Rio Hondo Healthcare, Inc. d/b/a Downey Post Acute, DAB CR6317 (2023)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) that Rio Hondo Healthcare (Petitioner) was not in substantial compliance with the Medicare program requirements for skilled nursing facilities (SNF) at 42 C.F.R. § 483.15(c)(1)-(2).  I also conclude that the $11,225 per-instance civil money penalty (CMP) imposed on Petitioner is reasonable. 

I.  Legal Framework

The Medicare program “provides basic protection against the costs of . . . related post‑hospital . . . care” for individuals over the age of 65 who are eligible for Social Security retirement benefits and for individuals under 65 who meet other criteria.  42 U.S.C. § 1395c.  Post-hospital care includes extended care services provided at an SNF.  42 U.S.C. §§ 1395f(a)(2)(B), 1395x(h)-(i). 

For Medicare program purposes, an SNF is an institution that is primarily engaged in providing skilled nursing care and/or rehabilitation services for its residents but is not primarily engaged in the care and treatment of mental diseases.  42 U.S.C. §§ 1395x(j),

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1395i-3(a)(1).  Because an SNF is a “provider of services” in the Medicare program, each SNF that participates in the program must file a provider agreement with the Secretary of Health and Human Services (Secretary).  42 U.S.C. §§ 1395cc(a), 1395x(u). 

In addition to complying with the terms of the provider agreement, a participating SNF must meet a variety of ongoing statutory requirements regarding how it provides services, maintains the rights of its residents, and administers its facility.  42 U.S.C. § 1395i‑3(a)(3), (b)-(d).  SNFs also must comply with “such other requirements relating to the health, safety, and well-being of residents or relating to the physical facilities thereof as the Secretary may find necessary.”¹  42 U.S.C. § 1395i-3(d)(4)(B); see 42 U.S.C. § 1395i-3(c)(1)(xi), (f).  The Secretary promulgated regulations to establish those additional requirements.  See 42 C.F.R. pt. 483, subpt. B.² 

When an SNF fails to meet a statutory or regulatory participation requirement, then the SNF has a “deficiency.”  42 C.F.R. § 488.301; see 42 U.S.C. § 1395i-3(h)(1).  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  42 C.F.R. § 488.301.  To maintain “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. 

Broadly, noncompliance that subjects an SNF to enforcement remedies is divided into two levels.  One level comprises deficiencies that immediately jeopardize the health or safety of residents and the other level is composed of deficiencies that do not.  42 U.S.C. § 1395i-3(h)(1).  “Immediate jeopardy” exists when “the provider’s noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.”  42 C.F.R. § 488.301. 

The Secretary has the duty to enforce the statutory and regulatory participation requirements for SNFs.  42 U.S.C. § 1395i-3(f)(1).  To do so, the Secretary contracts with state agencies to conduct surveys to determine whether SNFs are in substantial compliance.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  Standard surveys are unannounced and occur at least once every 15 months.  42 U.S.C. § 1395i‑3(g)(2)(A)(i), (iii)(I).  State agencies also conduct investigations into complaints against SNFs.  42 U.S.C. § 1395i-3(g)(1)(C), (4).  When the results of a survey show that an SNF is not in substantial compliance with program participation requirements, the

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Secretary may impose enforcement remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  When CMS selects an enforcement remedy to impose on an SNF, it determines the scope (i.e., the number of residents affected or potentially affected) and severity (i.e., the degree of harm or potential harm) for each deficiency.³  See 42 C.F.R. § 488.404(a)-(b). 

One such remedy is a CMP.  42 U.S.C. § 1395i-3(h)(2)(B)(ii).  CMS may impose a per‑instance CMP for each instance of the SNF’s noncompliance or a per‑day CMP for the number of days an SNF is not in substantial compliance.  42 U.S.C. § 1395i‑3(h)(2)(A), (B)(ii)(I); 42 C.F.R. § 488.430(a).  For CMPs assessed on or after January 17, 2020, and for deficiencies that occurred after November 2, 2015, the CMP amounts may range as follows:  $2,233 to $22,320 for per-instance CMPs; $112 to $6,695 per day for less serious noncompliance; or $6,808 to $22,320 per day for more serious noncompliance that poses immediate jeopardy to the health and safety of residents.  45 C.F.R. § 102.3 (2020); 85 Fed. Reg. 2869, 2870, 2880 (Jan. 17, 2020); see also 42 C.F.R. § 488.438(a) (providing original CMP amounts before statutory inflation adjustments).  

If CMS imposes a CMP based on a finding of substantial noncompliance, then the SNF may request a hearing before an administrative law judge (ALJ) to challenge CMS’s initial determination of noncompliance that led to the imposition of an enforcement remedy and/or the level of noncompliance (if a successful challenge to the level would affect the range of CMP amounts imposed on the SNF).  42 U.S.C. §§ 1320a-7a(c)(2), 1395i‑3(h)(2)(B)(ii); 42 C.F.R. §§ 488.330(e)(3)(ii), 488.408(g)(1), 488.434(a)(2)(viii), 498.3(b)(13)-(14), (d)(10); see also 5 U.S.C. §§ 554, 556.  However, CMS’s choice of remedies is not reviewable.  42 C.F.R. §§ 488.438(e)(2), 488.408(g)(2), 498.3(b)(13). 

If an SNF challenges the existence of a deficiency, CMS must make a prima facie case that the SNF failed to substantially comply with federal participation requirements and, if CMS makes such a showing, the SNF must then prove substantial compliance by a preponderance of the evidence.  Hillman Rehab. Ctr., DAB No. 1611 at 8 (1997); see Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson,129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800 (2001).  If

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an SNF challenges CMS’s determination as to the level of noncompliance, CMS’s determination must be upheld unless it is clearly erroneous.  42 C.F.R. § 498.60(c)(2). 

If an ALJ concludes that there was a basis for imposing a CMP on an SNF, then the SNF may dispute the amount of the CMP.  The ALJ’s review of the CMP amount is limited to considering the statutory and regulatory factors for setting a CMP amount.  42 C.F.R. § 488.438(e)(3); see 42 U.S.C. §§ 1320a-7a(d), 1395i-3(h)(2)(B)(ii)(I); 42 C.F.R. § 488.438(f).  The ALJ may not reduce a CMP to zero.  42 C.F.R. § 488.438(e)(1). 

Either the SNF or CMS may seek administrative review of an ALJ’s decision.  42 C.F.R. § 498.80. 

