SUBJECT:

Broadlawn Manor Nursing Center,

Petitioner,

DATE: August 22, 2002

Centers for Medicare & Medicaid Services.

DECISION

This case came before me pursuant to a request for hearing filed by Petitioner, Broadlawn Manor Nursing Center, on May 31, 2001, in accordance with section 1128A(c)(2) of the Social Security Act (Act) and 42 C.F.R. §§ 488.408(g), 498.40.

I. Background

Petitioner is a skilled nursing facility participating in the Medicare/Medicaid programs. On March 9, 2001, Petitioner underwent a standard survey by the New York State Department of Health (DOH).

The survey resulted in a finding that Petitioner was not in substantial compliance with participation requirements and its noncompliance constituted substandard quality of care. Some of the deficiencies consisted of a pattern of findings that constituted actual harm that is not immediate jeopardy (level "H") under Tags F-225, F-324, and F-490; while others under Tags F-224, F-309, and F-498 consisted of an isolated finding that constituted actual harm that is not immediate jeopardy (level "G"). Two of the "H" level deficiencies and two of the "G" level deficiencies constituted substandard quality of care. The DOH also found seven "D" level deficiencies. These involved no actual harm but had the potential for more than minimal harm. On March 28, 2001, the DOH informed Petitioner that it could avoid the imposition of remedies if a detailed Plan of Correction (POC) was completed and returned by April 9, 2001. Failure to submit a POC would result in the recommendation of denial of payment for new admissions (DPNA) beginning June 7, 2001 and termination effective September 5, 2001. Petitioner was also advised that the proposed remedies did not preclude the imposition of other remedies available to the Centers for Medicare & Medicaid Services (CMS) or DOH.

By letter faxed on April 3, 2001, CMS notified Petitioner that based on the March 9, 2001 survey, a DPNA would be imposed effective April 19, 2001. ⁽¹⁾ CMS Ex. 2. However, a revisit conducted on May 16, 2001 revealed lack of substantial compliance. Some of the deficiencies found constituted actual harm but not immediate jeopardy. Petitioner was notified of the findings on May 31, 2001.

Petitioner requested a hearing on May 31, 2001 regarding CMS's determination of April 3, 2001. In its request, Petitioner sought the following relief:

• That certain deficiencies be deleted or downgraded and inappropriate references and language be deleted from the Statement of Deficiencies.



• That the facility be given an opportunity to correct the deficiencies before the DPNA takes effect.



• If the facility is not given an opportunity to correct, that it be found in compliance as of May 8, 2001, the date the DOH should have conducted its revisit, or at the earliest, April 21, 2001, which is 15 days from the date the facility received the formal notice.



• That the DOH follow HCFA ⁽²⁾ guidance when establishing the three-month and six- month effective dates.

By motion and supporting memorandum dated November 1, 2001, CMS contends that it is entitled to summary judgment. CMS argues that Petitioner has effectively conceded that it was out of compliance at the time of the March 9, 2001 survey by not appealing all of the substandard deficiencies and by not challenging the "H" level deficiency at Tag F-324, but rather requesting that it be downgraded to a category "G" level. Petitioner responded to CMS's motion on April 5, 2002, and CMS filed a reply on May 2, 2002. In its reply CMS stated that in its summary judgment motion it had overlooked the fact that Petitioner had failed to contest the level "G" deficiency at Tag F-224 in its hearing request.

CMS submitted five exhibits with its memorandum of law. These have been admitted into evidence without objection as CMS Exs. 1-5. Petitioner submitted 13 exhibits. These have been admitted into evidence as P. Exs. 1-13, without objection.

Based on the documentary evidence, the arguments of the parties, and the applicable law and regulations, I find that a DPNA is appropriate from April 19, 2001 until May 16, 2001.

II. Standard for Summary Judgment

Summary judgment is appropriate when there is no genuine issue as to any material fact, and the proponent is entitled to judgment as a matter of law. Fed. R. Civ. P. 56. If the moving party meets this burden, the onus shifts to the opposing party to establish that a genuine issue does exist. The opposing party will have shown that genuine issues of fact are present if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 249 (1986). To accomplish this, the opposing party must go beyond mere allegations and come forward with factual evidence that creates a genuine issue of material fact. All reasonable inferences are to be drawn in the opposing party's favor. Pollock v. American Tel. & Tel. Long Lines, 794 F2d. 860, 864 (3rd. Cir. 1986). I have considered all the evidence set forth in documents submitted and conclude that all inferences drawn from such evidence casts no doubt as to the propriety of granting CMS's motion for summary judgment inasmuch as there is no issue of material fact to be tried. CMS's motion is properly supported by documentary evidence.

