The Oaks, DAB No. 3160 (2024)

REMAND OF
ADMINISTRATIVE LAW JUDGE DECISION

The Oaks (Petitioner) appeals an administrative law judge (ALJ) decision, The Oaks, DAB CR5285 (2019) (ALJ Decision), which granted summary judgment to the Centers for Medicare & Medicaid Services (CMS). The ALJ upheld CMS’s determination, based upon on-site surveys, that Petitioner’s skilled nursing facility (SNF) was not in substantial compliance from July 18, 2016 through November 3, 2016 with Medicare participation requirements stated in 42 C.F.R. §§ 483.20(k)(3)(i) and 483.25(m)(2).¹ ALJ Decision at 1, 6, 17. The ALJ also upheld CMS’s imposition of a civil money penalty (CMP) of $1,103 per day for 109 days of noncompliance, totaling $120,227. Id. at 1. For the reasons discussed below, we vacate the ALJ Decision and remand this case for further proceedings consistent with this Decision.

Legal Background

Section 1819 of the Social Security Act (Act) and 42 C.F.R. Part 483 govern SNFs’ participation in the Medicare program. To participate, a SNF must be in substantial compliance with program requirements. 42 C.F.R. § 488.330(b); Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 6 (2000). Substantial compliance means that no identified deficiency places residents at risk of more than minimal harm, and

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noncompliance means lack of substantial compliance. See 42 C.F.R. § 488.301 (defining “deficiency,” “noncompliance,” and “substantial compliance”).

Among the many participation requirements for SNFs are 42 C.F.R. §§ 483.20(k)(3)(i) and 483.25(m)(2). Section 483.20(k)(3) provides:

(3) The services provided or arranged by the facility must—

(i) Meet professional standards of quality; and

(ii) Be provided by qualified persons in accordance with each resident’s written plan of care.

Section 483.25(m) provides:

(m) Medication Errors. The facility must ensure that—

(1) It is free of medication error rates of five percent or greater; and

(2) Residents are free of any significant medication errors.

State health agencies conduct on-site compliance surveys of SNFs to determine whether they meet program participation requirements. Act §§ 1819(g), 1864(a); 42 C.F.R. §§ 488.10, 488.11, 488.110(m), 488.330(a). Surveyors who find substandard care or services prepare, and provide to the SNF and CMS, a Statement of Deficiencies that organizes deficiency findings by alpha-numeric “tags” corresponding to regulatory requirements and CMS guidance. 42 C.F.R. § 488.110(i)(4), (j), (k). Surveyors give each deficiency a “seriousness” designation ranging from “A” (least serious) to “L” (most serious). Donelson Place Care & Rehab. Ctr., DAB No. 3046, at 2 n.2 (2021). Seriousness is a function of the deficiency’s “severity” (whether potential harm, actual harm, or immediate jeopardy) and “scope” (whether “isolated,” a “pattern,” or “widespread”). Id. (citing 42 C.F.R. § 488.404(b)). “Immediate jeopardy” means noncompliance “has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. As relevant to this case, deficiency levels D through F signify no actual harm with a potential for more than minimal harm that is not immediate jeopardy, and deficiency levels G through I signify actual harm that is not immediate jeopardy. State Operations Manual, CMS Pub. 100-07, § 7400.5.1 (table) (Rev. 161, Effective Sept. 23, 2016). In response to a Statement of Deficiencies, the SNF must submit an acceptable plan of correction specifying corrective measures and a timetable for completing them. 42 C.F.R. §§ 488.402(d), 488.408(f). Follow-up surveys re-evaluate the deficiencies cited during the original survey. Id. § 488.110(l).

CMS may impose one or more enforcement “remedies” on a SNF found to be out of substantial compliance. Act § 1819(h); 42 C.F.R. §§ 488.400, 488.402(b)-(c), 488.404, 488.406, 488.408(a)-(e). Available remedies include a per-day CMP. Act § 1819(h)(2)(B)(ii); 42 C.F.R. §§ 488.406(a)(3), 488.430, 488.438(a). For noncompliance posing less than immediate jeopardy, a daily CMP can range from $50 to

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$3,000 per day, adjusted annually for inflation under 45 C.F.R. Part 102; when CMS imposed the CMP at issue in this case, the adjusted range was from $103 to $6,188 per day. Id. §§ 488.408(d)(1)(iii), (2)(ii), 488.438(a)(1)(ii); 45 C.F.R. § 102.3 (table); Adjustment of Civil Monetary Penalties for Inflation, 81 Fed. Reg. 61,538, 61,563 (Sept. 6, 2016) (Interim Final Rule). CMS sets the CMP amount by considering specified factors. 42 C.F.R. §§ 488.404, 488.408(b), (d)(2), (e)(2), 488.438(b), (f). A per-day CMP may accrue “as early as the date that the facility was first out of compliance” and continues until the SNF achieves substantial compliance or the SNF’s provider agreement terminates. Id. §§ 488.440(a)(1), 488.454(a).

Dissatisfied SNFs have several means of redress. A SNF may request an ALJ hearing and appeal an unfavorable ALJ decision to the Departmental Appeals Board (Board), which may “issue a decision or remand the case to an ALJ” with directions for further proceedings. Id. §§ 488.408(g)(1), 498.3(b)(13)-(14), 498.5(a)-(c), 498.88(a)-(b). A facility may ask to participate in an informal dispute resolution (IDR) process to dispute survey findings. Id. § 488.331(a). If CMS imposes a CMP that will be placed in escrow, a facility may request independent informal dispute resolution (IIDR). Id. § 488.431(a).

Case Background²

Petitioner operated a facility in New Bedford, Massachusetts that participated in Medicare as a SNF.³ ALJ Decision at 1; CMS Ex. 2, at 1. This case largely concerns Petitioner’s administration of MS Contin to one resident of Petitioner’s facility, Resident 8. MS Contin tablets are an extended-release form of morphine sulphate for oral use for managing severe pain. CMS Ex. 5, at 1. Resident 8 was a 55-year-old woman admitted to Petitioner’s facility on December 11, 2015, with numerous diagnoses including corticobasal degeneration and chronic pain. ALJ Decision at 8; CMS Ex. 2, at 19; CMS Ex. 3; P. Ex. 15, at 1. Corticobasal degeneration is a neurodegenerative disease characterized by nerve cell loss and atrophy of the cerebral cortex and basal ganglia. P. Ex. 7. A Physician Order on Resident 8’s admission stated: “May crush meds and add to food if not in conflict with crushing guidelines [e]very shift.” ALJ Decision at 9; CMS Ex. 4, at 1. On April 6, 2016, Resident 8’s physician ordered staff to administer one 60 mg tablet and one 15 mg tablet of MS Contin to Resident 8 by mouth three times per day. ALJ Decision at 9; CMS Ex. 4, at 2; see P. Ex. 4, at 14-15.

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I. Applicable facility policies, drug labeling, and professional standards

Petitioner’s nursing staff followed clinical guidelines titled “ 8 Rights of Medication Administration for Nurses,” from the Nursing2012 Drug Handbook (Lippincott Williams & Wilkins, 2012). ALJ Decision at 6; CMS Ex. 17; see CMS Ex. 10. Those “Rights” direct nurses administering medication to check for the right patient, medication, dose, route, time, documentation, reason, and response. CMS Ex. 2, at 18; CMS Ex. 17.

Labeling for MS Contin warned that its misuse can be fatal. CMS Ex. 5, at 1, 3-6, 19; ALJ Decision at 9. The “Dosage and Administration” labeling directs that patients are “to swallow MS CONTIN tablets intact.” CMS Ex. 5, at 1. “Abuse or misuse of” the drug by crushing it “will result in the uncontrolled delivery of morphine and can result in overdose and death.” Id. at 6; see also id. at 3 (crushing MS Contin tablets “can cause rapid release and absorption of a potentially fatal dose of morphine”); id. at 4 (crushing MS Contin tablets “will result in uncontrolled delivery of morphine and can lead to overdose or death”), 13 (taking crushed MS Contin “enhances drug release and increases the risk of overdose and death”). Symptoms of “[a]cute overdosage” can include respiratory depression, “hypotension, and death.” Id. at 14. Other possible adverse reactions include seizures, nausea, “euphoric mood,” and lethargy. Id. at 2, 5, 8, 10.

The Massachusetts Code of Federal Regulations requires licensed practical nurses (LPNs) to “incorporate the prescribed medical regimen into the nursing plan of care.” 244 Mass. Code Regs. 3.04 (2016); CMS Ex. 18, at 2; ALJ Decision at 6.

II. The July 18, 2016 medication error and its immediate aftermath

On July 18, 2016, at approximately 9:15 p.m., a LPN administered MS Contin to Resident 8. ALJ Decision at 10; CMS Exs. 7, 9, 10; P. Ex. 4, at 6-7; P. Ex. 15, at 3-4. The LPN administered three crushed 60 mg tablets, one uncrushed 60 mg tablet, and one uncrushed 15 mg tablet of MS Contin (totaling 255 mg), rather than the one 60 mg tablet and one 15 mg tablet of uncrushed MS Contin (totaling 75 mg) that Resident 8’s physician had ordered. ALJ Decision at 5, 10; CMS Exs. 6, 9; CMS Ex. 10, at 1. The LPN admittedly “realized the error while [she] was signing out [Resident 8’s] medications” and explained that “during this time there was a lot of confusion at the Nurses Station.” CMS Ex. 9; ALJ Decision at 10. Resident 8’s “[v]ital signs obtained after the overdose included a hypotensive blood pressure measurement of 86/46 mmHg.” ALJ Decision at 5; see also id. at 11 & n.11 (citing National Institutes of Health definition of hypotension as blood pressure lower than 90/60 mmHg); CMS Ex. 7.

The LPN notified the physician, who ordered Resident 8 transferred to the hospital emergency room. ALJ Decision at 11; CMS Exs. 7, 10; P. Ex. 4, at 6-7; P. Ex. 15, at 4.

