SUBJECT: Milpitas Care Center,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

On September 23, 2002, Milpitas Care Center (Milpitas) appealed the July 22, 2002 decision of Administrative Law Judge (ALJ) Alfonso J. Montano upholding the determination of the Centers for Medicare & Medicaid Services (CMS) ⁽¹⁾ terminating Milpitas' Medicare provider agreement and imposing civil monetary penalties (CMPs) against Milpitas. Milpitas Care Center, DAB CR932 (July 22, 2002) (ALJ Decision). The remedies arose from a series of surveys of Milpitas, originally triggered by complaints from the families of residents, which found severely inadequate staffing and administration, as well as numerous other specific deficiencies (many of them related to the lack of sufficient qualified employees). CMS determined that the level of noncompliance constituted an immediate jeopardy situation beginning with the initial survey on November 3, 1998 and not abating until November 18, 1998. Follow-up surveys in February and May of 1999 documented that Milpitas still had not come into substantial compliance, with many deficiencies remaining uncorrected from prior surveys. CMS terminated Milpitas effective June 17, 1999, imposed a denial of payment for new admissions (DPNA), and imposed a CMP of $3,050 per day of immediate jeopardy and a CMP of $3,000 per day from November 19, 1998 until the facility was terminated.

The ALJ found that the record before him demonstrated that CMS had the authority to impose the remedies because Milpitas was not in substantial compliance on the relevant dates, that Milpitas had not shown that the finding of immediate jeopardy was clearly erroneous, and that the amounts of the CMPs imposed were reasonable. Overall, the ALJ found that Milpitas presented very little evidence of any kind to challenge CMS's presentation, and the ALJ discounted the credibility or relevance of much of the evidence that was put forward by Milpitas. Our review of the entire record indicates that substantial evidence supports the ALJ's findings.

Based on the reasoning explained below, we affirm the ALJ Decision and sustain the remedies imposed, including the full amount of the CMPs imposed by CMS.

Background ⁽²⁾

Milpitas is a 35-bed skilled nursing facility in California which participated in the Medicare program and was bound to comply with requirements of participation imposed by statute and regulation. Section 1819 of the Social Security Act (Act); 42 C.F.R. Parts 483, 488, and 489. Compliance with these requirements is assessed generally by unannounced surveys conducted by a state survey agency.

Where deficiencies are found in a survey, the state survey agency and CMS assess the seriousness of the deficiencies on a scale that considers scope (how isolated or widespread the deficiency is) and severity (how great the harm or potential for harm the deficiency causes). 42 C.F.R. � 488.404. The findings are reported on a standard form (called a "2567") which identifies specific deficiencies and assigns "F-tag" numbers. In order to be found in "substantial compliance," a provider must have no deficiencies that pose a risk to resident health or safety greater than "the potential for causing minimal harm." 42 C.F.R. � 488.301. At the other extreme, the most serious deficiencies are those determined to constitute immediate jeopardy. "Immediate jeopardy" is defined in the regulations as a situation in which a provider's noncompliance "has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident." Id.

The first survey at issue here began on November 3, 1998 and was triggered by five complaints filed by family members of residents alleging severe staffing inadequacies. The surveyors found the complaints substantiated and determined that conditions in the facility presented an immediate jeopardy to residents. That survey continued with the state agency monitoring Milpitas's attempts to resolve the immediate jeopardy until November 18, 1998, when the surveyors concluded that Milpitas had abated the immediate jeopardy. The surveyors also determined that numerous other deficiencies at levels below immediate jeopardy existed at Milpitas and required Milpitas to provide a plan for correcting deficiencies and achieving substantial compliance. The state agency completed two revisit surveys to determine whether Milpitas in fact had achieved substantial compliance, the first beginning on February 8, 1999 and the second on May 18, 1999. In each case, the surveyors determined that Milpitas had not achieved substantial compliance and documented numerous deficiencies, many of them repetitions of those found in preceding surveys and not corrected.

Sections 1819(h) and 1919(h) of the Act authorize imposition of CMPs to remedy noncompliance at amounts not to exceed $10,000 per day. Regulations provide for different ranges of CMPs depending on the nature and seriousness of the noncompliance. 42 C.F.R. � 488.408. In particular, in cases involving immediate jeopardy determinations, CMS may impose a CMP in the range of $3,050 to $10,000 per day while the range for situations of less than immediate jeopardy is from $50 to $3,000 per day. Within the applicable range, the regulations provide a number of factors to be considered by CMS in determining an appropriate CMP amount. 42 C.F.R. � 488.438(f).

