Community Rehabilitation Center, LLC, DAB CR6129 (2022)

DECISION

Petitioner, Community Rehabilitation Center, LLC (Petitioner or “the facility”), was certified as a comprehensive outpatient rehabilitation facility (CORF) that participated in the Medicare program.  Based on a recertification survey conducted on November 6, 2019, and revisit surveys conducted on January 23 and June 18, 2020, the Centers for Medicare & Medicaid Services (CMS) determined that Petitioner was out of compliance with multiple conditions of participation for CORFs, namely 42 C.F.R. §§ 485.56, 485.58, and 485.66.  As a result, CMS terminated Petitioner’s Medicare provider agreement, effective September 10, 2020.  I affirm the termination of Petitioner’s Medicare provider agreement based on its noncompliance with multiple conditions of participation.

I.   Background

The Social Security Act (Act) defines a CORF as “a facility which . . . is primarily engaged in providing (by or under the supervision of physicians) diagnostic, therapeutic, and restorative services to outpatients for the rehabilitation of injured, disabled, or sick persons” and that, among other requirements, “provides at least the following

Page 2

comprehensive outpatient rehabilitation services:  (i) physicians’ services (rendered by physicians . . . who are available at the facility on a full- or part-time basis); (ii) physical therapy; and (iii) social or psychological services.  42 U.S.C. § 1395x(cc)(2)(A), (B); 42 C.F.R. § 485.51 (regulatory definition of “CORF”).  In defining the term “CORF,” the Act enumerates requirements for CORFs that include the following:

• Has policies established by a group of professional personnel (associated with the facility), including one or more physicians . . . to govern the comprehensive outpatient rehabilitation services it furnishes, and provides for the carrying out of such policies by a full- or part-time physician;
• Has in effect a utilization review plan in accordance with regulations prescribed by the Secretary;
• Meets such other conditions of participation as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by such facility, including conditions concerning qualifications of personnel in these facilities.

42 U.S.C. § 1395x(cc)(2)(D), (G), and (J).

To participate in the Medicare program and receive payments from the program, a CORF must satisfy all the requirements of 42 U.S.C. § 1395x(cc), to include complying with the Secretary’s conditions of participation for CORFs.  See 42 C.F.R. § 488.3 (requiring a CORF to meet conditions of participation); 42 C.F.R. § 488.1 (defining “conditions of participation” as “the requirements providers other than skilled nursing facilities must meet to participate in the Medicare program”); see also 42 C.F.R. §§ 485.54, 485.56, 485.58, 485.60, 485.62, and 485.66 (outlining the conditions of participation for CORFs).

The conditions of participation for CORFs include prescribed standards.  See 42 C.F.R. §§ 485.54, 485.56, 485.58, 485.60, 485.62, and 485.66.  A determination of compliance with a specific condition of participation “depends upon the manner and degree to which the provider . . . satisfies the various standards within each condition.”  42 C.F.R. § 488.26(b).  A CORF will be found out of compliance with conditions of participation when the 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).

“If it is determined during a survey that a provider . . . is not in compliance with one or more of the standards, it is granted a reasonable time to achieve compliance.”  42 C.F.R. § 488.28(c)(1).  If a CORF is unable to achieve compliance and no longer meets the conditions of participation, CMS may terminate the CORF’s Medicare provider agreement.  42 C.F.R. § 489.53(a)(3).

Page 3

To monitor compliance, CMS contracts with state agencies that will periodically survey CORFs.  42 U.S.C. § 1395aa(a); 42 C.F.R. § 488.10.  With respect to CORFs, the regulations require a state agency to conduct surveys “as frequently as necessary to ascertain compliance and confirm the correction of deficiencies.”  42 C.F.R. § 488.20(b)(1).

If a CORF is dissatisfied with CMS’s determination to terminate its Medicare participation, it may request review by an administrative law judge (ALJ).  42 C.F.R. §§ 488.24(c), 498.3(b)(8), 498.5(b).  Appeal procedures are governed by 42 C.F.R. Part 498.  See 42 C.F.R. § 488.24(c).

“Before the ALJ, CMS must bear its initial burden of going forward with evidence related to disputed findings that is sufficient (together with any undisputed findings and relevant legal authority) to establish a prima facie case of noncompliance.”  Mercy Home Care, Sioux City, DAB No. 3044 at 16 (2021) (citing Evergreene Nursing Care Ctr., DAB No. 2069 at 7 (2007)).  “‘If CMS makes this prima facie showing,’ the facility ‘must carry its ultimate burden of persuasion by showing, by a preponderance of the evidence, on the record as a whole, that it was in substantial compliance during the relevant period.’”  Id. at 16-17.  Although Departmental Appeals Board (DAB) cases addressing these burdens typically involve skilled nursing facility appeals addressing compliance with Medicare participation requirements, the DAB has explained that these burdens are applicable to other appeals involving compliance with conditions of participation.  See, e.g., Mercy Home Care, Sioux City, DAB No. 3044 at 17 (home health agency); Nightingale Home Healthcare, Inc., DAB No. 2784 at 11 (2017) (home health agency); The Malaria & Rheumatic Disease Research Inst., Inc., DAB No. 2872 at 11 (2018) (laboratory).

