Compassus - Kansas City, DAB CR6078 (2022)

DECISION

Following surveys by the Missouri Department of Health and Senior Services (state agency), the Centers for Medicare & Medicaid Services (CMS) determined that Compassus - Kansas City (Petitioner) failed to comply with the conditions of participation for hospices.  Based on this finding, CMS terminated Petitioner’s Medicare provider agreement effective October 10, 2018.  Petitioner requested a hearing to challenge the termination.  For the reasons explained below, I find CMS failed to make a prima facie case that Petitioner was out of compliance with Medicare participation requirements.  Accordingly, CMS lacked a basis to terminate Petitioner’s Medicare provider agreement.

Procedural Background

Prior to October 10, 2018, Petitioner was a hospice that participated in Medicare as a provider of services.  Petitioner operated from Liberty, Missouri, with a multiple location in Gallatin, Missouri.  See, e.g., CMS Ex. 1 at 1, 2; see also Transcript (Tr.) at 451 ; 42 C.F.R.

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§ 418.3 (definition of multiple location).  The state agency completed a complaint investigation of Petitioner’s hospice on July 27, 2018.  CMS Ex. 6 at 1.  The survey concluded that Petitioner failed to comply with the conditions of participation for core services (42 C.F.R. § 418.64) and organization/administration of services (42 C.F.R. § 418.100).  Id.  Based on the state agency’s investigation, CMS concluded that Petitioner’s noncompliance posed immediate jeopardy to resident health and safety.  Petitioner submitted a plan of correction (CMS Ex. 4), and the state agency completed a follow-up survey on August 30, 2018 (CMS Ex. 1).  Based on the findings at the August 30 survey, CMS determined that Petitioner remained out of compliance with the condition of participation for core services (42 C.F.R. § 418.64) at the immediate jeopardy level.  CMS Ex. 9 at 1.  CMS further determined that Petitioner’s deficiencies “constitute[d] an immediate threat to patient health and safety and remain[ed] ongoing since the conclusion of the August 30, 2018 revisit survey.”  Id.  CMS therefore informed Petitioner that its provider agreement would be terminated on October 10, 2018.  Id.

Petitioner requested a hearing to challenge the termination and the case was assigned to me for a hearing and decision.  I issued an Acknowledgment and Pre-Hearing Order (Pre‑hearing Order) requiring the parties to submit pre-hearing exchanges, which were to include legal arguments, proposed exhibits, the written direct testimony of any proposed witness, and requests to cross-examine the opposing party’s proposed witnesses.  CMS submitted its pre-hearing exchange, consisting of a brief (CMS Br.) and seven proposed exhibits (CMS Exs. 1-7), including the written direct testimony of two witnesses (CMS Exs. 3, 5).  Petitioner also submitted a pre-hearing brief (P. Br.) and two proposed exhibits (P. Exs. 1, 2), including the written direct testimony of one witness (P. Ex. 1).  Each party requested to cross-examine the witness(es) proposed by the opposing party.

On September 15, 2020, I held a hearing via video-teleconference (VTC), and a transcript was made of the proceeding.  I presided from my office in the Washington, D.C. metropolitan area.  All counsel and witnesses appeared separately from their homes or offices via VTC.  In the absence of objection, I admitted CMS Exs. 1-7 and P. Exs. 1 and 2.  See Tr. at 4, 16, 75, 104.  During the hearing, counsel for Petitioner cross-examined Sue Luckett, R.N., a state agency surveyor, and Elizabeth Henningfeld, a Health Insurance Specialist, who serves as the Home Health Agency and Hospice Lead for CMS’s Regional Office (Region VII).  Having previously requested to cross-examine Petitioner’s witness, Corina Tracy, R.N., Chief Operations Officer (COO) of Compassus Hospice and Palliative Care (see P. Ex. 1), CMS waived cross-examination at the hearing.  Tr. at 99.  However, pursuant to my authority under 42 C.F.R. § 498.60, I questioned Ms. Tracy.  See Tr. at 105-112.  I provided counsel for Petitioner and for CMS the opportunity to ask questions of the witness based on the testimony I elicited.  Tr. at 112-16, 121-25, 129-30.

Before the close of the hearing, I directed counsel for CMS to supplement CMS’s exhibits with two additional notice letters that Ms. Henningfeld referenced in her written

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direct testimony.  Tr. 132-33, 140.  Ms. Henningfeld’s testimony refers to the letters as “Exhibit 1” and “Exhibit 2.”  CMS Ex. 5 at ¶ 8.  However, I had already admitted, as CMS Exs. 1 and 2, the statement of deficiencies for the survey that concluded August 30, 2018, and the surveyor notes and medical records for that survey.  I therefore directed counsel to submit the letters as CMS Exs. 8 and 9.  Tr. at 133-34.  On September 15, 2020, counsel uploaded CMS Exs. 8 and 9 to the electronic file for this case.

