Madonna Manor, DAB CR6163 (2022)

DECISION

Madonna Manor (Petitioner or “the facility”) challenges determinations by the Centers for Medicare & Medicaid Services (CMS) to impose separate per‑day civil monetary penalties (CMPs) based on noncompliance with 42 C.F.R. § 483.80(g)(1)-(2) on November 15 and 22, and December 6, 13, 20, and 27, 2021, and January 3, 2022.  Because CMS did not present prima facie evidence of noncompliance with Medicare participation requirements on November 15 and 22, 2021, I reverse the November 15 and 22, 2021 findings of noncompliance.  I affirm the noncompliance cited on December 6, 13, 20, 27, 2021, and January 3, 2022.  In the absence of any evidence or argument by CMS regarding the reasonableness of separate $6,500 per-day CMPs, I reduce the CMPs to the minimum levels prescribed at 42 C.F.R. 488.447(a), for a combined CMP totaling $10,120.  

I.   Background

The Social Security Act (Act) establishes requirements for skilled nursing facility (SNF) participation in the Medicare program and authorizes the Secretary of Health and Human

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Services (“the Secretary”) to promulgate regulations implementing those statutory provisions.  See 42 U.S.C. § 1395i-3; 42 C.F.R. pts. 483 and 488.  To participate in the Medicare program, an SNF must maintain substantial compliance with program participation requirements.  In order to be in substantial compliance, an SNF’s deficiencies may “pose no greater risk to resident health or safety than the potential for causing minimal harm.”  42 C.F.R. § 488.301.  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  Id. 

CMS may impose a per-day CMP for the number of days an SNF is not in substantial compliance, or a per-instance CMP for each instance of the SNF’s noncompliance.  42 U.S.C. § 1395i-3(h)(2)(B)(ii); 42 C.F.R. § 488.430(a).  If CMS imposes a remedy based on a noncompliance determination, then the facility may request a hearing before an administrative law judge (ALJ) to challenge the noncompliance finding and enforcement remedy.  42 U.S.C. §§ 1320a-7a(c)(2), 1395i‑3(h)(2)(B)(ii); 42 C.F.R. §§ 488.408(g), 488.434(a)(2)(viii), 498.3(b)(13). 

On November 15, 2021, CMS issued the first of seven determinations citing noncompliance with 42 C.F.R. § 483.80(g)(1)-(2) (cited as Tag F884 (COVID-19 reporting)).  See DAB Docket No. C-22-269, entry No. 1a (November 15, 2021 initial determination); DAB Docket No. C-22-270, entry No. 1a (November 22, 2021 initial determination); DAB Docket No. C-22-296, entry Nos. 1a through 1e (December 6, 13, 20, and 27, 2021, and January 3, 2022 initial determinations); see also CMS Ex. 4 (corresponding Form CMS-2567s for the notices dated December 6, 13, 20, 27, 2021 and January 3, 2022).  CMS cited each deficiency at the “F” level of scope and severity¹ and imposed a CMP for a single day of noncompliance for each deficiency.  See DAB Docket No. C-22-269, entry No. 1a (November 15, 2021 ($6,000)); DAB Docket No. C-22-270, entry No. 1a (November 22, 2021 ($6,500)); Docket No. C-22-296, entry Nos. 1a through 1e (December 6, 13, 20, and 27, 2021, and January 3, 2022 ($6,500 each)); see also CMS Ex. 4 (corresponding Form CMS-2567s for the notices dated December 6, 13, 20, 27, 2021 and January 3, 2022).

On January 21, 2022, Petitioner, through counsel, timely requested a hearing to challenge the November 15, 2021 determination.  DAB Docket No. C-22-269, entry Nos. 1 and 1a.  That same day, Petitioner filed a separate request for hearing to challenge the November

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22, 2021 determination.  DAB Docket No. C-22-270, entry Nos. 1 and 1a.  In an order dated January 26, 2022, I consolidated Petitioner’s requests for hearing under docket number C-22-270.  I offered the parties 10 days to object to consolidation of these cases, and neither party objected. 