CMS adopted the recommendations of the state survey agency regarding appropriate remedies to impose to try to bring the facility into compliance. After the initial survey, a $3,050 per day CMP was imposed by letter for the 15 days in which immediate jeopardy was found. After the first revisit, CMS informed Milpitas that the CMP would be continued at the reduced rate of $3,000 per day until either substantial compliance was achieved or the facility was terminated, which would otherwise take place by operation of law on May 18, 1999. ⁽³⁾ In addition, CMS imposed a DPNA effective April 16, 1999. After the second revisit found continuing noncompliance, CMS provided notice of termination which became effective June 17, 1999 and continued the CMP and DPNA until that date.

Milpitas requested a hearing to review the remedies imposed based on all of the surveys, pursuant to 42 C.F.R. Part 498. An in-person hearing was held from August 21 through August 25, 2000.

Standard of review

A party, including CMS, dissatisfied with an ALJ decision or dismissal may file a written request for review by the Departmental Appeals Board. 42 C.F.R. � 498.82(a). The request must "specify the issues, the findings of fact or conclusions of law with which the party disagrees, and the basis for contending that the findings and conclusions are incorrect." 42 C.F.R. � 498.82(b). On review, the Board may remand to the ALJ, or may modify, affirm, or reverse the ALJ's decision. 42 C.F.R. � 498.88.

The standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the whole record. Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs. The standard of review on a disputed issue of law is whether the ALJ decision is erroneous. Id.

Issues

Milpitas excepted to all of the 35 Findings of Fact and Conclusions of Law (FFCLs) in the ALJ Decision. In regard to the staffing inadequacy and ineffective administration deficiencies, Milpitas argued that the facility did all it could to try to obtain "proper staffing" but that it was "extremely difficult." Milpitas Br. at 3-4, addressing FFCLs 1, 2, and 11. Regarding most of the remaining deficiency findings discussed in detail by the ALJ, Milpitas made virtually identical statements to the effect that the "testimony in the record established that the facility" was in compliance and that no evidence was "presented to show that this deficiency was proximately related to the problems cited." Id. at 4, addressing FFCLs 3-10. ⁽⁴⁾ Further, as to each, Milpitas asserted that the ALJ "incorrectly found that no evidence was presented by the facility and that CMS presented a prima facie case because he failed to take into account the cross-examination of the CMS witnesses." Id.

The ALJ dealt in an abbreviated manner with a number of additional deficiencies based on Milpitas's "complete failure to provide evidence on most of the deficiencies," finding that Milpitas had failed to prove substantial compliance as to each and setting out the essential facts with record citations and the legal authorities for each. ALJ Decision at 20-27. Milpitas argued that there was "no discussion of these findings" in the ALJ Decision and that "many are repeats of prior deficiencies." Milpitas Br. at 5.

In addition, Milpitas argued that the amount of the CMPs is unreasonable and excessive because of financial hardship to the facility, and because the amount remained nearly the same after immediate jeopardy abated even though the facility had allegedly corrected "a substantial portion of the deficiencies. ⁽⁵⁾

Finally, Milpitas offered two constitutional arguments. First, it alleged that it was "unconstitutionally forced to bear the burden of proving compliance [innocence], rather than the agency being required to prove the violation." Milpitas Br. at 6. Second, it argued that the CMPs as imposed violate the Fifth and Eighth Amendments of the Constitution because Milpitas was not provided with the "minimal protections for the imposition of quasi-criminal sanctions," citing again to the allocation of the burden of proof. Id.

1. Milpitas failed to present meaningful evidence or legal argument in support of most of its assertions.

As a preliminary matter, we note that Milpitas's presentation before us was extremely minimalist. Its entire briefing consisted of six pages. Each issue raised was addressed merely by conclusory assertions, devoid of any citations to the record or any discussion of legal authorities on which Milpitas relied. We have reviewed the full record, and sought to discern the points that Milpitas was making in its arguments, but the absence of any effort by Milpitas to indicate what evidence or authority supported its assertions significantly hampered consideration of the arguments Milpitas set out in summary fashion.

This problem is consistent with Milpitas's participation before the ALJ where Milpitas filed no post-hearing brief despite ample opportunities and ignored reiterated offers by the ALJ to receive additional evidence. ⁽⁶⁾ In sum, in a case with 1,766 pages of hearing transcript and thousands of pages of documentary exhibits, Milpitas's witnesses' direct testimony accounted for less than 100 pages; Milpitas offered only six exhibits into evidence, of which five were received, (while CMS exhibits totaled well over 100), and, most importantly, Milpitas never explained what it relied on in the record to support its position. The weighing of evidence cannot be done with a physical scale, but the paucity of affirmative evidence and argument in this case overwhelmingly accords with the ALJ's conclusions that Milpitas utterly failed to undercut CMS's case.

