Jeay Medical Services, LLC, DAB CR5429 (2019)

DECISION

Jeay Medical Services, LLC (Jeay or Petitioner) challenges the initial determination of the Centers for Medicare & Medicaid Services (CMS) to terminate Jeay’s Medicare provider agreement because it was not in compliance with multiple Medicare conditions of participation. I conclude that Jeay did not comply with two Medicare conditions of participation; therefore, CMS had a legal basis to terminate Petitioner’s Medicare provider agreement effective May 24, 2016.

I. Background

The Medicare program “provides basic protection against the costs of hospital . . . care” for individuals over the age of 65 who are eligible for Social Security retirement benefits and for other individuals under 65 who meet other criteria. 42 U.S.C. § 1395c. For Medicare purposes, a hospital is a “provider of services.” 42 U.S.C. § 1395x(u). As such, each hospital seeking to participate in the Medicare program must file a provider agreement with the Secretary of Health and Human Services (Secretary) that meets certain statutory requirements. 42 U.S.C. § 1395cc(a).

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In addition to the requirements laid out in the provider agreement, the Social Security Act (Act) requires a hospital to be an institution that: is primarily engaged in providing inpatient care to sick and injured individuals; maintains clinical records on all patients; has bylaws regarding its physicians; requires all patients to be under the care of a physician or clinical psychologist, as appropriate; provides, with certain exceptions, nursing care rendered by registered or licensed practical nurses 24 hours a day; has a hospital utilization review plan and a discharge planning process that meets requirements under the Act; is licensed by the relevant state or local government; has a plan and budget that meets the requirements in the Act; and meets “such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution.” 42 U.S.C. § 1395x(e).

The Secretary promulgated regulations that established the Medicare conditions of participation for hospitals. Each condition is composed of standards. The conditions and the standards reflect the requirements imposed on hospitals by both the Act and the Secretary. See 42 C.F.R. part 482.

The Secretary contracts with state agencies to conduct periodic surveys to determine whether a hospital meets the conditions of participation. 42 U.S.C. § 1395aa(a); 42 C.F.R. §§ 488.10(a)(1), 488.1. “The State agency will certify that a provider or supplier is not or is no longer in compliance with the conditions of participation . . . where the deficiencies are of such character as to substantially limit the provider’s or supplier’s capacity to furnish adequate care or which adversely affect the health and safety of patients.” 42 C.F.R. § 488.24(b). “The decision as to whether there is compliance with a particular requirement, condition of participation, or condition for coverage depends upon the manner and degree to which the provider or supplier satisfies the various standards within each condition.” 42 C.F.R. § 488.26(b). “Immediate jeopardy” is defined as “a situation in which the provider’s or supplier’s non-compliance with one or more Medicare requirements, conditions of participation, conditions of coverage or certification has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident or patient.” 42 C.F.R. § 488.1. A state agency may conduct a revisit survey “to evaluate the extent to which previously-cited deficiencies have been corrected and the provider or supplier is in substantial compliance with applicable conditions of participation, requirements, or conditions for coverage.” 42 C.F.R. § 488.30(a).

Under delegated authority from the Secretary, CMS may terminate a hospital’s provider agreement if CMS determines that the hospital no longer meets the conditions of participation or the requirements for a provider agreement. 42 U.S.C. § 1395cc(b)(2); 42 C.F.R. § 489.53(a)(3). If CMS terminates a hospital’s provider agreement, the hospital may request a hearing before an administrative law judge (ALJ) to dispute the termination. 42 U.S.C. § 1395cc(h)(1)(A); 42 C.F.R. §§ 488.24(c); 498.3(b)(8); 498.5(b); 498.40(a)(1). In a proceeding before an ALJ under 42 C.F.R. part 498, CMS

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must make a prima facie case that a provider failed to comply with a condition of participation, and, if this occurs, the provider has the burden of proving compliance by a preponderance of the evidence. Nightingale Home Healthcare, Inc., DAB No. 2784 at 11 (2017); Hillman Rehab. Ctr., DAB No. 1611 at 8 (1997); see Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004); Emerald Oaks, DAB No. 1800 (2001); Edison Med. Labs., Inc., DAB No. 1713 (1999); Cross Creek Health Care Ctr., DAB No. 1665 (1998).

Jeay was a hospital located in Eufaula, Oklahoma, that participated in the Medicare program. The Oklahoma State Department of Health (state agency) conducted unannounced Life Safety Code (LSC) and Medicare recertification surveys at Jeay, which were completed on March 4, 2016, and March 8, 2016, respectively. The state agency issued a statement of deficiencies (SOD) for each survey that identified deficiencies, including some at the immediate jeopardy level. CMS Exhibits (Exs.) 3, 4.

In a March 23, 2016 initial determination, CMS found that Petitioner was not in compliance with the following conditions of participation:

CMS Ex. 5 at 1. The initial determination advised Jeay that, unless the immediate jeopardy to patient health and safety was removed, CMS would terminate Jeay’s Medicare provider agreement on April 15, 2016. However, if Jeay submitted an acceptable Plan of Correction (POC), and the state agency verified that Jeay corrected the deficiencies listed in the SOD, then CMS would not terminate the provider agreement. CMS set March 28, 2016, as the due date for the POC and April 7, 2016, as the latest permissible completion date for Jeay’s corrective action. CMS Ex. 5.

On March 30, 2016, the state agency received a POC from Jeay for each of the SODs. CMS Exs. 37, 38. In an April 1, 2016 letter, the state agency informed Jeay that the POCs were not acceptable because Jeay “did not submit a plan of removal for the immediate jeopardy findings” and “the hospital remains in immediate jeopardy non-compliance for 482.13 Patient Rights and 482.41 Physical Environment.” CMS Ex. 8 at 1. This letter explained in detail why the POCs were not acceptable. CMS Ex. 8. Jeay

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submitted POCs twice more, but the state agency continued to deem them unacceptable, even though the state agency accepted some of the responses to LSC deficiencies. CMS Exs. 9-10, 33-36.

On April 14, 2016, the day before termination of the provider agreement was to take place, the state agency conducted unannounced revisit recertification and LSC surveys. The surveyors asked hospital officials to provide any documentation in support of corrective actions taken, but Jeay’s personnel only provided some documentation as to the LSC deficiencies. The surveyors toured the hospital and concluded that Jeay had on-going immediate jeopardy deficiencies. CMS Exs. 1-2.

The following are the deficiencies identified during the April 14, 2016 revisit surveys:

42 C.F.R. § 482.12 (Tags A043, A045, A057, A083, A084, A085)1  Governing Body

42 C.F.R. § 482.13 (Tags A115, A117, A123, A131, A143, A144) Patient Rights

42 C.F.R. § 482.21 (Tags A263, A395) QAPI

42 C.F.R. § 482.28 (Tags A618, A619, A620, A622, A629) Food and Dietetic Services

42 C.F.R. § 482.41 (Tags A700, A701, A709, A710, A713, A715, A722, A723, A724, A726) Physical Environment

42 C.F.R. § 482.42 (Tags A747, A748, A749, A756) Infection Control

42 C.F.R. § 482.43 (Tag A799) Discharge Planning

42 C.F.R. § 482.45 (Tags A884, A885, A886, A887) Organ, Tissue, and Eye Procurement

42 C.F.R. § 482.51 (Tags A940, A951, A956) Surgical Services

42 C.F.R. § 482.57 (Tags A1151, A1152, A1161) Respiratory Services

LSC (Tags K018, K021, K052, K054, K067, K078, K147)

CMS Exs. 1-2.