Thereafter, each party submitted a post-hearing brief (CMS Posthrg. Br.; P. Posthrg. Br.) and a post-hearing reply (CMS Reply; P. Reply).  With Petitioner’s post-hearing brief, counsel for Petitioner filed a list of all the admitted exhibits and noted that CMS Exs. 8 and 9 were submitted post-hearing.  P. Posthrg. Br. at [PDF pages] 17-18.  In that document, Petitioner objected to CMS Ex. 8 as irrelevant, but did not object to CMS Ex. 9.  I overrule Petitioner’s objection and admit CMS Exs. 8 and 9; however, I do not accord weight to CMS Ex. 8 because it concerns an entity other than Petitioner.

Issue

The sole legal issue before me is whether CMS properly terminated Petitioner’s Medicare provider agreement.

Discussion

A.  Applicable Legal Authority

The statutory requirements for hospices providing Medicare services are established at section 1861(dd) of the Social Security Act (Act).2   In order to participate in the Medicare program, a hospice must be certified as meeting Medicare participation requirements and have an approved provider agreement with CMS.

The regulations implementing section 1861(dd) of the Act appear at 42 C.F.R. part 418.  The regulations require hospices to comply with specified conditions of participation, including, as relevant here, core services (42 C.F.R. § 418.64).  Section 489.53(a)(3) of the regulations grants CMS the discretionary authority to terminate any Medicare provider agreement if the provider “no longer meets the appropriate conditions of participation . . . .”  42 C.F.R. § 489.53(a)(3).

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Termination of a provider agreement is an initial determination subject to review by an administrative law judge.  42 C.F.R. §§ 488.24(c), 498.5(b).  Before the administrative law judge, CMS must establish a prima facie case that it had a basis for termination, then the burden of persuasion shifts to the facility to prove by a preponderance of the evidence that it was in substantial compliance with the statutory and regulatory requirements.  Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 F. App’x 181 (6th Cir. 2005).

B.  Findings of Fact, Conclusions of Law, and Analysis

1.  I find the following facts related to the state agency’s investigation of Petitioner’s alleged noncompliance.

Compassus Hospice and Palliative Care, also referred to as FC Compassus (Compassus), is a corporate entity that operates multiple hospice locations in various states, including Missouri and Kansas.  See P. Ex. 1 at ¶¶ 1, 9, 10; see also Tr. at 105-07.  Petitioner is one of Compassus’ subsidiaries.

July 27, 2018 complaint investigation

The state agency conducted a complaint investigation of Petitioner that ended on July 27, 2018.  CMS Ex. 6 at 1.  Following the investigation, the state agency issued a statement of deficiencies (id. at 1-16) that found Petitioner did not comply with the conditions of participation for core services (42 C.F.R. § 418.64) and organization/administration of services (42 C.F.R. § 418.100) and that Petitioner’s noncompliance posed immediate jeopardy “for actual harm to one patient . . . and pot[e]ntial for future harm to patients.”  Id. at 1.

The state agency found that Petitioner failed to meet the standard for nursing services (42 C.F.R. § 418.64(b)(1)) because “the agency failed to ensure that the patient’s nursing needs were met when the registered nurse (RN)[3 ] did not make an after-hours home visit in one applicable case (Record/Patient #2) resulting in an immediate jeopardy finding.”  Id. at 2.  The incident that led to the finding of noncompliance involved a patient diagnosed with end stage Parkinson’s Disease and dementia.  Id. at 3.  The patient

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apparently resided in a long-term care facility.  See id. at 4 (RN documented receiving four phone calls from the facility and the patient’s spouse).4

At or about 10:20 p.m. on April 27, 2018, facility staff called Petitioner’s after hours call system and stated that Patient #2 was complaining of bladder spasms and leakage around the patient’s Foley catheter.  Id. at 3.  Patient #2’s spouse was requesting a visit from the hospice nurse to care for the catheter.  Id. at 3-4.  The Foley catheter had been changed on April 26, 2018.  Id. at 4.  Petitioner’s nurse on call (RN-A)5 returned the phone call and explained to facility staff and the patient’s spouse that changing the catheter would not prevent the spasms or stop the leaking and could increase the chance for infection and cause trauma.  Id.  Additionally, the facility reported that Patient #2 had not received his prescribed medication for bladder spasms because the facility was out of the medication.  Id.  RN-A did not make a home visit on the evening of April 27, but agreed to check on the patient in the morning.  Id.  RN-A did visit Patient #2 at 9:20 a.m. on April 28, 2018.  Id.  Thereafter, Petitioner’s nurses visited Patient #2 on May 1, 2018, and three times on May 3, 2018.  Id. at 4-6.  Throughout the day on May 3, Patient #2 complained of increasing pain, rated at “3” on a scale of 1-10 at 5:40 a.m. and 8:54 a.m., but increasing to “9” during a visit at 8:40 p.m.  Id. at 5-6.  Pain medication was ordered, administered, and appeared effective.  Id. at 6 (patient rated pain at “2” at end of 8:40 p.m. visit).  On May 4, 2018, Patient #2’s family noted a change of condition (flushed face and raised red areas on chin, neck, and jaw) and requested that the patient be sent to the emergency room for evaluation.  Id.  Patient #2 was admitted to the hospital with a severe urinary tract infection, dehydration, and unresponsiveness.  Id.  The statement of deficiencies noted that Petitioner’s executive director stated that the nurse on call on April 27, 2018, should have made a home visit.  Id. at 7.