In his decision, the ALJ made explicit findings about what weight he attributed to the various witnesses and explained his reasons. He characterized CMS's 11 witnesses as follows:

All of CMS's witnesses were qualified in their fields. CMS's witnesses included trained surveyors who conducted the various surveys and who are registered nurses with many years of experience. CMS also called as expert witnesses a registered pharmacist, a physician with over 40 years of experience, a social worker with a Master's degree, and another registered nurse who was not present at the surveys. A health insurance specialist with CMS also testified relative to the imposition and continuation of CMPs . . .

ALJ Decision at 8.

Milpitas called two witnesses: Hermingilda Manuel, the president and one of two shareholders of facility's parent corporation, and Cornelio Guevara, the corporation's office manager. The ALJ evaluated their testimony as follows:

Neither of these two witnesses were direct care givers, nor did they possess any medical expertise and [they] were not even present at the time of the surveys. Tr. 1653. After a review of the entire record in this case, I find that the testimony of these two witnesses was not substantiated by documentary evidence and much of the testimony was either inconclusive or self-serving. I therefore give no weight to their testimony.

ALJ Decision at 9. ⁽⁷⁾ Milpitas made no argument that would justify our revisiting the ALJ's assessments. We find his reasoning sound and based on facts supported by the record. Therefore, we accept the ALJ's attribution of weight among the witnesses before him.

The context for the rest of our decision is thus set by the nearly complete failure of Milpitas to direct our attention to any specific support in the record for its assertions (particularly those of compliance with each participation requirement), to articulate arguments or reasons to believe that the ALJ committed any error, or to present any credible witnesses or undercut the credibility of witnesses presented by CMS on the disputed issues of fact. We do not believe that a detailed discussion of each item of evidence relied on by the ALJ is necessary or useful in this situation. We limit our discussion to summarizing why the contentions that were raised by Milpitas on appeal lack merit.

2. Milpitas's repeated claim that the ALJ failed to consider its cross-examination of CMS's witnesses in evaluating the record is incorrect on the face of the ALJ Decision.

Milpitas's blanket claim that the ALJ did not consider Milpitas's cross-examinations fails in light of the ALJ's explicit discussion of the value of the cross-examinations, as follows:

Counsel for Petitioner conducted cross-examination of the CMS witnesses who testified at hearing. That cross-examination did not elicit any admissions from any CMS witness that would establish that any of the CMS findings cited in the CMS-2567 were in error. While the cross-examination by Petitioner's counsel may have elicited information which could possibly have assisted Petitioner's case, the cross-examination, standing alone in its raw form, did not present an identifiable defense to any or all of the specific deficiencies cited by CMS.

ALJ Decision at 9. It is hence clear that the ALJ reviewed and considered all of the testimony, including cross-examination. Further, the ALJ did not dismiss the possibility that a party could establish its case through cross-examination. He found instead that Milpitas had not done so. Our review of the transcript makes clear that substantial evidence supports the ALJ finding in this regard.

Further, the ALJ did not err in explaining his role in developing the record. ALJ Decision at 10. The regulations do require the ALJ to "inquire fully" into all matters at issue and receive relevant and material evidence, but do not impose a duty on the ALJ (or on the Board) to attempt to extrapolate legal arguments that a party might conceivably have attempted to raise but chose not to. We conclude that Milpitas's position that the ALJ somehow failed to extract inferences favorable to Milpitas from its cross-examination of CMS's witnesses is without merit.

We turn next to the substance of the ALJ's specific findings concerning Milpitas's lack of substantial compliance.

3. The challenged ALJ findings regarding each deficiency are supported by substantial evidence in the record as a whole.

A. The ALJ's conclusion that preponderance of the evidence supports central allegations of dangerous staff shortages and poor administration is well-founded.

At the heart of the concerns CMS raised about Milpitas lay allegations of recurring severe staffing inadequacies which management failed to avoid or cope with effectively, to the detriment of resident services and even basic needs. On this core issue, Milpitas did not assert in its appeal that it had marshaled evidence below to contest the staffing levels alleged by CMS nor to demonstrate that the number and kind of staff present was actually able to provide all the required services. Instead, Milpitas argued, essentially, that it had done what it reasonably could to try and get proper staffing and that staffing the facility "was extremely difficult." Milpitas Br. at 2. This formulation amounts to an admission rather than a defense and the evidence offered below by Milpitas merely reinforces that effect. As the Board held in a prior case, "assertions that efforts are being made to come into compliance or that Petitioner's staff is overworked do not constitute a meaningful defense to the allegations of noncompliance." Community Nursing Home, DAB No. 1807 (2002). The severity of the staff shortfalls and the magnitude of the potential for resulting harm thus stand virtually uncontradicted.

