Kern River Transitional Care, DAB CR5955 (2021)

DECISION

Petitioner, Kern River Transitional Care (Kern River), is a skilled nursing facility (SNF) located in Bakersfield, California.  The Centers for Medicare & Medicaid Services (CMS) determined that Petitioner had an effective enrollment date of April 16, 2019.  Petitioner now challenges that effective date.  CMS filed a motion for summary judgment.

I uphold CMS’s effective date determination.  The evidence establishes that Petitioner first met all Medicare participation requirements on April 16, 2019, which is, therefore, the correct effective date of coverage.

Background and Procedural History

On February 4, 2019, Petitioner filed an application (Form CMS-671) to enroll as a new Medicare Provider.  CMS Exhibit (Ex.) 1.  Petitioner’s initial certification survey was conducted by the California Department of Public Health (CDPH) on February 5, 2019.  On April 3, 2019, a Life Safety Code Survey was completed by CDPH surveyors.  P. Ex.

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1.  Several deficiencies were detailed by that survey at or above the scope and severity of level D.  Id.

At the time of the April 3, 2019 Life Safety Code Survey, Kern River was not in substantial compliance with all the applicable Life Safety Code requirements.  P. Ex. 2; CMS Ex. 5.  CDPH received Petitioner’s Plan of Correction (POC) on April 30, 2019, which stated all deficiencies were corrected as of April 16, 2019.

CMS, in its initial determination dated June 19, 2019, established an effective enrollment date of April 30, 2019 for Petitioner.  CMS Ex. 2.  In a letter dated June 24, 2019, Petitioner filed a request for reconsideration stating that February 25, 2019, should be the effective date for Medicare participation as that was the date Petitioner had passed the initial certification survey.  P. Ex. 4.  A reconsideration determination, issued August 9, 2019, upheld the initial decision that established April 30, 2019, as the effective date for Petitioner’s Medicare enrollment.  P. Ex. 5.  Petitioner again requested reconsideration.  After a teleconference with CMS, a revised reconsideration determination dated September 24, 2019, adjusted Petitioner’s effective enrollment date and established April 16, 2019, as the effective date for Medicare participation.  CMS Ex. 6.

Petitioner has now filed this appeal stating it had corrected the deficiencies found in the Life Safety Code Survey on April 3, 2019, and request that April 3, 2019, be established as Petitioner’s effective enrollment date instead of April 16, 2019, as stated in Petitioner’s POC.  P. Ex. 7; CMS Ex. 2.

This case was originally assigned to Administrative Law Judge Leslie A. Weyn.  On November 26, 2019, Judge Weyn issued an Acknowledgement and Prehearing Order (APHO) including standing orders for the parties.  These orders provided for the submission prehearing exchange, including proposed exhibits, witness list and the written direct testimony of all proposed witnesses.  The standing order provided that written direct testimony may be used to establish the qualifications of a witness, offer evidence that is relevant, explain the contents of other exhibits, and render opinions.  Further, the order stated that a witness written direct testimony would be a statement in lieu of in-person testimony.  An in-person hearing to cross-examine witnesses would be necessary only if a party files admissible, written direct testimony, and the opposing party asked to cross-examine the witness.

CMS submitted 12 proposed exhibits (CMS Exs. 1-12), including the written direct testimony of Cambria Pyle (Surveyor), the individual completing the April 3, 2019 Life Safety Code Survey.  Petitioner did not object to any of the CMS exhibits nor did Petitioner request to cross-examine Cambria Pyle.

Petitioner submitted seven proposed exhibits (P. Exs. 1-7), including the written direct testimony of Courtland Blomquist (Administrator), the administrator of Petitioner.  Mr. Blomquist’s declaration, labeled as P. Ex. 2, included 5 attachments.

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CMS has objected to the submission of attachments 1-5 in P. Ex. 2, stating that Petitioner has not provided good cause for failing to present that evidence previously to CMS pursuant to 42 C.F.R. § 498.56(e).  In provider/supplier enrollment appeals, a provider or supplier must show good cause to submit documentary evidence to the ALJ for the first time.  See 42 C.F.R. § 498.56(e); Mohammad Nawaz, N.D. and Mohammad Zain, M.D., PA, DAB No. 2687 at 11-13 (2016); Zille Shah, M.D. and Zille Huma Zaim, M.D., PA, DAB No. 2688 at 14 (2016).  The APHO states as follows:

Except as it relates to preclusion, Petitioner may not offer new documentary evidence in this case absent a showing of good cause for failing to present that evidence previously to CMS.  If Petitioner offers such evidence, the evidence must be specifically identified as new, and Petitioner’s brief must explain why good cause exists for me to receive it.  I must exclude any new evidence for which a showing of good cause has not been made pursuant to 42 C.F.R. § 498.56(e).