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At the hospital, a physician documented that Resident 8 “feels subjectively euphoric after receiving the medication but is not lethargic and has no evidence of respiratory depression.” CMS Ex. 8, at 3; ALJ Decision at 11. Resident 8 reportedly remained alert but nauseated. CMS Ex. 10, at 1.

The hospital discharged Resident 8 back to Petitioner’s SNF the next morning with a final diagnosis of “Narcotic overdose, accidental or unintentional, initial encounter.” ALJ Decision at 11; CMS Ex. 8, at 3; CMS Ex. 10, at 1. Petitioner’s staff prepared an Incident Report Form and investigated; the LPN who gave the crushed MS Contin to Resident 8 admitted “she did not follow the accepted standards of nursing practice related to medication administration” and voluntarily resigned immediately. CMS Ex. 10, at 1; CMS Ex. 19, at 1; ALJ Decision at 6 n.6. Petitioner periodically monitored Resident 8’s bowel and lung sounds for 72 hours and reviewed medication administration record (MAR) and narcotic book documentations daily for 30 days and weekly for 30 days. CMS Ex. 2, at 18-19; CMS Ex. 10, at 1; CMS Ex. 19, at 1. Petitioner also re-educated nursing staff on the medication administration “Rights.” CMS Ex. 2, at 19; CMS Ex. 10.

III. The October 7, 2016 survey

From October 5 through 7, 2016, the Massachusetts Department of Public Health, Division of Health Care Facility Licensure and Certification (state agency) surveyed Petitioner’s SNF. ALJ Decision at 3; CMS Ex. 1, at 1; CMS Ex. 2; CMS Ex. 16, at 1; CMS Ex. 20, at 2, ¶ 4. The unit manager informed the survey team that staff “were ‘keeping an eye on’ Resident 8 because she had developed seizures a few months prior.” CMS Ex. 20, at 2, ¶ 6. The unit manager recapped the July 18, 2016 incident and reportedly told surveyors that “since the overdose occurred, the Resident has muscle twitches and seizures (stares blankly into space).” CMS Ex. 2, at 7, 21-22. The survey team reviewed Resident 8’s clinical record, the narcotic log, and the Incident Report Form. CMS Ex. 2, at 4-5, 19-20; CMS Ex. 20, at 2-4, ¶¶ 6, 7.⁴

The surveyors interviewed Resident 8, who reported that on July 18, 2016, “a fireman arrived at approximately 10:00 P.M.” and said “that the nurse had given too much medication and [Resident 8] had to go to the hospital.” CMS Ex. 2, at 5-6, 20. Resident 8 also said that “on two other occasions (Resident could not recall the dates), a nurse had crushed the MS Contin,” which Resident 8 had “refused to take . . . because that would be too much medication at once.” Id. Resident 8 reported newly experiencing “muscle twitches and seizure activity” after July 18, 2016. Id. The survey team found from Resident 8’s records that staff also had crushed MS Contin 60 mg tablets on July 4 and September 7 of 2016. CMS Ex. 2, at 6, 21; CMS Ex. 20, at 3, ¶ 7g.

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The survey team also cited noncompliance by Petitioner involving a different individual, Resident 12. CMS Ex. 2, at 7-10. The facility admitted Resident 12 in April 2014 with diagnoses including cerebral vascular accident and tracheal stenosis. Id. at 8. Resident 12 was fed through a gastrostomy feeding tube (G‑tube). Id. Petitioner’s policy called for staff to “[c]heck placement” and to “[f]lush with” 30 cubic centimeters (ccs) of water before and after medication administration via the G-tube. Id. at 8-9. Surveyors found no physicians’ orders for checking the G-tube placement and flushing it with water. Id. at 9. Also, Resident 12 was on a fluid restriction of 500 ccs of water daily and therefore required fluid intake and output monitoring, which Petitioner’s records for June through October 2016 did not document adequately. Id.

On October 21, 2016, the state agency issued Petitioner a Statement of Deficiencies, which cited three D-level deficiencies (Tags F250, F282, and F329) and two more serious G-level deficiencies (Tags F281 and F333), and directed Petitioner to submit a plan of correction. CMS Ex. 2, at 1-2, 10, 13, 18; CMS Ex. 16, at 1.

IV. IDR, revisit survey, and remedies

In response to the Statement of Deficiencies, Petitioner on October 27, 2016 requested IDR, and on October 29, 2016 submitted a Plan of Correction with a stated completion date of November 4, 2016. P. Ex. 1; CMS Ex. 2. The state agency conducted a revisit survey on December 13, 2016. CMS Ex. 1, at 1.

By letter dated January 11, 2017, CMS notified Petitioner that it had returned to substantial compliance effective November 4, 2016. Id. CMS also imposed a $1,103 per-day CMP for 109 days, from July 18, 2016 to November 3, 2016 (totaling $120,227) based on Petitioner’s noncompliance with 42 C.F.R. §§ 483.20(k)(3)(i) (Tag F281) and 483.25(m)(2) (Tag F333) – that is, the G-level deficiencies. ALJ Decision at 3; CMS Ex. 1, at 1, 2. (CMS also barred Petitioner for two years from providing a nurse aide training and competency evaluation program, which Petitioner did not have at the time, so that remedy is not at issue. ALJ Decision at 3 n.4.)

On January 17, 2017, the state IDR committee announced its decision to delete Tag F329 as factually unsupported but to retain the G-level deficiencies (Tags F281 and F333). Id.

V. IIDR, ALJ proceedings, and appeal to the Board

After the IDR committee’s determination, Petitioner sought further relief. On January 25, 2017, Petitioner requested IIDR. P. Ex. 2. On March 7, 2017, Petitioner requested an ALJ hearing concerning the G-level deficiencies, Tags F281 and F333 (while reserving the right to address the other tags if CMS did). ALJ Decision at 3; Req. for Hr’g (RFH) at 1 & n.1. In a letter dated April 21, 2017, the state agency’s IIDR committee notified Petitioner that “the Committee recommended to delete both tags,” but CMS “has

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determined that the deficiencies cited at F281 and F333 shou[l]d remain as written.” P. Ex. 2; ALJ Decision at 13.

In the ALJ proceeding, CMS moved for summary judgment and filed 21 proposed exhibits, which included the written testimony of two proposed witnesses. ALJ Decision at 3; CMS’s Pre-Hr’g Exchange with Incorporated Mot. for Summ. J. & Supporting Mem. of Law (CMS Br. to ALJ). Those witnesses were a state surveyor who had participated in the October 2016 survey and a CMS Chief Survey Branch Manager who had reviewed the Statement of Deficiencies and the documentation the surveyors collected. CMS’s List of Exs. at 2; CMS Ex. 20, at 1-2; CMS Ex. 21, at 1-2.

Petitioner filed briefing opposing summary judgment and 16 proposed exhibits, including two witness declarations. ALJ Decision at 3; P.’s Prehr’g Br. & Reply to CMS’s Mot. for Summ. J. (P. Br. to ALJ). Petitioner’s proposed witnesses were two LPNs who worked at the SNF, including the Unit Manager of Resident 8’s unit at the relevant time. P.’s Proposed Witness & Ex. List at 1; P. Ex. 15, at 1; P. Ex. 16, at 1.

The ALJ allowed a reply by CMS and additional briefing by both parties. ALJ Decision at 3; CMS’s Reply to P.’s Prehr’g Br. & Reply to CMS’s Mot. for Summ. J.; P.’s Resp. to CMS’s Reply to P.’s Prehr’g Br. (P. Reply to ALJ). Both parties requested cross-examination. ALJ Decision at 3-4; P. Br. to ALJ at 5; P. Proposed Witness & Ex. List at 1; CMS’s Req. to Cross-Examine P.’s Witnesses.

Petitioner argued to the ALJ that “there is no factual or legal basis for CMS’s findings of noncompliance or ‘actual harm’ noncompliance following the October 7, 2016 survey, nor for the remedies imposed as the result of those findings.” RFH at 2. Petitioner did not dispute that a medication error occurred on July 18, 2016, but disputed whether the error caused actual harm to Resident 8. P. Br. to ALJ at 2, 10-13; P. Reply to ALJ at 7. Petitioner asserted that Resident 8’s symptoms after the medication error resulted not from an overdose but from the resident’s underlying neurologic condition. P. Br. to ALJ at 13-14. Petitioner also contended there is no factual or legal basis for CMS’s determination of an extended period of noncompliance and the resulting “large” CMP because Petitioner’s staff immediately recognized that a medication error had occurred and responded appropriately. Id. at 10-12, 15-16. Petitioner further complained that CMS rejected the IIDR panel’s recommendation without offering even “minimal justification.” Id. at 1-2, 16; see also P. Reply to ALJ at 2-6.

CMS argued in response that Petitioner failed to comply with regulations concerning professional standards of quality and medication administration when administering medications to Resident 8 on July 4, July 18, July 23, August 5, and September 7 of 2016. CMS Br. to ALJ at 10-19. CMS further alleged that the July 18, 2016 medication error caused Resident 8 actual harm. Id. at 14-15. CMS did not present any factual discussion or legal argument concerning Resident 12 (the second resident whose care the

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state surveyors detailed under Tag F281 in the Statement of Deficiencies) or concerning the D-level deficiencies (Tags F250, F282, and F329). CMS asserted that the amount and duration of the CMP imposed were reasonable. Id. at 19-21.

On April 2, 2019, the ALJ issued a written decision. ALJ Decision. The ALJ did not expressly admit or exclude any of the parties’ exhibits as evidence. Id. at 3. After acknowledging that both parties submitted written witness testimony and requested cross-examination, the ALJ stated, “As I rely on undisputed material facts in granting CMS’s motion for summary judgment, a hearing for the purpose of cross-examination of witnesses is unnecessary.” Id. at 3-4. Concerning Tag F281, the ALJ determined that, “[i]n the absence of any argument by Petitioner regarding this deficiency, I uphold CMS’s determination that Petitioner did not substantially comply with 42 C.F.R. § 483.20(k)(3)(i).” Id. at 6. Regarding Tag F333, the ALJ determined that “Petitioner committed a significant medication error by administering an overdose of MS Contin and administering crushed MS Contin, and its repeated medication errors could have had serious consequences,” therefore Petitioner “did not substantially comply with 42 C.F.R. § 483.25(m)(2).” Id. at 13. The ALJ granted CMS summary judgment on the grounds that there was no genuine dispute of material fact, the facility was not in substantial compliance with Medicare participation requirements, and the CMP was reasonable. ALJ Decision at 1, 17.

