SUBJECT:

Wisteria Care Center,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I sustain the imposition of civil money penalties against Wisteria Care Center, (Petitioner), by the Centers for Medicare & Medicaid Services (CMS, formerly the Health Care Financing Administration or HCFA) at the immediate jeopardy level of $3,050 per day for each day of a period that began on August 18, 1998 through August 20, 1998. I also sustain the imposition of civil money penalties of $1,000 per day for the periods August 21, 1998 through November 5, 1998 and December 29, 1998 through February 12, 1999.

I further sustain CMS's determination to terminate Petitioner's Medicare provider agreement.

BACKGROUND

Petitioner is a long-term care facility located in Castro Valley, California. Petitioner participates in federally funded health care programs including Medicare and California's Medicaid program. It is governed by federal statues and regulations which govern participation of long term care facilities in these programs.

In 1998 Petitioner was surveyed several times by surveyors employed by the California Department of Health Services (CDHS) in order to determine whether Petitioner was in compliance with federal participation requirements. These surveys included a standard survey that was completed August 21, 1998, (August survey), a revisit survey that was completed on November 6, 1998, ⁽¹⁾ and a subsequent revisit survey that was completed on December 29, 1998 (December survey).

The CDHS surveyors alleged that Petitioner was not in substantial compliance with federal participation requirements at each of these surveys. The surveyors made findings during the August survey that Petitioner was not in substantial compliance with two participation requirements at a level of noncompliance that was so egregious as to place residents of Petitioner in a state of immediate jeopardy.

Based on the CDHS findings, CMS imposed civil money penalties against Petitioner which included civil money penalties at the immediate jeopardy level of $3,050 per day for each day of the period that began on August 18, 1998 and which ran through August 20, 1998. Further, CMS imposed civil money penalties of $1,000 per day for each day of a period that began on August 21, 1998 through November 5, 1998 and December 29, 1998 through February 12, 1999.

In addition, CMS determined that Petitioner did not achieve substantial compliance with participation requirements within six months of the last day of the standard survey. CMS therefore terminated Petitioner's Medicare provider agreement on February 13, 1999.

Petitioner filed a request for hearing before an Administrative Law Judge (ALJ).

PROCEDURAL HISTORY

This case was initially assigned to ALJ Joseph Riotto, who issued an order requiring the parties to file case readiness reports within 60 days. CMS filed its report of readiness, in which it alleged that Petitioner's request for hearing did not adequately comply with 42 C.F.R. § 498.70. CMS maintained that Petitioner's request for hearing should therefore be dismissed. The case was subsequently assigned to ALJ Marc Hillson who conducted a prehearing conference and issued an Order setting a hearing date and establishing a briefing schedule for the submission of dispositive motions and reply briefs. CMS filed a motion to dismiss Petitioner's December 3, 1998 request for hearing, arguing that the request was inadequate in that it did not comply with the requirements of 42 C.F.R. § 498.70.

Petitioner filed a response brief which included a motion requesting leave to amend Petitioner's hearing request. An amended hearing request was appended to the motion.

On March 7, 2000, ALJ Hillson issued a ruling in which he found that while Petitioner's December 3, 1998 request for hearing was inadequate, there was good cause to allow Petitioner to file an amended hearing request. ALJ Hillson, therefore, accepted Petitioner's amended hearing request dated February 7, 1999.

Petitioner's amended hearing request consisted of a general denial of all of the findings of noncompliance made by CMS. The hearing request did not cite specific facts or specific evidence to address the survey findings with any form of particularity. Petitioner's amended hearing request made nonspecific assertions that Petitioner would provide evidence, and expert witnesses to prove that the finding of the surveys were incorrect. In addition, Petitioner raised the argument that the regulation under which the sanctions were recommended are unconstitutional under the Fourteenth Amendment to the United States Constitution and a violation of Petitioner's due process rights.