APHO at 5.  If good cause does not exist, the ALJ must exclude the evidence and may not consider it in reaching a decision.  See 42 C.F.R. § 498.56(e);  Mohammad Nawaz, N.D. and Mohammad Zain, M.D., PA, DAB No. 2687 at 11-13 (2016); Zille Shah, M.D. and Zille Huma Zaim, M.D., PA, DAB No. 2688, at 14 (2016); Sandra E. Johnson, CRNA, DAB No. 2708 at 3-4, 9-10 (2016).  Good cause has long been defined as circumstances beyond an entity’s ability to control, which excludes “avoidable human error.”  See e.g., Sedgwick Health Care Centers, DAB No. CR596 (1999); Norman Johnson, M.D., DAB No. 2779 at 15-17 (2017).

Petitioner states that the attachments were not in existence at the time of the Life Safety Code Survey.  While this statement is true for attachments 4 and 5, attachments 1-3 were completed well before the inspection and were available at the time of the survey and at the time of the Request for Reconsideration.  Attachments 4 and 5 were allegedly completed on April 3, 2019, after the survey was completed.  Although those attachments did not exist at the time of the survey, they were available at the time Petitioner filed both requests for consideration.  Therefore, I find that Petitioner has not provided good cause to submit the attachments.

Petitioner’s exhibits 1-5 are admitted, but attachments 1-5 submitted with exhibit 2 are excluded.

In a joint motion filed June 2, 2020, the parties moved for a decision on the written record, stating:

In accordance with paragraph 11 of this Tribunal’s Acknowledgment and Pre-Hearing Order dated January 10, 2020, and 42 C.F.R. § 498.66, the Centers for

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Medicare and Medicaid Services (CMS) and Kern River Transitional Care (Kern River) (collectively, the Parties) each request that the Tribunal reach a decision on the written record. CMS withdraws its request to cross-examine Kern River’s witness, Cortland Blomquist.

I grant the parties’ motion and will decide the case on the written record without considering whether the standard for summary judgment is met.

Issue

Whether the effective date of Petitioner’s enrollment in the Medicare program is April 16, 2019.

Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8).

I.  Finding of Fact and Conclusions of Law

A.  Petitioner had deficiencies at levels found during a Life Safety Code survey conducted on April 3, 2019.

B.  Petitioner submitted a POC stating Petitioner was in compliance beginning April 16, 2019.

C.  CMS correctly determined the effective date of Petitioner’s provider agreement is April 16, 2019.  42 C.F.R. § 489.13(b) states the effective date of a petitioner’s Medicare participation agreement can be no earlier than the date that CMS determines a petitioner satisfies the enrollment requirements.

II.  Law and Regulations

Section 1866(j)(1) of the Social Security Act (Act) requires that the Secretary of Health and Human Services (Secretary) implement regulations to establish an enrollment process for providers and suppliers.  42 U.S.C. § 1395cc(j)(1).  Pursuant to 42 C.F.R. § 424.510(a)(1), “[p]roviders and suppliers must submit enrollment information on the applicable enrollment application,” and certain providers and suppliers must complete “a State survey and certification or accreditation process” prior to enrollment in the program.  “CMS determines, based upon its review and verification of the prospective provider’s or supplier’s enrollment application, the date on which enrollment requirements have been met.”  42 C.F.R. § 489.13(b)(1).

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Section 489.13(b) was revised effective October 1, 2010, “to make explicit that the effective date of a provider agreement or supplier approval may not be earlier than the latest of the dates on which each applicable Federal requirement is determined to be met,” and the current version of section 489.13(b) explicitly states that the applicable federal requirements include the “enrollment requirements established in [42 C.F.R.] part 424, subpart P.”  See 75 Fed. Reg. 50,042, 50,402 (Aug. 16, 2010).  The Secretary explained, “[i]t would not be consistent with our duty to protect the Medicare Trust Funds from unsupported claims against it to permit payment for services furnished by a health care facility after it has passed a State survey or been accredited, but before it has satisfied all other Medicare participation requirements.”  42 C.F.R. § 489.13(b) (stating the effective date “may not be earlier than the latest of the dates on which CMS determines that each Federal requirement is met.”).  In addition to the plain language of section 489.13(b), the Secretary unambiguously explained, when section 489.13(b) was revised, it was intended “to make explicit” that the “effective date of a provider agreement . . . may not be earlier than the latest of the dates on which each applicable Federal requirement is determined to be met.”  75 Fed. Reg. at 50,402.

The guidance in the State Operations Manual is consistent with the Secretary’s stated reason for revising section 489.13(b), which was to “make explicit that the effective date of a provider agreement . . . may not be earlier than the latest of the dates on which each applicable Federal requirement is determined to be met.”  75 Fed. Reg. at 50,402.

