Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
Mercy Home Care, Sioux City
Docket No. A-19-42
Decision No. 3044
REMAND OF ADMINISTRATIVE LAW JUDGE DECISION
Petitioner Mercy Home Care, Sioux City (Mercy), a Medicare home health agency (HHA), appeals the November 15, 2018 decision of an Administrative Law Judge (ALJ), Mercy Home Care, Sioux City, DAB CR5211 (2018) (ALJ Decision). The ALJ Decision sustained the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a civil money penalty (CMP) of $414,000 ($6,000 per day, for 69 days, for the period from August 31, 2016 through November 7, 2016) based on a determination that Mercy did not comply with the condition of participation in 42 C.F.R. § 484.18. The determination arose from a survey of Mercy’s facility, completed on August 31, 2016, which found that Mercy failed to provide skilled nursing care to multiple home health patients consistent with physician orders and plans of care. A revisit survey on November 7, 2016 found that Mercy had returned to compliance as of that day.
We affirm the ALJ’s conclusion that Mercy did not comply with 42 C.F.R. § 484.18. However, we remand the case to the ALJ for further action consistent with the discussion below because the ALJ’s upholding the CMP of $414,000 based on a conclusion that Mercy violated section 484.18 only on findings of fact concerning a single patient is erroneous.
Legal authorities
The Medicare program, established under Title XVIII of the Social Security Act (Act), reimburses health care providers and suppliers for the medical care and services they furnish to Medicare beneficiaries. Act §§ 1811, 1812, 1831, 1832. Section 1861(o) of the Act defines “home health agency,” in part, as an organization “primarily engaged in providing skilled nursing services and other therapeutic services[.]” “Home health services” are “items and services furnished to an individual, who is under the care of a physician . . . under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician” and generally “provided on a visiting basis in a place of residence . . . .” Act § 1861(m). Such services may include
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skilled nursing care provided by or under the supervision of a registered professional nurse, skilled therapies, and medical supplies. Id.
An HHA must, among other things, meet the conditions of participation in section 1891(a) of the Act and the implementing regulations in 42 C.F.R. Part 484.
Patients are accepted for treatment on the basis of a reasonable expectation that the patient’s medical, nursing, and social needs can be met adequately by the agency in the patient’s place of residence. Care follows a written plan of care established and periodically reviewed by a doctor of medicine, osteopathy, or podiatric medicine.
(a) Standard: Plan of care. The plan of care developed in consultation with the agency staff covers all pertinent diagnoses, including mental status, types of services and equipment required, frequency of visits, prognosis, rehabilitation potential, functional limitations, activities permitted, nutritional requirements, medications and treatments, any safety measures to protect against injury, instructions for timely discharge or referral, and any other appropriate items. . . .
(b) Standard: Periodic review of plan of care. The total plan of care is reviewed by the attending physician and HHA personnel as often as the severity of the patient’s condition requires, but at least once every 60 days or more frequently when there is a beneficiary elected transfer; a significant change in condition resulting in a change in the case-mix assignment; or a discharge and return to the same HHA during the 60-day episode. Agency professional staff promptly alert the physician to any changes that suggest a need to alter the plan of care.
(c) Standard: Conformance with physician orders. Drugs and treatments are administered by agency staff only as ordered by the physician . . . .
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Compliance with Medicare participation requirements is determined through surveys performed by state agencies under agreements with CMS. 42 C.F.R. §§ 488.10-488.12; 488.18-.26; subpart I (488.700-.745, “Survey and Certification of Home Health Agencies”). Compliance with a condition of participation is determined by the manner and degree to which the HHA satisfies the standards within the condition. Id. § 488.26(b); CSM Home Health Servs., Inc., DAB No. 1622, at 6-7 (1997). A “[s]tandard-level deficiency means noncompliance with one or more of the standards that make up each condition of participation for HHAs.” 42 C.F.R. § 488.705. A “[c]ondition-level deficiency means noncompliance as described in § 488.24 . . . .” Id. Section 488.24 in turn provides that an HHA “is not or is no longer in compliance with the conditions of participation or conditions for coverage where the deficiencies are of such character as to substantially limit” the HHA’s “capacity to furnish adequate care or which adversely affect the health and safety of patients. . . .” Id. § 488.24(b). Thus, citation of a condition-level deficiency, e.g., noncompliance with section 484.18, may be based on facts that support a standard-level deficiency, e.g., noncompliance with section 484.18(b). See Consol. Home Health, DAB No. 2878, at 2 (2018) (quoting 42 C.F.R. § 488.24(b) and stating that “[i]f standard-level deficiencies are of such character as to ‘substantially limit the provider’s . . . capacity to furnish adequate care or . . . adversely affect the health and safety of patients[,]’ the provider is not in compliance with a condition of participation”).
CMS may terminate the Medicare participation of, or impose alternative sanctions (such as CMPs) on, a non-compliant HHA. 42 C.F.R. §§ 488.800, 488.810(b), 488.820; Act § 1891(e), (f). CMS “may impose a [CMP] against an HHA for either the number of days the HHA is not in compliance with one or more conditions of participation or for each instance that an HHA is not in compliance, regardless of whether the HHA’s deficiencies pose immediate jeopardy.” 42 C.F.R. § 488.845(a)(1). Section 488.845, paragraphs (b)(3)-(b)(5) set out three ranges of per-day CMPs, as follows:
(3) Upper range of penalty. Penalties in the upper range of $8,500 to $10,000 . . . per day of noncompliance are imposed for a condition-level deficiency that is immediate jeopardy. The penalty in this range will continue until compliance can be determined based on a revisit survey.
(i) $10,000 . . . per day for a deficiency or deficiencies that are immediate jeopardy and that result in actual harm.
(ii) $9,000 . . . per day for a deficiency or deficiencies that are immediate jeopardy and that result in a potential for harm.
(iii) $8,500 . . . per day for an isolated incident of noncompliance in violation of established HHA policy.
(4) Middle range of penalty. Penalties in the range of $1,500-$8,500 . . . per day of noncompliance are imposed for a repeat and/or condition-level
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deficiency that does not constitute immediate jeopardy, but is directly related to poor quality patient care outcomes.
(5) Lower range of penalty. Penalties in this range of $500-$4,000 . . . are imposed for a repeat and/or condition-level deficiency that does not constitute immediate jeopardy and that are related predominately to structure or process-oriented conditions . . . rather than directly related to patient care outcomes.
Id. § 488.845(b)(3)-(5) (references to authority for updating the ranges omitted).
An HHA may request an ALJ hearing on “the determination of the noncompliance that is the basis for imposition” of a CMP. 42 C.F.R. § 488.845(c)(2). The basis for the imposition of CMPs is an “initial determination” that an HHA may appeal, “but not the determination as to which sanction was imposed.” Id. § 498.3(b)(13). An HHA may also challenge CMS’s determination on level of noncompliance, “but only if a successful challenge on this issue would affect . . . [t]he range of [CMP] amounts that CMS could collect[.]” Id. § 498.13(b)(14)(i). On review, the ALJ and the Board may not reduce a CMP to zero, “[r]eview the exercise of discretion by CMS to impose” a CMP, or “[c]onsider any factors in reviewing the amount of the penalty other than those specified” in section 488.845(b). Id. § 488.845(h).
