SUBJECT: Wisteria Care Center,

Petitioner,

Centers for Medicare & Medicaid Services

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

On October 16, 2002, Wisteria Care Center (Wisteria) appealed an August 30, 2002 decision by Administrative Law Judge (ALJ) Alfonso J. Montano. Wisteria Care Center, DAB CR964 (2002) (ALJ Decision). The October 16, 2002 decision upheld certain remedies imposed by the Centers for Medicare & Medicaid Services (CMS) for Wisteria's noncompliance with Medicare participation requirements. These remedies included civil money penalties (CMPs) and the termination of Wisteria's provider agreement on February 13, 1999.

The ALJ found that: (1) Wisteria was not in substantial compliance with Medicare participation requirements from August 21 to November 5, 1998 and from December 28, 1998 to February 13, 1999; (2) Wisteria's noncompliance placed residents in "immediate jeopardy" from August 18 to August 20, 1998; and (3) the CMPs imposed by CMS were reasonable. Because these findings are supported by substantial evidence and are consistent with the applicable laws and regulations, we sustain the remedies imposed by CMS in this case: (1) a $3,050 per day CMP for the period August 18 to August 20, 1998; (2) a $1,000 per day CMP for the period August 21 to November 5, 1998; (3) a $1,000 per day CMP for the period December 29, 1998 to February 12, 1999; and (4) termination of Wisteria's provider agreement on February 13, 1999.

Regulatory Background

To participate in Medicare and Medicaid, a long term care facility must meet the requirements in 42 C.F.R. Part 483. A facility's compliance with these participation requirements is verified through the survey and certification process described in 42 C.F.R. Part 488, Subpart E.

Surveys are usually conducted by a state agency under an agreement with CMS. A survey's findings are presented in a Statement of Deficiencies, which identifies each instance of noncompliance with a participation requirement. See CMS State Operations Manual (SOM) Appendix P, Chap. IV. Each deficiency, or failure to meet a participation requirement, is identified by a "tag" corresponding to the section of the regulation in 42 C.F.R. Part 483 containing that requirement. Id.

The survey agency and CMS rate the "seriousness" (or "level of noncompliance") of each reported deficiency by determining its scope and severity. ⁽¹⁾ See 42 C.F.R. � 488.404. "Scope" refers to whether the deficiency is widespread or isolated or constitutes a "pattern." See 42 C.F.R. � 488.404(b)(2); SOM App. P, Chap. V. "Severity" refers to the magnitude of the harm or potential harm to resident health and safety. See 42 C.F.R. � 488.404(b)(1); SOM App. P, Chap. V. For example, a deficiency may cause "immediate jeopardy" ⁽²⁾ to resident health or safety, "actual harm" that is not immediate jeopardy, or no actual harm but a potential for more than minimal harm. See id.

A facility becomes subject to remedial action when it is not in "substantial compliance" with participation requirements. 42 C.F.R. � 488.400. Substantial compliance means "a level of compliance . . . such that any identified deficiencies pose no greater risk to resident health or safety than the potential for causing minimal harm. 42 C.F.R. � 488.301.

If a survey reveals that a facility is not in "substantial compliance," CMS may either terminate its provider agreement or, if the facility submits an acceptable plan of correction (POC), allow it to continue its participation for no longer than six months. 42 C.F.R. �� 488.402(d), 488.408(f), 488.412. Even if a POC is approved, the facility may not be regarded as in substantial compliance until the survey agency determines, following an onsite revisit or other verification procedure, that the deficiencies no longer exist. 42 C.F.R. � 488.440(g)-488.440(h), 488.454(a); SOM � 7316.

To encourage facilities to implement a plan of correction, CMS may impose intermediate sanctions, in the form of CMPs, for the days in which the facility remains in a state of noncompliance ("noncompliance" under the regulations means "any deficiency that causes a facility to not be in substantial compliance" ⁽³⁾). To impose a CMP, CMS must send the facility a written notice of penalty that describes the nature of the noncompliance, the statutory basis for the CMP, the facility's right to a hearing, and other information. 42 C.F.R. � 488.434.

