Mentor Ridge Health and Rehabilitation, DAB CR6409 (2023)

DECISION

I grant summary judgment in favor of the Centers for Medicare & Medicaid Services (CMS), sustaining its determination to impose the remedy of denial of payment for new Medicare admissions against Petitioner, Mentor Ridge Health and Rehabilitation, a skilled nursing facility, for each day of a period that began on October 30, 2021, and continued through December 5, 2021. 

I. Background

This case was transferred to me very recently from the docket of another administrative law judge. The case record includes a motion by CMS for summary judgment and Petitioner’s opposition to that motion.

CMS filed exhibits in support of its motion, identified as CMS Ex. 1 – CMS Ex. 36. Petitioner filed exhibits in opposition, identified as P. Ex. 1 – P. Ex. 9. I do not receive these exhibits into evidence because I grant summary disposition based entirely on undisputed facts. However, I cite to some of these exhibits, either to illustrate facts not in dispute or to address a party’s contentions. 

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II. Issues, Findings of Fact and Conclusions of Law

A. Issues

The issues are whether Petitioner failed to comply substantially with Medicare participation requirements and whether CMS may impose a denial of payment for new Medicare admissions to remedy noncompliance. 

B. Findings of Fact and Conclusions of Law

At issue here is Petitioner’s compliance with a regulation governing the quality of care that a facility must provide to its residents and Petitioner’s compliance with regulations governing the safety of its physical plant (Life Safety Code). CMS argues that Petitioner’s noncompliance extended through the period for which it imposed the denial of payment remedy. It argues that Petitioner’s noncompliance authorized that remedy, which, it contends, is a matter of discretion for CMS to impose. 

Petitioner denies that it was noncompliant with one of the regulations at issue. It asserts that CMS lacked discretion to impose a denial of payment for new Medicare admissions. 

I address the parties’ contentions and arguments in this decision. In doing so, I conclude that summary judgment is the appropriate method for deciding the case. 

I apply the principles of Rule 56 of the Federal Rules of Civil Procedure in deciding whether to grant summary judgment. I base my decision on facts that are undisputed. I make no fact finding that requires a credibility determination. I find no impediment to deciding a case if resolving a fact dispute in favor of one party or the other would make no difference to the outcome. Where reasonable inferences may be made from the undisputed facts, I make those inferences that are favorable to the party against whom the motion for summary judgment is filed. 

At bottom, the question that I ask in any case where a party moves for summary judgment is this: is there any issue that would benefit from being resolved in an evidentiary hearing? Fal-Meridian, Inc. v. U.S. Department of Health and Human Services, 604 F.3d 445, 449 (7^th Cir. 2010). 

There is no such issue in this case. There is no dispute about the material facts. 

1. Noncompliance

a. Noncompliance with 42 C.F.R. § 483.25

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The applicable regulation requires, among other things, that a skilled nursing facility ensures that its residents receive care in accordance with professional standards of practice. CMS alleges that Petitioner failed to comply with this requirement when it failed to timely request that a hospital provide it with a report of a magnetic resonance imaging (MRI) test that had been administered to one of Petitioner’s residents. I find this allegation to be supported amply by the undisputed facts. 

A resident, identified as R64, had been suffering from an injury to the middle toe on her right foot. The injury was first noted by the resident’s physician on August 6, 2021. CMS Ex. 9 at 6-7. The injury worsened during the ensuing days and weeks with the resident exhibiting signs of an infection. CMS Ex. 11; CMS Ex. 14 at 1-2; CMS Ex. 15 at 1. The resident’s podiatrist became concerned that the resident might be suffering from osteomyelitis, a bone infection. CMS Ex. 9 at 6; CMS Ex. 11 at 3; CMS Ex. 35 at 2. The podiatrist ordered that the resident undergo an MRI. Id.

The MRI was performed on September 7, 2021. CMS Ex. 13 at 3; CMS Ex. 16 at 1. The results showed that the resident manifested destructive changes in her toe likely due to osteomyelitis. CMS Ex. 16 at 2. The report noted additional signs consistent with infection. Id. The hospital radiologist discussed the findings with the resident’s physician. However, he did not discuss the findings with Petitioner’s staff.¹ 

A wound care specialist treated R64’s foot on September 9, 2021. As of this date, Petitioner had not obtained the MRI results. CMS Ex. 12 at 1. The wound care specialist saw the resident again on September 16, 2021. On that occasion the specialist found additional evidence of infection. CMS Ex. 9 at 1; 12 at 3; 14 at 7. 