II.  Background and Procedural History

Petitioner is an SNF that operates in Downey, California.  CMS Ex. 1 at 1.  On July 8, 2020, the California Department of Public Health (state agency) completed an abbreviated survey of Petitioner’s facility based on a complaint the state agency received.  The state agency issued a Statement of Deficiencies (SOD) in which it found Petitioner to be noncompliant with 42 C.F.R. § 483.15(c)(1)(i)-(ii), (2)(i)-(iii) (Tag F-622) (Transfer and Discharge Requirements) at a scope and severity level of “G” (isolated actual harm).  CMS Ex. 1. 

Based on the findings in the SOD, on July 8, 2020, the Los Angeles County Department of Public Health issued a notice of initial determination imposing a denial of payment for new admissions (DPNA) on Petitioner, to be effective on October 8, 2020, and recommending that CMS impose a civil money penalty (CMP) on Petitioner.  CMS Ex. 2.  The state agency conducted a revisit survey and concluded that Petitioner had returned to substantial compliance with Medicare participation requirements for SNFs on September 14, 2020.  CMS Ex. 3. 

On March 17, 2021, CMS issued a notice of initial determination imposing an $11,225 per-instance CMP on Petitioner.  CMS also noted that the DPNA would not go into effect because Petitioner returned to substantial compliance before October 8, 2020.  Electronic Filing System (E-File) Document No. 1a. 

On May 14, 2021, Petitioner requested a hearing before an ALJ to dispute the initial determination.  On May 18, 2021, I ordered this case consolidated with another matter docketed under C-21-765; however, I severed this case from C-21-765 after Petitioner objected to consolidation.  As a result, the Civil Remedies Division issued my Standing Prehearing Order (SPO), which established prehearing submission procedures and dates for the submission of prehearing exchanges.

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On September 7, 2021, CMS filed its prehearing exchange consisting of a brief and 14 exhibits, one of which was written direct testimony from a witness (CMS Ex. 13).  On October 12, 2021, Petitioner submitted a prehearing exchange that included a prehearing brief and 21 proposed exhibits, three of which were written direct testimony from three witnesses (P. Exs. 14-16) as well as a declaration from a physician (P. Ex. 12).  Petitioner requested to cross-examine CMS’s witness.  CMS filed a reply brief in which it expressly declined to cross-examine two of Petitioner’s witnesses and, in an email, clarified that CMS neither wanted to cross-examine any of Petitioner’s witnesses nor the physician from whom a declaration had been submitted.  E-File Document No. 36.  

I issued a Notice of Hearing on December 3, 2021, setting a hearing in this matter for February 22, 2022, so that Petitioner could cross-examine CMS’s witness, Jessica Castillo, R.N.  In the Notice of Hearing, I also admitted all of the proposed exhibits without objection. 

Based on CMS’s request, on February 8, 2022, I changed the time at which the February 22, 2022 hearing would commence.  Due to the unavailability of the witness, on February 22, 2022, I cancelled the hearing set for that day.  On February 28, 2022, I reset the date of the hearing for April 14, 2022; however, based on CMS’s request, I further reset the date for the hearing as April 5, 2022. 

On April 5, 2022, I held a hearing at which Petitioner cross-examined Ms. Castillo.  Hearing Transcript (Tr.) 5-51.  At the hearing, there was a document discussed that was not in the record.  Tr. 23.  Further, the written direct testimony (P. Ex. 15) for one of Petitioner’s witnesses, Licensed Vocation Nurse (LVN) Tam Nguyen, included an erroneous date.  Tr. 56-57.  I asked CMS to file a marked copy of the document discussed by the witness and allowed Petitioner to file amended written direct testimony to correct the erroneous date.  Tr. 26‑27, 57-58.  I also provided the parties with the opportunity to object after the parties filed their documents.  Tr. 54, 57-58.  At the end of the hearing, I established the parameters for post-hearing briefing and informed the parties that they must provide, in post-hearing briefing, all arguments that they want me to address in this decision.  Tr. 52‑54.  

On April 15, 2022, Petitioner filed amended Petitioner Exhibit 15.  On April 21, 2022, CMS filed CMS Exhibit 15.  Neither party objected to these exhibits.  Therefore, I admit amended Petitioner Exhibit 15, in place of the original version of that exhibit, and CMS Exhibit 15 into the record. 

In accordance with the briefing schedule I established, CMS filed a post-hearing brief (CMS Br.), Petitioner filed a post-hearing brief (P. Br.), and CMS filed a reply brief (CMS Reply). 

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III.  Issues

The issues in this case are:  

1. Whether Petitioner was in substantial compliance with the Medicare requirements for skilled nursing facilities at 42 C.F.R. § 483.15(c)(1)(i)-(ii), (2)(i)-(iii). 
2. If Petitioner was not in substantial compliance with Medicare requirements, whether the amount of the CMP that CMS imposed is appropriate under applicable statutory and regulatory factors.  42 U.S.C. § 1320a-7a(d); 42 C.F.R. § 488.438(f). 

IV. Findings of Fact

1. Resident 1 (R1), a male, was 68 years old in April 2020.  CMS Ex. 6 at 1; P. Ex. 5 at 1. 
2. R1 had been on worker’s compensation since June 2019 due to an injury R1 received while working at a job with the Department of Veteran’s Affairs (VA).  CMS Ex. 9 at 22; P. Ex. 5 at 2.  
3. R1 had been living independently with his wife until approximately December 2019.  For three months R1 had been at an SNF and then lived at an assisted living facility.  P. Ex. 18 at 2. 
4. R1 was admitted to a hospital on March 29, 2020, and was discharged to Petitioner’s facility.  Petitioner admitted R1 as a resident on April 1, 2020.  CMS Ex. 6 at 1.  R1 was admitted for rehabilitation and not long-term care.  CMS Ex. 7 at 1. 
5. On admission, R1 had diagnoses of mental and physical impairments that included schizophrenia, history of traumatic brain injury, bipolar disorder, urinary tract infection (UTI), radiculopathy in the lumbar region, and generalized muscle weakness.  CMS Ex. 6 at 1; CMS Ex. 7 at 1; CMS Ex. 9 at 21; P. Ex. 12 ¶ 4.  
6. On April 2, 2020, Petitioner established a care plan for R1.  An interdisciplinary team and R1 participated in the development of the care plan.  P. Ex. 3 at 1; P. Ex. 14 ¶ 5.  The care plan included an effort to improve R1’s ability to perform activities of daily living (ADL).  This was necessary because R1 had performance deficits caused by impaired mobility, UTI, and radiculopathy in the lumbar region.  CMS Ex. 10 at 6-9.  Further, the care plan indicated that physical therapy would be provided to R1 five times a week for four weeks to increase mobility.  CMS Ex. 10 at 10.  The care plan also indicated that R1’s impaired balance placed him at risk for falls, and included various interventions for R1 to avoid falls at the

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facility.  CMS Ex. 10 at 11-13.  Finally, the care plan indicated the potential for behavioral disturbance due to R1’s bi-polar disorder.  CMS Ex. 10 at 14-16. 

