SUBJECT:

Iredell Memorial Hospital - SNF,

Petitioner,

Health Care Financing Administration.

I sustain the determination of the Health Care Financing Administration (HCFA) to impose civil money penalties against Petitioner, Iredell Memorial Hospital - SNF, in the amount of $100 per day for a period which begins on January 14, 1999 and which runs through March 30, 1999. The sum total of the civil money penalties which I sustain in this case is $7,600.

I. Introduction and background

A. Introduction

Petitioner is a long-term care facility located in Statesville, North Carolina. On March 24, 1999, HCFA notified Petitioner that it had determined that Petitioner had failed to comply substantially with requirements for participation in the Medicare program. HCFA informed Petitioner that it had determined to impose civil money penalties against Petitioner, in the amount of $100 per day, for the period of time during which HCFA had determined Petitioner not to be complying with federal participation requirements. According to HCFA, that period began on January 14, 1999 and ran through March 30, 1999.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I held a prehearing conference at which the parties advised me that they had agreed that the case could be tried on their written submissions. I established a schedule for the submission of briefs and proposed exhibits. The parties complied with that schedule. HCFA submitted nine proposed exhibits (HCFA Exs. 1 - 9) in conjunction with its initial brief and two more proposed exhibits (HCFA Exs. 1 - 2) with its reply brief. Petitioner submitted four proposed exhibits (P. Exs. 1 - 4) in conjunction with its initial brief. I hereby renumber HCFA's final two exhibits and admit into evidence HCFA HCFA Exs. 1 - 11 and P. Exs. 1 - 4.

B. Background

HCFA bases its allegation, that Petitioner failed to comply substantially with federal participation requirements, on findings that were made at two compliance surveys that were conducted of Petitioner, one on January 12 - 14, 1999 and the other on March 4, 1999. HCFA Exs. 1 and 4. Both surveys were conducted by surveyors employed by the North Carolina Department of Health and Human Services (North Carolina State Agency).

The deficiency findings that the surveyors made at the two surveys are contained in written survey reports. HCFA Exs. 1 and 4. The findings are described under headings known as "Tags." Id. At the January 12 - 14, 1999 survey the surveyors found that Petitioner was not complying substantially with four participation requirements. They found at:

• Tag 176, that Petitioner was not complying substantially with the federal participation requirement set forth at 42 C.F.R. § 483.10(n). This requirement provides that a facility's residents may self-administer medication if the facility's interdisciplinary team determines the practice to be safe. The surveyors concluded that two of Petitioner's residents were self-administering medications absent any determination by Petitioner's interdisciplinary team that the residents were self-administering the medications safely. HCFA Ex. 1 at 2 - 3.

• Tag 250, that Petitioner was not complying substantially with the federal participation requirement set forth at 42 C.F.R. § 483.15(g). This requirement states that a facility must provide medically-related social services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident. The surveyors concluded that Petitioner failed to provide emotional support to a terminally ill resident. HCFA Ex. 1 at 3 - 5.

• Tag 312, that Petitioner was not complying substantially with the federal participation requirement set forth at 42 C.F.R. § 483.25(a)(3). This requirement states that, based on a comprehensive assessment of each resident, a facility must ensure that any resident who is unable to carry out activities of daily living receives the necessary services to maintain good nutrition, grooming, and personal and oral hygiene. The surveyors concluded that Petitioner had failed to provide toileting assistance to a resident who was in need of such assistance. HCFA Ex. 1 at 7 - 8.

• Tag 316, that Petitioner was not complying substantially with the federal participation requirement set forth at 42 C.F.R. § 483.25(d)(2). This requirement provides that, based on a comprehensive assessment of each resident, a facility must assure that any resident who is suffering from bladder incontinence must receive appropriate treatment and services to prevent urinary tract infections and to restore as much normal bladder function as possible. The surveyors concluded that Petitioner had allowed an indwelling catheter to remain in a resident past the point when the need for a catheter was medically indicated and without determining whether the resident needed a catheter. The surveyors concluded further that, in this instance, Petitioner failed to restore as much normal bladder function as was possible for the resident. HCFA Ex. 1 at 8 - 10.

