SUBJECT:

Maxwell Manor,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I sustain the imposition of remedies against Petitioner, Maxwell Manor, consisting of:

� Terminating Petitioner's participation in the Illinois Medicaid program, effective May 27, 2000;

� Denying payment for new Medicaid admissions during a period which began on May 18, 2000, and which continued through May 26, 2000; and,

� Imposing civil money penalties of $7,500 per day against Petitioner for each day of a period which began on May 12, 2000, and which continued through May 26, 2000.

These remedies are authorized because Petitioner had an immediate jeopardy level failure to comply with federal participation requirements governing its participation in the Illinois Medicaid program during the May 18 - 26, 2000 period which it did not correct.

I. Background and procedural history

Petitioner is a nursing facility in Chicago, Illinois. Prior to May 27, 2000, Petitioner participated in the Illinois Medicaid program. On May 9 - 12, 2000, Petitioner was surveyed for compliance with federal participation requirements (May 12 survey). At the May 12 survey, the surveyors alleged that Petitioner had two immediate jeopardy level failures to comply with federal participation requirements. Centers for Medicare & Medicaid Services (CMS) Exhibit 1. (On July 5, 2001, the Health Care Financing Administration was officially redesignated as the Centers for Medicare & Medicaid Services. 66 Fed. Reg. 35,437 (2001)). The surveyors revisited Petitioner's facility on May 25 - 26, 2000 (May 26 survey). They again alleged an immediate jeopardy level deficiency. CMS Exhibit 8.

CMS concurred with the surveyors' findings and determined to impose remedies against Petitioner consisting of: termination of Petitioner's participation in the Illinois Medicaid program; denial of payments for new admissions during a period which began on May 18, 2000, and which ran through May 26, 2000; and, imposition against Petitioner of civil money penalties in the amount of $7,500 per day for each day of a period which began on May 12, 2000, and which ran through May 26, 2000.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. CMS moved for summary disposition. Petitioner opposed the motion and cross-moved for summary disposition. On May 17, 2001, I ordered the parties to respond to certain specific questions by no later than June 5, 2001. Order Directing Parties to Provide Supplemental Information. CMS filed a response to this order. Petitioner did not file a response.

CMS submitted a total of 36 proposed exhibits (CMS Ex. 1 - CMS Ex. 36) with its motion, its reply brief, and its response to my Order Directing Parties to Provide Supplemental Information. Petitioner submitted 13 proposed exhibits (P. Ex. A - P. Ex. M) with its opposition to CMS's motion and its cross-motion for summary disposition. Neither party objected to my receiving these proposed exhibits into evidence. Therefore, I receive into evidence CMS Ex. 1 - CMS Ex. 36 and P. Ex. A - P. Ex. M.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. It is appropriate to decide this case based on the parties' written submissions;

2. Petitioner had an immediate jeopardy level deficiency between May 12 and May 26, 2000;

3. A basis exists in this case for CMS to impose remedies against Petitioner; and,

4. Civil money penalties of $7,500 per day are reasonable for each day of the period which ran from May 12, 2000 through May 26, 2000.

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 explain each Finding in detail.

1. It is appropriate to decide this case based on the parties' written submissions.

CMS and Petitioner have rested their cases on their written submissions. Neither party indicated any desire to have additional proceedings in this case. I conclude that it is appropriate to decide the case based on the parties' submissions without scheduling additional evidentiary proceedings.

Both CMS and Petitioner moved for summary disposition. CMS asserts that there are no disputed issues of material fact and that the remedies it determined to impose are authorized by the undisputed facts and the governing law. Petitioner argues that the facts as alleged by CMS do not establish a prima facie case of noncompliance by Petitioner which justifies the remedies that CMS determined to impose.