On November 6, 2019, the New Jersey Department of Health and Senior Services (state agency) completed a recertification survey of Petitioner’s facility in Edison, New Jersey.  CMS Ex. 2; see CMS Ex. 11 at 1 (reporting that a recertification survey is conducted “approximately every seven years”).  The state agency determined that Petitioner was out of compliance with five conditions of participation:  42 C.F.R. §§ 485.56 (Governing Body and Administration), 485.58 (Comprehensive Rehabilitation Program), 485.62 (Physical Environment), 485.66 (Utilization Review Plan), and 485.68 (Establishment of the Emergency Program).  CMS Ex. 2.

After receiving an acceptable plan of correction from Petitioner on December 27, 2019 (CMS Ex. 2), the state agency conducted a revisit survey on January 23, 2020.  CMS Ex. 3.  The revisit survey determined that Petitioner remained out of compliance with the following three conditions of participation:  42 C.F.R. §§ 485.56 (Governing Body and Administration), 485.58 (Comprehensive Rehabilitation Program), and 485.66 (Utilization Review Plan).  CMS Ex. 3.

Page 4

The state agency accepted a plan of correction from Petitioner on March 10, 2020 (CMS Ex. 4), and conducted a second revisit survey on June 18, 2020.  CMS Ex. 1.  Based on the second revisit survey, the state agency determined that Petitioner remained out of compliance with the same three conditions of participation that were cited during the previous survey.  CMS Ex. 1 (citing noncompliance with 42 C.F.R. §§ 485.56 (Governing Body and Administration), 485.58 (Comprehensive Rehabilitation Program), and 485.66 (Utilization Review Plan)); see CMS Exs. 2, 3.

In a letter dated August 19, 2020, CMS summarized the history of the survey cycle, explaining that Petitioner had been cited for noncompliance with multiple conditions of participation dating back to November 6, 2019, and had failed to come into compliance with three conditions of participation, even after two revisit surveys.  CMS Ex. 6 at 1-2.  CMS explained it “[had] determined that the existence of the . . . deficiencies seriously limits [Petitioner’s] capacity to furnish an adequate level of care.”  CMS informed Petitioner that, “[b]ased on the findings of the November 6, 2019, January 23, 2020, and June 18, 2020 surveys,” Petitioner “no longer met the requirements to be certified as a CORF in the Medicare program.”  CMS Ex. 6 at 2.  CMS concluded, “[a]ccordingly, we are terminating your Medicare agreement effective September 10, 2020.”  CMS Ex. 6 at 2 (underline omitted).

On October 9, 2020, Petitioner submitted a request for an ALJ hearing, along with three supporting exhibits.  On October 15, 2020, the Civil Remedies Division issued my standing pre-hearing order that established a schedule for filing briefs and pre-hearing exchanges.  CMS submitted a pre-hearing brief with an incorporated motion for summary judgment (CMS Br.), along with 12 proposed exhibits (CMS Exs. 1-12).  CMS’s proposed exhibits include the written direct testimony of a state agency surveyor (Ms. Rathore).  CMS Ex. 11.

Petitioner did not timely file its pre-hearing exchange.  In response to a February 19, 2021 show cause order, Petitioner did not file a brief or response to CMS’s motion for summary judgment.  Rather, Petitioner filed, on February 23 and 26, 2021, documents that were not marked as exhibits and that otherwise failed to comply with the requirements set forth in sections 8 and 9 of my standing pre-hearing order.

In an order dated March 2, 2021, I rejected those filings, but granted Petitioner additional time to file a compliant pre-hearing exchange.  Thereafter, Petitioner, through newly retained counsel, filed a pre-hearing exchange that included five exhibits (P. Exs. 1-5), the written direct testimony of its owner (Dr. Patel),1 and a response to CMS’s brief and motion for summary judgment (P. Br.).

Page 5

In the absence of any objections, I admit CMS Exs. 1-12, P. Exs. 1-5, and the Patel Declaration into the evidentiary record.

Sections 11 through 13 of the standing pre-hearing order explained that a hearing would be necessary only if a party requested an opportunity to cross-examine a witness or witnesses for whom the opposing party submitted written direct testimony.  Neither party has requested an opportunity to cross-examine witnesses.  Therefore, a hearing is unnecessary for the cross-examination of any witnesses, and I may decide this case on the merits without ruling on CMS’s motion for summary judgment.

II.   Issues

The issue presented is whether CMS had a legitimate basis to terminate Petitioner’s Medicare provider agreement.

III.   Discussion2

1. At the time of a second revisit survey completed on June 18, 2020, Petitioner remained out of compliance with three conditions of participation that had been initially cited on November 6, 2019.

Based on three separate surveys completed on November 6, 2019, and January 23 and June 18, 2020, the state agency determined that Petitioner was out of compliance with the CORF conditions of participation.  CMS Exs. 1-3.  Although Petitioner submitted plans of correction following the initial November 6, 2019 survey and the January 23, 2020 revisit survey, the state agency determined at a June 18, 2020 survey that Petitioner continued to remain out of compliance with the following three conditions of participation:  42 C.F.R. § 485.56 (Governing Body and Administration); 42 C.F.R. § 485.58 (Comprehensive Rehabilitation Program); and 42 C.F.R. § 485.66 (Utilization Review Plan).  CMS Exs. 1-3.

In its request for hearing that contained approximately a half page of discussion, Petitioner claimed, without any support, that it “disagree[d] with the findings” of the June 18, 2020 survey.  Notably, Petitioner did not explicitly allege that it was in compliance with conditions of participation at the time of the most recent survey, but rather, argued, in the present tense, that it was currently in compliance with the cited conditions of participation.