Petitioner timely requested Board review of the ALJ Decision. Request for Review (RR). CMS submitted a response brief and Petitioner replied. CMS Resp.; P. Reply. On July 5, 2024, Petitioner moved anew for remand and a refund of its CMP based upon the Supreme Court decision of Securities and Exchange Commission v. Jarkesy, 144 S. Ct. 2117 (2024). P.’s Mot. for Remand, & for Refund of CMP (P.’s Jarkesy Mot.). By letter dated July 22, 2024, the Presiding Board Member directed CMS to file a response to Petitioner’s motion within 30 days and allowed Petitioner to reply within 15 days after receiving CMS’s response. Req. for CMS Resp. & Not. of Opportunity to Reply at 1. CMS filed a timely opposition to Petitioner’s motion and Petitioner filed a timely reply. Opp. to Mot. for Remand, & for Refund of CMP (CMS’s Jarkesy Opp.); P.’s Reply to CMS’s Opp. to P.’s Mot. for Remand, & for Refund of CMP (P.’s Jarkesy Reply).

We address in this Decision both Petitioner’s original grounds for appeal and Petitioner’s new arguments concerning Jarkesy. Regarding Petitioner’s original grounds for appeal, we address only Tags F281 and F333, which CMS identified as the only basis for the CMP. See CMS Ex. 1, at 1 (January 11, 2017 letter from CMS notifying Petitioner that “CMS is imposing . . . a CMP . . . based on the non-compliance described at Federal Deficiency Tags” F281 and F333). As explained below, we vacate the ALJ’s entry of summary judgment and remand based on Petitioner’s original arguments, but reject Petitioner’s subsequent contentions concerning Jarkesy.

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Standard of Review

The Board reviews de novo the legal questions of whether a genuine dispute of material fact exists and if summary judgment is appropriate. Timothy Onyiuke, M.D., DAB No. 3092, at 13 (2023); Virginia Highlands Health Rehab. Ctr., DAB No. 2339, at 4 (2010); Guidelines - Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s Participation in the Medicare and Medicaid Programs (Guidelines), (last visited Oct. 2, 2024), https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/participation/index.html.

Summary judgment is appropriate when the record shows no genuine dispute of material fact and the moving party’s entitlement to judgment as a matter of law. Rehab. Ctr. at Hollywood Hills, DAB No. 3052, at 11 (2021). To overcome an adequately supported motion for summary judgment, the non-moving party may not rely on denials in its pleadings or briefs, but must furnish evidence of a dispute concerning a material fact that, if proven, would affect the outcome of the case under governing law. Medford Care Ctr., DAB No. 3040, at 11 (2021). Evaluating a summary judgment motion requires viewing the entire record in the light most favorable to the nonmoving party, drawing in that party’s favor all reasonable inferences from the evidence. Id.; Ramarao Kaza, M.D. & Ramarao Kaza, M.D., P.C., DAB No. 2924, at 8 (2019); Oak Ridge Ctr., DAB No. 2913, at 8 (2018). A decision granting summary judgment must not rely on credibility determinations or weighing of evidence. Rehab. Ctr. at 11; Medford at 11, 13; Fireside Lodge Ret. Ctr., DAB No. 2794, at 6 (2017). The Board may vacate a summary judgment and remand for further proceedings when the ALJ did not view the evidence in the light most favorable to the non-movant, did not draw all reasonable inferences in favor of the non-movant, and erroneously concluded that no material facts were in dispute. 42 C.F.R. § 498.88(a); Medford at 11.

Analysis

Before the Board, Petitioner argues the ALJ Decision “is replete with factual and legal errors and must be set aside.” RR at 1. Petitioner asserts it “plainly is not true” that no material facts were in dispute, so “the ALJ should have denied CMS’s motion.” Id. at 6. Petitioner argues the ALJ should have let Petitioner cross-examine CMS’s witnesses. Id. at 5, 8, 22-23, 30. Petitioner claims the ALJ improperly drew inferences against Petitioner and found additional noncompliance that CMS did not even allege. Id. at 3-4, 8, 16, 23. Petitioner objects to the ALJ’s entry of summary judgment against Petitioner without addressing its arguments concerning IIDR. Id. at 2, 5, 22-28. Petitioner also challenges the ALJ’s upholding of the amount and duration of the CMP. Id. at 3, 30, 33.

CMS counters that the ALJ did not commit legal error by granting summary judgment. CMS Resp. at 2-10. CMS claims that the ALJ identified sufficient undisputed material facts to support a conclusion that Petitioner was not in compliance with 42 C.F.R.

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§§ 483.20(k)(3)(i) and 483.25(m)(2). Id. at 7-10. CMS argues it had regulatory discretion to reject the IIDR recommendation, id. at 10-13, and the ALJ appropriately upheld the CMP amount and duration as reasonable, id. at 13-15.

Concerning Jarkesy, Petitioner argues the Supreme Court “held that where, as here, an agency imposes a CMP for regulatory noncompliance, such a CMP is equivalent to a common law remedy, and thus the Seventh Amendment requires that a jury, not an ALJ, must consider a challenge to that remedy in the first instance.” P.’s Jarkesy Mot. at 1. “Accordingly,” Petitioner asserts, “this appeal proceeding was void ab initio, and so the Board should,” among other things, “hold that under Jarkesy the ALJ did not have constitutional authority to conduct this review.” Id. at 3; see also P.’s Jarkesy Reply at 1 (“[T]his proceeding is void ab initio.”). Petitioner further contends that “if, as Jarkesy holds, the due process necessary in a CMP appeal is a jury trial, then CMS must meet that constitutional command and return the ‘escrowed’ [CMP] funds pending such review.” P.’s Jarkesy Mot. at 3.

CMS counters that “Jarkesy did not rule that the Medicare administrative appeal regime,” including the authorized regulations for collecting CMPs and escrowing them during appeals, “is unconstitutional.” CMS Jarkesy Opp. at 1. “Thus,” CMS states, “Jarkesy does not invalidate prior Board decisions or their reasoning that this type of constitutional challenge may not be heard before an ALJ or the DAB.” Id. CMS considers Petitioner’s refund request to be equally “unreviewable” in this forum and therefore argues “the motion should be denied in its entirety.” Id. at 2-3.

We vacate the ALJ’s entry of summary judgment for CMS and remand for further proceedings due to the ALJ’s misapplication of the standards for summary judgment. We conclude that Petitioner’s arguments based on Jarkesy provide no additional basis for remand and no basis for refunding the CMP; therefore, we deny Petitioner’s motion for relief based upon Jarkesy. We discuss below the reasoning supporting these determinations.

I. The ALJ erred in granting summary judgment concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.25(m)(2).

A. The record contains genuinely disputed material facts.

Petitioner’s alleged noncompliance with 42 C.F.R. § 483.25(m)(2) formed the basis for Tag F333. CMS Ex. 2, at 18. Section 483.25 provides generally that “[e]ach resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, in accordance with the comprehensive assessment and plan of care.” Subsection 483.25(m)(2) requires a facility to “ensure that . . . [r]esidents are free of any significant medication errors.” CMS has stated that a “significant medication error is judged by a

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surveyor” using “three factors,” specifically drug category, resident condition, and frequency of error. Medicare & Medicaid; Requirements for Long Term Care Facilities, 56 Fed. Reg. 48,826, 48,853 (Sept. 26, 1991) (Final Rule).

The ALJ based summary judgment for CMS concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.25 on six allegedly undisputed factual findings:

1. Resident # 8 had a physician’s order prescribing 75 mg of MS Contin (one 60 mg tablet and one 15 mg tablet) by mouth three times daily in the morning, afternoon, and nighttime;
2. MS Contin’s labeling includes boxed warnings that patients should be instructed to take tablets whole to avoid exposure to a potentially fatal dose of morphine and that crushing MS Contin tablets can cause the rapid release and absorption of a potentially fatal dose of morphine;
3. At approximately 9:15 pm on July 18, 2016, a nurse administered three crushed 60 mg tablets of MS Contin to Resident # 8, along with one uncrushed 60 mg tablet of MS Contin and one uncrushed 15 mg tablet of MS Contin, for a total dose of 255 mg of MS Contin;
4. Vital signs obtained after the overdose included a blood pressure measurement of 86/46 mmHg, which is lower than the threshold for a hypotensive blood pressure reading, and an on-call physician ordered that she be transferred to a hospital by ambulance;
5. Resident # 8 reported a “euphoric mood” at the hospital, and the hospital physician provided a final diagnosis of an accidental narcotic overdose;
6. On July 23, 2016, a different staff member administered crushed MS Contin to Resident # 8.

ALJ Decision at 8 (emphasis omitted); see also id. at 5. From these findings the ALJ further determined that, “on at least two occasions,” on July 18 and 23 of 2016, “Petitioner administered crushed MS Contin to Resident # 8 in contravention of the boxed warning on the medication’s labeling.” Id. at 5. The ALJ ruled:

Petitioner committed a significant medication error when it crushed MS Contin and administered more than three times the scheduled dose of MS Contin on July 18, 2016, and when it crushed and administered the MS

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Contin on July 23, 2016, only days after Resident # 8 was transferred to the hospital due to an overdose of the same medication.

Id. at 12.

Yet material facts concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.25(m)(2) were in dispute. Of the three CMS-specified factors for assessing the existence of a significant medication error (drug category, resident condition, and frequency of error), Petitioner challenged at least two. See 56 Fed. Reg. at 48,853. Petitioner acknowledged, regarding the drug category factor, “that a narcotic overdose potentially can be significant,” RFH at 5, but contested both Resident 8’s condition and the frequency of error. P. Br to ALJ at 7-16 (citing P. Exs. 3-14).