The statement of deficiencies also found that Petitioner’s treatment of Patient #2 demonstrated that Petitioner failed to comply with the condition of participation for organization and administration of services (42 C.F.R. § 418.100).  The state agency found that Petitioner “failed to organize, manage[,] and administer hospice resources to provide care and services to patients, caregivers[,] and families necessary for the palliation and management of the terminal illness and related conditions.”  Id. at 8.  In addition to reciting the facts described in the previous paragraph, the statement of deficiencies noted that RN-A stated that she did not make a home visit on April 27, 2018, because it would have taken RN-A one and a half hours to get to the facility to make the visit and RN-A did not think a visit was needed because the facility was out of the medication the patient needed for bladder spasms, they were giving the patient Tylenol,

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and there was nothing else RN‑A could do.  Id. at 11.  RN-A further stated that he/she had worked on an as-needed basis for two and a half months and did not feel adequately trained, felt uncomfortable, and did not know what to do when on call.  Id.  In addition, Petitioner’s executive director stated that Petitioner’s Director of Clinical Services (DCS) resigned on March 23, 2018, and another individual, the remaining DCS, resigned on June 4, 2018.  Id. at 11-12.  Petitioner’s governing body did not appoint an interim DCS until July 16, 2018; thus, “[t]here was a lapse of six weeks in which there was no designated DCS to assure that hospice care and services to patients, caregivers[,] and families was adequate for the palliation and management of the terminal illness and related conditions.”  Id. at 12.

Petitioner’s Plan of Correction

Petitioner submitted a plan of correction (POC) to address the deficiencies identified in the July 27 statement of deficiencies.  CMS Ex. 4; see also CMS Ex. 6 at 17-35.  Petitioner submitted its original POC on August 13, 2018, an addendum on August 15, 2018, and further corrections on August 24, 2018.  CMS Ex. 4 at 1; see also CMS Ex. 6 at 17, 24, 29.  The POC, as amended, listed a completion date of August 24, 2018.  CMS Ex. 4 at 1; see also CMS Ex. 6 at 29.  Among other things, Petitioner’s POC stated that Petitioner had hired a new DCS, who had started work on July 30, 2018.  CMS Ex. 4 at 1.  The POC explained:

The DCS, with oversight by the [Regional Clinical Director], will provide training to all hospice nursing staff regarding the standards associated with the provision of on-call nursing services, including when to make visits, the need to perform a complete assessment at each visit, communication requirements, care planning collaboration requirements, and the prioritization of care needs when multiple calls are received.  All training will be documented on an in-service roster form that is signed by attendees and maintained in the program.

Id. at 1-2.  The POC went on to state that “[a]ll current nurses are receiving ongoing competency evaluation and ride-along visits from the DCS or appropriately-qualified RN designee to ensure that assessment and intervention knowledge and skills meet clinical standards for hospice nurses.”  Id. at 2.  The POC further stated that Petitioner’s nursing staff consisted of four full-time nurses, one PRN (as needed) RN, one full-time on-call RN, and the DCS.  Id. at 1.  The state agency approved Petitioner’s POC and scheduled a follow-up survey.  CMS Ex. 2 at 2.

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August 30, 2018 Follow-up Survey

The state agency completed a follow-up survey to the July 27 complaint investigation on August 30, 2018.  CMS Ex. 1 at 2.  At least in part, the purpose of the follow-up survey was to determine if Petitioner had completed the corrective actions detailed in the POC.  See Tr. at 76; see also CMS Ex. 3 at ¶ 11.  For the follow-up survey, the state agency reviewed four clinical records, in‑service information, sign-in sheets, and the complaint log.  CMS Ex. 1 at 2.  In addition, the state agency conducted one home visit and multiple interviews.  Id.; see also CMS Ex. 2 at 1.  Based on the follow-up survey, state agency surveyor Sue Luckett opined that Petitioner remained out of compliance because it was “not following [the POC] and . . . had not done what [it was] supposed to do to correct [the] deficiencies.”  Tr. at 76.

According to the statement of deficiencies, Petitioner remained out of compliance with the condition of participation for core services in part because two nurses, identified in the statement of deficiencies as RN-1 and RN-2,6 did not receive the in-service training and on-site competency visit required by Petitioner’s POC.  CMS Ex. 1 at 7.  The statement of deficiencies recited that RN-1 was working on a temporary basis for the Compassus subsidiary in Lee’s Summit.  Id.  RN-2 worked for another Compassus subsidiary located in Iowa.  Id.  The information concerning RN-1 and RN-2 was gathered by a state agency surveyor “who was part of [a] separate survey team completing a revisit for [a] separate CCN location (Provider B - located in Lee’s Summit).”  Id. at 6.

