SUBJECT:

Madison Health Care Inc.,,

Petitioner,

Centers for Medicare & Medicaid

DECISION

I enter summary disposition against Petitioner, Madison Health Care, Inc., and in favor of the Centers for Medicare & Medicaid Services (CMS). I find that Petitioner failed to comply substantially with a Medicare participation requirement during a period that began on August 1, 2002 and which ran through August 22, 2002. I find also that civil money penalties of $450 per day are a reasonable remedy for each day of this period of noncompliance.

I. Background

Petitioner is a skilled nursing facility in Ohio that participates in the Medicare program. Its participation in this program is governed by sections 1819 and 1866 of the Social Security Act (Act) and by federal regulations at 42 C.F.R. Parts 483 and 488.

A compliance survey was conducted of Petitioner on or about August 1, 2002 (August survey) in order to establish whether it was complying substantially with Medicare participation requirements. The surveyors concluded that Petitioner was not complying substantially with these requirements in several respects. Petitioner was found to have attained substantial compliance beginning on August 23, 2002. CMS determined to impose remedies against Petitioner consisting of civil money penalties of $450 per day for each day of the period that began on August 1, 2002 and which ran through August 22, 2002. If this remedy determination becomes final, Petitioner's authority to conduct nurse aide training would be revoked for a period of two years.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I scheduled an in-person hearing to be conducted in Cleveland, Ohio, on October 30, 2003. However, prior to the hearing CMS moved for summary disposition and Petitioner opposed the motion.

In its pre-hearing exchange CMS submitted 47 proposed exhibits (CMS Exs. 1 - 47). Petitioner submitted 18 proposed exhibits in its pre-hearing exchange (P. Exs. 1 - 18). It submitted five additional proposed exhibits (P. Exs. 19 - 23) in connection with its opposition to CMS's motion for summary disposition. CMS argues that I should not accept any of Petitioner's exhibits that Petitioner did not submit with its pre-hearing exchange. Its argument is that Petitioner was obligated to submit all of its proposed exhibits in its pre-hearing exchange and that it would be unfair to CMS if I were now to accept additional exhibits from Petitioner. I have decided to consider the additional exhibits only for the limited purpose of ruling on the motion for summary disposition.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Summary disposition is appropriate;

2. Petitioner failed to comply substantially with a participation requirement during a period that began on August 1, 2002 and which ran through August 22, 2002; and

3. Civil money penalties of $450 per day are reasonable for each day of this period.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below, as a separate heading. I discuss each Finding in detail.

The report of the August survey alleges that Petitioner failed to comply substantially with nine distinct Medicare participation requirements. CMS Ex. 1. CMS moved for summary disposition with respect to seven of these. In this decision I address Petitioner's noncompliance with only one participation requirement, that being the requirement that is stated at 42 C.F.R. � 483.25(h)(2). The surveyors' allegations of noncompliance with this regulation are made at Tag 324 of the August survey report. CMS Ex. 1, at 23 - 26.

It is unnecessary that I consider additional allegations of noncompliance or Petitioner's defenses to these additional allegations because I find that the seriousness of Petitioner's noncompliance with the requirements of 42 C.F.R. � 483.25(h)(2) is sufficient to justify the imposition of civil money penalties of $450 per day for each day of the August 1 - 22, 2002 period.

1. Summary disposition is appropriate.

Summary disposition in administrative cases involving CMS is governed by the principles of summary judgment that are set forth at Rule 56 of the Federal Rules of Civil Procedure. Livingston Care Center, DAB CR906 (2002) aff'd, DAB No. 1871 (2003); Lebanon Nursing and Rehabilitation Center, DAB CR1069 (2003). Summary disposition is appropriate where there are no disputed issues of material fact. A material fact is a fact which, if established, might affect the parties' dispute over a particular issue. The moving party has the obligation to aver the material facts that it is relying on and which it alleges to be undisputed. Fed. R. Civ. P. 56(c). It is appropriate to grant summary disposition where conclusions favorable to the moving party may be drawn from undisputed material facts and applicable law.

