SUBJECT:

Aase Haugen Homes, Inc.,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

Petitioner, Aase Haugen Homes, Inc. (Petitioner or facility), is a long term care facility certified to participate in the Medicare and Medicaid programs as a provider of services.

Based on surveys conducted April 16 - 20, 2001, the Centers for Medicare & Medicaid Services (CMS) determined that the facility was not in substantial compliance with program participation requirements, and that its quality of care deficiencies posed immediate jeopardy to resident health and safety. No penalties were imposed for most of the deficiencies cited, even though some appear pretty serious. ⁽¹⁾ See, e.g., P. Ex. 1, at 6 - 9. However, the surveyors noted two instances of resident elopement, leading CMS to conclude that the facility had not ensured that each resident receive adequate supervision and assistive devices to prevent accidents, as required by 42 C.F.R. � 483.25(h)(2). Based on this finding, CMS imposed per instance civil money penalties (CMPs) totaling $2,000. P. Exs. 1, 2.

The parties agree that this matter may be decided based on their written submissions. Boes Letter dated 11/18/04.

I conclude that the facility was out of compliance with the program requirements set forth in 42 C.F.R. � 483.25(h)(2). CMS therefore had a basis for imposing a CMP, and, notwithstanding any provisions of the State Operations Manual (SOM) or stipulation of the parties, I have no authority to review the exercise of its discretion to impose that penalty. Although not entirely clear from this record, it appears that CMS imposed two $1,000 per instance CMPs, one for each instance of elopement. Inasmuch as $1,000 is the statutory minimum for a per instance CMP, the amount of each CMP must be sustained. On the other hand, if CMS has instead imposed just one $2,000 per instance CMP, I affirm that amount as reasonable.

I. Background

The Social Security Act (Act) sets forth requirements for nursing facility participation in the Medicare and Medicaid programs, and authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations implementing the statutory provisions. Act, sections 1819 and 1919. The Secretary's regulations governing nursing facility participation in the Medicare program are found at 42 C.F.R. Part 483.

Facilities must maintain substantial compliance with program requirements. To be in substantial compliance, a facility's deficiencies may pose no greater risk to resident health or safety than "the potential for causing minimal harm." 42 C.F.R. � 488.301. To determine whether they are in substantial compliance with program requirements, facilities periodically undergo surveys and the Secretary contracts with state survey agencies to conduct those surveys. Act, section 1864(a); 42 C.F.R. � 488.20. The regulations require that each facility be surveyed at least once every 12 months, and more often, if necessary, to ensure that identified deficiencies are corrected. 42 C.F.R. � 488.20(a).

In this case, from April 16 through 20, 2001, the Iowa Department of Inspections and Appeals (State Agency) conducted the facility's annual certification survey. Stipulations dated August 7, 2002 (Stip.) 4. Among other problems, the survey team concluded that the facility did not meet requirements for quality of care (42 C.F.R. � 483.25(h)(2)). Specifically, the surveyors found that the facility failed to monitor adequately two residents whom it had identified as wanderers. On one occasion, on August 1, 2000, following a tornado warning and storm, a neighbor telephoned the facility to report a resident (R22) ambulating with a walker on the dike near the facility. On a second occasion, on October 1, 2000, a neighbor telephoned the facility to report a man (R15) with a walker at her door. The surveyors determined that the facility had not ensured that each resident received adequate supervision and assistive devices to prevent accidents, in violation of 42 C.F.R. � 483.25(h)(2), and that the deficiencies posed immediate jeopardy to resident health and safety. P. Ex. 1, at 18 - 25.

CMS agreed with the state agency conclusions, and, by letter dated August 2, 2001, advised the facility that it was not in substantial compliance with federal requirements, and that CMS was imposing a per instance CMP of $2,000 for the quality of care deficiencies. P. Ex. 1, at 1.

In a letter dated September 27, 2001, Petitioner timely appealed, and the matter has been assigned to me. The parties initially filed 37 stipulations (Stips. 1 - 37), and proposed exhibits. Petitioner submitted a pre-hearing brief (P. Brief) and thirty exhibits (P. Exs. 1 -30). CMS submitted a pre-hearing brief (CMS Brief) and twenty-six exhibits (CMS Exs. 1 - 26). By letter dated November 18, 2004, the parties submitted an additional stipulation, which I have labeled Stip. 38. They have agreed that, rather than my treating their briefs as cross-motions for summary judgment, this matter may be decided on the record before me, including the stipulations, so long as Stip. 38 is included in the record. In the absence of any objections, I admit Stips. 1 - 38, P. Exs. 1 - 30, and CMS Exs. 1 - 26.

