SUBJECT:

Gelnburn Home,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to impose remedies against Petitioner, Glenburn Home. These remedies include a per-instance civil money penalty in the amount of $1,000.

I. Background

Petitioner is a long-term care facility that is located in Linton, Indiana. Petitioner participates in federally funded health care programs, including the Medicare program. On March 23, 2001, CMS notified Petitioner that it had determined to impose civil remedies against it. These remedies included a per-instance civil money penalty of $1,000 and a one-day denial of payment for new admissions for admissions made by Petitioner on January 31, 2000. CMS based its remedy determinations on findings made previously by CMS and surveyors employed by the Indiana State Department of Health (Indiana State survey agency) that Petitioner had failed to comply substantially with federal participation requirements governing long-term care facilities and with the Life Safety Code.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. Both parties moved for summary disposition. CMS filed ten exhibits in support of its arguments (CMS Ex. 1 - CMS Ex. 10). Petitioner filed nine exhibits (P. Ex. 1 - P. Ex. 9). I am receiving into evidence CMS Ex. 1 - CMS Ex. 10 and P. Ex. 1 - P. Ex. 9.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. It is appropriate to decide this case based on the parties' written submissions;

2. Petitioner failed to comply substantially with a federal participation requirement;

3. CMS may impose remedies, including a per-instance civil money penalty, against Petitioner; and,

4. A per-instance civil money penalty in the amount of $1,000 is reasonable.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below under a separate heading.

1. It is appropriate to decide this case based on the parties' written submissions.

It is appropriate to decide this case based on what the parties have submitted to me. Although the parties have styled their respective motions as motions for summary disposition, it is more appropriate to consider them as motions for disposition based on a written record. There are disputed issues of material fact in this case and I would have scheduled an in-person hearing to receive evidence about those issues had either party asked for one. However, neither party asserts that it desires an in-person hearing and both parties are content to rest their cases on their written submissions.

2. Petitioner failed to comply substantially with the requirements of a federal participation requirement at 42 C.F.R. § 483.25(h)(1).

Indiana State survey agency surveyors conducted compliance surveys of Petitioner in late 2000 and early 2001 which resulted in several findings of noncompliance by Petitioner with federal participation requirements. However, what is at issue in this case is a finding of noncompliance that was made at a survey that was conducted on January 4, 2001. CMS Ex. 4. At that survey the surveyors concluded that Petitioner was not complying substantially with the requirements of 42 C.F.R. § 483.25(h)(1). This regulation provides that a long-term care facility must ensure that its residents' environment remains as free of accident hazards as is possible.

The surveyors concluded that Petitioner failed to comply with the requirements of the regulation in that Petitioner had installed potentially hazardous portable space heaters in a room that was being used to house two residents (Resident # 5 and Resident # 7). The space heaters functioned by emitting heat. Allegedly, they posed a fire hazard when placed in the vicinity of flammable items. The surveyors found that the space heaters were a hazard to Petitioner's residents because flammable materials had been placed near the heaters or because there was a possibility that mentally impaired residents might come into contact with the heaters and be burned. The surveyors cited examples of facts to support their conclusion consisting of the following:

• A device known as a lap buddy had been left in close proximity to one of the space heaters. CMS Ex. 4 at 6.



• Resident # 5, one of the two residents in whose room space heaters had been placed, experienced low cognitive functioning related to advanced dementia. CMS Ex. 4 at 6. The resident was noted to display constant movements and to fidget. Id.

• There were confused residents who wandered on the residential unit in which the space heaters had been placed. CMS Ex. 4 at 6.

CMS argues that these findings establish the presence of an unacceptable and reasonably foreseeable accident hazard at Petitioner's facility in violation of 42 C.F.R. § 483.25(h)(1). CMS argues that, not only do the facts establish the presence of an unacceptable accident hazard, but that as a matter of law, the placing of space heaters in the residents' room constituted a failure to comply with the requirements of 42 C.F.R. § 483.25(h)(1). As support for this argument, CMS points out that a code which governs the physical premises of long-term care facilities such as Petitioner's facility, the Life Safety Code, prohibits the use in residents' room of portable heating devices such as those utilized by Petitioner. CMS Ex. 9 at 2 - 3. CMS argues that, if the use of space heaters to heat residents' rooms is deemed an unacceptable accident hazard by the Life Safety Code, then it must also be an unacceptable accident hazard which contravenes the requirements of 42 C.F.R. § 483.25(h)(1).

