Penick Village, DAB CR5377 (2019)

DECISION

In this case, I decide whether Petitioner is subject to an additional $600 penalty because it failed to bring itself into substantial compliance with Medicare program requirements.

Petitioner, Penick Village, is a skilled nursing facility, located in Southern Pines, North Carolina, that participates in the Medicare program.  Following a recertification survey, completed May 5, 2016, and a revisit survey, completed June 22, 2016, the Centers for Medicare and Medicaid Services (CMS) determined that the facility was not in substantial compliance with multiple Medicare program requirements and imposed a $100 per day civil money penalty (CMP), effective May 5.

Based on the June re-visit survey, CMS determined that the facility remained out of substantial compliance, citing deficiencies under two provisions:  42 C.F.R. § 483.20(g)-(j), which requires resident assessments, and 42 C.F.R. § 483.75(o)(1), which governs the administration’s responsibilities for quality assessment and assurance.  Because of its ongoing noncompliance, CMS continued the $100 per day CMP for an additional six days (June 22-27, 2016).

Page 2

Petitioner has appealed the June survey only.

The parties have waived their rights to an oral hearing and ask that I issue a decision based on the written record.  Order at 2 (April 25, 2019); see 42 C.F.R. § 498.66.

For the reasons set forth below, I find that from June 22 through 27, 2016, the facility was not in substantial compliance with 42 C.F.R. §§ 483.20(g)-(j) and 483.75(o)(1) and (2).  The nominal CMP is reasonable.

Background

The Social Security Act (Act) sets forth requirements for long-term care facilities to participate in the Medicare program and authorizes the Secretary of Health and Human Services to promulgate regulations implementing those statutory provisions.  Act § 1819.  The Secretary’s regulations are found at 42 C.F.R. Part 483.1  To participate in the Medicare program, a nursing facility must maintain substantial compliance with program requirements.  To be in substantial compliance, a facility’s deficiencies may pose no greater risk to resident health and safety than “the potential for causing minimal harm.”  42 C.F.R. § 488.301.

The Secretary contracts with state survey agencies to survey skilled nursing facilities in order to determine whether they are in substantial compliance.  Act § 1864(a); 42 C.F.R. § 488.20.  Each facility must be surveyed annually, with no more than fifteen months elapsing between surveys, and must be surveyed more often, if necessary, to ensure that identified deficiencies are corrected.  Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.  The state agency must also investigate all complaints.  Act § 1819(g)(4).

In this case, on May 5, 2016, surveyors from the North Carolina Department of Health and Human Services (state agency) completed the facility’s annual recertification survey.  Based on the survey findings, CMS determined that the facility was not in substantial compliance with multiple Medicare program requirements, specifically:

• 42 C.F.R. § 483.20(b)(1) (Tag F272) (comprehensive resident assessments) cited at scope and severity level E (pattern of substantial noncompliance that causes no actual harm with the potential for more than minimal harm);
• 42 C.F.R. § 483.20(b)(2)(i) (Tag F273) (comprehensive resident assessments:  when required) cited at scope and severity level D (isolated instance of substantial

Page 3

noncompliance that causes no actual harm with the potential for more than minimal harm);

• 42 C.F.R. § 483.20(c) (Tag F276) (quarterly assessments) cited at scope and severity level D;
• 42 C.F.R. § 483.20(g)-(j) (Tag F278) (resident assessments:  accuracy) cited at scope and severity level D;
• 42 C.F.R. § 483.20(d) and 483.20(k)(1) (Tag F279) (resident assessments:  use and development of comprehensive care plans) cited at scope and severity level D;
• 42 C.F.R. §§ 483.10(d)(3) and 483.20(k)(2) (Tag F280) (resident assessments:  comprehensive care plans and resident rights) cited at scope and severity level E;
• 42 C.F.R. § 483.25 (Tag F309) (quality of care) cited at scope and severity level E;
• 42 C.F.R. § 483.25(a)(3) (Tag F312) (quality of care:  activities of daily living) cited at scope and severity level D;
• 42 C.F.R. § 483.25(h) (Tag F323) (quality of care:  accident prevention) cited at scope and severity level D;
• 42 C.F.R. § 483.25(n) (Tag F334) (quality of care:  immunizations) cited at scope and severity level E; and
• 42 C.F.R. § 483.65 (Tag F441) (infection control) cited at scope and severity level E.

CMS Ex. 1.  Based on these deficiencies, CMS imposed a CMP of $100 per day, effective May 5.  CMS Ex. 3.