On April 25, 2000, the case was reassigned to Chief ALJ Marion T. Silva. In a letter dated April 26, 2000, Foley & Lardner, the law firm representing Petitioner, informed this office that the two attorneys handling the case for Petitioner had left the law firm. The letter further indicated that the firm had made several attempts to contact Petitioner by telephone with no success. Based on these facts, the law firm requested a continuance of the proceedings in this case. CMS filed an objection to the request for a continuance.

Chief ALJ Silva subsequently issued an Order to Show Cause why the case should not be dismissed. Petitioner's counsel filed a response to the Order, along with a motion to withdraw as counsel for Petitioner.

Orrin Grover, an attorney, filed a letter in this case indicating that he was considering taking over the representation of Petitioner in this matter.

The case was subsequently reassigned to me. I convened a prehearing conference during which I found there was good cause to allow Petitioner and its new counsel, Orrin Grover, to respond to Chief ALJ Silva's Order to Show Cause. I also set forth an amended schedule for the exchange of exhibits and witness lists.

I directed Mr. Grover to file a notice of appearance by June 16, 2000. He filed the notice of appearance on June 21. I also directed Mr. Grover to file Petitioner's response to Judge Silva's Order to Show Cause by July 17. He filed the response on July 26, 2000. CMS filed an objection to the untimely filing of Petitioner's response to the Order to Show Cause.

Thus began a series of pretrial events in which Petitioner never filed any of the documents ordered by this tribunal, in a timely manner. CMS filed objections to the untimely submissions by Petitioner and argued for dismissal of the case. Because Petitioner had obtained new counsel, I gave Petitioner the benefit of the doubt and did not dismiss Petitioner's case based on the conduct of its legal counsel.

I subsequently held an in-person hearing in San Francisco, California, on October 23 - 26, 2000. CMS presented the testimony of six witnesses. Petitioner presented the testimony of one witness. I admitted into evidence CMS exhibits identified as HCFA exhibits (HCFA Exs.) 1-11, 13-20, 22-91, and 99-124. It should be noted that the exhibits offered by CMS were marked with the acronym "HCFA." I will refer to these exhibits in this decision as they were identified at the hearing. Petitioner offered and I admitted into evidence Petitioner's exhibits (P. Exs.) 1, 2, 5, and 6. Both parties were subsequently sent a copy of the transcript (Tr.) of the hearing.

In my closing remarks at the end of the hearing, I ordered the parties to submit posthearing briefs along with proposed findings of fact and conclusions of law. CMS submitted its posthearing brief, in accordance with the schedule I set forth in the post hearing order. Counsel for Petitioner did not submit a posthearing brief nor did he seek leave to file Petitioner's posthearing brief out of time. In a letter dated July 3, 2001, CMS requested that the record in this case be closed because Petitioner had not filed a post hearing brief. In a letter sent at my direction dated August 1, 2001, I informed Petitioner that if Petitioner did not file a posthearing brief by August 13, 2001, the record would be closed.

A letter was received from Petitioner's counsel dated July 28, 2001, which listed Milpitas Care Center on the reference line of the letter. Petitioner's counsel was also representing Milpitas Care Center in another docketed case before me. Milpitas was also owned and operated by the same corporation as Wisteria Care Center. The same letter also makes specific reference to Wisteria Care Center in the body of the correspondence. The letter states in relevant part:

[d]ue to other demands from the client, Wisteria Care Center, has been unable to complete a reply brief. Given the fact that the brief is overdue and the Department has objected, the facility hereby submits the matter on the record.

Petitioner did not file a posthearing brief and the record was closed on August 13, 2001.

APPLICABLE LAW

Petitioner is considered a long-term care facility under the Social Security Act (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 Title 42 C.F.R. Part 483.

Sections 1819 and 1919 of the Act invest the Secretary with the authority to impose civil money penalties 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.

42 C.F.R. Part 483 provides 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. §§ 488.10-488.28.

The regulations contain special survey requirements for long-term care facilities. 42 C.F.R. §§ 488.300-488.335. Under the regulations, a state or CMS may impose a civil money penalty against a long-term care facility where a state survey agency ascertains that the facility is not complying substantially with participation requirements. 42 C.F.R. §§ 488.406, 488.408, 488.430.