The regulations establish two categories of conduct for which CMPs may be imposed. See 42 C.F.R. �� 488.408, 488.438. For deficiencies that constitute "immediate jeopardy" and for some repeat deficiencies, the regulations permit a CMP of $3,050 per day to $10,000 per day. 42 C.F.R. � 488.438(a)(1). For deficiencies that do not constitute immediate jeopardy but that cause actual harm or the potential for more than minimal harm, the regulations authorize CMS to impose a CMP of between $50 and $3,000 per day. 42 C.F.R. � 488.438(a)(ii).

A CMP accrues until either "(1) The facility has achieved substantial compliance, as determined by CMS or the State based upon a revisit or after an examination of credible written evidence that it can verify without an on-site visit," or "(2) CMS or the State terminates the provider agreement." 42 C.F.R. � 488.454(a).

Case Background

The following facts are drawn from the ALJ Decision and are undisputed.

Wisteria was a long-term care facility located in Castro Valley, California. During the period relevant to this decision (August 1998 to February 1999), Wisteria was owned by DHMJ, Inc. and managed by persons employed by DHMJ. Tr. at 984, 996-97.

Wisteria was surveyed at least three times in 1998 by the California Department of Health Services (CDHS). The first survey was a standard survey completed on August 21 (the "August survey"). As a result of the August survey, CDHS cited Wisteria for more than 40 deficiencies. CMS Ex. 1. One of these deficiencies was an alleged failure to comply with 42 C.F.R. � 483.70(b), which requires a facility to maintain an emergency electrical power supply capable of lighting building exits and powering emergency and life support equipment in the event that the normal or primary electrical supply is interrupted. A second reported deficiency concerned 42 C.F.R. � 483.25(h)(1), which requires a facility to maintain an environment free of accident hazards. CDHS found that Wisteria had violated section 483.25(h)(1) by allowing the tap water in resident rooms to be excessively hot.

CDHS determined that Wisteria's failure to maintain a backup electrical supply and proper tap water temperature were deficiencies that placed residents in immediate jeopardy between August 18 and August 20, 1998. ⁽⁴⁾ Id. at 44-46, 74-75. Based on that determination, CMS issued a penalty notice on October 6, 1998. CMS Ex. 75. The October 6 notice advised Wisteria that CMS was imposing a CMP of $3,050 per day for the three days of immediate jeopardy from August 18 to August 20. Id. CMS also advised Wisteria that despite its abatement of the immediate jeopardy, the facility was out of compliance with Medicare participation requirements, and that "another civil money penalty could be imposed if a further survey documents that you continue not to be in substantial compliance[.]" Id. at 2.

In response to the August survey, Wisteria submitted a plan of correction. To verify that the plan had been implemented, CDHS conducted a revisit survey of Wisteria in November 1998 (the "November survey"). See CMS Ex. 77, at 1. The November survey, which was completed on November 6, revealed that Wisteria was still in a state of noncompliance with Medicare participation requirements. Id.

In late December 1998, CDHS performed a second revisit survey (the "December survey"). Based on this survey, CDHS cited Wisteria for 18 deficiencies, five of which allegedly caused "actual harm" to residents. See CMS Ex. 22.

On December 31, 1998, CMS issued a second penalty notice. CMS Ex. 77. This notice advised Wisteria that it was not in substantial compliance with Medicare participation requirements and that CMS was imposing two remedies based on the November survey findings: a CMP of $1,000 per day effective August 21, 1998; and a denial of payment for new admissions (DPNA) effective January 15, 1999. Id. at 2. The December 31 notice also warned Wisteria that its provider agreement would be terminated no later than February 18, 1999 if substantial compliance was not promptly achieved and maintained. Id.

On January 25, 1999, CMS issued a third penalty notice, this one based on the December survey. CMS Ex. 78. The January 25 notice stated that Wisteria continued to be out of compliance, that the previously imposed remedies remained in effect, and that Wisteria's provider agreement would be terminated on February 13, 1999. Id.

Wisteria filed requests for hearing on December 3, 1998 and on February 4, 1999. See ALJ Record Index, Part 1 (nos. 1, 3). The December 3, 1998 hearing request relates to the immediate jeopardy determination stemming from the August survey. The contentions in the February 4, 1999 hearing request relate only to December survey (no mention is made of the November survey findings).

The ALJ Proceedings

The hearing in this case occurred on October 23-26, 2000. CMS presented more than 100 exhibits and the testimony of six witnesses (all of which the ALJ found credible). These witnesses included two CDHS surveyors as well as a CMS survey specialist and dietician consultant. For its part, Wisteria submitted only four exhibits and called a single witness, Herminigilda Manuel, who testified about Wisteria's financial condition.