On February 4, 2022, Petitioner filed a third request for hearing in which it challenged the December 6, 13, 20, 27, 2021, and January 3, 2022 initial determinations.  Petitioner’s request for hearing included an unopposed request for consolidation of the new requests for hearing with the requests for hearing that had previously been consolidated under docket number C-22-270.²  In an order dated February 9, 2022, I consolidated the requests for hearing under the instant docket number, C-22-296. 

CMS filed a pre-hearing brief (CMS Br.) and 4 proposed exhibits (CMS Exs. 1-4), and Petitioner filed a brief (P. Br.) and 11 proposed exhibits (P. Exs. 1-11).   In the absence of any objections, I admit all proposed exhibits into the evidentiary record. 

Petitioner submitted the written direct testimony of three witnesses (P. Exs. 9-11), and CMS did not request an opportunity to cross-examine these witnesses.  Therefore, a hearing is unnecessary for the purpose of cross-examination of any witnesses.  Pre-Hearing Order §§ 12-14.  The record is closed, and I issue this decision on the merits.  

II.   Issue

The issues presented are: 

Whether Petitioner was in substantial compliance with 42 C.F.R. § 483.80(g)(1)- (2) on November 15 and 22, and December 6, 13, 20, and 27, 2021, and January 3, 2022.

Whether the CMPs imposed are reasonable.

III.   Discussion³

1.   CMS has not submitted any evidence or argument supporting its citation of noncompliance with Medicare participation requirements on November 15 and 22, 2021, and therefore, CMS has not met its prima facie burden.

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2.   Because CMS has not met its prima facie burden, I reverse the November 15 and 22, 2021 findings of noncompliance.

Petitioner submitted requests for hearing to challenge the November 15 and 22, 2021 initial determinations.  CMS did not address either determination in its brief, nor did it submit any evidence, to include the corresponding the Form CMS-2567 statements of deficiencies.  

“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. 

CMS has not made a prima facie showing of noncompliance on November 15 and 22, 2021.  Therefore, I reverse the November 15 and 22, 2021 findings of noncompliance.⁴ 

3.   Petitioner’s former executive director was a registered user of Secure Access Management Services (SAMS) and was responsible for reporting weekly information to the National Health Safety Network on behalf of Petitioner, specifically, the weekly data reporting required by 42 C.F.R. § 483.80(g)(1)-(2).  

4.   Petitioner’s former executive director separated from employment with Petitioner on June 8, 2021.

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5.   Petitioner has submitted undisputed evidence that an administrative assistant, its new executive director, and an executive director of another facility operated by its parent entity reported data to the NHSN on a weekly basis following the former executive director’s separation from employment.

6.   Petitioner acknowledged that dating back to November 2021, it was aware that the data it reported to the NHSN had not been received and that CMS had determined it was noncompliant with 42 C.F.R. § 483.80(g)(1)-(2).

7.   Petitioner contacted the Quality Improvement Organization (QIO) on January 6, 2022, and inquired why data it had reported to the NHSN had not been received.  With the QIO’s technical assistance, it determined on January 10, 2022, that its former executive director, who was employed at another facility, had not been deactivated as an NHSN account user for Petitioner and had been overwriting Petitioner’s previously reported data.

8.   Upon recognizing that a former executive director’s user account “was still tied to [Petitioner],” Petitioner’s new executive director “took steps to deactivate” this user.

9.   Petitioner acknowledges there is “no way to demonstrate or prove the data that had been entered in the NHSN website” before it was overwritten by the other facility.

10.   Petitioner acknowledges “CMS was prevented from seeing, reviewing, or accessing” the information it reported to NHSN.

11.   The NHSN Facility/Group User & Administrator Rules of Behavior states that “Facility Administrators are responsible for managing and inactivating Users in their facility who no longer have a role related to NHSN surveillance activities for their organization.”

12.   Petitioner did not deactivate its former executive director until after CMS had cited it seven times for failing to comply with weekly reporting requirements.