Surveyors returned to the facility and completed a re-visit survey on June 22.  Based on their findings, CMS determined that the facility remained out of substantial compliance with section 483.20(g)-(j) at scope and severity level D and was not in substantial compliance with 42 C.F.R. § 483.75(o)(1) (Tag F520) (administration: quality assessment and assurance) cited at scope and severity level D.  CMS Exs. 2, 3.  Although the statement of deficiencies did not specifically cite sub-section 483.75(o)(2), it quoted the language of that provision and described facts that established noncompliance with that provision.  CMS Ex. 2 at 4; see Alden Town Manor Rehab. & HCC, DAB No. 2054 at 17-19 (2006).  In any event, CMS subsequently clarified that the administration

Page 4

deficiency included 42 C.F.R. § 483.75(o)(2).  CMS Br. at 11 n.5; see 42 C.F.R. § 498.56(a) (allowing the judge to add new issues).

After a July 22, 2016 follow-up survey, CMS determined that the facility returned to substantial compliance on June 28, 2016.  CMS Ex. 4.  It imposed against the facility a penalty of $100 per day for 54 days of substantial noncompliance (May 5-June 27), for a total penalty of $5,400.  CMS Exs. 3, 4, 5.

Petitioner appealed the June 22 survey only.  Therefore, from May 5 through June 21, 2016, the facility was not in substantial compliance with Medicare program requirements, and I sustain the $100 per day CMP (total:  $4,800).  42 C.F.R. §§ 488.408(d), 498.20(b) (characterizing as “binding” an initial determination that is not reversed or modified); see Order at 1-2 (April 25, 2019).

The parties have filed pre-hearing briefs (CMS Br.; P. Br.) and closing briefs (CMS Cl. Br.; P. Cl. Br.).  CMS submitted 24 exhibits (CMS Exs. 1-24).  Petitioner submitted five exhibits (P. Exs. 1-5).  In the absence of objections, I have admitted into evidence CMS Exs. 1-24 and P. Exs. 1, 2, 4, and 5.  Order at 2.

Issues

The issues before me are:

• From June 22-27, 2016, was the facility in substantial compliance with 42 C.F.R. §§ 483.20(g)-(j); and 483.75(o)(1) and (2); and
• Is the penalty imposed for those six days – $100 per day – reasonable.

Discussion

1. The facility has not established that it corrected the deficiencies cited under 42 C.F.R. § 483.20(g)-(j) because a resident’s assessment still did not accurately reflect his documented behaviors.2

Petitioner’s burden.  Once a facility has been found to be out of substantial compliance (as Petitioner was here), it remains so until it affirmatively demonstrates that it has returned to substantial compliance.  Ridgecrest Healthcare Ctr., DAB No. 2493 at 2-3 (2013); Taos Living Ctr., DAB No. 2293 at 20 (2009); Premier Living & Rehab. Ctr., DAB No. 2146 at 3 (2008); Lake City Extended Care Ctr., DAB No. 1658 at 12-15

Page 5

(1998).  The burden is on the facility to prove that it is back in compliance, not on CMS to prove that deficiencies continue to exist.  Asbury Ctr. at Johnson City, DAB No. 1815 at 19-20 (2002).

The facility must show that the incidents of noncompliance have ceased and that it has implemented appropriate measures to ensure that similar incidents will not recur.  Libertywood Nursing Ctr., DAB No. 2433 at 15 (2011), citing Life Care Ctr. of Elizabethton, DAB No. 2367 at 16 (2011); accord, 42 C.F.R. § 488.454(a) and (e); Hermina Traeye Mem’l Nursing Home, DAB No. 1810 at 12 (2002) (holding that, to be found in substantial compliance earlier than the date of the resurvey, the facility must supply documentation “acceptable to CMS” showing that it was in substantial compliance and was capable of remaining in substantial compliance on the earlier date); Cross Creek Health Care Ctr., DAB No. 1665 (1998).  A facility’s return to substantial compliance usually must be established through a resurvey.  42 C.F.R. § 488.454(a); Ridgecrest, DAB No. 2493 at 2‑3.

Program requirement:  42 C.F.R. § 483.20(g)-(j) (Tag F278).  Initially and periodically, the facility must conduct “a comprehensive, accurate, standardized, reproducible assessment of each resident’s functional capacity.”  The assessment must accurately reflect the resident’s status.  A registered nurse must conduct or coordinate each assessment with the appropriate participation of health professionals.  The registered nurse must sign and certify that the assessment is completed, and each individual who completes a portion of the assessment must sign and certify the accuracy of that portion.

The facility’s ongoing noncompliance.  As evidenced by the May survey findings, the facility repeatedly failed to assess its residents as required.  In some cases, they performed no assessments; in others, the assessments were not timely; and some assessments were not accurate.  CMS Ex. 1 at 1-24.  In one specific instance, involving Resident 42 (R42), his quarterly assessment indicated that he had exhibited physical and verbal behaviors, which, according to his clinical records, he had not, in fact, exhibited.  CMS Ex. 1 at 21-22.