The CDPH found several Life Safety Code deficiencies during the April 3, 2019 survey.  CMS Ex. 3.  Petitioner filed a plan of correction on April 30, 2019, addressing these deficiencies, stating that compliance was achieved on April 16, 2019, and requested an effective date of participation of February 25, 2019.  P. Ex. 4.

CMS determined that Petitioner was in compliance with Medicare participation requirements and established April 30, 2019, the date the POC was received, as the eligible date for participation in Medicare.  P. Ex. 5.  Petitioner requested that CMS reconsider its determination, asserting that its effective date of participation should be February 25, 2019. Id.  CMS issued a Reconsidered Determination on August 9, 2019, affirming the effective date of participation of April 30, 2019.  Id.  After a second Request for Reconsideration and a teleconference with CMS, CMS adjusted the effective date for participation to April 16, 2019, the date the POC stated compliance was achieved, denying Petitioner’s request to establish an effective participation date of February 25, 2019.  P. Ex. 5.

The effective date of participation of a Medicare provider is the date when CMS or its contractor finds the provider is in compliance with all applicable participation requirements.  42 C.F.R. § 489.13(b); Community Hosp. of Long Beach, DAB No. 1938 (2004).  The regulation plainly states:

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The agreement or approval is effective on the date the . . . survey (including the Life Safety Code survey, if applicable) is completed, . . . if on that date the [provider] meets all applicable Federal requirements as set forth in this chapter . . . .  However, the effective date of the agreement or approval may not be earlier than the latest of the dates on which CMS determines that each applicable Federal requirement is met.  Federal requirements include, but are not limited to-

*  *  *  *

(3) The applicable Medicare health and safety standards, such as the applicable conditions of participation, the requirements for participation, the conditions of coverage, or the conditions for certification.

42 C.F.R. § 489.13(b) (emphasis added).

I have considered Petitioner’s arguments for an earlier effective participation date of April 3, 2019.  However, I have no authority to grant the relief requested.  I find that CMS has determined the correct date for Petitioner’s effective Medicare participation.

Discussion

Petitioner is required to comply with Life Safety Code requirements and with the Medicare participation requirements governing skilled nursing facilities to receive certification for participation.  Compliance with one set of requirements without compliance of all the other requirements does not qualify a facility for participation.  Forest Glen Skilled Nursing & Rehab. Ctr., DAB No. 1887 (2003).  In this case, CMS determined that Petitioner met all applicable requirements for participation (including compliance with the Life Safety Code and Medicare participation requirements) effective April 16, 2019, the date Petitioner stated it was in compliance in the Plan of Correction (POC) submitted to CMS.  CMS Ex. 2; P. Ex. 7.

The Administrator, in his sworn statement, admits there were deficiencies during the Life Safety Code inspection performed April 3, 2019.  P. Ex. 2.  His testimony states he began preparing the POC on or around April 16, 2019, shortly after receiving the form 2567 for the Life Safety Code survey.  P. Ex. 2 at 2.  He states he used April 16, 2019, as the date for completion of the form not realizing it would impact the participation date for Petitioner.  He also states Petitioner had documentation for some of survey findings but neglected to present them at the time of the inspection.  Further, some of the documentation was not in existence at the time of the survey.  The witness goes on to state other deficiencies were corrected on April 3, 2019, the day of the inspection.  Id.  No evidence

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has been submitted to show why this evidence was not presented with the initial Request for Reconsideration or subsequent Request for Reconsideration.

Tag K324 requires inspection and maintenance of the kitchen fire suppression maintenance every six months.  P. Ex. 1 at 5-7.  As reported in Form 2576 (Id.) and corroborated by the surveyor’s testimony (CMS Ex. 5 at 4-5), there was no documentation of the required inspection and maintenance at six months intervals after the initial maintenance was performed in June of 2018.  Any records of maintenance after June 2018 were to be sent by email to the Surveyor by 8:00 a.m. on April 4, 2019, but none was received.  P. Ex. 1 at 7.  Thus, Petitioner was not in compliance on April 3, 2019, and evidence does not support it achieved compliance until the POC dated April 16, 2019.

Tag K345 involves testing and maintenance of the fire alarm system.  On inspection, Petitioner’s records and interview with maintenance staff did not produce evidence of battery testing records for the fire alarm control panel nor load voltage, charger and discharge testing affecting 9 smoke compartments.  P. Ex. 1 at 7.  The charger test should be performed at least annually, and the load voltage test performed semiannually.  P. Ex. 1 at 8.  Administrator Blomquist testified that inspections were completed in July of 2018 but failed to indicate the required semiannual testing was performed.  This testimony is consistent with the sworn statement of Cambria Pyle, the surveyor making the inspection. See CMS Ex. 5.  The surveyor states that interviews with maintenance staff indicated Petitioner’s records did not specify what tests were performed on this equipment.  CMS Ex. 5 at 5-6.  Thus, Petitioner was not in compliance at the time of the inspection.  The evidence does not support Petitioner achieved compliance prior to April 16, 2019, as stated in Petitioner’s POC Submitted on April 30, 2019.  P. Ex. 7. 