13.   Pursuant to 42 C.F.R. § 483.80(g)(1)-(2), a facility must electronically submit COVID-19 reports through the NHSN; no other means of COVID-19 reporting is authorized by the regulation.

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14.   Petitioner was not in substantial compliance with the participation requirement at 42 C.F.R. § 483.80(g)(1)-(2) on December 6, 13, 20, and 27, 2021, and January 3, 2022.

At the outset of the COVID-19 pandemic, CMS implemented rulemaking to mandate weekly electronic reporting by skilled nursing facilities of an array of data related to COVID-19 surveillance, to include, but not limited to, COVID-19 infections of residents and staff, deaths, staffing levels, and supply levels of personal protective equipment (PPE).  85 Fed. Reg. 27,550, 27,601-02 (May 8, 2020); see 85 Fed. Reg. at 27,627 (text of 42 C.F.R. § 483.80(g)(1)).  Thereafter, and through further rulemaking, CMS required facilities to “report certain data regarding vaccination and other therapeutic treatments . . . via NHSN.”  91 Fed. Reg. 26,308, 26,312 (May 13, 2021); see 91 Fed. Reg. at 26,335-36 (addition of 42 C.F.R. § 483.80(g)(1)(viii) and (ix)).  The frequency of reporting prescribed by 42 C.F.R. § 483.80(g)(2) is weekly.  

CMS policy memorandum, QSO-20-29-NH (Interim Final Rule Updating Requirements for Notification of Confirmed and Suspected COVID-19 Cases Among Residents and Staff in Nursing Homes), dated May 6, 2020, addressed the then-new participation requirement and the creation of F-Tag 884.  See P. Ex. 1.⁵  CMS explained the following, as relevant here:  

Review for F884 will be conducted offsite by CMS Federal surveyors (state surveyors should not cite this F-tag).  Following an initial reporting grace period granted to facilities, CMS will receive the CDC NHSN COVID-19 reported data and review for timely and complete reporting of all data elements.  Facilities identified as not reporting will receive a deficiency citation at F884 on the CMS-2567 with a scope and severity level at an F (no actual harm with a potential for more than minimal harm that is not an Immediate Jeopardy [IJ] and that is widespread; this is a system failure with the potential to affect a large portion or all of the residents or employees), and be subject to an enforcement remedy as described below. 

P. Ex. 1 at 4.

With the exception of the week ending November 29, 2021, CMS informed Petitioner, on a weekly basis, that it had not received the COVID-19 data reporting through the NHSN

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as required by 42 C.F.R. § 483.80(g)(1)-(2).  Petitioner submitted credible evidence that its current executive director and an executive director from a sister facility submitted data to the NHSN during the relevant reporting periods.  P. Exs. 9-11.  However, Petitioner acknowledges that due to technical issues, “CMS was prevented from seeing, reviewing, or accessing the reported data” (P. Br. at 7) and the reported data “was not visible to CMS.”  P. Br. at 12.  

As explained by Petitioner, and not disputed by CMS, Petitioner’s former executive director became the executive director at another facility and reported data on behalf of that facility to the NHSN.  P. Br. at 6; see P. Ex. 9 at 3-4.  Petitioner determined, with the assistance of a QIO technical advisor, that its former executive director “was reporting data for her new facility under the new facility’s CCN while using her SAMS access that was still associated with [Petitioner’s] account.”  P. Br. at 6; see P. Ex. 9 at 3-4.  Petitioner’s current executive director rectified the NHSN data reporting problems when she “took steps to deactivate [the former executive director] from [Petitioner’s] NHSN account.”  P. Ex. 9 at 4; see NHSN Facility/Group User & Administrator Rules of Behavior, Version 3.0, § 3.4.1, Healthcare Facility Users of NHSN, Facility Administrators (“Facility Administrators are responsible for managing and inactivating Users in their facility who no longer have a role related to NHSN surveillance activities for their organization.”). 