The penalty may start accruing as early as the date that the facility was first out of compliance until the date substantial compliance is achieved or the provider agreement is terminated.

The regulations specify that a civil money penalty that is imposed against a facility will fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of civil money penalties, of from $3,050 per day to $10,000 per day, is reserved for deficiencies that constitute immediate jeopardy to a facility's residents, and in some circumstances, for repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1), (d)(2).

The term "immediate jeopardy" is defined under federal regulations to mean a situation in which a facility's noncompliance with one or more participation requirements has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301.

The lower range of civil money penalties, of 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 regulations define the term "substantial compliance" to mean:

(1) 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.

In determining the amount of the civil money penalty, the following factors specified at 42 C.F.R. § 488.438(f) must be considered:

1. The facility's history of noncompliance, including repeated deficiencies;

2. The facility's financial condition;

3. The seriousness of the deficiencies as set forth at 42 C.F.R. § 488.404; and

4. The facility's degree of culpability.

In a civil money penalty case, CMS must make a prima facie case that the facility has failed to comply substantially with participation requirements. To prevail, a long-term care facility must overcome CMS's showing by a preponderance of the evidence. Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation Center v. U. S. Dep't of Health and Human Services, Health Care Financing Administration, No. 98-3789 (GEV), slip op. at 25 (D.N.J. May 13, 1999).

The regulations make a hearing available before an ALJ to a long-term care facility against whom CMS has determined to impose a civil money penalty. 42 C.F.R. § 488.408(g). The hearing before an ALJ is de novo proceeding. Anesthesiologists Affiliated, et al., DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir. 1991).

ISSUES

The issues in this case are whether:

a. The facility was in substantial compliance with federal participation requirements on the dates CMS determined to impose a civil money penalty;

b. The amount of the penalty imposed by CMS is reasonable, if noncompliance is established; and

c. There is a basis for terminating Petitioner's Medicare provider agreement.

DISCUSSION OF PARTIES' CASES

The case presented by CMS

CMS moved into evidence 113 exhibits and presented the testimony of six witnesses at the hearing. CMS, as directed by this forum, filed an extensive and detailed posthearing brief. CMS's witnesses included two surveyors who conducted the survey of the facility, a pharmaceutical consultant, and a physician with 20 years of medical experience, who testified as a medical consultant. A CMS Survey Certification Review Specialist and a CMS Health Insurance Specialist also testified as part of CMS's case in chief.

I found the witnesses presented by CMS to be well qualified in their respective fields. Each CMS witness was cross-examined by Petitioner's counsel and I found each of CMS's witnesses' testimony to be credible.

The case presented by Petitioner

Petitioner offered into evidence four exhibits, none of which related to quality of care issues or any other medical issues. The exhibits were of no assistance to Petitioner in rebutting CMS's survey findings.

Petitioner's only witness at the hearing was Hilda Manual, the president and one of two shareholders of DHMJ Inc., the corporation which owned and operated Wisteria Care Center. Ms. Manual was not a direct care giver nor does she posses any medical expertise. She was not present at Wisteria Care Center when the surveys in issue were conducted. The testimony elicited from Ms. Manual did not address quality of care, medical care, nor did her testimony serve to rebut any of the specific deficiencies cited by CMS. Ms. Manual testified as to the corporate ownership of Wisteria and discussed the take over of the facility by Trucare Inc. She testified that she had no business relationship with Trucare, but asserted that she made substantial loans to Trucare to pay for expenses to run Wisteria, during the decertification process. Tr. 990. Ms. Manual's testimony was self serving and was not substantiated in any way by documentary evidence. I find her testimony regarding alleged loans to Trucare not credible. I therefore give her entire testimony no weight.