Petitioner subsequently submitted a two-page brief in opposition to CMS’s motion for summary judgment that is devoid of any substantive arguments challenging CMS’s

Page 6

determination that it remained out of compliance with conditions of participation through the June 18, 2020 survey.  The brief, in its entirety, states the following:

Petitioner, Community Rehabilitation Center, LLC (“CRC”) does provide this Brief in opposition to the motion for summary judgment filed by Respondent Centers for Medicare and Medicaid Services (“CMS”).  For the following reasons, Respondent’s motion must be denied.

To prevail on a motion for summary judgment under F.R.C.P. 56, a party must establish that there is no genuine issue as to any material fact and that the party is entitled to judgment as a matter of law.  [Matsushita] Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 686 (1986).  The Respondent has failed to meet this burden.  The Respondent relies solely on the statements found in the Declaration of [Ms.] Rathore (hereinafter “Rathore Certification”).

Ms. Rathore’s findings are conclusory, and inaccurate.  Petitioner objects to these inaccurate findings and demands a hearing for all issues raised by Ms. Rathore.

Respondent’s decision to terminate is based on three alleged violations identified by Ms. Rathore in her third survey, or second revisit survey, conducted on June 18, 2020.  Ms. Rathore found CRC was allegedly out of compliance with three Conditions of Participation (“COP”),

42 [C.F.R. §] 485.56  Governing Body and Administration
42 [C.F.R. §] 485.58  Comprehensive Rehabilitation Program
42 [C.F.R. §] 485.66  Utilization Review Plan

Ms. Rathmore’s [sic] conclusions are contradicted by the statements and exhibits attached to the accompanying Declaration of [Dr.] Patel.  The Court is referred to Dr. Patel’s Declaration and exhibits.

The decision to terminate Petitioner must be reversed.  However, this matter is not ripe for summary judgment.  At the very least, numerous questions of fact exist which preclude the entry of a motion for summary judgment.

P. Br. at 1-2.  I conclude that Petitioner continued to remain out of compliance with the conditions of participation at 42 C.F.R. §§ 485.56, 485.58, and 485.66 at the time of the second revisit survey on June 18, 2020.  Because Petitioner has not shown compliance with the aforementioned conditions of participation, CMS was authorized to terminate its provider agreement.

Page 7

2. Surveys revealed that Petitioner did not have an administrator, a group of professionals that reviews facility policies, or policies and procedures for social work services.

3. Petitioner failed to comply with the condition of participation at 42 C.F.R. § 485.56, Governing Body and Administration.

The condition of participation for Governing Body and Administration, 42 C.F.R. § 485.56, provides:

The facility must have a governing body that assumes full legal responsibility for establishing and implementing policies regarding the management and operation of the facility.

At the time of the June 18, 2020 revisit survey, the state agency determined that Petitioner remained out of compliance with the Governing Body and Administration condition of participation that had been previously cited during the initial survey in November 2019 and the January 2020 revisit survey.

Although Petitioner submitted a plan of correction on March 10, 2020, following the January 23, 2020 revisit survey (CMS Ex. 4), in which it reported that it had corrected the deficiencies cited under the Governing Body and Administration condition of participation between February and March 2020, the state agency determined that Petitioner had not implemented the corrective actions listed in the plan of correction.  See CMS Ex. 1 at 1-5.

The state agency, through the June 18, 2020 survey, determined that this condition of participation was “not corrected” and that based on surveyor observations, document review, and staff interviews, Petitioner “failed to have a governing body that assumed full responsibility for managing and operating the CORF.”  CMS Ex. 1 at 1.  Specifically, the state agency determined that Petitioner failed to comply with the standard-level requirements at 42 C.F.R. § 485.56(b), (c), (c)(1) and (2), and (e), which provide:

(b)  Standard:  Administrator.  The governing body must appoint an administrator who:

(1) is responsible for the overall management of the facility under the authority delegated by the governing body;
(2) Implements and enforces the facility’s policies and procedures;
(3) Designates, in writing, an individual who, in the absence of the administrator, acts on behalf of the administrator; and
(4) Retains professional and administrative responsibility for all personnel providing facility services.

Page 8

(c) Standard:  Group of professional personnel.  The facility must have a group of professional personnel associated with the facility that –

(1) Develops and periodically reviews policies to govern the services provided by the facility; and
(2) Consists of at least one physician and one professional representing each of the services provided by the facility.

*        *        *

(e) Standard:  Patient care policies.  The facility must have written patient care policies that govern the services it furnishes.  The patient care policies must include the following . . . .

The state agency determined that Petitioner failed to comply with several standards and made the following findings of standard-level noncompliance:

The facility failed to have a designated facility administrator.

The facility failed to have specified job duties for the appointed social worker.3

The facility failed to have a group of professional personnel[] associated with the facility that developed and periodically reviewed policies that governed services provided by the social worker.  

Page 9

The facility failed to have current patient care policies compatible with the CORF’s provision of services governing all patient care services. 

CMS Ex. 1 at 1-2; see 42 C.F.R. § 485.56(b), (c), and (e).  CMS, in its August 19, 2020 notice terminating Petitioner’s provider agreement, adopted the state agency’s findings.  CMS Ex. 6 at 1-2.  Petitioner has not rebutted CMS’s determination that it remained out of compliance with the Governing Body and Administration condition of participation, and I conclude that Petitioner’s noncompliance with several standard-level requirements establishes condition-level noncompliance with 42 C.F.R. § 485.56. 