Petitioner generated a genuine factual dispute as to whether Resident 8’s condition left “the resident compromised in such a way that he or she could not easily recover from the error,” which is material to assessing whether a significant medication error occurred. See 56 Fed. Reg. at 48,853. Petitioner argued that Resident 8 was under physician orders to receive “significant doses of MS Contin” for months before the July 18, 2016 incident, and “Petitioner’s witnesses note that this large a dose can cause a patient to develop resistance to the effects of the drug.” P. Br. to ALJ at 9; see P. Ex. 15, at 3. Petitioner countered CMS’s evidence that Resident 8 did not “easily recover from the error” with evidence that the alleged long-term consequences to Resident 8, including seizures, were attributable to the resident’s underlying medical conditions instead. See, e.g., P. Ex. 4, at 6 (July 19, 2016 Progress Note stating that Resident 8 returned from hospital “with no ill effects from medication”); P. Ex. 8, at 1 (Interdisciplinary Progress Notes from hospice, bearing December 11, 2015 fax transmittal date, documenting that Resident 8 already was having “frequent muscle spasms” before admission to Petitioner’s facility); P. Ex. 11 (October 25, 2016 examining physician’s statement that Resident 8 “has a long standing history of taking high doses of MS Contin,” and after return from hospitalization showed “no ill effects from the extra dose of medication”); P. Ex. 14 (October 27, 2016 Physician’s Progress Note stating physician’s “agree[ment] with corticobasal degeneration as probable cause of [Resident 8’s] symptoms and unlikely that MS Contin med error (additional single dose of 180 mg more than scheduled dose) contributed to her current neurological complaints.”); P. Ex. 15, at 6 (written testimony of Unit Manager that “this error seems to have caused no actual harm to” Resident 8).

Petitioner also generated a genuine factual dispute as to the frequency of error, which is another fact material to assessing whether a significant medication error occurred. See 56 Fed. Reg. at 48,853. Petitioner argues the ALJ’s “Finding #6, which is based solely on the ALJ’s own inference, is not consistent with the evidence.” RR at 6. Petitioner explains that “the ALJ supported her summary decision with an inference against Petitioner that all of the Resident’s medications, including MS Contin, were administered crushed” on July 23, 2016, “and that inference is inconsistent with other undisputed

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evidence.” Id. at 15 n.8. Petitioner claims the ALJ thus improperly based summary judgment for CMS on the ALJ’s own interpretation of “evidence not described in the Statement of Deficiencies or discussed in any CMS testimony,” and “the inferences she drew against Petitioner from her own interpretation of that evidence.” Id. at 3-4. We consider Petitioner’s arguments persuasive on this point, as further discussed below.

B. The ALJ erred by not considering the entire record in the light most favorable to Petitioner and not allowing cross-examination.

The standards for summary judgment require an ALJ to consider the entire record and draw all reasonable inferences in the non-movant’s favor. Medford at 11. Accordingly, “in deciding whether a facility has defeated an adequately supported motion for summary judgment,” the Board considers “whether a rational trier of fact, viewing the entire record in the light most favorable to the facility, and drawing all reasonable inferences in its favor,” could find its presentation sufficiently persuasive. Heritage House of Marshall Health & Rehab., DAB No. 3035, at 8 (2021) (emphasis added).

The ALJ Decision does not reflect appropriate consideration of the entire record, including the parties’ testimonial evidence, in the light most favorable to Petitioner. It is true that we “will not presume that the ALJ ‘ignored’ evidence merely because the ALJ did not specifically discuss it.” Cheryl Ackerman, MD, DAB No. 3050, at 13 (2021). However, Petitioner proffered testimony from two nurses with personal knowledge of relevant events, which the ALJ neither cited nor expressly excluded. From reading the ALJ Decision, it is impossible to determine whether the ALJ deemed Petitioner’s testimonial evidence to be inadmissible or merely unpersuasive, and in either case, why. The Board’s de novo review of this evidence does not satisfy us that it is necessarily inadmissible, irrelevant, or completely without persuasive force.

When, as here, an ALJ finds there are no disputed material facts without ruling on which exhibits are admissible and receiving them into the record, “[t]he Board has long held that this approach to summary judgment is problematic.” Medford at 18; see Ill. Knights Templar Home, DAB No. 2274, at 5-6 (2009). An ALJ addressing a summary judgment motion for which evidence was proffered in support or in opposition must consider all the evidence in determining whether a genuine dispute of material fact exists. Ill. Knights at 6. In doing so, the ALJ need not necessarily admit the evidence into the record. Medford at 18. “This analysis, however, presumes there are no outstanding evidentiary objections and no questions about the admissibility of exhibits proffered by the parties.” Id.

The parties raised no evidentiary objections, but the admissibility of each exhibit is not beyond question, and several incomplete exhibits expose factual gaps that the parties were entitled to explore through cross-examination. The declaration of surveyor Lisa Stors asserts, “My statements regarding [Petitioner’s] noncompliance are more thoroughly set forth in the attached Addendum,” which is not attached. CMS Ex. 20, at

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5, ¶ 9. A Witness Statement Form containing the administering LPN’s handwritten account of the July 18, 2016 medication incident ends mid-sentence (indicating that at least one page is missing) and lacks the LPN’s signature and date “acknowledging accuracy of facts reported and documented.” CMS Ex. 9. An Incident Report Form for the July 18, 2016 medication incident similarly contains only pages “1 of 3” (ending with an unfinished sentence) and “3 of 3.” CMS Ex. 19. The ALJ was required to consider these exhibits as components of the entire record, and weighed at least two of these fragmentary exhibits as sufficient to support summary judgment against Petitioner and for CMS, despite their material factual gaps. See ALJ Decision at 6 n.6, 10 (quoting CMS Exs. 9 and 19). Those holes in the record were suitable for exploration through the cross-examination that both parties had requested.

Yet the ALJ denied the parties the opportunity they requested for cross-examination, contrary to established legal principles. “The right to a hearing in these matters is a statutory one,” so the Part 498 regulations “generally contemplate that the ALJ will hold an oral hearing at which witnesses will testify and may be cross-examined (unless the parties have waived their right to a hearing in writing).” Vandalia Park, DAB No. 1939, at 5 (2004); see also Lebanon Nursing & Rehab. Ctr., DAB No. 1918, at 3 (2004) (“The hearing procedures in Subpart D of Part 498 generally contemplate that the ALJ will fix a time for an oral hearing at which witnesses will testify and may be cross-examined (unless the parties have waived their right to a hearing in writing).”). It is a “fundamental principle that short-circuiting the right to a hearing is disfavored.” Vandalia at 20.

Petitioner did not waive its right to a hearing and properly requested cross-examination of CMS’s witnesses. The ALJ acknowledged that, “[i]n compliance with my Pre-Hearing Order, the parties submitted the written direct testimony of several witnesses” and also “requested an opportunity to cross-examine the opposing party’s witnesses.” ALJ Decision at 3-4. The ALJ’s Pre-Hearing Order confirmed that “Petitioner has the right to cross-examine any witness for whom CMS offers written direct testimony,” provided that “Petitioner must state in its brief if it desires the opportunity to cross examine any witness.” Pre-Hr’g Order at 6. Petitioner did so. P. Br. to ALJ at 5; see also P. Proposed Witness & Ex. List at 1. The Pre-Hearing Order further informed the parties that “[a]n in-person hearing will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine the witness or witnesses.” Pre-Hr’g Order at 7. It is undisputed that CMS filed admissible, written direct testimony of two witnesses and Petitioner asked to cross-examine them; therefore, Petitioner presumptively was entitled to an in-person hearing and cross-examination.

The ALJ acknowledged but denied Petitioner’s properly filed request for cross-examination. “[O]nce cross-examination is requested, the ALJ must either grant the request or explain why cross-examination is not required.” Garden City Med. Clinic, DAB No. 1763, at 11 (2001). The ALJ’s only explanation for denying Petitioner’s request for cross-examination was that, “[a]s I rely on undisputed material facts in

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granting CMS’s motion for summary judgment, a hearing for the purpose of cross-examination of witnesses is unnecessary.” ALJ Decision at 4.

The ALJ’s stated basis for denying Petitioner an oral hearing was erroneous in this case. We recognize that the “requirement affording the opportunity for an oral hearing is not contravened by a summary judgment if there are no genuine issues of material fact.” Lebanon at 3. However, material facts were in dispute; Petitioner stipulated “that a nurse did make a medication error,” but disputed “the nature, severity and effect of that error.” RFH at 3; P. Br. to ALJ at 7; see also P. Reply to ALJ at 8 (“[E]ven assuming that a nurse made a medication error, the effect of that error . . . obviously is in dispute.”). As both CMS and Petitioner recognize, 42 C.F.R. §483.25(m) requires facilities to be free of “significant” medication errors, but not free from any medication errors whatsoever. See 56 Fed. Reg. at 48,853 (acknowledging that “medication errors vary in their significance (e.g., from significant errors such as a double dose of a potent cardiac drug like digoxin to a small error in the dose of an antacid like milk of magnesia)”); P. Br. to ALJ at 10 n.4 (“Section 483.25(m)(1) . . . specifically recognizes that while all actual medication errors are undesirable, some are inevitable. . . .”). Petitioner presented argument and evidence that the July 18, 2016 medication error involving Resident 8 was less significant than CMS contended. Id. at 8-13 (citing P. Exs. 4-16). As we explain below, Petitioner also disputed the seriousness of the alleged noncompliance and thus the reasonableness of the CMP. P. Reply to ALJ at 1.

