SUBJECT: Britthaven of Goldsboro,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Britthaven of Goldsboro (Britthaven) appealed the March 2, 2004 decision of Administrative Law Judge (ALJ) Steven T. Kessel upholding civil money penalties (CMPs) imposed by the Centers for Medicare & Medicaid Services (CMS) in the amount of $5,000 per day for each day of a period that began on July 21, 2002, and which ran until August 13, 2002. Britthaven of Goldsboro, DAB CR1148 (2004) (ALJ Decision). For the reasons discussed below, we affirm the ALJ Decision.

Factual Background

Britthaven is a skilled nursing facility located in Goldsboro, North Carolina, that participates in the Medicare program. Following a complaint, Britthaven was surveyed for compliance with federal participation requirements on August 14, 2002 by surveyors employed by the North Carolina Department of Health and Human Services (State survey agency). The surveyors concluded that, effective July 21, 2002, Britthaven was not complying substantially with two requirements for participation and that the level of noncompliance was such that residents were in a state of immediate jeopardy. These findings were based on the care received by a single individual, referred to as Resident #1, on July 21, 2002.

The events of July 21, 2002 are detailed in the ALJ Decision and can be briefly summarized by the following undisputed facts. Resident #1 was admitted to the facility from a hospital on July 18, 2002. Physician orders at all times indicated a need for particular care in the event that the Resident's oxygen saturation levels fell. When the Resident was admitted, he was receiving continuous nasal oxygen at the rate of three liters per minute, and his physician authorized up to six liters per minute. On July 20, 2002, the Resident's physician discontinued nasal oxygen administration to the Resident, and prescribed oxygen at the rate of one and one-half liters per minute if the Resident's blood oxygen levels fell below 92 percent. On July 21, 2002, the Resident was observed in respiratory distress by a certified nursing assistant, and a licensed practical nurse was called in. The licensed practical nurse determined that the blood oxygen level was 78 percent, and the nurse administered oxygen to the Resident up to six liters per minute. The licensed practical nurse did not notify the Resident's physician or a supervising registered nurse at that time. Subsequently, the condition of the Resident appeared to improve slightly but he continued to exhibit symptoms such as nausea and vomiting. When the Resident's physician arrived at the facility pursuant to his usual schedule, he examined the Resident and ordered a transfer to a hospital for a more thorough evaluation. The Resident was transported to a hospital emergency department, was admitted to the hospital and subsequently died.

The surveyors found that the facility had failed to comply with Medicare requirements at 42 C.F.R. � 483.10(b)(11), in caring for Resident #1, because the facility did not "immediately consult with the resident's physician . . . when there is . . . a significant change in the resident's physical, mental or psychological status." The surveyors also found that the facility had failed to comply with Medicare requirements at 42 C.F.R. � 483.25 because it failed to provide "necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well-being in accordance with the comprehensive assessment and plan of care." Brithaven Ex. 4, at 6. This second finding was based on alleged failure to properly assess the Resident, document the findings of that assessment, follow facility procedures to notify other staff members, and promptly effect the Resident's discharge to a hospital. The surveyors concluded that the facility's noncompliance resulted in immediate jeopardy to resident health and safety.

Case Background

On September 12, 2002, CMS issued an initial determination, based on the August 14, 2002 State survey agency findings, that the appropriate remedy was to impose civil money penalties of $5,000 per instance of noncompliance for each of two regulatory deficiencies, for a total of $10,000 in penalties. Britthaven requested a hearing and the parties exchanged documentary exhibits, exhibit lists, witness lists, written direct testimony of proposed witnesses, and pre-hearing briefs.

On August 8, 2003, prior to the scheduled hearing, CMS issued a new notice, which it called a "Notice of Revised Determination." In this notice, CMS stated that "CMS has reopened and revised the determination described in its September 12, 2002 letter in accordance with CMS' authority under 42 C.F.R. � � 498.30 and 498.32." This notice informed Britthaven that CMS was "revising our initial determination because that determination did not sufficiently take into account the very serious nature of the deficiencies identified during the complaint survey" by changing the civil money penalty imposed to $5,000 per day for each day of the period of noncompliance from July 21, 2002 until August 13, 2002. The ALJ granted leave for Britthaven to file an amended hearing request, prehearing brief, and additional exhibits and testimony. The ALJ also permitted CMS to present new exhibits and testimony to address any new issues raised by Britthaven.

On September 22, 2003, Britthaven filed a Motion to Strike CMS's Revised Determination (Motion to Strike), which the ALJ denied on October 28, 2003. On October 31, 2003, Britthaven filed a waiver of its request for an in-person hearing, which CMS did not oppose, and the ALJ permitted additional briefing and submission of exhibits.