The state agency, based on a survey that included staff interviews and document review, determined that Petitioner, at the time of the June 18, 2020 survey, continued to lack an administrator, which is a standard-level requirement pursuant to 42 C.F.R. § 485.56(b).  CMS Ex. 1 at 1-3; see CMS Ex. 11 at 6.  The statement of deficiencies reported that Petitioner provided an undated letter appointing a physical therapist, Ms. Paschal, as its administrator.4  CMS Ex. 1 at 3; see CMS Exs. 10 at 3; 11 at 6.  However, a review of Ms. Paschal’s personnel file “failed to show evidence of being appointed as the administrator.”  CMS Ex. 1 at 3; see CMS Ex. 11 at 6.  Further, when Ms. Paschal was interviewed on June 18, 2020, she denied that she was the administrator and reported that she worked as the staff physical therapist and had not received any management training.  CMS Ex. 1 at 3; see CMS Ex. 11 at 6; see also CMS Br. at 10 (“The comedy continued when [Petitioner] claimed this time that a different physical therapist . . . was the Administrator.”).  On the same day as the June 18, 2020 survey, Ms. Paschal sent an email message to the surveyor in which she clarified that she “was never formally trained for the clinical administrator position” and “ha[d] since respectfully stepped down from accepting that position.”  CMS Ex. 10 at 15-16.  Another staff member, Mr. Bhagat, who was listed as the “alternate administrator” on an undated organizational chart5 that did not identify a facility administrator (CMS Ex. 10 at 6), reported to the surveyor that Ms. Paschal was a staff physical therapist and not the administrator.  CMS Ex. 1 at 3.  The statement of deficiencies reported that Mr. Bhagat’s personnel file “did not have a job description and/or duties for the alternate adminstrat[or] role.”  CMS Ex. 1 at 3.  

The state agency also determined that Petitioner “failed to have policies and procedures that govern social services,” which is a standard-level requirement set forth at 42 C.F.R.

Page 10

§ 485.56(e).  CMS Ex. 1 at 6.  Although the surveyor requested the facility’s policies and procedures for social services, Petitioner did not furnish any policies and procedures.  CMS Ex. 1 at 6.  Further, the state agency documented that Petitioner’s receptionists reported they were “not aware of who the social worker was or how to schedule for social services at the facility.”  CMS Ex. 1 at 6.  Mr. Bhagat confirmed the surveyor’s observations.  CMS Ex. 1 at 6. 

The state agency also determined that the facility “failed to have a group of professional personnel that reviews facility policies,” which is a standard level requirement pursuant to 42 C.F.R. § 485.56(c)(1).  CMS Ex. 1 at 5.  The statement of deficiencies reported that Petitioner’s policy and procedure manual was last updated on January 10, 2020, yet “failed to have signatures from a group of professional personnel affirming review of the procedure manual.”  CMS Ex. 1 at 5.  Dr. Patel and Mr. Bhagat confirmed these observations.  CMS Ex. 1 at 5. 

Petitioner did not refute the aforementioned Governing Body and Administration standard-level deficiencies in any of its submissions in connection with the instant proceeding.  In written direct testimony, Dr. Patel addressed subsequent efforts to come into compliance with this condition of participation, stating:  

With regard to a governing body, I am the owner and proprietor of Petitioner.  Attached as [P. Ex. 1] is a document labelled Organization Structure and Meeting Minutes which shows the organization structure for the Petitioner.  Also attached are Governing Body Minutes of meetings held on January 13, 2021, January 18, 2021, January 20, 2021, January 27, 2021, February 9, 2021, and March 11, 2021. 

The current Administrator for the Petitioner is [Ms.] Sishodia.  Attached as Exhibit P2 is a copy of her resume and other documents showing her qualifications.  She has been administrator since December 2020. 

* * * *

Due to the Covid 19 pandemic, the Petitioner was not able to hire certain medical professionals as individuals were not able to work due to the infection. 

However, we have just hired [Dr. Boktor] as physician and medical director.

Page 11

Patel Declaration at 2-3.  Likewise, in its request for hearing, Petitioner argued that it was presently in compliance, stating:  “The facility has a Governing Body in place that meets regularly, approves policy and procedure; oversee working of the facility.  I am the only member of the Governing Body.  However there are other officers who attend the meetings.”  Request for Hearing (citing “Attachment 1” to Request for Hearing (DAB E-file docket entry # 1b)).

Attachment 1 is a two-page document, with the first page captioned as a table of contents for a policy and procedure manual.  Both Dr. Patel, the owner, and Mr. Muglia, the then-administrator, attested, in late August 2020 (approximately two months after the second revisit survey and one week after CMS notified Petitioner of the termination of its provider agreement), that “the material contained within above written chapters have been reviewed and approved by the governing body.”  The second page of the document is a “Policies and Procedures Acceptance Form” that Dr. Patel signed in December 2019 and Mr. Muglia signed in August 2020 (approximately two months after the second revisit survey and one week after CMS notified Petitioner of the termination of its provider agreement), attesting that the policies and procedures had been reviewed and accepted by the facility’s governing authority.  On the bottom half of the form, staff members signed to certify that they had reviewed the facility’s policies and procedures, to include the then-medical director (Dr. Sinha) and three receptionists/front desk coordinators (Ms. Patel, Ms. Lantigua, and Ms. Polanco). See CMS Ex. 10 at 1-2, 6.