The ALJ found that the preponderance of the evidence proved that Milpitas was clearly inadequately staffed, and painted a stark picture of the needs of, the dangers to, and detrimental impact on the very vulnerable residents Milpitas undertook to serve, as illustrated in the following passages:

The resident make-up included 4 bedfast residents, 6 residents with feeding tubes, 32 residents who were dependent on the staff for bathing, 31 residents dependent on the staff for dressing, 29 residents dependent on the staff for transferring, 28 residents dependent on the staff for toileting, 19 residents dependent on the staff for eating, 29 residents who were chair bound and 32 residents who had restraints. The evidence was clear that one licensed nurse and one CNA was totally inadequate to meet the needs of the residents such as repositioning, dressing, bathing, and toileting.

The evidence also showed that other individuals were providing care to the residents who were not qualified to do so.

* * *

The situation that existed . . . was not an isolated situation because the DON [Director of Nursing] and the administrator told the surveyors that many on the staff had quit and the remaining staff was being ordered to do mandatory overtime or mandatory double shifts. . . . There were many times that there was insufficient staff during the months of October and November 1998.

* * *

As a result, there was insufficient staff to provide basic care and the care required by residents' care plans. Moreover, this deficiency rose to the level of immediate jeopardy because there was a lack of sufficient staff to care for the residents in an emergency situation or to remove the residents from danger and also because the facility used untrained and unsupervised staff in lieu of qualified nursing staff.

ALJ Decision at 12-13 (record citations omitted). The ALJ findings on this score were supported by more than ample evidence in the record. See id. at 11-13 (FFCLs 1, 2) and 19-20 (FFCL 11), and record citations therein. The testimony of CMS's witnesses, as well as its exhibits, established that only one certified nursing assistant (CNA) was on duty on the day shift on November 3, 1998 although Milpitas's own policies required four CNAs, and that staffing levels did not return to adequate levels until November 18, 1998 despite warnings of immediate jeopardy and daily monitoring by surveyors. See, e.g., CMS Ex. 2; Tr. at 81-93, 1556. Even then, at the point where immediate jeopardy was abated, no system was functioning to prevent recurrence of the dangerous conditions. See ALJ Decision at 13, and record citations therein. Inadequate staffing (and inadequate administrative measures to remedy it) continued to be evident in each of the revisits.

What affirmative evidence Milpitas offered on this subject further reinforced the ALJ's findings. Milpitas's owner admitted that the facility was shorthanded. Tr. at 1655, 1689-94. She further acknowledged that the facility never sought the help of the state agency with its staffing problems. Tr. at 1712-13.

In posing questions on cross-examination, Milpitas's counsel several times suggested that public transportation to the facility was limited, that a general nursing shortage in the area impacted hiring, or that some apparently untrained staff might have begun nurse aide training permitting them to provide some services. See, e.g., Tr. at 555-64. Questions by counsel are not evidence, however, and the witnesses' responses did not support any of these suppositions. Nor did Milpitas ever provide elsewhere an evidentiary foundation establishing the premises of these questions. Similarly, no witness testified to the existence of any coherent plan by the management to deal with shortfalls caused by employees calling in sick or failing to show up, although Milpitas elicited admissions on cross-examination that such events can be expected to occur in this type of facility.

The deficiency relating to ineffective administration can in large part be confirmed based on the uncontradicted facts relating to the failure to use efficacious means either to remedy the constant staff shortfalls or to take meaningful countermeasures to protect or transfer vulnerable residents to avoid the consequences of the inability to provide needed care.

See ALJ Decision at 13, and record citations therein. The haphazard use of untrained staff to fill in by performing direct care tasks represents, in our view, not a reasonable step to alleviate the shortage.

We conclude that the ALJ's determination that these deficiency findings were proven by the preponderance of the evidence is itself supported by substantial evidence in the record as a whole. Our conclusion on these deficiencies requires us to sustain the immediate jeopardy determination for the period November 3-18, 1998. Furthermore, since the CMP imposed for the period of immediate jeopardy was the lowest permitted by regulation, we must also uphold the reasonableness of the amount of that CMP. 42 C.F.R. � 488.408.

Finally, as noted above, the abating of the immediate jeopardy did not resolve the staffing and administration problems fully and no evidence was adduced to demonstrate that effective measures were adopted thereafter to prevent such serious situations from occurring again.

What is more, actual shortages were found again during the revisit survey of February 8, 1999. At one point in time, the shortage was so drastic that family members of residents contacted the local police to report that dinner was not being distributed and incontinence care was not occurring because only one nurse was on duty and no CNA was present. ALJ Decision at 20 and record citations therein. Thus, substantial non-compliance resulting from inadequate staffing clearly continued at the time of the February revisit. Given that this continued inadequacy was in an area that had generated prolonged immediate jeopardy, we see nothing unreasonable in the imposition of a CMP near the top of the non-immediate jeopardy range for the period from the abatement of the immediate jeopardy through February 8, 1999.

We turn next to the many other deficiencies, some also quite serious and many discovered repeatedly, that were found at Milpitas during the various we conclude that the continuation of the CMP at the same level through Milpitas's termination is not unreasonable.