Surveyor Luckett’s notes confirm that neither Lorna Knights nor Kay Mullens-Peters worked for Petitioner.  See CMS Ex. 2 at 14-15.  According to the surveyor notes, Lorna Knights worked “only” at “Pleasant Hill PRN [as needed]”.  Id. at 15.  The notes state also that she “[c]an work at Liberty if needed.”  Id. However, there is no documentation in the record demonstrating that Nurse Knights ever provided nursing services to any of Petitioner’s patients.  With regard to Kay Mullens-Peters, the notes record that she “came down [from Iowa] for a weekend – of 3rd + 4th of August.”  Id.  Yet, as with the notes regarding Lorna Knights, there is no documentation that Nurse Mullens-Peters saw any patients for Petitioner.  Moreover, both nurses had received training from their home offices and their training was up-to-date.  Id.

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2.  CMS did not establish a prima facie case that Petitioner failed to comply with the condition of participation for core services (42 C.F.R. § 418.64).7

CMS contends that Petitioner failed to provide “substantially all core services directly by hospice employees” as required by 42 C.F.R. § 418.64.  CMS Posthrg. Br. at 1.  In CMS’s view, Petitioner did not comply with the regulation because Compassus (Petitioner’s parent corporation) “treated its various locations across the state (and across state lines) as one big hospice” and “treated its employees from its various [subsidiary] hospices . . . as interchangeable.”  Id. at 3.  I discuss in more detail below the legal basis for CMS’s argument, which I find flawed.  But, CMS’s theory of the case is not only legally flawed; it also relies on a narrative that is based on assumptions and speculation, rather than facts supported by documentary or testimonial evidence.

a.   CMS’s allegations of noncompliance include allegations concerning entities other than Petitioner.

Ironically, the factual fallacy on which CMS relies is the mirror image of what it asserts as the basis of Petitioner’s noncompliance.  It appears CMS determined that Petitioner was out of compliance with the Medicare conditions of participation for hospices largely based on allegations concerning Compassus subsidiaries other than Petitioner.  As Petitioner rightly points out, CMS cannot “have it both ways.”  P. Posthrg. Br. at 8.  That is, CMS cannot contend on the one hand that Petitioner must meet all Medicare conditions of participation independent of other Compassus subsidiaries, while simultaneously holding Petitioner responsible for allegations of noncompliance that may (or may not) have occurred at other Compassus subsidiaries.

I draw the inference that CMS’s findings of noncompliance by Petitioner are based on alleged noncompliance by other Compassus subsidiaries from the testimony of Elizabeth Henningfeld, CMS’s Home Health Agency and Hospice Lead for Region VII.  In her written direct testimony, Ms. Henningfeld stated that, in May of 2018, CMS received a complaint about the care provided by a Compassus subsidiary in Overland Park, Kansas.  CMS Ex. 5 at ¶ 5.  Then, in July of 2018, CMS received complaints regarding a different Compassus subsidiary in Lee’s Summit, Missouri.  Id. at ¶ 6.

Ms. Henningfeld testified that the complaints she received regarding the Compassus subsidiaries in Overland Park and Lee’s Summit “were very similar” and involved such issues as:

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a.  Lack of on-call nurses for hospice patients;

b.  Only one nurse per 30 hospice patients . . . ;

c.  Nurses being instructed to cut hospice visits from one hour to 20 to 30 minutes due to understaffing;

d.  Employees not charting at point of contact with hospice patients;

e.  Missed patient visits;

f.  Patient’s plans of care not being followed;

g.  Lack of organization focus on patient care; and

h.  Organization focusing on recruiting more patients despite the inability to adequately care for the existing patients.

Id. at ¶ 7.

The Compassus subsidiaries in Overland Park and Lee’s Summit are distinct from Petitioner in the present case.  Each subsidiary, including Petitioner, is separately certified to operate as a hospice; each has a unique CMS Certification Number (CCN); and each has a separate provider agreement with CMS.  Tr. at 107.  On cross-examination, Ms. Henningfeld acknowledged that the allegations in paragraph seven of her written direct testimony relate to the Compassus subsidiaries in Overland Park and Lee’s Summit.  Id. at 21.  Counsel for CMS stipulated that the allegations regarding Petitioner (i.e., Compassus – Kansas City) appear beginning at paragraph eight of Ms. Henningfeld’s written direct testimony.  Id. at 24-25.

However, in paragraph ten of her written direct testimony, Ms. Henningfeld again pointed to facts relating to the Compassus subsidiary in Lee’s Summit as evidence of noncompliance by Petitioner:

I am also aware of specific instances of Compassus employees who have worked for multiple Compassus locations.  For example, I know of a Compassus St. Louis nurse who also did work for Compassus Lee’s Summit.