A facility can overcome CMS’s prima facie case not only “by proving facts that affirmatively show substantial compliance,” but also “by rebutting the evidence upon which [CMS’s] case rests,” and Petitioner sought to do so here. See Evergreene Nursing Care Ctr., DAB No. 2069, at 7 (2007). Petitioner specifically challenged the inferential conclusions and credentials of CMS’s witnesses. See P. Br. to ALJ at 6-7 (disputing surveyors’ “conclusions that they presumably extrapolated from the few pages of resident records that CMS has produced”); id. at 14 (challenging qualifications of surveyor and CMS witness L. Stors, as a “social worker and not a nurse,” to “know the likely specific effects of certain medications at certain doses on specific patients”). As CMS has acknowledged, “Petitioner argues against the credibility of Surveyor Stors’ Declaration.” CMS Reply to ALJ at 7 n.5. Summary judgment “is not the proper stage for determination of credibility.” Vandalia at 11. When, as here, the non-governmental party clearly has “disputed the facts alleged in the affidavits provided by [CMS] as support for its position and raised questions about the affiants’ qualifications and the data upon which they based their opinions,” the material facts are disputed and a hearing is required. Garden City at 11. Board decisions that have rejected analogous defenses after a hearing are distinguishable. See, e.g., Blossom S. Nursing & Rehab. Ctr., DAB No. 2578, at 22 (2014) (holding, where petitioner claimed dietician was “unqualified to opine on the effects of a narcotic substance on a resident,” that after an evidentiary hearing the ALJ “could reasonably determine that [the dietician] was qualified” to opine on that topic); Residence at Salem Woods, DAB No. 2052, at 8-9 (2006) (concluding that “the

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ALJ committed no error in admitting or relying on the surveyors’ testimony” at evidentiary hearing, as “CMS produced sufficient evidence that the surveyors were qualified to testify about the matters in dispute”).

We hold in this case, as we have held in comparable circumstances, that “[o]verall, [Petitioner] raised questions about the credibility of the surveyors’ assessment and reporting of the scope and impact of the problematic conditions sufficient to justify permitting [Petitioner] to test those witnesses in cross-examination.” Franklin Care Ctr., DAB No. 2869, at 11 (2018). This is true “whether or not the ALJ ultimately concludes that the questions have any merit at all.” Id. “Summary judgment can,” and in this case did, “deprive the decision-maker of a fully-developed record and the opportunity to observe and question witnesses, as well as presenting the risk of impairing the rights of an adversely affected party.” See Vandalia at 20.

The ALJ thus erred by granting summary judgment without considering the entire record in the light most favorable to Petitioner and without granting cross-examination.

C. The ALJ erred by drawing factual inferences against Petitioner.

The record presents a genuine factual dispute as to whether, after the July 18, 2016 incident, Petitioner committed a “repeated” significant medication error on July 23, 2016. See ALJ Decision at 13. The Statement of Deficiencies did not allege any medication error, significant or otherwise, on July 23, 2016. The state surveyors stated “the narcotic log confirmed that MS Contin ER 60 mg tablet was crushed in error on 2 occasions” other than July 18, 2016, on “7/4/16 and 9/7/16” – but not July 23, 2016. CMS Ex. 2, at 4, 6, 21. CMS alleged Petitioner actually administered MS Contin overdoses to Resident 8 only on July 18 and August 5 of 2016 – but not July 23, 2016. CMS Br. to ALJ at 11. Petitioner disputed CMS’s interpretation of “several entries” in Resident 8’s MAR, denied that they proved a deficient practice or supported the sanction, and offered an alternative explanation of the evidence. P. Br. to ALJ at 10 n.4. The ALJ rejected Petitioner’s factual defense even while noting that, “[t]o the extent that Petitioner disputes other medication errors cited by CMS, I agree with Petitioner that CMS has not demonstrated medication errors occurred on dates other than July 18 and 23, 2016.” ALJ Decision at 12 n.12. In reaching that conclusion, the ALJ necessarily weighed evidence that was susceptible to different inferences.

The equivocal nature of the evidence on the frequency of medication errors is apparent from the varying interpretations that the surveyors, parties, and ALJ gave to this evidence. For example, the state agency surveyors identified no medication errors by Petitioner in August 2016. CMS Ex. 2, at 4, 6, 21; CMS Ex. 20, at 2-4. However, CMS’s Chief Survey Branch Manager testified to MS Contin dosage errors by Petitioner affecting Resident 8 on both July 18 and August 8 of 2016. CMS Ex. 21, at 3. CMS then argued from the MAR that “the record supports a reasonable inference that Petitioner

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failed to correct its noncompliance with federal regulations given that its staff administered an additional overdose on August 5, 2016,” not August 8, 2016. CMS Br. to ALJ at 2; see id. at 12 (“Petitioner’s records further indicate that on August 5, 2016, Petitioner’s staff again administered an overdose of MS Contin to Resident 8.”) (citing CMS Ex. 6, at 2). Yet the ALJ found no overdose occurred on August 5, 2016, but instead that the MAR “indicates that Petitioner ‘dropped’ the medication and wasted it” rather than administering it to Resident 8 that day. ALJ Decision at 12 n.12.

The ALJ committed prejudicial error by drawing inferences against Petitioner from this ambiguous body of evidence to find that Petitioner administered crushed MS Contin to Resident 8 on both July 18 and July 23 of 2016. It is indeed undisputed that on July 23, 2016, Petitioner’s nursing staff recorded a Progress Note that Resident 8 received “‘[m]eds crushed in applesauce with thin liquids without difficulty.’” CMS Br. to ALJ at 7, ¶ 16 (citing CMS Ex. 14); see P. Ex. 4, at 4. Yet the inference that the crushed meds Petitioner administered on July 23, 2016, necessarily included crushed MS Contin is not the only available and reasonable inference from the record evidence.

“An ALJ must consider whether the record taken as a whole could lead a rational trier of fact to find for the non-moving party, but here the ALJ did not discuss evidence that tends to undercut the inferences she drew.” Pleasant View Ctr., DAB No. 2488, at 11 (2012). It is undisputed that on admission, Resident 8 had a physician’s order permitting Petitioner’s staff to “crush meds and add to food if not in conflict with crushing guidelines,” and that the subsequent April 6, 2016 physician’s orders for oral administration of MS Contin did not countermand that prior order. See CMS Br. to ALJ at 3 (citing CMS Ex. 4, at 1); CMS Ex. 4, at 2. Accordingly, record evidence shows that Resident 8 received medications “crushed in applesauce” both before and after the April 6, 2016 physician’s orders for MS Contin. CMS Ex. 14 (Progress Note for July 23, 2016); P. Ex. 4, at 17, 22 (Progress Notes for February 18, 2016, and March 3, 2016). The MAR shows that on July 23, 2016, Petitioner administered all of Resident 8’s MS Contin dosages “PO,” meaning orally. CMS Ex. 6, at 2. One possible inference from this evidence is that Petitioner’s staff administered the MS Contin orally by crushing it and mixing it into applesauce, but another possible inference is that staff administered the MS Contin orally in tablet form and the other medications crushed in applesauce. See Hanover Hill Health Care Ctr., DAB No. 2507, at 11, 13 (2013) (discussing evidence that facility’s nurses were authorized to, and did, offer medications as whole pills along with applesauce to assist with swallowing).

As Petitioner summarizes, the July 23, 2016 nursing note on which the ALJ relied “do[es] not say one way or the other whether those crushed medications included MS Contin, and that inference – against Petitioner – would seem to be inconsistent with otherwise undisputed evidence that the Resident usually took all of her medications crushed except MS Contin.” RR at 15. Furthermore, Petitioner presented nursing Progress Notes for Resident 8 on July 23 and 24 of 2016 that documented no hypotensive blood pressure or

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euphoric mood, such as the ALJ specifically found to be undisputed evidence that Petitioner had administered an MS Contin overdose on July 18, 2016. P. Ex. 4, at 4. Drawing negative inferences against a party “is not proper on summary judgment if the party has offered other evidence (e.g., records) that could cause a reasonable person to conclude that there is a material dispute of fact,” and Petitioner has offered such evidence in this case. See Kingsville Nursing & Rehab. Ctr., DAB No. 2234, at 9 (2009).

The ALJ erred further by inferring an MS Contin overdose on July 23, 2016 that CMS did not even allege. See CMS Br. to ALJ at 11 (distinguishing Petitioner’s “medication errors when administering overdoses of MS Contin to Resident 8 on July 18, 2016 and August 5, 2016” from Petitioner’s “crushing or chopping” of Resident 8’s MS Contin without administering it on dates including July 23, 2016); id. at 15-16 (alleging Petitioner’s “staff administered overdoses of MS Contin to Resident 8 on July 18, 2016 and August 5, 2016,” not July 23, 2016); id. at 18 (stating that after the July 18, 2016 incident, Petitioner “administered a second overdose on August 5, 2016,” not July 23, 2016). “Factual allegations on which CMS did not rely as undisputed in moving for summary judgment . . . cannot fairly be relied on as a basis for granting summary judgment.” St. Catherine’s Care Ctr. of Findlay, Inc., DAB No. 1964, at 27 (2005); see also Rehabilitation Ctr. at 13 (stating that ALJ, without due notice to petitioner, “based her decision in part on grounds not identified in CMS’s summary judgment motion,” so Board was “disinclined for that reason to uphold a grant of summary judgment reliant on those grounds”); Columbia Care & Rehab. Ctr., DAB No. 2348, at 13 (2010) (“An ALJ may not grant summary judgment on a ground not alleged by the moving party without providing adequate notice,” so “[w]e therefore remand the case to the ALJ for further proceedings”); Venetian Gardens, DAB No. 2286, at 2, 4-5 (2009) (stating that, in granting CMS summary judgment “on grounds independent of those on which CMS relied in its motion,” and “independently formulating his bases for summary judgment,” ALJ “failed to follow applicable summary judgment standards”).

Even if undisputed record facts supported a finding that Petitioner committed a significant medication error on July 18, 2016, we could not disregard the ALJ’s Finding #6 that Petitioner committed a second significant medication error on July 23, 2016, as an immaterial finding or as harmless error. The ALJ’s finding of “at least two occasions” of significant medication errors was integral to the ALJ’s noncompliance determination based on “repeated medication errors.” See ALJ Decision at 5, 13. The ALJ “agree[d] with Petitioner that CMS has not demonstrated medication errors occurred on dates other than July 18 and 23, 2016.” Id. at 12 n.12. Thus, the existence of a genuine dispute of material fact regarding what occurred on July 23, 2016, necessarily creates a genuine dispute of material fact whether Petitioner in fact committed “repeated medication errors” that would support the ALJ’s conclusion of Petitioner’s noncompliance with 42 C.F.R. § 483.25(m)(2). We therefore must remand the ALJ Decision in its entirety. As guidance on remand, we observe that CMS presented no authority, and we know of none, for the proposition that Petitioner violated section 483.25(m)(2) even when discarding an

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erroneously crushed MS Contin dose rather than administering it (or attempting to administer it) to a resident. An erroneously crushed MS Contin tablet that an SNF safely discards without offering it to a patient to ingest does not produce or risk any adverse outcome for any patient, and therefore would not appear to fall within the intended ambit of the regulation. See 56 Fed. Reg. at 48,853 (describing section 483.25(m)(2) as setting an “outcome-oriented standard” intended to reduce medication error rates).