B. Other serious deficiencies revealed in November remained uncorrected at the February 8, 1999 and May 18, 1999 revisit surveys.

i. Milpitas did not rebut evidence showing that restraints were improperly used on residents for the convenience of the staff rather than medical purposes.

Residents have a regulatory right to be free of physical or chemical restraints placed on them for discipline or staff convenience and not required for treatment of medical symptoms. 42 C.F.R. � 483.13(a). Violations of these rights were found in all of the survey visits. ALJ Decision at 13-15 (FFCL 3), 21 (FFCL 14), and 24 (FFCL 25). The instances demonstrated on the record showed multiple restraints used regularly without complete resident assessments, without current physician orders, or in violation of limitations on restraint usage in the assessments or in physician's orders.

One example of the egregiousness of this problem is the situation of Resident 15, who had been in four kinds of restraints for three years without evidence that any effort was made to find less restrictive alternatives or to reduce restraint use. See ALJ Decision at 14, and record citations therein. The resident's most recent assessment was August 11, 1998 and called for the restraints to be limited to the hours between 9 AM and 1 PM. The physician had ordered daily ambulation to preserve mobility. Yet, during the November 1998 survey, the resident was observed in the restraints at all times, and no documentation was found of daily ambulation. Furthermore, the surveyors noted that Resident 15 was evidently bothered by the restraints, banging on the lap tray and shaking the bed rails, and yet no assessment was made about these reactions.

The ALJ found that CMS presented evidence showing that overuse of restraints presented dangers of loss of capacity for independent functioning (such as walking or continence), increased dependence, and greater risk of pressure sores. ALJ Decision at 15, 24. On these deficiencies, the ALJ found, and our review of the record confirms, that Milpitas presented no relevant or material evidence. We conclude that the ALJ findings in this area were supported by substantial, and indeed, uncontradicted, evidence.

ii. Milpitas failed to rebut evidence that no regular activities were provided to residents.

Regulations require that residents be assessed for and have access to an "ongoing program of activities designed to meet . . . the interests and the physical, mental, and psychosocial well-being of each resident." 42 C.F.R. � 483.15(f)(1). The ALJ found CMS presented evidence of the importance of such an activities program in promoting sensory stimulation, fostering socialization and physical exertion, and preventing depression and boredom. ALJ Decision at 15. Yet, at each survey, Milpitas was found to have performed no adequate assessments of residents' needs and on many days to have provided few or no actual activities for all or most of its residents. Id. at 15 (FFCL 4), 21 (FFCL 16) and 24 (FFCL 27). These findings were supported by substantial evidence.

Again, what evidence was offered by Milpitas tended to confirm the problem, or at most show unsuccessful efforts to address it. For example, Milpitas suggested that an activities person from another facility made some visits to Milpitas, but did not provide any evidence that this person learned the needs and interests of Milpitas's residents, designed a program to meet those needs, or implemented actual activities. Nothing proffered by Milpitas rebutted the allegations that residents lacked consistent access to appropriate activities throughout the survey cycle.

iii. Milpitas did not rebut evidence that it failed to provide medically-related social services and failed to handle resident's property responsibly.

Another repeated deficiency area related to the requirement that a facility provide "medically-related social services to attain or maintain the highest practicable physical, mental and psychosocial well-being of each resident." 42 C.F.R. � 483.15(g); see ALJ Decision at 15-16 (FFCL 5), 21 (FFCL 17), and 25 (FFCL 28), and record citations therein. Milpitas failed to meet many of the social needs that residents demonstrated, causing them unnecessary anxiety among other concerns. Milpitas did not develop plans to deal with inappropriate behavior by residents that disrupted their socialization and other residents; did not help residents it could not serve find other placements and to provide discharge planning; did not assist a resident distressed over missing items; did not help residents obtain such necessities as clothing, proper dentures or wheelchairs; did not provide supports for residents dealing with pain and fear; or did not assist residents with financial concerns and issues about which they were worried. In addition, many residents remained in restraints on revisits with no evidence that social services interventions had been attempted to reduce the need for restraints.

One particularly egregious example of the facility's lack of respect for residents' concerns involved an incident which was cited as a failure to "safeguard, manage, or account for the personal funds of a resident" under 42 C.F.R. � 483.10(c)(2-3). ALJ Decision at 17, and record citations therein. A resident entrusted to Milpitas's administrator a check for partial proceeds from the sale of her home. The resident at one time had been under a conservatorship but had been released from it by the time the check was issued. Milpitas did not rebut evidence that it failed to properly manage and account for this resident's check for $34,000 and did not return it to her despite repeated requests. As the ALJ noted, Milpitas's business manager told surveyors that he was given the check "for safekeeping;" the check itself was endorsed to Milpitas for deposit in its own account and bore no signature from the resident to whom the check was made out; and the office manager testified to receiving the check from the business manager, who told him to apply it to the resident's room and board charges, and to putting the check in the facility's business account without endorsement by the resident. Id. The ALJ also found that the check was deposited to the facility's account on September 25, 1998 but not credited to the resident's billing account until March 1, 1999 (after the issue had arisen in two surveys). The ALJ also found that the resident received no interest, no receipt, and no accounting for her funds, all of which aggravated the distress she was suffering from major depression after being paralyzed in a car accident. Id. at 17-18, and record citations therein.