In a March 2, 2004 decision, the ALJ sustained CMS's determination to impose civil money penalties in the amounts of $5,000 per day for each day of a period from July 21, 2002 until August 13, 2002. The ALJ reviewed the evidence regarding the instances of noncompliance, and made the following Findings of Fact and Conclusions of Law (FFCLs):

1. Effective July 21, 2002, Petitioner failed to comply substantially with Medicare participation requirements.

a. Petitioner failed to comply substantially with the requirements of 42 C.F.R. � 483.10(b)(11).
b. Petitioner failed to comply substantially with the requirements of 42 C.F.R. � 483.25.

2. Petitioner did not prove that CMS's determination that Petitioner's noncompliance was at the immediate jeopardy level to be clearly erroneous.
3. Petitioner's noncompliance continued until August 13, 2002.
4. Civil money penalties of $5,000 per day are reasonable.

Standard of Review

The standard of review on a disputed conclusion of law is whether the decision is erroneous. The standard of review on a disputed finding of fact is whether the ALJ's finding is supported by substantial evidence in the whole record. ⁽¹⁾ South Valley Health Care Center, DAB No. 1691, at 2 (1999), aff'd, South Valley Health Care Center v. HCFA, 223 F.3d 1221 (10th Cir. 2000). Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971), quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). ⁽²⁾

Discussion

Britthaven alleged the following errors in the ALJ Decision in its Notice of Appeal and Appellate Brief (Appellate Brief). First, Britthaven asserted that the ALJ erred both factually and legally in denying Britthaven's Motion to Strike because applicable regulations did not permit CMS to revise only the penalty component of an "initial determination." Appellate Brief at 6-17. Second, Britthaven argued that the ALJ erred both in finding facts and in applying the law in determining that the facility failed to comply substantially with the requirements of 42 C.F.R. �� 483.10(b)(11) and 483.25. Id. at 17-33. Third, Britthaven argued that the ALJ erred as a matter of law in determining that any noncompliance rose to the level of immediate jeopardy. Id. at 34-36. Fourth, Britthaven asserted that the ALJ erred in the factual determination that noncompliance continued past July 21, 2002. Id. at 37-42. Fifth, Britthaven argued that the ALJ erred as a matter of law in determining that a civil money penalty of $5,000 per day was reasonable. Id. at 42-44. Sixth, Britthaven argued that the ALJ erred procedurally, in failing to rule on Britthaven's motion to file a reply brief and in admitting into evidence CMS Exhibits 17 and 18. Id. at 44-47. And, finally, Britthaven argued that the ALJ erred in "making unnecessary and unwarranted inflammatory statements that . . . tainted the entire decision." Id. at 48-49.

As we discuss below in more detail, we do not find any error of law by the ALJ, and we find substantial evidence in the record supporting the ALJ's factual findings. Thus, we affirm the ALJ Decision in full.

1. Denial of Britthaven's Motion to Strike was Proper.

Britthaven argued that it was not consistent with CMS's own regulations to revise only the penalty included in an "initial determination," and, thus, that the ALJ erred in denying Britthaven's Motion to Strike. The crux of Britthaven's argument is that the regulations at 42 C.F.R. �� 498.30 and 498.32 only authorize CMS to revise an "initial determination," and that the definition of that term in 42 C.F.R. � 498.3 includes findings of noncompliance resulting in a remedy, but does not include a determination of the sanction or penalty alone. Britthaven pointed specifically to regulations at 42 C.F.R. �� 498.3(d)(11) and 498.3(d)(14), which expressly exclude from the definition of an "initial determination" the choice of an alternative sanction or remedy. Britthaven thus concluded that CMS was not authorized to revise the remedy associated with an initial determination. In support of its argument, Britthaven cited Del Rosa Villa, Inc. v. Shalala, 1997 WL 269487 (C.D. Cal. Mar. 5, 1997)(a finding of noncompliance without imposition of a remedy is not a reviewable determination). Britthaven also cited ALJ decisions finding that a revised determination did not necessarily give rise to new appeal rights. See Renaissance Care Center, DAB No. CR497 (1997); Northfield Place, DAB No. CR549 (1998).