In a May 9, 2016 letter, CMS stated that Jeay no longer met the requirements for participation in the Medicare program because of deficiencies that represent immediate jeopardy to patient health and safety. CMS further stated that it was terminating Jeay’s provider agreement as of May 24, 2016. CMS did not provide Petitioner any additional opportunity to correct the cited deficiencies. CMS Ex. 7 at 1.

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Petitioner timely requested a hearing before an ALJ to dispute CMS’s findings. Following receipt of Petitioner’s hearing request, I issued an Acknowledgment and Pre-hearing Order. In that order, I directed the parties to file written direct testimony for all witnesses they wanted to present.

CMS filed a prehearing brief (CMS Br.) and 32 proposed exhibits (CMS Exs. 1-32), including the written direct testimony for three witnesses, Tracy Bishop (CMS Ex. 30), Cynthia Knox (CMS Ex. 31), and James Nathan Johns (CMS Ex. 32) – all of whom worked for the state agency (CMS Exs. 30-32). Petitioner filed a prehearing brief (P. Br.) and 85 proposed exhibits (P. Exs. 1-85), including the written direct testimony for four witnesses (P. Exs. 82-85). CMS did not request to cross-examine any of Petitioner’s witnesses; however, Petitioner requested to cross-examine all of CMS’s witnesses.

CMS then filed a motion for summary judgment and six additional exhibits (CMS Exs. 33-38). Petitioner opposed the motion (P. Opp.) and filed additional exhibits (P. Exs. 86-103). In my notice setting a hearing in this case, I denied CMS’s motion for summary judgment.

On January 30-31, 2017, I held a video hearing to give Petitioner an opportunity to cross-examine CMS’s witnesses. I appeared from the offices of the Departmental Appeals Board (DAB) in Washington D.C. CMS counsel, along with two of their witnesses (Ms. Knox and Mr. Johns) appeared from Dallas, Texas. Hearing Transcript (Tr.) at 6. Petitioner’s counsel appeared from the United States District Court for the Western District of Oklahoma. Tr. at 5. Because Ms. Bishop was suffering from a medical condition, she testified by telephone. Tr. at 6.

At the hearing, I admitted all of the proposed exhibits (CMS Exs. 1-38 and P. Exs. 1-103) without objection. Tr. at 9. After the hearing, CMS and Petitioner filed post-hearing briefs (CMS Post-Hrg. Br. and P. Post-Hrg. Br.) and post-hearing reply briefs (CMS Reply and P. Reply).

Shortly after receiving the parties’ submissions, I began to hear cases in another component of the Department of Health and Human Services. This case was assigned to another ALJ at the DAB. However, on November 20, 2018, this case was again assigned to me because I resumed hearing and deciding cases with the DAB.

II. Issue

The sole issue in this case is whether CMS had a legal basis to terminate Jeay’s Medicare provider agreement.

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III. Findings of Fact, Conclusions of Law, and Analysis2

My findings of fact and conclusions of law (FFCLs) are in italics and bold.

42 C.F.R. § 482.43 (Discharge Planning)

1. Petitioner’s discharge planning policies and procedures in effect during the March 2016 surveys were extremely brief and lacked detail, and Petitioner did not adopt new discharge planning policies and procedures by the time of the revisit survey in April 2016.

According to Ms. Knox, during the March health survey, the surveyors requested, among other things, that Petitioner produce its discharge planning policies and procedures. CMS Ex. 3 at 55; CMS Ex. 31; see also Tr. at 298. At that time, Petitioner produced a one-page document that contained its discharge planning policy and procedure. CMS Ex. 3 at 55; see also CMS Ex. 31; Tr. at 299. Consistent with the surveyor’s report, Petitioner produced in this proceeding a one-page document. P. Ex. 41 at 4. Petitioner concedes that this is “its discharging policy . . . .” P. Br. at 8. Therefore, I find that Petitioner’s discharge planning policy and procedure was a one-page document, which was effective from August 18, 2011 through the time of the March health survey.

Leaving aside the heading and caption at the top and white space at the bottom, the actual text of Petitioner’s discharge planning policy and procedure fills approximately one third of the page in total. The section labeled “Policy”—which itself is about one third of the remainder of the document—is, in essence, a legal disclaimer rather than a statement of Petitioner’s discharge planning policy. The statement of purpose, a single sentence, is “[t]o establish guidelines for the ‘discharge planning’ of all patients regardless of financial class or status.” It contains two procedures spanning four additional sentences that read as follows:

1. Discharge Planning is initiated on admission incorporating assessment data and the plan of care. Information concerning high-risk patients, i.e., elderly, having a debilitating chronic illness, absence of caregivers in the home or diagnosed with a catastrophic illness is forwarded to the Discharge Planners for evaluation and follow-up.

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1. When possible, family members and significant others shall be included in these plans.
2. A plan for discharge will be included in the physician’s progress notes and communication between all disciplines will be documented in the medical record.

P. Ex. 41 at 4.

The surveyors found these four sentences inadequate and cited Petitioner’s failure to have a proper discharge planning policy and procedure as part of the reason they determined Petitioner was not in compliance with the discharge planning condition of participation found at 42 C.F.R. § 482.43 (Tag A799). CMS Ex. 3 at 54-55.

In its plan of correction for this alleged deficiency, Petitioner asserted that “[a] new Discharge Planning policy was created, reviewed and approved by the Medical Staff and Governing Body Ad Hoc meeting on March 30, 2016.” P. Ex. 41 at 2. The record does not contain a copy of this purported new discharge planning policy. It does, however, contain the agenda and minutes from the ad hoc meeting Petitioner’s governing board held on March 30, 2016. P. Ex. 1 at 26-27; P. Ex. 3 at 49-50; P. Ex. 5 at 51-52; P. Ex. 6 at 56-57; P. Ex. 8 at 49-50. One of the items of new business listed on the meeting agenda is revisions to Petitioner’s policy and procedures, but the discharge planning policy and procedure is not among the policies and procedures listed for revision. P. Ex. 1 at 26; P. Ex. 3 at 49; P. Ex. 5 at 51; P. Ex. 6 at 56; P. Ex. 8 at 49.3  The meeting minutes similarly contain no mention of Petitioner’s discharge planning policy and procedure. P. Ex. 1 at 27; P. Ex. 3 at 50; P. Ex. 5 at 52; P. Ex. 6 at 57; P. Ex. 8 at 50.

Based on the agenda and minutes from the March 30, 2016 ad hoc meeting of Petitioner’s governing board and the absence of any evidence of an amended discharge planning policy and procedure, I find it more likely than not that Petitioner did not amend or otherwise alter its discharge planning policy and procedure at any time after the March health survey. I further find it more likely than not that the one-page discharge planning policy and procedure described above continued in effect after the March health survey.

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2. Petitioner did not comply with the condition of participation at 42 C.F.R. § 482.43 (Discharge Planning).

Hospitals, like Petitioner, must have a discharge planning process that meets specific requirements in the Act. 42 U.S.C. § 1395x(e)(6)(B). Congress directed the Secretary generally to “develop guidelines and standards for the discharge planning process” but instructed him to include at least the following detailed guidelines and standards:

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42 U.S.C. § 1395x(ee)(2)(A)-(H).

To implement this statutory directive, the Secretary established, as a condition of participation, the requirement that a hospital “have in effect a discharge planning process that applies to all patients. The hospital’s policies and procedures must be specified in writing.” 42 C.F.R. § 482.43. Within the condition, the Secretary specified five standards that a hospital’s discharge planning process and written policies and procedures must meet. 42 C.F.R. § 482.43(a)-(e); see also SOM, App’x A, A799. (“The hospital is required to specify in writing its discharge planning policies and procedures. The policies and procedures must address all of the requirements of 42 CFR 482.43(a) – 482.43(e).”).