On appeal, Milpitas asserted that "all transactions were handled with the approval of" a representative of the county public guardian's office, but pointed to no evidence in the record supporting this claim. Milpitas Br. at 3. Milpitas did not address the ALJ's express finding, based on documentation in the record, that the resident's conservatorship was terminated in June 1998 and that the county conservator therefore did not authorize or consent to the facility's appropriation of the check. ALJ Decision at 17, citing CMS Exs. 41, at 15 and 141, at 1. Milpitas also argued that the resident involved was "severely depressed." Milpitas Br. at 3. It is undisputed, and the ALJ found, that the resident "suffered from major depression." ALJ Decision at 18. Milpitas did not explain how this illness could justify its failure to account properly for the resident's property. The ALJ's findings rested in large part on the facility's records and on the admissions of its staff, as well as on observations of surveyors about the resident's distress. The ALJ did not rely for his factual determination on reports by the resident, so that any implication that the depression compromised the resident's reliability would not undermine the ALJ's findings.

iv. Milpitas failed to rebut CMS's showing that its residents did not receive appropriate treatment and services.

At the heart of the role of a skilled nursing facility is the requirement that it provide quality care and services to each resident designed to attain or maintain the resident's "highest practicable physical, mental and psychosocial well-being, in accordance with the comprehensive assessment and plan of care," developed by the facility to meet their individual needs. 42 C.F.R. � 483.25. The regulation requires, among other things, supporting independence in the activities of daily living, avoiding pressure sores, providing range of motion services, proper handling of naso-gastric feeding, providing adequate nutrition and hydration, taking steps to prevent accidents, meeting special needs, and avoiding unnecessary drugs and medication errors. Id. The ALJ found that Milpitas repeatedly fell short in this area. See ALJ Decision at 16 (FFCL 6), 18 (FFCL 9), and 22 (FFCL 18)(all relating to lack of range of motion services); 18-19 (FFCL 10) (wound treatment), 23 (FFCL 22) (unnecessary drugs); and 25-26 (FFCL 29, 31, 32) (pain management, transfer and feeding, unnecessary drugs and gasterostomy techniques).

The ALJ found that CMS established that, at every survey, residents assessed as needing range of motion exercises and ambulation assistance did not receive those services consistently because Milpitas did not hire sufficient staff to enable it to meet those needs, thereby increasing the risk of such serious consequences as falls, pressure sores, and depression. ALJ Decision at 16, 18, and 22. Milpitas provided neither documentation nor testimony showing that the 21 residents affected did receive the care required or that the exercises were not actually needed.

In one case, the ALJ found that no physician assessment or treatment order was obtained for a serious wound on a resident's back (described as a red excoriated area), no documentation of tracking or treatment was available, and no plan to manage the resident's severe pain was provided. ALJ Decision at 18-19; see generally Tr. at 311-20. Milpitas raised questions about exactly how large the involved area was and about what the facility should do if the physician did not respond promptly. Even had Milpitas provided affirmative evidence to lay a foundation for the assertions its questions implied (which it did not), the assertions would not matter. The wound should have been assessed and treated even if the size were smaller, and the facility needed to follow up on any effort to notify the physician to assure not only that the physician was notified but that the physician was consulted about treatment and any orders were implemented. Milpitas raised questions about the remnant of zinc oxide found by the surveyors, presumably as evidence that the staff was treating the wound, but again did not address the basic concerns that this treatment was not ordered by a physician, its efficacy was not assessed, and its appropriateness was not evaluated by a physician. See, e.g., Tr. at 489-92.

The ALJ credited expert testimony from a pharmacist presented by CMS that residents were receiving drugs not appropriate for their age without assessment of possible alternatives, that side effects of medications were not properly assessed and addressed, and that the medications were begun or continued without clear reasons or careful monitoring. ALJ Decision at 25-26. While Milpitas raised questions on cross-examination about how active the nursing staff should have been expected to be in evaluating physicians' orders, it neither presented any expert testimony on the standards for nurses to support a claim that the facility staff should not have taken action to question or clarify the drug orders, nor addressed why the facility did not monitor and address adverse side effects more effectively.

We conclude that substantial evidence in the record supports the ALJ's findings in this area as well.

C. The ALJ's brief discussions of some deficiencies were adequate given Milpitas's failure to present meaningful evidence or argument in regard to most of them.