Counsel for Petitioner conducted cross-examination of the CMS witnesses who testified at the hearing. That cross-examination did not elicit any admissions from any CMS witnesses that would establish that any of the CMS findings cited in the statement of deficiencies (also known as the 2567) (HCFA Ex. 1) 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, by itself, did not rebut any of the specific deficiencies cited by CMS.

At the conclusion of the hearing, I set a schedule for the parties to file posthearing briefs. The purpose of a posthearing brief is to allow a party to present a summation of its case with citation to exhibits and relevant sections of the transcript to support its case arguments and respective positions. It provides an opportunity to bring all of the bits of evidence into a final cohesive presentation of the arguments and closing remarks in the respective parties case.

As stated above, Petitioner did not submit a posthearing 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 at issue.

Petitioner has denied CMS's allegations of noncompliance in only the most general of terms in its hearing request, and has failed to present any specific 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 proceedings in this case are adversarial in nature. Both parties in this case 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 on behalf of a party where that party has failed to do so. To interpret the provision otherwise would require me to raise arguments that Petitioner's counsel could have or should have made. I would then be required to rule, in an objective manner, on the very arguments I raised for Petitioner.

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 file briefs or other written statements of proposed findings of fact and conclusions of law. Here, Petitioner affirmatively chose not to file a posthearing 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.

Specifically, I find that CMS established a prima facie case, which Petitioner did not rebut by a preponderance of the evidence as addressed in the following findings of fact and conclusions of law.

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 as a separately numbered heading. I discuss each Finding in detail.

August 1998 Survey

1. Petitioner was not in substantial compliance with 42 C.F.R. § 483.70(b) (1)-(2) during the period of August 18, 1998 through August 20, 1998.

The surveyors who conducted the August survey concluded at Tag 455 of their survey report that from August 18, 1998 through August 20, 1998, that Petitioner failed to comply substantially with the requirements of 42 C.F.R. § 483.70(b). HCFA Ex. 1, at 74. This deficiency finding was one of two immediate jeopardy level deficiency findings that were made in the report of the August survey.

The applicable regulation at 42 C.F.R. § 483.70, entitled "Physical environment," provides:

The facility must be designed, constructed, equipped, and maintained to protect the health and safety of residents, personnel, and the public.

Consistent with that requirement 42 C.F.R. § 483.70(b)(1)-(2) provides that:

(1) An emergency electrical power system must supply power adequate at least for lighting all entrances and exits; equipment to maintain the fire detection, alarm, and extinguishing systems; and life support systems in the event the normal electrical supply is interrupted; and

(2) When life support systems are used, the facility must provide emergency electrical power with an emergency generator (as defined in NFPA 99, Health Care Facilities) that is located on the premises.

Based on interviews and observations during the course of the August survey, one of the surveyors found that one of the batteries that operates the emergency electrical power system was dead, and as a result, in the case of a power outage emergency, no electricity would be available to power residents' call lights, building exit lights, and fire alarms. Tr. 120-121. In addition, Petitioner did not have any alternative means, such as call-lights or handheld flashlights, to protect residents from danger in the event of a power outage. Tr. 122.

The surveyor testified that the lack of a battery operated system placed residents in immediate jeopardy, because, in the event of a fire, earthquake, or loss of power in the building, there would be no exit lights to direct residents or staff out of the building. Tr. 123-124.

I find that CMS established a prima facie case of noncompliance with this requirement which Petitioner did not rebut by a preponderance of the evidence. Other than a general denial, Petitioner did not offer any testimonial or documentary evidence to contradict CMS's allegations. Clearly, the facilities residents were placed at serious risk of immediate harm, as they would not have had life support systems, fire detection, and alarm systems available in a power outage emergency situation. Therefore, I sustain CMS's deficiency finding on Tag 455 at the immediate jeopardy level.

2. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25 (h)(1) on August 18, 1998.

On August 18, 1998, a CDHS surveyor, tested the water temperature in the sinks of two residents' rooms. The surveyor found that some of the temperatures reached over 130 degrees fahrenheit. Tr. 420.