There is no dispute that Petitioner had a written policy and procedure for its discharge planning process. P. Ex. 41 at 4; P. Br. at 8; CMS Post-Hrg. Br. at 27. Rather, the surveyors and CMS allege that Petitioner’s one-page written policy and procedure was inadequate because it only “minimally outlined the process of discharge planning.” CMS Ex. 1 at 77; CMS Ex. 3 at 55; CMS Post-Hrg. Br. at 27. Whether this charge has merit depends on the extent to which Petitioner’s discharge planning policy and procedure conforms to the standards found in 42 C.F.R. § 482.43(a)-(e). As explained below, Petitioner’s discharge planning policy and procedure did not conform to four of those

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standards, rendering it ineffective and causing Petitioner to be out of compliance with the discharge planning condition of participation at 42 C.F.R. § 482.43.

The standard at 42 C.F.R. § 482.43(b) contains the following detailed requirements for discharge planning evaluation:

See also 42 U.S.C. § 1395x(ee)(2)(B)-(E), (G).

Petitioner’s discharge planning policy and procedure (P. Ex. 41 at 4) provides for discharge planning evaluation for what it terms “high-risk patients,” but it does not provide for such evaluation at the request of a patient, a patient’s responsible party, or a patient’s physician, contrary to subsection (b)(1). See also 42 U.S.C. § 1395x(ee)(2)(B). Similarly, while it indicates “Discharge Planners” should evaluate high-risk patients, it does not specify the qualifications necessary to be a discharge planner, contrary to

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subsection (b)(2). See also 42 U.S.C. § 1395x(ee)(2)(G). Further, although the policy and procedure indicates that the discharge planners should evaluate and follow up with high-risk patients, it gives no guidance on what type of evaluation and follow-up is required. It does not instruct discharge planners to evaluate a patient’s likelihood of needing post-hospital services or the availability of any such services, contrary to subsection (b)(3). See also 42 U.S.C. § 1395x(ee)(2)(D). It also does not instruct discharge planners to evaluate a patient’s capacity for self-care or the possibility that the patient could be cared for in the environment from which the patient entered the hospital, contrary to subsection (b)(4). In addition, the policy and procedure does not establish a time frame for completing a discharge planning evaluation, contrary to subsection (b)(5). See also 42 U.S.C. § 1395x(ee)(2)(C). Finally, the policy and procedure does not require Petitioner’s staff to include a discharge planning evaluation for a patient in the patient’s medical record or to discuss the evaluation results with the patient or responsible party. See also 42 U.S.C. § 1395x(ee)(2)(E).

In sum, Petitioner’s discharge planning policy and procedure does not meet any of the six elements of the standard at 42 C.F.R. § 482.43(b). Consequently, Petitioner did not comply with that standard.

b. Petitioner did not comply with the standard at 42 C.F.R. § 482.43(c) because its discharge planning policy and procedure lacked nearly all the elements contained within the standard.

The standard at 42 C.F.R. § 482.43(c) contains the following detailed requirements for discharge plans:

(c) Standard: Discharge plan. (1) A registered nurse, social worker, or other appropriately qualified personnel must develop, or supervise the development of, a discharge plan if the discharge planning evaluation indicates a need for a discharge plan.

(2) In the absence of a finding by the hospital that a patient needs a discharge plan, the patient’s physician may request a discharge plan. In such a case, the hospital must develop a discharge plan for the patient.

(3) The hospital must arrange for the initial implementation of the patient’s discharge plan.

(4) The hospital must reassess the patient’s discharge plan if there are factors that may affect continuing care needs or the appropriateness of the discharge plan.

(5) As needed, the patient and family members or interested persons must be counseled to prepare them for post-hospital care.

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(6) The hospital must include in the discharge plan a list of HHAs or SNFs that are available to the patient, that are participating in the Medicare program, and that serve the geographic area (as defined by the HHA) in which the patient resides, or in the case of a SNF, in the geographic area requested by the patient. HHAs must request to be listed by the hospital as available.

(i) This list must only be presented to patients for whom home health care or post-hospital extended care services are indicated and appropriate as determined by the discharge planning evaluation.

(ii) For patients enrolled in managed care organizations, the hospital must indicate the availability of home health and post[-]hospital extended care services through individuals and entities that have a contract with the managed care organizations.

(iii) The hospital must document in the patient’s medical record that the list was presented to the patient or to the individual acting on the patient’s behalf.

(7) The hospital, as part of the discharge planning process, must inform the patient or the patient’s family of their freedom to choose among participating Medicare providers of post[-]hospital care services and must, when possible, respect patient and family preferences when they are expressed. The hospital must not specify or otherwise limit the qualified providers that are available to the patient.

(8) The discharge plan must identify any HHA or SNF to which the patient is referred in which the hospital has a disclosable financial interest, as specified by the Secretary, and any HHA or SNF that has a disclosable financial interest in a hospital under Medicare. Financial interests that are disclosable under Medicare are determined in accordance with the provisions of part 420, subpart C, of this chapter.

See also 42 U.S.C. § 1395x(ee)(2)(F)-(H), (ee)(3).

As noted above, Petitioner’s discharge planning policy and procedure (P. Ex. 41 at 4) does not specify the qualifications necessary to be a discharge planner, which is contrary not only to subsection (b)(2) but also to subsection (c)(1). See also 42 U.S.C. § 1395x(ee)(2)(G). It also does not provide for the hospital to fulfill its obligation to arrange for implementing patient discharge plans, contrary to subsection (c)(3). See also 42 U.S.C. § 1395x(ee)(2)(F). It further fails to require or detail a procedure for staff to reassess patients’ discharge plans in the face of new developments that may affect the

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patient’s care needs or the appropriateness of the discharge plan, contrary to subsection (c)(4). In addition, the policy and procedure does not mention any sort of counseling for the patient, the patient’s family members, or other interested persons to help them prepare for post-hospital care, contrary to subsection (c)(5). Likewise, the policy and procedure does not require staff to include in patients’ discharge plans a list of home health agencies (HHAs) or skilled nursing facilities (SNFs) fitting regulatory criteria, contrary to subsection (c)(6) and paragraphs (c)(6)(i) and (ii), nor does it require staff to document in the patient’s medical record that such a list was presented to the patient or responsible party, contrary to paragraph (c)(6)(iii). In the same vein, the policy and procedure does not require staff to inform the patient or family that they are free to choose among Medicare providers of post-hospital care services and respect the patient’s or family’s choices and otherwise avoid any attempt to limit the qualified providers that are available to the patient, contrary to subsection (c)(7). Finally, the policy and procedure omits any mention of Petitioner’s obligation to disclose, as specified in 42 C.F.R. part 420, subpart C, a financial interest that Petitioner has in any HHA or SNF (or any financial interest an HHA or SNF has in it) to which the patient is referred, contrary to subsection (c)(8).

In sum, Petitioner’s discharge planning policy and procedure fails to meet almost all of the eight elements of the standard at 42 C.F.R. § 482.43(c). Therefore, Petitioner also did not comply with that standard.

c. Petitioner did not comply with the standard at 42 C.F.R. § 482.43(d) because its discharge planning policy and procedure does not address transfers and referrals.

A hospital’s discharge planning policies and procedures must provide for the transfer or referral of patients, with necessary medical information, to appropriate agencies or outpatient services, as needed, for follow-up or ancillary care. 42 C.F.R. § 482.43(d).

