SUBJECT:

Milpitas Care Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I decide that Petitioner, Milpitas Care Center, was not in substantial compliance with Medicare participation requirements. Consequently, the Centers for Medicare & Medicaid Services (CMS, formerly known as the Health Care Financing Administration or HCFA) ⁽¹⁾ had the authority to terminate Petitioner's Medicare provider agreement. I also decide that the civil money penalties (CMPs) that were imposed against the Petitioner were authorized and reasonable.

I. Applicable law

Skilled nursing facilities, such as Petitioner, participate in the Medicare program by entering into provider agreements with the United States Department of Health and Human Services (DHHS). Requirements of participation are imposed by statute and regulation. Social Security Act (Act), section 1819 [42 U.S.C. § 1395i-3]; 42 C.F.R. Parts 483, 488, and 489.

The regulations define "substantial compliance" as follows: "Substantial compliance means a level of compliance with the requirements of participation such that any identified deficiencies pose no greater risk to resident health or safety than the potential for causing minimal harm." 42 C.F.R. § 488.301.

The regulations define "immediate jeopardy" as follows: "Immediate jeopardy means a situation in which the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident." 42 C.F.R. § 488.301.

The regulations specify that a CMP that is imposed against a provider will fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The lower range of civil money penalties, from $50 per day to $3,000 per day, is reserved for deficiencies that do not constitute immediate jeopardy, but either cause actual harm to residents, or cause no actual harm, but have the potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(2). The upper range of civil money penalties, from $3,050 per day to $10,000 per day, is reserved for deficiencies that constitute immediate jeopardy to a provider's residents, and, in some circumstances, for repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1), (d)(2).

The preponderance of the evidence standard is applied to resolve disputed issues of fact, except as provided by 42 C.F.R. § 498.60(c)(2), which states that in CMP cases, CMS's determination as to the level of noncompliance of a provider must be upheld unless it is clearly erroneous. CMS bears the burden of coming forward with evidence sufficient to establish a prima facie case that the provider was not in substantial compliance with the participation requirements at issue. Once CMS has established a prima facie case, the provider has the ultimate burden of persuasion: to prevail, the provider must prove by a preponderance of the evidence that it was in substantial compliance with each participation requirement at issue. Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. DHHS, No. 98-3789 (GEV), slip op. at 25 (D.N.J. May 13, 1999).

II. Background

Petitioner is a skilled nursing facility (SNF) located in Milpitas, California. In November of 1998, the families of several residents of Milpitas Care Center filed five complaints against the provider alleging severely inadequate staffing. In response to these complaints, the California Department of Health Services (CDHS, a State survey agency) ⁽²⁾ conducted a survey of Petitioner commencing on November 3, 1998. CDHS determined that the inadequate nursing staff and ineffectual administration of the provider would constitute widespread immediate jeopardy if not corrected that day. The next morning, the CDHS found that the circumstances had not been corrected or changed. As a result, Petitioner was notified that the facility would be monitored daily until the immediate jeopardy had been abated. It was determined that the immediate jeopardy was abated on November 18, 1998. A survey is identified by its exit date; the survey lasted from November 3, 1998 until November 18, 1998. In addition, during the time of the first survey, CDHS found other numerous deficiencies. By letter dated December 15, 1998, after the immediate jeopardy was abated, CMS imposed a CMP in the amount of $3,050.00 per day for the 15 days of the immediate jeopardy.

A follow up survey was completed on February 8, 1999. CMS determined that Petitioner was not in substantial compliance with Medicare participation requirements as a result of the February 8, 1999 survey. The February 8, 1999 survey documented numerous deficiencies, of which seven remained uncorrected from the November 18, 1998 survey, including one of the deficiencies previously identified as constituting immediate jeopardy. By letter dated April 1, 1999, CMS informed Petitioner that it was not in substantial compliance based on the February 8, 1999 survey; imposed a denial of payment for new admissions (DPNA), effective April 16, 1999; and based on both the November 18, 1998 and February 8, 1999 surveys, it would continue the CMP previously imposed in the amount of $3,050.00 per day at a reduced rate of $3,000.00 per day, effective November 19, 1998 and continuing through and after February 8, 1999 until CMS either terminated Petitioner's provider agreement on May 18, 1999 (six months from the first noncompliant survey) or determined that Petitioner had come into substantial compliance.

A second follow up survey was conducted on May 18, 1999. CMS determined that Petitioner was again not in substantial compliance with Medicare participation requirements as a result of the May 18, 1999 survey. The May 18, 1999 survey documented deficiencies, all of which had been found in the November 18, 1998 or the February 8, 1999 surveys, or both. By letter dated June 2, 1999, CMS notified Petitioner that it would be terminated on June 17, 1999, 15 days from receipt of this notification as required by 42 C.F.R. § 488.456(c), and that the CMP and DPNA would continue until June 17, 1999. CMS terminated Petitioner from participation in the Medicare program, effective June 17, 1999.

Petitioner requested a hearing concerning the November 18, 1998 survey and this hearing request was assigned docket number C-99-364. Subsequently, Petitioner requested a hearing concerning the February 8, 1999 revisit survey and the second revisit survey of May 18, 1999 and these hearing requests were assigned docket number C-00-074. Both of these cases were initially assigned to Administrative Law Judge (ALJ) Clifton. Judge Clifton consolidated these cases on January 12, 2000 because these cases involved the same survey cycle, as well as similar issues and evidence.

Petitioner retained new representation for itself shortly before its hearing. By Order dated July 6, 2000, Judge Clifton set the hearing to start on August 21, 2000 and set an exchange of exhibits and other documents for July 27, 2000. At a prehearing conference on July 25, 2000, Petitioner's counsel assured Judge Clifton that he would be ready to proceed to hearing on August 21, 2000. On July 28, 2000, Judge Clifton issued a subpoena duces tecum for Petitioner's use in obtaining medical records from the successor operator of the facility. Petitioner's counsel did not provide any medical records in his exchange prior to the hearing even though he listed records for residents 1 - 19 on his list of exhibits. The medical records were not made available at the hearing and not made available during the post-hearing process.

During the hearing, August 21 - 25, 2000, in San Jose, California, each party called witnesses to testify. CMS called 11 witnesses to testify who were all qualified to testify in their fields. Petitioner called two witnesses to testify, neither of whom had any medical background whatsoever. The transcript of the hearing is referred to as "Tr". During the hearing, the medical records that Petitioner should have obtained by use of the subpoena duces tecum were never made available. Also at the hearing, Petitioner identified, but did not offer into evidence, some of its exhibits.

After the hearing, by letters dated September 11, 2000 and September 21, 2000, the parties were afforded the opportunity to offer additional exhibits and to offer into evidence those exhibits identified at the hearing, but not previously offered into evidence. In addition, Petitioner was allowed to offer additional testimony and provide Judge Clifton with both testimony and documentation to support testimony which she indicated that she would need to render her decision. In particular, Judge Clifton requested that Petitioner provide her with additional information on Petitioner's financial condition and the information concerning a resident's check of approximately $34,000.00 (discussed below at sections IV.8 and IV.28. The only response to these letters was CMS's submission of additional exhibits dated December 1, 2000. Petitioner failed to respond to these two letters.

Judge Clifton issued a ruling concerning the admission of exhibits in this case on January 3, 2001. That portion of her ruling that concerns the evidence that was before her is copied below:

During the hearing, August 21- 25, 2000, in San Jose, California, each party called witnesses to testify and moved the admission of exhibits into evidence. Following the hearing, the Health Care Financing Administration (CMS) moved the admission of exhibits into evidence, in accordance with letters sent at my direction dated September 11, 2000, and September 21, 2000, over the signature of Staff Attorney Debra Sapper.

HCFA Exhibits.