Background
The following factual background is drawn from the ALJ Decision and the record of the ALJ proceedings.
On August 31, 2016, the Iowa Department of Inspections and Appeals (state agency) completed a survey of Mercy, which is located in Sioux City, Iowa and has a branch office in Pender, Nebraska. CMS Ex. 1. The state agency found that Mercy did not comply with 42 C.F.R. §§ 484.14, 484.18, 484.48, and 484.55. Id. With respect to the condition of participation in section 484.18, the state agency cited noncompliance under Tag G156
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS1201984.
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- Tag G158: In violation of section 484.18, Mercy did not follow physician-ordered plans of care, notify the physician of changes in visit frequency and/or use a specific number of as-needed visits with a specific identified reason for the as-needed visit, as to three of nine sampled patients (Patients 1, 3, 5). These failures put patients at risk of not receiving safe, individualized and consistent care. Id. at 5-9.
- Tag G159: Mercy failed to ensure that physician-ordered plans of care contained accurate, complete, and up-to-date information, for five of nine sampled patients (Patients 3, 4, 5, 7, 8), in violation of section 484.18(a). These failures put patients at risk of not receiving services, medication, and/or treatments in accordance with the patients’ assessed needs and physician orders. Id. at 9-13.
- Tag G164: Mercy failed to promptly alert physicians about changes that suggest a need to alter the plan of care, for two of seven sampled patients who received wound care (Patients 5 and 6), in violation of section 484.18(b). Id. at 13-16.
- Tag G156: The deficiencies cited as Tags G158, G159, and G164 supported Tag G156 because “[t]he cumulative effects of these systemic practices resulted in the failure to promote the safe and effective delivery of patient care to [Mercy’s] 134 patients receiving services, 101 patients receiving services from the Sioux City, Iowa parent office and 33 patients receiving services from the Pender, Nebraska branch office.” Id. at 4-5.
By determination dated November 28, 2016, CMS informed Mercy that it had violated the condition of participation in section 484.18 and that it was imposing a CMP of $414,000 ($6,000 per day for the 69-day period from August 31 through November 7, 2016, the date of the revisit survey, which resulted in a determination that Mercy had returned to compliance). Nov. 28, 2016 CMS notice (submitted with request for ALJ hearing) at 1.
ALJ proceedings and decision
Mercy appealed, asserting that it complied with 42 C.F.R. § 484.18 because the care it provides its patients “follows a written plan of care established and reviewed by a doctor”; Mercy “assured that the plan of care covers all pertinent diagnoses”; and its “professional staff promptly alerts physicians to changes that suggest alteration of the
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plan of care[.]” Request for ALJ hearing at 2. According to Mercy, the surveyors failed to consider the “professional expertise” of Mercy’s registered nurses to determine when it was reasonable to inform a physician about the need to revise a plan of care. Id.
Mercy moved for summary judgment in its favor, asserting that CMS relied on “isolated statements about individual patients” which “do not rise to the level of substantial noncompliance” with section 484.18 and, thus, CMS failed to establish its prima facie case. Mercy’s pre-hearing memorandum and motion for summary judgment (Mercy’s MSJ) at 6. CMS, the ALJ noted, did not file a motion for summary judgment, but “invoke[d] summary judgment in the conclusory two sentences of its brief.” ALJ Decision at 3 n.2.
The ALJ did not decide the appeal on summary judgment. The ALJ issued a decision based on the written record, without holding a hearing, since neither party chose to cross-examine the opposing party’s witness(es) whose written direct testimony the parties had offered in accordance with the instructions in the ALJ’s pre-hearing order. ALJ Decision at 3 & 3 n.5; P. Exs. 10-12 and CMS Ex. 3 (written direct testimony of a total of four witnesses).
The ALJ concluded that Mercy did not comply with section 484.18 based on factual findings concerning a single patient, Patient 6 (P6), to whom Mercy had provided wound care for an infection that had developed following hernia surgery. ALJ Decision at 4-9. The ALJ determined that CMS “presented prima facie evidence” that Mercy “failed to comply with” section 484.18 as to P6. Id. at 4 (ALJ’s emphases omitted). However, the ALJ stated, Mercy’s “briefing is silent regarding CMS’s allegation of noncompliance regarding [P6], and therefore, [Mercy] has not rebutted CMS’s prima facie case by a preponderance of the evidence.” Id. (ALJ’s emphases omitted). We summarize the ALJ’s factual findings below.
- P6 had a primary diagnosis of infection following surgery. She had surgical repair of an incarcerated hernia in June 2016 and received 60 days of home health services for post-surgery wound care. The wound became infected. Mercy established a new plan of care for another 60 days, beginning August 9, 2016. The August 2016 plan of care directed that Mercy assess and evaluate P6’s co-morbid conditions, including wound care, to identify changes and intervene to minimize complications. The plan of care directed that P6 will demonstrate improved wound status as evidenced by a decrease in size and drainage of wound, absence
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- of infection, and decreased pain. The plan of care instructed that a skilled nurse would report significant changes in status to the physician for early intervention. ALJ Decision at 4 (facts 3, 7), 6-7 (citing CMS Ex. 2 at 285, 321, 322).
- Mercy’s policy, “Care Management and the Plan of Care,” required Mercy to reevaluate a patient’s medical condition and the achievement or lack of achievement of goals and outcomes. This policy also required Mercy’s clinicians to notify an attending physician of any condition changes and to make any physician-ordered changes to a patient’s plan of care. ALJ Decision at 4 (fact 8), 6 (citing CMS Ex. 2, at 20, 24).
- In accordance with Mercy’s policy, “Wound Measurements and Assessment,” all wounds must be measured at least weekly with dressing changes. Wound length is measured in centimeters from “head to toe” at the longest points on a vertical plane, and width of a wound is measured in centimeters from “side to side” at the widest point on a horizontal plane. Signs of wound infection, including erythema, induration, purulent or increased drainage, color changes, odor, pain or fever, must be documented. ALJ Decision at 6 (citing CMS Ex. 2, at 34); id. at 7 n.8.