The definition of an "initial determination," in pertinent parts at 42 C.F.R. � 498.3(b)(13) and (14), provides for appeals of "a finding of noncompliance that results in the imposition of a penalty" or "the level of noncompliance found . . . but only if a successful challenge on this issue would affect . . . the range of civil money penalty amounts that CMS could collect . . ." (as in effect in 2002 to the present). This linkage between the finding of noncompliance and the imposition of a remedy ensures that appeal rights accrue only when there is a significant adverse impact on the facility. There is no question in the instant case that there was an initial determination, that Britthaven had an appeal right, and that Britthaven has taken full advantage of that appeal right (which affords the opportunity for a hearing before an ALJ).

There is also no question that the choice of alternative remedies is not within the scope of an "initial determination" and does not give rise to new appeal rights. 42 C.F.R. � 498.3(d)(11) and (14); see Del Rosa Villa, Inc. v. Shalala. Britthaven argued that, consistent with that position, a change in the sanction or penalty does not revise an initial determination and thus is not authorized as a revised determination. The regulations clearly support Britthaven's argument that the initial determination does not include the choice of sanction or remedy. Since such a choice is not within the scope of an initial determination, a change to that choice cannot be within the scope of a revision to an initial determination.

This does not, however, mean that a change in the choice of remedy is necessarily impermissible. Since the choice of remedy is not part of the initial determination, neither the initial determination nor the revised determination regulations address the issue of selecting the remedy. None of these regulatory provisions would preclude CMS from adjusting the choice of remedy (once the facility is on notice that the findings of noncompliance would result in a penalty or sanction). Thus, we conclude that CMS was not precluded from changing the per instance penalty to a per day penalty by the definition of an "initial determination" in Part 498.

Before the ALJ, Britthaven also argued that 42 C.F.R. � 488.438(d) prohibits any change in a CMP after a hearing request has been filed. This reading is not supported by the precise wording of the section. The section refers only to increases in a "per day penalty amount." Furthermore, the section permits changes before the date the actual hearing is held. Specifically, the section provides:\

(1) Before a hearing requested in accordance with � 488.432(a), HCFA [now CMS]. . . may propose to increase the per day penalty amount for facility noncompliance which, after imposition of a lower penalty amount, becomes sufficiently serious to pose immediate jeopardy.
(2) HCFA does . . . increase the per day penalty amount for any repeated deficiencies for which a lower level penalty amount was previously imposed . . . .

� 488.438(d)(emphasis added). Here, Britthaven did not dispute that the change was from a "per instance" CMP to a "per day" CMP. Nor did Britthaven dispute that the change was made before the hearing was scheduled to be held. Britthaven had full notice of the change, and an opportunity to address it at the scheduled hearing. ⁽³⁾

Finally, Britthaven argued that it would be contrary to the remedial purpose of the regulations to permit CMS to increase the remedy imposed almost a year after the initial imposition, and two years after the noncompliance at issue. Britthaven argued that the change was primarily punitive rather than remedial, and was made in retaliation for Britthaven exercising its right to file a request for a hearing.

We reject the broad sweep of Britthaven's argument that the statute must be read to preclude CMS from altering the selection of remedy because there would be no remedial effect. Changing the remedy imposed can permit CMS flexibility to ensure that it acts consistently in imposing remedies, and appropriately reacts to ongoing facility conduct. The ALJ found, and we affirm below, that the final CMS remedy imposed was consistent with the regulatory guidelines. Moreover, we sustain the ALJ's finding that the timing of the change in remedy is not sufficient evidence to show that CMS improperly or arbitrarily applied the regulatory factors to set the amount of the per day CMP.

We might find Britthaven's arguments concerning CMS's possible motivations more compelling if there was clear unfairness in either the amount of the per day CMP or the appeals process. But the ALJ, after an exhaustive review of the factual record, found the per day CMP to be justified by the seriousness of the deficiencies and the culpability of the facility. The ALJ considered the regulatory factors and, presumably without any improper motivation, found that the remedy was within the range authorized by law and was reasonable. ALJ Decision at 22-23. ⁽⁴⁾ Furthermore, the ALJ specifically found no prejudice to Britthaven in the timing of the final agency determination. ALJ Decision at 2-3. The ALJ considered whether Britthaven had a full and fair opportunity to address any new issues that might be raised by that determination, and concluded that it did. In sum, absent any unfairness in either the selection of remedy or the process, Britthaven has provided no reason why the ALJ was wrong to review the per day CMP in the same light as if it had been the originally issued remedy.

2. The ALJ properly concluded that the facility did not comply substantially with 42 C.F.R. �� 483.10(b)(11) and 483.25.

Britthaven asserted that the ALJ erred in finding failure to immediately notify the attending physician of a significant change in Resident #1's condition on the morning of July 21, 2002, based on the factual argument that there was no apparent significant change at the time. Britthaven argued that Resident #1 was admitted to the facility in need of care, and that the symptoms on the morning in question were not markedly different from those present the day before.