During the hearing, HCFA offered into evidence HCFA Exhibits (HCFA Exs.) 1 - 3, 3a, 4 - 22, 25 - 27, 29, 31 - 48, 48a, 49 - 51, 51a, 52 - 57, 57a, revised 57A, 57b, 58 - 61, 61a, 62 - 67, 68 (of which pp 1 - 20 are marked as 54), 70, 70a, 71 - 91, 93 - 100, 102 -113, 115 - 117, 119 - 120, 122, 125 - 127, revised 127, 128, 128a (only the blue cover page shows 128a; the exhibit itself is marked 128), 129 - 135, and 137 - 138.

[Exhibits are identified by the marking on the exhibit itself, and, except as noted, the blue cover page is usually disregarded when the exhibit number on it does not match the exhibit number on the exhibit itself. For example, the blue cover page marked as HCFA Ex. 121 actually covers HCFA Ex. 122.]

Following the hearing, HCFA offered into evidence HCFA Exs. 136, and 139 - 142.

The following HCFA Exs. were admitted into evidence at the hearing: 1 - 3, 3a, 4 - 22, 25 - 27, 29, 31 - 48, 48a, 49 - 51, 51a, 52 - 57, 57a, revised 57A, 57b, 58 - 61, 61a, 62 - 67, 68 (of which pp 1 - 20 are marked as 54), 70, 70a, 71 - 91, 93 - 100, 102 - 113, 115 - 117, 119 - 120, 122, 125 - 127, revised 127, 128, 128a (only the blue cover page shows 128a; the exhibit itself is marked 128), 129 - 131, and 133 - 135.

I hereby admit into evidence HCFA Exs. 136 - 142.

The Provider Exhibits.

During the hearing, Petitioner Milpitas Care Center (the Provider) offered into evidence six exhibits, Petitioner Exhibits (P. Exs.) 20 - 25. Over HCFA's objections, P. Exs. 22 - 25 were admitted into evidence at the hearing. I hereby admit into evidence, over HCFA's objection, P. Ex. 20. HCFA's objection to P. Ex. 21 is SUSTAINED, based on lack of foundation and failure to prove relevance.

During the hearing the Provider also identified but did NOT offer into evidence P. Exs. 26 and 28 - 30. P. Ex. 26 was identified on August 24, 2000 (Tr. 1094 - 1095), and the Provider indicated that P. Ex. 26 was NOT being offered into evidence (Tr. 1102 - 1106, 1647 - 1650). P. Exs. 28 - 30 were identified on August 25, 2000, and the Provider indicated that P. Exs. 28 - 30 were NOT being offered into evidence, that properly marked exhibits would later be submitted (Tr. 1639 - 1650, 1727 - 1755). [Neither the September 11, 2000 letter, nor the September 21, 2000 letter, each sent at my direction over the signature of Staff Attorney Debra Sapper, prompted any response from the Provider.]

The evidence in this case is closed. The only response to the September 11, 2000 letter, and the September 21, 2000 letter, was HCFA's December 1, 2000 filing. No additional evidence will be admitted.

Objections. Any objections to this Ruling shall be filed within 10 days from receipt.

January 3, 2001 Ruling by Judge Clifton (bolding in original).

Neither party objected to this ruling. Judge Clifton left the Departmental Appeals Board (DAB) before any briefs were scheduled to be submitted. ⁽³⁾ This case was reassigned to me with the agreement of the parties. Judge Clifton set an April 4, 2001 deadline for initial post-hearing briefs, even though she would have already left the Departmental Appeals Board. Petitioner did not object to this deadline. Due to a medical emergency, CMS requested an extension of time until April 11, 2001 to file the initial post-hearing brief. Petitioner did not object to the extension of time and CMS's request was granted and Petitioner's time to file its post-hearing brief was extended for the same period of time. CMS subsequently filed its post-hearing brief within the time frame allowed. (CMS Br.) Petitioner failed to timely file any document. By motion dated April 30, 2001, Petitioner requested an extension of time to file its brief which was already more than two weeks overdue. CMS objected to this request for an extension of time. By letter dated May 8, 2001, I denied Petitioner's request for an extension of time but I directed Petitioner to file a reply brief to CMS's initial post-hearing brief by May 18, 2001. In the May 8, 2001 letter, Petitioner was notified that I would close the record if Petitioner did not timely file a brief by May 18, 2001. By facsimile dated May 18, 2001, Petitioner's counsel stated that he was unable to file his brief by May 18, 2001 but that he expected to be able to finish his brief and forward it to my office for receipt no later than May 21, 2001. By May 22, 2001, nothing had been received from Petitioner. By letter dated May 22, 2001, I informed the parties that the record was closed due to Petitioner's failure to file a brief in a timely fashion. By letter dated July 28, 2001 which referenced this case, but confusingly identified the client as Wisteria Care Center, Petitioner's counsel stated that he was unable to complete a brief and submits the matter on the record. Both Milpitas Care Center and Wisteria Care Center are owned by the same corporation, represented by the same counsel, and, currently, I have cases involving both facilities before me.

III. Parties' presentation of the case

A. The case presented by CMS

CMS submitted into evidence over 140 exhibits, provided me with a very lengthy brief after the hearing and had 11 witnesses testify on its behalf. All of CMS's witnesses were qualified in their fields. CMS's witnesses included trained surveyors who conducted the various surveys and who are registered nurses with many years of experience. CMS also called as expert witnesses a registered pharmacist, a physician with over 40 years of experience, a social worker with a Master's degree, and another registered nurse who was not present at the surveys. A health insurance specialist with CMS also testified relative to the imposition and continuation of CMPs, including the factors at 42 C.F.R. § 488.438 in setting the amount of the CMPs and the reasonableness of the CMPs in light of those factors for the three surveys at issue.

B. The case presented by Petitioner

As noted earlier in this decision, this case was assigned to me after the hearing was conducted. I have reviewed the entire case file in this matter as well as the exhibits submitted by the parties. In addition, I have read through the entire transcript of the hearing in this case. The case was assigned to me because I am also assigned the case of Wisteria Care Center which, as noted above, is owned by the same corporation, and is represented by the same attorney, Mr. Orrin L. Grover.

Petitioner retained Mr. Grover as new counsel shortly before the hearing in this matter which was scheduled to begin on August 21, 2001. As previously noted, counsel for Petitioner assured Judge Clifton during a prehearing conference that he would be ready to proceed to hearing on the date that had been scheduled.

Prior to the hearing, Mr. Grover requested and was granted an opportunity to file an amended hearing request over objections by CMS. The amended hearing request, in essence, provided a recitation of each specific cited deficiency followed by a general statement of denial indicating that the provider was in compliance. Each recitation and general denial was followed by virtually the same language which read as follows:

The Provider contests the assigned matrix level for this deficiency, as being improper and as being assigned arbitrarily and capriciously and at a level unjustified by the factual allegations. As alleged, the deficiency is not sufficiently serious alone or in conjunction with any other alleged deficiency, to warrant the imposition of any remedy for this noncompliance.

The amended hearing request did not provide any specific defenses, advance any facts which would assist in identifying specific defenses, nor raise any arguments other than general denials. Thus, prior to hearing, Petitioner's legal position was a general statement that it was in substantial compliance with all of cited deficiencies.

At hearing, Petitioner was allowed, over objections by CMS, to mark for identification, exhibits with the understanding that it would later be allowed to submit and move the exhibits into evidence. As previously noted, none of the identified exhibits were ever provided or moved into evidence despite the fact that Petitioner was given ample opportunity to do so by Judge Clifton.

During the five-day hearing in this case, Petitioner called only two witnesses on its behalf. The two witnesses that Petitioner called were Hermingilda Manuel, the president and one of two shareholders of DHMJ, Inc., the corporation which owned and operated Milpitas Care Center, during the time of the three surveys. The second witness for Petitioner was Cornelio Guevarra, the office manager for DHMJ, Inc. Neither of these two witnesses were direct care givers, nor did they possess any medical expertise and were not even present at the time of the surveys. Tr. 1653. After a review of the entire record in this case, I find that the testimony of these two witnesses was not substantiated by documentary evidence and much of the testimony was either inconclusive or self- serving. I therefore give no weight to their testimony.