I directed Petitioner to explain what, if any, additional evidence it might wish to offer either at an in-person hearing or by documentary submission in order to make certain that Petitioner was not seeking an additional opportunity to offer evidence. Order Directing Parties to Provide Supplemental Information. Petitioner did not respond to this order. I find additional support for my conclusion that Petitioner does not seek an in-person hearing in this case nor does it desire an opportunity to offer additional documentary evidence from Petitioner's failure to respond to my order.

2. Petitioner had an immediate jeopardy level deficiency from May 12 through May 26, 2000.

The surveyors who conducted the May 12 survey alleged that Petitioner had an immediate jeopardy level failure to comply with participation requirements that are stated at 42 C.F.R. � 483.13(c)(1)(ii). CMS Ex. 1 at 1 - 4. They alleged, additionally, that Petitioner had an immediate jeopardy level failure to comply with participation requirements that are stated at 42 C.F.R. � 483.25(h)(2). CMS Ex. 1 at 4 - 25. At the May 26 survey, the surveyors alleged a continuing immediate jeopardy level failure by Petitioner to comply with the requirements of 42 C.F.R. � 483.25(h)(2). CMS Ex. 8.

I find that Petitioner failed to rebut CMS's prima facie showing that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.25(h)(2) both as of the May 12 and May 26 surveys. Thus, Petitioner failed to comply substantially with the requirements of this regulation from May 12 through May 26, 2000, and its noncompliance remained unabated as of May 26, 2000. Furthermore, Petitioner failed to prove to be clearly erroneous CMS's determination that Petitioner had an immediate jeopardy level failure to comply with the regulation's requirements both as of May 12, 2000, and as of May 26, 2000.

It is not necessary that I address the question of whether Petitioner's alleged failure to comply with the requirements of 42 C.F.R. � 483.13(c)(1)(ii) was a second immediate jeopardy level deficiency during the May 12 - 26, 2000 period. As I discuss below, at Finding 3, the presence of a single immediate jeopardy level deficiency during the May 12 - 26, 2000 period enabled CMS to impose remedies against Petitioner consisting of: termination of Petitioner's participation in the Illinois Medicaid program, denial of payment for new admissions, and civil money penalties of at least $3,050 per day for each day of the May 12 - 26, 2000 period. And, as I explain at Finding 4, the existence of a second immediate jeopardy level deficiency in this case is not a necessary element of my decision that civil money penalties of $7,500 per day are reasonable.

a. As of May 12, 2000, Petitioner had an immediate jeopardy level failure to comply with the requirements of 42 C.F.R. � 483.25(h)(2).

The requirements of 42 C.F.R. � 483.25(h)(2) are that a long-term care facility must ensure that each of its residents receives adequate supervision and assistance devices to prevent accidents. The surveyors who conducted the May 12 survey found that Petitioner failed to comply with the requirements of the regulation in that it allegedly failed to provide security, supervision, and sufficient staff to prevent: resident elopement; resident to resident abuse including sexual assault and physical assault; stealing among residents; unsupervised smoking in areas not designated as smoking areas (including resident bedrooms); and, alcohol and drug abuse. The survey report recites a litany of findings that are offered to support the allegations. CMS Ex. 1 at 4 - 25.

Petitioner argues that many of the allegedly supporting findings are based on hearsay that is not only inherently not probative but which Petitioner could not possibly be expected to rebut due to its nature. As Petitioner observes, many of the specific allegations of noncompliance that are made in the survey report depend on statements that are attributed to unidentified residents or unidentified employees of Petitioner. Petitioner asserts that it would be unfair to rely on these alleged statements as evidence of its noncompliance in that it cannot challenge or respond to them.

I agree with Petitioner's characterization of many of the specific allegations of fact that are contained in the survey report. The kind of hearsay that these allegations consist of - alleged statements attributed to anonymous individuals - is inherently unreliable because the accuracy and honesty of the statements cannot be tested. In other cases, I have declined to attach any weight to such statements and I do so here. None of the findings that I make in this decision relies on statements that are attributed to anonymous individuals.