CMS Ex. 5 at ¶ 10.  CMS’s repeated allegations of noncompliance that occurred, if at all, at entities that are not before me in this proceeding lead me to infer that CMS’s determination that Petitioner failed to comply with the condition of participation for core services was driven, at least in part, by CMS’s experience with Compassus subsidiaries other than Petitioner.

I must decide whether Petitioner failed to comply with the Medicare conditions of participation for hospices.  In doing so, I have considered de novo whether the evidence before me, including the statements of deficiencies (CMS Exs. 1 and 6), surveyor notes (CMS Ex. 2), and witness testimony (both written and oral), supports a conclusion that Petitioner itself was noncompliant with the Medicare participation requirements for

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hospices.  I have not considered allegations of noncompliance that concern Compassus subsidiaries other than Petitioner, even if such allegations appear in the statements of deficiencies or surveyor notes.  I next discuss why I find that the evidence does not support a prima facie case of noncompliance by Petitioner.

b.  CMS did not offer evidence that Petitioner’s noncompliance, if any, was related to a failure to provide core services directly by its employees.

CMS determined that Petitioner was out of compliance with 42 C.F.R. § 418.64 in July of 2018 based on a finding in the statement of deficiencies that Petitioner “failed to provide nursing care and services to meet the nursing needs of the patient.”  CMS Ex. 6 at 2.  CMS reached this conclusion based on an incident in which RN-A, Petitioner’s on-call nurse, did not make an after-hours visit to Patient #2 despite requests from the patient’s spouse and from nursing staff at the facility where the patient resided.  Id.  CMS concluded that this failure posed immediate jeopardy to resident health and safety because Patient #2 was ultimately admitted to the hospital with a “severe urinary tract infection, dehydration[,] and unresponsiveness.”  Id. at 6.  However, in this proceeding, CMS has not presented any medical evidence that the failure of RN-A to make a home visit on the evening of April 27, 2018 was outside the standard of care for hospice nurses, nor that failing to make the visit led to Patient #2 developing a urinary tract infection that required hospitalization on May 4, 2018, some six days later.

This is particularly significant given that, while it is undisputed that RN-A did not visit Patient #2 on the evening of April 27, 2018, Petitioner’s nurses did visit Patient #2 on the morning of April 28, 2018. and on May 1, and three times on May 3.  On each of these occasions, the nurses provided nursing services, including interventions to adjust the patient’s Foley catheter on two visits.  Id. at 4-6.  Based on the record review described in the statement of deficiencies, it appears that the patient’s condition did not begin to worsen until the evening of May 3, when Patient #2 experienced pain of “9” on a 10‑point pain scale (which was treated with pain medication) and the following day was observed to have flushed skin with raised red areas prior to being sent to the hospital for evaluation.  Id. at 5-6.  Thus, the statement of deficiencies itself presents evidence that Petitioner’s nurses in fact provided nursing services to meet the patient’s nursing needs on April 28, May 1, and May 3.8

CMS appears to have inferred that RN-A failed to make the requested home visit on the evening of April 27, 2018 because of understaffing or lack of training.  See, e.g., id. at 7.  However, the statement of deficiencies does not document that either of those factors was

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the reason the nurse declined to make a visit.  Rather, as the statement of deficiencies makes clear, both Petitioner’s records and the surveyor’s interview with RN-A document that RN‑A explained to the patient’s spouse that, in the nurse’s view, a visit was unlikely to resolve the problems that the patient was experiencing with the Foley catheter, which had just been changed the previous day.  Id. at 4, 6-7.  Additionally, RN-A explained to the family that changing the catheter on April 27 could increase the chance for infection and may cause trauma.  Id. at 4.  The statement of deficiencies therefore does not support an inference that RN-A failed to make a visit because of a staff shortage or inadequate training; rather, it appears RN-A concluded, based on her nursing judgment, that a visit was not medically necessary.9   In addition, there is no evidence that RN-A was not a core employee of Petitioner.

But, even if one could conclude that RN-A’s failure to make an after-hours visit on April 27, 2018, was evidence of Petitioner’s failure to comply with 42 C.F.R. § 418.64, CMS failed to show that such noncompliance persisted as of the August 30, 2018 follow-up survey.  Indeed, as I describe in the following section, the August statement of deficiencies reported that the state agency recommended that the finding of immediate jeopardy be removed and Surveyor Luckett acknowledged in testimony that she uncovered no new findings of improper care to a patient.  Tr. at 76, 93, 95.

c.  Even if Petitioner had been out of compliance at the July 27 survey, CMS did not present evidence that Petitioner remained out of compliance at the August 30 follow-up survey.