Counsel for Petitioner conducted cross-examination of the CMS witnesses who testified at hearing. That cross-examination did not elicit any admissions from any CMS witness that would establish that any of the CMS findings cited in the CMS-2567 were in error. While the cross-examination by Petitioner's counsel may have elicited information which could possibly have assisted Petitioner's case, the cross-examination, standing alone in its raw form, did not present an identifiable defense to any or all of the specific deficiencies cited by CMS.

At the conclusion of the hearing, Judge Clifton set a schedule for the parties to file their post-hearing briefs after having an opportunity to review the transcript of the hearing. The purpose of the post-hearing brief is to allow the parties to present a summation of their case with citation to exhibits and relevant sections of the transcript to support their case arguments and respective positions. It provides an opportunity to bring all of the bits of evidence from the exhibits and the transcription into a final, cohesive presentation of the arguments and closing remarks in the respective party's case. CMS complied with Judge Clifton's order and filed its post-hearing brief in a timely manner, as had been its practice throughout the course of this litigation.

Petitioner did not file a post-hearing brief. Thus, I do not have before me a cognizable presentation of Petitioner's affirmative defenses and arguments to prove it was in compliance with the requirements of participation and that CMS was in error in citing the deficiencies in issue. I have before me Petitioner's denial of CMS's citations in the most general of terms in the amended hearing request, which fail to present any form of an affirmative defense. The limited exhibits submitted by Petitioner, in and of themselves, establish nothing. In addition, the isolated responses to Petitioner's cross-examination questions by CMS witnesses do not present or constitute a cognizable affirmative argument let alone a defense to any of the deficiencies cited by CMS.

The legal proceeding in this case is adversarial in nature. Both parties are represented by legal counsel charged with the responsibility of representing their respective clients. While the applicable regulations require that the ALJ inquire fully into all of the matters at issue and receive in evidence the testimony of witnesses and any documents that are relevant and material, I do not interpret this provision to require me to develop and make legal arguments for a party where that party fails to do so. To interpret the provision otherwise, would require me to cull through the raw record, raise argument that Petitioner's counsel could have, would have, or should have made. I would then be required to rule on the very argument I raised in an objective manner. Certainly such conduct would expose my reasoning to appeal as Petitioner may not fully adopt the arguments I have raised. Certainly an appellate panel of the DAB would not shrink from the opportunity to point out that the ALJ did not raise an argument that the appellate panel believed Petitioner should have, could have, or would have made.

Petitioner and its legal counsel were given ample opportunity to present its case despite meritorious objections by the opposing party. The regulations at 42 C.F.R. § 498.63 provide that the parties to a hearing are allowed a reasonable time to present oral summation and to file briefs or other written statements of proposed findings of fact and conclusions of law. To provide Petitioner with additional time beyond that which was already provided to submit exhibits and a post-hearing brief would make a mockery of the concept of fairness to both parties. This is especially so when, as here, Petitioner affirmatively chose not to file a post-hearing brief and decided to submit the case on the record as it stands.

Based on the entire record before me, I find that CMS has sustained its burden of proving a prima facie case. I further find that Petitioner has not advanced any form of affirmative defense or specific argument to rebut, by a preponderance of the evidence, the prima facie case clearly and unequivocally established by CMS.

IV. Issues, findings of fact and conclusions of law

A. Issues

The issues are whether the provider was in substantial compliance with Medicare participation requirements at the time of each of the surveys and whether the amount of the CMPs imposed were reasonable.

B. Findings of fact and conclusions of law

In this section I first address in detail my findings of fact and conclusions of law relative to specific deficiencies cited by CMS. I then provide a summary of findings relative to the remainder of the cited deficiencies.

1. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with staffing requirements under 42 C.F.R. § 483.30(a)(1) and (2).

CMS cited Petitioner with an immediate jeopardy deficiency at tag 353 under the requirement for nursing services, 42 C.F.R. § 483.30(a)(1) and (2), which states.

The facility must have sufficient nursing staff to provide nursing and related services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident, as determined by the resident assessments and individual plans of care.

(a) Sufficient staff. (1) The facility must provide services by sufficient numbers of each of the following types of personnel on a 24-hour basis to provide nursing care to all residents in accordance with resident care plans:

(i) Except when waived under paragraph (c) of this section, licensed nurses; and

(ii) other nursing personnel.

(2) Except when waived under paragraph (c) of this section, the facility must designate a licensed nurse to serve as a charge nurse on each tour of duty.

The preponderance of the evidence showed that Petitioner was inadequately staffed. Based on the observations, interviews, and review of Petitioner's documentation and the testimony given during the hearing, I find that Petitioner was clearly inadequately staffed. In fact, Petitioner's own witness, Ms. Manuel, admitting during the hearing that the facility was inadequately staffed. Tr. 1655, 1689, 1694. The evidence showed that on November 3, 1998 at 11:00 a.m., there was only one Certified Nursing Assistant (CNA) and one licensed nurse to care for 35 residents. Tr. 1556; CMS Ex. 2. During the day shift, the testimony was that four CNAs should be on duty as well as a licensed nurse, but there was only one CNA to do the work of four CNAs. Tr. 81, 93. Two CNAs were required for the evening shift and the night shifts as well as one licensed nurse. Tr. 89, 93. Both the charge nurse on duty on November 3, 1998 and the acting director of nurses (DON) admitted that there were not enough staff on duty. Tr. 83 - 84, 93. The acting DON would sometimes work as a charge nurse to provide resident care, which would leave the duties of the acting DON unfilled. Tr. 116 - 117.

The resident make-up included 4 bedfast residents, 6 residents with feeding tubes, 32 residents who were dependent on the staff for bathing, 31 residents dependent on the staff for dressing, 29 residents dependent on the staff for transferring, 28 residents dependent on the staff for toileting, 19 residents dependent on the staff for eating, 29 residents who were chair bound and 32 residents who had restraints. CMS Exs. 2, 3a; Tr. 90 - 91. The evidence was clear that one licensed nurse and one CNA was totally inadequate to meet the needs of the residents such as repositioning, dressing, bathing, and toileting. Tr. 91 - 93, 98 - 99, 100 - 101.

The evidence also showed that other individuals were providing care to the residents who were not qualified to do so. An individual identified as someone from the Dietary Department was helping to feed residents, but although she had been a CNA in the past, her certification had expired years before 1998. Tr. 86, 115; CMS Ex. 37. There was also evidence that the janitor/housekeeping staff person/maintenance person and a cook were providing direct resident care, including toileting. CMS Exs. 2, 5, 6; Tr. 85 - 86, 137, 138, 140, 143 - 144. None of these individuals were trained or had the qualifications to provide resident care.

On November 4, 1998, the surveyors again found a situation of inadequate staffing during the night shift even though the DON had been informed of the immediate jeopardy situation the day before. Tr. 97.

The situation that existed at Petitioner was not an isolated situation because the DON and the administrator told the surveyors that many on the staff had quit and the remaining staff was being ordered to do mandatory overtime or mandatory double shifts. Tr. 105, 149. Since the remaining staff were getting tired of working all the extra shifts, they were calling in sick because they were so tired. Tr. 148 - 149. There were a many times that there was insufficient staff during the months of October and November 1998. CMS Exs. 3, 36, 37. It was not until November 18, 1998, that it was determined that there was sufficient staff at the facility. Tr. 106. At that time the immediate jeopardy was abated, however, Petitioner still remained out of compliance with tag 353 because Petitioner still had not shown that there was a system in place that would provide sufficient trained and oriented staff on a continuous basis to prevent the reoccurrence of the insufficient staffing problem. Tr. 119 - 122, 1583 - 1584, 1585, 1613, 1618; CMS Ex. 1.

As a result, there was insufficient staff to provide basic care and the care required by the residents' care plans. Moreover, this deficiency rose to the level of immediate jeopardy because there was a lack of sufficient staff to care for the residents in an emergency situation or to remove the residents from danger and also because the facility used untrained and unsupervised staff in lieu of qualified nursing staff. Tr. 87, 88, 100, 101, 116, 1342, 1354, 1371, 1412.

2. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with administration requirements under 42 C.F.R. § 483.75.

Under 42 C.F.R. § 483.75, a facility is required to be "administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident." The evidence and testimony show that Petitioner was not efficiently and effectively administered in its failure to have a system in place to ensure adequate staffing, in its failure to have a system in place to obtain additional staff when needed, and its failure to ensure that its staff was adequately trained, oriented and licensed. CMS Ex. 2; Tr. 1347 - 1348.

3. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with physical restraint requirements under 42 C.F.R. § 483.13(a).

Under 42 C.F.R. § 483.13(a), residents have a right to be free of any physical restraints imposed for the purposes of convenience and not required to treat a residents' medical symptoms.

If a resident is cognitively impaired, as was Resident 34 (R34), and incapable of decision making, a facility is required to secure consent from a family member before placing a resident in restraint. R34, who was blind and hard of hearing, had been placed in a soft tie restraint so that the resident could not get up or move by herself. CMS Ex. 2; Tr. 59. Petitioner had not gotten the consent of R34's family before putting her in a restraint. Tr. 59 - 60. In addition, before a resident is to be put into a restraint, a restraint assessment must be done to show that a restraint is medically warranted. No such restraint assessment was done for R34. CMS Ex. 2; Tr. 60 - 62. Both of these facts give rise to an inference that the restraint was not medically necessary but was instituted for the facility's convenience. This inference was not rebutted by Petitioner.

Resident 15 (R15) was observed under four restraints that impaired her mobility. R15 was seated in a gerichair, with a lap table, with a vest restraint on, and in bed with both side-rails up. CMS Ex. 2, at 4. The surveyor observed this resident banging on the lap tray and shaking the bed-rails and looking as if the restraints bothered her. Id.; Tr. 62 - 63. However, the restraint assessment form did not reflect R15's reactions to the restraints. R15 had been restrained in this manner for the previous three years with no evidence that the facility had considered gradual restraint reduction or any less restrictive alternative. CMS Ex. 2, at 4; CMS Ex. 12, at 4. In addition, the most recent restraint assessment dated August 11, 1998 restricted the facility to using restraints on this resident only between 9 a.m. and 1 p.m. CMS Ex. 2, at 4; CMS Ex. 12, at 4. However, a surveyor observed restraints on this resident "all the time." Tr. 64. Nor was there any documentation that the resident was being ambulated daily as ordered by her physician. CMS Ex. 2, at 4; CMS Ex. 12, at 4. The lack of restraint assessment, the excess duration of restraint, and the violation of the physician's orders leads to an inference that restraints were being used for the facility's convenience that was not rebutted by Petitioner.

Resident 9 (R9) was under three restraints. R9 was in a wheelchair, and when in bed she was in a soft belt restraint with both side-rails up. However, R9's restraint assessment was incomplete in that there was no evidence of Petitioner having considered less restrictive alternatives or that R9 had been receiving the walking to increase muscle tone that had been ordered for her. CMS Ex. 2, at 4; CMS Ex. 9, at 15; Tr. 66. In addition, the facility was not to restrict R9 in bed outside the hours of 6 p.m. and 9 a.m. CMS Ex. 9, at 15. However, a surveyor had observed R9 restrained in bed during the day. Tr. 66, 69.

There is a danger of more than minimal harm in the overuse of restraints because such residents lose their ability to walk independently, become incontinent of bowel and bladder, develop pressure sores, and become dependent on others to meet their needs. Tr. 72. Petitioner did not rebut CMS's prima facie case under this regulation by a preponderance of the evidence because no evidence was presented that was relevant to this deficiency.

4. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with the regulation requiring an ongoing program of activities. 42 C.F.R. § 483.15(f)(1).

A skilled nursing facility is required to provide an "ongoing program of activities designed to meet, in accordance with the [resident's] comprehensive assessments, the interests and the physical, mental, and pyschosocial well-being of each resident." 42 C.F.R. § 483.15(f)(1). CMS presented evidence that the activities director was not present in the facility at a regular basis, did not know the residents, had not evaluated the residents' needs and interests quarterly, no activities were provided on November 7, 8, 11, 14, and 15, 1998, activities were not provided even though the activities were listed on an activities schedule, and activities were not provided for all residents particularly for those bed bound, depressed, or demented. CMS Ex. 2, at 6 - 8. Petitioner presented no evidence to rebut this. An ongoing program of activities is important to residents' well-being in that it promotes sensory stimulation and socialization and encourages physical exertion and helps prevent depression and boredom. Tr. 1436, 1439, 1442 - 1443.

5. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with the regulation requiring medically related social services. 42 C.F.R. § 483.15(g).

Under 42 C.F.R. § 483.15(g) a skilled nursing facility must provide "medically-related social services to attain or maintain the highest practicable physical, mental and psychosocial well-being of each resident."

Resident 21 (R21) was diagnosed with dementia. During the survey he was observed wandering into other resident's rooms and going through their belongings. CMS Ex. 2, at 9; CMS Ex. 26, at 21. However, the facility had not evaluated his behavior and there were no social services notes concerning interventions to design an activities program to redirect his inappropriate behavior. Tr. 1439 - 1441. Such an activities program was in his care plan for confusion, for aggressive behavior, and for depression. CMS Ex. 14, at 14 - 18. The potential for more than minimal harm was that without such an activity plan R21 remained socially isolated and his actions distressed the other residents whose rooms he wandered into. Tr. 1444, 1446.

Evidence was also presented that the social services staff person failed to investigate an incident involving missing items belonging to Resident 28 (R28) and thereby causing R28 distress. CMS Ex. 57A; Tr. 1445.

6. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with the regulation requiring that a facility give appropriate treatment and services to maintain or improve residents' abilities. 42 C.F.R. § 483.25(a)(2).

Based on the comprehensive assessment of a resident, a facility must ensure that a resident is given the appropriate treatment and services to maintain or improve the resident's abilities in the activities of daily living. 42 C.F.R. § 483.25(a)(2).

Out of 34 residents at the facility, 21 had been assessed and their plans of care required range of motion exercises and/or assistance in ambulation to maintain or improve their abilities in the activities of daily living. There was no documentation at the facility to show that these residents were receiving these services as scheduled. CMS Ex. 2, at 14, 15; Tr. 77. The cause of the failure of the facility to provide these services was its lack of sufficient staff. Id. CMS's expert witness, Dr. Watson testified that he reviewed the restorative nursing documents and found that while none of the 21 residents received appropriate therapy on a consistent basis, 14 residents had enough "significant gaps in therapy" in the care given them to cause concern from a medical basis about adverse potential consequences presented to these residents. Tr. 975 - 979. Dr. Watson also testified that there is a potential for more than minimal harm in not receiving these services because residents will have an increased risk of fractures, falls, pressure ulcers, osteoporosis, and depression.

7. As of the November 18, 1998 survey, Petitioner was not in substantial compliance with the regulation requiring an infection control program (42 C.F.R. § 483.65(a)(1) - (3)) and failed to store drugs in locked compartments (42 C.F.R. § 483.60(e)).

In addition, CMS clearly established a prima facie case that Petitioner failed to establish an infection control program (42 C.F.R. § 483.65(a)(1) - (3); CMS Ex. 2, at 23 - 25; Tr. 164 - 166) and failed to store drugs in locked compartments (42 C.F.R. § 483.60(e); CMS Ex. 2, at 21 - 22; CMS Ex. 14, at 14; Tr. 159, 161 - 163, 637 - 639). Both of these failures have a risk of more than minimal harm and Petitioner failed to carry its burden to provide any evidence to rebut CMS's prima facie case.

8. As of the February 8, 1999 revisit survey, Petitioner failed to safeguard, manage, or account for the personal funds of a resident. 42 C.F.R. § 483.10(c)(2 - 3).