- On August 15, 2016, a registered nurse visited P6. The nurse assessed P6’s wound and reported no change in the status of the wound, which measured 4 cm in length by 9 cm in width by 1 cm in depth, covering a surface area of 36 cm2. The Wound Assessment Tool (WAT) score
The WAT score is derived from an assessment of various factors concerning a wound – length, width, depth, surface area (in cm2), surface area score, depth description, granulation tissue, edges, exudate type, exudate amount, epithelialization, necrotic tissue type, necrotic tissue amount, skin color surrounding a wound, peripheral tissue edema, peripheral tissue induration, and undermining – and is used to objectively evaluate and trend the status of wound healing. The lower the score, the better the wound healing is; the higher the score, the worse the deterioration of the wound. See ALJ Decision at 7 n.8 (discussing the meaning of the WAT score in reliance on the declaration of B.S., RN, MSN, of record as Petitioner’s exhibit 11); see also Mercy’s MSJ at 16 n.10 (citing P. Ex. 11, ¶ 11 and explaining that “[t]he WAT score refers to the Bates-Jensen Wound Assessment Tool, which is a widely-accepted standard for measuring the scope and severity of thirteen wound parameters,” and that “possible scores range from 1 (complete tissue health) to 60 (complete wound degeneration)”). (CMS does not dispute this description.) was 23. The nurse noted that P6 reported pain at level 6 at the wound site, and that there was moderate bloody discharge. ALJ Decision at 4 (fact 4), 7 (citing P. Ex. 6, at 65, 98-99). - P6 reported that her wound pain was at level 4 on August 20, 2016. ALJ Decision at 4 (fact 6); id. at 7 (citing P. Ex. 6, at 108).
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- A nurse visited P6 on August 22, 2016. That day the wound measured 16.2 cm in length
On Tag G164 (prompt notification to physician of any changes calling for changes in care-planning), the ALJ noted that in stating that P6’s record “lacked documentation of any contact with the patient’s physician to report the 400% increase in length of the wound,” CMS rested its argument concerning the increase in length of P6’s wound from August 15 to August 22, 2016 only on the SOD. ALJ Decision at 5-6 (quoting CMS Br. at 9-10); CMS Ex. 1, at 16 (P6’s “clinical record lacked documentation of any contact with [P6’s] physician to report the increased length of the wound”). Mercy, the ALJ noted, did not respond to this allegation. ALJ Decision at 6. by 4 cm in width by 1 cm in depth. The surface area of the wound had increased to 64.8 cm2. The WAT score was 37. The nurse noted a large amount of serosanguineous discharge from the wound. P6 reported a pain level of 7 at the wound site. Despite significant increase in the length of the wound and increases in surface area and WAT score, along with increased pain and large amount of serosanguineous discharge, the nurse reported there was no change in the status of the wound. ALJ Decision at 4 (facts 5, 6), 7-8 (citing P. Ex. 6, at 65, 116-17). - Mercy offered testimony that the condition of a wound would not warrant special notice to an attending physician when, in the span of one week, the total surface area of the wound had been decreasing, the patient had no pain in the wound area, and the WAT score had decreased, which would evidence healing. P6’s condition, however, evidently worsened because P6’s wound quadrupled in length, the surface area nearly doubled in size, the WAT score increased from 23 to 37, and P6 reported increased pain at the wound site. ALJ Decision at 4-5 (fact 9); id. at 7 n.8.
- P6 experienced a change in her condition. But Mercy failed to notify P6’s physician of a change of condition after the August 22, 2016 visit by one of its clinicians. Mercy did not determine whether it was necessary for the physician to update P6’s plan of care to address the change. ALJ Decision at 5 (facts 10, 11).
Mercy, the ALJ stated, “failed to recognize a worsening of the wound over the course of a week, and this failure is even more remarkable because [P6] had suffered from a prior infection of the same wound, and was undergoing her second 60-day course of skilled home care to treat the wound.” ALJ Decision at 8 (citations omitted). The ALJ continued, “[b]ecause [Mercy] failed to recognize the change in status of this wound, [Mercy] did not notify the physician of a change of condition” consistent with Mercy’s policy and P6’s plan of care. Id.; id. at 6 (discussing the provisions of Mercy’s “Care Management and the Plan of Care” policy and the standard-level requirement in section 484.18(b) to promptly alert the physician of changes that suggest a need to alter the plan of care). “As a result, Patient # 6’s physician was not given an opportunity to update the plan of care to address this condition.” Id. at 8. The ALJ determined that, “by not recognizing a change of condition, nor contacting the physician about the change of
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condition so that the plan of care could be reviewed and revised, as necessary, [Mercy] did not comply with” the condition of participation in 42 C.F.R. § 484.18. Id.
The ALJ further determined she “need not address any other deficiencies cited under the same condition of participation” in 42 C.F.R. § 484.18 (ALJ Decision at 8 (ALJ’s emphases removed)) because the noncompliance as to P6 was “in and of itself . . . sufficient to demonstrate noncompliance with the entire condition of participation at 42 C.F.R. § 484.18.” Id. at 9 (also stating that she “will not address the other [section 484.18] deficiencies cited under Tags G158, G159, and G164”).
The ALJ upheld the imposition of the $414,000 CMP. The ALJ noted that the per-day CMP of $6,000 was “at the low end” of the “middle range” of penalties assessed when, as here, “there is a deficiency involving structure and process that is directly related to patient care outcomes.” ALJ Decision at 9 (citing 42 C.F.R. § 488.845(b)(4), which sets out a middle range of inflation-adjusted per-day CMPs of $2,968 to $16,819 under 81 Fed. Reg. 61,538, 61,555 (Sept. 6, 2016)
As the ALJ noted, the regulatory factors to be considered in determining the appropriate amount of a CMP include: the extent to which deficiencies pose immediate jeopardy (which the ALJ determined was not at issue here since CMS did not cite an immediate-jeopardy-level deficiency
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quality care. ALJ Decision at 10 (citing 42 C.F.R. §§ 488.815(a)-(f), 488.845(b)(1)). Noting that CMS’s determination referred to 42 C.F.R. §§ 488.815 and 488.845(b), the ALJ stated that CMS thus notified Mercy of the factors to be considered when determining a CMP and gave Mercy an opportunity to submit relevant evidence on those factors. Mercy did not, however, submit any such evidence. Id. n.12.
Rejecting Mercy’s argument that there is no basis to impose any CMP, the ALJ stated that “the nature, manner, and degree of the noncompliance support the penalty that was imposed at the low end of the penalty range.” ALJ Decision at 11. Those factors, the ALJ continued, “would support a much higher penalty, and would even support a per-day CMP of $6,000 based on the CMP range of $1,500 to $8,500 that preceded inflation adjustment.” Id. (citing 42 C.F.R. §§ 488.815, 488.845(b)(4)). Also, rejecting Mercy’s assertion that it had no repeated deficiencies, the ALJ observed that Mercy “appears to have overlooked that it was cited for noncompliance with the same condition (under multiple tags, including G158, G159, G164, and G165) in a June 2016 survey, which [was] the reason why it was the subject of a revisit survey in August 2016.” Id. (citing CMS Ex. 2, at 10; 42 C.F.R. § 488.815(c)); see also CMS Ex. 1, at 1 (“Initial Comments” section of the SOD, discussing the June 2016 survey findings). And, the ALJ observed, contrary to Mercy’s assertion that there was no evidence of any causal nexus between any cited deficiency and deficient care, Mercy “failed to identify [P6’s] change of condition and did not notify the physician of this change of condition,” and that “this deficiency is undoubtedly and directly related to patient care.” Id. (citing 42 C.F.R. § 488.815(d)). That factor, the ALJ observed, would support the $6,000 per-day CMP. Id. Lastly, noting that Mercy did not raise any argument challenging the reasonableness of the per-day CMP amount or the duration of noncompliance on which that amount was based, the ALJ upheld the total CMP of $414,000. Id. at 1 and 11 (citing 42 C.F.R. § 488.845(b)).