As described above, the focus of Petitioner’s POC was to ensure that each of its nurses received training, in the form of “ongoing competency evaluation and ride-along visits . . . to ensure that assessment and intervention knowledge and skills meet clinical standards for hospice nurses.”  CMS Ex. 4 at 2.  According to the August 30 statement of deficiencies, Petitioner remained out of compliance with the condition of participation for core services in part because two nurses, Lorna Knights and Kay Mullens-Peters, did not receive all of the training called for in the POC.  CMS Ex. 1 at 7; see also CMS Ex. 2 at 14-15.  However, as the statement of deficiencies acknowledges, neither Nurse Knights nor Nurse Mullens-Peters was a core employee of Petitioner.  See CMS Ex. 1 at 7. Consistent with the statement of deficiencies, the surveyor notes document that Lorna Knights worked “only” at “Pleasant Hill PRN [as needed].”  CMS Ex. 2 at 15.  The notes state also that she “[c]an work at Liberty if needed.”  Id.  There is no documentation in the record demonstrating that Nurse Knights ever provided nursing services to any of

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Petitioner’s patients.  Similarly, the surveyor notes record that Kay Mullens-Peters “came down [from Iowa] for a weekend – of 3rd + 4th of August.”  Id.  Yet, as with the notes regarding Lorna Knights, there is no documentation that Nurse Mullens-Peters saw any patients for Petitioner.  Moreover, both nurses had received training from their home offices and their training was up-to-date.  Id.

On the other hand, all nurses who were core employees of Petitioner, with one exception, had received both phases of the training promised in the POC.  Compare id. at 14 with id. at 136.  The one nurse who had not yet completed the on-site visit portion of the training was scheduled to complete it on August 31, 2018, the day following the state agency follow-up visit.  Id. at 15.  Moreover, Surveyor Luckett acknowledged on cross-examination that the follow-up survey did not reveal any further instance of improper care to a patient.  Tr. at 76, 93, 95.

Based on these findings, the state agency apparently concluded that the deficiencies attributed to Petitioner no longer posed immediate jeopardy as of the August 30 follow-up survey.  The statement of deficiencies includes the following language:

The findings of this follow-up survey were presented by the state to the Centers for Medicare and Medicaid Services (CMS), making a recommendation that the IJ be abated; however, CMS has determined the immediate jeopardy has not been abated.  CMS has determined there is still the potential for harm for future and existing patients.

CMS Ex. 1 at 2.

CMS’s witness, Ms. Henningfeld, denied that the state agency recommended to her that the immediate jeopardy citation be abated.  Tr. at 68-70.  Surveyor Luckett testified that she was not the person who recommended that the immediate jeopardy be abated.  Id. at 95-96.  However, she did not dispute that someone at the state agency made such a recommendation.  Id.  I find the testimony of both CMS witnesses consistent with the probability that the state agency, through someone other than Surveyor Luckett, recommended to someone at CMS other than Ms. Henningfeld, that the immediate jeopardy citation be cleared.  I find it unlikely that the statement of deficiencies would have included the quoted language if no one at the state agency had made such a recommendation.  Thus, the state agency’s recommendation in the statement of deficiencies is consistent with my own examination of the evidence, namely, that Petitioner, at a minimum, had abated the immediate jeopardy (if any had existed).

Moreover, I find that, even if Petitioner had been out of compliance with 42 C.F.R. § 418.64 as of the July 27, 2018 complaint investigation, the evidence CMS offered does not establish that Petitioner failed to complete its POC.  Therefore, CMS did not make a

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prima facie case that Petitioner continued to be out of compliance with 42 C.F.R. § 418.64 as of the August 30, 2018 follow-up survey.

d.  CMS did not make a prima facie case that, as of August 30, 2018, Petitioner failed to provide “substantially all” nursing services through core employees.

CMS contends that Petitioner failed to provide “substantially all core services directly by hospice employees” as required by 42 C.F.R. § 418.64.  CMS Posthrg. Br. at 1.  In CMS’s view, Petitioner did not comply with the regulation because Compassus (Petitioner’s parent corporation) “treated its various locations across the state (and across state lines) as one big hospice” and “treated its employees from its various [subsidiary] hospices . . . as interchangeable.”10   Id. at 3.  CMS argues that “[n]either the statute nor regulations permit the practice and doing so violates Medicare conditions of participation.”  Id.

CMS argues that the phrase “directly by hospice employees” in 42 C.F.R. § 418.64 refers to individuals who “must be employed by the entity that holds the Medicare provider agreement; and that entity must be the one that issues the employees’ W-2 form for tax purposes.”  Id. at 4 (citing 42 C.F.R. §§ 418.64 and 418.3).  Based on CMS’s reading of the regulations, Petitioner failed to comply with 42 C.F.R. § 418.64 because, CMS alleges, Petitioner delivered some nursing services through nurses who were employed by other Compassus subsidiaries.  I find nothing in the cited regulations that unequivocally supports CMS’s reading.