The evidence established that on September 22, 1998, Resident 1 (R1) entrusted Petitioner's administrator with a check for $34,698.25, for safekeeping. CMS Ex. 39, at 8; Tr. 270. This check was partial proceeds from the sale of R1's house. R1 did not have a bank account. R1 was not given a receipt and the check was not returned to her when she asked for it three months later in December. Id. R1 tried several times to contact the business manger and the administrator but no one would return her check. R1 never endorsed the check. Tr. 405. The business manager acknowledged that he had been given the check "for safekeeping." Tr. 271. The check was cashed without R1's knowledge or signature. Tr. 272; CMS Ex. 39, at 9. Petitioner's own accounting records support the fact that Petitioner had never established an interest-bearing account, separate from the facility's to safeguard R1's money, nor was the check ever returned to R1. Id.; CMS Ex. 41, at 15 - 16. A true copy of R1's check showed that it was made payable only to R1 and Petitioner endorsed the check as follows: "FOR DEPOSIT ONLY DHMJ Inc. MILPITAS CARE CENTER." CMS Ex. 142, at 1.

RI was paralyzed in the lower extremities from a motor vehicle accident and was suffering from major depression. R1 was no longer conserved at the time she entrusted the check to the facility as the conservatorship was terminated in June 1998. CMS Ex. 41, at 15. The County conservator never authorized or consented to the facility cashing this check as his conservatorship was already terminated. CMS Ex. 141, at 1.

Petitioner's own witness, Mr. Guevarra, admitted that he had received the check from the business manager and was told to "take care of the outstanding room and board" of R1. Tr. 1726, 1747, 1750. Mr. Guevarra also testified that he deposited this check to the facility's business account to which only the corporate owners, Hermingilda and Rogelio Manuel, have access. Tr. 1747, 1750 - 1751. Mr. Guevarra admitted that the check was made payable to R1, but endorsed by Petitioner. Id.

The check was deposited on September 25, 1998, but it was not posted to R1's billing account until March 1, 1999. Tr. 1748; P. Ex. 29, at 2. At that time, the office manager applied the proceeds from the check to the charges R1 had accrued as R1 was a private pay patient. Id. Petitioner maintained R1's funds in its own account for over six months without ever providing R1 with an accounting or paying R1 interest on her funds. Tr. 1738, 1749, 1747; P. Ex. 29, at 12. R1, who suffered from major depression also suffered great distress from all this uncertainty concerning her check and, in addition, R1 was made to worry about her ability to pay the facility. Tr. 275 - 276.

9. As of the February 8, 1999 revisit survey, Petitioner failed to provide the necessary range of motion services, resulting in actual harm to Resident 9 (R9).

Under 42 C.F.R. § 483.25(e)(2) a facility must, based on a comprehensive assessment of a resident, ensure that a resident with limited range of motion receives appropriate treatment and services to increase range of motion and/or prevent further decrease in range of motion. R9 had minimal use of his right hand because several of his fingers were contracted and had lost all the use of his left hand because all the left handed fingers were fully contracted. CMS Ex. 39, at 43. R9 had been residing at the facility since 1997, but at the time of the February 1999 survey R9 had not yet been evaluated for range of motion exercises, had not been evaluated by a physical therapist, nor was there a care plan showing that R9 would be provided with range of motion exercises. Id. at 43 - 44. CMS presented expert testimony that without range of motion exercises R9 was at risk for losing all use of his right fingers and that R9's Minimum Data Set assessment taken at the time of his entry into the facility did not describe R9's contractures to be as severe as they were at the time of the survey leading to the conclusion that the contractures had gotten worse during R9's stay at the facility, thus confirming that R9 had suffered actual harm. Tr. 332 - 337, 345.

10. As of the February 8, 1999 revisit survey, Petitioner failed to provide the necessary medical treatment and pain management resulting in actual harm to R9 and R7 (Resident 7). 42 C.F.R. § 483.25.

a. Resident 9 (R9)

R9 was totally dependent on the facility for his activities of daily living because of his multiple sclerosis and intractable back pain. On February 3, 1999, the facility documented that R9 had a pressure sore located on his shoulder, but instead the surveyor, Ms. Tushinski, observed during the survey that R9 had a large bright red wound measuring 12 inches by 12 inches "with several excoriated areas, with streaks which seeped drainage." Tr. 312; CMS Ex. 39, at 36 - 37; CMS Ex. 48(a), at 3. The medical record shows that on February 3, 1999, the wound was 14 cm by 12 cm in size. Dr. Watson, an expert witness called by CMS, testified that based on the illustration of the wound at CMS Ex. 48(a), page 2, the wound was likely 14 cm by 16 cm on February 3, 1999. The wound was either described incorrectly in the medical records or it had grown alarmingly by the time of the survey to measure 12 inches by 12 inches. R9 was not receiving adequate wound treatment in that there was no physician's order for wound care, no treatment record or skin sheet to track the progress of the wound, no wound assessment by the nursing staff, and the staff had not even consulted a physician about the wound until after Ms. Tushinski talked to the staff. Tr. 317. In addition, the facility had not developed a pain management program to control the severe pain that R9 was experiencing. There was remnants of zinc oxide on the wound, but there was no physician's order for such treatment. Dr. Watson testified that it sounded as if the wound was severe and getting worse and the doctor was not notified and there was no assessment from the doctor and no physician/nurse interaction that would qualify as notification. Tr. 985, 1034, 1048. R9 suffered actual harm because the condition threatened his health due of the size of the lesion. There was also severe pain, and either actual infection or an increased risk of infection. Tr. 320, 987.

b. Resident 7 (R7)

R7 was diagnosed with a dislocation of the right shoulder, among other things. R7 had a standing order for Tylenol every four hours for pain, if needed. R7 was observed as crying and grimacing during a wheelchair transfer. Despite the facility's knowledge that the resident had pain and had a standing order for pain, the facility had not assessed the degree of pain or the source of pain because it did not have a pain management policy and thereby the facility caused R7 unnecessary pain. CMS Ex. 39; Tr. 1302 - 1312.

11. As of the February 8, 1999 revisit survey, Petitioner failed to have sufficient numbers of nursing staff to provide necessary care and services to the residents. 42 C.F.R. § 483.30(a)(1) and (2).

Although this deficiency was found to be at an immediate jeopardy level during the November 1998 survey, the facility had still not come into substantial compliance with the adequate staffing requirement by the time of the February survey in that the facility did not meet the State minimum staffing levels for several days between November 15, 1998 and February 8, 1999. CMS Ex. 39, at 57. In particular, family members contacted the local police department on January 30, 1999 because there was only one licensed staff member and no CNA during the evening shift. Dinner could not be distributed to the residents, toileting and diaper changes were not being assisted by the nurse, and additional staff could not be located until 8 p.m. Tr. 350 - 359. A male janitor/housekeeper, who was unqualified and untrained had been observed by family members changing the diapers of female residents. CMS Ex. 68. This caused distress and emotional harm to residents and their family members and had the potential for great harm to the residents had an emergency situation occurred. Tr. 371, 383 - 384.

Due to Petitioner's complete failure to provide evidence on most of the deficiencies involved in all three surveys, I will not formally address each deficiency alleged for the remainder of the decision. As previously noted, Petitioner called only two witnesses at the hearing, the owner of the facility and the financial officer, neither of whom had any medical expertise. Neither witness was competent to testify relative to the medical findings in this case. Petitioner offered into evidence only a very few exhibits that were of little or no value at all. Petitioner failed to submit a post-hearing brief which addressed or provided any form of defense relative to the numerous survey findings. I have read and considered the entire record and I find that CMS has made a prima facie case for each of its alleged deficiencies and Petitioner has failed to carry its burden to present a preponderance of the evidence to show that it was in substantial compliance with any of the deficiencies alleged. I will therefore summarize each of the remaining deficiencies not previously discussed and cite the evidence presented by CMS to establish its burden of proving a primae facie case. I specifically find, in each of the deficiencies summarized, that CMS has established a primae facie case. I further find, based on my review of the entire record, that in each of the following deficiencies, Petitioner failed to carry its burden to present a preponderance of the evidence to show that it was in substantial compliance.