II. Issue

The issue before me is whether the facility was in substantial noncompliance with 42 C.F.R. � 483.25(h)(2) (Quality of Care) on August 1, 2000, when R22 eloped from the facility, and on October 1, 2000, when R15 eloped from the facility. Assuming CMS has imposed two per instance CMPs at the statutory minimum amount, the reasonableness of the amount of the CMP is not an issue. Otherwise, I must determine whether the imposition of a $2,000 per instance CMP is reasonable.

I recognize the parties' agreement that I also consider other issues: 1) whether the facility's past noncompliance was "egregious," within the meaning of section 7510 of the SOM; 2) whether the facility's noncompliance constituted immediate jeopardy; and 3) whether the imposition of a per instance CMP was reasonable. Joint Notice of Issues for Which Summary Judgment Will Be Requested (Aug. 7, 2002). However, as discussed below, I have no authority to decide these issues, and parties cannot confer subject matter jurisdiction by stipulation. If I find substantial noncompliance, I have no authority to review CMS's choice of remedy (in this case, a per instance CMP). 42 C.F.R. � 488.438(e)(2); 42 C.F.R. � 498.3(b)(13); see also 42 C.F.R. � 488.408(g)(2). Nor may I review the immediate jeopardy finding since, where a per instance CMP is imposed, a decision on that issue does not affect the range of CMP amounts that CMS could collect. 42 C.F.R. � 488.438(a)(2); 42 C.F.R. �� 498.3(b)(14); 498.3(d)(10).

III. Discussion

A. The facility was not in substantial compliance with 42 C.F.R. � 483.25 (Quality of Care) when R22 and R15 eloped from the facility.

Under the statute and "quality-of-care" regulation, each 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 resident's comprehensive assessment and plan of care. Act, section 1819(b); 42 C.F.R. � 483.25. Specifically, the facility must ensure that each resident receives adequate supervision and assistance devices to prevent accidents. 42 C.F.R. � 483.25(h)(2). Facilities thus have an affirmative duty to achieve favorable outcomes "to the highest practicable degree." Windsor Health Care Center, DAB No. 1902, at 16 - 17 (2003); Woodstock Care Center, DAB No. 1726, at 25 - 30 (2000), aff'd, Woodstock Care Center v. Thompson, 363 F.3d 583 (6^th Cir. 2003). In ensuring adequate supervision, the facility is not required to do the impossible or be a guarantor against an unforeseeable occurrence, but it is required to "take reasonable steps to ensure that a resident receives supervision and assistance devices designed to meet his or her assessed needs and to mitigate foreseeable risks of harm from accidents." 42 C.F.R. � 483.25(h)(2); Windsor Health Care Center, DAB No. 1902, at 5 (2003); Asbury Center at Johnson City, DAB No. 1815, at 12 (2002); Koester Pavilion, DAB No. 1750, at 25 - 26 (2000); Woodstock, DAB No. 1726, at 25. The regulation requires the facility to anticipate what accidents might befall a resident and to take steps - increased supervision or the use of assistance devices - to prevent them. Guardian Health Care Center, DAB No. 1943, at 18 (2004).

A facility is permitted the flexibility to choose the methods it uses to prevent accidents, but the chosen methods must constitute an "adequate" level of supervision under all the circumstances.

Windsor, DAB No. 1902, at 5. Measures taken by the facility to prevent accidents must be considered in deciding whether the facility satisfies the regulatory requirement that each resident receive adequate supervision and assistance devices. Guardian Health Care Center, DAB No. 1943, at 12.

Here, the facility plainly considered R22 and R15 at risk. Its assessments for these residents recognize that, given the opportunity, either would attempt an elopement, and neither could safely leave the facility unattended. R22 was admitted to the facility on April 11, 2000. Stip. 8. He was diagnosed with dementia, insomnia, paranoia, and a personality disorder. Stip. 9. His April 11, 2000 information form directed staff to monitor him closely because of his wandering. Stip. 10. The facility gave him a WatchMate wrist alarm designed to activate door locks alarmed with the WatchMate alarm system, so if he attempted to open a door fitted with a sensor, the alarm would alert staff that he was trying to leave the facility. Stip. 12 - 13. A subsequent risk assessment, dated July 19, 2000, shows that R22 was also at high risk for falls, and required a walker. Stip. 11.

R15 was admitted to the facility on January 1, 1999. He had short and long-term memory deficits, and was moderately impaired in daily decision making skills. He exhibited wandering and "outside seeking" behaviors. Stip. 22. R15 was also provided a WatchMate bracelet, which thwarted his multiple attempts to leave the facility. Stip. 23; see also Stip. 38.