Section 418.3 of the regulations defines “Hospice” as “a public agency or private organization or subdivision of either of these that is primarily engaged in providing hospice care as defined in this section.”  42 C.F.R. § 418.3 (emphasis added).  In fact, the definition of “Hospice” in 42 C.F.R. § 418.3 suggests that an “employee” could be employed by a larger “hospice organization.”  Further, as part of the definition of “Employee” the same regulation provides:  “If the hospice is a subdivision of an agency or organization, an employee of the agency or organization who is assigned to the hospice.”  Id. (emphasis added).  Corina Tracy, Compassus’ COO, testified that all employees of Compassus, regardless of which subsidiary they work for, receive a W-2 form from the parent company (i.e. not from the individual subsidiary).  Tr. at 106.  Indeed, if I were to take CMS’s reading of the regulation to its logical conclusion, every Compassus subsidiary across the nation would be out of compliance with the condition of

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participation for core services because none of its employees receives a W-2 directly from the Compassus subsidiary for which they work.11

Fortunately, given the paucity of authority supporting CMS’s position on this point, I need not – and do not – decide whether CMS’s reading of the regulation is correct.  That is because CMS did not offer evidence that Petitioner failed to provide “substantially all” nursing services to its patients by nurses who were assigned to Petitioner.  Rather, the evidence shows that Petitioner’s core nurses – that is, nurses who were assigned to the Compassus - Kansas City hospice – provided its nursing services and that nurses employed by other Compassus entities provided services, if at all, on an infrequent basis.

CMS’s entire argument that Petitioner did not provide “substantially all” core services by direct employees derives from what appears to be a misunderstanding of the lists of employee names and contact information that Petitioner provided to the state agency surveyors during the August 30 follow-up survey.12   According to CMS, the lists prove that Petitioner provided nursing services to its patients using employees of other Compassus subsidiaries.  See, e.g., CMS Br. at 6 (“Review of employee rosters showed widespread sharing of employees from several of Compassus’ sites across the state.”).  Surveyor Luckett testified that she could not tell from the list which employees worked for Petitioner (as opposed to other Compassus subsidiaries).  Tr. at 77-79.  However, Petitioner’s witness, Ms. Tracy, the COO of Petitioner’s corporate parent, testified that the lists in question are, in essence, resource lists for the benefit of staff and say little, if anything, about which nurses were core employees at which location.  See, e.g. Tr. at 109, 112-13, 124-27.

According to Ms. Tracy’s testimony, which I find credible and unrebutted, the staff lists that are in evidence include all individuals working at neighboring Compassus subsidiaries under the supervision of a single administrator, Loree Parcells.  Id. at 112-13, 127-29.  The resource lists in evidence are over-inclusive, in that they include core employees of Petitioner, but also individuals employed at other subsidiaries, or in corporate positions, who may be resources for Petitioner’s core employees.  Id. at 112-13, 116-17, 123-24.  In essence, the surveyors were looking at broader resource lists rather than specific lists of core employees for a single subsidiary.  See Tr. at 114, 125.

Compassus, i.e. Petitioner’s corporate parent, maintains an electronic human resources system that identifies which employees are assigned to which subsidiary.  Id. at 118.  Thus, all Compassus “programs and . . . teams know what core employee belongs to

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Gallatin, Missouri, that actual location.”  Id.  Moreover, Compassus corporate management ensures that each subsidiary, including Petitioner, has the appropriate number of core employees so that each separately-certified subsidiary “can stand on its own.”  Id. at 128.

Ms. Tracy testified that “the idea of sharing staff, [is] not common practice[; . . .] a colleague to a colleague could never call and say, could you come work over at my program?  That doesn't happen.”  Id. at 119.  The only time Compassus subsidiaries might share staff is during an “emergent situation” such as a flu outbreak.  In that instance, regional management may institute a temporary staffing plan to deal with that situation.  Id. at 119, 121.

However, according to Ms. Tracy, if an after-hours on-call nurse from one subsidiary is already responding to a patient emergency and gets another emergency call, that nurse might request that an on-call nurse from a neighboring subsidiary respond to the second emergency.  Id. at 120.  Ms. Tracy’s testimony on this point allows for the possibility that, on occasion, a nurse from a different Compassus subsidiary may have provided an on-call visit to one of Petitioner’s patients.  Nevertheless, CMS made no showing of the number of such visits nor did it offer any calculation of how that number related to the overall number of on-call visits made by Petitioner’s core staff.  When asked if she could estimate what percentage of care was performed by nurses who were not employees of Petitioner, Surveyor Luckett replied, “I do not know.”  Tr. at 78.  As such, CMS has made no showing that the number of such visits, if any, was “substantial.”  Put another way, there is no evidence from which I can conclude that Petitioner failed to provide “substantially all” nursing services through its core employees.

CMS additionally seems to suggest that it was inappropriate for Petitioner (or Compassus more generally) to maintain a call center in Michigan, whose staff might respond to calls from Petitioner’s patients in Missouri.  See, e.g. CMS Br. at 4-5; Tr. at 79.  However, in an interview with state agency surveyor Vickie Heuett on August 30, 2018, Petitioner’s nurse Jennifer Oshel explained that, when the call center in Michigan receives a call from a patient, “they transfer call right to us [we do not have] the on call center give instructions.”  CMS Ex. 2 at 7; see also id. at 233 (Petitioner’s nurse Cindy Porter documented she called the patient’s wife after the wife phoned the call center).  This is consistent with Petitioner’s on call policy.  See CMS Ex. 2 at 197-98 (per ¶¶ 2, 16, the on call RN will triage the call); see also CMS Ex. 6 at 3.  CMS made no showing that having an on call center direct after hours calls from patients to on call nurses is a core nursing service that must be performed directly by Petitioner’s employees.  For all these reasons, I conclude that that CMS did not make a prima facie case that Petitioner failed to comply with 42 C.F.R § 42 C.F.R. § 418.64.