Petitioner’s discharge planning policy and procedure (P. Ex. 41 at 4) does not provide for transfers or referrals to other health care agencies or practitioners. In fact, the discharge planning and policy does not even mention the possibility that Petitioner might need to transfer or refer patients for additional care. Therefore, Petitioner did not comply with the standard at 42 C.F.R. § 482.43(d). 

d. Petitioner did not comply with the standard at 42 C.F.R. § 482.43(e) because its discharge planning policy and procedure did not require ongoing reassessment of the discharge planning process.

A hospital’s discharge planning policies and procedures must address the hospital’s responsibility to “reassess its discharge planning process on an on-going basis[, which] reassessment must include a review of discharge plans to ensure that they are responsive to discharge needs.” 42 C.F.R. § 482.43(e).

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Petitioner’s discharge planning policy and procedure (P. Ex. 41 at 4) lacks any requirement that Petitioner’s staff reassess its discharge planning process in any sort of interval, regular or otherwise. It follows, a fortiori, that the policy and procedure does not mandate that staff review past discharge plans to confirm those plans were responsive to the patients’ discharge needs. Consequently, the policy and procedure does not meet, and Petitioner did not comply with, the standard at 42 C.F.R. § 482.43(e).

e. Petitioner’s noncompliance with 42 C.F.R. § 482.43 rose to the condition level because its four standard-level deficiencies show that its discharge planning policy and procedure substantially limited Petitioner’s capacity to furnish adequate care and adversely affected the health and safety of Petitioner’s patients.

Whether a provider is noncompliant with a condition of participation “depends upon the manner and degree to which the provider . . . satisfies the various standards within [the] condition.” 42 C.F.R. § 488.26(b). If a provider’s “deficiencies are of such character as to substantially limit the provider’s . . . capacity to furnish adequate care or which adversely affect the health and safety of patients,” the provider is not in compliance with the conditions of participation. 42 C.F.R. § 488.24(b).

As shown above, Petitioner’s discharge planning policy and procedure (P. Ex. 41 at 4) failed to meet four of the five standards required of such a policy and procedure.4  A

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cursory review of the policy and procedure shows it is patently deficient and defective because it utterly fails to provide a guide (comprehensive or otherwise) for Petitioner’s unidentified “Discharge Planners” to use in evaluating patients for their need for discharge planning or in crafting actual discharge plans. It similarly fails to grapple with transfers and referrals for follow-up or ancillary care and the need to reassess the discharge planning process to ensure discharge plans were, and continued to be, responsive to patients’ discharge needs. I find that these failures so significantly infected Petitioner’s discharge planning policy and procedure that they substantially limited Petitioner’s capacity to furnish adequate care and adversely affected the health and safety of its patients. 42 C.F.R. § 488.24(b).

Sound policy considerations support this legal conclusion. In its interpretive guidance for 42 C.F.R. § 482.43, CMS notes that “a poor discharge planning process may slow or complicate the patient’s recovery, may lead to readmission to a hospital or may even result in the patient’s death.” SOM, App’x A, A799. Specifically regarding hospital readmissions, CMS cites a study showing a relatively high rate of “rehospitalizations” for Medicare beneficiaries following initial hospitalization, the vast majority of which were not planned. Id. As CMS explains, “Reducing the number of preventable hospital readmissions is a major priority for patient safety, and holding hospitals accountable for complying with the discharge planning [condition of participation] is one key element of an overall strategy for reducing readmissions.” Id. Thus, CMS’s goal in enforcing the discharge planning condition (which, notably, was required by Congress, 42 U.S.C. § 1395x(e)(6)(B), (ee)) is to protect hospital patients from rehospitalization and other adverse outcomes (even death) by ensuring hospitals develop an adequate written discharge planning policy and follow that policy. If a hospital fails to comply with the condition by maintaining a grossly inadequate written discharge planning policy, then it places its patients at risk—in some cases grave risk.

Therefore, I conclude that Petitioner’s violations of the standards established by 42 C.F.R. § 482.43(b)-(e) amount to a condition-level violation of 42 C.F.R. § 482.43. Id.; see 42 U.S.C. § 1395x(e)(6)(b), (ee); see also Humble Surgical Hosp., LLC, DAB CR2862 at 18 (concluding that, where a hospital’s discharge planning policy violated the standards at 42 C.F.R. § 482.43(b)-(e), the “violation of four of five standards of the condition established by 42 C.F.R. § 482.43, amounts to a condition-level violation of 42 C.F.R. § 482.43”).

In opposition to this conclusion, Petitioner raises a series of arguments, none of which is persuasive. First, Petitioner argues that CMS’s evidence from the April health survey is

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insufficient to establish a prima facie case of its noncompliance, pointing out that most of CMS’s evidence relates to the March surveys. P. Post-Hrg. Br. at 5-10. This argument suffers from two infirmities. First, CMS does not have the burden to prove that a provider’s noncompliance continued after the initial survey (in this case, the March surveys). See, e.g., Premier Living & Rehab. Ctr., DAB No. 2146 at 23 (2008) (“[O]nce a [provider] has been found to be out of substantial compliance, it remains so until it affirmatively demonstrates that it has achieved substantial compliance once again.”). Thus, so long as CMS established a prima facie case that Petitioner was not in compliance with a condition of participation as of the March health survey, which it has, it was under no obligation to proffer any evidence that Petitioner was still out of compliance during the April health survey. Rather, the burden shifted to Petitioner to show, by a preponderance of the evidence, that it returned to compliance. Id.

This leads to the second, more fundamental reason why Petitioner’s argument fails: not only did Petitioner fail to show it returned to compliance, its own records affirmatively establish its noncompliance continued throughout the survey cycle and through to when CMS terminated its provider agreement. As discussed, Petitioner’s one-page discharge planning policy and procedure establishes its noncompliance with 42 C.F.R. § 482.43. But even after the surveyors notified Petitioner of this noncompliance in the March SOD, Petitioner did not modify or replace the policy and procedure. It claimed in a POC that its governing board created a new discharge planning policy during an ad hoc meeting on March 30, 2016 (P. Ex. 41 at 2), but it offered no evidence, to the surveyors or in this proceeding, of any such new policy. To the contrary, the agenda and minutes from the March 30 meeting omit any mention of any revision to Petitioner’s discharge planning policy (P. Ex. 1 at 26-27; P. Ex. 3 at 49-50; P. Ex. 5 at 51-52; P. Ex. 6 at 56-57; P. Ex. 8 at 49-50) convincingly establishing, as I have found, that Petitioner in fact never altered or amended its discharge planning policy and procedure at any time after the March health survey.

For the same reason, Petitioner’s argument that the date of termination is the date by which it was required to return to compliance, as opposed to the date of the final survey, holds no water. P. Br. at 9-10; P. Reply at 1-2. Even assuming I was not inclined to follow the DAB’s reasoning in past cases that the date of the final survey is the “critical date for establishing compliance,” Carmel Convalescent Hosp., DAB No. 1584 (1996), Petitioner did not return to compliance with the conditions of participation by the termination date. In this case, CMS gave Petitioner until April 7, 2016, to correct all deficiencies to avoid termination on April 15, 2016. CMS Ex. 5. It appears that the state agency extended this date to correct twice, but to no later than April 14, 2016. CMS Ex. 9 at 16, CMS Ex. 10 at 9. The state agency then conducted a revisit survey on April 14, 2016, and CMS extended the termination date to May 15, 2016, so that the state surveyors could complete their survey reports. CMS Ex. 6. Although CMS later extended the date of termination to May 24, 2016, CMS neither provided Petitioner with a further opportunity to correct (CMS Ex. 7), nor was CMS required to do so. See

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42 C.F.R. § 488.28 (providing that CMS determines the time period by which a provider must return to compliance).