Petitioner’s staff did not obtain the MRI results until September 16, 2021. CMS Ex. 9 at 1; CMS Ex. 11 at 4. On viewing the results, the resident’s podiatrist recommended that the resident receive an infectious disease appointment as soon as possible. ² CMS Ex. 11 at 4. 

On September 17, 2021, R64 was admitted to a hospital and was found to be suffering from sepsis. Physicians at the hospital amputated the resident’s toe because of the infection. CMS Ex. 34 at 1. 

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There are no facts showing that Petitioner’s staff willfully mistreated R64, or that they ignored treatment orders for the resident. However, the staff clearly failed to provide care of a professional quality. The staff knew that the resident was suffering from a worsening infection and that the resident’s podiatrist suspected that the resident was suffering from osteomyelitis, an extremely serious infection of the bone. The staff also knew that the podiatrist had ordered an MRI to confirm or deny the possibility of osteomyelitis. That knowledge imposed on the staff the duty to communicate with the resident’s physician and/or podiatrist and to obtain MRI results as quickly as possible.

The staff did neither and I find that these derelictions violated the quality of care requirements of 42 C.F.R. § 483.25. It is standard nursing practice for the staff of a facility to obtain test results and to discuss those results with the resident’s physician. CMS Ex. 35 at 3. The staff failed to do so and its failure potentially harmed R64 because that resident was suffering from a serious and dangerous infection. 

I have considered Petitioner’s contentions and arguments and I find them to be unpersuasive. 

Petitioner asserts that it is “standard Facility protocol to await direction from . . . [a resident’s] physician regarding any course of treatment for a Resident based on the applicable needs.” Mentor Ridge Health and Rehabilitation’s Reply to the Center for Medicare and Medicaid Services’ Motion for Summary Judgment, and Pre-hearing Brief (Petitioner’s brief) at 5. It contends that, when its staff heard nothing from R64’s physician or podiatrist, they reasonably assumed that there would be no change in the resident’s care. Id.

However, in this case Petitioner’s staff knew that the resident’s condition was not stable and was, in fact, worsening. The staff had the findings of R64’s podiatrist, who believed that the infection in the resident’s toe had possibly progressed to osteomyelitis as well as the findings of a wound care specialist, made on September 9, 2021 – after the MRI had been performed – that showed that the condition of the resident’s toe was deteriorating. CMS Ex. 12 at 1-2. Petitioner’s staff also noted changes in the condition of the toe that suggested deterioration. CMS Ex. 14 at 5. Given these changes, it was unreasonable for staff to assume that no notification of test results equaled no change in the resident’s condition and no need to consider treatment modification. 

Petitioner argues that the wound care specialist who treated R64 on September 9 and 16, 2021 did not observe any evidence of systemic infection or cellulitis on either occasion. Petitioner’s brief at 6; P. Ex. 4 at 1. However, the wound care specialist also found evidence of possible osteomyelitis, corroborating the possibility entertained by the podiatrist who ordered the MRI. P. Ex. 4 at 2. The continued suspicion that R64 suffered from osteomyelitis obligated Petitioner’s staff to inquire about the MRI report, if only to assure that it would be furnished to the resident’s physicians and podiatrist. 

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At bottom, Petitioner had a duty to ensure that R64 was getting the care that she needed. That meant that Petitioner’s staff were obligated to consult with the resident’s physicians and podiatrist about necessary treatment. Staff could not sit back passively when the MRI results were not forthcoming. They should have contacted R64’s physicians, podiatrist, and the hospital to obtain the results and to make certain that the physicians and the podiatrist had them.

Petitioner argues that, even if it may have been noncompliant with the requirements of 42 C.F.R. § 483.25, CMS’s determination of scope and severity (actual harm) is incorrect. Petitioner’s brief at 7-9. However, and Petitioner’s argument notwithstanding, the scope and severity of Petitioner’s noncompliance is not at issue here. 

A facility may challenge the scope and severity of a CMS determination of noncompliance only if the scope and severity of noncompliance affects the range of any civil money penalty that is imposed as a remedy or if it results in a finding of substandard quality of care that results in a loss of approval of a facility’s nurse aide training program. 42 C.F.R. § 498.3(b)(14), (d)(10)(ii); Saturn Nursing & Rehab. Ctr., DAB No. 1826 at 6 (2008). 

CMS did not determine to impose a civil money penalty, nor did it make a finding of a substandard quality of care. Consequently, Petitioner may not challenge the scope and severity of CMS’s determination of noncompliance. 

Indeed, CMS’s authority to impose the remedy of denial of payment for new Medicare admissions is not contingent on a finding of actual harm. 42 C.F.R. §§ 488.406(a)(2)(ii); 488.417. All that is necessary to authorize imposition of a denial of payment is a finding of a potential for more than minimal harm resulting from a deficiency. 