However, the surveyors developed additional evidence of Petitioner's noncompliance with 42 C.F.R. � 483.25(h)(2) consisting of their own observations and information obtained from reviews of Petitioner's records. I find that this evidence is persuasive prima facie evidence of Petitioner's noncompliance with the requirements of the regulation.

Petitioner is a facility whose resident population at the time of the May 12 and 26 surveys consisted largely of younger mentally ill individuals. Many of these residents had impulse control and substance abuse problems. Many of them had histories of engaging in destructive or self-destructive behavior. Petitioner's brief at 12.

The characteristics of Petitioner's resident population imposed a burden on Petitioner and its staff to protect the residents from their self-destructive conduct. Additionally, Petitioner and its staff were obligated to protect residents from the destructive acts of other residents. This meant that Petitioner and its staff had to supervise residents to assure that they did not place themselves or other residents in jeopardy. The surveyors developed compelling evidence at the May 12 survey that Petitioner and its staff were either incapable or unwilling to provide the needed supervision. This included evidence that Petitioner and its staff were unwilling or unable to:

� Protect residents or Petitioner's staff against assaults by other residents. For example, on April 19, 2000, a resident who is identified in the report of the May 12 survey as R25 assaulted a member of Petitioner's staff. The resident was removed in handcuffs by the police. However, the following day the resident was returned to the facility and, immediately, the resident assaulted another resident, R17. CMS Ex. 1 at 8.

� Prevent residents from smoking without adequate supervision. The surveyors observed residents smoking in inappropriate locations without supervision. For example, they observed R8 smoking in an unguarded stairway, and they observed R35 smoking while sitting on his bed. CMS Ex. 1 at 10 - 11. The surveyors found physical evidence of smoking in inappropriate areas including cigarette butts and burnt matches on the floor of a resident's room. Id. at 11.

� Ensure that staff provided requisite security for residents. The surveyors observed that staff was absent from duty stations for protracted periods. CMS Ex. 1 at 13. Petitioner's records showed that on one occasion there was a failure for several hours to provide staff to cover a nurse's station. Id.

� Develop procedures to assure that Petitioner's staff supervised residents adequately to assure that residents did not abuse drugs or alcohol or engage in destructive behaviors. Petitioner's staff gave residents passes which enabled these residents to be out of Petitioner's facility - sometimes for extended periods of time - without supervision. The surveyors found that Petitioner had not developed procedures which contained criteria for determining which residents could receive passes. CMS Ex. 1 at 16. Nor had Petitioner developed policies and procedures to ensure that residents did not abuse drugs or alcohol. Id.

� Assure that only residents who had received proper authorization for passes were given passes to leave Petitioner's facility unsupervised. In one instance, a resident was given a pass to leave Petitioner's facility unsupervised despite the facility having received an order from the resident's physician which prohibited giving the resident a pass. CMS Ex. 1 at 19. On other occasions, residents were allowed to leave the facility with passes without having received authorization from their treating physicians. Id.

� Prevent elopements and escapes. Residents frequently eloped or escaped Petitioner's facility without having obtained a pass and contrary to physicians' orders. CMS Ex. 1 at 18 - 19; 20 - 25. For example, the treating physician for R26 had ordered that the resident not be given a pass to leave Petitioner's facility. CMS Ex. 1 at 18. This resident had a major depressive disorder and, obviously, the physician was concerned that the resident would not be safe if the resident was not closely supervised. See Id. Notwithstanding, the resident made numerous attempts to escape Petitioner's facility. Id. at 18 - 19. These attempts included climbing down a fire escape ladder and exiting the facility via a rope made out of bed sheets. Id. Petitioner's staff documented numerous other instances in which residents: forced their way past guards in order to escape; ran out through unguarded doors; or simply walked out of the facility. Id. at 20 - 25. At least one of these residents, R28, eloped for protracted periods of time. Id. at 20.