Petitioner argues that any failure to comply with the reporting requirements set forth at 42 C.F.R. § 483.80(g)(1)-(2) is a technical problem and does not amount to noncompliance.  P. Br. at 9-10 (citing 85 Fed. Reg. 54,820, 54,824 (Sep. 2, 2020)).  As explained in the cited rulemaking, facilities “are offered an opportunity for Independent Informal Dispute Resolution [IIDR] under § 488.431,” and that IIDR “may be requested for reasons, such as technical difficulties that should be adequately documented, that may have prevented the facility from submitting its report in a timely manner.”  85 Fed. Reg. at 54,824.  Petitioner argues that it “was prevented from utilizing the IIDR process to resolve this issue with CMS because [it] could not determine within the 10-day deadline [for requesting IIDR] why it was receiving the Notices of alleged non-compliance after reporting timely and complete data every week.”  P. Br. at 10.  Petitioner further contends that “[w]here IIDR resolution was not available to [it], this Court is the facility’s only avenue to correct this technical issue.”  P. Br. at 11.  Inasmuch as Petitioner identifies technical difficulties as a basis to request IIDR, Petitioner did not avail itself of the opportunity to request IIDR.  Nor has Petitioner demonstrated that it could not have requested IIDR or that any technical difficulties beyond its reasonable control prevented its timely submission of data for the reporting weeks ending December 6, 13, 20, and 27, 2021, and January 3, 2022. 

Although the December 6, 13, 20, 27, 2021, and January 3, 2022 initial determinations are the focus of the instant discussion, Petitioner should have already been aware, as early as November 2021, that CMS had determined that it had not reported data to the NHSN

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system.  See C-22-269, docket entry No. 1a (November 15, 2021 initial determination informing Petitioner that a review of the NHSN system had determined it was not in compliance with 42 C.F.R. § 483.80(g)(1)-(2)).  I did not uphold the November 15, 2021 initial determination because CMS did not meet its prima facie burden to demonstrate noncompliance, but the November 15, 2021 initial determination nonetheless put Petitioner on notice of CMS’s determination that its data had not been received by the NHSN system.  Petitioner’s current executive director vaguely claimed that she “tried to investigate the notices of non-compliance, but could not determine why [she] was receiving the notices.”  P. Ex. 9 at 3.  It was not until approximately seven weeks later, and the issuance of six more notices of noncompliance, that she contacted the QIO for technical assistance on January 6, 2022.  P. Ex. 9 at 3.  Only four days later, on January 10, 2022, the technical assistance enabled the current executive director to identify and correct the data reporting problem.  P. Ex. 9 at 3-4.  Because Petitioner became aware of its “technical problem” in November 2021 and failed to take meaningful action, which consisted of simply requesting technical assistance from the QIO, until January 2022, the evidence does not show that Petitioner was prevented from requesting IIDR within 10 days of receipt of the December 6, 2021 initial determination (or within 10 days of any of the subsequent initial determinations).  Nor does the evidence support that Petitioner’s repeated noncompliance on December 6, 13, 20, and 27, 2021, and January 3, 2022, was caused by a technical problem beyond its control.  Rather, Petitioner did not take the initiative to correct the problem until a number of weeks later. 

Citing my previous decision in Signature HealthCARE at Jackson Manor Rehab and Wellness Center, DAB CR5890 (2021), Petitioner argues that reversal is similarly warranted based on a technical problem.  P. Br. at 11-13.  Petitioner is mistaken; the circumstances here are not analogous to the circumstances presented in the Signature HealthCARE case.  First, Signature HealthCARE had requested IIDR, and an IIDR request remained pending months after the 60-day deadline for completion of a requested IIDR review.  See 42 C.F.R. § 488.431(a)(1).  In fact, the IIDR request remained pending even after the parties had filed their pre-hearing exchanges, and CMS had not requested that I stay proceedings to allow for completion of the IIDR process.  Signature HealthCARE, DAB CR5890 at 5 n.3.  In the Signature HealthCARE case, CMS also did not dispute the petitioner’s claim that, even after months of effort, it was unable to obtain access credentials to report data to the NHSN.  Rather, CMS illogically claimed that the lack of access credentials, which it conceded was a technical problem, was not an excuse for not electronically reporting data to the NHSN, even though 42 C.F.R. § 483.80(g)(1)-(2) only allows for reporting via the NHSN.  Id. at 8.  The circumstances here, which largely involve Petitioner’s lengthy inaction and failure to deactivate its former executive director as an NHSN user, are dissimilar to the frankly absurd circumstances presented in the Signature HealthCARE case. 