Petitioner argues that it may challenge the finding of actual harm because that finding is necessary to support a “Category 2” remedy as is described at 42 C.F.R. § 488.408(d). That section describes the remedies that CMS may impose for deficiencies that are not at the scope and severity of immediate jeopardy, but that are widespread with no actual harm to residents, or that cause actual harm to residents. However, that section does not limit the remedies that are available to CMS. As I have explained, other sections of the regulations authorize CMS to impose denial of payment where noncompliance is substantial, even if it is not widespread or does not harm a resident. 

b. Life Safety Code violations

Petitioner’s facility was surveyed on November 22, 2021 in order to assess its compliance with Life Safety Code requirements. The Life Safety Code of the National Fire Prevention Association (NFPA) contains rules that address the conditions of a skilled

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nursing facility’s physical plant. The intent of the code is to assure that a facility does not manifest conditions that are dangerous to the physical well-being of residents. 

The survey disclosed that Petitioner was noncompliant in three respects with the Life Safety Code: 

• It failed to ensure that it had smoke barriers constructed to a one-half hour fire resistance rating as is required by NFPA 101, §§ 19.3.7.3. There were gaps in attic space smoke barriers that, in the event of a fire, would allow the passage of smoke from one part of Petitioner’s facility to another. CMS Ex. 27 at 28; CMS Ex. 29 at 1-2; CMS Ex. 36 at ¶ 4. 
• Petitioner failed to perform the annual fuel quality test for its electrical generator as is required by NFPA § 6.4.4.1.1.3. The test is important. A facility must be equipped to provide emergency electrical power in the event of a power failure. A generator might fail to operate if fuel is not of required quality. Petitioner had not performed a fuel quality test since 2019. CMS Ex. 27 at 42; CMS Ex. 28 at 1; CMS Ex. 30.
• The facility used an electrical extension cord in lieu of fixed wiring as is required by NFPA § 10.2.4.2.3. CMS Ex. 25 at 8-10. Using an extension cord instead of fixed wiring poses a fire hazard because the cord can become overloaded or overheated. CMS Ex. 36 at 4.

Petitioner has not contested any of these noncompliance findings. Therefore, they are administratively final. 

2. Remedy

CMS determined to impose a denial of payment for new Medicare admissions as a remedy for Petitioner’s noncompliance. The denial of payment ran from October 30, 2021, through December 5, 2021. The remedy was imposed beginning on October 30 to spur Petitioner into taking the necessary corrective actions to ensure that its residents received care of a quality mandated by 42 C.F.R. § 483.25. The end date of December 5 accounted for Petitioner’s representation that it had corrected all Life Safety Code deficiencies effective December 6, 2021. 

As I have discussed, CMS has discretion to impose a denial of payment for new Medicare admissions for any noncompliance that is substantial. 42 C.F.R. §§ 488.406(a)(2)(ii); 488.417. Imposition of the remedy need not be predicated on a finding of actual harm. All that is necessary to authorize imposition of a denial of payment is a finding of more than minimal noncompliance with participation requirements. 

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I do not have the authority to second-guess CMS’s exercise of discretion. The issue that I may decide is not whether I might have imposed the remedy that CMS determined to impose, but whether CMS had the authority to do so. 

CMS plainly had that authority in this case. The undisputed material facts establish an uninterrupted period during which Petitioner was not in substantial compliance with participation requirements. That period began prior to October 30, 2021, when CMS determined to begin denying Petitioner payment for new Medicare admissions. The undisputed facts show that Petitioner’s noncompliance with 42 C.F.R. § 483.25 began in September 2021 when staff failed to inquire about the results of R64’s MRI test. CMS would have had the authority to begin imposing the denial of payment remedy beginning in September if it had determined to do so. 

The undisputed facts show uninterrupted noncompliance by Petitioner through December 5, 2021. CMS determined that Petitioner did not correct its noncompliance with 42 C.F.R. § 483.25 until November 26, 2021. Its surveyor found Life Safety Code deficiencies on November 22, 2021, and Petitioner did not correct them until December 6.

That said, CMS would have had the authority to impose the denial of payment remedy for the entire period even if Petitioner had attained compliance with 42 C.F.R. § 483.25 prior to November 26, 2021. Indeed, CMS would have had the authority to impose the denial of payment for the entire period even if there had been no finding of noncompliance with 42 C.F.R. § 483.25. 

At least two of the Life Safety Code deficiencies – Petitioner’s inadequate smoke barriers and its failure to verify the condition of its generator’s fuel – clearly predated November 22, 2021 by months or years. That long-standing noncompliance authorized CMS to impose the remedy at a date that predated the survey. Donelson Place Care and Rehabilitation Center, DAB No. 3046 (2021). 