Petitioner has not offered evidence which rebuts the prima facie evidence obtained by the surveyors. With respect to R25, Petitioner asserts that the resident's assaultive behaviors occurred "within hours of his admission" to Petitioner's facility and Petitioner "never had the opportunity to fully evaluate this resident or implement a treatment plan to address his behaviors." Petitioner's brief at 5. But, the fact is that the assault that the resident perpetrated on April 19, 2000, gave Petitioner's staff ample warning that this resident posed a threat for assaultive conduct. Notwithstanding this warning, Petitioner's staff failed to take appropriate measures to prevent the resident from committing a second assault on the following day.

Petitioner's response to the surveyors' findings concerning episodes of unauthorized smoking essentially is to argue that there is no evidence that any harm resulted from these episodes. But, Petitioner does not deny that the episodes occurred. See Petitioner's brief at 7. Petitioner's response to the allegations does not address the dangers - such as a fire hazard - that were the consequence of unsupervised smoking. Moreover, the fact that Petitioner's staff failed to supervise adequately the residents' smoking suggests a more generalized overall failure of staff to supervise residents.

Petitioner has not offered persuasive evidence to refute the surveyors' findings that Petitioner lacked procedures which contained criteria for determining which residents could receive passes. Nor has Petitioner provided evidence that addresses the surveyors' findings that Petitioner lacked procedures for dealing with drug and alcohol abuse.

Petitioner concedes that many of the unauthorized absences and elopements documented by the surveyors occurred. Petitioner makes two arguments to justify the unauthorized absences and elopements from its facility. First, Petitioner contends that its residents had "a right to go out and be in the community" and that these residents also had "a right to engage in self-destructive behaviors." Petitioner's brief at 12. As an aspect of this argument, Petitioner contends that it was helpless to prevent residents with pass orders from going out into the community and engaging in self-destructive behaviors because, aside from physician-ordered restrictions, it lacked the authority to infringe on the residents' rights. Second, Petitioner asserts that the surveyors' findings do not document an immediate jeopardy level deficiency because the surveyors did not find evidence that actual harm occurred to the eloping or escaping residents. E.g., Id. at 16 - 17.

I do not find these arguments to be persuasive. It may be true that Petitioner lacked the authority to bar some of its residents from leaving its premises. But, at least some of the residents were individuals whose physicians had ordered their access to the community to be restricted. The weight of the evidence in this case is that Petitioner and its staff did little or nothing to honor these physicians' orders and, in some instances, contravened them. Moreover, Petitioner failed to develop or to effectively implement rules that protected its residents from the destructive conduct of other residents. Although Petitioner may have lacked the authority to bar some of its residents from going out into the community and abusing substances or alcohol, neither was it obligated to tolerate such behavior. At the least, it could have protected residents who did not elope or abuse substances and alcohol from those who did by imposing effective restrictions on the admission or continued stay of those residents who were determined to ignore facility rules and procedures. But, the evidence in this case shows that Petitioner did nothing of the kind. Furthermore, as I explain below, it is unnecessary to prove that residents actually experienced harm as a consequence of Petitioner's deficiencies.

b. As of May 26, 2000 Petitioner continued to have an immediate jeopardy level failure to comply with the requirements of 42 C.F.R. � 483.25(h)(2).

The surveyors who conducted the May 26 survey found a continuing immediate jeopardy level failure by Petitioner to comply with the requirements of 42 C.F.R. � 483.25(h)(2). CMS Ex. 8. These surveyors found that Petitioner: continued to allow residents to leave its premises inappropriately; allowed one resident to elope the facility; and, failed to implement a corrective system designed to assure that residents not be permitted unauthorized absences. Id. at 1 - 21. The surveyors found specific examples to support their allegations. The evidence relied on by the surveyors and by CMS to support these allegations includes records generated by Petitioner's staff.