7. While at the facility, R1’s attending physician was Martin Zapata, D.O.  CMS Ex. 6 at 1; CMS Ex. 7 at 4; P. Ex. 12 ¶¶ 2-3.  In an April 2, 2020 examination report, Dr. Zapata indicated that R1 had a history of acute back pain, dehydration, and UTI, and listed diagnoses that included lumbar spinal stenosis and “psych.”  Dr. Zapata recommended physical therapy/occupational therapy and an orthopedic evaluation for R1.  He also noted that R1 had a fair rehabilitation potential and the capacity to understand and make decisions.  CMS Ex. 6 at 15; see also CMS Ex. 9 at 18.  
8. On April 2, 2020, a Physical Therapy Evaluation and Plan of Treatment document was completed for R1.  It noted that physical therapy would be provided five times per week for four weeks.  P. Ex. 18 at 1.  The short-term goals for R1 were to:  roll to the right in bed with supervision and use the segmental rolling technique; transfer from supine to sitting position with contact guard assistance in order to use the segmented rolling technique to get in and out of bed; and safely perform functional transfers with contact guard assistance and compensatory strategies in order to perform functional mobility with reduced risk of falls.  P. Ex. 18 at 1.  The long-term goals were for R1 to perform mobility up to 350 feet using a walker and to improve to 18 on the 30-second chair rise test.  P. Ex. 18 at 1.  Although R1 felt unsteady when standing and walking, R1 had not fallen in the past year.  P. Ex. 18 at 2.  R1’s right and left lower extremity strength was assessed as impaired.  P. Ex. 18 at 2.  The summary of the assessment indicated that R1:  had a decline in mobility; had a back brace due to sacral pain; was at a high risk for falls; and was “[m]otivated to return to the community.”  P. Ex. 18 at 3. 
9. On April 2, 2020, an Occupational Therapy Evaluation and Plan of Treatment was completed for R1.  It noted that occupational therapy would be provided five times per week for four weeks.  The short-term goals for R1 were to:  perform lower body dressing safely and efficiently with contact guard assistance and increased independence to return to prior skill level; safely perform toileting tasks using standard commode with contact guard assistance; and safely perform bathing with contact guard assistance using a shower chair.  The long-term goals for R1 were to perform lower body dressing with modified independence and to safely perform toileting using a standard commode.  The assessment indicated that R1’s personal goal was to go home to his wife as soon as possible.  R1’s potential for achieving goals in the plan were considered excellent based on his ability to follow multi‑step directions and motivation to return to his prior level of function.  P. Ex. 17 at 1.

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10. On April 3, 2020, Petitioner’s staff completed a Minimum Data Set (MDS) assessment for R1.  The MDS revealed that R1:  was able to understand and convey information verbally; received a score of 15 on the Brief Interview for Mental Status (BIMS), which showed normal cognitive abilities; had normal mood and behavior; required a one-person physical assist (mostly at the non-weight bearing “[l]imited assistance” level) with all ADLs (e.g., bed mobility, transfers, walking and locomotion, and toilet use); was not steady during walking and transitions and required assistance of staff to stabilize; and normally used a walker or wheelchair.  CMS Ex. 6 at 3-4, 6, 8, 12-13. 
11. On April 3, 2020, Debra Grant of Petitioner’s Social Services Staff, completed a Discharge Evaluation for R1.  R1 participated in the planning.  R1 indicated that he expected to be discharged into the community, i.e., to R1’s home residence.  The evaluation indicated that active discharge planning to return to the community was occurring.  CMS Ex. 10 at 1; P. Ex. 4; P. Ex. 14 ¶ 6; see also P. Ex. 3 at 4. 
12. On April 4, 2020, Social Worker Grant completed a Social Services Assessment/Evaluation V 2 for R1, in which discharge planning was conducted.  Prior to admission, R1 lived in an apartment and the plan was for R1 to go to an independent living facility.  A summary at the end of the document stated that “[d]ischarge plans to return back to his residence place will continue to assist resident while he [is] here at the facility.” CMS Ex. 9 at 21-22; P. Ex. 5; P. Ex. 14 ¶ 7; see also CMS Ex. 9 at 17.  
13. In an April 9, 2020 Daily Skilled Note, LVN Abigail Udarbe stated that R1 “requires extensive assist with [ADLs.]  Active SX:  unsteady balance / gait.  Active SX:  Weakness.”  The note also stated that R1 was receiving physical and occupational therapy for muscle weakness and abnormal posture.  CMS Ex. 9 at 12. 
14. In an April 11, 2020 Daily Skilled Note, LVN Udarbe indicated that R1 required extensive to moderate assistance with ADLs.  R1 still had unsteady balance and gait as well as weakness.  CMS Ex. 9 at 9-10. 
15. In an April 16, 2020 Nursing Note, LVN Udarbe stated that R1 insisted that he was going home that day and would leave against medical advice if R1’s physician would not discharge him.  R1 indicated that he was willing to wait for staff to contact his physician to obtain a response.  CMS Ex. 9 at 4; P. Ex. 16 ¶¶ 4‑5. 
16. An April 16, 2020 Social Services Note authored by Social Worker Grant stated that R1 was waiting for housing placement with the VA.  Social Worker Grant

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made calls to the VA hospital and R1’s wife; however, neither answered the phone.  CMS Ex. 9 at 4; P. Ex. 14 ¶ 8.