R42 was an 84-year-old man, admitted to the facility on December 14, 2015.  CMS Ex. 11 at 3, 5.  He suffered from Parkinson’s disease, anxiety disorder, and hypertension.  CMS Ex. 11 at 23-26.  His physician prescribed the sedative, Lorazepam, as needed, “for agitation.”  CMS Ex. 10 at 4.

In order to correct its deficiencies regarding R42’s earlier assessment, the facility promised to complete an updated comprehensive assessment no later than June 1.  CMS Ex. 1 at 21.  The facility also hired a new MDS (minimum data set) coordinator who, the facility promised, would review and correct “discrepancies” in all of its assessments.  CMS Ex. 1 at 21.  It promised continuing audits and Director of Nursing (DON) review of the assessments; it promised to train its staff.  CMS Ex. 1 at 22.

Page 6

During the June re-visit, surveyors compared R42’s assessment with his clinical records.  According to his revised MDS (minimum data set) assessment, dated June 1, 2016, R42 exhibited no behavioral symptoms.  CMS Ex. 11 at 13.3  However, according to the resident’s behavior logs, on May 26 and May 28, R42 exhibited one of the behaviors listed in the behavior log list.  CMS Ex. 10 at 17; see CMS Ex. 10 at 25 (including “agitation” in the list of specific behaviors to be monitored).  Because the resident’s assessment did not accurately reflect the resident’s documented behaviors, the facility was not in substantial compliance with section 483.20(g)-(j).  See CMS Ex. 24 at 3 (directing the assessor to review the resident’s medical record for the 7-day “look-back” period and to interview staff and other observers of the resident’s behavior).

Petitioner responds by attacking the accuracy of its records and the competence of its staff, albeit, in a mostly irrelevant way.  It presents the written declaration of Greg Powell, a nurse aide for the night shift who provided care to R42.  According to that declaration, based on Nurse Aide Powell’s “current understanding of what constitutes a ‘behavioral issue,’” his documentation “was not intended” nor did his personal observations reveal that the resident “exhibited a behavioral issue.”  P. Ex. 4 at 1 (Powell Decl. ¶ 4).  Nurse Aide Powell attempts to minimize the significance of the resident’s behavior, claiming that R42 “did not demonstrate any physical aggression or abuse, and did not exhibit any signs of verbal aggression or abuse.  He did not attempt to hit, push or scratch . . . .”  On the other hand, Nurse Aide Powell describes the resident as “agitated”:  “agitation” is one of the behaviors staff were supposed to document.  P. Ex. 4 at 1 (Powell Decl. ¶ 5); see CMS Ex. 10 at 25.

Moreover, Nurse Aide Powell limits the scope of his “retraction” to the behaviors he documented in June 2016, specifically June 7 and June 12.  P. Ex. 4 at 1 (Powell Decl. ¶ 2); see CMS Ex. 10 at 20, 21.  The surveyors reviewed a June 1 assessment and found that it did not reflect behaviors documented in May (May 26 and 28).  Nurse Aide Powell’s disavowal of his June entries thus says nothing about the accuracy of the June 1 assessment.

In its plan of correction, the facility promised that a new MDS coordinator would review and correct all assessments and that the facility’s DON would audit and review the assessments.  CMS Ex. 1 at 22.  Significantly, neither of those responsible employees has submitted testimony to explain the discrepancy between R42’s clinical records and his assessment.  Assuming the assessor reviewed R42’s behavior logs and questioned the entries, she should have consulted Nurse Aide Powell immediately.  Had she determined that his entries were in error, she should have corrected them.  CMS Ex. 20 at 3 (Calder Decl. ¶ 13 (explaining that those completing portions of the MDS “should ensure that the

Page 7

information is accurate” and talk to staff if they question an entry)).  She was not free to disregard the entries.  Thus, even assuming that the behavior logs were wrong, the facility continued its substantial noncompliance because its assessment tools were so vague that staff did not understand them, and, contrary to the assurances it made in its plan of correction, the facility did not adequately train its staff.

But the more persuasive evidence establishes that the assessment itself was inadequate.  We know that agitation was a significant problem for R42.  In addition to the behavior log entries, he was prescribed Lorazepam “for agitation,” and review of his medication records confirms that staff administered it with some regularity, particularly on the nightshift.  See CMS Ex. 11 at 11-13.4  This suggests “that either the resident requested something to relieve his anxiety or the staff observed something significant enough to justify administering the prescription medication.”  CMS Ex. 21 at 3-4 (Telega Decl. ¶ 16); CMS Ex. 22 at 3 (Maas Decl. ¶ 15).  Most important, we also know that R42’s interdisciplinary team recognized agitation as a problem and added that behavior to his “Behavioral Monitoring Record.”  CMS Ex. 10 at 25.  Staff documented the behavior but that documentation was not reflected in the assessment.