Petitioner did not rebut the allegations made in the report of the May 26 survey. Petitioner conceded that residents went off the premises of Petitioner's facility without appropriate authorization. Petitioner's brief at 21 - 22. Petitioner's argument in opposition to the finding of a deficiency is, essentially, that there is no proof that any of the residents whose absences were unauthorized were actually harmed.

3. CMS established a basis for imposing remedies against Petitioner.

A basis exists in law for CMS to impose remedies against a long-term care facility which participates in Medicare or a State Medicaid program if the facility fails to comply substantially with one or more federal requirements governing Medicare or Medicaid participation. 42 C.F.R. �� 488.406(a)(3), 488.430. A facility fails to comply substantially with a participation requirement where the facility is deficient in meeting that requirement and the deficiency poses a potential for causing more than minimal harm to the health and safety of the facility's residents. 42 C.F.R. � 488.301. It is not necessary for there to be multiple deficiencies at a facility as a prerequisite for the imposition of remedies against that facility. The presence of even one deficiency, if that deficiency is substantial, is a basis for the imposition of remedies. Remedies that CMS may impose include: termination of participation in Medicare or Medicaid; denial of payment for new admissions; and, civil money penalties. Civil money penalties of $3,050 or more may be imposed where a facility has at least one immediate jeopardy level deficiency. 42 C.F.R. � 488.438(a)(i).

A basis exists to impose remedies against Petitioner consisting of: denial of payment for new admissions, termination of Petitioner's participation in the Illinois Medicaid program, and civil money penalties of at least $3,050 per day for each day of the May 12 - 26, 2000 period. The basis for these remedies is the presence of an immediate jeopardy level deficiency as of May 12, 2000, which was not abated as of May 26, 2000.

The surveyors who conducted the May 12 survey found that Petitioner had two immediate jeopardy level deficiencies as of that date. These involved alleged failures by Petitioner to comply with the requirements of 42 C.F.R. �� 483.13(c)(1)(ii) and 483.25(h)(2). At Finding 2 of this decision I sustain the finding of an immediate jeopardy level failure to comply with the requirements of 42 C.F.R. � 483.25(h)(2). It is not necessary that I address the alleged failure by Petitioner to comply with the requirements of 42 C.F.R. � 483.13(c)(1)(ii) inasmuch as Petitioner's immediate jeopardy level failure to comply with the requirements of 42 C.F.R. � 483.25(h)(2) is a sufficient basis for CMS to impose the remedies that CMS determined to impose in this case.

4. Civil money penalties of $7,500 per day for each day of the period which ran from May 12, 2000 through May 26, 2000 are reasonable.

CMS determined to impose civil money penalties of $7,500 per day against Petitioner for each day of the period that ran from May 12, 2000 through May 26, 2000, based on the presence of immediate jeopardy level deficiencies at the May 12 and 26 surveys. I conclude that civil money penalties in these amounts are reasonable.

The regulations authorize civil money penalties in amounts that range between $3,050 and $10,000 for each day that a facility has an immediate jeopardy level deficiency. 42 C.F.R. � 488.438(a)(i). Where within that range a civil money penalty or penalties should lie depends on the application to the facts of the case of regulatory factors which must be considered in determining the amounts of civil money penalties. These are set forth at 42 C.F.R. �� 488.438(f) and 488.404 (incorporated by reference into 42 C.F.R. � 488.438(f)(3)). These factors include: a facility's history of noncompliance; its financial condition; the seriousness of a facility's deficiencies; and, the relationship between deficiencies.

I have considered these factors in deciding whether CMS's civil money penalty determination is reasonable. I sustain CMS's determination to impose civil money penalties in amounts of $7,500 per day for each day of the May 12 - 26, 2000 period because of the high risk of harm to Petitioner's residents, the pervasiveness of Petitioner's failures of oversight and supervision, and Petitioner's culpability. I have taken into consideration that Petitioner offered no evidence showing that it lacks the financial ability to pay the civil money penalties that CMS determined to impose. Indeed, Petitioner has not supplied any argument as to what amounts of civil money penalties might be imposed beyond asserting that the facts do not establish a basis to impose remedies in this case.