Standard of review
The standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the record as a whole. The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. The bases for modifying, reversing or remanding an ALJ decision include the following: a finding of material fact necessary to the outcome of the decision is not supported by substantial evidence; a legal conclusion necessary to the outcome of the decision is erroneous; the decision is contrary to law or applicable regulations; a prejudicial error of procedure (including an abuse of discretion under the law or applicable regulations) was committed. See Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s Participation in the Medicare and Medicaid Programs (Guidelines), “Completion of the Review Process,” ¶ (c), available at
https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/participation/index.html.
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Evidence sufficient to support a factual finding under the “substantial evidence” standard need only be “more than a mere scintilla,” meaning “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Under this standard, the reviewer must examine the record as a whole and consider whatever in the record fairly detracts from the weight of the decision below. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). We do not re-weigh the evidence or overturn an ALJ’s “choice between two fairly conflicting views” of the evidence; instead, we determine whether the contested finding could have been made by a reasonable fact-finder “tak[ing] into account whatever in the record fairly detracts from [the] weight” of the evidence on which the ALJ relied. Douglas Bradley, M.D., DAB No. 2663, at 4 (2015) (internal quotation marks omitted), appeal dismissed per stipulation, Bradley v. Burwell, No. 2:15-cv-08835 (D.N.J. June 2, 2017). We would reverse an ALJ’s factual findings only when we “cannot conscientiously find that the evidence supporting that decision is substantial when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the [ALJ’s] view.” Universal Camera, 340 U.S. at 488.
Analysis
As noted earlier, the state agency made findings concerning seven patients (1, 3, 4, 5, 6, 7, 8) with respect to the alleged violation of section 484.18. In its determination imposing the CMP, CMS stated that the state agency found noncompliance with section 484.18 but did not refer to any specific patient or Tag. On appeal, the ALJ upheld CMS’s determination that Mercy was not in compliance with the condition of participation in section 484.18 and that the CMP of $414,000 was reasonable. As to the evidence concerning the patients discussed in the survey findings, however, the ALJ made factual findings concerning only a single patient, P6.
Mercy asserts that the ALJ’s decision is not supported by substantial evidence and is contrary to law because, in limiting her fact-finding and conclusions to the wound care provided to P6, the ALJ “ignored relevant and probative” documentary and testimonial evidence concerning other patients that “rebutted” or “detract[ed] from” CMS’s allegations of noncompliance and established that Mercy complied with 42 C.F.R. § 484.18. Brief in support of request for review (RR)
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be considered harmless,
In section I of our analysis below, we discuss the Part 498 regulations that govern this case and the Board’s decisions interpreting those regulations. In section II, we discuss why the ALJ’s determination to uphold the condition-level deficiency based on factual findings concerning one patient, by itself, is not error that would compel us to vacate the ALJ’s decision. Rather, given the ALJ’s limited fact-finding, the essential question is whether the facts the ALJ found are sufficient to resolve the material issues presented, one being whether there is a legal basis for imposing a penalty on Mercy. As we explain in section III, the ALJ’s findings of fact concerning the wound care provided to P6 do establish a standard-level deficiency (section 484.18(b)) on which a condition-level deficiency (section 484.18) may properly be found and, accordingly, a basis for imposing a CMP on Mercy. We therefore affirm that part of the ALJ Decision and conclude that Mercy was not in compliance with the condition of participation in section 484.18.
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The next and remaining issue is reasonableness of the CMP, which the ALJ upheld, as imposed by CMS, based on factual findings significantly fewer than the ALJ could have made on the record evidence. As we explain in section IV, remand for further ALJ action is appropriate because upholding the per-day CMP of $6,000 and the total CMP of $414,000 based on the limited fact-finding is erroneous. On remand, the ALJ is to reexamine the reasonableness of the CMP consistent with the discussion below.
I. Mercy relies on inapplicable regulations; this case is governed by 42 C.F.R. Part 498.
In asserting that the ALJ erred in issuing a decision that was not based on a review and assessment of all the record evidence and therefore must be vacated and the case remanded for a new decision, Mercy cites and relies on 42 C.F.R. §§ 405.1046(a) and 405.1110. See RR at 1-2, 12, 13, 14, 15, 19.
Under 42 C.F.R. § 405.1046(a), a decision of an ALJ (or attorney adjudicator) in the Office of Medicare Hearings and Appeals (OMHA) “must be based on evidence offered at the hearing or otherwise admitted into the record” and “shall include independent findings and conclusions.” Section 405.1110 addresses the authority of the Medicare Appeals Council (Council), an adjudicative body under the DAB umbrella, to review an OMHA ALJ’s (or attorney adjudicator’s) decision (or dismissal) on appeal and remand the case. These regulations are in 42 C.F.R. Part 405, subpart I, which governs a process of multi-level appeals of initial determinations for benefits under Medicare Parts A and B. See 42 C.F.R. §§ 405.900, 405.902 (defining “ALJ,” “OMHA,” “Medicare Appeals Council”), 405.904, 405.906, 405.1000, 405.1100.
CMS’s November 28, 2016 determination from which Mercy’s appeal arises is an initial determination appealable under 42 C.F.R. Part 498. See 42 C.F.R. §§ 498.3(b)(13), 488.845(c)(2). The regulations in Part 405, subpart I do not govern this appeal or apply to cases before the Board.
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reliance on those inapplicable regulations by determining whether the ALJ’s decision was consistent with 42 C.F.R. § 498.74(a), which, generally speaking, is the Part 498 regulation comparable to section 405.1046(a). Section 498.74, captioned “Administrative Law Judge’s decision,” provides in part:
(a) Timing, basis and content. As soon as practical after the close of the hearing, the ALJ issues a written decision in the case. The decision is based on the evidence of record and contains separate numbered findings of fact and conclusions of law.[
42 C.F.R. § 498.74(a) (emphasis supplied). Section 498.74(a) does not specify what is meant by “the evidence of record.” Other Part 498 regulations are instructive as to what the record must contain and how the record is to be developed. Under section 498.60(b)(1), where a hearing is held, an ALJ “inquires fully into all of the matters at issue” and “receives in evidence the testimony of witnesses and any documents that are relevant and material.” 42 C.F.R. § 498.60(b)(1). If the ALJ determines there is relevant and material evidence available which has not been presented at the hearing, the ALJ may reopen the hearing to receive that evidence. Id. § 498.60(b)(2). Where, as here, no oral testimony was taken, the ALJ must have “[m]a[de] a record of the relevant written evidence that was considered in making the determination being appealed, and of any additional evidence submitted by the parties.” Id. § 498.66(d)(1).