12. As of the February 8, 1999 revisit survey, Petitioner failed to inform residents of their total health status in a language that they could understand. The facility had five residents who did not speak English and there was no staff who could communicate with them. 42 C.F.R. § 483.10(b)(3); CMS Ex. 39, at 2 - 3; Tr. 1204, 1206 - 1207, 1211.

13. As of the February 8, 1999 revisit survey, Petitioner failed to inform R1 (referred to at subsection 1 of the February 8, 1999 revisit survey) periodically during her stay of charges for services rendered. R1 had not been provided with a written statement of her charges, including pharmacy services, on a regular basis since November 1997 and therefore she did not know how her money was being spent by the facility and was deprived of her right to make her own financial decisions. 42 C.F.R. § 483.10(b)(5 - 8); CMS Ex. 39, at 6; CMS Ex. 41; Tr. 280, 283.

14. As of the February 8, 1999 revisit survey, Petitioner violated the residents' rights to be free from any physical restraints imposed for purposes of convenience and not required to treat medical symptoms. Petitioner used physical restraints on residents without conducting the necessary restraint assessments, had not developed a revised restraint policy, and had not developed new restraint assessments forms. 42 C.F.R. § 483.13(a); CMS Ex. 39, at 10 - 13; Tr. 285, 293 - 295. Specifically, this deficiency related to Petitioner's treatment of Resident 3 (CMS Ex. 39, at 12; Tr. 295, 298 - 299, 302, 433, 442) and Resident 22 (CMS Ex. 39, at 13; Tr. 302 - 308). This deficiency also had been cited against Petitioner in the November 1998 survey.

15. As of the February 8, 1999 revisit survey, Petitioner failed to ensure that the care was provided to residents in a manner and in an environment that promotes dignity and a recognition of residents' individuality. Staff members wheeled/pulled residents down a hallway backwards "like an object" (Tr. 1448), not interacting or responding to residents' questions, rushing residents at mealtimes, and failing to groom residents as requested by residents. This would impact residents' self-esteem and caused them frustration. 42 C.F.R. § 483.15(a); CMS Ex. 39, at 14 - 15; CMS Ex. 56, at 5; CMS Ex. 55, at 1; CMS Ex. 104; Tr. 1448 - 1450.

16. As of the February 8, 1999 revisit survey, Petitioner failed to provide an ongoing program of activities in that no activities were provided or, if provided, only attended by a fraction of the residents; activities were not attended by staff members able to encourage residents to participate or to modify the activity to include more residents, and activities were not designed to accommodate resident's with different physical or emotional needs or who were bedbound. 42 C.F.R. § 483.15(f)(1); CMS Ex. 39, at 18 - 25; CMS Ex. 55, at 7, 11 - 12; CMS Ex. 54, at 27; CMS Ex. 51; CMS Ex. 68, at 45 - 49; Tr. 1452 - 1453. This deficiency also had been cited in the November 1998 survey.

17. As of the February 8, 1999 revisit survey, Petitioner failed to provide medically related social services (this deficiency had also been found in the November 1998 survey) in that Residents 1, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 18, 20, 22, 23, 24, and 25 continued to be in restraints and no social service interventions had been tried to address less restrictive alternatives and that Residents 1, 3, 4, 5, 17, 26, and 27 continued to be on psychoactive medications and no social service alternatives to drug therapy had been tried. In addition, theft and loss records lacked documentation about the loss of Resident 28's ⁽⁴⁾ lost items, there were no social services interventions about inappropriate behaviors of Residents 3, 4, 6, 7, and 10, no assistance was provided for a resident that had poorly fitting dentures, and no assistance was given to Resident 11 to obtain a proper size wheelchair. The social service designee was not doing her job in that she did not deal with all these problems which had a potential for more than minimal harm. 42 C.F.R. § 483.15(g); CMS Exs. 2, 107; CMS Ex. 39, at 25 - 30; CMS Ex. 68, at 49 - 51; Tr. 1458 - 1460, 1468.

18. As of the February 8, 1999 revisit survey, Petitioner failed to provide range of motion exercises necessary to maintain or improve residents' abilities (this deficiency had also been found in the November 1998 survey) in that 21 of the 34 residents at the facility who required range of motion exercises continued not to receive them because Petitioner had not hired the necessary staff to provide the range of motion exercises, had not revised its range of motion program, and had not reassessed residents to determine the frequency of the exercises that they were supposed to receive. 42 C.F.R. § 483.25(e)(2); CMS Ex. 39, at 39 - 40; Tr. 324 - 331.

19. As of the February 8, 1999 revisit survey, Petitioner failed to provide clean bed and bath linens. 42 C.F.R. § 483.15(h)(3); CMS Ex. 39; Tr. 309 - 311, 1213 - 1214.

20. As of the February 8, 1999 revisit survey, Petitioner failed to provide the necessary services to residents that needed nutrition and grooming services in that the facility failed to give showers to demented residents and allowed an unqualified staff person to feed a resident who required a soft diet in a dangerous manner. The staff person had not been trained in how to feed a resident properly and was feeding solid foods to the resident who had difficulty chewing too quickly. This put the resident in danger of choking, aspiration, weight loss, and dehydration. Dr. Watson testified that aspiration could lead to pneumonia and death. 42 C.F.R. § 483.25(a)(3); CMS Exs. 39, 47, 68; Tr. 998 - 993, 1215 -1216, 1220 - 1221, 1290.

21. As of the February 8, 1999 revisit survey, Petitioner failed to ensure an environment free of accident hazards in that the sterilization room was left unlocked and accessible to residents, the janitors' closet was also left unlocked and was accessible to residents, there was electrical wire loose on the floor that amounted to a tripping hazard, and there was an unstable fire extinguisher. Some of the residents were mobile and were demented and were exposed to these hazards. 42 C.F.R. § 483.25(h)(1); CMS Ex. 39; Tr. 1320 - 1321, 1224 - 1229, 1265.

22. As of the February 8, 1999 revisit survey, Petitioner failed to ensure that each resident's drug regimen was free of unnecessary drugs. According to Dr. Sanguinetti's expert opinion, Resident 4 (R4) was given Depakote, Risperidone, and Ativan without adequate indications for these drugs' use and without adequate monitoring and for an excessive duration. Resident 5 (R5) received unnecessary drugs (Buspar, Valproic acid and Ativan) and the facility was to monitor those behaviors that would correspond to each medication. However, the facility and staff could not explain the facility's system for monitoring behaviors and corresponding behaviors to justify the use to these medications. Dr. Sanguinetti testified that the description of the behaviors being monitored by the facility for R5 were so vague and lacking in specificity that there was no objective criteria from which one could determine what data was being collected in order to determine the efficacy of the drug regimen. Dr. Sanguinetti testified to the potential for more than minimal harm that both R4 and R5 were exposed to. 42 C.F.R. § 483.25(l)(ii); CMS Exs. 39, 44, 45; Tr. 645 - 647.

23. As of the February 8, 1999 revisit survey, Petitioner failed to have an infection control program in place at the time of the second survey in spite of committing to this in the Plan of Correction after the November 1998 survey. 42 C.F.R. § 483.65(a)(1 - 3); CMS Exs. 39, 60, 67; Tr. 385 - 386, 1230 - 1235, 1291.

24. As of the February 8, 1999 revisit survey, Petitioner failed to require staff to wash their hands after resident contact which is against accepted hand washing practices for such professionals. This failure could promote the spread of infection from one resident to the next. 42 C.F.R. § 483.65(b)(3); CMS Exs. 39, 67; Tr. 387 - 391, 533, 538, 577 - 578.

25. As of the May 18, 1999 second revisit survey, Petitioner violated the resident's right to be free from any physical restraints imposed for purposes of convenience and not required to treat the residents' medical symptoms. R5 had a mitten restraint on his left hand to prevent him from scratching his head or pulling his gastrostomy tube. CMS Exs. 70, 78. The last physician order had expired the month before and therefore the resident should not have been restrained past that time. R5 was restrained without a physician's order, without the necessary assessment, and his mitten was not removed every two hours as required by the last restraint assessment dated March 30, 1999. Unnecessary restraint can cause a decline in functioning and prevents the necessary cleaning of the left hand. 42 C.F.R. § 483.13(a); CMS Exs. 39, 70, 78; Tr. 1523 - 1527.