See Petitioner's brief at 1. I note that in my Order Directing Parties to Provide Supplemental Information, I specifically asked Petitioner if it was denying that civil money penalties in the amounts of $7,500 per day were reasonable assuming that a basis existed to impose civil money penalties against Petitioner. Petitioner did not respond to this order.

� The high risk of harm to residents resulting from Petitioner's deficiencies. Risk of harm is a measure of the seriousness of a deficiency. In this case, the likelihood was very high that residents would eventually experience serious harm or die. These residents were, by Petitioner's own admission, individuals who were capable of engaging in destructive or self-destructive behavior, including substance and alcohol abuse and assaultive behavior. Yet, Petitioner and its staff essentially allowed many of these residents to come and go as they pleased from Petitioner's facility, thereby greatly increasing the risk that these residents would engage in the very behaviors for which they were receiving treatment. And, in fact, some of the residents did become intoxicated or were picked up by the police while away from Petitioner's facility. In at least one instance, a resident returned to the facility after an absence so intoxicated that the resident had to be hospitalized. CMS Ex. 8 at 2.

� The pervasiveness of Petitioner's deficiencies. The pervasiveness of deficiencies is another measure of their seriousness. Petitioner's deficient supervision of its residents is made more serious by its pervasiveness. This is not a case in which a resident occasionally eloped from a facility. The picture that is depicted by the reports of the May 12 and 26 surveys is of a facility at which unauthorized absences and elopements were part of the normal daily routine. Residents literally seemed to be able to come and go as they pleased, regardless of any physicians' restrictions on their freedom of movement from the facility and without any meaningful attempt by Petitioner or its staff to restrict the residents' freedom to leave the facility or to supervise the residents when they were off-premises even in those situations where restrictions and supervision were medically required. And, accepting for argument's sake Petitioner's assertion that it had no authority to restrict the freedom of its residents to come and go as they pleased, Petitioner did not implement effective measures to protect residents from those residents who engaged in destructive behavior, including assaults on other residents.

� Petitioner's culpability for its deficiencies. Petitioner's culpability is high. The repeated unauthorized absences and elopements by residents put Petitioner and its staff on notice that its security and resident supervision were terribly deficient. Yet, as is documented in the report of the May 12 survey, the unauthorized absences and elopements continued unabated for weeks at Petitioner's facility. These episodes were the direct consequence of Petitioner's lax management of its residents' care. As was documented by the surveyors, Petitioner did not establish criteria for giving passes to residents. At times, stations in Petitioner's facility were unmanned.

� The absence of evidence proving that Petitioner lacks the wherewithal to pay civil money penalties of $7,500 per day. As I explain above, Petitioner has not offered any evidence to show that it lacks the financial capacity to pay the civil money penalties that CMS determined to impose in this case.

CMS argues that the case for civil money penalties in amounts of $7,500 per day is strengthened by evidence establishing a second immediate jeopardy level deficiency as of May 12, 2000. This deficiency was identified by the surveyors as an alleged failure by Petitioner to comply with the requirements of 42 C.F.R. � 483.13(c)(1)(ii). At Finding 3, I explain why it is unnecessary for me to consider this alleged deficiency in reaching my conclusion that a basis exists to impose remedies against Petitioner. I also find it unnecessary to consider this alleged additional deficiency as an element of my decision sustaining the $7,500 per day civil money penalties that CMS determined to impose against Petitioner. The evidence which relates to Petitioner's immediate jeopardy level failure to comply with the requirements of 42 C.F.R. � 483.25(h)(2) is adequate to sustain CMS's penalty determination.

Steven T. Kessel

Administrative Law Judge