At the close of the hearing, the ALJ ordered the parties to submit post-hearing briefs along with proposed findings of fact and conclusions of law. CMS timely submitted its post-hearing brief. However, Wisteria's attorney advised the ALJ that he could not file a post-hearing brief "[d]ue to other demands from the client" and requested that the ALJ decide the case based on the evidence of record.

The ALJ Decision

As a preliminary matter, the ALJ found that because Wisteria had not appealed CMS's determination of noncompliance based on the November survey, the only matters properly before him were (1) CMS's determination that Wisteria had placed residents in immediate jeopardy from August 18 to August 20, 1998; (2) the deficiency findings stemming from the December survey; (3) the reasonableness of the $3,050 per day CMP for the period August 18 to August 20, 1998; (4) the reasonableness of the $1,000 per day CMP for the periods August 21 to November 5, 1998 and December 29, 1998 to February 12, 1999; and (5) CMS's determination to terminate Wisteria's provider agreement. See ALJ Decision at 2 (n.1), 6.

In addressing these matters, the ALJ began by characterizing the evidence submitted or elicited by Wisteria at the October 2000 hearing:

Petitioner offered into evidence four exhibits, none of which related to quality of care issues or any other medical issues. The exhibits were of no assistance to Petitioner in rebutting CMS's survey findings.

Petitioner's only witness at the hearing was Hilda Manuel . . . . Ms. Manuel was not a direct care giver nor does she possess any medical expertise. She was not present at Wisteria Care Center when the surveys in issue were conducted. The testimony elicited from Ms. Manuel did not address quality of care, medical care, nor did her testimony serve to rebut any of the specific deficiencies cited by CMS. Ms. Manuel testified as to the corporate ownership of Wisteria and discussed the take over of the facility by Trucare Inc. She testified that she had no business relationship with Trucare, but asserted that she made substantial loans to Trucare to pay for expenses to run Wisteria, during the decertification process. Ms. Manuel's testimony was self serving and was not substantiated in any way by documentary evidence. I find her testimony regarding alleged loans to Trucare not credible. I therefore give her entire testimony no weight.

Counsel for Petitioner conducted cross-examination of the CMS witnesses who testified at the hearing. That cross-examination did not elicit any admissions from any CMS witnesses that would establish that any of the CMS findings cited in the statement of deficiencies (also known as the 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, by itself, did not rebut any of the specific deficiencies cited by CMS.

ALJ Decision at 7 (citations omitted). The ALJ further remarked that Wisteria had --

denied CMS's allegations of noncompliance in only the most general of terms in its hearing request, and has failed to present any specific affirmative defense. The limited exhibits submitted by Petitioner in and of themselves establish nothing. In addition, the isolated responses to Petitioner's cross-examination questions by CMS witnesses do not present or constitute a cognizable affirmative argument, let alone a defense to any of the deficiencies cited by CMS.

Id. at 8.

The ALJ then determined that Wisteria was not in substantial compliance with Medicare participation requirements between August 18, 1998 and February 12, 1999. ALJ Decision at 9-14. The ALJ also determined that the remedies imposed by CMS for Wisteria's noncompliance were reasonable and lawful. Id. at 8-9. In support of these determinations, the ALJ made 13 numbered findings of fact and conclusions of law (FFCLs). Id. at 9-15.

In FFCLs 1 and 2, the ALJ affirmed CMS's findings that Wisteria had placed residents in "immediate jeopardy" between August 18 and August 20, 1998 by failing to maintain a backup electrical power source and by failing to keep tap water temperatures at safe levels. In FFCL 3, the ALJ found that it was unnecessary to make findings about the non-immediate jeopardy deficiencies that existed between August 18 and August 20 because such findings would not affect the amount of the CMP ($3,050 per day) imposed by CMS for that period.

In FFCLs 4-10, the ALJ found that CMS had presented unrebutted evidence of seven additional violations of Medicare participation requirements. These violations, which were cited by CDHS during the December survey, were:

. FFCL 4: failure to provide appropriate treatment and services to prevent or promote the healing of a pressure sore. 42 C.F.R. � 483.25(c).

• FFCL 5: failure to keep a resident free from unnecessary physical restraints. 42 C.F.R. � 483.13(a).