The applicable regulation at 42 C.F.R. § 483.25 entitled "Quality of care" provides:

Each resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, in accordance with the comprehensive assessment and plan of care.

Consistent with that requirement, 42 C.F.R. § 483.25(h)(1) provides that:

(h) Accidents. The facility must ensure that -- (1) The resident environment remains as free of accident hazards as is possible.

The surveyor testified that the residents were exposed to a high risk of burn because the skin of an older person tends to be thin. Tr. 421.

The surveyor concluded that the hot water temperature was so high that it created serious and immediate jeopardy to residents' safety. Tr. 420.

I find that CMS established a prima facie case of noncompliance with this requirement which Petitioner did not rebut by a preponderance of the evidence. Extremely elevated hot water temperatures created an unreasonable risk of serious injury to the elderly residents of the nursing home. Other than a general denial, Petitioner did not offer any testimonial or documentary evidence to contradict CMS's allegations. Therefore, I sustain CMS's deficiency finding on Tag 323 at the immediate jeopardy level.

3. It is not necessary that I make Findings concerning the presence of or levels of other deficiencies that are alleged to have been present at Petitioner's facility during the period that ran from August 18, 1998 through August 20, 1998.

CMS alleges that during the period which began August 18, 1998 through August 20, 1998, Petitioner manifested over 20 other non immediate jeopardy level deficiencies. HCFA Ex. 1.

It is not necessary that I make findings concerning these additional alleged deficiencies inasmuch as their presence or absence will add nothing to my decision in this case. The presence or absence of deficiencies in addition to the two immediate jeopardy level deficiencies in the August survey is irrelevant. CMS has the authority to impose immediate jeopardy level civil money penalties of $3,050 - $10,000 per day based on the presence of even a single immediate jeopardy level deficiency. 42 C.F.R. § 488.408(e)(2)(ii). In this case CMS determined to impose civil money penalties in the amount of $3,050 per day. That is the minimum civil money penalty amount for an immediate jeopardy level deficiency. The presence or absence of other deficiencies will not affect this penalty amount.

December 1998 Survey

4. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25 (c) on December 29, 1998.

As discussed above, 42 C.F.R. § 483.25 is a "quality of care" regulation. It mandates that the facility must provide the necessary care and services to attain or maintain the highest practicable well being of the patient. Consistent with that requirement, 42 C.F.R. § 483.25 (c) states:

(c) Pressure sores. Based on the comprehensive assessment of a resident, the facility must ensure that --

(1) A resident who enters the facility without pressure sores does not develop pressure sores unless the individual's clinical condition demonstrates that they were unavoidable; and

(2) A resident having pressure sores receives necessary treatment and services to promote healing, prevent infection,and prevent new sores from developing.

Based on interviews and record reviews during the course of the December survey, surveyors found that Resident No. 2 developed pressure sores while at the facility. Resident No. 2 was 85 years old and had a principle diagnosis of Alzheimer's disease. HCFA Ex. 22. On December 8, 1998, the resident was placed on a gerichair with a locking tray table, which acted as a physical restraint. Tr. 154. On December 17, 1998, the resident developed a pressure sore approximately one inch in size, which was described as a "reddened open area on the right knee." HCFA Ex. 24.

According to the surveyors, the pressure sore developed from friction caused by the resident rubbing both knees together when she was in the gerichair. Tr. 154-155.

The surveyors found that the facility failed to conduct an assessment of the resident's needs in order to prevent the pressure sore from developing. Tr. 160-161. Ultimately, the surveyors concluded that Resident No. 2 incurred actual harm, in that she developed an open wound, and that the pressure sore was preventable and avoidable. Tr. 156. I find that CMS established a prima facie case, that as of December 29, 1998, Petitioner was not in substantial compliance with participation requirements at 42 C.F.R. § 483.25(c). Petitioner did not rebut the prima facie case established by CMS.