In the instant case, Petitioner unconvincingly claims that its coordination with the QIO to ascertain the reason for its reported data being unavailable was a “long, protracted

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process” and that it would not have been able to provide the “adequate documentation” necessary to support a request for IIDR within 10 days.  P. Br. at 11.  Petitioner’s claim is belied by the evidence; within four days of contacting the QIO for technical assistance, Petitioner had received the guidance necessary to rectify the situation.  P. Ex. 9 at 3-4.  While Petitioner may have initially had a technical problem that impacted its ability to report data to the NHSN, Petitioner’s failure to submit data that could be accessed by CMS unnecessarily continued for weeks.  Petitioner has not demonstrated that a technical problem beyond its reasonable control caused its repeated noncompliance on December 6, 13, 20, and 27, 2021, and January 3, 2022. 

Although Petitioner undoubtedly attempted to report its data and the circumstances are unfortunate, the evidence demonstrates that the NHSN repeatedly did not receive Petitioner’s reported data over a period of weeks.  Petitioner acknowledges that “CMS was prevented from seeing, reviewing or accessing the reported data.”  P. Br. at 7.  Petitioner was required to electronically report data that CMS was monitoring, to include, but not limited to, the prevalence of COVID-19, deaths from COVID-19, PPE supply levels, and staffing levels.  Further, the information reported by Petitioner would be “posted publicly by CMS to support protecting the health and safety of residents, personnel, and the general public.”  42 C.F.R. § 483.80(g)(2).  This public data would be available to residents and family members who could use that information to make informed decisions about current or planned skilled nursing facility care.  The repeated failure to submit required weekly data that could be accessed by CMS amounted to noncompliance with Medicare participation requirements.  42 C.F.R. § 483.80(g)(1)-(2); see, e.g., 86 Fed. Reg. 62,240, 62,392 (Nov. 9, 2021) (“Timely and actionable surveillance will enable CMS to continue to respond to facilities in need of additional technical support and oversight, should they experience new COVID-19 infections.”) 

15.   Pursuant to 42 C.F.R. § 488.447(a)(1), CMS may impose a minimum CMP of $1,000 for the first occurrence of noncompliance, as adjusted for inflation.

16.   Pursuant to 42 C.F.R. § 488.447(a)(2), “[a]n amount equal to $500 added to the previously imposed [CMP] amount” is permissible for subsequent noncompliance, as adjusted for inflation.

17.   CMS imposed five separate per-day CMPs of $6,500 for single days of noncompliance on December 6, 13, 20, and 27, 2021, and January 3, 2022.

18.   CMS’s initial determinations lacked any discussion of the rationale for imposing a $6,500 CMP for each day of noncompliance.

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19.   CMS’s brief lacked any discussion of the rationale for imposing a $6,500 CMP for each day of noncompliance. 

20.   CMS has not identified any factors that warrant the imposition of a CMP above the minimum levels identified in 42 C.F.R. § 488.447(a)(1), much less multiple times the minimum CMP. 

21.   A CMP at the minimum levels prescribed by 42 C.F.R. § 488.447, as adjusted for inflation, is a reasonable enforcement remedy.  

On September 2, 2020, CMS implemented rulemaking addressing the imposition of CMPs for noncompliance with 42 C.F.R. § 483.80(g)(1)-(2).  85 Fed. Reg. at 54,823-25; see also 85 Fed. Reg. at 54,873 (text of 42 C.F.R. § 488.447(a)-(d)).  Pursuant to 42 C.F.R. 488.447(a)-(d), and as adjusted annually for inflation, “a minimum $1,000 CMP will be imposed for the first occurrence of noncompliance,” and that “[f]or each subsequent time the facility fails to report the requisite COVID-19 related data, the amount of the CMP imposed will be increased by $500.”  85 Fed. Reg. at 54,874. 