Petitioner also, futilely, takes issue with CMS’s failure to present a witness for Tag A799 (i.e., 42 C.F.R. § 482.43). P. Post-Hrg. Br. at 10-12; P. Reply at 8. Presumably, Petitioner means that CMS did not present a witness for the findings under Tag A799 during the April health survey, as Ms. Knox, who made the findings under Tag A799 during the March health survey, testified for CMS. CMS Ex. 31; Tr. at 292-307. This is simply irrelevant, for two reasons. First, as stated, CMS already established its prima facie case that Petitioner did not comply with a condition of participation as of the March health survey, for which it did submit witness testimony for Tag A799, and did not need to prove continuing noncompliance as of the April health survey, whether by witness testimony or otherwise. See Premier Living, DAB No. 2146 at 23. Second, CMS was under no obligation to prove its case through witness testimony; often, surveyor testimony is much less probative of a provider’s noncompliance with the conditions of participation than, for example, a provider’s own documents obtained during the survey. That is the situation here; Petitioner’s (inadequate) one-page discharge planning policy and procedure—over which it takes ownership, P. Br. at 8—fully establishes its condition-level noncompliance, independent of any witness testimony.

Finally, the fact that Petitioner’s own policy establishes its condition-level noncompliance undermines Petitioner’s additional arguments that the surveys suffered from infirmities, including containing mistakes, speculation not grounded in fact, and procedural errors, and that CMS’s witnesses had credibility issues. P. Br. at 10; P. Post-Hrg. Br. at 18-19. Any shortcomings in the survey process or witness credibility issues simply are not relevant because they do not impact the outcome of the condition-level deficiency explained above.

42 C.F.R. § 482.41 (Physical Environment)

3. Prior to the March 2016 surveys, Petitioner did not fix a door to an electrical room that would not close due to damage to the door frame assembly, did not inspect fire dampers that penetrated its fire wall, and had not installed smoke detectors in its operating room or the ante-room leading to the operating room, and Petitioner did not rectify any of these issues by the time of the revisit survey in April 2016.

Surveyor James Nathan Johns conducted the March 2016 LSC survey and the April 2016 LSC revisit survey of Petitioner’s facility and recorded his findings in the SODs for those surveys. CMS Exs. 2, 4, 32; Tr. at 310-11. He testified that the SOD for the March 2016 LSC survey was “true and correct and accurately reflect[s his] observations, interviews and findings.” CMS Ex. 32; see also CMS Ex. 4. He also testified that he was the life

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safety code surveyor who conducted the April 2016 revisit survey and addressed similar LSC provisions as the March 2016 survey. Tr. at 310-11; see also CMS Ex. 2.

During the March 2016 LSC survey, Surveyor Johns observed, among other things, the following:

On 03/02/16 at 14:28, the two fire doors to the mechanical equipment electrical room located in the basement were observed to be held open. One of the doors was observed to be held open by wire around the door knob and anchored to an electrical panel. The second door to the electrical room was held open due to damage to the frame assembly.

. . .

On 03/02/16 the east hall and west hall w[ere] observed to have fire dampers that penetrate through the fire wall. Upon record review of fire inspection report revealed the fire dampers were not inspected.

On 03/02/16 the maintenance supervisor acknowledged the inspection report not containing fire dampers were inspected.

. . .

On 03/03/16 at 11:41 a.m., no smoke detection was observed in the critical care operating/endo room in the surgical suite. There was no smoke detection observed in the ante-room leading into the operating/endo room within the surgical suite.

At 11:41 a.m., the maintenance supervisor acknowledged there were no smoke detection devices.

CMS Ex. 4 at 4, 9-10. These three observations related to Tags K-21, K-52, and K-54, respectively.

In its various plans of correction, Petitioner indicated, first, that “[t]he second door to the electrical room will be repaired with a new door jam[b].” CMS Ex. 33 at 20; CMS Ex. 34 at 37; CMS Ex. 36 at 39; CMS Ex. 37 at 102, 133; CMS Ex. 38 at 11; P. Ex. 16 at 4; P. Ex. 29 at 11. In the later plan(s) of correction, Petitioner further noted, “The door jam[b] has been ordered.” CMS Ex. 33 at 20; CMS Ex. 34 at 37; P. Ex. 29 at 11.

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Next, Petitioner noted that it had “arranged to have the fire dampers inspected. The maintenance supervisor has been trained in making sure fire inspections are performed correctly. The fire dampers will be covered in all future fire inspections.” CMS Ex. 33 at 22, 51; CMS Ex. 34 at 39, 69; P. Ex. 19 at 20; P. Ex. 29 at 13; P. Ex. 34 at 6-7. Interestingly, in its initial plan of correction, Petitioner indicated that no action was required to correct its prior failure to inspect its fire dampers. CMS Ex. 37 at 102, 134, 149.

Finally, with respect to the lack of smoke detectors in the operating room and anteroom, Petitioner initially stated that “[a] smoke detector will be added to the system to provide coverage.” CMS Ex. 37 at 102, 134. However, Petitioner stated in its later POCs that “[t]he maintenance supervisor has been trained on where smoke detectors are required. The maintenance supervisor will do inspections every other month (six times a year) to maintain compliance. The hospital has closed and locked the surgical suite. The hospital will not reopen the surgical suite without the required smoke detection in place.” CMS Ex. 33 at 22; CMS Ex. 34 at 39; P. Ex. 29 at 13.

During the April 2016 revisit LSC survey, Surveyor Johns’s findings were that Petitioner had not corrected most of the foregoing problems, writing that:

On 04/14/16, at 10:53 a.m., the fire door leading to the electrical room hazardous area located in the basement was observed to still be held open due to damage to the fire door frame assembly.

. . .

On 04/14/2016, at 11:02 a.m., the maintenance supervisor was asked for the fire damper inspection report. He mentioned it had not been completed and . . . it has been hard to obtain a vendor to get it done.

. . .

On 04/14/2016, at 11:26 a.m., an inspection of the surgical suite was completed. There w[ere] no smoke detection devices installed within the surgical suite.

At 11:33 a.m., the chief operating office was asked for supporting documentation for the plans to install smoke detection in the facility operating suite. He said that since they indicated all surgical procedures had been ceased they had not started to prepare plans, contact an architect, or do

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anything with the surgical suite. He further stated that the facility wanted to concentrate on fixing other areas of citations with in [sic] the facility.

CMS Ex. 2 at 4-6. Again, these three observations related to Tags K-21, K-52, and K-54, respectively.

At the hearing, Surveyor Johns confirmed that, during the April 2016 LSC revisit survey, he: “found that the doors to the basement were held open . . . due to damage to the frame assembly,” “cited [Petitioner] for not having fire damper testing,” and saw that “there was no smoke detection device installed in the surgery suite.” Tr. at 319-21.

I find Surveyor Johns’s testimony and recorded observations to be credible. Petitioner argues that I “should . . . evaluate the credibility of CMS’ [sic] witnesses in light of their sequestration instruction” and insinuates that one of the witnesses may have committed perjury. P. Post-Hrg. Br. at 19. After reviewing this matter, I find that the three surveyors’ testimony is largely consistent, and any inconsistencies can easily be attributed to each surveyor’s understanding of the questions Petitioner’s counsel asked them and the import of their conversations. Tr. at 184-86, 293-94, 312-13. I do not find that any inconsistencies reduce the credibility of the testimony from Surveyor Johns on which I rely in this decision.