Petitioner did not address the cited standard-level deficiencies in its brief, nor did it submit relevant evidence in its five exhibits, P. Exs. 1-5.6  The evidence submitted by Petitioner, to include Dr. Patel’s testimony, does not establish compliance with the standard-level requirements supporting condition-level noncompliance.  Petitioner did not have an appointed administrator at the time of the June 18, 2020 survey, and its attempt to pass off its physical therapist as its administrator was thwarted when the physical therapist refused the appointment.  CMS Ex. 1 at 3; CMS Ex. 10 at 7, 15-16.7  Although Dr. Patel provided an organizational chart, the chart was undated and did not identify an administrator.  CMS Exs. 1 at 3; 10 at 1, 6; 11 at 6.  And to the extent the same organizational chart listed an alternate administrator, that individual’s personnel file

Page 12

lacked an appointment letter, job description, or other documentation of the duties for the alternate administrator position.  CMS Exs. 1 at 3; 10 at 6.

The evidence submitted by Petitioner does not refute the determination that it lacked an administrator at the time of the June 2020 survey, and therefore, Petitioner has not shown compliance with 42 C.F.R. § 485.56(b) which requires that the facility have an appointed administrator.  Rather, this evidence supports that Petitioner appointed an administrator after the June 18, 2020 survey, beginning in August 2020.  P. Ex. 3 at 18-20.  Dr. Patel testified that Petitioner appointed another administrator, Ms. Sishodia, in December 2020, several months after CMS notified it of the termination of its provider agreement.  Patel Declaration at 2; see CMS Ex. 6 at 2.

Petitioner claims compliance with 42 C.F.R. § 485.56(c)(1), which requires that it have a group of professional personnel that reviews facility policies.  To the extent Petitioner claims it held Governing Body meetings at various times during 2021, the conduct of such meetings more than six months after the second revisit survey and several months after CMS terminated its provider agreement is neither relevant nor material to the question of whether, at the time of the June 18, 2020 survey, Petitioner complied with the requirement that the group of professional personnel associated with the facility reviewed facility policies.  See Patel Declaration at 2-3; P. Ex. 1 at 4-23 (documenting Governing Body meetings in January, February, and March 2021).  And inasmuch as Petitioner submitted documentation that an administrator appointed in August 2020 (two months after the second revisit survey and after CMS notified it of the termination of its provider agreement) signed off on policies and procedures, and other employees acknowledged reviewing Petitioner’s policies and procedures, I note that there is no evidence that professional personnel, such as the social worker, staff physician, or physical therapist, reviewed these policies prior to the second revisit survey on June 18, 2020.  See P. Ex. 3 at 19 (August 20, 2020 appointment of Mr. Muglia as administrator); CMS Ex. 6 (CMS’s August 19, 2020 notice informing Petitioner that it had terminated its provider agreement); see also Attachment 1 to Request for Hearing (reflecting that the Governing Body, consisting of the owner and administrator, “reviewed and approved” the policy and procedure manual chapters on August 26 and 27, 2020).  In fact, Dr. Patel conceded that Petitioner was “not able to hire certain medical professionals.”  Patel Declaration at 3.  Petitioner has not submitted evidence demonstrating compliance with 42 C.F.R. § 485.56(c)(1), and therefore it has not shown compliance with the standard-level requirement that it have a group of professional personnel associated with the facility that develops and periodically reviews policies to govern the services provided by the facility.

Finally, the record shows that, as of June 18, 2020, Petitioner did not produce any written policies and procedures for providing social services.  I note that Petitioner submitted an undated document that purports to outline policies and procedures governing its services, including a policy and procedure for “Social Worker Services.”  See P. Ex. 3 at 4.  Petitioner has not offered any evidence that this undated document existed at the time of

Page 13

the June 2020 survey and was furnished to the surveyor.  See CMS Ex. 1 at 6 (statement of deficiencies report that Petitioner did not produce any written policies and procedures for social services at the time of the survey).  Staff members interviewed during the survey, to include the receptionists/front desk coordinators, were “not aware of who was the social worker or how to schedule for social services at the facility.”  CMS Ex. 1 at 6.  Further, Petitioner’s alternate administrator confirmed the findings reported in the statement of deficiencies.  CMS Ex. 1 at 6.  Petitioner has not reported when this undated document was adopted by the facility, nor has Petitioner affirmatively claimed that this policy and procedure was in effect at the time of the June 18, 2020 second revisit survey.  Petitioner has not shown compliance with the standard-level requirement that it have written patient care policies that govern the services it furnishes, to include social services, as required by 42 C.F.R. § 485.56(e).

The condition-level requirement for Governing Body and Administration requires that a facility “must have a governing body that assumes full legal responsibility for establishing and implementing policies regarding the management and operation of the facility.”  42 C.F.R. § 485.56.  Petitioner has not offered evidence demonstrating that, at the time of the June 18, 2020 survey, it complied with this condition of participation, as shown by its noncompliance with at least three of the standard-level requirements.  The standard-level deficiencies included the lack of an administrator, the lack of a group of professionals that developed and periodically reviewed facility policies, and a lack of patient care policies compatible with the CORF’s provision of services, namely social work services.  See 42 C.F.R. § 485.56(b), (c), and (e).  The lack of an administrator, alone, is a serious deficiency that amounts to condition-level noncompliance with the Governing Body and Administration condition of participation; at the time of the June 18, 2020 second revisit survey, the facility operated without an administrator, who, by regulation, is responsible for the overall management of the facility under the authority delegated by the governing body and is responsible for implementing and enforcing the facility’s policies and procedures.  42 C.F.R. § 485.56(b)(1), (2).  And the lack of an administrator was in addition to the failure to have a group of professionals that reviewed facility policies, a significant standard-level requirement.  Likewise, a fundamental service of a CORF is social or psychological services, and Petitioner’s lack of a policy and procedure to provide social work services amounts to a condition-level failure.  See 42 C.F.R. § 485.58.  The standard-level deficiencies substantially limited Petitioner’s capacity to furnish adequate care to its patients, and I conclude that Petitioner’s deficiencies amounted to a condition-level violation of 42 C.F.R. § 485.56, Governing Body and Administration.  See 42 C.F.R. § 488.24(b).