Consistent with section 498.66(d)(1), the ALJ made a written record that included three CMS exhibits and twelve Mercy exhibits.
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II. The ALJ’s confining her fact-finding to evidence concerning one patient is not a ground for vacating the ALJ Decision; if those facts support a standard-level deficiency (42 C.F.R. § 484.18(b)) as is the case here, a condition-level deficiency (42 C.F.R. § 484.18) may be found based on those facts.
Mercy asserts that the ALJ erred in not assessing and making findings on patients other than P6 when Mercy submitted, and the ALJ admitted, “evidence and testimony of experienced clinicians” on which Mercy relied “to rebut the allegations in the [SOD] . . . .” RR at 10; id. at 16 (stating that the ALJ’s “failure to make any findings of fact regarding seven patients cited in the [SOD] falls well short of the minimum standard required under the relevant caselaw and the Board’s consistent decisions”).
The Board’s “role in determining whether the ALJ’s factual findings are supported by substantial evidence on the record as a whole is not a mere formality.” Life Care Ctr. of Bardstown, DAB No. 2233, at 10 (2009). Thus, the Board does not rubber-stamp an ALJ’s decision, affirming that decision simply because the decision was “based on evidence ‘which in and of itself justified it.’” Id. (quoting Barry D. Garfinkel, M.D., DAB No. 1572, at 5-6 (1996), aff’d, Garfinkel v. Shalala, No. 3-96-604 (D. Minn. June 25, 1997), citing Universal Camera, 340 U.S. at 487)); see also Hanover Hill Health Care Ctr., DAB No. 2507, at 4 (2013); Emerald Shores Health & Rehab. Ctr., DAB No. 2072, at 12-13 (2007), reversed sub nom. on other grounds, Emerald Shores Health Care Associates, LLC v. U.S. Dep’t of Health & Human Servs., 545 F.3d 1292 (11th Cir. 2008). The essential question is whether the ALJ made those findings of fact, supported by substantial evidence, that “are indeed necessary to resolve the material issues in a case.” Aase Haugen Homes, Inc., DAB No. 2013, at 9 (2006). “[A]n omission of a factual finding by an ALJ would have to be material” to be considered to have prejudiced an appellant. Id.
Accordingly, an ALJ is not required to assess and make a factual finding on every piece of evidence in the record but must resolve the issues properly before the ALJ. See Aase Haugen Homes at 9; Willow Creek Nursing Ctr., DAB No. 2040, at 7 (2006). In doing so, however, an ALJ “may not simply ignore without explanation evidence concerning facts which tend to undercut findings on which the ALJ relies.” Aase Haugen Homes at 9. The ALJ must address, as appropriate, conflicting or contradictory evidence. Estes Nursing Facility Civic Ctr., DAB No. 2000, at 5 (2005) (“While an ALJ does not have to address every fact in the record, [the ALJ] must address the evidence that conflicts with the evidence supporting his/her findings of fact.”). The ALJ need not address irrelevant evidence. Miss. Care Ctr. of Greenville, DAB No. 2450, at 14 (2012), aff’d, Miss. Care Ctr. of Greenville v. U.S. Dep’t of Health & Human Servs., 517 F. App’x 209 (5th Cir. 2013). Nor is the ALJ required to assess evidence “that does not detract from [her] findings.” Lake Park Nursing & Rehab. Ctr., DAB No. 2035, at 18 (2006); see also Saadite A. Green, DAB No. 2940, at 10 (2019) (declining to presume, based solely on the lack of discussion of certain evidence, that the ALJ did not consider that evidence, and
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observing that nothing in the two exhibits the ALJ allegedly failed to consider undercut, detracted from, or was relevant to, the ALJ’s findings and conclusions) (and cited Board decisions).
Thus, in accordance with the Board’s decisions, the ALJ’s fact-finding on evidence concerning one patient is not, by itself, error that would render the ALJ’s decision legally infirm or inconsistent with Part 498. Rather, consistent with the decisions discussed above, under circumstances like that presented here, the Board must consider both whether the facts the ALJ found are supported by substantial evidence and whether there are additional factual findings the ALJ could have made but did not make that are material and necessary to resolve the issues that were before the ALJ. Were we to determine that the ALJ did not make factual findings that are material and necessary, then that could be a basis to reverse or remand. See 42 C.F.R. § 498.88(a) (The Board “may either issue a decision or remand the case to an ALJ for a hearing and decision.”); Pac. Regency Arvin, DAB No. 1823, at 3-4 (2002) (The Board may modify, reverse or remand an ALJ decision where, for instance, “a finding of material fact necessary to the outcome of the decision is not supported by substantial evidence”; “the decision is contrary to law or applicable regulations”; or “a prejudicial error of procedure . . . was committed.”); Evergreene Nursing Care Ctr., DAB No. 2069, at 9 n.9 (2007) (The Board may issue a “new or modified decision or remand the case to the ALJ” if the ALJ’s decision is “based on factual or legal errors.”), appeal dismissed per consent motion to dismiss with prejudice, Evergreene Nursing Care Ctr. v. Leavitt, No. 3:07-cv-00024 (W.D. Va. June 16, 2008).
With this framework in mind, with respect to the ALJ’s fact-finding on only P6, we next consider whether the ALJ needed to resolve all of the parties’ numerous disputes about the deficiency findings in the SOD involving patients other than P6 to find a condition-level deficiency, that is, noncompliance with section 484.18. As we explain below in section III, the ALJ did not need to do so; substantial evidence in the record supports the facts the ALJ found concerning wound care provided to P6, and those facts support a standard-level deficiency (section 484.18(b)) on which a condition-level deficiency (section 484.18) may be based. We therefore affirm the ALJ’s conclusion that Mercy did not comply with section 484.18.
III. We affirm that part of the ALJ’s decision which concluded that Mercy did not comply with the condition of participation in 42 C.F.R. § 484.18.
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. Evergreene Nursing Care Ctr., DAB No. 2069, at 7. “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
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relevant period.” Id.; Pac. Regency Arvin at 5 n.2 (before the ALJ, the facility must prove substantial compliance by the preponderance of the evidence unless CMS has failed to make its prima facie case that the facility was not in substantial compliance). The parties’ burdens, as laid out in these cited cases involving skilled nursing facility appeals, apply in HHA appeals such as that filed by Mercy. See Nightingale Home Healthcare, Inc., DAB No. 2784, at 11 (2017).
The ALJ determined that “CMS presented prima facie evidence that, with respect to [P6], [Mercy] failed to comply with 42 C.F.R. § 484.18, which is a condition of participation addressing the acceptance of patients, plans of care, and medical supervision.” ALJ Decision at 4 (ALJ’s emphases omitted). Specifically, the ALJ found that Mercy had failed to recognize changes indicating deterioration of P6’s wound and to contact the physician about those changes so that P6’s plan of care could be reviewed and revised as necessary. Id. at 6, 8. Based on those findings, the ALJ concluded that Mercy did not comply with the condition of participation in section 484.18. Id. at 8.