17. An April 17, 2020 Social Services Note authored by Social Worker Grant stated that an individual named Kevin from the VA Hospital said that R1 needed to come to the VA hospital emergency room and then the VA would find housing placement for R1.  Further, it stated that “resident is aware we [are] waiting for the doctor to give order.”  CMS Ex. 9 at 2-3 Ex. 14 ¶ 9. 
18. On April 20, 2020, Dr. Zapata examined R1 and, in his examination report, diagnosed R1 as having weakness due to spinal stenosis and degenerative disc disease, hypertension, and “Bipolar/Psych.”  Dr. Zapata continued to consider R1 to have a fair rehabilitation potential and the capacity to understand and make decisions.  Dr. Zapata did not mention discharging R1 from Petitioner’s facility or order R1’s discharge from the facility.  CMS Ex. 6 at 14.  
19. On April 20, 2020, Petitioner’s staff completed an MDS for R1.  R1’s BIMS score was 15, and R1 did not show signs of inattention, disorganized thinking, or altered levels of consciousness.  P. Ex. 19.  R1’s ADL functional status showed that all ADLs only required supervision without assistance.  P. Ex. 20. 
20. On April 20, 2020, LVN Nguyen authored a Discharge Note (CMS Ex. 9 at 1-2) and completed a Discharge Summary and Post-Discharge Plan of Care (Discharge Summary) (P. Ex. 6).  P. Ex. 15 ¶ 4.  Both documents stated R1 was being discharged to a VA hospital.  CMS Ex. 9 at 2; P. Ex. 6 at 3.  The Discharge Note indicated that the treatments provided during R1’s stay at Petitioner’s facility were physical therapy and administration of medicine, while the Discharge Summary stated that the treatments provided were physical therapy and skilled nursing care.  CMS Ex. 9 at 1; P. Ex. 6 at 1.  Both documents specified that the “Reason for Discharge” was that “Resident’s health has improved sufficiently, resident no longer needs the services of the facility.”  CMS Ex. 9 at 1; P. Ex. 6 at 1; P. Ex. 15 ¶ 5.  The Discharge Note and Discharge Summary stated that R1’s cognitive status was sufficient to be able to make his needs known.  CMS Ex. 9 at 1; P. Ex. 6 at 1; P. Ex. 15 ¶ 5.  The Discharge Summary indicated that R1’s physical function included being ambulatory, able to independently engage in ADLs, and had no pain.  P. Ex. 6 at 1-2; P. Ex. 15 ¶ 5.  The Discharge Note and Discharge Summary stated that staff provided R1 with discharge instructions and a list of medications, and spoke with R1 about the discharge instructions, his diagnoses, and medications.  CMS Ex. 9 at 1-2; P. Ex. 6 at 3-4, 6; P. Ex. 15 ¶¶ 6-7.
21. The record contains a “Physician Discharge Summary” with Dr. Zapata’s name on it indicating a “Discharge Date” of April 20, 2020 to “VA Hospital ER”; however, the document is neither signed nor dated.  CMS Ex. 6 at 18.  The handwriting on

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this document differs from Dr. Zapata’s handwriting on his physical examination reports from April 2, 2020, and April 20, 2020.  Compare CMS Ex. 6 at 14-15, with CMS Ex. 6 at 18. 

22. In an April 20, 2020 Nursing Note, LVN Tam Nguyen stated that R1 was “pick[ed] up by transportation at 4pm with all his belongings, medicines and discharge papers.”  CMS Ex. 9 at 1. 
23. In an April 20, 2020 Social Service Note, Social Worker Grant stated that Petitioner discharged R1 at 4 p.m. and sent R1 to the VA hospital emergency room via UBER.  Social Worker Grant stated that the purpose of the transport to the VA was for the VA to find housing for R1.  CMS Ex. 9 at 1; P. Ex. 14 ¶ 11. 
24. On April 21, 2020, one of Petitioner’s LVNs electronically signed an eInteract Transfer Form V4.1 concerning R1.  CMS Ex. 7.  The form indicates an “Effective Date” of April 20, 2020.  CMS Ex. 7 at 1.  It also states that R1’s transfer to another hospital was “Planned” and that the reason for transfer was “Other.”  CMS Ex. 7 at 1.  The form includes R1’s vital signs and pain level.  CMS Ex. 7 at 5-6.  The form further indicates that:  R1’s mental status was “Alert, oriented, follows instructions”; R1’s usual functional status is “Ambulates independently”; R1 independently completes his ADLs except that he needs assistance with bathing and toileting; and R1 had been receiving physical and occupational therapy with the goal of returning home.  CMS Ex. 7 at 7-11. 
25. An Occupational Therapy Discharge Summary, signed on April 21, 2020, indicated that three goals (both short-term and long-term) had been to increase independence and safety when R1 would dress his lower body, use the toilet, and bathe himself.  At discharge, R1 required stand-by assistance for lower body dressing and toileting and contact guard assistance for bathing.  P. Ex. 9.
26. A Physical Therapy Discharge Summary, signed on April 23, 2020, stated that the reason for discharge was “All Goals Met.”  P. Ex. 10 at 1.  The summary also stated that “[p]atient was discharged to the community meeting all goals.  Upon [discharge] resident demonstrates independence with all areas of functional mobility with low fall risk.”  P. Ex. 10 at 2.  Further, the summary noted that, by April 17, 2020, R1 had become independent with rolling in bed and using a segmented roll technique to get in and out of bed.  By April 20, 2020, R1 met his goal of using compensatory strategies to perform functional mobility with reduced risk for falls.  P. Ex. 10 at 1.  Finally, the summary stated that R1 had an excellent prognosis to maintain his current level of function.  P. Ex. 10 at 2. 

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27. During R1’s stay at Petitioner’s facility, Petitioner’s staff checked R1’s temperature and screened him for symptoms of COVID-19.  R1 did not display symptoms of having COVID-19.  P. Exs. 7-8; see also CMS Ex. 9 at 11.
28. In a Notice of Proposed Transfer/Discharge signed by Dr. Zapata on May 28, 2020, Dr. Zapata noted that R1’s date of transfer to “VA Hosp 11301” was on April 20, 2020, that R1’s transfer/discharge was necessary because R1’s specific needs could not be met, and that R1 “requested to be discharged.”  CMS Ex. 8. 
29. On May 28, 2020, R1 spoke with the state agency surveyor and said that his discharge from Petitioner’s facility was horrible, he was discharged to the street and did not feel safe, and he was not given papers to sign or his appeal rights.  CMS Ex. 13 ¶ 6. 
30. On May 28, 2020, the state agency surveyor interviewed R1’s case manager at the receiving VA hospital.  The case manager stated that R1 called the case manager on April 20, 2020, and said he was being forced out of the facility and did not want to leave.  The surveyor also interviewed the social worker at the VA hospital who said that R1 should not have been discharged via public transportation because R1 had difficulty walking, was aggressive, and was forgetful.  R1 was also COVID-positive.  CMS Ex. 13 ¶ 6. 

V.  Conclusions of Law and Analysis

1. Petitioner was not in substantial compliance with 42 C.F.R. § 483.15(c)(1)-(2) because Petitioner discharged R1 to the emergency room of a VA hospital without a physician’s order and without providing required documentation to the VA hospital.

The SOD alleged that Petitioner was non-compliant with 42 C.F.R. § 483.15(c)(1)-(2), which involves resident transfer and discharge requirements that SNFs must follow.⁴  CMS Ex. 1.  The SOD alleged that: 

[R1], who was not independent in care and required physical assistance with all [ADLs] . . . was discharged to a general acute care hospital (GACH) to be placed in a different [SNF].

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This deficient practice resulted in [R1], who required a SNF care, being inappropriately discharged on 4/20/2020 to the (GACH) Emergency Department (ED) for them to obtain placement for the resident. 

CMS Ex. 1 at 3-4. 