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3.  CMS did not present a prima facie case that Petitioner failed to comply with the condition of participation for organization and administration of services (42 C.F.R § 418.100).

CMS apparently concluded that Petitioner did not comply with 42 C.F.R. § 418.100 because of what CMS regarded as understaffing and inadequate management.  CMS seems to have formed the opinion that Petitioner was understaffed and mismanaged based on anecdotal reports by some nurses during the July 27 complaint investigation.  Even if there were staffing issues that affected Petitioner (as opposed to other Compassus subsidiaries) leading up to July 27, 2018, CMS presented no evidence that these issues persisted as of the August 30, 2018 follow-up survey.

For example, during the July 27 complaint investigation, RN-A told the surveyor that he/she had worked on an as-needed basis for two and a half months and did not feel adequately trained, felt uncomfortable, and did not know what to do when on call.  CMS Ex. 6 at 11.  In addition, Petitioner’s executive director described a period of six weeks from the time the second DCS resigned until a new DCS was appointed, when “there was no designated DCS to assure that hospice care and services to patients, caregivers[,] and families was adequate for the palliation and management of the terminal illness and related conditions.”  Id. at 11-12.  However, even if there had been a period of time when Petitioner’s organization and administration of services failed to comply with 42 C.F.R. § 418.100, there is no evidence that the problem persisted after management appointed a new DCS for Petitioner on July 30, 2018 (CMS Ex. 2 at 177) and for the neighboring Compassus subsidiaries in Pleasant Hill, Missouri and Lansing, Kansas on August 7, 2018 (id. at 178).  I therefore conclude that CMS did not make a prima facie case that Petitioner failed to comply with 42 C.F.R § 418.100.

4.  Because Petitioner was in compliance with the conditions of participation for core services and organization and administration of services, no question remains as to whether its actions posed immediate jeopardy to resident health and safety.

5.  Because Petitioner was in compliance with the conditions of participation for core services and organization and administration of services, CMS lacked a basis to terminate Petitioner’s Medicare provider agreement.

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Conclusion

For all of the reasons discussed above, I find CMS failed to make a prima facie case that Petitioner was out of compliance with Medicare participation requirements.  I therefore reverse CMS’s determination to terminate Petitioner’s participation in the Medicare program effective October 10, 2018.

1.  I cite to the page numbers printed at the top right-hand corner of the transcript pages.  This number differs from the PDF page number as displayed in the electronic record.
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2.  The current version of the Act can be found at: https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm.  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section. Also, a cross-reference table for the Act and the United States Code can be found at 42 U.S.C.A. Ch. 7, Disp. Table.
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3.  The statement of deficiencies describes actions or observations by several of Petitioner’s nurses, identified as RNs A, B, C, and D.  See CMS Ex. 6 at 4-6.  I describe these actions below.  I infer from the narrative that the nurse who did not make a visit, resulting in the deficiency citation, was RN-A.
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4.  CMS did not offer in evidence any patient records related to the July 27 complaint investigation.  My recitation of the facts is drawn solely from the statement of deficiencies.
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5.  The record does not identify RN-A by name.
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6.  The surveyor notes identify RN-1 as Lorna Knights and RN-2 as Kay Mullens-Peters.  See CMS Ex. 2 at 14, 183; see also id. at 143 (for spelling of the nurses’ names).
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7.  My findings of fact and conclusions of law appear as numbered headings in bold italic type.
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8.  In addition, the statement of deficiencies strongly suggests that one of Petitioner’s nurses made a visit on April 26, 2018.  See, e.g., CMS Ex. 6 at 4 (“Foley catheter was changed 04/26/18”).
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9.  The fact that RN-A’s supervisor later stated in an interview that, in her view, a visit should have been made on April 27, 2018 (CMS Ex. 6 at 7, 11), does not establish a comprehensive failure to provide nursing care.  Indeed, Petitioner’s own on-call policy contemplates that the RN on call “will disperse staff as deemed appropriate to meet the patient and/or [patient care giver] needs.”  CMS Ex. 2 at 197 (emphasis added).
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10.  CMS simultaneously takes the contradictory position that Petitioner failed to comply with Medicare conditions of participation because it failed to train nurses employed at other Compassus subsidiaries.  The unmistakable corollary to this argument is that Petitioner would have been in compliance had it trained the nurses who were not its core employees.  This is yet another example of CMS trying to “have it both ways.”
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11.  CMS does not appear to argue that Compassus’ entire business structure is impermissible under the hospice regulations, however.
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12.  The lists appear at pages 142-51 of CMS Ex. 2.
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