFA's lead surveyor during both the
March and June surveys whether it was necessary for a provider to
have corrected all of the problems by the time of the revisit
survey. Tr. at 99. I note specifically the following part of her
answer, which contradicts HCFA's current contention that Petitioner
should have reevaluated every patient by the time of the resurvey:
We wouldn't expect that every patient that we went back to
see, that we would pull those old records and that things had been
corrected with those patients, but what we would look for is to say
"all right, this is what you said you were going to do, now you've
admitted X number of people in this period of time; have you
followed your plan of correction," and you know, if it's shown that
they have followed the plan of correction, then they would be back
into compliance. We don't expect total perfection, but we expect
enough corrections to have taken place to show that they understand
what the original deficiency was and that they are working towards
it not re-occurring.
Tr. at 100.
HCFA attempts to circumvent the terms of Petitioner's revised plan
and its usual expectations on revisit surveys by arguing that it
reviewed records under criteria 2 and 4 because Petitioner was on
notice since at least April of 1994 that it was required to correct
existing problems by treating and meeting the medical needs of the
terminally ill. HCFA Supp. Br. at 6, 9. (HCFA uses the April date
because the SOD from the first survey was sent to Petitioner on
April 7, 1994. HCFA Ex. 15.) This type of argument ignores the
parties' actions since HCFA issued its April 7, 1994 letter.
The evidence of record shows that nearly all of the problems that
may be associated with the use of these two criteria arose prior to
May 5, 1994. E.g., HCFA Memo at 11 - 22; HCFA Ex. 20. 22/ HCFA
did not identify in its briefs even one instance of improper
recertification or failure to timely recertify that which occurred
after May 5, 1994. Instead, HCFA improperly relies on
certifications such as the one done on April 12, 1994, for which
HCFA concludes that supporting documentation and a prognosis were
lacking. HCFA Ex. 20 at 5. I agree with Petitioner that HCFA
improperly used other examples as well to allege noncompliance when
the certifications in those examples occurred before the date
Petitioner implemented the revised plan. P. Supp. Br. at 2 - 4.
As an example, I note that HCFA specifically introduced testimony
to establish the impropriety of various certifications that were
made prior to May 5, 1994 for one patient (patient # 6 or # 277).
Tr. at 281 - 97. Yet, the documents submitted by HCFA show also,
as correctly noted by Petitioner (P. Supp. Br. at 3 - 4), that this
patient underwent the recertification process after May 5, 1994 and
was discharged on June 29, 1994 pursuant to the results of the
interdisciplinary group meeting. HCFA Ex. 42 at 6. The available
evidence concerning Petitioner's actions on this patient after May
5, 1994 does not indicate deviation from the revised plan of care.
In addition, since Petitioner did not receive the resurvey SOD
until after July 14, 1994 and HCFA did not allege any problems with
this particular patient until the time of hearing, there is no
evidence that Petitioner specifically discharged this patient due
to HCFA's revisit survey findings. HCFA Exs. 20, 22, 23.
After reviewing the other relevant exhibits and testimony
concerning recertification done after May 5, 1994, I found only
information that did not amount to a substantial deviation from
Petitioner's obligation to implement its revised plan of
correction. For example, for one patient whose records HCFA
reviewed (see HCFA Ex. 41), the interdisciplinary group's minutes
of May 19 and June 2, 1994 were not in the file at the time of the
revisit survey on June 6. Tr. at 135. However, Petitioner told
HCFA surveyors that the minutes were being typed at that time. Tr.
at 135. HCFA did not present any evidence to contradict
Petitioner's explanation.
Nor did I find persuasive HCFA's argument that its fourth criteria
(selecting records of patients recertified in the extension period
of unlimited duration since January 1994 with diagnoses that were
questionable as terminally ill) was based on Petitioner's
statements in its revised plan of correction at Addendum I, items
11 and 13. HCFA Supp. Br. at 5. Item 11 of Addendum I cited by
HCFA states that Petitioner's interdisciplinary group "will
monitor" the status of a patient as part of the recertification
process. HCFA Ex. 18 at 5. Item 13 of Addendum I cited by HCFA
refers to an audit to be conducted by Petitioner's quality
assurance personnel after a patient is admitted. Id. According to
the revised plan of correction, the purpose of the audit is to
ensure that the documentation in the record evidences the patient's
terminal prognosis and, "[i]f there is not sufficient findings of
the terminal condition, this information will be brought to the
attention of the Interdisciplinary Group for decision making for
recertification or discharge (Enclosure 8)." Id.
The words in the part of the revised plan cited by HCFA do not
support HCFA's contention that it may properly evaluate
Petitioner's success in implementing the revised plan for physician
services by surveying the records of patients who were recertified
in the extension period of unlimited duration since January of
1994. As earlier noted, Petitioner's new recertification
procedures were to involve the taking of specified actions on or
shortly before the date each patient was due for recertification.