This case is comparable to Pleasant View, DAB No. 2488, which vacated summary judgment against a long-term care facility on several grounds. In Pleasant View, as in this case, the ALJ granted summary judgment in favor of CMS on a different set of facts than those that CMS asserted. Id. at 7. In Pleasant View, as in this case, the petitioner argued that the situation that was the focus of survey findings was “a one-time aberration.” Id. at 19; compare P. Br. to ALJ at 15 (“[T]he mere fact that an isolated error occurs is not sufficient to infer the existence of a ‘systemic’ or continuing problem with medication administration.”); RR at 16 (contending that any medication error on July 18, 2016 “was isolated” and did not require “‘systemic’ correction”). As in Pleasant View, we consider this case appropriate for remand because “facility records were subject to more than one interpretation and material facts remained in dispute,” which the ALJ erroneously resolved by inferences against the petitioner. Pleasant View at 18.

The ALJ thus erroneously entered summary judgment in CMS’s favor despite genuinely disputed material facts concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.25(m)(2).

II. The ALJ erred in granting summary judgment concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i).

Petitioner’s alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i) formed the basis for Tag F281. CMS Ex. 2, at 2. Section 483.20(k) requires a “comprehensive care plan for each resident that includes measurable objectives and timetables to meet a resident’s medical, nursing, and mental and psychosocial needs that are identified in the comprehensive assessment.” Section 483.20(k)(3)(i) requires that “[t]he services provided or arranged by the facility must . . . [m]eet professional standards of quality.”

The ALJ determined that, “[i]n the absence of any argument by Petitioner regarding this deficiency, I uphold CMS’s determination that Petitioner did not substantially comply with 42 C.F.R. § 483.20(k)(3)(i).” ALJ Decision at 6. As support for that determination, the ALJ itemized evidence concerning the July 18, 2016 incident, including that the treating LPN admitted not having followed in that instance the accepted standards of nursing practice related to medication administration. Id. at 6 & n.6 (citing CMS Exs. 10 and 19). The ALJ summarized that Petitioner “does not argue in its briefing that it substantially complied with” the regulation or dispute that Petitioner “failed to comply with its own policy regarding professional standards of quality.” Id. at 6.

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However, material facts concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i) were in dispute. As the ALJ correctly stated, the record contains reports that the treating LPN admitted having not followed the relevant professional standards for medication administration on July 18, 2016. ALJ Decision at 6 & n.6; CMS Ex. 10, at 1; CMS Ex. 19, at 1. “As the Board has explained, for the purpose of evaluating a facility’s compliance with the Medicare and Medicaid participation requirements, the facility acts through its staff and cannot dissociate itself from the consequences of its employees’ actions.” Springhill Senior Residence, DAB No. 2513, at 14 (2013). Nevertheless, as CMS recognized, “Petitioner contends that it acted in accordance with professional standards of quality when it immediately addressed the situation.” CMS Br. to ALJ at 17. Petitioner argued this point and presented evidence tending to support it. See, e.g., RFH at 4 (arguing that “the nurse recognized her error immediately; the matter was reported to an on-call physician; and the Resident’s condition was monitored closely (with no signs of overdose)”); P. Br. to ALJ at 2 (arguing that “the evidence shows that the Center’s staff immediately recognized and responded appropriately to the error”); P. Ex. 4, at 6-7; P. Ex. 10; P. Ex. 15, at 4-5; P. Ex. 16. Moreover, the surveyors cited noncompliance with section 483.20(k)(3)(i), and Petitioner disputed that citation, based on Petitioner’s care for another resident – Resident 12 – as well. CMS did not mention Resident 12 in its briefing, but did present as an exhibit the Statement of Deficiencies, which asserts facts about Resident 12 as support for Tag F281. See CMS Ex. 2, at 7-10. CMS also reportedly determined “that the deficiencies cited at F281 and F333 shou[l]d remain as written.” P. Ex. 2 (emphasis added). As Petitioner notes, it presented argument and proffered evidence before the ALJ, which “the ALJ did not address,” that Tag F281, as it related to Resident 12, “was not factually accurate.” RR at 7 n.4; see RFH at 2 n.2; P. Br. to ALJ at 3 n.1.

The Board has held summary judgment on alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i) erroneous where, as here, the ALJ “drew negative inferences against the non-movant,” which “should have [had] an opportunity to rebut [CMS’s] prima facie case” and “raised genuine disputes of material fact.” NMS Healthcare of Hagerstown, LLC, DAB No. 2803, at 15, 29 (2017). We consider this to be another such case. “If the proffered evidence as a whole, viewed in the light most favorable to the facility, might cause a rational trier of fact to reach an outcome in favor of the facility, summary judgment on the issue of substantial compliance is not appropriate.” St. Catherine’s at 2. Even if “the ALJ might ultimately find [Petitioner’s] evidence too vague or unreliable,” nevertheless “the proffer is enough to raise a dispute of fact.” See Madison Health Care, Inc., DAB No. 1927, at 11 (2004); accord NMS at 17.

The ALJ thus erroneously entered summary judgment in CMS’s favor despite the existence of genuine disputes of material fact concerning Petitioner’s alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i).

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III. The ALJ erred in granting summary judgment concerning the reasonableness of the CMP.

To assess the reasonableness of a CMP, an ALJ must apply “the same factors de novo to the facts and evidence of record” that CMS applied when determining the CMP. See Rosewood Care Ctr. of Swansea, DAB No. 2721, at 13 (2016) (citing 42 C.F.R. §§ 488.438(f), 488.404), aff’d, 868 F.3d 605 (7th Cir. 2017). The Board, like the ALJ, “determines de novo whether the amount of a CMP is reasonable based on facts and evidence in the appeal record.” Autumn Ridge Rehab. Ctr., DAB No. 2467, at 22 (2012). The 42 C.F.R. § 488.438 regulatory factors for “determining the amount of penalty” are the facility’s noncompliance history, financial condition, and culpability, and “[t]he factors specified in § 488.404.” 42 C.F.R. § 488.438(f). The section 488.404 factors address “the seriousness of the deficiency,” meaning its severity and scope, and allow for consideration of other factors including “[t]he relationship of the one deficiency to other deficiencies resulting in noncompliance.” Id. § 488.404(b), (c). A per day CMP may begin as early as the date the facility was first out of compliance and continues until the SNF achieves substantial compliance. Id. §§ 488.440(a)(1), 488.454(a).

The ALJ upheld the CMP imposed on Petitioner, which was “a per-day CMP of $1,103 for 109 days from July 18 through November 3, 2016, for a total CMP of $120,227.” ALJ Decision at 15; see CMS Ex. 1, at 1. The ALJ found the CMP supportable “for either deficiency, alone” under the 42 C.F.R. § 488.438(f) factors, and reasoned:

The per-day CMP of $1,103 is at the low end of the penalty range, in that the maximum per-day penalty could have been $6,188. The deficiencies here are serious, as evidenced by the failure of Petitioner’s staff to adhere to professional standards of quality and to administer medications in compliance with the prescription labeling’s boxed warnings; Petitioner’s errors could have resulted in death or serious harm to Resident # 8. And it was not just a lone nurse who committed the significant medication error; only a few days after a nurse provided an overdose of crushed MS Contin, a different nurse administered crushed MS Contin to Resident # 8. Petitioner has not offered a regulatory basis to challenge the CMP, and it has not offered any evidence showing an inability to pay the per-day CMP. Unless a facility contends that a particular regulatory factor does not support the CMP amount, an ALJ must sustain it.

ALJ Decision at 16. The ALJ further stated that Petitioner “does not argue that a $1,103 per-day CMP is unreasonable,” has “not offered a regulatory basis to challenge the CMP,” and “did not allege it returned to compliance until November 4, 2016.” Id.

Petitioner argues that “the ALJ plainly misstated the record by holding that Petitioner never challenged the duration of noncompliance,” as well as the reasonableness of the

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daily CMP amount. RR at 33; id. at 20 (arguing that Petitioner’s evidence and argument were “material to the evidentiary basis for the CMP,” including factors “the ALJ would have been required to take . . . into account when determining an appropriate CMP per 42 C.F.R. § 488.438(e) and (f)”). Petitioner asserts that under 42 C.F.R. § 488.438, “the ALJ must consider various factors, including ‘severity and scope,’ when determining the reasonableness of the CMP,” but erroneously failed to do so in this case. Id. at 20 n.10; see also P. Reply at 3 (arguing “the ALJ did not evaluate CMS’s allegations under the standard of 42 C.F.R. §§ 488.438(e) and (f), which required her to consider, among other things, the seriousness of the alleged noncompliance when evaluating the reasonableness of the CMP”). “For instance,” Petitioner argues, “if the evidence – including cross-examination,” had established that an error caused no actual harm, “then the ALJ would have been required to take that determination into account when determining an appropriate CMP per 42 C.F.R. § 488.438(e) and (f).” RR at 20.

CMS counters that Petitioner “seeks to indirectly challenge a scope and severity determination where it is not permitted to do so directly in the circumstances of this case, by operation of 42 C.F.R. § 498.3(d)(10[)](ii).” CMS Resp. at 13. CMS argues that “any challenge to the scope and severity would not have affected the range of CMP amounts” that applied, so the issue “is not reviewable,” and even if it was reviewable the ALJ adequately addressed it. Id. at 13-14 (citing ALJ Decision at 12 n.13).