4. Although Petitioner was required to provide a coordinated rehabilitation program that included, at a minimum, physicians’ services, physical therapy services, and social or psychological services, the evidence indicates that Petitioner provided physical therapy services and did not provide other services, to include physician and social services.

Page 14

5. Petitioner failed to comply with the condition of participation at 42 C.F.R. § 485.58, Comprehensive Rehabilitation Program.

The condition of participation for Comprehensive Rehabilitation Program, 42 C.F.R. § 485.58, provides:

The facility must provide a coordinated rehabilitation program that includes, at a minimum, physicians’ services, physical therapy services, and social or psychological services. These services must be furnished by personnel that meet the qualifications set forth in [§] 485.70 . . . of [42 C.F.R.] and must be consistent with the plan of treatment and the results of comprehensive patient assessments.

Petitioner’s noncompliance with this condition of participation at the June 18, 2020 second revisit survey was a repeat violation (CMS Ex. 1 at 6-8), as this deficiency had previously been cited at both the initial survey in November 2019 (CMS Ex. 2 at 16-17) and the first revisit survey in January 2020 (CMS Ex. 3 at 5-7).  According to the plan of correction that Petitioner submitted following the first revisit survey on January 23, 2020, Petitioner reported that it had “hired . . . personal [sic] to provide a coordinated rehabilitation program,” effective March 20, 2020.  CMS Ex. 4 at 2.  Despite this claim, the state agency determined, based on the June 18, 2020 second revisit survey, that the condition-level noncompliance was “not corrected” and that Petitioner “failed to provide a coordinated rehabilitation program that included at minimum, physician service, social and or psychological services.”  CMS Ex. 1 at 7; see CMS Ex. 11 at 6.  The state agency determined that condition-level noncompliance existed because Petitioner did not produce policies and procedures “that included social services as part of the patient treatment plan” and it did not provide physician services as part of the CORF services.  CMS Ex. 1 at 7-8.

In addition to condition-level noncompliance, the state agency cited noncompliance with the standard-level requirement for coordination of services, which states:

Standard:  Coordination of services.  The facility must designate, in writing, a qualified professional to ensure that professional personnel coordinate their related activities and exchange information about each patient under their care.

CMS Ex. 5 at 8; see 42 C.F.R. § 458.58(c).  The state agency determined that Petitioner “failed to have a schedule indicating frequency of Social Services provided.”  CMS Ex. 1 at 8.  Notably, Mr. Bhagat reported, on June 18, 2020, that no referrals had been made to the social worker since her appointment to that position in March 2020.  CMS Ex. 1 at 8.

Page 15

Petitioner argued in its request for hearing that “[t]he facility has a Comprehensive Rehabilitation Program in place” and it “believe[s] it was an overlook [sic] by surveyor.”  Petitioner cited documentation it had submitted for review.  See P. Ex. 3.  Dr. Patel also testified as follows:

With regard to a coordinated rehabilitation program, attached as [P. Ex. 3] is summary of this program and the application information of [Ms.] Switzer who was the social worker for the Petitioner from January[8] through August, 2020 and [Mr.] Muglia, who was the Administrator and Therapist for the Petitioner from August 2020 to December, 2020.  Also attached are examples of social worker notes.

* * * *

Due to the Covid 19 pandemic, the Petitioner was not able to hire certain medical professionals as individuals were not able to work due to the infection.

However, we have just hired [Dr. Boktor] as physician and medical director.

Patel Declaration at 2-3.

Petitioner relies on undated policies and procedures for “provided services,” “physician services,” “physical therapy,” and “social worker services” as support that it complied with 42 C.F.R. § 485.58 and operated a coordinated rehabilitation program.  See P. Ex. 3.  However, the state agency surveyor correctly observed, “[t]he only service [Petitioner] appeared to have was part time physical therapy . . . [Petitioner] was really operating as an outpatient physical therapy facility, not as a CORF based on the CORF core requirements.”  CMS Ex. 11 at 3.

Petitioner has not offered evidence that, at the time of the survey, it was providing “physicians’ services, physical therapy services, and social or psychological services,” as required by the condition of participation.  See 42 C.F.R. § 485.58.  Petitioner does not dispute that at the time of the June 18, 2020 survey, it did not have a physician on staff who performed physicians’ services, as required by the condition of participation at 42 C.F.R. § 498.58.  Dr. Patel reported to the surveyor that Petitioner’s Medical Director was “not part of the CORF services” and “[did] not provide physician services directly to the CORF.”  CMS Ex. 1 at 7-8.  Petitioner, through testimony, conceded that it “was not

Page 16

able to hire certain medical professionals,” and that it had only recently (apparently following the termination of its provider agreement) hired a physician.  Patel Declaration at 3; see CMS Ex. 6 at 1; P. Ex. 5 at 1 (April 20, 2021 appointment of physician).  The record thus shows that Petitioner did not have a physician on staff at the time of the June 2020 survey who had been designated to provide the services required by 42 C.F.R. § 485.58.  Likewise, the state agency reported that Petitioner did not produce any policies and procedures that included social services as part of the treatment plan, and Mr. Bhagat informed the state agency that no referrals had been made to the social worker since her appointment three months earlier.  CMS Ex. 1 at 8.