Tag K711 corresponds to Petitioner’s Evacuation and Relocation Plan.  This written plan concerns evacuation of residents in the event of an emergency.  The plan should provide for the periodic instruction to employees for their duties as required by the plan.  A copy should be readily available with the telephone operator of security.  During the surveyor’s interview with the staff during the survey, the staff failed to provide a prompt and effective answer of the requirements for protection of residents during a fire.  The response of the Administrator, in his sworn testimony, indicates all new staff are provided a packet during orientation which contains the emergency response procedures.  The staff must sign a form acknowledging receipt of the packet and that they are familiar with the emergency response guidelines as contained in the packet.  This does not provide evidence to rebut the finding of the survey of April 3, 2019, nor does it provide evidence of periodic instruction to Petitioner’s employees.  The Surveyor indicated that an interview with staff elicited a delayed response and failed to mention the removal of occupants in a fire emergency, confinement of the fire by closing doors to isolate the area, and the transmission of an appropriate fire alarm.  CMS Ex. 5 at 7-8.

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Tag K293 requires monthly exit sign testing.  This survey item requires testing at least once every 30 days with written records of visual inspection and test.  P. Ex. 1 at 2-4.  The exit signs require testing for a period of 30 seconds every month. Upon interview with maintenance staff, it was indicated the monthly testing lasted only 5 seconds.  P. Ex. 1 at 5.  Mr. Blomquist states in his declaration that Petitioner began testing on April 3, 2019, and performed monthly testing as required since that date.  P. Ex. 2 at 3.  Therefore, Petitioner was not in compliance on the date of survey and was not in full compliance until submission of the POC that states full compliance was achieved on April 16, 2019.

Tag K363 states that corridor doors should properly close and latch to resist the passage of smoke.  There should not be an impediment that prevents the secure closing of the doors.  Testing of these doors for proper closure during the survey revealed two doors failed to fully close and one door failed to stay latched.  P. Ex. 1 at 10-11.  The Administrator admits to this deficiency in his sworn testimony and alleges Petitioner came into compliance shortly after the surveyor left on April 3, 2019.  P. Ex. 2 at 3.

Tag K374 requires that doors shall be self-closing.  Testing during the survey indicated three self-closing smoke barrier doors failed to fully close.  P. Ex. 1 at 10-13; CMS Ex. 2 at 6-7.  The Administrator admits this deficiency, but states Petitioner came into full compliance with this requirement shortly after the surveyor left on April 3, 2019.  P. Ex. 2 at 3.

In its Request for Reconsideration, Petitioner requested a compliance date of February 25, 2019.  Petitioner now contends it was in full compliance as of April 3, 2019.  P. Br. at 2. Petitioner argues the latter date should be used as it made the corrections found in the Life Safety Survey on that day.  However, the Petitioner’s POC submitted to CMS after the Life Safety Survey stated it was not in full compliance until April 16, 2019.  Petitioner now argues that it did not realize that the date provided as full compliance in the POC was decisive or would impact the certification date, as Petitioner believed it had met all the requirements for participation on the initial survey of February 25, 2019.  P. Br. at 9.

This argument misstates the test for certification.  First, the regulations make it plain that compliance with “enrollment requirements” is not sufficient to establish a basis for certification in the Medicare program.  CMS may not certify a skilled nursing facility until CMS has determined that a facility meets all applicable requirements.  42 C.F.R. § 489.13(b).  Successful compliance with Medicare requirements and Life Safety Code Survey is an essential requirement for qualifying as a Medicare participant.

The regulations are explicit that the effective date of participation is not the date when a facility states it is in compliance, but the date when CMS concludes that Petitioner has achieved all requirements for certification and continues to meet those requirements.  That date will either be the date of a survey of a facility for compliance or the date when CMS certifies that Petitioner has corrected any deficiencies found during a survey.  Here,

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Petitioner was surveyed for compliance with Life Safety Code Survey on April 3, 2019. Deficiencies were found at or above a level D.1  As there were deficiencies, Petitioner was not in compliance at the time the survey.  As stated in Petitioner’s POC submitted April 30, 2019, CMS determined that Petitioner was in full compliance with all requirements (including Life Safety Code requirements) beginning April 16, 2019.

Conclusion

CMS determined that Petitioner met all federal requirements on April 16, 2019.  Pursuant to 42 C.F.R. § 489.13(b), the earliest effective date of Petitioner’s provider agreement is April 16, 2019.

1.   Under 42 CFR § 489.13(c), CMS only has to prove one “D” level scope and severity deficiency to prove that Kern River was out of substantial compliance on the date of the April 3, 2019 survey.
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