• FFCL 6: failure to ensure that residents maintained acceptable parameters of nutritional status. 42 C.F.R. � 483.25(i)(1).


• FFCL 7: Failure to develop assessments after a significant change in the resident's condition. 42 C.F.R. � 483.20(b)(2)(ii).
  
  
• FFCL 8: Failure to develop comprehensive resident assessments. 42 C.F.R. � 483.20(b).

  � FFCL 9: Failure to promote care for residents in a manner that maintains each resident's dignity and respect. 42 C.F.R. � 483.15(a).
  

• FFCL 10: Failure to store food under sanitary conditions. 42 C.F.R. � 483.35(h)(2).
  

The final three FFCLs -- numbers 11, 12, and 13 -- concern the remedies imposed by CMS. In FFCL 11, the ALJ affirmed the $3,050 per day CMP imposed for the period of immediate jeopardy. In FFCL 12, the ALJ determined that the $1,000 per day CMP for the periods August 21, 1998 to November 5, 1998 and December 29, 1998 to February 12, 1999 was reasonable based on the seriousness of the deficiencies and Wisteria's history of noncompliance. Finally, in FFCL 13, the ALJ determined that CMS had the authority to terminate Wisteria's provider agreement.

Standard of Review

Our standard of review on a disputed conclusion of law is whether the ALJ decision is erroneous. Our standard of review on a disputed issue of fact is whether the ALJ decision as to that fact is supported by substantial evidence on the record as a whole. See Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs (at http://www.hhs.gov/dab/ guidelines/); South Valley Health Care Center, DAB No. 1691 (1999), aff'd South Valley Health Care Center v. HCFA, 223 F.3d 1221 (10^th Cir. 2000).

Preliminarily, we note that Wisteria does not contest the ALJ's finding that it had waived the opportunity to contest the CMP that accrued between November 6 and December 28, 1998. We also note that our decision does not address all of the contentions made by the parties in this appeal. ⁽⁵⁾ We nevertheless have considered all of the points made in the parties' briefs in reaching the conclusions set forth below.

• Summary affirmance of FFCLs 1-10 is warranted because the request for review and accompanying brief fail to articulate the basis for Wisteria's disagreement with them.

The brief filed by Wisteria in support of its request for review (which we cite to as "RR Brief") is just eight pages long. In the main, the brief contains little more than unsupported expressions of disagreement with the ALJ's findings. For example, regarding each of the first ten FFCLs, which address the deficiencies supporting the imposed remedies, Wisteria asserts that the "testimony and evidence did not establish a prima facie case and did establish that the facility took all reasonable steps" to comply with the relevant participation requirement. RR Brief at 1-3. These assertions are unaccompanied by argument or by citations to evidence or legal authority. Wisteria's other contentions (regarding the remedy and other issues) are similarly devoid, or virtually devoid, of significant argument or citations.

CMS asks us to dismiss the appeal on the ground that Wisteria's request for review fails to satisfy 42 C.F.R. � 498.82(b). CMS Response Brief at 8-10. Section 498.82(b) states that a request for review "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."

We agree with CMS that elements of Wisteria's request for review -- in particular, its assertions regarding FFCLs 1-10 -- do not comply with section 498.82(b). Simply asserting, as Wisteria does, that "the testimony and evidence did not establish a prima facie case" does not satisfy a party's obligation to specify the basis for contending that the ALJ's findings or conclusions are incorrect. Wisteria's contentions regarding FFCLs 1-10 also fail to meet the standards in our Guidelines for Appellate Review, which require that contentions be accompanied by argument and citations to the record and applicable legal authorities.

However, the shortcomings of Wisteria's request for review do not permit us to dismiss the appeal. Section 498.83(b) states that the Board "will grant the affected party's request for review unless it dismisses the request for one of the following reasons": (1) the provider requests dismissal; (2) the provider did not file timely (or show good cause for late filing); (3) the provider does not have a right to review; or (4) a final previous determination or decision on the same facts and law and regarding the same question has already been issued. We interpret this provision as precluding dismissal unless one of the enumerated circumstances is found to exist. None of those circumstances exist here.