In this argument, however, Britthaven cannot overcome the undisputed fact that Resident #1 experienced a change in oxygen saturation level on the morning of July 21, 2002 and was reported to be in "respiratory distress." ALJ Decision at 8; CMS Ex. 4, at 27. Furthermore, the physician orders for Resident #1 explicitly referred to the significance of oxygen saturation levels. ALJ Decision at 7-8; CMS Ex. 4, at 26-27. Although Britthaven argued that the respiratory distress experienced by Resident #1 could be, and was, adequately treated by oxygen therapy without notifying the attending physician, that argument is not consistent with the regulatory requirements to notify the Resident's physician when there is a significant change in condition. ⁽⁵⁾ The record also contains evidence that the oxygen treatment given to the Resident by the nursing staff exceeded the levels authorized by the Resident's physician in his latest order. CMS Ex. 4. This supports CMS's conclusion that the Resident's respiratory distress was not an anticipated change covered by standard orders, but a significant change requiring physician intervention. ⁽⁶⁾ Thus, we cannot agree with Britthaven's argument that, because the Resident was admitted in a precarious condition, there was no change in condition when the Resident experienced an acute episode needing particular attention.

Britthaven also argued that the ALJ made a clear error of law in interpreting the requirement to "immediately" notify the attending physician when there is a change in resident condition. Britthaven specifically disputed the ALJ's statement that "[n]either applicable law nor nursing standards of care justified even a minute's delay in contacting the resident's treating physician." ALJ Decision at 19. Britthaven argued that it was reasonable to undertake necessary care and vital signs before contacting the treating physician. ⁽⁷⁾ While there could be a legal issue about the interpretation of "immediately" in a close case, the case at hand is not a close case in part because the facility did not promptly notify the physician even after providing necessary care and taking vital signs. The nursing records indicate that the standing physician orders specifically expressed concern about oxygen saturation levels, that the resident suffered an acute episode of respiratory distress and required immediate intervention by nursing staff, and that neither the physician nor the resident's family were contacted until as much as an hour later, after the Resident's acute symptoms had subsided. See CMS Ex. 3, at 3. ⁽⁸⁾

We find no error of law in this case, where the delay in notification was a significant period of time after the facility was aware of the onset of the resident's acute episode. Even assuming that the Resident was in a precarious condition and that the acute episode of respiratory distress required immediate attention by the nursing staff, we do not find a satisfactory reason for this delay in notifying the physician. Indeed, we find all the more reason for notification. The notification requirement is not a mere formality; it provides an opportunity for the physician to provide input and direction as to the care appropriate under the circumstances.

We conclude that there was substantial evidence in the record to support the ALJ's finding of noncompliance with section 483.10(b)(11).

Our conclusion is similar with respect to the finding of noncompliance with 42 C.F.R. � 483.25, which requires that each resident receive the necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well-being. The Resident's medical records do not include any indication of a full assessment of the Resident's condition performed by the attending licensed practical nurse, simply indications that vital signs were monitored. Britthaven Ex. 15, at 2. Britthaven asserted that this nurse was present in the Resident's room and must have been continually observing and assessing the Resident's condition to adjust the treatment being administered. Britthaven provided no support for this assertion. In any event, monitoring and reacting to manifest symptoms are not the same as conducting a full assessment; only a full assessment can serve as the basis for a clear diagnostic determination. The ALJ reasonably concluded that observing and reacting to symptoms did not result in the same level of care as a full assessment of the Resident's condition. See ALJ Decision at 15-16.

The ALJ also found noncompliance with 42 C.F.R. � 483.25 in the failure of the attending licensed practical nurse to contact a registered nurse supervisor. Britthaven asserted that the ALJ incorrectly relied on provisions of North Carolina nursing practice law that were not clear on the subject, and which Britthaven asserted specifically allowed flexibility based on the qualifications of the licensed practical nurse and circumstances at hand. Appellate Brief at 29-30. Britthaven also argued that the ALJ misinterpreted facility procedures requiring notification of a registered nurse because those procedures did not contain any express timing provisions. Id. at 30-31. Even if Britthaven correctly characterized state law and facility procedures, however, we still find a basis in the record for noncompliance. The record does not establish that the attending licensed practical nurse had any special qualifications to act without supervision of a registered nurse, nor does the record establish that the North Carolina criteria for flexibility were met. ⁽⁹⁾ Moreover, even assuming that notification of a registered nurse did not have to be immediate under Britthaven's own policies, the record indicates that the supervising registered nurse was contacted only after the physician had ordered transfer of the Resident to a hospital emergency room. Britthaven Ex. 15, at 2.