Petitioner submitted a plan of correction to the North Carolina State Agency in which it asserted that it had attained substantial compliance with participation requirements effective February 10, 1999. HCFA Ex. 1 at 1. On March 4, 1999, the surveyors revisited Petitioner's facility in order to determine whether Petitioner had, in fact, attained substantial compliance. The surveyors concluded that Petitioner continued not to comply substantially with two participation requirements. HCFA Ex. 4. They found at:

• Tag 176, that a resident was self-administering medications without the requisite review and approval by the facility's interdisciplinary team. HCFA Ex. 4 at 1 - 2.

• Tag 316, that Petitioner had not attempted to restore normal bladder function to one of its residents. The surveyors concluded, essentially, that the facility had allowed an indwelling catheter to remain in a resident past the point where its use was medically indicated. HCFA Ex. 4 at 2 - 3.

Petitioner submitted a second plan of correction to the North Carolina State Agency in which it averred that it had corrected the deficiencies that were identified at the March 4, 1999 survey by March 31, 1999. HCFA Ex. 4 at 1. On April 15, 1999, the surveyors revisited Petitioner's facility for a third time and concluded that Petitioner had attained substantial compliance with participation requirements effective March 31, 1999.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner failed to comply substantially with federal participation requirements during the period which began on January 14, 1999 and which ran through March 30, 1999; and

2. Assuming that Petitioner was not complying substantially with federal participation requirements, a civil money penalty of $100 for each day of Petitioner's noncompliance is reasonable.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision that Petitioner did not comply substantially with federal participation requirements during the period which began on January 14, 1999 and which ran through March 30, 1999, and that a civil money penalty of $100 for each day of Petitioner's noncompliance is reasonable. I set forth each Finding below as a separately numbered heading. I discuss each Finding in detail.

1. The weight of the evidence establishes that Petitioner was not complying substantially with participation requirements as of January 14, 1999.

HCFA established a prima facie case that Petitioner was not complying substantially with federal participation requirements as of January14, 1999. Petitioner did not refute any of the evidence introduced by HCFA. Therefore, I find that Petitioner was not complying substantially with participation requirements as of January 14, 1999.

In cases involving HCFA, HCFA has the burden of coming forward with sufficient evidence to establish a prima facie case that a petitioner has not complied substantially with participation requirements. If HCFA meets that burden then the burden shifts to the petitioner to prove, by a preponderance of the evidence, that it was in fact in substantial compliance with participation requirements. Hillman Rehabilitation Center, DAB No. 1611 (1997); aff'd Hillman Rehabilitation Center v. United States, No. 98-3789 (GEB) (D. N.J. May 13, 1999).

HCFA offered credible evidence, sufficient to establish a prima facie case, that Petitioner was not complying substantially with the participation requirements that are set forth at 42 C.F.R. §§ 483.10(n), 483.15(g), 483.25(a)(3), and 483.25(d)(2) as of January 14, 1999. This evidence consists of the report of the January 12 - 14, 1999 survey. HCFA Ex. 1. It consists also of the worksheets of the surveyors who participated in that survey. HCFA Ex. 2. And, it consists of the affidavit of Harold Davis, a pharmacist, who participated in the March 12 - 14 survey as a surveyor. HCFA Ex. 3.

Petitioner has not offered any evidence to rebut the findings that the surveyors made at the January 12 - 14, 1999 survey. It does not appear that Petitioner denies the surveyors' findings of noncompliance that were made at that survey. The evidence that Petitioner introduced in this case, consisting of P. Ex. 1 - 4, addresses only the findings that were made at the March 4, 1999 survey of Petitioner.

2. The weight of the evidence establishes that Petitioner was not complying substantially with a participation requirement as of March 4, 1999.

As I discuss above, at Part I.B. of this decision, Petitioner alleged that it had corrected the deficiencies that were identified at the January 12 - 14, 1999 survey by February 10, 1999. However, when the surveyors returned to Petitioner's facility on March 4, 1999, they found that Petitioner remained out of compliance with two participation requirements. These are the requirements that are discussed at Tags 176 and 316 of the report of the March 4, 1999 survey of Petitioner. HCFA Ex. 4. I conclude, based on my review of the evidence which pertains to these two deficiency citations, that the surveyors were incorrect in concluding that Petitioner remained noncompliant under Tag 316 as of March 4, 1999. However, the weight of the evidence supports the surveyors' conclusion that Petitioner continued to be noncompliant under Tag 176.