Further, Petitioner did not offer any testimony from its maintenance supervisor to rebut Surveyor Johns’s reports of their conversations. In addition, Petitioner’s chief operating officer, who did testify, did not dispute that he told Surveyor Johns the facility had ceased to work on the surgical suite (see P. Ex. 82), although he did confirm that after the March survey Petitioner closed the surgical suite. P. Ex. 82 at 4. By contrast, I find the representations in Petitioner’s POCs to be of limited weight, except to the extent they are consistent with Surveyor Johns’s testimony and recorded observations.

Based on Surveyor Johns’s testimony and recorded observations, I find that, as of the March 2016 LSC survey, the fire doors leading to the basement electrical room were held open, one by a wire and the other by damage to the door frame assembly. CMS Ex. 4 at 4. I find also that, by the April 2016 LSC revisit survey, Petitioner had removed the wire but had not repaired the door frame assembly. CMS Ex. 2 at 4; Tr. at 319. Petitioner’s POCs are consistent with Surveyor Johns’s testimony and recorded observations on this point because, in its POCs, Petitioner only indicated that the door “will be repaired” and that “[t]he door jam[b] has been ordered,” not that it in fact had been repaired at any time. CMS Ex. 33 at 20; CMS Ex. 34 at 37; CMS Ex. 36 at 39; CMS Ex. 37 at 102, 133; CMS Ex. 38 at 11; P. Ex. 16 at 4; P. Ex. 29 at 11. Petitioner offered no evidence tending to show that it fixed the door frame assembly (e.g., by obtaining and installing the door jamb it purportedly ordered) at any time prior to the termination. See P. Ex. 16 (described in Petitioner’s exhibit list as “Response to K-Tag 021”). Therefore, I find that,

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even after the April 2016 LSC revisit survey, Petitioner did not fix the door frame assembly for the fire door leading to the basement electrical room, which door was still held open by the unrepaired damage.

I find further that, as of the March 2016 LSC survey, Petitioner had fire dampers penetrating its fire wall but no record of any inspection of the fire dampers. CMS Ex. 4 at 9. I infer from this that Petitioner had not inspected the fire dampers prior to or during the March 2016 LSC survey. I find also that, by the April 2016 LSC revisit survey, Petitioner still had not inspected the fire dampers. CMS Ex. 2 at 5; Tr. at 320. I do not credit Petitioner’s claim in its POC that it had “arranged to have the fire dampers inspected” (CMS Ex. 33 at 22, 51; CMS Ex. 34 at 39, 69; P. Ex. 19 at 20; P. Ex. 29 at 13; P. Ex. 34 at 6-7), because it conflicts with Surveyor Johns’s report that the maintenance supervisor told him “it has been hard to obtain a vendor” to inspect the fire dampers. CMS Ex. 2 at 5. In any event, even if Petitioner had arranged for a fire damper inspection, such an inspection had not been completed by the April 2016 LSC revisit survey.

Petitioner’s later statement in the POCs that “[t]he fire dampers will be covered in all future fire inspections” does not convince me that it had the fire dampers inspected at any particular time, or at all, after the March 2016 LSC survey. CMS Ex. 33 at 22, 51; CMS Ex. 34 at 39, 69; CMS; P. Ex. 19 at 20; P. Ex. 29 at 13; P. Ex. 34 at 6-7. Even though Petitioner submitted records from fire alarm system tests and inspections completed on July 16, 2015, and May 3, 2016, those records do not demonstrate that the inspector ever looked at the fire dampers. P. Exs. 90, 91. Neither document mentions “fire dampers” at all, and while both allow for testing of “[s]moke damper operation,” the boxes for “Visual Inspection” and “Functional Test” on both documents are blank, meaning the inspector did not inspect or test any smoke dampers. P. Ex. 90 at 9; P. Ex. 91 at 5. Thus, I find that, even after the April 2016 LSC revisit survey, Petitioner still did not inspect the fire dampers.

Finally, I find that Petitioner had not installed smoke detectors in the operating room or the anteroom leading to the operating room prior to or during the March 2016 LSC survey and did not install smoke detectors in either room after that survey. CMS Ex. 2 at 5-6; CMS Ex. 4 at 9-10. I do not credit Petitioner’s claim in its initial POC that it would add a smoke detector to the rooms, as it is inconsistent with both Surveyor Johns’s observations during the April 2016 LSC revisit survey and Petitioner’s later POCs. Tr. at 320; CMS Ex. 2 at 5-6; CMS Ex. 33 at 22; CMS Ex. 34 at 39; CMS Ex. 37 at 102, 134; P. Ex. 20 at 3; P. Ex. 29 at 13. Further, Petitioner offered no evidence that it ever installed smoke detectors in those two rooms (see P. Ex. 20 (described in Petitioner’s exhibit list as “Response to K-Tag054”)), and its later POCs indicated it did not intend to install them until it reopened the surgical suite, which it did not do prior to the termination.

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4. Petitioner did not comply with the condition of participation at 42 C.F.R. § 482.41 (Physical Environment).

Hospitals that participate in Medicare “must be constructed, arranged, and maintained to ensure the safety of the patient, and to provide facilities for diagnosis and treatment and for special hospital services appropriate to the needs of the community.” 42 C.F.R. § 482.41; see also 42 U.S.C. 1395x(e)(9). This condition contains three standards requiring hospitals to: develop and maintain their physical plans and overall environments to assure patient safety and well-being, keep their premises safe from fire, and maintain adequate facilities for their services. 42 C.F.R. § 482.41(a)-(c).

The surveyors and CMS charge that Petitioner violated all three of the standards under this condition and the condition itself. CMS Ex. 1 at 32-57; CMS Ex. 2; CMS Ex. 3 at 19-41; CMS Ex. 4; CMS Post-Hrg. Br. at 15-22. As explained below, Petitioner violated multiple LSC provisions and, by extension, the Life Safety from Fire standard at 42 C.F.R. § 482.41(b), and its noncompliance with that standard was severe enough to put Petitioner out of compliance with the physical environment condition of participation at 42 C.F.R. § 482.41.

a. Petitioner did not comply with the Life Safety from Fire standard at 42 C.F.R. § 482.41(b) because it violated three separate LSC provisions.

Of key import in this case is the Life Safety from Fire standard found at 42 C.F.R. § 482.41(b), and, in particular, elements 1 and 8 within that standard. Those elements read as follows:

(1) Except as otherwise provided in this section—

(i) The hospital must meet the applicable provisions of the 2000 edition of the Life Safety Code of the National Fire Protection Association. The Director of the Office of the Federal Register has approved the NFPA 101® 2000 edition of the Life Safety Code, issued January 14, 2000, for incorporation by reference . . . .

(8) The hospital must maintain written evidence of regular inspection and approval by State or local fire control agencies.

42 C.F.R. § 482.41(b)(1)(i), (b)(8).

Across the March and April 2016 LSC surveys, the surveyors charged that Petitioner violated numerous LSC provisions, in violation of the above-described standards. Based on the facts I have found, I conclude that Petitioner violated three LSC provisions, those

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under Tags K21, K52, and K54, and thereby failed to comply with the Life Safety from Fire standard at 42 C.F.R. § 482.41(b).5  I discuss each provision in turn.

Tag K21: Section 19.2.2.2.6 of the NFPA 101 (2000 ed.) provides: 

Any door in an exit passageway, stairway enclosure, horizontal exit, smoke barrier, or hazardous area enclosure shall be permitted to be held open only by an automatic release device that complies with 7.2.1.8.2. The automatic sprinkler system, if provided, and the fire alarm system, and the systems required by 7.2.1.8.2 shall be arranged to initiate the closing action of all such doors throughout the smoke compartment or throughout the entire facility.