Moreover, we affirm the ALJ's conclusion that the failure to promptly obtain physician services, discussed above, also constituted noncompliance with 42 C.F.R. � 483.25. CMS presented expert testimony that: (1) the Resident was experiencing a cardiac emergency that required more intensive evaluation and treatment than could be provided by nursing staff; and (2) the Resident's physician would have been more likely than the facility's nursing staff to recognize the gravity of the symptoms and to arrive at an appropriate diagnosis. CMS Ex. 18, at 10-11. Additionally, the Resident's physician could have determined at an earlier stage that the Resident required hospitalization. Id. It is reasonable to conclude that, by failing to obtain physician care for the Resident, the facility did not ensure that the Resident received necessary care and services to maintain physical well-being. ⁽¹⁰⁾

We conclude that there is substantial evidence in the record to support the ALJ's finding of noncompliance with 42 C.F.R. � 483.25.

3. The ALJ did not err in upholding CMS's determination that Britthaven's noncompliance posed immediate jeopardy to residents.

Immediate jeopardy is defined at 42 C.F.R. � 488.302 as "a situation in which the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm or death to a resident." CMS's determination of the scope and severity of noncompliance "must be upheld unless it is clearly erroneous." 42 C.F.R. � 498.60(c)(2).

Britthaven argued that immediate jeopardy was not present because the facility staff "were constantly and appropriately assessing him and implementing appropriate interventions." Appellate Brief at 34. Britthaven argued that, because the care given was appropriate, there was no immediate jeopardy to Resident #1.

We disagree with Britthaven's argument for reasons similar to those expressed above in affirming the findings of noncompliance. Even assuming for the purposes of this argument that, in this particular case, the care given to Resident #1 was the most appropriate care that could be given by the facility, there would still be a basis to find immediate jeopardy in this case. As discussed above, the ALJ found that the facility did not ensure that when there was a significant change in resident condition the attending physician would be immediately notified, a registered nurse would be notified, and a full patient assessment would be performed. CMS Ex. 18, at 6-8. These failures clearly result in a likelihood that the care given would be inappropriate and would cause serious harm (even if the care was, in fact, appropriate in a particular case).

Moreover, in the absence of the involvement of an attending physician or a registered nurse with the knowledge and understanding to recognize and diagnose patient needs, Britthaven's assertion that care was appropriate is purely speculative. The record contains evidence that individuals experiencing a cardiac event have a greater chance of survival with prompt emergency medical care. CMS Ex. 14, at 8-9. As discussed above, the record also contains evidence that the care the Resident received, significant increases in oxygen flow levels, could pose risks of harm in certain patients and, under normal practice standards, should only be done on physician orders. ⁽¹¹⁾

As a result, we affirm the ALJ determination of noncompliance on both factual and legal grounds.

4. The ALJ did not err in upholding CMS's finding that the noncompliance continued until August 13, 2002.

The ALJ affirmed CMS's determination that Britthaven's noncompliance continued from July 21, 2002 until August 13, 2002. On August 13, 2002, the State survey agency conducted a complaint survey. Also on that date, the facility submitted an acceptable plan of correction to address its deficiencies through inservice training for staff on emergency care and notification, acute episodes and emergency transfer protocol (these actions were completed by August 14, 2002). ALJ Decision at 20; CMS Ex. 3, at 13. In addition, on that date the facility took action to sanction the licensed practical nurse involved in the care of Resident #1. CMS Ex. 3, at 13.

While Britthaven argued that any deficiency was an isolated occurrence of a duration limited to July 21, 2002, we find ample support in the record for the ALJ's conclusion that, even though the State surveyors may have concluded that the deficiency was "isolated," CMS could reasonably find that the noncompliance was a systemic issue and that Britthaven had not shown that it had corrected the noncompliance prior to August 13, 2002. ⁽¹²⁾

In arguing that the noncompliance did not continue after July 21, 2002, Britthaven relied primarily on a review by a registered nurse of other patient records involving transfers to the hospital during the period of July 21, 2002 to August 13, 2002. Britthaven Ex. 30. ⁽¹³⁾ In that review, the registered nurse found that "the nursing staff of Britthaven of Goldsboro were consistently recognizing ... acute changes in its residents' conditions, routinely and appropriately assessing those changes, and providing timely notification of the Attending Physician in accordance with its policy." Id. Britthaven also noted that the State surveyors had not cited deficiencies in any other case reviewed. Appellate Brief at 40.