See HCFA Ex. 18 at 14 - 16. For example, the interdisciplinary
group "will collect recertification dates on each patient on a
monthly basis." HCFA Ex. 18 at 14. Moreover, in arguing that item
13 of Addendum I supports HCFA's selection of records for the
revisit survey, HCFA failed to include the "Enclosure 8" referenced
in said item. 23/ The information before me does not indicate
that, as a part of its revised plan of correction Petitioner had
committed to reassess or recertify those patients whose records
HCFA said it reviewed under the fourth criteria.
CONCLUSION
For all of the reasons stated above, I set aside HCFA's decision of
June 7, 1994 to terminate Petitioner's provider agreement effective
June 9, 1994 based on the results of the June 6, 1994 revisit
survey. See HCFA Ex. 21.
However, if HCFA wishes to pursue those plan of care problems noted
during the June 6, 1994 revisit survey, HCFA may follow its usual
procedures by proceeding with a new notice to Petitioner based on
the plan of care condition of participation. In addition, HCFA may
take other actions not inconsistent with my findings in this
decision with respect to physician services.
I note especially my finding that HCFA's evidence from the March
1994 survey adequately supported the conclusion that Petitioner was
out of compliance with the physician services condition as of March
1994. I have not held in this decision that Petitioner has
implemented its revised plan of correction as alleged or has come
into compliance with the condition of participation of physician
services. My ruling against HCFA on the termination issue is based
on HCFA's failure to sustain its burden of proof with respect to
the June 6, 1994 revisit survey, the results of which HCFA used to
justify terminating the provider agreement on June 9, 1994. HCFA
Ex. 21. Primarily because HCFA had selected inappropriate patient
records for review during the June 6, 1994 revisit survey, HCFA
lacked the requisite relevant evidence for proving that Petitioner
failed to remedy its physician services problems in accordance with
the plan of correction approved by HCFA. HCFA is not precluded by
this decision from taking other actions to ascertain and enforce
Petitioner's compliance with the physician services condition of
participation.
Mimi Hwang Leahy
Administrative Law Judge
1. I refer to the parties' exhibits, their briefs, and the
transcript of the hearing as follows:
Petitioner's exhibit P. Ex. (number) at (page)
HCFA's exhibits HCFA Ex. (number) at (page)
Petitioner's posthearing P. Br. at (page)
brief
HCFA's posthearing HCFA Memo at (page)
memorandum
Petitioner's additional P. Supp. Br. at (page)
brief
HCFA's supplemental brief HCFA Supp. Br. at (page)
2. I will be discussing in a separate section below my denial
of HCFA's motion to correct the transcript of hearing.
3. The beneficiary must elect to receive hospice care in lieu
of other types of services. The election requirements are
contained in section 1812(d)(1) of the Act.
4. For example, the provider must agree to refrain from
charging a Medicare beneficiary for an item or service payable by
and under the program, and the provider must agree to make
provisions for the return of any moneys incorrectly collected from
Medicare beneficiaries or other persons. Section 1866(a)(1)(A),
(C). See also, 42 C.F.R. 489.20.
There is no allegation in this case that Petitioner had violated
any of the terms or provisions specified in section 1866(a)(1) of
the Act.
5. This regulation and others cited in this decision refer to
both prospective providers and suppliers. However, a hospice is
defined as "a provider of services or provider" and not a supplier.
42 C.F.R. 488.1.
In addition, several of the regulations cited in this decision
refer also to "conditions of coverage" (or whether a supplier is
covered under Medicare) and "requirements." I note here for the
sake of clarity that suppliers are entities, such as chiropractors
and independent laboratories, that must meet "conditions for
coverage," and suppliers that meet the conditions of coverage are
then eligible to be "covered under the Medicare program." 42
C.F.R. 488.1, 488.10(a)(2), 488.12(a)(1). Providers or
prospective providers such as hospices or hospitals must meet
"conditions of coverage," and the providers that meet such
conditions are eligible to "participate in the Medicare program."
Id. Skilled nursing facilities (SNFs) and nursing facilities (NFs)
are a type of provider or prospective providers that must meet
"requirements" in order to "participate in the Medicare program."
Id.
6. By law, HCFA is authorized to enter into agreements with
State or local surveying agencies to determine whether providers or
prospective providers meet the Medicare conditions of
participation. 42 C.F.R. 488.10 - .12.
7. Pursuant to my February 14, 1995 Order Directing Additional
Briefing by Parties, HCFA has resubmitted HCFA Ex. 18 on March 8,
1995 in order to include those attachments that were a part of
Petitioner's revised plan of correction.
8. Due to the different cultural customs reflected in the
transcript of hearing, I was sometimes referred to as Judge Leahy
and sometimes as Judge Hwang. Similarly, Petitioner's attorney was
alternately referred to as Mr. Morales-Coll, Mr. Morales, or Mr.
Coll.