By contrast, Petitioner asserts that there was no failure by it to comply with the requirements of the regulation. Petitioner argues that no conclusion or inference of noncompliance may be drawn from its failure to comply strictly with the requirements of the Life Safety Code inasmuch as the regulations which govern long-term care facilities do not state that Life Safety Code violations are, in and of themselves, failures to comply with participation requirements. Petitioner argues also that the facts fail to show a prima facie case of noncompliance by it with participation requirements. According to Petitioner, CMS has not presented any credible evidence that Petitioner's use of space heaters posed even a potential for more than minimal harm to Petitioner's residents. Finally, Petitioner asserts that the facts which relate to its use of space heaters more than overcome any inference of noncompliance that might be drawn from the evidence presented by CMS. Petitioner asserts that it made a reasoned judgment to use space heaters and that it more than compensated for any possibility of harm by training its staff and by using space heaters that were safe when operated properly.

I conclude that Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 483.25(h)(1). I do not find that Petitioner failed as a matter of law to comply with the requirements of 42 C.F.R. § 483.25(h)(1) because it placed space heaters in its residents' room in violation of the requirements of the Life Safety Code. I find, however, that Petitioner's failure to comply with the Life Safety Code created a presumption of noncompliance with the requirements of 42 C.F.R. § 483.25(h)(1) which Petitioner was obliged to rebut. I find that Petitioner did not rebut the presumption of noncompliance. I am satisfied from the evidence that the parties presented that the use of space heaters in the residents' room presented an unacceptable hazard and a reasonably foreseeable hazard to those residents.

There is no dispute in this case that Petitioner's staff placed space heaters in the room that housed Resident # 5 and Resident # 7. The type of space heater utilized by Petitioner, which Petitioner refers to as the "Lakewood Unit," is an oil-filled electric radiator heater. CMS Ex. 8 at 2; P. Ex. 4. The Lakewood Unit evidently contains heating elements that are run by an electric current. The heating elements heat the oil which circulates through the unit's sealed casing. The casing radiates heat. Id.

Furthermore, Petitioner does not dispute CMS's assertion that the Lakewood Unit, when operated, would become sufficiently hot that it might burn the exposed skin of an individual who came into contact with it. Nor does Petitioner dispute that the unit might ignite flammable substances after contact with the unit. The manufacturer of the unit expressly warns users that the unit is a fire hazard. CMS Ex. 8 at 4. The manufacturer's warning contains two statements which explain the risks that are associated with using the Lakewood Unit.

1. Do not place any objects such as furniture, papers, clothes, or curtains closer than 3 feet (0.9 m) to the front of the heater. Keep them away from the sides and rear when the heater is plugged in. Do not use near any flammable materials.

2. Do not place the heater near a bed because objects such as pillows or blankets can fall off the bed and be ignited by the heater.

Id. Given these unquestionable risks, the question is whether the placement of two Lakewood heating units in an area that housed a cognitively impaired resident and which was accessible to other cognitively impaired residents, posed unacceptable and reasonably foreseeable risks of injury to these residents or of accidental fire.

I do not find, as CMS urges, that Petitioner's failure to follow the requirements of the Life Safety Code is per se a failure by it to comply with the requirements of 42 C.F.R. § 483.25(h)(1). The regulation does not state that Life Safety Code deficiencies constitute unacceptable and reasonably foreseeable accident hazards. Rather, the regulation contemplates that a case-by-case evaluation be made in order to decide whether any particular circumstance comprises a failure to comply with the regulation.

That is not to suggest, however, that the Life Safety Code has no significance in deciding whether Petitioner created an unacceptable and reasonably foreseeable accident hazard at its facility. It is reasonable to presume from the Life Safety Code's prohibition against the use of portable space heaters to heat residents' rooms that there are problems with such devices that make them inherently hazardous in such circumstances. CMS requires long-term care facilities to comply with the requirements of the Life Safety Code because failures to comply with the code may endanger the health and safety of residents of these facilities. Thus, any failure by a facility to comply with the code creates a presumption that an unacceptable hazard exists to the safety and welfare of the facility's residents. A facility may rebut that presumption in a case where it has been charged with creating an accident hazard by proving that its failure to comply with the Life Safety Code did not endanger the health and safety of residents.

The hazards that are associated with the use of space heaters - and which are recognized and warned against by the Lakewood Unit's manufacturer - are recognized also in the Life Safety Code. The code asserts that space heaters may be used in long-term care facilities only in circumstances that are exceptions to the general rule which prohibits the use of such devices. Exception No. 1 to the general prohibition states:

Approved suspended unit heaters may be used in locations other than means of egress and patient sleeping areas, provided such heaters are located high enough to be out of the reach of persons using the area and provided they are equipped with . . . [enumerated safety features].

CMS Ex. 9 at 2. This language makes it plain that portable space heaters are regarded as being dangerous if they are placed in locations where residents of a facility are likely to come in close proximity with them. Thus, such heaters may not be used in sleeping areas or in areas of egress. Nor may they be considered to be acceptable means of heating unless they are located high enough so that they are beyond the reach of residents.