a. Tag 316

The surveyors who conducted the March 4, 1999 survey of Petitioner based their conclusion that Petitioner remained noncompliant with the requirements of 42 C.F.R. § 483.25(d)(2) on the care that Petitioner gave to a single resident who is identified in the report of the March 4, 1999 survey as Resident # 6. HCFA Ex. 4 at 3. The surveyors found that the resident had been admitted to Petitioner's facility on February 24, 1999 with an indwelling catheter. This resident was suffering from a Stage II pressure sore on her lower back. According to the surveyors, the admission assessment that Petitioner conducted of the resident included a plan to do bladder training and to remove the catheter. However, at the time of the survey, the catheter remained in the resident. The surveyors noted also that the resident expressed a desire that the catheter be removed. Id. And, the catheter was removed on March 4, 1999, evidently in response to the surveyors' observations.

The report of the March 4, 1999 survey does not specifically explain why the facts as recited above constitute evidence of a failure by Petitioner to comply with the requirements of 42 C.F.R. § 483.25(d)(2). The survey report states that Petitioner failed to restore as much normal bladder function as possible to Resident # 6. However, there is no statement in the report of the survey that the catheter was not medically necessary. Nor do the surveyors conclude anywhere in the report of the survey that Petitioner should have removed the catheter at an earlier date than March 4, 1999.

However, I infer from a liberal reading of the survey report that the surveyors found that Petitioner should have removed the catheter from Resident # 6 at an earlier date than March 4, 1999. Evidently, the surveyors concluded that the catheter became unnecessary at a date prior to March 4, 1999.

The weight of the evidence does not support this conclusion. I am persuaded from the affidavit testimony of Petitioner's staff that retaining the catheter in Resident # 6 was prudent in light of the resident's pressure sore. P. Exs. 3 and 4. I am not persuaded that the sore had healed sufficiently prior to March 4, 1999 to justify removal of the catheter at an earlier date than March 4, 1999.

b. Tag 176

The surveyors who conducted the survey of March 4, 1999, based their conclusion that Petitioner continued to be noncompliant with the requirements of 42 C.F.R. § 483.10(n) on the care that Petitioner gave to a resident who is identified as Resident # 5 in the report of the March 4, 1999 survey. The surveyors found that two medications, consisting of a nasal spray and an inhalant identified as Flovent, had been left in the resident's room. HCFA Ex. 4 at 2. A physician had prescribed Flovent for the resident with instructions that it be administered to the resident twice per day (two puffs two times each day). Id. The resident related to the surveyors that she used the Flovent inhaler every three to four hours. Id. The surveyors concluded that medications should not have been left in the resident's room, inasmuch as Petitioner had not determined that the resident safely could self-administer medications. Id.

There plainly existed a risk that the resident might be harmed from her unsupervised use of Flovent. Flovent is a steroid that is dispensed pursuant to prescription. HCFA Ex. 3. Steroids can cause serious side effects even when administered pursuant to a physician's orders. Id. In light of that, a goal of treatment with steroids is to obtain beneficial results with the smallest possible dosage. Id. Here, Resident # 5 was being allowed by Petitioner to self-administer a steroid in uncontrolled quantities.

I conclude that the evidence which relates to Petitioner's care of Resident # 5 is evidence from which I may infer reasonably that, as of March 4, 1999, Petitioner was not complying with the participation requirement in 42 C.F.R. § 483.10(n) governing the circumstances under which a resident of a long-term care facility may self-administer medication. The evidence is sufficient for me to conclude that, as of March 4, 1999, Petitioner had not implemented controls which assured that residents did not self-administer medication absent determinations by facility staff that it was safe for them to do so. Nor had Petitioner given its employees sufficient training to assure that they would monitor residents to prevent inappropriate self-administration of medications.

Petitioner argues that it should not be found to be deficient based on isolated evidence of erroneous treatment of a single resident. I do not disagree with Petitioner that an isolated mistake by an employee of a facility may not necessarily be persuasive evidence of an overall failure by the facility to comply with participation requirements. The issue in any of these cases is not whether there are mistakes in providing care to residents but whether evidence of errors demonstrates some systemic inability or unwillingness by the facility and its staff to comply with federal participation requirements. However, the evidence in this case shows that Petitioner manifested a continuing problem with residents self-administering medication unsupervised and without the approval of Petitioner's staff. I infer from this evidence that, in Petitioner's case, the repeated failures by Petitioner to assure that residents did not self-administer medications inappropriately demonstrates an overall failure by Petitioner to assure that it complied with the requirements of 42 C.F.R. § 483.10(n).