In support of this general charge, the SOD alleged the following facts:  a care plan for discharge was not created; the April 20, 2020 order issued by R1’s primary physician “did not indicate an order for discharge was written”; R1 was transported to the GACH using a public independent transportation service; an unsigned and undated Physician’s Discharge Summary did not provide a variety of necessary information about R1; R1 did not sign the April 20, 2020 Notice of Proposed Transfer/Discharge form; R1 did not want to be discharged from Petitioner’s facility to the GACH and the GACH did not have placement for R1 ready at that time; a GACH employee told the surveyor that R1 should not have been sent alone to the GACH because of his difficulty walking and aggressive and forgetful behavior; R1 tested positive for COVID-19 on his arrival at the GACH; R1 stated on May 28, 2020, that it was horrible how Petitioner’s staff removed him from the facility, that Petitioner’s staff did not provide R1 with any paperwork to sign when leaving the facility, and that R1 did not feel it was safe to be on the street because of COVID-19; and Petitioner’s Director of Nursing stated on June 3, 2020, that there was no Notice of Proposed Transfer/Discharge or discharging physician order for R1.  CMS Ex. 1 at 5-7.  

As can be seen by the Findings of Fact above, the SOD’s allegations are not all supported by the record.  However, as discussed below, the record is clear that CMS established a prima facie case that Petitioner did not have the proper medical documentation prepared by R1’s physician to support R1’s discharge on April 20, 2020, and did not provide the required information and documentation to the VA hospital that received R1.  Although Petitioner provided significant evidence to support the propriety of its actions, Petitioner was unable to produce contemporaneous documentation showing that R1’s physician authorized R1’s discharge or that Petitioner provided all required information and documentation to the VA hospital on discharge.  Further, despite Petitioner’s assertion that it discharged R1 based on R1’s request, Petitioner failed to produce contemporaneous documentation from April 20, 2020, showing that R1 requested/agreed to his discharge.  As a result, Petitioner failed to show that it was in substantial compliance with 42 C.F.R. § 483.15(c)(1)-(2). 

1. R1’s discharge was not resident‑initiated.

Petitioner’s primary argument is that Petitioner discharged R1 at R1’s request.  Therefore, Petitioner argues that it did not violate 42 C.F.R. § 483.15(c)(1)-(2) because those regulations only apply to facility-initiated discharges.  P. Br. at 2.  In support of this

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argument, Petitioner points to the April 16, 2020 Nursing Note authored by LVN Udarbe documenting an incident where R1 insisted that he would go home that day and would leave the facility against medical advice if R1’s physician would not discharge him.  P. Br. at 2, 5-6; CMS Ex. 9 at 4.  Petitioner asserts its staff acted in R1’s interests when it persuaded R1 to remain at the facility.  P. Br. at 6 (“[Petitioner] was not trying to discharge Resident 1 against his wishes, and in fact, was doing their absolute best to insure a safe discharge for Resident 1.  If [Petitioner] had instead allowed Resident 1 to leave the facility against medical advice on July 16, a deficiency would not have been written and this appeal would not be a necessity.”). 

The record supports Petitioner’s assertion that, on April 16, 2020, R1 wanted to leave the facility and Petitioner’s staff dissuaded R1 from doing so.  LVN Udarbe testified to R1’s strong desire, on April 16, 2020, to leave the facility.  P. Ex. 16 ¶¶ 4-5.  LVN Udarbe notified R1’s physician and the facility’s social services spoke to R1 that day.  P. Ex. 16 ¶ 4.  Social Worker Grant testified that she spoke with R1 and explained that he should wait for a safe discharge to be arranged in conjunction with housing placement with the VA.  CMS Ex. 9 at 4; P. Ex. 14 ¶ 8.  LVN Udarbe testified that “[s]ocial services and I were able to convince [R1] to stay until the VA could assist him with housing.”  P. Ex. 16 ¶ 5.  Similarly, Social Worker Grant testified that “we were able to convince [R1] to wait until a safe discharge could be arranged through the VA . . . .”  P. Ex. 14 ¶ 8.  Significantly, LVN Udarbe stated in a Nursing Note that R1 also indicated that he was willing to wait for staff to contact his physician to obtain a response.  CMS Ex. 9 at 4.  Therefore, on April 16, 2020, R1 decided that he would not leave the facility immediately.  Rather, he agreed to wait for his physician’s response and for information about VA assistance with housing placement. 

Petitioner further asserts that, in response to R1’s desire to be discharged, Petitioner’s staff contacted the VA hospital to ensure that R1 would receive VA housing assistance.  P. Br. at 7.  This is also substantially supported by the record. 

The record shows that, following R1’s statement that he wanted to leave on April 16, 2020, Social Worker Grant proceeded to seek information concerning the VA housing program and attempted to contact R1’s wife.  CMS Ex. 9 at 4; P. Ex. 14 ¶ 8.  Social Worker Grant testified that, on April 17, 2020, she made contact with a VA case worker, that R1 was aware of her efforts to get clear instructions from the VA case worker concerning housing before Petitioner would discharge R1 to the VA hospital, and that “[R1] was aware of and agreed with this plan.”  P. Ex. 14 ¶ 9.  An April 17, 2020 Social Services Note authored by Social Worker Grant also stated that “resident is aware we [are] waiting for the doctor to give order.”  CMS Ex. 9 at 2-3; P. Ex. 14 ¶ 9.  Therefore, in addition to confirming Petitioner’s assertion that its staff were attempting to assist R1 with a safe discharge, the record confirms that R1 had decided not to leave Petitioner’s facility pending adequate housing placement with the VA and receiving an order from his physician.

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While Petitioner’s arguments to this point have been supported by the record,⁵ Petitioner’s remaining argument as to why R1’s discharge was resident‑initiated is based on limited evidence.  Petitioner argues that, on April 20, 2020, R1 never voiced any reluctance to leaving Petitioner’s facility.  Petitioner heavily relies on a declaration from Dr. Zapata to discount R1’s statements to the state agency surveyor in May 2020 that R1 did not want to leave the facility.  P. Br. at 7-8.  Petitioner also relies on Dr. Zapata’s declaration to show Dr. Zapata was actively involved in R1’s discharge planning.  P. Br. at 7-9.  For the reasons stated below, I do not credit Dr. Zapata’s declaration because it contradicts evidence in the record.  I also cannot conclude that the record as a whole supports Petitioner’s argument that R1 was voluntarily discharged on April 20, 2020. 