We hold that the ALJ erred in upholding the CMP for two reasons. First, the Petitioner generated a genuine dispute of material fact about the reasonableness of the daily CMP amount (although not about the CMP’s duration). Second, the ALJ erred when applying the requisite factors in 42 C.F.R. § 488.438.

Before the ALJ, the Petitioner “specifically challenge[d] the amount” of the CMP as “inappropriate.” RFH at 2, 6. Petitioner’s supporting legal and factual citations were scant, but not entirely absent. As discussed above, Petitioner argued and presented evidence that any deficiency was isolated and lacked the severity CMS claimed; Petitioner thus established a basis for challenging the daily CMP amount under 42 C.F.R. §§ 488.438(f)(3) and 488.404(b)-(c)(1). See, e.g., P. Br. to ALJ at 13 (“[T]he Center will show that the nurse’s error on July 18, 2016 was an isolated human error that caused no actual harm. . . .”); P. Reply to ALJ at 8 (discussing, regarding daily CMP amount, facts concerning severity of harm that tribunal “would be required to take . . . into account when determining an appropriate remedy per 42 C.F.R. § 488.438(e) and (f)”); P. Exs. 4, 8, 14, 15 (containing facts relevant to seriousness of alleged noncompliance). Even when a petitioner has made “no direct challenge to the reasonableness of the amount of the CMP,” the Board has chosen to address that issue when, as here, the petitioner “did identify disputed facts that arguably could affect application of the relevant factors.” Bartley Healthcare Nursing & Rehab., DAB No. 2539, at 25 (2013); see Madison Health at 21 (holding, where ALJ found a petitioner “did not offer distinct argument or fact

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allegations” on reasonableness of CMP amount, that ALJ’s analysis nevertheless was “not sufficient to support summary judgment as to the amount of the CMP”).

While we conclude Petitioner generated a genuine dispute of material fact about the reasonableness of the daily CMP amount, we perceive no error in the ALJ’s determination, regarding the duration of the CMP, that Petitioner “did not allege it returned to compliance until November 4, 2016.” ALJ Decision at 16. Petitioner’s representative on October 29, 2016, signed the Plan of Correction detailing weekslong corrective measures and projecting a November 4, 2016 completion date. CMS Ex. 2, at 1, 2-5, 18-19. “[A] SNF cannot be considered to have corrected a deficiency and achieved substantial compliance based on remedial measures short of those specified in its plan of correction.” Libertyville Manor Rehab. & Healthcare Ctr., DAB No. 2849, at 14 (2018) (citing cases). Petitioner complains that it “should have been entitled to offer evidence and argument that it corrected [its] noncompliance and resumed substantial compliance sooner than CMS alleged,” RR at 20, but Petitioner had ample opportunity before the ALJ to present such evidence and argument and merely failed to do so.

The ALJ erred when applying the seriousness factors in 42 C.F.R. § 488.438 to the evidence. The ALJ permissibly did not discuss the “facility’s history of noncompliance,” its “financial condition,” or its “culpability,” per section 488.438(f)(1)-(2) and (4), because Petitioner presented no evidence or argument concerning those factors. See Azalea Court, DAB No. 2352, at 23 (2010) (rejecting petitioner’s complaint that ALJ did not consider its compliance history or financial condition, because petitioner “put on no evidence for the ALJ to consider on these issues,” and the “ALJ properly considered all of the factors on which he had evidence”), aff’d, 482 F. App’x 460 (11th Cir. 2012). However, when applying section 488.438(f)(3), the ALJ erred in concluding “[t]he deficiencies here are serious” partly because “only a few days after a nurse provided an overdose of crushed MS Contin, a different nurse administered crushed MS Contin to Resident # 8.” ALJ Decision at 16. As discussed above, the ALJ’s finding that Petitioner administered a second MS Contin overdose to Resident 8 on July 23, 2016, erroneously resolved a disputed material fact by inference against Petitioner. Moreover, we cannot uphold the ALJ’s assessment that, as a matter of law, the $1,103 daily CMP was reasonably “low,” given that it was more than ten times the applicable daily minimum of $103 and exceeded it by $1,000. See id.; NMS at 31 (rejecting ALJ’s upholding of CMP as acceptably “minimal” because “this rationale is insufficient” when the “CMP of $150 per day, although low, is still three times the minimum amount established by regulation for a less than immediate jeopardy-level CMP”); Virginia Highlands at 12 (2010) (holding ALJ erred in granting summary judgment concerning CMP amount and describing $950 per diem CMP as “well above the $50 minimum”).

We reject CMS’s position that 42 C.F.R. § 498.3(d)(10)(ii) renders Petitioner’s challenge unreviewable, because that reading would negate 42 C.F.R. § 488.438(f)(3). See Proteam Healthcare, Inc., DAB No. 2658 (2015) (“We generally do not read one

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provision of a regulation in a manner that makes others superfluous where that reading can be avoided.”). Section 488.438(e) limits the scope of review of the amount of a CMP to the factors “specified in [subsection 488.438](f).” 42 C.F.R. § 488.438(e)(2)-(3). Section 488.438(f)(3) not only permits but requires us to consider the seriousness of any deficiencies when reviewing the reasonableness of a resulting CMP. 38-40 Freneau Ave. Operating Co. LLC, DAB No. 3008, at 12 (2020) (“ALJs and the Board may consider only the factors specified or cross-referenced in 42 C.F.R. § 488.438(f), factors which include the seriousness – that is, the severity and scope – of a cited deficiency.”) (emphasis added). Accepting CMS’s construction of section 498.3(d)(10)(ii) would require us to nullify section 488.438(f)(3), which we cannot do. See Madison County Nursing Home, DAB No. 2895, at 17 (2018) (“ALJs and the Board are bound by applicable statutes and regulations, and may not ignore or refuse to apply those laws.”).

Our disposition of this issue is consistent with Board precedent. Where the reasonableness of the amount of a CMP is at issue, “an ALJ may not dispose of the case entirely on a summary judgment motion without considering whether there is a genuine dispute of fact material to resolving” that issue. Lebanon at 5 (emphasis added); accord Madison Health at 21. “Thus, even where summary judgment properly lies against a facility as to the existence of a basis sufficient to authorize CMS to impose remedies, a factual dispute material to the factors justifying the reasonableness of the amount of a CMP may preclude summary judgment on this issue.” Madison Health at 21. “Where the ALJ’s assessment of one or more of [the 42 C.F.R. § 488.438] factors is based on factual determinations about which genuine issues of fact are disputed, and the full amount of the CMP is not supported by the undisputed facts alone (construed in favor of the facility), it is improper to resolve the reasonableness of the amount on summary judgment.” Franklin Care at 10; see also Kingsville at 14 (holding that where ALJ’s determination of CMP’s reasonableness depended on reversed or vacated findings of fact and conclusions of law, the “reasonableness of the amounts of the CMPs are remanded to the ALJ for further proceedings”).

When, as here, we conclude “that there are indeed material facts in dispute,” we hold that “the reasonableness of the amount of the CMP must be reviewed de novo by the ALJ after resolving the factual disputes and conflicting inferences on a full evidentiary record.” Madison Health at 23. Accordingly, we remand.

IV. Petitioner’s remaining arguments are without merit.

As guidance on remand, we address certain additional arguments by Petitioner and reiterate Board precedent concerning the effect of a remand.

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A. We reject any argument that establishing noncompliance in this case requires proof of actual harm.

We first reject any argument by Petitioner that CMS must show actual harm to Resident 8 to establish noncompliance (although, as discussed above, if noncompliance is proven, the deficiency’s severity is relevant to assessing the reasonableness of the CMP imposed). “Noncompliance means any deficiency that causes a facility to not be in substantial compliance,” and “[s]ubstantial compliance means a level of compliance with the requirements of participation such that any identified deficiencies pose no greater risk to resident health or safety than the potential for causing minimal harm.” 42 U.S.C. § 488.301 (emphasis added). In other words, “the occurrence of actual harm to a resident is not a prerequisite for finding a SNF noncompliant with a Medicare participation requirement, even at the immediate jeopardy level.” Perry County Nursing Ctr., DAB No. 2555, at 15 (2014), aff’d, 603 F. App’x 265 (5th Cir. 2015); see Virginia Highlands at 11 (“The absence of actual harm is not a basis for reversing a finding that a facility failed to substantially comply with a participation requirement.”). In particular, “the Board has held that actual harm is not a prerequisite for concluding that a medication error was significant.” Blossom at 18 (citing cases). “Of course, CMS need not prove actual harm to support a finding of noncompliance and, as CMS’s interpretive guidelines state, a medication error may be considered significant if it ‘jeopardizes’ – that is, has the potential to harm – the resident’s health.” Life Care Ctr. of Tullahoma, DAB No. 2304, at 44 (2010) (underlining replaced with italics), aff’d, 453 F. App’x 610 (6th Cir. 2011). In a prior case involving excessive morphine doses administered to a resident, the Board held that establishing noncompliance did not require finding actual harm to the resident, given evidence “that morphine in excessive doses can potentially be serious, even life threatening.” See Premier Living & Rehab Ctr., DAB No. 2146, at 19 (2008).

B. We reject Petitioner’s arguments concerning the IIDR determination.

We further reject Petitioner’s arguments that the ALJ erred by disregarding the IIDR determination and rendering a summary judgment inconsistent with it. RR at 22-28. Factually, the ALJ found that “CMS considered the IIDR recommendation and expressly rejected that recommendation.” Id. at 14. Legally, the ALJ observed that “Petitioner does not cite to any DAB decisions in support of its argument and cites only to two older” and distinguishable ALJ decisions; the ALJ relied instead on the Board’s “analogous” decision in Britthaven of Chapel Hill, DAB No. 2284 (2009). Id. at 13-14.