There is also no evidence that Petitioner complied with the standard-level requirement that it have a designated qualified professional to ensure that professional personnel coordinated their activities and exchanged information about patients under their care.  42 C.F.R. § 485.58(c).  And with respect to this standard, Petitioner has not refuted the determination that it failed to have a schedule indicating the frequency of social services provided.  CMS Ex. 1 at 8.  In fact, Petitioner has not submitted any evidence that it made any social worker referrals prior to the June 18, 2020 second revisit survey.  See P. Ex. 3 at 23-25 (social work referral form, dated October 2020, and social work consultation report, dated November 2020).

Based on the foregoing deficiencies, I find that Petitioner failed to provide a coordinated rehabilitation program that included, at a minimum, physicians’ services and social or psychological services, as required by the condition of participation for a Comprehensive Rehabilitation Program.  After three surveys and two opportunities to implement corrective action, Petitioner continued to lack a schedule indicating the frequency of social services provided to its patients, and had not, within the previous three months, made any referrals to its social worker.  The evidence indicates that Petitioner offered physical therapy services, and not the coordinated services of a physician, physical therapist, and social worker, which substantially limited Petitioner’s capacity to furnish adequate care as a CORF.  See 42 C.F.R. § 488.24(b).  Petitioner therefore failed to meet the condition of participation at 42 C.F.R. § 485.58, Comprehensive Rehabilitation Program, at the time of the June 18, 2020 revisit survey.

6. Surveys revealed that Petitioner did not have a utilization review plan or a utilization review committee.

7. Petitioner failed to comply with the condition of participation at 42 C.F.R. § 485.66, Utilization Review Plan.

The condition of participation for Utilization Review Plan, 42 C.F.R. § 485.66, provides:

Page 17

The facility must have in effect a written utilization review plan that is implemented annually, to assess the necessity of services and promotes the most efficient use of services provided by the facility.

The statement of deficiencies for the June 18, 2020 second revisit survey remarked that Petitioner’s noncompliance with this condition of participation was a “repeat deficiency.”  CMS Ex. 1 at 8-15.  Noncompliance with 42 C.F.R. § 485.66 had previously been cited at both the initial survey in November 2019 and the January 2020 revisit survey.  See CMS Exs. 2 at 22-27; 3 at 7-12.

Petitioner listed several corrective actions in the plan of correction it submitted following the January 23, 2020 revisit survey.  CMS Ex. 4 at 3-4; see CMS Ex. 1 at 10-14.  However, the state agency determined that Petitioner did not implement the necessary corrective actions to achieve condition-level compliance.  CMS Ex. 1 at 14-15.

The June 18, 2020 statement of deficiencies reported that Petitioner “failed to implement an effective Utilization Review Program.”  CMS Ex. 1 at 9; see CMS Ex. 11 at 7.  The state agency determined that Petitioner did not comply with the following standards:

(a)  Standard:  Utilization review committee.  The utilization review committee, consisting of the group of professional personnel specified in § 485.56(c), a committee of this group, or a group of similar composition, comprised by professional personnel not associated with the facility, must carry out the utilization review plan.

(b) Standard:  Utilization review plan.  The utilization review plan must contain written procedures for evaluating –

(1) Admissions, continued care, and discharges using, at a minimum, the criteria established in the patient care policies;
(2) The applicability of the plan of treatment to established goals; and
(3) The adequacy of clinical records with regard to –

(i) Assessing the quality of services provided; and
(ii) Determining whether the facility’s policies and clinical practices are compatible and promote appropriate and efficient utilization of services.

42 C.F.R. § 485.66(a) and (b).

The statement of deficiencies summarized the standard-level deficiencies as follows:

Page 18

The facility failed to provide evidence of a utilization review committee, consisting of the group of professional personnel specified in § 485.56(c).

The facility failed to provide evidence of a utilization review plan.

The facility failed to ensure that the utilization review plan contained written procedures for evaluating Comprehensive Outpatient Rehabilitation Facility admissions, continued care and discharges.

The facility failed to provide evidence of a utilization review plan which contained written procedures for evaluating the applicability of the plan of treatment to established goals.

The facility failed to ensure that the utilization review plan contained written procedures for evaluating the adequacy of the clinical records with regard to assessing the quality of services provided, and determining whether the facility’s policies and clinical practices are compatible and promote appropriate and efficient utilization of services.

The facility failed to ensure that the utilization review plan contained written procedures for evaluating the adequacy of the clinical records.

CMS Ex. 1 at 9-10.  Addressing the deficiencies cited during the June 18, 2020 survey, the surveyor reported the following in her written testimony: 

I also determined that [Petitioner] had still failed to implement an effective Utilization Review Program.  There was no utilization review committee and no procedures for evaluating CORF admissions, continued care and discharges.  See CMS Ex. 5 at 8-14.  Staff were unable to produce a facility utilization plan.  See CMS Ex. 10 at 1. 

CMS Ex. 11 at 7. 

Inasmuch as compliance with the Utilization Review Plan condition of participation requires the existence of two components, a utilization review committee and a utilization review plan, and Petitioner lacked both a utilization review committee and a utilization review plan, it is unnecessary to address each standard-level deficiency finding.  I limit the discussion herein to the standard-level noncompliance with 42 C.F.R. § 485.66(a) (make-up of utilization review committee) and 485.66(b) (requiring that a utilization review plan contain written procedures). 