Mercy asserts that the ALJ’s confining her fact-finding only to P6 when the SOD addressed numerous other patients “creates a substantial doubt that CMS ever did present a prima facie case” that Mercy was not in substantial compliance with any condition of participation. RR at 16. Mercy says, “Any conclusion that CMS met its obligations to establish a prima facie case is undermined by the [ALJ’s] caustic remark that ‘CMS’s brief consists largely of a regurgitation of the [SOD], and CMS did not provide a single citation to the documentary record that was relied upon by CMS and the surveyors.’” Id. at 16 n.4 (quoting ALJ Decision at 3 n.2).
In light of Mercy’s assertions, a discussion of an SOD’s role in the enforcement process is appropriate. The basic function of an SOD, which sets out survey findings, is to notify a facility of alleged deficiencies, but an SOD also may serve as evidence of the facts asserted therein. See Oxford Manor, DAB No. 2167, at 2 (2008); Pac. Regency Arvin at 9 (The SOD “is a notice document, and is not designed to lay out every single detail in support of a finding that a violation has been committed.”); W. Care Mgmt. Corp., DAB No. 1921 (2004) (An SOD is evidence of notice to a facility “of the nature, scope, and severity of the deficiencies found and the factual basis for the survey agency’s conclusion that regulatory standards had been violated.”). SODs frequently contain observations made by surveyors, reports of interviews with relevant staff, and summaries of relevant records. An SOD thus could serve as an evidentiary basis supporting a prima facie case. Life Care Ctr. of Bardstown, DAB No. 2479, at 19 (2012) (“[T]he SOD itself constitutes
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prima facie evidence of the facts asserted in it.”), aff’d, Life Care Ctr. of Bardstown v. Sec’y of Health & Human Servs.,535 F. App’x 468 (6th Cir. 2013). If a finding in the SOD is not disputed at all, then CMS need not present additional evidence to support the finding. Oxford Manor at 2 (citing Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson,129 F. App’x 181 (6th Cir. 2005)). If a facility disputes a finding in the SOD, “the issue once both parties have presented their evidence . . . is whether [the facility] showed substantial compliance by a preponderance of the evidence.” Id. Mere denials are not enough. Id. If the evidence on which the facility relies is irrelevant, unreliable, or outweighed by contrary evidence, the facility has not met its burden. Id. at 2-3.
In consideration of the decisions discussed above, that CMS appears to have relied largely on restatement of parts of the SOD (CMS Ex. 1) in its brief to the ALJ does not necessarily warrant a conclusion that CMS’s prima facie case is undermined for that reason alone. A prima facie case may be established based on the allegations in the SOD alone if the facility does not dispute a survey finding at all. Mercy did not dispute CMS’s allegations concerning P6 in its brief submitted to the ALJ or cite any record evidence concerning P6 to attempt to rebut the allegations. P6 is the only patient (of the patients the SOD discussed as to the section 484.18 deficiency) Mercy did not specifically address in its brief to the ALJ. Thus, even where, as here, CMS relied mainly on the SOD to establish its prima facie case as to the standard-level deficiency concerning wound care provided to P6, an ALJ could find, as the ALJ in this case found, that Mercy did not then carry its burden to rebut the prima facie case.
Mercy leans heavily on the ALJ’s determination not to address all deficiency allegations in the survey findings, patient by patient. It asserts that it put before the ALJ evidence that “rebutted” CMS’s allegations of noncompliance based on the contents of the SOD, but that the ALJ ignored most of that evidence. But Mercy does not address the ALJ’s factual findings concerning P6. Nowhere in its opening brief or reply brief does Mercy cite any record evidence concerning P6 that contradicts, or is inconsistent with, or detracts from, the evidence concerning P6 on which the ALJ relied. Mercy does not explain specifically how and on what evidence it rebutted CMS’s prima facie case as to
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this patient.
The ALJ’s factual findings concerning P6, as summarized earlier, are supported by substantial evidence in the record. The evidence on which the ALJ relied to make her factual findings show that P6 had a post-surgical wound that increased in size markedly over just a week, which indicated worsening or deterioration of the wound and which called for Mercy to notify her physician of that change, to enable her physician to revise P6’s plan of care as appropriate. Mercy did not show before the ALJ, and does not show before the Board, that Mercy’s nursing professionals recognized and noted the changes in P6’s wound and alerted a physician about them consistent with the regulatory standard or Mercy’s care-planning policy. Nor does Mercy show that its nurses made any conscious professional judgment not to notify a physician or that such a judgment could be justified in any way under the applicable standards.
We note the ALJ stated there was no need to address any other deficiencies cited under the condition of participation in 42 C.F.R. § 484.18 because the noncompliance as to P6 was “in and of itself . . . sufficient to demonstrate noncompliance with the entire condition of participation at 42 C.F.R. § 484.18” and Mercy did not rebut CMS’s prima facie case by a preponderance of the evidence as to this deficiency. ALJ Decision at 4-5, 8-9.
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alone to terminate absent conclusion that it met definition of a condition-level violation in section 488.24).
The ALJ’s factual findings concerning P6 establish a standard-level deficiency, that is, noncompliance with 42 C.F.R. § 484.18(b). Here, the ALJ found, and we agree, that Mercy’s failure to recognize changes indicating deterioration of P6’s wound and to contact the physician about those changes so that P6’s plan of care could be reviewed and revised as necessary is a failure that substantially limited Mercy’s capacity to furnish adequate care or which adversely affected patient health and safety. See ALJ Decision at 11 (“Petitioner failed to identify [P6’s] change of condition and did not notify the physician of this change of condition; this deficiency is undoubtedly and directly related to patient care.”). Leaving P6’s wound changes unattended and unaddressed inconsistent with section 484.18(b) and Mercy’s care-planning policy provisions (CMS Ex. 2, at 20, 24) could have further hampered P6’s post-surgical recovery process, causing her even more pain, and could have led to further complications, notably, infection, which evidently had manifested as indicated by changes in discharge noted at the wound site. The findings not only constituted inadequate patient care but adversely affected a patient’s health and safety. We therefore conclude that the ALJ’s findings of fact concerning P6 supported a standard-level deficiency on which a condition-level deficiency may be found. The ALJ properly found noncompliance with the condition of participation in section 484.18.