Milpitas's complaint that the ALJ provided "no discussion" of his findings about multiple allegations that Milpitas failed to provide required services to its residents, as set out at FFCLs 12-33, has a certain irony. Milpitas Br. at 5. The ALJ devoted about seven pages to his findings regarding these deficiencies, whereas Milpitas's total briefing on the subject, both before the ALJ and on appeal, totals two sentences. ALJ Decision at 20-27. Furthermore, the ALJ addressed each deficiency finding individually, provided an affirmative statement of his conclusion as to each based on the record, identified the affected residents, identified potential or actual harm from the failure to provide adequate services, and set out as to each both the legal authority and specific citations to the exhibits and testimony on which he relied. Milpitas did not explain what more it contended was required to constitute an adequate "discussion."

The second sentence of Milpitas's argument, stating that "[m]any are repeats of prior deficiencies," is simply incomprehensible. Milpitas Br. at 5. The large number of repeat deficiencies adds to the damning evidence that conditions at Milpitas remained unacceptable throughout the survey cycle ending in its termination from the program. The ALJ may reasonably have felt that he did not need to comment as extensively on the nature or rationale of deficiencies whose existence had already been established and which Milpitas had promised to take specific measures to eliminate in its plan of correction. We can discern no sense in which the fact that these deficiencies were "repeats" benefits Milpitas's position.

We conclude that the ALJ's discussions of these findings were adequate and that they were in each case supported by substantial evidence in the record as a whole.

4. Milpitas failed to show that the amount of the CMPs imposed was unreasonable.

The ALJ correctly understood his role in looking at the factors relating to the reasonableness of the amount of the CMP to be taking evidence on contested factors and determining whether any challenge to the amount is supported by the record before him, rather than reviewing how CMS arrived at the amount it selected. ALJ Decision at 27-30; see also Emerald Oaks, DAB No. 1800 (2001); CarePlex of Silver Spring, DAB No. 1683 (1999); Capitol Hill Community Rehabilitation and Speciality Care Center, DAB No. 1629 (1997). The factors to be considered are set out in 42 C.F.R. � 488.438(f)(1)-(4), and encompass the facility's history of noncompliance, including repeat deficiencies, its degree of culpability, and its financial condition, as well as the scope and severity of the deficiencies. See also 42 C.F.R. � 488.404. The ALJ addressed these factors in reaching his conclusion that the amounts of the CMPs were reasonable. ALJ Decision at 27-30 (FFCLs 34a and 34b).

Milpitas raised two arguments contesting the amount of the CMPs. First, it argued that the facility's financial status meant that the amount was excessive. Milpitas Br. at 5. Second, it argued that the CMP after abatement of the immediate jeopardy was not significantly reduced even though "CMS's allegations admit improvements in the facility." Id.

As noted above, we, like the ALJ, may not revisit the reasonableness of the amount of the CMP imposed for the period of immediate jeopardy because it is already set at the lowest level permitted by the regulations. ALJ Decision at 27-28; 42 C.F.R. � 488.408(e). For this CMP, the financial situation is therefore irrelevant. Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002). The rest of our discussion is hence directed at the reasonableness of the amount of the non-immediate jeopardy CMP.

For that purpose, the ALJ reviewed the evidence in the record concerning Milpitas's financial status. ALJ Decision at 30. His inquiry properly went to whether the facility was able to pay the CMPs without being put out of business. See Coos Bay Rehabilitation, Inc. d/b/a Hearthside Care Center, DAB No. 1741 (2000)(discussing ability to pay as relevant inquiry regarding financial condition); see also preamble discussion in 59 Fed. Reg. 56,204 (Nov. 10, 1994) ("it is not our intent to put facilities out of business"). He concluded that Milpitas had the "funds available to it at the time of termination to pay the CMP." ALJ Decision at 30. He based this conclusion on testimony of the co-owner of the parent corporation of Milpitas. He noted that she did not state that the amount would put the facility out of business. He also found that her claim that funds were lent to the new operator after the termination in amounts that exceeded the CMP totals, even if credited, merely demonstrates that adequate funds were available to make payment.

We note first that the proximity of this daily amount to that imposed before immediate jeopardy was abated does not constitute an ipso facto demonstration of excessiveness. What Milpitas characterizes as "improvements" can as well be described as persistence in untenable conditions. Most of the serious deficiencies found in the initial survey continued to exist, including those which had resulted in the immediate jeopardy situation. An amelioration in the latter (after more than two weeks) sufficient to reduce it below the immediate jeopardy level does not necessarily warrant a major reduction in the CMP amount. The purpose of alternative remedies short of termination, including CMPs, is to apply pressure to motivate facilities to solve problems quickly and so protect residents without disrupting placements unnecessarily. See H.R. Rep. No. 391, 100th Cong., 1st Sess. 942 (1987); 59 Fed. Reg. 56,116-17, 56,177-78; see also Regency Gardens Nursing Center, DAB No. 1858 (2002); CarePlex of Silver Spring, DAB No. 1683 (1999), Golden State Manor and Rehabilitation Center, DAB No. 1597 (1996). Clearly, Milpitas's response to the initial CMP does not suggest that less pressure was necessary.