In response to these findings, Dr. Patel asserts the following:

Page 19

Petitioner has a Utilization Review Program in place.  The Administrator has a weekly review of performance and other activities.  I am attaching at [P. Ex. 4] some examples of these reviews.

Patel Declaration at 3.  Petitioner made a similar claim in its request for hearing, stating:  “The facility has a Utilization Review Plan in place.  I again contend that it was an overlook on part of surveyor.”  Request for Hearing (citing Attachment # 3 to Request for Hearing (DAB E-file docket entry # 1d)).

Attachment # 3 is an undated two-page document, entitled “Utilization Review Plan,” that purports to describe the policy and procedures related to Petitioner’s utilization review plan and the utilization committee.  With respect to P. Ex. 4, the first page of the exhibit purports to be from Petitioner’s utilization review plan, and lists the headings, “Utilization review,” “Weekly Meeting,” and “QI Management & Improvement Program.”  P. Ex. 4 at 1.  It is simply implausible that Petitioner was in possession of this undated policy and procedure at the time of the June 18, 2020 survey yet declined to provide it in response to the surveyor’s request for a copy of the utilization review plan.  See CMS Ex. 1 at 15 (reporting Petitioner “was not able to provide the Requested Utilization Review Plan”); see CMS Ex. 11 at 4 (testimony of the surveyor that “[b]ased on [her] interview and [her] review of documentation, [she] determined that [Petitioner] had still failed to implement an effective Utilization Review Program, as there was no committee and no plan.”).  The surveyor testified that Dr. Patel “confirmed that [Petitioner] did not have a facility utilization review plan.”  CMS Ex. 11 at 4.

Petitioner reports that pages 3-14 of P. Ex. 4 are “sample reviews” pursuant to its Utilization Review Program.  See Petitioner’s Exhibit List.  Despite this characterization, these documents do not appear to be “sample reviews.”  Rather, the document appears to be a single untitled report, possibly a census report, that resembles a spreadsheet with columns for patient names, status of insurance coverage, diagnosis, doctor/surgeon, date of surgery, diagnosis, frequency of prescribed physical therapy services, end date of plan of care, and the date of the most recent visit with the physical therapist.  P. Ex. 4 at 1-12.9  There is no indication that Petitioner prepared this report as part of a utilization review plan, and it appears that, regardless of the purpose of the report, Petitioner created this report following the June 18, 2020 second revisit survey.  P. Ex. 4 at 1-12 (overwhelmingly reflecting that the referenced plans of care were initiated after June 2020).

Further, there is no evidence that Petitioner had a utilization review committee at the time of the June 2020 survey, and Petitioner’s former consultants informed the surveyor that Petitioner did not have a utilization review committee.  See CMS Ex. 1 at 10-11.  One of

Page 20

the former consultants reported that she had been working to implement the plan of correction with respect to this condition of participation, but was “unable to place the Plan of Correction in place as [she] was told not to provide services as of 3/13/2020.”  CMS Ex. 1 at 14-15; see CMS Exs. 10 at 2; 11 at 7.  And although Dr. Patel testified that an administrator performed a “weekly review of performance and other activities” in satisfaction of this requirement, the condition of participation requires that a utilization review committee consisting of a “group” or “committee” of professionals or “professional personnel not associated with the facility” carry out a utilization review plan.10  See 42 C.F.R. § 485.66(a).  

Petitioner was given three opportunities to demonstrate compliance with the condition-level requirement for a Utilization Review Plan, 42 C.F.R. § 485.66.  By failing to have a utilization review committee and a utilization review plan, Petitioner failed to meet the standard-level requirements found at 42 C.F.R. § 485.66(a) and (b).  Petitioner failed to meet more than one standard-level requirement, and the standard-level 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,” and therefore was not in compliance with the CORF conditions of participation as of the June 2020 survey.  42 C.F.R. § 488.24(b); see 42 C.F.R. § 485.66.  Accordingly, Petitioner remained out of compliance with the condition-level requirement for a Utilization Review Plan at the time of the June 18, 2020 second revisit survey.

8. Because Petitioner remained out of compliance with Medicare conditions of participation at the time of the June 18, 2020 second revisit survey, CMS was authorized to terminate its Medicare provider agreement.

The regulations authorize CMS to terminate a CORF’s participation in Medicare when the CORF has failed to maintain compliance with the applicable conditions of participation.  42 C.F.R. § 489.53(a)(3); see 42 U.S.C. § 1395x(cc)(2)(J) (requiring a CORF to meet “conditions of participation as the Secretary may find necessary in the interest of health and safety of individuals who are furnished services by such facility”).  Petitioner failed to comply with the conditions of participation at 42 C.F.R. § 485.56 (Governing Body and Administration), 42 C.F.R. § 485.58 (Comprehensive Rehabilitation Program), and 42 C.F.R. § 485.66 (Utilization Review Plan).  Noncompliance with a single condition of participation can serve as a basis for termination of a Medicare provider agreement, and Petitioner was repeatedly out of compliance with three conditions of participation.  CMS had a legitimate basis to

Page 21

terminate Petitioner’s Medicare provider agreement based on its repeated failure to comply with three conditions of participation.  See 42 C.F.R. § 489.53(a)(1), (3).

IV.   Conclusion

Petitioner was noncompliant with three conditions of participation, even after it had three opportunities to demonstrate compliance.  CMS had a legitimate basis to terminate Petitioner’s Medicare provider agreement based on its condition-level noncompliance with 42 C.F.R. §§ 485.56, 485.58, and 485.66.

---

Endnotes