3. Petitioner attained substantial compliance with all participation requirements effective March 31, 1999.

The surveyors who conducted the April 15, 1999 survey of Petitioner found Petitioner to be complying substantially with federal participation requirements. HCFA subsequently determined that Petitioner had attained substantial compliance by March 31, 1999. That determination is based on the representations that Petitioner made in its plan of correction to address the deficiencies that were identified at the March 4, 1999 survey. In that plan of correction, Petitioner averred that it would eliminate by March 31, 1999 the deficiencies that were identified as of March 4, 1999, including the deficiency that was identified at Tag 176. HCFA Ex. 4.

Petitioner now asserts that, in fact, it attained substantial compliance at an earlier date than March 31, 1999. It contends that the problems relating to self-administration of medication by Resident # 5 - which were identified by the surveyors as the basis for the deficiency cited at Tag 176 - were resolved with the termination of employment of the employee who was responsible for admitting Resident # 5 to Petitioner's facility.

The weight of the evidence, however, is that Petitioner attained substantial compliance with participation requirements by March 31, 1999. I base this conclusion on the fact that Petitioner admitted in its plan of correction that it would not complete actions to correct all of the deficiencies that were identified on March 4, 1999 prior to March 31, 1999, and on the absence of any credible evidence to show that Petitioner corrected all deficiencies prior to March 31, 1999.

Petitioner does not provide the date on which it discharged the employee whom Petitioner holds responsible for the improper self-administration of medications by residents. However, assuming that the employee was discharged immediately after the March 4, 1999 survey, the act of discharging the employee was not enough to bring Petitioner into full compliance with participation requirements. Petitioner's plan of correction, which it submitted in response to the report of the March 4, 1999 survey, listed several actions that Petitioner would take to assure that its residents did not inappropriately self-administer medications. These actions, by Petitioner's own estimate, would not be completed prior to March 31, 1999. The actions included assessing each resident to determine: whether that resident wanted to self-administer medications; whether the resident had brought medications into the facility; and, whether the resident's physician had directed the resident to self-administer medications. The actions also included educating each resident and the resident's family concerning Petitioner's policy about self-administration of medications. The actions also included a review of each admission to the facility to determine whether self-administration of medications by that resident was safe.

In any case, it is conceivable that a facility may actually implement corrections at an earlier date than the completion date that it provides in its plan of correction. It is the facility's burden to prove that it has implemented corrections as of a specific date. Petitioner has not offered credible evidence to establish that it implemented all of the corrective actions in its plan of correction prior to March 31, 1999.

4. A basis exists in this case to impose civil money penalties against Petitioner.

HCFA has shown that Petitioner was not complying substantially with at least one federal participation requirement during the period which began on January 14, 1999 and which ran through March 30, 1999. Therefore, HCFA has established a basis to impose a civil money penalty against Petitioner for each day of this period. 42 C.F.R. § 488.430(a).

5. A civil money penalty of $100 per day for each day of noncompliance is reasonable.

HCFA determined to impose civil money penalties against Petitioner of $100 per day for each day of the period of Petitioner's noncompliance. I find this amount to be reasonable.

HCFA is authorized to impose a civil money penalty in an amount ranging from $50 to $3,000 for each day that a facility is not complying substantially with participation requirements and where the deficiencies do not pose immediate jeopardy to the facility's residents. 42 C.F.R. § 488.438(a)(2). The amount of a civil money penalty must be determined from criteria that are contained in 42 C.F.R. §§ 488.438(f) and 488.404.

I find the penalties imposed here to be reasonable. HCFA determined to impose a daily civil money penalty which approaches the minimum amount that may be imposed for deficiencies that are substantial but that are not at the immediate jeopardy level. The penalties that HCFA determined to impose against Petitioner reflect the relatively low potential for harm of Petitioner's deficiencies, as well as the relatively isolated character of the deficiencies.

Steven T. Kessel

Administrative Law Judge