Although we cannot dismiss the appeal, section 498.82(b) and the Board's Guidelines for Appellate Review make it clear that the Board may decline to consider an issue that is not identified in the request for review or, if identified, is unaccompanied by argument, record citations, or statements that articulate the factual or legal basis for the party's objection to the ALJ's findings. See Guidelines for Appellate Review (indicating that the Board will review only those portions of the record that are cited by the parties or which the Board considers necessary to decide the appeal). In other words, the Board may summarily affirm a factual or legal finding if a party's presentation of an issue regarding that finding is such that the Board cannot discern the legal or factual basis for the party's disagreement with it.

As indicated, with respect to each of the deficiencies addressed in FFCLs 1-10, Wisteria contends that the evidence of record "did not establish a prima facie case." However, Wisteria fails to articulate the specific factual or legal grounds for that assertion. Wisteria does not assert that any of CMS's uncontested evidence regarding these deficiencies should be disregarded or discounted. Nor does it explain why this evidence is insufficient proof that the relevant participation requirements were violated. In short, Wisteria has failed to identify a basis in the statute, regulations, or evidentiary record for disturbing FFCLs 1-10. For this reason, we summarily affirm those FFCLs.

• The CMP imposed by CMS for the period of immediate jeopardy was reasonable.
  

Wisteria suggests that the $3,050 per day CMP imposed by CMS for the period of immediate jeopardy was unreasonable and should have been reduced or set aside for that reason. RR Brief at 3-4. There is no merit to this contention. If CMS chooses to impose a per day CMP based on an immediate jeopardy finding, the CMP must, by regulation, fall between $3,050 and $10,000. See 42 C.F.R. �� 488.438(a), (d)(3)(ii); 488.408(g)(2); Lake City Extended Care Center, DAB No. 1658 (1998). Here, the CMP imposed by CMS for the period of immediate jeopardy was the lowest permitted by the regulations. It was, therefore, presumptively reasonable. See Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002); Woodstock Care Center, DAB No. 1726 (2000) (finding that a $3,050 per day CMP based on an immediate jeopardy finding was reasonable because CMS imposed the lowest per day CMP possible under the regulations). Consequently, we affirm FFCL 11.

• The ALJ's finding that the $1,000 per day CMP was reasonable is supported by substantial evidence.
  

We next consider the ALJ's finding, in FFCL 12, that the $1,000 per day CMP was reasonable. In CarePlex of Silver Spring, DAB No. 1683 (1999), the Board held that an ALJ's assessment of a CMP's reasonableness must be guided by the factors specified in (or cross-referenced by) 42 C.F.R. � 488.438(f). These factors are the facility's history of noncompliance, its financial condition, its culpability for the cited deficiencies, and the seriousness of those deficiencies. The ALJ's evaluation of the CMP must be an independent determination about "whether the evidence presented on the record concerning the relevant regulatory factors supports a finding that the amount of the CMP is at a level reasonably related to an effort to produce corrective action by a provider with the kind of deficiencies found and in light of the other factors involved (financial condition, facility history, and culpability)." CarePlex of Silver Spring, at 8.

The only regulatory factor addressed by Wisteria at the hearing was its financial condition -- i.e., its ability to pay the $1,000 per day CMP. ⁽⁶⁾ Claiming an inability to pay, Wisteria submitted Medicaid cost reports (Wisteria Exs. 5 & 6) and presented testimony from Herminigilda Manuel, the president of DHMJ, Inc. (DHMJ), Wisteria's corporate owner.

The ALJ found that the cost reports submitted by Wisteria failed to show its inability to pay the CMP. ALJ Decision at 15. The ALJ also noted that Ms. Manuel never testified that a CMP of $1,000 per day would put the facility out of business, and that her testimony "related more to the sale of assets of [DHMJ] and the health of certain officers within the corporation rather than to Petitioner's inability to pay because of its financial condition." Id.

Wisteria now contends that the ALJ "[f]ailed to take into account the fiscal capabilities of the Provider." RR Brief at 4. Wisteria also asserts that the ALJ ignored testimony by Ms. Manuel that the CMPs imposed a "severe hardship" and that Wisteria had no assets to pay them. Id. at 3.

Before addressing these contentions, we note that there is no evidence of any legal separation between DHMJ and Wisteria Care Center. By all accounts, Wisteria was directly owned and controlled by DHMJ and the corporation's principal shareholders (one of whom was Ms. Manuel). Consequently, it is DHMJ's ability to pay the CMP that is relevant here.