See also CMS Ex. 2 at 3; CMS Ex. 4 at 3; CMS Ex. 11 at 7; P. Ex. 12 at 54. The Fire Safety Survey Report for the 2000 Code, form CMS-2786R, elaborates that “[b]oiler rooms, heater rooms, and mechanical equipment rooms doors are kept closed.” CMS Ex. 11 at 7.

As of the March 2016 LSC survey, the fire doors leading to an electrical room in Petitioner’s basement, an undisputedly hazardous area, were held open, one by a wire anchored to an electrical panel, the other by damage to the door frame assembly. CMS Ex. 4 at 4. Petitioner removed the wire, which allowed one of the doors to close. CMS Ex. 33 at 20; CMS Ex. 34 at 37; CMS Ex. 36 at 39; CMS Ex. 37 at 101, 133; CMS Ex. 38 at 11; P. Ex. 16 at 4; P. Ex. 29 at 11. However, despite claiming numerous times in its various plans of correction that it would repair the door with a new door jamb, and despite its less-repeated claim that it had ordered a new door jamb (CMS Ex. 33 at 20; CMS Ex. 34 at 37; CMS Ex. 36 at 39; CMS Ex. 37 at 102, 133; CMS Ex. 38 at 11; P. Ex. 16 at 4; P. Ex. 29 at 11) Petitioner had not fixed the door jamb by the time Surveyor Johns returned in April (CMS Ex. 2 at 4). Nor did it fix the door jamb prior to the termination. Thus, Petitioner violated NFPA 101 section 19.2.2.2.6 (Tag K21).

Tag K52: Section 9.6.1.4 of the NFPA 101 provides, with an exception not applicable here, that “[a] fire alarm system required for life safety shall be installed, tested, and maintained in accordance with the applicable requirements of NFPA 70, National Electrical Code, and NFPA 72, National Fire Alarm Code . . . .” Section 9.6.1.7 of the NFPA 101 provides that, “[t]o ensure operational integrity, the fire alarm system shall have an approved maintenance and testing program complying with the applicable requirements of NFPA 70, National Electrical Code, and NFPA 72, National Fire Alarm

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Code.” See also CMS Ex. 2 at 4; CMS Ex. 4 at 9; CMS Ex. 11 at 16; P. Ex. 12 at 63. Section 3-9.5.2 of NFPA 72 (1999 ed.) provides, “If connected to the fire alarm system serving the protected premises, all detection devices used to cause the operation of HVAC systems smoke dampers, fire dampers, fan control, smoke doors, and fire doors shall be monitored for integrity . . . .” I conclude from this that such devices, including fire dampers, also need to be monitored for integrity to ensure they operate in case of a fire.

As of the March 2016 LSC survey, Petitioner had not inspected or tested the fire dampers penetrating its fire wall, and it did not inspect the fire dampers by the April 2016 LSC revisit survey. CMS Ex. 2 at 5; CMS Ex. 4 at 9; Tr. at 320. Despite having its fire alarm system tested and inspected on July 16, 2015, and again on May 3, 2016 (P. Exs. 90, 91), Petitioner did not have the fire dampers tested, either as part of those fire alarm system tests and inspections or otherwise, prior to the termination. Thus, Petitioner also violated NPFA 72 section 3-9.5.2 and, by extension, NFPA 101 sections 9.6.1.4 and 9.6.1.7 (Tag K52).

Tag K54: Section 9.6.1.3 of the NFPA 101 provides that “[t]he provisions of Section 9.6 cover the basic functions of a complete fire alarm system, including fire detection, alarm, and communications. These systems are primarily intended to provide the indication and warning of abnormal conditions, the summoning of appropriate aid, and the control of occupancy facilities to enhance protection of life.” The Fire Safety Survey Report for the 2000 Code elaborates that “[a]ll required smoke detectors, including those activating door hold-open devices, are approved, maintained, inspected and tested in accordance with the manufacturer’s specifications.” CMS Ex. 11 at 17; P. Ex. 12 at 164.

Petitioner does not dispute that the foregoing LSC provision required it to have smoke detectors in its operating room and the anteroom leading into the operating room. Yet Petitioner did not install smoke detectors in either room at any time, either before, during, or after the March 2016 and April 2016 LSC surveys. Petitioner seemed to think that it did not need to install smoke detectors in these rooms because it closed the surgical suite. CMS Ex. 2 at 5-6; CMS Ex. 4 at 9-10. If anything, though, closing the surgical suite increased the urgency of installing smoke detectors since it reduced the likelihood that a staff person would notice a fire in the suite, had one started. Consequently, Petitioner also violated NFPA 101 section 9.6.1.3 (Tag K54).

42 C.F.R. § 482.41(b): As explained above, Petitioner did not meet all applicable provisions of the 2000 LSC, which violated 42 C.F.R. § 482.41(b)(1)(i). In addition, Petitioner’s failure to inspect the fire dampers penetrating its fire wall separately violated 42 C.F.R. § 482.41(b)(8). Hence, Petitioner did not comply with the life safety from fire standard at 42 C.F.R. § 482.41(b).

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b. Petitioner’s noncompliance with 42 C.F.R. § 482.41 rose to the condition level because its violation of the Life Safety from Fire standard (42 C.F.R. § 482.41(b)) posed a great potential for harm to its patients.

As mentioned earlier, a provider is not in compliance with the conditions of participation if its “deficiencies are of such character as to substantially limit the provider’s . . . capacity to furnish adequate care or which adversely affect the health and safety of patients.” 42 C.F.R. § 488.24(b). Deficiencies that pose a “great potential for harm” meet this legal standard. Angel Kidney Care of Inglewood, Inc., DAB No. 2795 at 9 (2017).

Petitioner’s LSC deficiencies and attendant violation of 42 C.F.R. § 482.41(b) all inhibited Petitioner’s ability to protect its patients from fires. Its failure to ensure the doors to a hazardous area containing electrical equipment—which equipment could provide the spark for a larger conflagration—were able to close and its failure to inspect the fire dampers that penetrated its fire wall each increased the risk that what might otherwise be a small and contained fire would spread throughout the facility. Its failure to install smoke detectors in the operating room or ante-room leading to the operating room increased the risk that a fire in that area, once started, would spread without detection until it became too large to contain. The fact that Petitioner had closed its surgical suite and ceased conducting surgeries magnified this risk, as it increased the odds that, for example, an electrical fire in the room would go undetected by staff who would have little reason to enter the suite. Any such fire posed an obvious and severe threat to Petitioner’s patients, as any larger fire that evaded detection and spread easily due to Petitioner’s deficiencies would reduce the time Petitioner’s staff had to evacuate the building and escort the patients to safety. See Cahokia Nursing & Rehab. Ctr., DAB CR5374 at 5-6 (2019) (describing the chaotic nature of a long-term care facility’s response to a fire when that facility failed to have proper fire alarms and other required equipment to slow the spread of a fire resulting in 14 injured residents). Consequently, I conclude that Petitioner’s LSC deficiencies and attendant violation of the Life Safety from Fire standard at 42 C.F.R. § 482.41(b) posed a great potential for harm to its patients and thereby adversely affected the health and safety of its patients. 42 C.F.R. § 488.24(b); Angel Kidney Care, DAB No. 2795 at 9. From this, I conclude that Petitioner’s violation of the standard established by 42 C.F.R. § 482.41(b) amounted to a condition-level violation of 42 C.F.R. § 482.41. 42 C.F.R. § 488.24(b).