The ALJ explicitly addressed the argument that the noncompliance did not continue until August 13, 2002, and we find no error of fact or law in his conclusion. First, the ALJ found the evidence of a review of similar cases by a registered nurse to be unpersuasive because the evidence included no details as to the specific facts of the transfers and only general assertions that care was appropriate. ⁽¹⁴⁾ ALJ Decision at 21. Second, as the ALJ pointed out, this evidence did not establish that Britthaven had corrected the source of the noncompliance with respect to Resident #1, the licensed practical nurse involved in that case. Id. Third, Britthaven provided no indication of a contemporaneous recognition of error in caring for Resident #1.

Indeed, if Britthaven had recognized errors in the care of Resident #1 and taken prompt action to sanction or retrain staff to ensure that such errors did not recur, that action might have established that it had come into compliance with all requirements earlier than August 13, 2002. But there was no evidence that the facility had flagged any problems with staff procedures in the case. Nor was there evidence that the facility had taken action to ensure that similar errors did not recur in other cases.

The ALJ properly weighed the evidence before him, and we affirm his conclusion that the duration of the CMS penalty was proper.

5. The amount of the penalty was reasonable.

Britthaven challenged the ALJ's determination to affirm the amount of the penalty imposed by CMS primarily by reiterating arguments that the deficiencies were not serious, the degree of its culpability was minimal, and the noncompliance was an isolated occurrence. Appellate Brief at 42. ⁽¹⁵⁾ For the reasons discussed above in reference to the nature of the noncompliance, we reject those arguments. The failure to seek physician input when there is a significant change in condition, the failure to notify a registered nurse, and the consequent delays in transferring Resident #1 to the hospital were very serious and indicate a level of noncompliance that supports the level of the penalty imposed. 42 C.F.R. � 488.404(b). The evidence that the facility did not recognize that there was a problem, and did not take prompt action to prevent recurrence of similar actions, indicates a level of culpability by the facility that also supports the ALJ's conclusion that the penalty was reasonable. 42 C.F.R. � 488.438(f)(4).

We also reject Britthaven's argument that the penalty was not reasonable because of a delay in conducting the complaint investigation. Appellate Brief at 42-43. Britthaven argued that, because the facility was not aware of any problem until the complaint survey, and that complaint survey was conducted 23 days after the incident at issue, it was not reasonable to impose a daily penalty for the entire duration of the period of noncompliance. This argument is not persuasive because we find that Britthaven's lack of awareness of its noncompliance was specifically considered by the ALJ, who concluded that the lack of awareness was an indication that Britthaven did not exercise adequate oversight for care. The ALJ essentially concluded that lack of awareness does not reduce the degree of culpability under 42 C.F.R. � 488.438(f)(4), but instead confirms the culpability of the facility because it indicates that the facility did not have adequate procedures to recognize and correct noncompliant care. ⁽¹⁶⁾ We agree with the ALJ on this point.

6. Britthaven was not prejudiced by procedures below and had a full and fair opportunity for a hearing before the ALJ.

Britthaven asserted a procedural error warranting reversal because the ALJ failed to rule on Britthaven's December 31, 2003 motion for leave to file a reply brief prior to issuing his decision on March 2, 2004. Appellate Brief at 45. While CMS did not dispute the error, CMS argued that the error was harmless and did not prejudice Britthaven's case. We agree with CMS that the error was harmless because Britthaven alleged no new factual or legal issues that would have been raised in its reply brief, and had a full and fair opportunity to present its case before the ALJ and in the instant review.

In the Appellate Brief, at 45, Britthaven described the points it would have made in the unfiled reply brief. These points related to alleged inaccuracies in the CMS presentation of the underlying facts in the record, but there is no indication that the reply brief would have presented any new evidence or legal arguments. Britthaven indicated that the primary purpose would have been to provide further explanation of the timing of events related to Resident #1. Britthaven presented its explanation in its principal brief in proceedings before the ALJ, and reiterated that explanation in this appeal. While perhaps Britthaven could have articulated that explanation more clearly in a reply brief, our review of the evidence in the record supports the ALJ's conclusion that there was no evidentiary support for that explanation. Thus, we find no reversible error on that basis.