26. As of the May 18, 1999 second revisit survey, Petitioner failed to ensure that care was provided to residents in a manner and environment that promoted dignity and respected residents' individuality in that assistance was not provided on time for meals and that a resident being given a bedbath was not covered for privacy and warmth. Petitioner provided no evidence in rebuttal. 42 C.F.R. § 483.15(a); CMS Ex. 70; Tr. 1469 - 1471.

27. As of the May 18, 1999 second revisit survey, Petitioner was still not providing an ongoing program of activities in accordance with residents' interests and needs and has not been doing so for over six months. There was no plans of care for activities for R1, R2, R3, no documentation of interests of R5 or what activities had been planned for R5 or R7. Without care plans or progress notes these residents' activity needs were not addressed or met. 42 C.F.R. § 483.15(f)(1); CMS Exs. 70, 75, 78.

28. As of the May 18, 1999 second revisit survey, Petitioner was still not providing medically related social services and had not been doing so for over six months. One resident (R1), who was identified as "not appropriate for the facility," had not been given assistance in locating a more appropriate facility or finding financial assistance. Petitioner had not helped R1 with activities appropriate for her interests, needs, and goals and had not helped R1 with discharge planning. As a result, R1 remained in the facility longer than necessary and without a comprehensive program coordinated by social services to attain or maintain her highest practicable level of well-being. Petitioner's social services designee failed to assess and propose interventions for residents (R7 and R11) with behavior problems. R8 (identified in the November 1998 survey as R28 and in the February 1999 survey as R1), who had previously complained about a personal check of approximately $34,000 that she had entrusted to the facility for safekeeping, was still not receiving information about her financial situation. Petitioner's social services designee failed to help R4 deal with her pain and fears of further surgery and also failed to obtain clothing for R11. 42 C.F.R. § 483.15(g); CMS Exs. 68, 70, 77, 81; Tr. 1474 - 1476.

29. As of the May 18, 1999 second revisit survey, Petitioner failed to provide necessary care and services to assist residents attain or maintain their highest practicable physical, mental, and psychosocial well-being in that R19 who suffered from multiple sclerosis and chronic debilitating pain was not placed on a pain management program as Petitioner had promised to do after the February 1999 survey; the required transfer technique was not used on R5 who had a tightly contracted arm and put R5 at risk for injury and pain; and, R1, who had a recent stroke, was left unattended during meals in violation of physician's orders and was in danger of choking by aspirating food into her lungs. 42 C.F.R. § 483.25; CMS Exs. 70, 74, 82; Tr. 170 - 175, 1529 -1535.

30. As of the May 18, 1999 second revisit survey, Petitioner failed to provide services with reasonable accommodation to resident's individual needs and preferences in that R4 who was unable to move about due to recent foot surgery was not provided with a table of the correct height to eat from. 42 C.F.R. § 483.15(e)(1); CMS Ex. 70; Tr. 167 - 170.

31. As of the May 18, 1999 second revisit survey, Petitioner failed to ensure that each resident's drug regimen was free from unnecessary drugs as it concerned R7, R8, and R18. R7 had been medicated with a drug called Cogentin for 42 months. Expert testimony was presented by Dr. Sanguinetti that Cogentin was used by R7 for an excessive duration, without adequate monitoring, and in the presence of adverse consequences which indicated that the drug should have been discontinued. R18 was taking several drugs including Valproic acid, Ativan, and Buspar. On May 5, 1999, R18's medication times and dosages had been changed and, as a result, R18 had started sleeping through the afternoons. Dr. Sanguinetti testified that the facility should have recognized that the change in R18's sleeping pattern could have been due to an adverse drug effect or been an adverse consequence due to the May 5, 1999 changes, but the facility never assessed or evaluated this situation and never notified the physician that the medication times and dosages might need to be adjusted. Dr. Sanguinetti also testified that R18 had been on both Ativan and Buspar for an excessive duration and there had been no attempt at a dosage reduction. Dr. Sanguinetti also testified that a different resident, R8, had been on the drugs Elavil and Buspar improperly. There was no indicated reason for Elavil, a high severity drug that is not recommended for the elderly, being prescribed and there were alternative drugs available that would not have severe side effects. Dr. Sanguinetti also testified that R8 was receiving Buspar for an excessive duration because there was no evidence that the facility had reassessed the behavioral symptoms that were a basis for this medication and that there were no adequate indications for the continued use of this medication. Taking unnecessary drugs put residents at risk for more than minimal harm because of the side effects caused, particularly in the elderly population. 42 C.F.R. § 483.25(l)(ii); CMS Exs. 70, 80, 83; Tr. 180 - 185, 677 - 678, 681 - 684, 687 - 688, 903, 940 - 944.

32. As of the May 18, 1999 second revisit survey, Petitioner failed to provide residents who were fed via gasterostomy with the appropriate treatment and services to prevent aspiration pneumonia, diarrhea, vomiting or other metabolic abnormalities. On four occasions during the survey, staff at the facility used improper technique in that medications were administered to R5 and R19 by forcing the medications down the gasterostomy tube by "pushing the bulb syringe" putting these residents in danger of nausea, vomiting, and aspiration. Dr. Watson provided expert testimony of the dangers of pushing medication down a gasterostomy tube. In addition, R5 was twice observed to be lying almost flat in bed when her gasterostomy pump was on instead of at least at a 30-degree angle, as is the common practice in the medical community. Dr. Watson testified that R5 was put at a great risk of aspirating material from her stomach when lying flat. 42 C.F.R. § 483.25(g)(2); CMS Exs. 70, 89; Tr. 176 - 178, 994 - 998.

33. As of the May 18, 1999 second revisit survey, Petitioner failed to provide a safe environment for its residents in that flammable items were stored in the same room as the facility's working generator putting the facility at risk for an explosion. 42 C.F.R. § 483.70(h); CMS Exs. 70, 70a; Tr. 187 - 189.

34. The CMPs imposed by CMS are reasonable.

The regulations specify the factors that I can consider in determining whether the amount of a CMP is reasonable. These factors are: the facility's history of noncompliance, including repeat deficiencies; the facility's financial condition; the factors specified in 42 C.F.R. § 488.404 (including seriousness and scope of deficiencies); and the facility's degree of culpability which includes but is not limited to neglect, indifference, or disregard for resident care, comfort, or safety. 42 C.F.R. § 488.438(f)(1) - (4).

a. CMS's imposition of a CMP in the amount of $3,050 per day from November 4, 1998 to November 18, 1998, the period of immediate jeopardy, is reasonable.

CMS determined that Petitioner's period of immediate jeopardy lasted from November 4, 1998 through November 18, 1998. The immediate jeopardy showed "not only a lack of staff, but a lack of systems to provide nursing care and services." Tr. 1147. Immediate jeopardy was identified on November 4, 1998, but when the surveyors returned the next day, there was nobody at the facility to provide a plan of correction. A plan of correction was not furnished by the facility until November 6, 1998 and the plan of correction showed that corrective action to abate the immediate jeopardy could not be taken by the facility until November 12, 1998. This showed that the facility did not appreciate the seriousness of the staffing problems. Petitioner's culpability in this situation was extremely high.