III. Applicable Law and Regulations

Petitioner is considered a long-term care facility under the Act and regulations promulgated by the Secretary of Health and Human Services (Secretary). The statutory requirements for participation by a long-term care facility are found at sections 1819 and 1919 of the Act and at 42 C.F.R. Part 483.

Sections 1819 and 1919 of the Act invest the Secretary with authority to impose certain remedies, including DPNA, against a long-term care facility for failure to comply substantially with participation requirements.

Pursuant to the Act, the Secretary has delegated to CMS and the states the authority to impose remedies against a long-term care facility that is not complying substantially with federal participation requirements. Regulations provide that facilities which participate in Medicare may be surveyed on behalf of CMS by state survey agencies in order to ascertain whether the facilities are complying with participation requirements. 42 C.F.R. Part 483.

The term "substantial compliance" is a defined term in the regulations which govern participation of long-term care facilities in Medicare. "Substantial compliance" is defined to mean:

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 Act and regulations make a hearing available before an Administrative Law Judge to a long-term facility against whom CMS has determined to impose a civil money penalty (CMP). Section 1128A(c)(2) of the Act; 42 C.F.R. §§ 488.408(g), 498.3(b)(12), (13). The hearing before an Administrative Law Judge is a de novo proceeding. Anesthesiologists Affiliated, et al, DAB CR65 (1990), affd, 941 F2d. 678 (8^th Cir. 1991).

IV. Issues

1. Whether CMS is entitled to impose a DPNA against Petitioner.

2. Whether CMS is bound to give Petitioner an opportunity to correct the deficiencies prior to imposition of the DPNA.

3. If Petitioner is not given an opportunity to correct, whether the period of noncompliance should commence on April 21, 2001 and end on May 8, 2001.

4. Whether the DOH should be directed to follow CMS's guidelines when establishing the three-month and six-month effective dates.

V. 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 of my Findings below as a separate heading. I discuss each Finding in detail.

1. CMS is authorized to impose a DPNA against Petitioner.

42 C.F.R. § 488.417(a) provides that CMS or the State may deny payment for all new admissions when a facility is not in substantial compliance with the [participation] requirements.

The regulations define substantial compliance as:

a level of compliance with 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. Thus, CMS may impose a DPNA when it is found that a facility is not in compliance with any level of deficiency that is classified at a level "D" or above.

In this case; Petitioner chose to contest only two of the three deficiency examples under Tag F-324. See Petitioner's request for hearing at 12. Petitioner did not dispute the existence of a deficiency under Tag F-324 regarding Resident 19. As to this resident; CMS alleged that Petitioner failed to ensure that he received adequate supervision to prevent accidents, thereby providing substandard quality of care. CMS Ex. 1 at 21.

Although Petitioner did not contest the existence of a deficiency as to Resident 19, it did dispute the scope of the deficiency under Tag F-324. Whereas, CMS claims that under this tag there was actual harm cited at the level "H" deficiency, Petitioner proposed that it be downgraded to a "G" level deficiency. That would make it an isolated incident of actual harm that is not immediate jeopardy, as opposed a pattern of deficiencies constituting substandard quality of care. Petitioner's Brief at 19 (P. Br). At page 17 of its response brief Petitioner argued that:

[s]pecifically, Broadlawn challenged two of the category "H" deficiencies in their entirety (Tags F225 and F490) and argued that the category "H" finding under Tag F324 should be downgraded to a category "G" level because there was no basis for two out of the three examples given. (Emphasis supplied.)

Thus, Petitioner concedes that there was a basis for one of three examples given under F-324. Petitioner suggests that if it is successful in downgrading this deficiency from a category "H" to "G," CMS would have no basis for the finding of substandard quality of care, which resulted in the loss of approval of its facility's nurses' aide program. ⁽³⁾ Petitioner fails to address, however, the issue at hand. That issue is whether the concession that the facility was not in compliance at a "G" level deficiency warrants a finding that a DPNA was appropriate. I find that in the request for hearing, as well as in its brief, Petitioner has conceded that it was not in substantial compliance. Furthermore, Petitioner has not disputed that fact. In addition, Petitioner did not challenge the seven "D" level deficiencies. CMS Ex. 1, at 7-14. ⁽⁴⁾ Therefore, I must conclude that CMS was authorized to impose a DPNA against Petitioner.