Nor do we find reversal warranted by the admission into evidence of CMS Exhibits 17 and 18, the Curriculum Vitae and Declaration of Dr. Peter Vaitkevicius, CMS's expert witness. The ALJ recognized that these exhibits contained new substantive evidence that had not been offered by CMS as part of the initial prehearing exchange, but based his ruling to admit them on the fact that Britthaven nonetheless had ample time to respond to these exhibits through cross-examination (which it ultimately opted not to do) or submission of additional evidence of its own. ALJ Decision at 5. In fact, on December 1, 2003, Britthaven submitted the written declaration of Bonnie Ard, R.N. to supplement the record and address new issues raised by CMS. The ALJ accepted Britthaven's submission into the record notwithstanding issues of timeliness. This action is a further indication that Britthaven had a full and fair opportunity to present evidence and argument before the ALJ, and we conclude that there was no reversible error on these grounds.

7. Reversal is not warranted based on ALJ bias.

Britthaven alleged that certain statements in the ALJ Decision are a basis for reversible error because the statements indicate that the ALJ was biased and could not render an impartial decision. The Board previously considered this kind of allegation in St. Anthony Hospital, DAB No. 1728, at 97-98(2000), saying:

The ALJ's rulings . . . do not constitute a sufficient basis for showing bias. See Ex Parte American Steel Barrel Co. and Seaman, 230 U.S. 35 (1913); In Re International Business Machine Corp., 618 F.2d 923, 929 (2d Cir. 1980); see also Annotation, Disqualification of Federal Judge, 2 A.L.R. Fed. 917, at 927 (1969), noting: "It has been uniformly held or recognized in civil proceedings that adverse rulings made by the judge in the case or proceeding itself do not constitute a sufficient basis for his disqualification under the statute [pertaining to disqualifications of federal judges]." Indeed, a close examination of the entire record shows that the ALJ properly considered the parties' motions, carefully analyzed the legal issues disputed, and issued appropriate rulings.

Here, as in the St. Anthony Hospital case, we find that the ALJ carefully analyzed both legal and factual issues, and ruled appropriately on substantive and procedural matters. While it is clearly regrettable if Britthaven perceived bias in the ALJ's comments, the overall context has no indication that this language reflected anything more than the strength of the ALJ's opinions after reviewing the record in the case. Indeed, we do not find those comments to be unfounded in the evidentiary record. Thus, we find no reversible error on this basis.

Conclusion

For the reasons discussed above, we affirm the ALJ Decision in full. Specifically, we uphold the ALJ's FFCLs 1 through 4, relating to noncompliance posing immediate jeopardy, and the penalty of $5,000 per day for the period July 21, 2002 until August 13, 2002.

Judith A. Ballard

Donald F. Garrett

Daniel Aibel
Presiding Board Member

1. This standard is included in the Board's published guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs, which can be found on the Internet at http://www.hhs.gov/dab/guidelines/prov.html.

2. Under the substantial evidence standard, the reviewer must examine the record as a whole and take into account whatever in the record fairly detracts from the weight of the decision below. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). Upon review, the Board does not reweigh the evidence, even though a different choice could justifiably have been made if the matter had been before the Board de novo. The Windsor House, DAB No. 1942 (2004).

3. Britthaven argued that it was prejudiced because the new issue introduced by the per day CMP - the duration of noncompliance - required considerable time and effort to prepare a defense. Furthermore, Britthaven complained that the ALJ had refused to postpone the hearing date. Appellate Brief at 16-17. We do not find that argument compelling for several reasons. First, the evidence as to the duration of the noncompliance is not significantly different from the evidence necessary to challenge the initial determination. Evidence of facility policies and practices are relevant to both the initial per instance CMP and the per day CMP, and could be shown through review of care given other residents at the time and by the facility's own reaction to an instance of noncompliance. (This latter element is significant here, where there is evidence that the facility did not regard the care for Resident #1 to be contrary to its own policies until cited for noncompliance.) Britthaven had an opportunity for a hearing, with a proposed hearing date that was more than 90 days after CMS issued the change in its selection of remedies, and more than 15 days after the ALJ denied the Motion to Strike. Under 42 C.F.R. � 498.52, only 10 days' notice of the date of a hearing is required.

4. While we understand that Britthaven finds unfairness in the substantial difference between the amount of the penalties imposed by the per instance and per day CMPs, the variation in the amount does not alone establish any unfairness. This variation is a function of the legal framework. The range of potential civil money penalties under sections 1819(h) and 1919(h) of the Social Security Act is wide. CMS has considerable discretion under the regulations in determining the appropriate penalty based on factors including, but not limited to, certain factors set forth in regulation. 42 C.F.R. � 488.404. As a result, the determination of the appropriate penalty is not a mathematical operation, and CMS has flexibility to make this determination on a case-by-case basis.