5. Petitioner was not in substantial compliance with C.F.R. § 483.13(a) on December 29, 1998.

The applicable regulation at 42 C.F.R. § 483.13(a), entitled "Resident behavior and facility practices," states:

(a) Restraints. The resident has the right to be free from any physical or chemical restraints imposed for purposes of discipline or convenience, and not required to treat the resident's medical symptoms.

The record shows that Resident No. 10 was a 79-year-old man, admitted to the facility from an acute care hospital. HCFA Ex. 22. His diagnoses included cancer of the prostate, bladder, and various other ailments. HCFA Ex. 22.

The surveyors found that upon admission to the facility, the resident was immediately placed in a vest restraint, even though the necessary documentation supporting use of the restraints was lacking. Tr. 421-422. The surveyors concluded that by unnecessarily restraining the resident, the facility exposed the resident to the potential for more than minimal harm in that the resident would lose his ability to ambulate. Tr. 423.

I find that CMS established a prima facie case, which Petitioner did not rebut, that as of December 29, 1998, Petitioner was not in substantial compliance with participation requirements at 42 C.F.R. § 483.13(a).

SUMMARY OF ADDITIONAL SURVEY FINDINGS

Due to Petitioner's complete failure to provide evidence on any of the deficiencies cited in the surveys, I will not address in detail each deficiency alleged for the remainder of the decision. As previously noted, Petitioner failed to provide even a scintilla of evidence of compliance with deficiency allegations in any of the surveys. The owner of the facility was the Petitioner's only witness at the hearing. She did not testify regarding quality of care or medical issues nor was she competent to testify relative to the medical findings in this case. At the hearing Petitioner offered into evidence only a few exhibits, none of which related to quality of care or medical issues.

Petitioner failed to submit a posthearing brief to address or provide any form of defense relative to the numerous survey findings. As previously stated, 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. 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.

Specifically, I find that CMS established a prima facie case, which Petitioner did not rebut by a preponderance of the evidence the following deficiencies:

6. 42 C.F.R. § 483.25(i)(1). Failure to ensure that residents maintained acceptable parameters of nutritional status. HCFA Ex. 3; Tr. 860.

7. 42 C.F.R. § 483.20(b)(2)(ii). ⁽²⁾ Failure to develop assessments after significant changes in residents condition. HCFA Ex. 22; Tr. 141.

8. 42 C.F.R. § 483.20(b). Failure to develop comprehensive resident assessments. HCFA Ex. 22; Tr. 136.

9. 42 C.F.R. § 483.15(a). Failure to promote care for residents in a manner that maintains each resident's dignity and respect. HCFA Ex. 22; Tr. 424.

10. 42 C.F.R. § 483.35(h)(2). Failure to store food under sanitary conditions. HCFA Ex. 22; Tr. 704.

REASONABLENESS OF THE CIVIL MONEY PENALTY

11. CMS's imposition of a civil money penalty in the amount of $3,050 per day from August 18, 1998 through August 20, 1998, the period of immediate jeopardy, is reasonable.

CMS determined that Petitioner's period of immediate jeopardy lasted from August 18, 1998 through August 20, 1998. The regulations at 42 C.F.R. § 488.438(f) specify the criteria to be considered in determining whether the amount of the civil money penalty is reasonable: (1) the facility's history of noncompliance, including repeated deficiencies; (2) the facility's financial condition; (3) the factors specified in 42 C.F.R. § 488.404 (including seriousness and scope of the deficiencies); and (4) the facility's degree of culpability.

The minimum daily civil money penalty amount that CMS may impose for an immediate jeopardy level deficiency is $3,050 per day. That is the amount that CMS imposed in this case.

At the hearing, Hilda Manual, Petitioner's president, testified regarding the facility's financial condition. I do not find Petitioner's financial status to be relevant in deciding the amount of the immediate jeopardy level penalties because I have no authority to reduce the immediate jeopardy level penalties below $3,050 per day regardless of a facility's financial condition. Therefore, I sustain it because it is the minimum amount and because it is based on the presence of an immediate jeopardy level deficiency.