The record indicates that, by April 20, 2020, the date on which R1 was discharged from Petitioner’s facility, it was no longer the case that R1 wanted to be discharged from Petitioner’s facility against medical advice (as R1 stated on April 16, 2020) and without a discharge order from his physician.  Social Worker Grant testified that she essentially upheld her end of the agreed-upon plan by confirming that R1 should go to the VA hospital to obtain housing placement.  While she testified that R1 seemed pleased to leave the facility, she did not testify that R1 expressly signed any document or stated again that he wanted to be discharged.  P. Ex. 14 ¶¶ 10-11; see also P. Ex. 15 ¶ 6 (LVN Nguyen testified that R1 “did not express any desire to remain at the Facility[,]” but did not state that R1 affirmatively requested discharge).  Further, while Social Worker Grant testified that it was her understanding that R1’s physician was aware of and agreed with R1’s discharge, she did not testify that Dr. Zapata ordered the discharge.  P. Ex. 14 ¶¶ 10‑11. 

I conclude that the lack of a physician order is significant to the determination as to whether R1 was still seeking a discharge from the facility on April 20, 2020.  After all, on April 16, 2020, R1 agreed to wait for Dr. Zapata’s response to R1’s demand to be discharged and, on April 17, 2020, R1 was waiting for Dr. Zapata to issue a discharge order.  CMS Ex. 9 at 2, 4. 

My conclusion is supported by the fact that Dr. Zapata examined R1 on April 20, 2020, and, in his report of the examination, Dr. Zapata made no reference to R1 seeking discharge or that he was ordering R1’s discharge.  CMS Ex. 6 at 14.  Given that R1 was waiting, in part, for Dr. Zapata’s input and order for discharge, the lack of any reference to discharge in the report supports the position that R1 was not actively seeking discharge

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on April 20, 2020.  Strong support for this interpretation lies in the fact that the facility partially prepared a Physician’s Discharge Summary for Dr. Zapata, yet Dr. Zapata did not sign that document.  CMS Ex. 6 at 18; see also CMS Ex. 4 at 7, 10; CMS Ex. 13 ¶¶ 5, 7.  Because R1 was awaiting Dr. Zapata’s discharge order, the fact that Dr. Zapata did not sign such an order on April 20, 2020, means that it is not likely R1 intended to leave the facility on that date. Cf. CMS Ex. 4 at 4-5; CMS Ex. 13 ¶ 6 (R1 complaining to surveyor that he was not allowed to stay at Petitioner’s facility). 

It was not until May 28, 2020, well after R1 was discharged to the VA hospital, that Dr. Zapata signed a Notice of Proposed Transfer/Discharge.  CMS Ex. 8.  It is true that, in that document, Dr. Zapata noted R1’s request to be discharged.  CMS Ex. 8 at 1.  However, the probative value of that statement is outweighed by the fact that Dr. Zapata failed to reference R1’s alleged discharge request in the April 20, 2020 examination report and Dr. Zapata’s decision not to complete and sign a Physician’s Discharge Summary on April 20, 2020. 

As stated above, Petitioner relies heavily on Dr. Zapata’s declaration to support its argument that R1’s discharge was at R1’s request.  However, while Dr. Zapata stated in his declaration that he was informed that R1 wanted to be discharged, Dr. Zapata never stated that R1 told Dr. Zapata that he wanted to be discharged.  See P. Ex. 12 ¶¶ 5-6, 8; see also P. Ex. 13.  If R1 had discussed discharge with Dr. Zapata, Dr. Zapata would presumably have noted that in the April 20, 2020 examination report and included reference to that in his declaration.  In addition, Dr. Zapata’s May 28, 2020 Notice of Proposed Transfer/Discharge contradicts his declaration because the former indicates that discharge was made because the facility could no longer give R1 the care he needed, while the latter indicates that R1 had sufficiently improved and no longer needed the care and/or services of the facility.  CMS Ex. 8 at 1; P. Ex. 12 ¶ 7.  These are mutually exclusive reasons for discharging a resident.  Therefore, the evidentiary value of both of these later-created documents is limited and I instead give weight to the April 20, 2020 examination report authored by Dr. Zapata and its lack of content related to discharge.  

The record is, therefore, insufficient for me to conclude that, on April 20, 2020, R1 wanted to be discharged from Petitioner’s facility.  R1 wanted to leave on April 16, 2020; however, he agreed with Petitioner’s staff that he would wait for staff to coordinate with the VA concerning his housing.  He also agreed to wait for his physician’s input and discharge order.  Although Petitioner’s staff completed the first condition for R1’s discharge, the second condition, Dr. Zapata’s discharge order, was prepared but never signed, despite R1 being examined on April 20 by Dr. Zapata.  Further, Petitioner produced no documentation showing that R1 agreed to a discharge on April 20, 2020.  Therefore, the weight of evidence is that, by April 20, 2020, R1 no longer wanted to be discharged on that date.  See CMS Ex. 13 ¶¶ 5-6.

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2. Petitioner discharged R1 because his health had improved and R1 no longer needed the services of the facility.

Although Petitioner primarily asserts that R1 voluntarily discharged himself from Petitioner’s facility, Petitioner also asserts that, by April 20, 2020, R1’s health had improved sufficiently for Petitioner to discharge him.  P. Br. at 2, 11-12, 21.  Petitioner states Resident 1’s discharge was pursuant to 42 C.F.R. § 483.15(c)(1)(B) because “[t]he resident’s health had improved sufficiently so the resident no longer needs the services provided by the Facility.  P. Br. at 2.  Petitioner supports its position as follows:  

If this tribunal believes this was a Facility initiated discharge, [Petitioner] still maintains they followed the correct regulatory requirements for transfer and discharge.  In this instance, Resident 1 had improved sufficiently that he no longer needed the services of the Facility.  As outlined in detail above, and as evidenced by the Petitioner exhibits listed above, the Physical Therapy Discharge Summary dated April 20 notes the resident had improved significantly and was independent with ambulation and with his ADL’s.  The resident’s physician and the nursing staff submitted Declarations as to the resident’s status on the date of discharge, which are consistent with the PT discharge summary.  The discharge MDS clearly indicates Resident 1 was independent, alert and oriented and his health had improved sufficiently so the resident no longer needed the services provided by the facility. 

P. Br. at 21. 

Having concluded that R1 did not voluntarily discharge himself from Petitioner’s facility on April 20, 2020, I conclude that the record shows that Petitioner discharged R1 based on R1’s medical improvement.  LVN Nguyen expressly stated this in the Discharge Note he entered into R1’s medical record, in the Discharge Summary and Post-Discharge Plan of Care he signed, and in his written direct testimony.  CMS Ex. 6 at 1; CMS Ex. 9 at 1; P. Ex. 15 ¶ 5.  According to the physical therapy discharge summary, R1 met two of his short-term goals on April 17, 2020, and the last short-term goal on April 20, 2020 (i.e., R1 achieved independence with each goal).  P. Ex. 10 at 1.  An April 20, 2020 MDS indicated that R1’s functional status concerning ADLs had reached the point where R1 only needed supervision and not assistance.  P. Ex. 20 at 1.  R1’s BIMS score was assessed on April 20, 2020, as 15 (cognitively intact).  P. Ex. 19 at 1.  R1’s cognitive patterns were also clear of various negative behaviors.  P. Ex. 19 at 2.