Facts are not material to the outcome of a case if they are not probative of the issue which is in dispute. A motion for summary disposition will not be defeated by facts that are not material to the issue that is in dispute. Moreover, the concept of material facts must not be confused with conclusions that are based on material facts. A conclusion is a finding that may be drawn from material facts. A dispute between the parties as to the correct conclusion to draw from the facts will not be an impediment to the entry of summary disposition if the material facts are not disputed.

There are no disputed issues of material fact pertaining to Tag 324 of the August survey report. As I discuss below, at Finding 2, CMS's fact allegations are almost entirely drawn from records that Petitioner's staff generated regarding the care of two of Petitioner's residents. These allegations describe a failure by Petitioner's staff to comply with regulatory requirements in giving care to two residents of Petitioner's facility. For purposes of this decision I am accepting as true all of Petitioner's allegations that it supports with facts based on evidence or proposed testimony. However, and as I discuss in detail at Finding 2, Petitioner's allegations do not rebut the allegations of noncompliance that are made at Tag 324. In some respects they are not material to the issue of Petitioner's noncompliance. In other respects they are allegations which Petitioner does not support with facts.

2. Petitioner failed to ensure that its residents received adequate supervision and assistive devices, and thus failed to comply substantially with the requirements of 42 C.F.R. � 483.25(h)(2).

At Tag 324 of the August survey report the surveyors found that Petitioner was not complying substantially with the requirements of 42 C.F.R. � 483.25(h)(2). This regulation requires that a facility ensure that each of its residents receives adequate supervision and assistance devices to prevent accidents.

The regulation has been the subject of much litigation at the administrative level, and it has been applied in numerous cases. The compliance standard embodied by the regulation is that a facility must take all measures that are within its power to prevent accidents that are reasonably foreseeable. This is not a strict liability standard but it does impose a heavy burden on a facility to protect its residents from known or knowable accident hazards.

Petitioner devotes a substantial portion of its brief in opposition to CMS's motion for summary disposition to arguing the extent of its duty to protect residents under various common law and State law standards. Petitioner's Memorandum in Opposition to CMS's Motion for Summary Judgment (Petitioner's memorandum) at 4 - 9. It is not entirely clear that Petitioner would disagree with the standard for compliance with 42 C.F.R. � 483.25(h)(2) that I set forth in this decision. But, in any event, it is the text and interpretation of the regulation and not common law or State tort law standards that define Petitioner's duty to its residents under 42 C.F.R. � 483.25(h)(2).

CMS asserts that there are undisputed facts which establish that Petitioner did not comply with the regulatory standard. These facts pertain to two of Petitioner's residents, identified in the report of the August survey as Residents #s 85 and 60.

With respect to Resident # 85, CMS asserts the following facts:

� The resident has impairments, including Alzheimer's dementia, which cause her to suffer from delirium, short and long-term memory problems, impaired decision making ability and loss of balance. CMS Ex. 28, at 9, 11. Petitioner's staff recognized that the resident is at risk for sustaining falls and the resident's care plan addressed that issue. CMS Ex. 1, at 24; CMS Ex. 28, at 3.

� Petitioner's staff supplied the resident with a merri walker. This is an assistance device which is designed to enable the resident to ambulate. CMS Ex. 28, at 5.

� On June 22, 2002, Resident # 85 fell while using the merri walker. She was found on her left side in the merri walker with the harness and body alarm in place. CMS Ex. 28, at 16. She suffered two bruised areas by her left eye. Id.

� On June 23, 2002, the resident again fell while using the merri walker. She was found lying face down on the floor. CMS Ex. 28, at 16. On this occasion she fractured her nose. Id.

� The resident was not supervised by Petitioner's staff during either falling episode. Petitioner did not modify its assessment of the resident nor did it take any precautionary steps concerning the resident's unsupervised use of a merri walker after the first episode on June 22, 2002 in which the resident fell while using a merri walker.

CMS asserts the following facts with respect to Resident # 60:

� Resident # 60 suffers from impairments which included Alzheimer's disease and dementia. CMS Ex. 1, at 25. The resident has a history of sustaining falls, including falls sustained on November 18, 2001, December 8, 2001, and December 29, 2001. Id.