Regulations governing CMPs provide that, in the case of an immediate jeopardy level deficiency or deficiencies, penalties may be imposed in a range from $3,050 to $10,000 for each day that the deficiency or deficiencies persist. 42 C.F.R. § 488.408(e). A CMP in the amount of $3,050 per day is the lowest CMP that can be imposed at an immediate jeopardy level. I sustain a CMP of $3,050 per day against Petitioner for each day of immediate jeopardy which began on November 4, 1998 and which ran through November 18, 1998. I do not find Petitioner's financial status to be a relevant consideration in deciding the amount of the immediate jeopardy level penalties because I have no authority to reduce immediate jeopardy level penalties below $3,050 per day regardless of a facility's financial condition.

b. CMS's imposition of a CMP of $3,000 per day for the periods of November 19, 1998 through February 7, 1999 and February 8, 1999 through May 17, 1999 and May 18, 1999 through June 17, 1999 is reasonable in light of the factors specified in 42 C.F.R. §§ 488.438(f)(1) - (4) and 488.404.

I find that there is a basis for imposing non-immediate jeopardy level CMPs against Petitioner of a CMP of $3,000 per day for the periods of November 19, 1998 through February 7, 1999, February 8, 1999 through May 17, 1999, and May 18, 1999 through June 17, 1999. I sustain the CMPs imposed from November 19, 1998 until June 17, 1999 and find that the CMPs are reasonable. CMS offered prima facie evidence, which Petitioner did not overcome, that shows that Petitioner had non-immediate jeopardy level deficiencies from the time that the immediate jeopardy abated until the February survey, from the February survey until the May survey, and from the May survey until the date of termination.

Paula Perse, a Health Insurance Specialist and team leader with CMS's Long Term Care Operations Branch, testified concerning the reasonableness of the CMPs imposed by CMS for the various periods. Ms. Perse noted, in addition to the immediate jeopardy found during the November 1998 survey, that there were deficiencies in the area of physical restraints, activities program, social services, and restorative services and that these deficiencies were related to each other because of the lack of staffing. Tr. 1151. Ms. Perse also testified that Petitioner's compliance history was considered. Petitioner had been cited in May 1998 (six months prior to the November survey) in the areas of physical restraints, activities program, social services, restorative services, sufficiency of nurse staffing, and infection control. CMS Ex. 133; Tr. 1152. The physical restraints deficiency was found to be at an "H" level (actual harm), the activities program deficiency was found to be at an "I" level (actual harm), and the social services, restorative services, and nursing services, after the abatement of the immediate jeopardy, were all found to be at an "F" level (widespread potential for more than minimal harm). The deficiencies found at the November survey remained uncorrected through the time of the February 1999 revisit survey in spite of a plan of correction and this shows the facility's high degree of culpability. Ms. Perse testified that CMS had considered the facility's financial condition prior to imposing the CMP, but the facility had submitted no additional information about its inability to pay the CMP despite having an opportunity to do so. Tr. 1152; CMS Exs. 115, 116. In light of the interrelatedness of the deficiencies, the facility's past compliance history, the facility's culpability because of the significant impact of these deficiencies on resident health, and the scope and severity of the deficiencies, a CMP of $3,000 per day from November 19, 1998 through February 7, 1999 is reasonable.

The uncorrected deficiencies persisted and were again noted during the February 1999 revisit survey. There were numerous other deficiencies found during the February 1999 revisit survey that were interrelated. There were found to be instances of actual harm and the potential for more than minimal harm including a failure to properly maintain a resident's personal funds, failure to promptly deliver a resident's social security checks, failure to deliver care in a manner to promote a resident's dignity, use of unnecessary drugs, inadequate infection control, and failure to ensure staff was properly trained to feed residents. The repetitive character of these deficiencies is evidence from which I infer an overall inattentiveness of Petitioner's staff to the residents' needs. In light of th interrelatedness of the deficiencies, the facility's past compliance history, the facility's culpability because of the significant impact of these deficiencies on resident health, and the scope and severity of the deficiencies, a CMP of $3,000 per day from February 8, 1999 through May 17, 1999 is also reasonable.

The second revisit survey of May 1999 again documented numerous repeated uncorrected deficiencies. By this time, all the cited deficiencies had remained uncorrected for many months, many since November 1998, or were closely related to deficiencies found during the November 1998 survey. Again, the repetitive character of these deficiencies is evidence from which I infer an overall inattentiveness of Petitioner's staff to the residents' needs. In light of the interrelatedness of the deficiencies, the facility's past compliance history, the facility's culpability because of the significant impact of these deficiencies on resident health, and the scope and severity of the deficiencies, a CMP of $3,000 per day from May 18, 1999 through June 17, 1999 is reasonable.

At no time prior to the hearing did the facility provide information about its financial condition even though it was given opportunities to do so. At the hearing, Petitioner attempted to make the argument that it did not have the financial resources to pay the CMPs imposed. "As to the facility's financial condition, the proper inquiry is whether the amount of the CMP would put the facility out of business. This is the only conclusion suggested in the Federal Register. 59 Fed. Reg. 56204." Kelsey Memorial Hospital, DAB CR583 (1999). However, Petitioner provided no verifiable documentation to support the argument that payment of the CMP would put it out of business. Petitioner called only one witness to testify as to its financial condition, Hermingilda Manuel, president and co-owner of DHMJ, Inc., the corporation which operated the facility during 1998 and 1999. Ms. Manuel, however, never testified that the amount of the CMP would put the facility out of business. Ms Manuel, instead, testified that the corporation made a profit from 1997 through the date of termination. Tr. 1661 - 1663. Following the termination, Ms. Manuel entered into a management contract/lease with a prospective buyer of the facility. Ms. Manuel then testified that she lent the new operator considerable funds from the time of the termination until the time of the hearing. This testimony, however, was completely unsupported, unverifiable, and self-serving and I give it little weight. ⁽⁵⁾ Even if this testimony had been verified by documentation, the funds were lent after the CMPs were imposed by CMS and this information is irrelevant to the information CMS could consider at the time it imposed a CMP for the purpose of bringing a facility back in compliance and to encourage a facility to remain in compliance. See Cambridge South Nursing Care Center, DAB CR585 (1999); Wellington Specialty Care & Rehabilitation Center, DAB CR546 (1998). The burden is on Petitioner to show that it could not pay the CMP imposed and it failed to meet that burden. Ms. Manuel's testimony was that the new operator of the facility had been lent about $60,000 per month from the time of termination until the end of 1999 and $400,000 from the beginning of 2000 until the time of the hearing in August 2000. Therefore, Petitioner had the funds available to it at the time of termination to pay the CMP.

35. CMS had authority to impose a DPNA and to terminate Petitioner's provider agreement.

CMS showed that there was a basis for imposing a DPNA against Petitioner. In addition, if a facility is not in substantial compliance within six months of the last day of a survey, as in the instant case, CMS must terminate the facility's provider agreement. 42 C.F.R. § 488.412.

IV. Conclusion

Petitioner was not in substantial compliance with Medicare participation requirements during the three surveys of November 18, 1998, February 8, 1999, and May 18, 1999. Consequently, CMS had the authority to impose a DPNA and to terminate Petitioner's Medicare provider agreement. CMS also had authority to impose CMPs in the amount of $3,050 per day from November 4, 1998 to November 18, 1998, the period of immediate jeopardy, and in the amount of $3,000 per day for the periods of November 19, 1998 through February 7, 1999, and February 8, 1999 through May 17, 1999, and May 18, 1999 through June 17, 1999. These CMPs are reasonable.

Alfonso J. Montano

Administrative Law Judge

1. Since "HCFA" was used to refer to the agency at the time that the actions at issue were taken, references from documents use the old acronym.

2. CMS contracts with state health agencies to conduct surveys of nursing homes' compliance with Medicare participation requirements. Sections 1864 and 1819(a) of the Act; 42 U.S.C. § 1395aa; 42 U.S.C. § 1395i-3(g); 42 C.F.R. § 488.20.

3. Judge Clifton originally tried to schedule briefs before her planned departure from the DAB so that she could decide this case. However, both parties objected that there was not enough time to prepare post-hearing briefs prior to her departure.

4. Resident 28 was the same individual that was identified as Resident 1 in the November 1998 survey.

5. Judge Clifton, at the hearing and through two post-hearing letters to the parties dated September 11, 2000 and September 21, 2000, invited Petitioner to submit documentation to support Ms. Manuel's testimony. Petitioner failed to do so.