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Much of the evidence showing R1’s medical improvement was not provided to the surveyor during the state agency survey.  Tr. 12-13, 46-48, 50-51.  Therefore, the SOD and CMS’s exhibits do not account for it.  However, because CMS did not object to Petitioner’s exhibits concerning R1’s medical assessments and status at the time of discharge, I accept those assessments.  Therefore, I conclude that Petitioner’s basis for the discharge of R1 was that Petitioner’s staff believed R1’s medical improvement was sufficient and that he no longer necessitated the services of Petitioner’s facility. 

3. Petitioner improperly discharged R1 on April 20, 2020, because Dr. Zapata did not order or authorize the discharge.

As indicated above, Petitioner asserts that it properly discharged R1 because R1’s medical condition had improved so that R1 no longer needed the services of Petitioner’s facility. 

The Social Security Act (Act) requires the following: 

A skilled nursing facility must permit each resident to remain in the facility and must not transfer or discharge the resident from the facility unless . . . (ii) the transfer or discharge is appropriate because the resident’s health has improved sufficiently so the resident no longer needs the services provided by the facility. 

42 U.S.C. § 1395i-3(c)(2)(A)(ii).  This requirement also appears in the regulations.  See 42 C.F.R. § 483.15(c)(1)(i)(B). 

Of utmost important for this case, the Act specifies that: 

[T]he basis for the transfer or discharge must be documented in the resident’s clinical record.  In the case[] described in clause[] . . . (ii), the documentation must be made by the resident’s physician.

42 U.S.C. § 1395i-3(c)(2) (emphasis added); see also 42 C.F.R. § 483.15(c)(2)(ii)(A). 

As explained above, there is no doubt that R1’s clinical record is documented by nurses and a physical therapist who believed that R1 had medically improved and that discharge was appropriate.  However, despite this, R1’s clinical record did not include documentation from Dr. Zapata to support R1’s discharge on April 20, 2020.

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Petitioner’s only evidence that Dr. Zapata believed that R1 had improved to the point that he no longer needed the services of the facility is Dr. Zapata’s declaration of July 17, 2020.  Dr. Zapata stated: 

[I]t is my professional opinion that Resident 1’s health had improved sufficiently that he no longer needed the care and/or services of the facility and this was the basis for the discharge.

P. Ex. 12 ¶ 7.  This statement, in a declaration signed nearly three months after R1’s discharge, is not documentation in R1’s medical record.  On the contrary, the record provides evidence to support the conclusion that Dr. Zapata never documented in R1’s medical record that R1’s medical improvement was a basis for discharge. 

As mentioned above, Dr. Zapata provided documentation in R1’s clinical record concerning an examination he conducted of R1 on April 20, 2020.  CMS Ex. 6 at 14.  The report from the examination makes no reference to medical improvement by R1 and, like Dr. Zapata’s April 2, 2020 examination report, continues to assess R1’s rehabilitation potential as “fair.”  CMS Ex. 6 at 14-15.  This examination report also does not mention that R1 was ready for discharge from the facility.  In support of this conclusion is the fact that, despite the facility partially completing a Physician’s Discharge Summary for the April 20, 2020 discharge of R1, Dr. Zapata neither completed the document nor signed it.  CMS Ex. 6 at 18. 

There is additional evidence that Dr. Zapata did not document R1’s clinical record in support of the April 20, 2020 discharge from the facility.  Dr. Zapata signed a Notice of Proposed Transfer/Discharge on May 28, 2020, and indicated that R1 was discharged on April 20, 2020, because R1’s specific needs could not be met, and that R1 “requested to be discharged.”  CMS Ex. 8.  Not only is this document signed more than a month after the discharge, but Dr. Zapata provided the wrong basis for the discharge.  Finally, Dr. Zapata never states in his declaration that he documented in R1’s clinical record that R1’s discharge was based on medical improvement.  P. Ex. 12; P. Ex. 13.  This is consistent with the surveyor’s investigation, which showed that there was no physician order for the April 20, 2020 discharge.  CMS Ex. 13 ¶ 7. 

Because there is no evidence in the record that Dr. Zapata documented in R1’s clinical record that R1’s medical condition had improved such that R1 no longer needed the services of Petitioner’s facility, I conclude that Petitioner was not in substantial compliance with 42 U.S.C. § 1395i-3(c)(2)(A) and 42 C.F.R. § 483.15(c)(1)(i)(B), (c)(2)(ii)(A). 

4. Petitioner failed to provide required documentation and information to the VA hospital that was receiving R1 on April 20, 2020.

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In its post-hearing brief, CMS asserts that Petitioner did not prove that Petitioner provided, at the time of R1’s discharge, to the VA hospital all of the information required under 42 C.F.R. § 483.15(c)(2).  CMS posits that Dr. Zapata’s May 28, 2020 Notice of Proposed Transfer/Discharge did not exist on April 20, 2020, but concedes that the eInteract Transfer Form may have been sent.  CMS also asserts that there is no evidence that various assessments of R1’s condition or a comprehensive care plan were sent.  CMS Br. at 8.  CMS also argues that, even though LVN Nguyen testified that he provided discharge documentation to R1, “there was no copy of the exact documents provided to the hospital.  Moreover, he does not allege that the paperwork included contact information of the practitioner, resident representative information, advance directive information, or comprehensive care plan goals.  P. Ex. 15 at 2.”  CMS Br. at 13. 

Petitioner disagrees with CMS and argues the following in its post-hearing brief: 

The Discharge Summary and Plan of Care provided to Resident 1 was not even discussed by CMS, but it was clearly given to Resident 1.  (P Ex 6 and 15).  In addition to the eInteract Transfer Form sent to the VA and called into the VA, along with the fact Resident 1 was already a VA patient and in their system, these discharge regulation requirements were met.  (CMS Ex 7)

* * * * *

The Facility contends they were compliant with the discharge requirements for documentation and with their own policy on discharges.  (CMS Ex. 5)  A written Discharge Summary and Plan of Care was reviewed with Resident 1 and he was given the opportunity to ask questions.  This written plan was provided to the resident and the VA was also provided with a transfer form.  A verbal report was called by [Petitioner] to the VA emergency room. 