� Petitioner's staff understood that the resident required staff assistance for transfers, locomotion and toileting. CMS Ex. 23, at 3. The resident's plan of care, dated November 26, 2001, stated that the resident was at risk for injury in part because the resident was unaware of her own limitations and safety needs, and because the resident had osteoporosis. Id. at 8. The resident's care plan provided that she was to have a pressure alarm in her bed and in her chair every day. Id. at 9.

� The resident's pressure alarm did not sound when the resident sustained her falls on November 18, 2001 or on December 8, 2001. CMS Ex. 23, at 4.

� On April 7, 2002, at 3:00 a.m., Resident # 60 again fell while attempting to walk to the bathroom. CMS Ex. 23, at 13. On this occasion the resident suffered a fractured hip. Id. at 15. The resident's bed alarm failed to function on this occasion. Id. at 12.

� Petitioner's staff had not checked the resident's bed alarm on April 7, 2002, or on the preceding day. P. Ex. 8, at 1.

� After the April 7, 2002 fall, Petitioner's staff decided to check Resident # 60's alarm battery daily. However, on August 1, 2002, Petitioner's director of nursing told a surveyor that its system for checking the reliability of resident alarms was to check them on a random basis. CMS Ex. 23, at 4, 13.

The facts alleged by CMS, if unrebutted by Petitioner, provide a basis for me to conclude that Petitioner failed to ensure that its residents received adequate supervision and assistance devices to protect them against accident hazards, in contravention of the requirements of 42 C.F.R. � 483.25(h)(2). In the case of Resident # 85, the facts averred by CMS show that Petitioner was on notice that the resident was at risk for falling while using a merri walker and yet permitted the resident to use the device without close supervision. The facts offered by CMS concerning this resident show that the resident suffers from dementia that impairs her decision making ability. She also suffers from balance problems. These problems made it necessary that the resident not ambulate without an assistance device. But, it became apparent to Petitioner's staff - or should have become apparent to the staff - that the resident's limitations were so great that the resident could not be trusted to use an assistance device without close supervision. Despite that, the staff allowed the resident to attempt to ambulate without supervision, with consequences that were entirely predictable.

The facts offered by CMS establish that the resident fell while using a merri walker on June 22, 2002. Yet, the resident was allowed to resume using the walker without supervision and fell again on June 23, 2002, the following day, fracturing her nose. It is reasonable to infer from these facts that the proximate cause of the second fall sustained by the resident was the failure of Petitioner's staff to exercise supervision over the resident that they knew or should have known was necessary. If nothing else, the fall sustained by the Resident on June 22, 2002, should have given Petitioner's staff all of the notice it needed that the resident needed to be supervised closely.

In the case of Resident # 60 the facts offered by CMS show that Petitioner's staff knew that the resident presented an extreme risk for falling while unsupervised. They show that the protective action that Petitioner's staff took - placing movement alarms in the resident's bed and chair in order to alert the staff to attempts by the resident to walk - were rendered ineffective by the staff's failure to ensure that the alarms functioned properly.

The facts show that the resident fell in both November and December, 2001, and on each occasion the resident's alarm malfunctioned. On April 7, 2002, the resident again fell, this time while attempting to ambulate from her bed to the bathroom, fracturing her hip. The resident's bed alarm had not been checked in the two days preceding this fall. After the April 7, 2002 fall Petitioner's staff decided that the resident's alarms needed to be checked daily in order to protect the resident adequately. But, as of August 1, 2002, Petitioner's staff still was not checking the resident's alarms daily.

Petitioner has not alleged facts which call into dispute the facts on which CMS relies and from which I infer that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.25(h)(2). Petitioner asserts that Resident # 85 "was never unstable in the merri walker." Petitioner's memorandum at 11 (emphasis in memorandum). Petitioner attempts to bolster this conclusion with testimony from its staff that merri walkers are inherently stable devices, that the resident had been trained to use a merri walker and, that the resident had been found to be safe to use the device with "general supervision." Id.; P. Ex. 23, at 3 - 5. ⁽¹⁾

But, assuming the truth of all of this, Petitioner offers nothing which would challenge the facts from which I conclude that Petitioner failed adequately to supervise Resident # 85. Petitioner does not dispute that, on June 22, 2002, Resident # 85 fell, injuring herself, while using a merri walker without supervision. That establishes that the resident was not safe using the merri walker unsupervised, regardless of the general stability of the device and regardless also of any assessment that the staff had made of the resident's capabilities based on observations made previously. It put Petitioner on notice that allowing the resident to use a merri walker without supervision was potentially hazardous to the resident. Petitioner had a duty to provide additional supervision to the resident and it failed to discharge that duty. The fall that the resident sustained on June 23, 2002, the day after the first fall, while using the merri walker unsupervised, is the consequence of Petitioner's failure to discharge that duty.