We find no merit to Wisteria's contentions. The ALJ did not fail to account for its financial condition: he expressly considered the evidence submitted by Wisteria on this topic but found it unilluminating and not credible. Moreover, his characterization of Ms. Manuel's testimony was accurate. Her direct testimony focused largely on the sale or disposition of Wisteria and other DHMJ assets, and on a personal loan she allegedly made to the individual who assumed operational control of Wisteria after its provider agreement was terminated. See Tr. at 983-991. However, she produced no documentation of these transactions or of the $50,000 per month that she (or DHMJ) allegedly spent to run Milpitas Care Center, another nursing home owned by DHMJ. See Tr. at 993.

At one point during the hearing, Ms. Manuel suggested that DHMJ had insubstantial assets. Tr. at 997. However, she also admitted that DHMJ had never submitted written information to CMS concerning its assets or overall financial condition (Tr. at 1008-09), and we can find no such information in the record.

The cost reports proffered by Wisteria were prepared for submission to the California Medi-Cal program for fiscal years 1998 and 1999. Wisteria Exs. 5 and 6; Tr. at 991-92, 1003. They contain information about Wisteria's revenue, expenses, net income, and total assets for those years. Although Ms. Manuel claimed to be DHMJ's chief financial officer (Tr. at 996), she did not explain how these reports demonstrated the corporation's inability to pay the $1,000 per day CMP. In addition, Ms. Manuel did not assert that the CMPs affected DHMJ's ability to safely operate any of the other nursing facilities in which it had an interest. Given these circumstances and the absence of any written documentation concerning DHMJ's finances, we agree with the ALJ that Wisteria failed to show that it was financially unable to pay the CMP. ⁽⁷⁾

After addressing Wisteria's evidence concerning its financial condition, the ALJ determined that a CMP of $1,000 per day was reasonable based on the seriousness of the deficiencies and the facility's "history of noncompliance." ALJ Decision at 15.

There was substantial evidence in the record to justify the ALJ's reliance on these factors. CMS provided uncontested evidence of seven deficiencies, three of which were found to have caused actual harm. ⁽⁸⁾ Two of the seven involved a failure to perform resident assessments (see FFCLs 7 and 8), a fundamental task critical to ensuring that residents receive adequate, timely, and appropriate care. At least two deficiencies -- relating to resident assessments and the use of physical restraints -- were ones that Wisteria had been cited for during the August or November surveys, indicating a failure to take timely and effective corrective action. See CMS Ex. 22 at 11-14, 19-22; CMS Ex. 1 at 12-14, 30-33. In addition, Paula Perse, R.N., a CMS Health Insurance Specialist, demonstrated with computer records that seven of the deficiencies cited by CDHS during the 1998 surveys (including the failure to keep residents free of unnecessary physical restraints) had been cited in surveys of Wisteria in 1996 and 1997. Tr. at 935-41.

Wisteria contends that the $1,000 per day CMP was "improper and extended for too long because the facility corrected a substantial portion of the deficiencies which existed prior to the termination date, requiring an adjustment or reduction of the CMPs." RR Brief at 4-5. The meaning of this statement is somewhat unclear. If Wisteria is contending that the amount of the CMP was excessive in relation to the corrective action it took after the August survey, it is sufficient to note that a facility's post-survey remedial action is not a factor that the ALJ may consider in evaluating the reasonableness of a CMP. See 42 C.F.R. � 488.438(e). If Wisteria is contending that the CMP should have been stopped or rescinded at some point, it did not show that it ever came back into "substantial compliance" after the August survey. Substantial compliance means having no deficiencies that pose a risk for more than minimal harm to resident health and safety. 42 C.F.R. � 488.301. There is no evidence that Wisteria satisfied this standard at any time between the August survey and the day its provider agreement was terminated (when the CMPs stopped accruing). The regulations permitted the CMP to accrue for as long as Wisteria remained out of substantial compliance (up to the day that its provider agreement was terminated). 42 C.F.R. �� 488.440(f), 488.454(a).