In addition to door alarms, the facility had in place a surveillance camera system, by which staff could view some of the exit doors. Stip. 24. However, the evidence establishes that the facility's systems were flawed in ways that jeopardized resident safety. First, as is required, the facility had in place an emergency generator, which would automatically provide electricity in the event of a power failure. Stips. 16, 20. However, the facility's WatchMate alarm system "was not fully wired into the generator" (P. Brief, at 25), so, while under emergency power, the door alarm system became inactivated on four of the facility's exit doors. Stip. 21. Thus, on August 1, 2000, when the facility lost power during a thunderstorm and the emergency generator "immediately commenced operation," R22 was able to exit the facility undetected. Stips. 16, 21. Facility staff learned of his disappearance when a neighbor called to report that he was walking with his walker near the base of a dike "that served as an earthen fence," about 180 feet from the facility. Staff members found him at the base of the dike, and returned him to the facility unharmed. Stips. 18 - 19. The maintenance man "rearmed the system per his normal protocol," and the facility has had no further problems or malfunctions of the door alarm/lock system since then. Stip. 20.

Of course, a door alarm system is only effective if staff respond appropriately to the alarms. With respect to R15, a nursing note entry indicates that the front door alarm sounded at 6:30 a.m. on October 1, 2000. Stip. 26. Hearing the alarm, a registered nurse (identified as Staff P) checked the "detection unit," which showed that the front door "was the source of the alarm." But Staff P did not go to the front door to see if a resident had left the building. Stip. 27. A second registered nurse (identified as Staff A) also checked the detection unit, saw that the front door had been opened, and turned on a surveillance camera for the main entrance. She did not see anyone on the monitor screen, and did not investigate further. The door alarm stopped sounding, which indicates that it was reset, but the facility has not been able to identify the person who reset the door alarm. Stip. 28. At approximately 6:40 a.m., a neighbor living across the street from the facility telephoned to report that a man was standing outside her apartment. Staff retrieved R15 and returned him to the facility unharmed. Stip. 25.

In each of these instances, Petitioner fell short of taking reasonable steps to mitigate foreseeable risks of harm. Staff recognized that these residents would attempt to elope and that elopement would jeopardize their safety. They determined that an adequate response to those risks included attaching to each resident a wrist bracelet that activated a door alarm system. But the facility's system was flawed, for which the facility is accountable. Momentary power outages, not uncommon anywhere, are especially predictable during Midwestern thunderstorms. Yet, when such outage occurred, the facility's door alarm system failed on four of the facility exit doors. Further, in the case of R15, even when the exit door alarm sounded, staff failed to respond appropriately. Apparently, no staff member considered himself/herself responsible for investigating what all should have known was a possible (if not likely) elopement. I do not consider it an adequate response that one staff person looked at the security monitor.

Petitioner points out that neither resident was hurt, and, in each case, makes much of the relatively short time that elapsed between the resident's elopement and return (about 10 minutes for R22, somewhat longer for R15). First, I need not find that a resident suffered actual harm as a result of these incidents. The potential for more than minimal harm is sufficient to establish substantial noncompliance. 42 C.F.R. � 488.301. Fortuitously, due primarily to the vigilance of facility neighbors, tragedies were averted in these two instances, but such reliance on strangers is not a "reasonable step" designed to ensure that the resident receives supervision and assistive devices designed to meet his or her assessed needs and to mitigate foreseeable risks of harm from accidents. The facility's actions (or inactions) in these instances placed its residents at risk and constitute substantial noncompliance with the quality of care regulation, 42 C.F.R. � 483.25(h)(2).

B. Because CMS had a basis for imposing a remedy, I have no authority to review CMS's exercise of its authority to impose a penalty.

If a facility is not in substantial compliance with program requirements, CMS has the authority to impose one or more of the enforcement remedies listed in 42 C.F.R. � 488.406, which include imposing a CMP. See Act, section 1819(h). CMS may impose a CMP for the number of days that the facility is not in substantial compliance with one or more program requirements or for each instance that a facility is not in substantial compliance. 42 C.F.R. � 488.430(a). This is so even if, by the time of the survey, the facility corrected its deficiencies and achieved substantial compliance. Act, section 1819(h)(1); 42 C.F.R. � 488.430(b); North Ridge Care Center, DAB No. 1857, at 11 n.8 (citing 59 Fed. Reg. 56,116, 56,161 (Nov. 10, 1994)) and at 12 n.10 (2002). ⁽²⁾

Where CMS has the authority to impose a remedy, the regulations specifically preclude appeal of CMS's choice of remedy or the factors considered by CMS in selecting the remedy:

A facility may not appeal the choice of remedy, including the factors considered by CMS or the State in selecting the remedy specified in � 488.404.

42 C.F.R. � 488.408(g)(2). Elsewhere, the regulations specify that if an administrative law judge finds a basis for imposing a CMP, as I have here, he/she may not review CMS's exercise of its discretion to impose a civil money penalty. 42 C.F.R. � 488.438(e).