The facility has thus failed to demonstrate that it corrected its deficiencies under section 483.20(g)-(j).

2. The facility was not in substantial compliance with 42 C.F.R. § 483.75(o)(1) and (2) because its quality assurance committee did not ensure that the facility corrected identified problems with resident assessments.

Program requirement:  42 C.F.R. § 483.75(o)(1) and (2) (Tag 520).  The facility must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well‑being of each resident.  42 C.F.R. § 483.75.  To this end, the facility must (among other requirements) have in place a quality assessment and assurance committee made up of the DON, a physician, and at least three other staff members.  The committee must meet at least quarterly to identify issues for which quality assessment and assurance activities are necessary.  It develops and implements appropriate plans of action to correct identified quality deficiencies.

That inadequate assessments were an ongoing problem at the facility is well-illustrated by the results of the May survey.  Facility management admitted to the surveyors that it had known for months that its assessments were inadequate and that its staff needed additional training.  See, e.g., CMS Ex. 7 at 5.  Following the May survey, the facility

Page 8

acknowledged its serious problems and promised correction.  Assuring that the corrections were made was the responsibility of the quality assurance committee.  Jewish Home of E. Pa., DAB No. 2380 at 10-11 (2011); review denied, Jewish Home of E. Pa. v. CMS, 2012 WL 834129 (Mar. 14, 2012).  That it failed to do so put the facility out of substantial compliance with the quality assurance regulation, 42 C.F.R. § 483.75(o)(1)) and (2).

3. The penalty imposed is reasonable.

To determine whether a civil money penalty is reasonable, I apply the factors listed in 42 C.F.R. § 488.438(f):  (1) the facility’s history of noncompliance; (2) the facility’s financial condition; (3) factors specified in 42 C.F.R. § 488.404; and (4) the facility’s degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort, or safety.  The absence of culpability is not a mitigating factor.  The factors in 42 C.F.R. § 488.404 include:  (1) the scope and severity of the deficiency; (2) the relationship of the deficiency to other deficiencies resulting in noncompliance; and (3) the facility’s prior history of noncompliance in general and specifically with reference to the cited deficiencies.

I consider whether the evidence supports a finding that the amount of the CMP is at a level reasonably related to an effort to produce corrective action by a provider with the kind of deficiencies found, and in light of the section 488.438(f) factors.  I am neither bound to defer to CMS’s factual assertions nor free to make a wholly independent choice of remedies without regard for CMS’s discretion.  Barn Hill Care Ctr., DAB No. 1848 at 21 (2002); Cmty. Nursing Home, DAB No. 1807 at 22 et seq. (2002); Emerald Oaks, DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1683 at 8 (1999).

Here, CMS imposes a penalty of $100 per day for the facility’s six additional days of substantial noncompliance.  This minimal amount is at the very, very low end of the penalty range ($50 to $3,000).  42 C.F.R. §§ 488.408(d)(1)(iii); 488.438(a)(1)(ii).5 Considering the relevant factors, these penalties are reasonable.

By itself, the facility’s failing to correct its earlier deficiencies justifies the minimal penalty here.

With respect to financial condition, the facility obviously does not claim that paying the additional $600 penalty would render it insolvent or would compromise the health and safety of its residents.  Van Duyn Home and Hosp., DAB No. 2368 (2011); Gilman Care Ctr., DAB No. 2357 (2010).

Page 9

Applying the remaining factors, accurate assessments are critical because they “form the bases for the care that the facility provides.”  Avalon Place Trinity, DAB No. 2819 at 18 (2017).  That the facility did not immediately correct the problems with its assessments is significant and justifies this minimal penalty.

For these reasons, I find that the penalty imposed is reasonable.

Conclusion

From June 22-27, 2016, the facility was not in substantial compliance with 42 C.F.R. §§ 483.20(g)-(j) and 483.75(o)(1) and (2); the small penalty imposed is reasonable.

• 1. The regulations governing long-term-care facilities have been revised. 81 Fed. Reg. 68,688 (Oct. 4, 2016); 82 Fed. Reg. 32,256 (July 13, 2017). I apply the regulations in effect at the time of the survey.
• 2. My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.
• 3. The MDS is a federally-mandated process for assessing residents in Medicare and Medicaid-certified nursing homes.
• 4. That staff did not document the reasons for administering the drug is itself a problem. See 42 C.F.R. § 483.25(l)(1)(iii) and (iv).
• 5. Effective August 1, 2016, the CMP amounts increased substantially. See 45 C.F.R. § 102.3. CMS based its penalties on the much lower amounts that were in effect at the time of the survey.