I have already addressed and rejected many of Petitioner’s more general arguments in section III.2.e (FFCL 2.e), above. Largely the same logic leads to rejection of those arguments in the context of Petitioner’s condition-level noncompliance with 42 C.F.R. § 482.41. For example, the fact that most of CMS’s evidence relates to the March surveys (P. Post-Hrg. Br. at 5-10) gives me no pause because (1) that evidence establishes Petitioner’s condition-level noncompliance with 42 C.F.R. § 482.41 as of the March 2016 LSC survey and Petitioner failed to rebut that showing or prove it returned to

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compliance thereafter, and (2) sufficient evidence from the April 2016 LSC revisit survey establishes Petitioner’s continuing condition-level noncompliance and no evidence shows that it ever returned to compliance. In addition to the discussion earlier in this decision, the latter reason further underpins my rejection of Petitioner’s argument that it was required only to return to compliance by the termination date, rather than the final survey date. Similarly, because the evidence establishes Petitioner’s condition-level noncompliance with 42 C.F.R. § 482.41, I also find irrelevant Petitioner’s allegations of infirmities in the surveys (P. Br. at 10; P. Post-Hrg. Br. at 18-19).

In addition to these meritless arguments, Petitioner argues that it “conducted the necessary testing” of its fire dampers, citing to the July 16, 2015 and May 3, 2016 fire alarm inspection and testing reports (P. Exs. 90, 91). P. Opp. at 6-7; see also P. Reply at 6-7. Relatedly, Petitioner asserts that it “provided copies of the inspection.” P. Post-Hrg. Br. at 16 (citing P. Ex. 19 at 25). This argument similarly lacks merit. First, as already discussed, those fire alarm inspection and testing reports contain no evidence that the inspector looked at the fire dampers. Second, the document found at P. Ex. 19 at 25, which continues on pages 26 and 27 of that exhibit, is not an inspection report but rather a “contract for automatic fire sprinkler equipment inspection” that makes no mention of fire dampers. Further, the date of the contract is April 22, 2016, more than a week after the revisit LSC survey concluded. P. Ex. 19 at 25. Simply put, Petitioner has not shown that it conducted the necessary inspection of the fire dampers that penetrated its fire wall.

5. Petitioner’s condition-level noncompliance with 42 C.F.R. §§ 482.41 and 482.43 furnished a legal basis for CMS to terminate Petitioner’s Medicare provider agreement.

CMS may terminate a hospital’s Medicare provider agreement where the hospital is not in substantial compliance with Medicare requirements. 42 U.S.C. §§ 1395cc(b)(2)(B), 1395x(e). Failure to comply with a single condition of participation constitutes lack of substantial compliance and justifies terminating a hospital’s provider agreement. 42 C.F.R. § 489.53(a)(3); see, e.g., Profound Health Care, DAB No. 2371 at 3 (2009).

I have already concluded that Petitioner failed to comply with the discharge planning condition at 42 C.F.R. § 482.43 because it adopted a grossly deficient discharge planning policy and procedure. Petitioner’s condition-level noncompliance pre-dated and continued throughout the survey cycle, as it adopted that policy and procedure effective August 18, 2011, and never altered or amended it. P. Ex. 41 at 2, 4; P. Ex. 1 at 26-27; P. Ex. 3 at 49-50; P. Ex. 5 at 51-52; P. Ex. 6 at 56-57; P. Ex. 8 at 49-50. In addition, I have concluded that Petitioner failed to comply with the physical environment condition at 42 C.F.R. § 482.41 because it failed to comply with multiple LSC provisions (and, by extension, the Life Safety from Fire Standard at 42 C.F.R. § 482.41(b)) and those failures, viewed together, posed a great potential for harm to its patients. Petitioner’s condition-level noncompliance with 42 C.F.R. § 482.41 also pre-dated and continued

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throughout the survey cycle, as the LSC violations existed prior to the survey and Petitioner did not correct those violations by the date established by CMS. As a result, I further conclude that CMS had a legal basis to terminate Petitioner’s provider agreement effective May 24, 2016. 42 C.F.R. § 489.53(a)(3).

If a hospital fails to comply with the condition by maintaining a grossly inadequate written discharge planning policy, or fails to take basic fire safety precautions, then it places its patients at risk—in some cases grave risk. In such a situation, as exists here, it is eminently reasonable for CMS to sever its relationship with the hospital by terminating the hospital’s Medicare provider agreement in order to protect Medicare beneficiaries from the risk of harm they would face.

IV. Conclusion

Based on the foregoing, I conclude that Petitioner did not comply with two Medicare conditions of participation. Accordingly, I conclude that CMS had a legal basis to terminate Petitioner’s Medicare provider agreement effective May 24, 2016.

• 1.“Tags” are used in the State Operations Manual (SOM), CMS Pub. 100-07, App’x A – Survey Protocol, Regulations and Interpretive Guidelines for Hospitals (rev. 87; eff. July 19, 2013) available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_a_hospitals.pdf to identify each provision in a given regulation.  Tags with an “A” relate directly to hospitals.  The state surveyors cite to both the Code of Federal Regulations and the SOM Tags in a SOD when discussing a deficiency. 
• 2.I have not discussed every deficiency appearing in the March and April SODs because the deficiencies I uphold below are sufficient to justify the termination of Petitioner’s provider agreement.  See Claiborne-Hughes Health Ctr., 609 F.3d 839, 847 (6th Cir. 2010); Carrington Place of Muscatine, DAB No. 2321 at 20-21 (2010); see also Humble Surgical Hosp., LLC, DAB CR2862 at 6-7 (2013).
• 3.Listed instead are Petitioner’s poison control policy, infection prevention program and policy, clinical actions to alleged or suspected patient abuse policy, plant operations QAPI plan, medical equipment management plan, environment of care safety management plan, and power strips in patient care areas (categorical waiver).  P. Ex. 1 at 26; P. Ex. 3 at 49; P. Ex. 5 at 51; P. Ex. 6 at 56; P. Ex. 8 at 49.
• 4.Arguably, the policy did not meet the fifth standard, either.  Under that standard, a hospital’s discharge planning policy and procedure must specify how staff will “[i]dentif[y] patients in need of discharge planning.”  42 C.F.R. § 482.43(a).  A patient is in need of discharge planning when he or she is “likely to suffer adverse health consequences upon discharge if there is no adequate discharge planning.”  Id.  While Petitioner’s discharge planning policy and procedure lists (P. Ex. 41 at 4) several vulnerable groups of “high-risk patients,” it does not explain how to identify the need for discharge planning for patients not included in those categories who might otherwise be likely to suffer adverse health consequences without adequate discharge planning.  On the other hand, the statement of purpose and first procedure listed in the policy and procedure, read together, suggest that Petitioner’s policy was to create a discharge plan for all patients.  If this was Petitioner’s policy, it quite possibly would render any noncompliance with subsection (a) merely a technical violation.  Notably, though, Petitioner’s discharge planning policy and procedure is so poorly written that it is impossible to say with any certainty that this is the case.  The fact that only information concerning “high-risk patients” is forwarded for evaluation and follow-up certainly suggests Petitioner did not create a discharge plan for each patient.  The surveyors’ observation that five out of five patient records reviewed during the March health survey “did not contain evidence of discharge planning” further supports this inference.  CMS Ex. 3 at 55.  I need not explore this issue further, however, because, as I discuss in the text, even if Petitioner’s discharge planning policy and procedure complied with 42 C.F.R. § 482.43(a), its manifest noncompliance with the four remaining standards placed Petitioner out of compliance with the discharge planning condition.
• 5.I make no findings or conclusions about the remaining alleged LSC violations as it is unnecessary to do so to conclude, as I do here, that Petitioner was noncompliant, at the condition-level, with 42 C.F.R. § 482.41.