Before we turn to the issue of reasonableness of the CMP, we address an argument relevant to our preceding discussion on the standard-level deficiency. Mercy asserted below that nurses had made appropriate discretionary professional judgment calls not to immediately contact the physician about P5’s wound status and that their determination not to do so was consistent with state regulations adopting the Iowa Board of Nursing standards, which, according to Mercy, recognize that a registered nurse has a broad delegated role in executing a physician-approved plan of care. Mercy’s MSJ at 19-20. However, in making that argument, Mercy stated there was no need to contact the physician about P5’s wound status because P5’s wound was improving, not deteriorating,
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the change in the depth of P5’s wound was minimal, and measurements of the total surface area of his wound indicated progress toward healing; P5 had no pain during the relevant time period; drainage from the wound was decreasing; and no odor was reported. Id. at 19; P. Ex. 11, at 2-3 (¶¶ 10-12, 14). However, in contrast, with respect to P6, the ALJ made findings that P6’s wound progressively worsened – facts Mercy does not dispute. Following Mercy’s line of reasoning on why it did not need to contact P5’s physician reinforces the finding that nurses should have notified P6’s physician about P6’s wound changes since, unlike P5’s wound, P6’s wound was deteriorating. Mercy does not argue or show that, with respect to P6, its nurses, in exercising their professional judgment, appropriately decided that they need not notify P6’s physician about P6’s wound status.
Based on the foregoing, we affirm the ALJ Decision in part.
IV. We remand the case to the ALJ for further assessment of the evidence and reconsideration of the issue of reasonableness of the CMP.
Having determined that Mercy did not comply with the condition of participation in section 484.18, we consider whether the ALJ adequately analyzed the issue of reasonableness of the CMP since the ALJ upheld the CMP, as imposed, as reasonable based on fewer factual findings than the ALJ could have made.
When CMS selects a sanction, it considers various regulatory factors, including “[t]he nature, incidence, manner, degree, and duration of deficiencies or noncompliance,” “[t]he extent to which the deficiencies are directly related to a failure to provide quality patient care” and “[a]n indication of any system-wide failure to provide quality care.” 42 C.F.R. § 488.815(b), (d), (f). On appeal the ALJ considers these factors to determine the reasonableness of a CMP. Id. § 488.845(b), (h)(3). “[T]here is a presumption that CMS has considered the regulatory factors in setting the amount of the CMP and that those factors support the CMP amount imposed by CMS. Unless a facility contends that a particular regulatory factor does not support that CMP amount, the ALJ must sustain it.”
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Coquina Ctr., DAB No. 1860, at 32 (2002). If a facility makes such a contention, then the question is whether CMS has produced evidence as to that factor. The ALJ must then determine whether the CMP imposed is reasonable. Id.
In its November 28, 2016 determination, CMS stated that the state agency found noncompliance with section 484.18 but did not refer to any specific patient or Tag. Nowhere in its brief to the ALJ did CMS – which filed its brief and exhibits first – confine its arguments as to noncompliance to certain patient(s) or Tag(s) or state that the per-day CMP of $6,000 was based on only certain patient findings or Tags. Referring to “the repeat standard deficiencies” (i.e., the deficiencies cited under Tags G158, G159 and G164) that allegedly resulted in “cumulative effects” that support the “condition-level deficiency” (Tag G156), CMS asserted that the CMP imposed was appropriate based on all of the noncompliance findings in the SOD. CMS Br. to ALJ at 1-2, 16; id. at 11 (referring to uncorrected “systematic problems”), 15 (asserting that the $6,000 per-day CMP is reasonable based on Mercy’s “continued and repeated inability” to comply), 16 (“[T]he repeat standard deficiencies relate to the condition-level deficiency because they cast a dark shadow of doubt on Mercy’s capacity to furnish adequate care.”). CMS thus maintained that various survey findings on which the section 484.18 condition-level deficiency was grounded collectively supported the CMP imposed.
In response, Mercy attempted to rebut CMS’s allegations, making arguments about every patient (other than P6) discussed in the survey findings concerning the condition of participation in section 484.18. Mercy asserted that “[t]he alleged deficiencies cited by CMS do not rise to the level that justifies imposing a CMP,” that it made no “systematic errors,” and that errors, if any, reflected “isolated incidents” not indicative of a “widespread” failure to provide quality patient care. Mercy’s MSJ at 21, 22. We understand Mercy to have thus disputed CMS’s claims as to the nature, manner and degree of the alleged deficiencies and whether they reflected system-wide failures (see 42 C.F.R. § 488.815(b), (f)) on which CMS had determined to impose a per-day CMP of $6,000.
The Board has recognized that an ALJ need not address every disputed deficiency finding so long as the findings that the ALJ made support a legal basis for imposing a remedy, namely, a CMP. See W. Care Mgmt. at 19-21; Rockcastle Health & Rehab. Ctr., DAB No. 2891, at 24 (2018) (no ALJ error in not addressing a deficiency tag in the absence of assertion or showing that the ALJ would have had to uphold the unaddressed deficiency to also uphold those deficiencies the ALJ did address and the sanctions imposed); see also Alexandria Place, DAB No. 2245, at 27 n.9 (2009) (ALJ has discretion, as an exercise of judicial economy, not to address SOD findings that are immaterial to the outcome) (and cited cases); Perry Cnty. Nursing Ctr., DAB No. 2555, at 19 (2014) (declining petitioner’s request that the Board make de novo findings concerning unaddressed deficiencies in the absence of an argument that the ALJ committed prejudicial error in not addressing them and where the unaddressed deficiencies are
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immaterial to the outcome), aff’d, Perry Cnty. Nursing Ctr. v. U.S. Dep’t of Health & Human Servs., 603 F. App’x 265 (5th Cir. 2015).
The Board has also recognized that, because the ALJ conducts a de novo review, the ALJ is not to review whether CMS’s determination to impose a particular remedy was made correctly, but instead must make an independent determination of whether evidence presented on appeal supports the reasonableness of the amount of the CMP imposed. See W. Care Mgmt. at 17; The Residence at Salem Woods, DAB No. 2052, at 11 (2006). In so doing, the ALJ should consider whether disputed findings could have implications for the reasonableness of a CMP and should take appropriate action to resolve them as necessary to make an independent determination on the reasonableness question. See, e.g., Salem Woods at 11 (An ALJ “may . . . find the CMP amount selected by CMS to be reasonable based on fewer deficiencies than those upon which CMS relied to impose the penalty”; if the ALJ overturns some of the deficiencies on which CMS determined a CMP amount, the ALJ should consider whether the CMP, as originally imposed, is reasonable based on the remaining deficiencies.); Emerald Shores, DAB No. 2072, at 30 (“Where the ALJ overturns some of the allegations relied on by CMS, the ALJ must consider the reasonableness of the amount based on the altered factual findings even if the facility did not argue that the amount was unreasonable had all the original allegations been upheld.”). A remand to the ALJ for further consideration of the reasonableness question may be called for under certain circumstances. See, e.g., NMS of Hagerstown, LLC, DAB No. 2803, at 31-32 (2017) (remanding to the ALJ to revisit the reasonableness of per-day CMP, which, although low, was three times the minimum permissible amount, where the ALJ addressed only two of the four participation requirements CMS alleged NMS had not complied with and which CMS asserted supported the CMP imposed); see also Virginia Highlands Health Rehab. Ctr., DAB No. 2339, at 13-14 (2010).