Wisteria contends, without any explanation, that the CMPs were "assigned arbitrarily and capriciously and at a level unjustified by the factual allegations." RR Brief at 4. The issue before the ALJ was whether the "evidence presented on the record concerning the relevant regulatory factors supports a finding that the amount of the CMP is at a level reasonably related to an effort to produce corrective action by a provider with the kind of deficiencies found and in light of the other factors involved (financial condition, facility history, and culpability)." CarePlex, at 8. In this case, the ALJ determined, based on substantial evidence, that the CMP was justified by the seriousness of the deficiencies and the facility's history of noncompliance. Wisteria did not assert that the ALJ's reliance on these factors was unwarranted or inadequate. For this reason, and because Wisteria has failed to show an inability to pay the proposed CMP amount, we affirm the ALJ's finding in FFCL 12 that the $1,000 per day CMP was reasonable.

• Adequate grounds existed to terminate Wisteria's participation agreement.
  

Wisteria asserts that CMS "did not establish a prima facie case for termination of the Provider Agreement." RR Brief at 5, � 12. There is no merit to this assertion. The Board has held that "[o]nce a facility has been found not to be in substantial compliance with the [participation] requirements, that is to say, having any deficiencies which present a risk greater than the potential for minimal harm, CMS has discretion to select an appropriate remedy, whether termination and/or alternative remedies, and the exercise of this discretion is not subject to ALJ review." Emerald Oaks, DAB No. 1800 (2001).

As mentioned above, CMS produced uncontested evidence that Wisteria was not in substantial compliance with Medicare participation requirements during the August 1998 survey and that Wisteria remained in a state of noncompliance during the subsequent revisit surveys. Having established that Wisteria was out of substantial compliance, CMS could legally terminate its provider agreement. See 42 C.F.R. � 488.412.

• The ALJ committed no error with respect to CMS's findings regarding the scope and severity of Wisteria's noncompliance.
  

Wisteria contends that the ALJ "failed to find that the assessed scope and severity of each of the deficiencies was proper and set out the basis thereunder." RR Brief at 3. We find that the ALJ made all the necessary findings regarding the level of noncompliance.

The regulations provide that CMS's determination as to the level of noncompliance -- i.e., the scope and severity of the deficiency -- "must be upheld unless it is clearly erroneous." 42 C.F.R. � 498.60(c)(2). The regulations also provide that a determination with respect to the level of noncompliance may be appealed only if the outcome of such an appeal could change the penalty range within which CMS could impose a CMP. 42 C.F.R. � 498.3(b)(14); see also 42 C.F.R. �� 498.3(d)(10)(ii), 488.438(e). These regulations require an ALJ to uphold CMS's determination that a deficiency constituted immediate jeopardy unless the facility proves that the deficiency was clearly erroneous. See Koester Pavilion, DAB No. 1750, at 4 (2000); Woodstock Care Center, DAB No. 1726, at 9 (2000).

Having properly determined (based on uncontested evidence) that Wisteria was not in substantial compliance during the relevant periods, the ALJ was not required to make findings regarding the scope and severity of each of the non-immediate jeopardy level deficiencies identified by the surveyors. Such findings would not have affected the range of penalty amounts that CMS could collect.

The only CMS findings on level of noncompliance within the ALJ's scope of review were the findings that two deficiencies placed residents in immediate jeopardy. The ALJ did make findings on the level of noncompliance with respect to these two deficiencies. See ALJ Decision at 9-11. Wisteria has not alleged that CMS's immediate jeopardy determination was clearly erroneous.

• The Board declines to address Wisteria's "reserved issues."
  

The request for review identifies a number of "reserved" issues that, according to Wisteria, "are not capable of decision by the Administrative Law Judge or the DAB." RR Brief at 6, � 14. Wisteria does not ask us to rule on these issues, and we find no reason to do so.

• Wisteria's constitutional objections lack merit, are too vague to warrant consideration, or are outside the Board's purview.

Wisteria states that it objects to the entire underlying proceeding on constitutional grounds, stating:

The provider is not provided with any simple, efficient means of pretermination or post-termination due process. Instead, the provider is forced to submit to a long, formal administrative process that occurs, by definition, many months or years after the provider has been put out of business by CMS. Here, the provider's original counsel withdrew after charging tens of thousands of dollars in fees. Provider's successor counsel was unable, within the financial constraints governing provider, to fully participate in the hearing process.

RR Brief at 7, � 15. These contentions are too vague and undeveloped to warrant consideration. Moreover, to the extent that Wisteria is alleging that CMS's enforcement scheme and appeals procedures are unconstitutional on their face, we have no authority to address such a contention. Meadow Wood Nursing Home, DAB No. 1841 (2002); Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002).