Petitioner failed to comply with these requirements. It placed space heaters in a sleeping area. These heaters were located within a few feet of residents and could easily have been touched by them. The problems associated with the use of space heaters in close proximity to residents were exacerbated by the fact that one of Petitioner's residents in whose room space heaters were located (Resident # 5) was a mentally impaired individual.

I am not persuaded from Petitioner's evidence and arguments that Petitioner took precautions which overcame the inherent risks posed by the use of space heaters to heat a sleeping area. Nor has Petitioner overcome the presumption that its failure to comply with the Life Safety Code comprised a failure by it to comply with the requirements of 42 C.F.R. § 483.25(h)(1). Petitioner asserts that it purchased Lakewood Units because of their construction and inherent safety. It may be that Lakewood Units are safer than are other types of space heaters. But, even the manufacturer of the Lakewood Unit recognizes that the use of such heaters poses risks of fire and of personal injury. Thus, while the units may well be "safer" than are other units, they are not "safe" when used inappropriately.

What Petitioner cannot overcome is the fact that it utilized space heaters in circumstances that clearly were hazardous and where the risks were easily foreseeable. Its staff placed space heaters in relatively close proximity to sleeping residents at a level which made human contact with the heaters possible. They placed the heaters in a room used to house a mentally impaired resident who had a tendency towards agitated behavior. And, they left the heaters accessible to other residents who were demented and who wandered. These acts or omissions by Petitioner and its staff plainly departed from recognized safe practices as are set forth in the Life Safety Code and they endangered Petitioner's residents.

3. CMS may impose remedies, including a per-instance civil money penalty, against Petitioner.

Petitioner's failure to comply substantially with a federal participation requirement is a basis for CMS to impose remedies against Petitioner. Those remedies may include a per-instance civil money penalty. 42 C.F.R. § 488.430.

4. A per-instance civil money penalty in the amount of $1,000 is reasonable.

CMS determined to impose a per-instance civil money penalty in the amount of $1,000 against Petitioner. Petitioner argues that this penalty amount is unreasonable in that it is not justified by the scope and severity of Petitioner's failure (of course, Petitioner does not concede that any failure existed) to comply with 42 C.F.R. § 483.25(h)(1). Petitioner asserts that CMS premised the penalty amount on its determination that Petitioner manifested an immediate jeopardy level failure to comply with the requirements of 42 C.F.R. § 483.25(h)(1). Petitioner notes that the Indiana State survey agency did not find Petitioner's deficiency to be so egregious. It argues that CMS had no basis to find a higher level of scope and severity than that which was found by the Indiana State survey agency and it argues that, consequently, the civil money penalty amount imposed by CMS is disproportionate to the actual scope and severity of Petitioner's deficiency.

CMS argues that, in fact, the penalty amount was justified by the level of seriousness of Petitioner's deficiency and by other factors that are specified at 42 C.F.R. §§ 488.438 and 488.404 (incorporated by reference into 42 C.F.R. § 488.438). It observes that the penalty amount of $1,000 is the minimum per-instance civil money penalty that may be imposed. Therefore, according to CMS, the penalty is reasonable and should be sustained.

It is not necessary for me to decide whether Petitioner manifested an immediate jeopardy level deficiency. Nor is it necessary for me to decide whether the $1,000 per-instance civil money penalty is justified based on application of the regulatory factors that are stated at 42 C.F.R. §§ 488.438 and 488.404.

Whether or not Petitioner manifested an immediate jeopardy level deficiency is irrelevant to deciding the question of whether CMS is authorized to impose a per-instance civil money penalty against Petitioner. CMS is authorized to impose a per-instance civil money penalty for any failure by a facility to comply substantially with participation requirements whether or not that failure rises to the level of an immediate jeopardy level deficiency. 42 C.F.R. § 488.430(a). CMS is authorized to impose a per-instance civil money penalty here because I have found that Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 483.25(h)(1).

I note that CMS argues that Petitioner is financially capable of paying the $1,000 per-instance civil money penalty that CMS determined to impose. CMS makes this argument to address an anticipated argument by Petitioner that it lacks the wherewithal to pay a $1,000 civil money penalty. It also makes this argument to address one of the regulatory factors for determining the amount of a civil money penalty that is stated at 42 C.F.R. § 488.438(f)(2). I find the issue of Petitioner's financial ability to pay a $1,000 civil money penalty to be moot. Petitioner did not raise the issue as an affirmative argument. Moreover, the regulations which govern per-instance civil money penalties would not appear to allow me to sustain a per-instance civil money penalty of less than $1,000 in any case where CMS has the authority to impose a per-instance civil money penalty and determines to do so. See 42 C.F.R. § 488.438(a)(2).

Steven T. Kessel

Administrative Law Judge