As for Resident # 60, Petitioner denies that any standard of care exists that would require it to check a resident's alarms as often as once daily. Petitioner's memorandum at 12. Petitioner contends, therefore, that there is a factual dispute as to whether it was checking Resident # 60's alarms with sufficient frequency. Petitioner argues that checking the alarms on April 1 and 5 was consistent with its own practice of checking alarms, and Petitioner asserts that this practice was reasonable. Id.

Petitioner also asserts that there is a factual dispute as to whether the resident's alarms actually malfunctioned on November 18 and December 8, 2001, the dates of the resident's two falls prior to April 7, 2002. Petitioner argues also that on these two occasions it is not even clear that the resident fell. Petitioner's memorandum at 13.

I find that these assertions about Resident # 60 do not create a meaningful dispute as to the facts of this case. First, it is unnecessary for me to decide whether there is a generally recognized standard of care in the nursing profession which mandates daily checking of alarm batteries. Petitioner does not deny that its solution to the problem posed by Resident # 60's malfunctioning alarm was to check the resident's alarm batteries daily after April 7, 2002. That was Petitioner's decision and the undisputed fact - which is not denied by Petitioner - is that it failed to implement it.

The obvious problem that Petitioner confronted in providing care for Resident # 60 was that the resident had a tendency to attempt to walk under circumstances where her dementia and loss of balance made unsupervised walking a hazard. The resident fell repeatedly while attempting to walk unsupervised and fractured her hip on April 7, 2002, as a result of such an attempt. Petitioner was faced with having to find a way to ensure that the resident would either not walk without being closely supervised or, at the least, would not make such an attempt without Petitioner's staff immediately being alerted.

The solution arrived at by Petitioner to this problem - placing alarms in the resident's chair and bed - was ineffective because the alarms did not function properly each time the resident attempted to walk. Thus, on April 7, 2002, the resident fell after leaving her bed and after the bed alarm did not function. Petitioner's additional solution was to check the bed alarm daily to ensure that it functioned correctly.

This was not an unreasonable solution to the problem that Petitioner confronted. But, Petitioner had an obligation to implement that solution once it decided on it. ⁽²⁾ The undisputed facts are that it failed to do so. As of August 1, 2002, it was still checking bed alarms only randomly or episodically. However, it was a policy of random and episodic checking that led to Resident # 60's fall on April 7, 2002 (the resident's bed alarm not having been checked after April 5, 2002).

Second, Petitioner's contentions that the bed alarm may not have malfunctioned when the resident fell on November 18 and December 19, 2001, and that the resident may not actually have fallen on these dates, are immaterial to the issue of whether Petitioner was providing adequate protection to Resident # 60 after April 7, 2002. The undisputed facts are that Petitioner's staff understood by April 7, 2002, that they were confronted with a problem in dealing with Resident # 60 - that being her propensity to attempt to walk from a bed or a chair while not being supervised - which was not being addressed effectively with a bed alarm because the alarm was malfunctioning. And, the undisputed facts show that Petitioner's staff failed to implement the solution that it had arrived at to address this problem.

In addressing the care that Petitioner's staff gave to Resident # 60 after April 7, 2002, I have taken into consideration that there is no evidence showing that the resident fell after that date. But, the absence of post-April 7 falls is not proof that Petitioner successfully implemented actions to protect the resident. Petitioner's own staff recognized that it was necessary to check the resident's alarms daily to make sure that they functioned properly. That the resident did not fall after April 7, 2002, is fortunate, but that does not mean that Petitioner was adequately protecting the resident, given its staff's failure to check the resident's alarms daily.

3. Petitioner did not argue that, if it was not complying substantially with a participation requirement or requirements on August 1, 2002, it came into compliance on a date prior to August 23, 2002.