9. HCFA cited noncompliance with 42 C.F.R. 418.80 and
418.86 among its findings that support Petitioner's noncompliance
with 42 C.F.R. 418.50.
10. Substantial evidence means "more than a scintilla. It
means such relevant evidence as a reasonable mind might accept to
support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S.
197, 229 (1938).
11. ] HCFA had every opportunity to elicit accurately this
witness' participation in the June 1994 survey. Even before HCFA
called this witness (Merta Fernandez) to testify, HCFA had elicited
the information from another surveyor that Ms. Fernandez was
present during the June survey to lend assistance and to receive
"in-service training on how to survey hospice facilities." Tr. at
298. In answer to HCFA's question, the other surveyor testified
that the "in-service training" for Ms. Fernandez consisted of her
spending approximately one hour with Ms. Fernandez going over what
they were looking for, reviewing hospice regulations, and
discussing issues that arose at the survey site. Id.
During HCFA's direct examination of Ms. Fernandez, Petitioner
objected repeatedly because HCFA appeared to suggest with its
questions that Ms. Fernandez had more substantial participation in
the June survey (e.g., making findings and reaching conclusions, as
opposed to making recommendations) than implied by the contents of
HCFA's list of proposed witnesses, which stated that Ms. Fernandez
would testify concerning her "assistance." E.g., Tr. at 338, 339,
344, 348. HCFA's counsel also took the position that Ms. Fernandez
was acting as HCFA's agent in the June 1994 survey of Petitioner.
Tr. at 348. I sustained the objections, remarked on the notice
issue, and repeatedly instructed counsel for HCFA to first pose
questions that would clarify the extent and nature of Ms.
Fernandez's "assistance." Tr. at 338 - 49.
12. At hearing, HCFA explained that there is no list of
illnesses that are considered to be terminal. Tr. at 24. HCFA
makes case-by-case evaluations during its surveys. Id.
13. A Medicare beneficiary may elect to receive hospice care
for an initial period of 90 days, for a subsequent period of 90
days, for a subsequent period of 30 days, and for a subsequent
extension period of unlimited duration during the beneficiary's
lifetime. 42 C.F.R. 418.21.
14. All of the pages in HCFA Ex. 15 were not numbered
consecutively. Thus, I have renumbered the pages in this exhibit
and the SOD begins on page 3.
15. HCFA's witness explained also the certification
requirements and their ramifications for Medicare beneficiaries.
Tr. at 38 - 43, 108.
16. In the SOD for the March survey, the surveyors noted a
violation under 42 C.F.R. 418.74(a). HCFA Ex. 15.
17. I read this subsection of the regulation as applicable to
those situations where the consequences of the provider's
noncompliance are as serious as if the provider had a violation of
a condition of participation, but no condition of participation
precisely describes the noncompliance. See 42 C.F.R. 488.24,
488.26.
18. I have discussed earlier the relevant requirements for
Petitioner to meet the condition of participation for central
clinical records. Under the quality assurance condition of
participation, Petitioner should have been conducting ongoing,
comprehensive, and integrated self-assessments of the quality and
appropriateness of the care provided. The findings from such
self-evaluations should have been used to correct identified
problems and to revise hospice policies if necessary. 42 C.F.R.
418.66. The problems discerned by HCFA's surveyors during March
1994 could have just as properly been attributed to Petitioner's
noncompliance with the conditions of participation for quality
assurance or central clinical records.
19. Compliance with a condition depends on the manner and
degree to which the provider satisfies the various standards within
each condition. 42 C.F.R. 488.26. HCFA is not authorized to
terminate a provider agreement due to deficiencies in standards
which do not amount to condition-level noncompliance. 42 C.F.R.
489.53.
20. By "referral," Petitioner means a referral from, or the
receipt of a referral form from, attending physicians, hospitals,
or community health facilities. HCFA Ex. 18 at 4.
21. I have avoided identifying patients more frequently in
this case due to the time consuming nature of explaining the
identification processes. HCFA used two systems for identifying
patients by numbers after having entered into record the relevant
documents containing the patients' names. (The last page of HCFA
Ex. 20 provides a cross-reference for the various patient numbers
applicable to the resurvey.) During hearing, Petitioner used the
patients' names of record as well as one or more of HCFA's
identification numbers.
22. As parts of certain exhibits, HCFA did submit some
documents that it could not have reviewed during the June 6, 1994
resurvey. For example, there is a page showing a notation on June
16, 1994, indicating that the doctor will visit patients soon to
decide whether to continue "illegible;" there is another notation
dated June 29, 1994 indicating that the same patient was found not
to be terminally ill and would be discharged. HCFA Ex. 42 at 6.
I assume HCFA came into possession of such documents pursuant to
prehearing discovery.
23. When I ordered the parties to submit supplemental briefs,
I gave them the opportunity to file any "enclosure" referenced in
the revised plan of correction. Order of February 14, 1995. HCFA
then resubmitted its exhibit 18 with additional pages but without
"Enclosure 8."