I find Petitioner’s arguments against imposition of the remedy to be unavailing. 

First, Petitioner asserts that the remedy cannot be imposed based in part on a determination that it failed to comply with 42 C.F.R. § 483.25, because it in fact complied with that regulation. Petitioner’s brief at 3-6. I have addressed that argument above and I need not readdress it here. Moreover, and as I have explained, CMS would be authorized to impose the remedy for the entire October 30 - December 5, 2021 period based solely on the presence of at least one Life Safety Code deficiency, even if Petitioner had been compliant with 42 C.F.R. § 483.25.

Second, Petitioner contends that scope and severity of its noncompliance with 42 C.F.R. § 483.25 should not be actual harm, but something less than that, and, from that, it asserts

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that CMS has no authority to impose a discretionary denial of payment for new Medicare admissions. Petitioner’s brief at 7-8. 

I have explained why Petitioner may not challenge the scope and severity of CMS’s noncompliance determination. Not only is scope and severity not an issue that I have authority to hear and decide, but it is irrelevant to the question of CMS’s authority to impose denial of payment for new Medicare admissions. That is because: (1) a finding of actual harm is not a necessary requirement for imposing the remedy; and (2) the finding of noncompliance with 42 C.F.R. § 483.25 is unnecessary to establish CMS’s authority to impose the remedy for the entire October 30 - December 5, 2021, period. 

Third, Petitioner asserts that “separate enforcement tracks” should be the basis for imposition of remedies. Petitioner contends that it attained compliance with 42 C.F.R. § 483.25 by October 26, 2021, and not November 26, 2021, as was determined by CMS. Therefore, according to Petitioner, CMS may not predicate the inception date of its remedy – October 30, 2021 – on Petitioner’s noncompliance with 42 C.F.R. § 483.25. If any remedy is imposed, Petitioner argues, it cannot begin prior to November 22, 2021, when findings were made of Life Safety Code deficiencies. 

As I have explained, the Life Safety Code deficiencies, in and of themselves, justify CMS’s determination to begin applying a denial of payment for new Medicare admissions on October 30, 2021. The date when Petitioner attained compliance with 42 C.F.R. § 483.25 is effectively irrelevant. 

But Petitioner has not offered facts that establish that it corrected its noncompliance with 42 C.F.R. § 483.25 prior to November 26, 2021, as was determined by CMS to be the date when Petitioner completed its corrective actions. 

The plan of correction submitted by Petitioner to address its noncompliance with 42 C.F.R. § 483.25 asserted that it had audited the performance of its staff on October 21, 2021 to assure compliance, and had re-educated staff concerning compliance on October 25, 2021. CMS Ex. 5 at 1-3. These assertions are not sufficient to assure that Petitioner was complying fully as of October 25. 

Duration of denial of payment for new admissions is controlled by 42 C.F.R. § 488.454. With exceptions that do not apply here, a denial of payment will continue in effect until: 

The facility has achieved substantial compliance as determined by CMS or the State based upon a revisit or after an examination of credible written evidence that it can verify without an on-site visit; . . . .

42 C.F.R. § 488.454(a)(1). 

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The regulation creates a presumption that noncompliance, once it is established, continues until CMS or a State agency can verify compliance through an on-site inspection. CMS has no burden to establish continuing noncompliance during a period when a remedy is in effect. N. Mont. Care Ctr., DAB No. 1930 at 8 (2004). The burden falls entirely on a facility to establish that it has attained compliance. 

Here, Petitioner offers nothing that would have enabled CMS to verify compliance without an on-site visit. The assertions in Petitioner’s plan of correction are representations of compliance and not proof that staff is complying. What was necessary to establish compliance was proof that staff were assuring prompt delivery of test results to the facility. That required additional review of Petitioner’s clinical records and, perhaps, in-person observation by surveyors of staff performance. That evidence could only be developed at a follow-up survey. 

Finally, Petitioner complains that denial of payment is a “severe sanction” that CMS should not impose given Petitioner’s compliance history and the financial impact that the remedy will have on Petitioner’s operations. However, and as I have explained, the determination to impose this remedy is a matter that lies within CMS’s discretion. I have no authority to substitute my judgment for that of CMS. 

Endnotes

¹ Petitioner avers that the resident’s physician assumed that the podiatrist who had ordered the MRI would discuss the findings with Petitioner’s staff and so, deferred to the podiatrist. See CMS Ex. 34. I accept this assertion as true for purposes of deciding CMS’s motion. 

² The podiatrist had missed work the previous week due to having sustained injuries in an accident.