We see no error in the ALJ’s determination concerning the IIDR recommendation. The ALJ properly disregarded Ridgely Care & Rehab. Ctr., DAB CR1258 (2004) and Park Manor, DAB CR1090 (2003), on which Petitioner relied, because “ALJ decisions have no precedential weight and so are useful only to the extent their reasoning is on point and persuasive.” See Wassim Younes, M.D. & Wassim Younes, M.D., P.L.C., DAB No. 2861, at 8 n.9 (2018). Neither the Ridgely Care nor the Park Manor ALJ decision is persuasive

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because the Board has rejected the former “as authority for the proposition that CMS cannot reject IDR results,” Britthaven at 10, and reversed the latter outright, Park Manor, DAB No. 1926 (2004). “The informal dispute resolution process (which includes IIDR) offers facilities an informal opportunity to dispute survey findings.” Kindred Transitional Care & Rehab – Greenfield, DAB No. 2792, at 21 (2017). Nevertheless, “CMS has the ultimate authority for the survey findings and imposition of CMPs.” Id. (citing authorities, including 42 C.F.R. § 488.431). “State agencies . . . perform compliance surveys of facilities under agreement with the federal government, but it is CMS that enforces compliance with applicable federal law and regulations.” Id. (underlining replaced with italics). “Where, as here, a state surveys skilled nursing facilities for compliance with Medicare requirements, the State merely recommends findings of compliance (or noncompliance); CMS ultimately determines whether the facility is in substantial compliance.” Britthaven at 6-7; accord Ridgecrest Healthcare, DAB No. 2598, at 11 (2014). “As a Medicare provider, Petitioner should have known that CMS, not the state agency, would make the ultimate determination.” Hartford HealthCare at Home, Inc., DAB No. 2787, at 9-10 (2017).

Rejection of the IIDR recommendation was within CMS’s regulatory discretion under the Act and implementing regulations at 42 C.F.R. §§ 488.431 and 488.452(a)(2). Section 1819(h)(2) of the Act authorizes enforcement by CMS, including imposition of CMPs, either on CMS’s own finding or pursuant to a state’s recommendation that a SNF does not meet a Medicare participation requirement. Avon Nursing Home, DAB No. 2830, at 10 (2017). The implementing regulations make plain that, although CMS provides opportunity for IIDR, “CMS retains ultimate authority for the survey findings and imposition of civil money penalties.” 42 C.F.R. § 488.431(a); see also id. § 488.452(a)(2) (“CMS’s findings of noncompliance take precedence when” CMS finds noncompliance and the state finds substantial compliance). “It is important to reemphasize that a state agency’s survey findings constitute recommendations to CMS,” which “makes its own determination of noncompliance, and decides what enforcement action to take, based on the survey’s findings.” Avon at 14 (citing 42 C.F.R. §§ 488.11, 488.12). Accordingly, the Board consistently has held that CMS is not bound by the results of the informal dispute resolution process and may initiate and prosecute an enforcement action based on CMS’s own review and acceptance of all or part of the survey and informal dispute resolution results. See Avon at 14; San Fernando Post Acute Hosp., DAB No. 2492, at 14 (2012); Columbus Park Nursing and Rehab. Ctr., DAB No. 2316, at 10 (2010), appeal dismissed, 940 F. Supp. 2d 805 (N.D. Ill. 2013); Capitol House Nursing & Rehab Ctr., DAB No. 2252, at 6 (2009). “An IIDR reviewer’s opinion is just that,” and, “because CMS is not bound to follow or defer to an IIDR determination, let alone the opinion of an IIDR reviewer, it is inconsequential that an IIDR reviewer expressed an opinion favorable to” Petitioner during IIDR. Kindred at 21.

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C. We emphasize that the Board has not determined the ultimate merits of the case.

We “reiterate that, while the existence of a dispute of material fact sufficient to go forward to hearing on an issue precludes summary judgment, it says nothing about the relative merits of the parties’[] evidence on that issue.” Vandalia at 13. “The same evidence that suffices to preclude summary judgment may thus very well ultimately fail to persuade in final analysis.” St. Catherine’s at 24. “The non-moving party at this stage need only set out such argument and evidence as, viewed in the most favorable light, could lead a rational trier of fact to find for it on an issue material to the outcome of [the] case.” Id. Here, based upon our de novo review of the entire record in the light most favorable to Petitioner, we conclude that Petitioner has met that test.

D. We reject Petitioner’s arguments based upon Jarkesy.

Finally, we reject Petitioner’s arguments for remand and refund of the CMP based upon Jarkesy. That case arose from “an enforcement action” by the Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Jarkesy, 144 S. Ct. at 2124-26. The SEC brought an enforcement action seeking CMPs from an investment advisor company and its individual manager for alleged securities fraud, and the SEC elected to proceed before an ALJ. Id. at 2124, 2126-27. The Supreme Court heard the case to address the question of “whether the Seventh Amendment permits the SEC to compel respondents to defend themselves before the agency rather than before a jury in federal court,” and concluded that “[t]he Seventh Amendment . . . applies and a jury is required.” Id. at 2125, 2127.

We reject Petitioner’s attempts to equate this case with Jarkesy. This case concerns an entirely separate statutory and regulatory scheme (the Act and its implementing regulations) as administered by the United States Department of Health and Human Services. As CMS argues, “Jarkesy did not rule that the Medicare administrative appeal regime” at issue in this case is unconstitutional. CMS Jarkesy Opp. at 1. That question was not even before the Court, which held that the “SEC’s antifraud provisions replicate common law fraud, and it is well established that common law claims must be heard by a jury.” Jarkesy, 144 S. Ct. at 2127. The Court did not hold that every agency’s attempt to impose and enforce CMPs necessarily is, like the SEC’s action, “a common law suit in all but name” that “must be adjudicated in Article III courts.” Id. at 2136. On the contrary, the Court acknowledged the long-established “public rights exception,” under which “Congress may assign [a] matter for decision to an agency without a jury, consistent with the Seventh Amendment,” and extensively discussed the Court’s precedents applying that exception. Id. at 2131-34. We recognize, but do not decide – as the Supreme Court did not decide – the potential applicability of that exception to the Act and its implementing

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regulations concerning imposition and enforcement of CMPs for noncompliance with Medicare participation requirements.

It is not the Board’s role to invalidate any part of the Act, or its complex implementing regulations, by extrapolation from the Supreme Court’s reasoning in Jarkesy. “The Board has consistently held that ALJs may not declare a statute or regulation to be unconstitutional and refuse to apply or follow the statute or regulation on that basis.” Fady Fayad, M.D., DAB No. 2266 (2009), aff’d, 803 F. Supp. 2d 699 (E.D. Mich. 2011); see also Borgess Med. Ctr., DAB No. 3106, at 42 (2023); Russell L. Reitz, M.D., DAB No. 2748, at 8 (2016). We cannot anticipate how federal courts may apply the reasoning of Jarkesy in different circumstances, including in the context of the intricate and long-standing statutory and regulatory scheme governing imposition of CMPs upon SNFs, like Petitioner, that CMS deems noncompliant with the conditions of Medicare participation. Instead, the Board “must follow applicable statutes and regulations,” Linda Silva, P.A., DAB No. 2966, at 12 (2019), and we do so in this case. Accordingly, we deny Petitioner’s motion for remand and refund of the CMP on the basis of Jarkesy.

Conclusion

Pursuant to 42 C.F.R. § 498.88(a) and (b), we vacate the ALJ Decision and remand this case for the ALJ to conduct further proceedings consistent with this Decision, including:

(1)    giving the parties an opportunity to narrow by stipulation the issues still requiring resolution (including whether CMS foregoes reliance on facts concerning Resident 12 to support Petitioner’s alleged noncompliance with 42 C.F.R. § 483.20(k)(3)(i));

(2)    determining whether to grant the parties any further opportunity to develop the record by substituting complete for incomplete exhibits, submitting additional exhibits, or identifying additional witnesses (and giving the opposing party an opportunity to request cross-examination of any new witnesses);

(3)    determining the admissibility of all exhibits; and

(4)    affording the parties an opportunity for an oral hearing and cross-examination of the opposing party’s witnesses.

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We also deny Plaintiff’s motion for relief based upon Jarkesy, and direct that the Board’s ruling settles this issue of law for purposes of proceedings on remand.

Endnotes

¹ We apply, as the ALJ applied, the regulations in effect on the initial survey date of October 7, 2016, although regulatory changes occurred before the revisit survey on December 13, 2016. See ALJ Decision at 3 n.2. Effective November 28, 2016, CMS re-designated 42 C.F.R. § 483.20(k)(3)(i) as § 483.21(b)(3)(i), re-designated section 483.25(m) as section 483.45(f), and revised both sections. Medicare and Medicaid Programs; Reform of Requirements for Long-Term Care Facilities, 81 Fed. Reg. at 68,696-98, 68,825-68,831 (Table 1), 68,859, 68,863 (Oct. 4, 2016) (Final Rule). The Board generally relies on “the regulations in effect when the state agency performed the survey(s)” relevant to a case. Cahokia Nursing & Rehab. Ctr., DAB No. 2991, at 2 n.1 (2020) (emphasis added); see also Rockcastle Health & Rehab. Ctr., DAB No. 2891, at 1 n.1 (2018). However, the alleged noncompliance period ended on November 3, 2016, so CMS applied the regulations then in effect. CMS Br. to ALJ at 1 n.1 (“Since CMS determined that Petitioner was noncompliant from July 18, 2016 through November 3, 2016, the versions of the regulations in effect at that time are discussed in [CMS’s] Brief.”). Petitioner has not objected.

² This section draws from the administrative record to give context for the issues Petitioner raises on appeal, and discusses both disputed and undisputed facts, but does not constitute fact finding by the Board.

³ Petitioner is a dually participating facility with a provider agreement in both the Medicare and Medicaid programs. See 42 C.F.R. § 488.301 (defining “Dually participating facility”); CMS Ex. 1 (referencing Petitioner’s participation “in the Medicare and Medicaid programs”). “[T]he regulations for long-term care facilities cover both Medicare SNFs and Medicaid nursing facilities (NFs).” Putnam Ctr., DAB No. 2850, at 1 n.1 (2018), aff’d, 770 F. App’x 630 (4th Cir. 2019); see 42 C.F.R. § 483.1(b).

⁴ The surveyor’s declaration is misnumbered beginning on page 4, where the first full paragraph should be numbered as ¶ 8, not ¶ 6.