5. Essentially, Britthaven argued that the finding of noncompliance was based primarily on the ultimate negative outcome in the particular case, rather than failure to comply with applicable requirements. As discussed above, we find substantial evidence in the record that there was, indeed, failure to comply with the cited requirements.

6. While Britthaven argued that the physician orders from July 18 authorized the higher level of oxygen and had not been clearly rescinded, there is substantial evidence in the record to support the conclusion that the new physician orders indicated a change in treatment plan and that the physician should have been contacted to obtain authorization for the higher oxygen levels regardless of any determination of change of condition. CMS Ex. 18, at 7-11.

7. Britthaven asserted that, since the staff was aware of the physician's customary practice to make rounds in the morning, it was also reasonable to wait until the physician arrived to attempt notification. As the ALJ correctly noted, the requirement for notification does not require the physical presence of the physician (or personal examination of the patient by the physician).

8. Britthaven asserted that the actual timing of the acute episode recorded in the nurse's notes may not have been accurate because the notes were made after the events occurred. Appellate Brief at 22-23 and 32-33. Since medical records are required to be "complete" and "accurately documented" pursuant to 42 C.F.R. � 483.75(l), it does not help Britthaven's case to impugn its own medical recordkeeping practices. In addition, the ALJ reasonably discounted this argument because it does not appear to help the facility. The argument is based largely on alleged inconsistencies between the nurse's notes, the customary arrival time of Resident #1's day sitter, and the time records of the ambulance transport company. If all time records were adjusted, as Britthaven suggested, to reflect slightly later times, they still would not show prompt notification of the attending physician and supervising registered nurse. Nor would they show prompt transfer to the hospital.

9. Britthaven argued that CMS had not met its burden to set forth a prima facie case that the absence of registered nurse supervision was contrary to State law. Assuming, as Britthaven alleged, that the law permits some discretion in the degree of required supervision for a licensed practical nurse, CMS met this burden when it presented expert testimony that informing a registered nurse or nursing supervisor was a normal staff responsibility in this circumstance. CMS Ex. 18 at 7.

10. Indeed, as CMS pointed out, the record supports the conclusion that the facility did not have procedures to ensure that the full capabilities of the facility are available to a resident in need; the record indicates that the care for Resident #1 was primarily furnished by only one staff member, a licensed practical nurse, throughout the episode at issue. See, e.g., CMS Ex. 18, at 7-8.

11. Britthaven argued that the ALJ gave undue weight to CMS's expert witness on the issue of immediate jeopardy, and "disregarded" the written testimony of its expert witness, Dr. David Jackson (Britthaven Ex. No. 29). While Dr. Jackson opined that, in his judgment, the situation did not warrant finding a deficiency at the level of immediate jeopardy, the issue before the ALJ is whether the CMS finding was "clearly erroneous." In light of this standard of review, the ALJ gave appropriate weight to CMS's evidence indicating a reasonable basis for its finding on this issue.

12. CMS regulations at 42 C.F.R. � 488.454(a)(1) provide that civil money penalties (and other alternative remedies) continue, absent termination of the provider, until "the facility has achieved substantial compliance as determined by CMS or the State based upon a revisit survey or after an examination of credible written evidence that it can verify without an on-site visit." The Board has held previously that CMS is not required to provide affirmative evidence of continuing noncompliance for each day a remedy is in place; instead the facility bears the burden of establishing, through credible written evidence (or a revisit survey), that it was in compliance on that day. See Regency Gardens Nursing Center, DAB No. 1858 (2002).

13. Britthaven had a written policy that it argued was consistent with all requirements, and asserted that this review examined whether there were any deviations from that policy in similar cases during the time period of the penalty. Appellate Brief at 39-40.

14. Because Britthaven waived its opportunity for an oral hearing, this evidence was not subject to cross examination and must be assessed as presented by Britthaven.

15. In affirming the CMS penalty, the ALJ considered the range of civil money penalty amounts that may be imposed to remedy immediate jeopardy level deficiencies (from $3,050 to $10,000 per day) under applicable regulations at 42 C.F.R. � 488.438(a)(1)(I). The ALJ also considered the regulatory factors set forth in determining a reasonable penalty at 42 C.F.R. � 488.438(f) and 42 C.F.R. � 488.404. Britthaven did not allege legal error in the ALJ's consideration, but relied on the factual arguments described above.

16. Britthaven also argued that the amount of the civil money penalty was unreasonable because of the wide variation between amount imposed between the per instance and per day CMPs. As we noted in footnote 4 above, the law provides CMS considerable flexibility in determining the amount of a civil money penalty. In this case, however, the factors relevant to evaluating the reasonableness fully support the per day CMP amount.