12. CMS's imposition of a civil money penalty in the amount of $1,000 per day from August 21, 1998 through November 5, 1998 and December 29, 1998 through February 12, 1999 was reasonable.

Under 42 C.F.R. § 488.438(a)(2), penalties in the range of $50 - $3,000 per day are imposed for deficiencies that do not constitute immediate jeopardy but either caused actual harm, or caused no actual harm, but have the potential for more than minimal harm.

CMS imposed civil money penalties in the amount of $1,000 per day, based on the criteria set forth in 42 C.F.R. § 488.438(f). CMS argues that numerous deficiencies, coupled with the seriousness of the deficiencies and the facilities previous history of non-compliance (surveys in 1996 and 1997), justify a civil money penalty in the mid range of $1,000 per day.

Petitioner sought to demonstrate that it could not pay the civil money penalty by submitting financial statements (P. Exs. 5, 6) and calling Hilda Manual, president of the corporation, to testify regarding the facilities financial condition.

The financial statements provided by Petitioner fail to demonstrate that Petitioner was unable to pay a civil money penalty because of its financial condition. Moreover, Manuel never indicated in her testimony (Tr. 983 - 1014) that a civil money penalty at the $1,000 per day amount would put the facility out of business.

Indeed, Manual's testimony related more to the sale of assets of the corporation that owned Wisteria, and the health of certain officers within the corporation rather than to

Petitioner's inability to pay because of its financial condition. As previously noted, I do not find Ms. Manual's testimony to be credible.

Paula Perse, R.N., Health Insurance Specialist and team leader with CMS, testified concerning the reasonableness of the civil money penalties imposed by CMS. Ms. Perse testified that the December survey continued to show troubling instances of actual harm to residents' health and safety, as well as widespread instances of the potential for more than minimal harm, that encompassed repeat deficiencies in patient care areas which had not been corrected at the time of the December survey. Tr. 930. Indeed, Ms. Perse testified that the number of major uncorrected deficiencies (involving the facilities continued use of unnecessary restraints) would support a civil money penalty amount in excess of $1,000 per day. Tr. 932-933.

Therefore, I find that based on the seriousness of the deficiencies cited at Wisteria Care Center, and the history of noncompliance of the facility, it is reasonable to impose a civil money penalty of 1,000 per day from August 21, 1998 through November 5, 1998 and from December 29, 1998 through February 12, 1999.

13. CMS had the authority to terminate Petitioner's provider agreement.

Based on the entire record of evidence presented in this case, I sustain CMS's determination to terminate Petitioner's Medicare provider agreement. CMS clearly established that Petitioner was not in substantial compliance within six months of the last day of the standard survey. Thus, Petitioner's Medicare provider agreement was properly terminated on February 13, 1999. 42 C.F.R. § 488.412.

CONCLUSION

I conclude that Petitioner was not in substantial compliance with Medicare participation requirements during the two surveys completed August 21, 1998 and December 29, 1998. As noted, the findings of the November 6, 1998, revisit survey was not appealed by Petitioner.

I find that the civil money penalties imposed by CMS against Petitioner at the immediate jeopardy level of $3,050 per day for each day of a period that began on August 18, 1998 through August 20, 1998, were reasonable. I further find that the civil money penalties imposed at the non-immediate jeopardy level of $1,000 per day for the periods August 21, 1998 through November 5, 1998 and December 29, 1998 through February 12, 1999 were also reasonable. I further find that CMS had the authority to terminate Petitioner's provider agreement.

Alfonso J. Montano

Administrative Law Judge

1. I note that the revisit survey that was completed on November 6, 1998 was not appealed by Petitioner. Therefore, CMS's deficiency determination and civil money penalty sanctions of $1,000 per day from November 6, 1998 through December 28, 1998 are not under review in this decision.

2. CMS incorrectly cited this Tag 274 violation as 42 C.F.R. § 483.20(b)(4)(iv).