2. CMS was not bound to give Petitioner an opportunity to correct prior to the imposition of the DPNA.

In its request for hearing, Petitioner concedes that CMS has discretion to determine whether a facility will be given an opportunity to correct deficiencies before remedies are imposed. Petitioner also recognizes that a facility may not be given an opportunity to correct if it has deficiencies of actual harm or above on the current survey. Petitioner's request for hearing at 15. In its response brief, Petitioner merely stated that CMS offered no explanation for overruling the DOH's recommendation that the facility be given an opportunity to correct its deficiencies before imposition of DPNA. P. Br. at 6.

From Petitioner's own analysis, it is clear that there is no legal requirement mandating that CMS provide the facility with an opportunity to correct deficiencies. The regulations make a hearing available exclusively for those CMS actions that constitute initial determinations listed in 42 C.F.R. § 498.3(b). CMS's determination not to allow the facility an opportunity to correct deficiencies prior to the imposition of a remedy is completely discretionary and not open to appellate review. Consequently, I will not interfere with CMS's exercise of discretion in this case.

3. The period of non-compliance subject to summary judgment commences on April 3, 2001 and ends on May 16, 2001.

On March 28, 2001, the DOH notified Petitioner that as a result of the survey conducted on March 9, 2001, it was imposing a DPNA beginning June 7, 2001. The facility was required to submit a plan of correction by April 9, 2001.

CMS concurred with the findings and remedy but not with the commencement date of the remedy. See 42 C.F.R. § 488.330(a)(1)(C). CMS's determination was made known in a letter dated April 3, 2001 and faxed to Petitioner on that same date. Petitioner acknowledges receipt of CMS's notice within the 15-day requirement stated in 42 C.F.R. § 488.402(f)(4). However, Petitioner argues that when the facility received the initial DOH notice, which indicated that the denial of payment remedy would not take effect until June 7, 2001, it believed it had sufficient time to request an extension to submit its directed POC. This request was granted, says Petitioner, but subsequently, it was notified that the payment ban would commence April 19, 2001. Petitioner contends that had it known sooner, it could have submitted its POC earlier and potentially lessened the impact of the remedy. Petitioner's request for hearing at 17.

If Petitioner was able to file its POC sooner, it should have done so. The starting date of the DPNA would not be the determining factor on the impact of the remedy, but rather, the moment at which Petitioner returned to substantial compliance. As CMS states, since Petitioner was not in substantial compliance when the State conducted its revisit survey on May 16, 2001, submitting a POC at an earlier date would not have lessened the impact of the DPNA. CMS Br. at 17.

The DOH conducted a revisit survey on May 16, 2001 and found that the facility was still not in compliance. Those findings were communicated to Petitioner on May 31, 2001. On that same date, Petitioner filed its request for hearing. In view of the foregoing, I find that summary judgment is appropriate for the imposition of the DPNA for the period beginning April 19, 2001 and ending May 16, 2001, the date of the revisit survey.

4. It is not appropriate to direct the DOH to follow CMS guidelines.

Petitioner requests that I direct the DOH to follow CMS's guidelines when establishing the three-month and six-month effective dates.

As CMS correctly points out, while it must impose a DPNA if a provider is out of compliance on the date three months from a survey, CMS may impose a DPNA whenever a facility is not in substantial compliance with participation requirements, provided the required notice is given. 42 C.F.R. § 488.417(a) and (b). Inasmuch as Petitioner acknowledges having received a 15-day notice from CMS and concedes that it was not in compliance at the March 9, 2001 survey, the time-line errors are not relevant here. Moreover, the directive sought by Petitioner is not a justiciable issue under the regulations.

VI. Conclusion

For the reasons stated above, I hereby grant CMS's motion for partial summary judgment. Accordingly, CMS is authorized to impose a DPNA against Petitioner from April 19, 2001 to May 16, 2001.

Jose A. Anglada

Administrative Law Judge

1. It is apparent that CMS did not agree with the June 7, 2001 effective date for the commencement of the DPNA chosen by the DOH. In view of this action taken by CMS, the DOH sent Petitioner a revised letter dated March 28, 2001, which was received on April 6, 2001. CMS Ex. 3. See also Petitioner's hearing request at 3.

2. HCFA is now known as Centers for Medicare and Medicaid Services.

3. The loss of nurses' aide program is not at issue in this partial motion for summary judgment.

4. CMS alleged in its reply brief that it mistakenly overlooked Petitioner's failure to appeal the "G" level deficiency at Tag F-224. CMS Reply Brief at 6. I note, however, that Petitioner did contest the F-224 deficiency in its request for hearing at page 13.