Facts supporting a determination that Mercy did not violate section 484.18 requirements as to various patients other than P6, if found, could be material to the issue of whether a $6,000 per-day CMP is reasonable, particularly to the extent that such facts bear on the nature, manner and degree of the deficiencies (42 C.F.R. § 488.815(b)), on “[t]he extent to which the deficiencies are directly related to a failure to provide quality patient care” (id. § 488.815(d)), and on whether the deficiencies reflect “[a]n indication of any system-wide failure to provide quality care” (id. § 488.815(f)). However, because the ALJ confined her fact-finding to the wound care given to P6, the only patient Mercy did not address in its brief submitted to the ALJ, the ALJ did not reach the questions of whether Mercy’s arguments about rebutting CMS’s allegations on deficiencies affecting patients other than P6 had any merit and whether Mercy had put before the ALJ evidence about such other patients that could favor Mercy as it relates to the reasonableness question. If an ALJ elects not to make findings concerning certain disputed deficiencies (as the ALJ did here), the ALJ should assess whether the resolution of some or all of the unaddressed deficiencies could materially affect a determination on the reasonableness of the CMP. But the ALJ did not explain if she had considered whether an outcome favorable to
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Mercy with respect to one or more of the unaddressed deficiency findings “would have been material to [a] determination that the amounts of the CMPs were reasonable.” See W. Care Mgmt. at 20. Furthermore, although the ALJ stated that “the nature, manner and degree of noncompliance” as to the wound care given to P6 “would support a much higher penalty,” ALJ Decision at 11, the ALJ did not sufficiently explain the basis for that statement.
We note that in its brief to the ALJ, Mercy asserted “there are no repeat deficiencies.” Mercy’s MSJ at 21. Rejecting this argument, the ALJ stated that Mercy “appears to have overlooked that it was cited for noncompliance with the same condition (under multiple tags, to include G158, G159, G164, and G165) in a June 2016 survey, which is the reason why it was the subject of a revisit survey in August 2016.” ALJ Decision at 11 (citing 42 C.F.R. § 488.815(c) and CMS Ex. 2, at 10). The evidence the ALJ cited, CMS’s exhibit 2, page 10, is the first page of a two-page summary of data from the June 2016 survey in chart form. The chart summary indicates that noncompliance with five conditions of participation, 42 C.F.R. §§ 484.14, 484.18, 484.30, 484.48, and 484.55, were found; that various section 484.18 deficiency findings, cited under various tags, were noted as to several of 20 sampled patients; and, with respect to Tag G164 (“Periodic Review of the POC [plan of care] – failed to alert physician to need to change POC”), deficiency findings were noted with respect to four of 20 sampled patients. CMS Ex. 2, at 10. The SOD states that the state agency conducted a “45-day validation survey revisit” at the end of August 2016 “following the condition level validation survey concluded” in June 2016 and that Mercy was found to have remained out of compliance with section 484.18. See CMS Ex. 1, at 1; CMS Ex. 3 (written direct testimony of H.T., a registered nurse), at 1-2 (¶¶ 4, 5, 9, 10) (testifying that she was a member of the survey team for both the June and August surveys; although Mercy returned to compliance with four of the five conditions of participation as of August 2016, Mercy remained out of compliance as to Tags G156 and G164). Thus, the record supports a history of noncompliance, at minimum, with the standard-level condition in section 484.18(b), even the conclusion we have upheld regarding P6, that goes back to June 2016. Before the Board, Mercy does not raise any specific dispute about this evidence of history of noncompliance. On remand, the ALJ may further consider whether that history, in the context of subsequent (August 2016) revisit survey findings upheld by the ALJ, has a bearing on the overall nature, manner and degree of the deficiencies and whether the deficiencies reflect a broader, system-wide failure to provide quality care. See 42 C.F.R. § 488.815(b), (c), (d), (f).
Although the per-day CMP of $6,000 was at the low end of the middle range based on the inflation-adjusted per-day CMP amounts ($2,968 to $16,819), it is still more than double
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the lowest possible inflation-adjusted amount ($2,968).
CMS’s brief submitted to us does not alleviate the concerns raised by the ALJ’s limited fact-finding or articulate clearly why the circumstances surrounding P6 alone support the same CMP as the one that CMS imposed based on findings regarding multiple patients on which CMS originally set the per-day amount. In response to Mercy’s argument that the ALJ’s upholding the CMP of $414,000 is “speculative” because it assumed CMS would have concluded that Mercy did not comply with the condition of participation based only on survey findings related to one patient and that a per-day CMP of $6,000 was warranted on the ALJ’s findings of fact concerning P6 only (RR at 17-19), CMS asserts that “Mercy’s deficient care of [P6] alone substantiates the condition-level deficiency. Mercy’s allegedly stellar care of other patients does not excuse its ineptitude in [P6’s] care.” CMS Response Br. at 7. While we agree with this, and therefore upheld the condition-level violation, we do not agree that this necessarily establishes that the “ineptitude” in P6’s care, by itself, warrants the full per-day amount. It may well warrant it, but that precise question has not been directly addressed either by CMS or the ALJ.
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Mercy, in reply, disputes CMS’s “change[d] position,” stating that earlier, CMS urged the ALJ to uphold the deficiency findings and the CMP based on “aggregate” survey findings concerning all seven patients. Reply Br. at 5-7. Because the ALJ reviews whether the CMP is in a reasonable range based on the facts as found by the ALJ, it is not necessary for the ALJ to determine what CMS would have imposed if it had made only the findings which the ALJ upheld. CMS’s original imposition of the same CMP based on its more extensive factual findings as to multiple patients does not preclude it from agreeing with the ALJ that the single patient’s circumstances sufficed to justify the same amount. However, neither the ALJ nor CMS has offered an analysis of how the circumstances of P6’s care alone, reviewed in the light of the factors set out in section 488.815, demonstrate that a $6,000 per day CMP still falls within a reasonable range. For example, if the other patients’ care is not considered in weighing the reasonableness of the penalty for this deficiency, the ALJ should explain how that limited assessment still results in evaluating the facility’s failures as sufficiently widespread and/or systemic to warrant the same CMP amount as CMS proposed when it determined that multiple patients were treated inadequately.
In sum, we have determined that the most appropriate course of action would be to remand this case to the ALJ for further consideration of the reasonableness of the CMP. If, on remand, the ALJ again determines that the deficiency findings concerning P6 alone support the imposition of a per-day CMP of $6,000, the ALJ is to set out her rationale explaining why the absence of findings concerning the disputed deficiencies unrelated to P6 does not materially affect or detract from her assessment of reasonableness of the CMP. In the alternative, the ALJ may consider the parties’ arguments and evidence concerning the unaddressed, disputed deficiencies, make additional findings of facts and reach conclusions of law, and thereafter reassess the reasonableness of the CMP in light of those additional findings and conclusions.
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Conclusion
We affirm the ALJ’s decision in part but remand the case to the ALJ for further action consistent with the foregoing discussion.
/s/
Leslie A. Sussan Board Member
/s/
Constance B. Tobias Board Member
/s/
Susan S. Yim Presiding Board Member