CMS inexplicably imposed a CMP of $6,500 for each deficiency cited on December 6, 13, 20, and 27, 2021, and January 3, 2022.  A $6,500 CMP is more than six times the minimum CMP for a first-time instance of noncompliance, and more than twice the minimum CMP for a fifth-time instance of noncompliance.  See 42 C.F.R. § 488.447(a).  Pursuant to section 1128A(d) of the Act, 42 U.S.C. § 1320a-7a(d), the Secretary, in determining the amount of a CMP, shall take into account “the nature of claims and the circumstances under which they were presented,” “the degree of culpability, history of prior offenses, and financial condition of the person presenting the claims,” and “such other matters as justice may require.”  Pursuant to 42 C.F.R. § 488.438(f), CMS must take into account the facility’s history of noncompliance, financial condition, the factors specified in 42 C.F.R. § 488.404, and the facility’s degree of culpability. 

Absent any evidence that Petitioner had a history of prior noncompliance or that the circumstances somehow warrant a CMP multiples higher than the minimum level set by 42 C.F.R. § 488.447(a), per-day CMPs at the minimum level are reasonable.  CMPs at the minimum level are also supported by the degree of culpability of Petitioner; Petitioner’s noncompliance is not due to a deliberate failure to report its data to the NHSN, but rather, a lack of diligence in identifying the cause of its noncompliance and its delay in deactivating a former authorized user.  I therefore find the following inflation-adjusted per-day CMPs to be reasonable:  $1,012 (December 6, 2021); $1,518 (December 13, 2021); $2,024 (December 20, 2021); $2,530 (December 27, 2021); $3,036 (January 3, 2022), combining for a total CMP of $10,120. 

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IV.   Conclusion

For the reasons discussed above, I reverse CMS’s November 15 and 22, 2021 determinations of noncompliance.  I affirm the noncompliance cited in the December 6, 13, 20, and 27, 2021, and January 3, 2022 initial determinations.  A total CMP of $10,120 is reasonable. 

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Endnotes

¹ Scope and severity levels are used by CMS and state survey agencies when selecting remedies.  The scope and severity level is designated by letters A through L.  Pub. 100-7, State Operations Manual (SOM), chap. 7, § 7400.3 (Selection of Remedies), “Matrix for Scope & Severity” (table) (Rev. 185, eff. Nov. 16, 2018) (current version and applicable at the time of the survey at issue); see also 42 C.F.R. § 488.408.  As relevant here, a scope and severity level of “F” indicates a widespread deficiency that posed a potential for more than minimal harm to resident health and safety.

² In an email message dated February 9, 2022, a Civil Remedies Division staff attorney requested that CMS provide its position regarding consolidation.  CMS reported it was unopposed to consolidation.  DAB Docket No. C-22-296, entry No. 2a.

³ Findings of fact and conclusions of law are in bold and italics.

⁴ I note that the November 15 and 22, 2021 initial determinations informed Petitioner that it was required to file a request for hearing within 60 days of receipt of the initial determination.  However, the initial determinations do not independently indicate the actual date of receipt.  See State Operations Manual, Pub. 100-07. Ch. 7, § 7305.4 (Rev. 63, effective September 10, 2010) (addressing means of sending notice).  Further, CMS did not submit the Form CMS-2567 statements of deficiencies, or otherwise indicate that it had served the statements of deficiencies on Petitioner (and if so, when).  See P. Ex. 1 at 4 (CMS Policy Memorandum QSO-20-29-NH, dated May 6, 2020, stating: “Facilities identified as not reporting will receive a deficiency citation at F884 on the CMS-2567 with a scope and severity of F.”).  CMS did not oppose consolidation of the requests for hearing and did not challenge the timeliness of either request for hearing.

⁵ The policy memorandum is CMS’s guidance regarding citation of this deficiency.  Appendix PP of the State Operations Manual (CMS Pub. 100-07, Rev. 173, Nov. 22, 2017) does not include this participation requirement.