We conclude that the ALJ did not err in concluding that the CMP amounts were reasonable.

5. The placement of the burden of proof is irrelevant here because the evidence in the record as whole would suffice for CMS to prevail under allocation of the burden of proof.

In many of the deficiencies at issue, the ALJ found, and our review of the record confirms, that Milpitas presented no rebuttal at all to the evidence adduced by CMS to establish the underlying facts justifying the remedies imposed. See ALJ Decision at 20. The ALJ followed Board precedent in requiring CMS to present a prima facie case that would establish a lawful basis for the remedies imposed absent contradictory evidence and then determined ultimately whether Milpitas proved by the preponderance of the evidence in the record that it was in compliance with the relevant participation requirements. Hillman Rehabilitation Center, DAB Nos. 1611 and 1663 (1997), aff'd sub nom., Hillman Rehabilitation Center v. DHHS, No. 98- 3789 (GEV), slip op. (D.N.J. May 13, 1999); Cross Creek Health Care Center, DAB No. 1665 (1998).

As noted above, on the overarching staffing and administration failures, the ALJ expressly found that CMS's allegations were proven by the preponderance of the evidence. Furthermore, the deficiencies falling into these two categories more than adequately support the remedies imposed by CMS and upheld by the ALJ. The question of which party bore the ultimate burden of proving its case by the preponderance of the evidence is one that affects the outcome only where conflicting evidence rests near equipoise and the decision-maker must determine which party prevails. Fairfax Nursing Home, DAB No. 1794, aff'd sub nom., Fairfax Nursing Home v. Dep't of Health & Human Srvcs., 300 F.3d 835 (7th Cir. 2002), cert. denied, 2003 WL 98478 (Jan. 13, 2003); Meadow Wood Nursing Home, DAB No. 1841 (2002). In light of the posture of the case before us, in which the balance of evidence is so overwhelmingly one-sided, we need not evaluate whether the placement of the ultimate burden of proof on the provider to establish continuing compliance with the requirements for its participation in federally-funded health care programs raises different questions in the CMP context than those we have already fully considered in the context of other remedies.

6. Milpitas articulated no cognizable constitutional challenge to the ALJ Decision.

To the extent that Milpitas's constitutional arguments arose solely from its objection to the allocation of the burden of proof in CMP cases, we find that they are moot here for the reasons explained in the preceding section. To the extent Milpitas intended a broader constitutional argument, we are unable to discern its basis and, in any case, lack authority to rule directly on the validity of binding statutes and regulations. See generally Sentinel Medical Laboratories, Inc., DAB No. 1762 (2001).

Conclusion

For the reasons set out above, we affirm the ALJ Decision in its entirety and sustain all of the challenged FFCLs.

Judith A. Ballard

Donald F. Garrett

Marc R. Hillson
Presiding Board Member

1. CMS was previously named the Health Care Financing Administration (HCFA). See 66 Fed. Reg. 35,437 (July 5, 2001). We use "CMS" in this decision unless we are quoting documents that refer to HCFA.

2. The facts included in this general background are drawn from the ALJ Decision which contains relevant record citations and are presented here merely to provide a general framework for understanding the rest of our decision. They are not intended to substitute for the ALJ's findings.

3. The law requires termination of any provider who has been out of compliance for six months. Section 1919(h)(3)(D) of the Act; 42 C.F.R. �� 488.412(d), 488.450(d).

4. In addition to these reiterated statements, Milpitas made two further assertions in regard to allegations of mishandling of a personal check for $34,000 made out to a resident and deposited in the facility's own account. Milpitas asserted that testimony established that "all transactions were handled with the approval of" a representative of the county public guardian's office and that the resident involved was "severely depressed." Id. at 3. The intended significance of the assertions is not entirely clear but we discuss them further in our analysis.

5. The argument that the CMP amounts were excessive is capped by a statement that the "termination was improper under 42 C.F.R. � 483." The body of that part of the brief, however, contains no discussion of the termination but speaks specifically to the CMPs.

6. To the extent Milpitas made any arguments before us, they might fairly be characterized as untimely since they were not raised before the ALJ and should have been. Nevertheless, we have addressed what we could discern to be the basis for Milpitas's appeal to us.

7. We note that the case was reassigned to the ALJ after the hearing had taken place, so that his assessment of the weight he gave to the witnesses was based appropriately on his review of the transcript rather than on observation of their demeanor.