P. Br. at 10, 20. 

In reply, CMS argues the following: 

The only evidence of documentation that was sent with Resident 1 is Petitioner’s Ex. 6, entitled “Discharge Summary & Post-Discharge Plan of Care.”  This document does not contain contact information for the practitioner (other than the physician’s name), Resident’s representative information,

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advance directive information, or comprehensive care-plan goals.  The discharge summary does not contain a detailed recapitulation of the resident’s stay including course of illness.  The post-discharge plan of care is mostly blank, with very little information.  P. Ex. 6 at 3 – 5.  [Petitioner] checked off a box indicating that it has done a reconciliation of the pre-discharge and post-discharge medications, but [Petitioner] did not provide that reconciliation.  P. Ex. 6 at 3.  The other records that [Petitioner] provided are dated after the discharge date, and there is no evidence that they were ever provided to the VA hospital.  P. Ex. 9 and 10.  

CMS Reply at 3-4. 

The regulations require the following of SNFs discharging/transferring residents to another health care provider: 

(iii) Information provided to the receiving provider must include a minimum of the following:  

(A) Contact information of the practitioner responsible for the care of the resident

(B) Resident representative information including contact information.

(C) Advance Directive information.

(D) All special instructions or precautions for ongoing care, as appropriate.

(E) Comprehensive care plan goals,

(F) All other necessary information, including a copy of the resident’s discharge summary, consistent with § 483.21(c)(2), as applicable, and any other documentation, as applicable, to ensure a safe and effective transition of care.

42 C.F.R. § 483.15(c)(2)(iii). 

A review of the April 20, 2020 Discharge Summary and Post-Discharge Plan of Care shows that it left blank the place that Petitioner was to provide the contact information for

Page 21

R1’s physician (P. Ex. 6 at 4), did not provide any information concerning a representative for R1, advance directive information, and special instructions or precautions for ongoing care.  Further, despite the name of this document, which includes in it “Post-Discharge Plan of Care,” Petitioner left blank most of the plan of care portions of this document.  P. Ex. 6 at 2-5. 

A review of the April 21, 2020 eInteract Transfer Form shows that Petitioner provided the name and phone number for R1’s physician while at the facility (i.e., Dr. Zapata) and indicated that R1 was the key contact person related to R1.  CMS Ex. 7 at 3-4.  However, this document did not contain advance directive information, special instructions or precautions for ongoing care, or comprehensive care plan goals.  CMS Ex. 7 at 2-3. 

At the least, Petitioner has not shown that it provided the VA hospital to which R1 was sent advance directive information, special instructions or precautions for ongoing care, and comprehensive care plan goals.  Therefore, I conclude that Petitioner was not in substantial compliance with 42 C.F.R. § 483.15(c)(2)(iii). 

2. The amount of the $11,225 per-instance CMP was not challenged.  Therefore, that penalty amount is reasonable.

Based on the findings of the SOD, CMS imposed an $11,225 per-instance CMP on Petitioner.  E-File Document No. 1a. 

When determining whether a CMP amount is reasonable, I am to 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) the 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.  See 42 U.S.C. §§ 1320a-7a(d)(2), 1395i-3(h)(2)(B)(ii)(I).  The absence of culpability is not a mitigating factor.  42 C.F.R. § 488.438(f).  The factors listed 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.  See 42 U.S.C. §§ 1320a-7a(d)(1), (3), 1395i-3(h)(2)(B)(ii)(I). 

The regulations leave the decision regarding the choice of remedy to CMS, and the amount of the remedy to CMS and the ALJ, requiring only that the regulatory factors at 42 C.F.R. §§ 488.438(f) and 488.404 be considered when determining the amount of a CMP within a particular range.  42 C.F.R. §§ 488.408(g)(2), 498.3(d)(11); see also 42 C.F.R. § 488.438(e)(2)-(3); Alexandria Place, DAB No. 2245 at 27 (2009); Kenton Healthcare, LLC, DAB No. 2186 at 28-29 (2008).  However, unless a facility contends that a particular regulatory factor does not support the CMP amount, an ALJ must sustain it.  Coquina Ctr., DAB No. 1860 (2002).

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In its post-hearing brief, CMS argues that several of the factors support the penalty amount imposed.  In particular, CMS stated that the deficiency in this case was serious and Petitioner’s culpability was high.  CMS Br. at 13-14.  Further, CMS points out that Petitioner did not raise a financial inability to pay the penalty and that Petitioner had a history of noncompliance.  CMS Br. at 15 (“The facility’s history of noncompliance shows numerous past deficiencies.  CMS Ex. 14 at 3.  There were 18 to 24 deficiencies for each of the last three annual surveys.  CMS Ex. 14 at 7.  In addition, there were two earlier substantiated complaints.  CMS Ex. 14 at 7.”). 

Although Petitioner challenged the imposition of any CMP, Petitioner did not argue that CMS incorrectly applied any specific factors to determine the amount of the CMP.  P. Br. at 22-23. 

Because Petitioner did not dispute any of the factors related to the CMP amount, I consider the $11,225 per-instance CMP to be reasonable and sustain it. 

VI.  Conclusion

For the reasons set forth above, I sustain CMS’s finding that Petitioner was not in substantial compliance with 42 C.F.R. § 483.15(c)(1)-(2) and conclude that the $11,225 per-instance CMP is reasonable.

---

Endnotes

¹  “It is the duty and responsibility of the Secretary to assure that requirements which govern the provision of care in skilled nursing facilities . . . are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective and efficient use of public moneys.”  42 U.S.C. § 1395i-3(f)(1).

²  All citations to the Code of Federal Regulations are to the version in effect at the time of the survey unless otherwise indicated. 

³   State agencies designate the scope and severity level using a matrix published in the State Operations Manual, chap. 7, § 7400.3.1 (Nov. 16, 2018).  Scope and severity levels of A, B, or C are deficiencies for which CMS cannot impose enforcement remedies.  Scope and severity levels of D, E, or F are deficiencies that present no actual harm, but have the potential for more than minimal harm that do not amount to immediate jeopardy.  Scope and severity levels of G, H, or I indicate deficiencies that involve actual harm that do not amount to immediate jeopardy.  Scope and severity levels J, K, and L are deficiencies that constitute immediate jeopardy to resident health or safety. 

⁴  In briefing, CMS occasionally discussed potential violations of 42 C.F.R. § 483.15(c)(3) involving notice requirements before a facility discharges/transfers a resident to another health care facility.  See CMS Br. at 8-9.  In this proceeding, CMS did not request to formally add deficiencies under that regulatory provision, and I have not added those potential deficiencies as new issues in this case.  See 42 C.F.R. § 498.56(a)(1).  Therefore, I do not further discuss those matters raised by CMS.

⁵  As indicated above, progress notes and written testimony authored by LVN Udarbe and Social Worker Grant provide much of the support for Petitioner’s assertions thus far.  I credit the testimony discussed above from these witnesses because their testimony is consistent with the record and CMS neither objected to the testimony nor cross-examined these witnesses.