I am fully aware that the parties have stipulated that the State Agency, with CMS's concurrence, issued a deficiency under Tag F698, which, they agree, is authorized by � 7510 of the SOM. Stip. 29. That provision instructs the state to impose a remedy where, at the time of the survey, the facility has corrected a deficiency through its quality assurance program, if that earlier noncompliance was "egregious." P. Ex. 4, at 28 - 29. The parties also agree that:

[i]n the absence of a finding of "egregious noncompliance[,]" there would not be a basis for citing a deficient practice under F698.

Stip. 29. This stipulation is not relevant to the issue legitimately before me. Provisions of the SOM are not legally binding. They offer unpublished guidance to surveyors, but do not change the participation requirements set out in the regulations. Alden-Princeton Rehabilitation & Health Care Center, DAB No. 1873, at 8 (2003); Beverly Health and Rehabilitation Center - Williamsburg, DAB No. 1748, at 8 (2000). Substantial noncompliance means that the facility has not complied with regulatory requirements, and, notwithstanding the tag number referred to, the Statement of Deficiencies clearly states that the facility failed to comply with 42 C.F.R. � 483.25(h)(2). Whether the facility complied with the regulation is the question I am empowered to review. The parties may not, by stipulation, expand my jurisdiction beyond that conferred by the statute and regulations.

C. To the extent that the amount of the CMP is an issue before me, I find $2,000 reasonable.

The reasonableness of the amount of the CMP is probably not before me. Although Petitioner initially mentioned the issue in its hearing request, neither party has mentioned it in any subsequent submission. In my pre-hearing order, dated April 26, 2002, I directed the parties to submit pre-hearing briefs that "must contain any argument that a party intends to make," and cautioned that "I may exclude an argument and evidence that relates to [it] if a party fails to address it in its pre-hearing brief."

Moreover, if CMS has imposed two $1,000 per instance CMPs, I must sustain these amounts as a matter of law. Although the record is not clear, inasmuch as CMS cites two separate instances of noncompliance, and imposed per instance CMPs, it is likely that CMS imposed a $1,000 CMP for each instance of elopement. When CMS imposes a CMP for an instance of noncompliance, the penalty must be in the range of $1,000 to $10,000 per instance. 42 C.F.R. � 488.438(a)(2). Where CMS imposes a penalty amount that is the minimum, I must sustain that determination.

On the other hand, the language of the notice letter and CMS's subsequent submissions suggest that CMS may have imposed one per instance CMP in the amount of $2,000, in which case, the amount of the CMP would be reviewable. 42 C.F.R. � 488.438(e). Assuming the amount is reviewable here, I determine whether the amount is reasonable by applying the factors listed in 42 C.F.R. � 488.438(f): 1) the facility's history of noncompliance; 2) the facility's financial condition; 3) factors specified in 42 C.F.R. � 488.404; and 4) the facility's degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort, or safety. The absence of culpability is not a mitigating factor. 42 C.F.R. � 488.438(f). The factors in 42 C.F.R. � 488.404 include: 1) the scope and severity of the deficiency; 2) the relationship of the deficiency to other deficiencies resulting in noncompliance; and 3) the facility's prior history of noncompliance in general and specifically with reference to the cited deficiencies.

The record is silent as to most of these factors. However, a $2,000 per instance CMP is at the very low end of the range for per instance CMPs, and well below the facility's potential liability had CMS determined to impose a per diem CMP (which can be as high as $10,000 per day for immediate jeopardy situations). This deficiency is not based on a single isolated incident, so a penalty above the minimum is justified. Fortunately, no one was injured, but resident safety was jeopardized, and the facility must be considered culpable. I am therefore not able to find unreasonable this relatively minimal CMP.

IV. Conclusion

For all of the reasons discussed above, I uphold CMS's determination that the facility was not in substantial compliance with program participation requirements, specifically, 42 C.F.R. � 483.25(h)(2) (Quality of Care). I do not believe that the reasonableness of the amount of the penalty is appropriately before me, but if it were, I would find reasonable the amount of the per instance CMP imposed, $2,000.

Carolyn Cozad Hughes

Administrative Law Judge

1. The parties have argued needlessly about the cited deficiencies for which no penalties were imposed. I have authority to review only findings of noncompliance that result in the imposition of a remedy. 42 C.F.R. � 498.3(b)(13); see Schowalter Villa, DAB No. 1688 (1999); see also, Beechwood Sanitarium, DAB No. 1824, at 19 (2002) (An administrative law judge is not required to make more findings than necessary to support the remedies imposed).

2. North Ridge contains a comprehensive discussion of CMS's authority to impose penalties for past noncompliance, defined as "noncompliance with the participation requirements between standard surveys." Id. at 14.