Wisteria also contends that its due process rights under the Fourteenth Amendment were violated because it was "forced to bear the burden of proving compliance . . . rather than the agency being required to prove the violation." RR Brief at 4. We reject this contention for two reasons. First, it is unsupported by argument or citation to case law. Second, as we held in Milpitas Care Center, DAB No. 1864, the placement of the burden of proof is inconsequential in a case, like this one, in which the provider has failed to rebut prima facie evidence of noncompliance. "The question of which party bore the ultimate burden of proving its case by a 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." Milpitas Care Center, at 19 (citing Fairfax Nursing Home, DAB No. 1794, aff'd sub nom., Fairfax Nursing Home v. Dep't of Health and Human Srvcs., 300 F.3d 835 (7^th Cir. 2002).

Referring again to the burden of proof, Wisteria contends that the CMPs constitute an "unconstitutional forfeiture which are imposed without the minimal protections required for the imposition of quasi-criminal sanctions or forfeitures[.]" RR Brief at 4. This contention too is not supported by argument or citation to case law, and we reject it for that reason. Moreover, Wisteria's claim of "unconstitutional forfeiture" appears to be facial challenge to the constitutionality of enforcement scheme in 42 C.F.R. Part 498, a challenge that the Board has no authority to entertain. Sentinel Medical Laboratories, Inc., DAB No. 1762 (2001)(finding it "well established that administrative forums, such as this Board and the Department's ALJs, do not have the authority to ignore unambiguous statutes or regulations on the basis that they are unconstitutional"), aff'd sub nom., Teitelbaum v. Health Care Financing Admin., No. 01-70236 (9^th Cir. Mar. 15, 2002), reh'g denied, No. 01-70236 (9^th Cir. May 22, 2002).

• There is no basis for disturbing the ALJ's credibility determinations.
  

Wisteria asserts that "[g]enerally, the [ALJ Decision] fails to discuss whether and on what basis the Administrative Law Judge found the witnesses offered by CMS to be credible." RR Brief at 1. In general, the Board defers to an ALJ's assessment of witness credibility absent a compelling reason not to. Meadow Wood Nursing Home, DAB No. 1841 (2002); Woodstock Care Center, DAB No. 1726 (2000). In this case, Wisteria offers no compelling reason (or for that matter any reason) why we should not rely on the ALJ's credibility determinations. Consequently, we reject this contention.

Conclusion

For the reasons above, we affirm the ALJ Decision in its entirety and sustain the CMPs imposed in this case. In doing so, we affirm and adopt all of the FFCLs made by the ALJ.

Judith A. Ballard

Cecilia Sparks Ford

Donald F. Garrett
Presiding Board Member

1. The seriousness or level of noncompliance is designated by a letter (A through L) that corresponds to the scope-severity matrix in section 7400(E) of the State Operations Manual (SOM).

2. "Immediate jeopardy" is defined 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, impairment, or death to a resident." 42 C.F.R. � 488.301.

3. 42 C.F.R. � 488.301.

4. According to the Statement of Deficiencies, Wisteria corrected the tap water temperature problem on August 18. CMS Ex. 1, at 45. The backup power problem was corrected on August 20, when Wisteria installed functioning batteries. Id. at 75. Wisteria also purchased flashlights and call bells for resident use in the event of an emergency. Id.

5. Certain contentions (see, e.g., Brief in Support of Request for Review, at 5, � 13) by Wisteria either fail to allege an error by the ALJ, or allege only insignificant or inconsequential problems with CMS's evidence.

6. The Board has said that an inquiry into a provider's financial condition should be focused on whether the provider can pay the CMP without being put out of business. See Milpitas Care Center, DAB No. 1864 (2003).

7. Wisteria asserts that the CMPs "amount to more than the entire income of the provider for 1.5 months operating at full capacity." RR Brief at 4 (italics in original). However, the issue is not whether the penalties exceeded operating income, but whether Wisteria's assets were sufficient to pay the penalties.

8. The deficiencies found to have caused actual harm were the deficiencies discussed in FFCLs 4, 6, and 8. See CMS Ex. 22, at 19-22 (failure to develop comprehensive resident assessment -- FFCL 8), 28-30 (failure to prevent or treat pressure sores -- FFCL 4), 30-32 (failure to maintain parameters of nutritional status -- FFCL 6).