CMS determined that the duration of Petitioner's noncompliance with participation requirements, including 42 C.F.R. � 483.25(h)(2), was from August 1 through August 22, 2002. Petitioner has not offered any argument or facts to show that if it was deficient as of August 1, it came into compliance on any date prior to August 22. I therefore sustain CMSs' determination that the duration of Petitioner's noncompliance was from August 1 through August 22, 2002.

4. Civil money penalties of $450 per day are reasonable for each day of the period which began on August 1, 2002, and which ran through August 22, 2002, based on the seriousness of Petitioner's noncompliance with the requirements of 42 C.F.R. � 483.25(h)(2).

I sustain the civil money penalties that CMS determined to impose because they are reasonably related to the seriousness of Petitioner's noncompliance with the requirements of 42 C.F.R. � 483.25(h)(2) and to Petitioner's past history of noncompliance with the requirements of this regulation. Petitioner has offered nothing to show that it would be unable to pay the civil money penalties that CMS determined to impose. ⁽³⁾

The regulations governing imposition of civil money penalties establish criteria by which penalty amounts may be determined. 42 C.F.R. �� 488.438(f)(1) - (4), 488.404 (incorporated by reference into 42 C.F.R. � 488.438(f)(3)). These factors include a facility's compliance history along with the seriousness of the deficiencies for which the penalties are imposed. They also include the facility's financial ability to pay civil money penalties.

The range of civil money penalty amounts that may be imposed for deficiencies that do not put residents of a facility at immediate jeopardy is from $50 to $3,000 per day. The regulations contemplate that more serious deficiencies should be remedied with civil money penalties at the higher end of the permissible penalty range.

The civil money penalties that CMS determined to impose here - $450 per day - are at the lower end of the non-immediate jeopardy range, constituting only 15% of the maximum non-immediate jeopardy level penalty amount. I decide that they are reasonable based on the following undisputed material facts:

� The scope and severity of Petitioner's deficiency at Tag 324 of the August survey report was relatively serious. The surveyors who conducted the August survey assigned a scope and severity level of "G" to the deficiency. I take notice that a "G" level deficiency involves a finding of actual harm to residents. There is undisputed evidence that at least one of the two residents whose care is at issue, Resident # 85, experienced harm as a result of Petitioner's failure to provide adequate supervision to her. ⁽⁴⁾

� Petitioner has a history of similar noncompliance with participation requirements. In September 2001, Petitioner was found not to be complying substantially with the requirements of 42 C.F.R. � 483.25(h)(2). CMS Ex. 9, at 1. Petitioner's noncompliance on this previous occasion was also at the "G" level of scope and severity. Id.

The undisputed facts show repeated failures by Petitioner to protect residents against accidents, resulting in harm to residents. These relatively serious deficiencies justify the moderate penalties that CMS determined to impose.

Petitioner has offered nothing that would rebut or detract from the foregoing. Its sole argument as to penalty amounts consists of a one-sentence conclusion that CMS cannot justify the civil money penalty amounts. Petitioner's memorandum at 25. Petitioner has offered no evidence to prove that it is unable to pay the civil money penalty amount of $450 per day.

Steven T. Kessel

Administrative Law Judge

1. Petitioner does not define the term "general supervision" and I have no idea what it intends the term to mean. However, Petitioner has not disputed CMS's assertion that Resident # 85 fell on June 22, 2002, and again on June 23, 2002, while unsupervised.

2. I emphasize here that the choice to check the resident's alarms daily was Petitioner's solution. It could have implemented other solutions that might have been just as effective such as, for example, monitoring the resident continuously. But, once Petitioner elected to deal with the problem of the resident's attempts at ambulation by ensuring that bed and chair alarms functioned with daily checking, then Petitioner was obligated to ensure that this solution was implemented.

3. A collateral consequence of my sustaining these civil money penalties is that Petitioner loses authority to conduct nurse aide training for a period of two years.

4. Arguably, Resident # 60 also suffered actual harm as a consequence of her fall on April 7, 2002. However, for the purposes of this decision I have decided that Petitioner failed to discharge its obligations under 42 C.F.R. � 483.25(h)(2) based on Petitioner's failure to take remedial action (checking the resident's bed alarm daily) after April 7, 2002.