SUBJECT:

Britthaven of Smithfield

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a per instance civil money penalty (CMP) of $3,000 against Petitioner for failure to comply substantially with federal requirements governing participation of long-term care facilities in Medicare and State Medicaid programs.

I. Background

This case came before me pursuant to a request for hearing filed by Britthaven of Smithfield (Petitioner), dated April 1, 2003, in accordance with section 1128A(c)(2) of the Social Security Act (Act) and 42 C.F.R. �� 488.408(g), 498.40.

On January 31, 2003, CMS informed Petitioner that, based on a survey completed by the North Carolina State survey agency (State agency) on January 10, 2003, it was imposing selected remedies due to Petitioner's failure to be in substantial compliance with the applicable federal requirements for nursing homes participating in the Medicare and Medicaid programs.

CMS concurred with the State agency recommendation and imposed a per instance CMP in the amount of $3,000. CMS Ex. 5.

The parties have agreed to waive their right to an in-person hearing and have the case decided on the basis of documentary evidence and written memoranda. See Parties' Joint Response To Order Directing Statements On Waiver Of Oral Hearing dated May 6, 2004. CMS submitted its principal brief, accompanied by seven proposed exhibits. These have been admitted into the record, without objection, as CMS Exhibits 1-7 (CMS Exs. 1-7). Petitioner filed its principal brief, accompanied by 13 exhibits. Petitioner's proposed exhibits have been admitted into the record, without objection, as Petitioner's Exhibits 1-13 (P. Exs. 1-13). Each party submitted a response brief and, on July 28, 2004, Petitioner filed a reply to CMS's response brief.

Based on the affidavits, the documentary evidence, the written arguments of the parties, and the applicable law and regulations, I find that Petitioner was not in substantial compliance with Medicare participation requirements.

II. Applicable Law and Regulations

Petitioner is considered a long-term care facility under the Act and regulations promulgated by the Secretary of Health and Human Services (Secretary). The statutory requirements for participation by a long-term care facility are found at sections 1819 and 1919 of the Act, and at 42 C.F.R. Part 483. Sections 1819 and 1919 of the Act vest the Secretary with authority to impose CMPs and other remedies against a long-term care facility for failure to comply substantially with participation requirements.

Pursuant to the Act, the Secretary has delegated to CMS the authority to impose various remedies against a long-term care facility that is not complying substantially with federal participation requirements. Facilities which participate in Medicare may be surveyed on behalf of CMS by State survey agencies in order to ascertain whether the facilities are complying with participation requirements. 42 C.F.R. �� 488.10-488.28; 42 C.F.R. �� 488.300-488.335. Under Part 488, CMS may impose a per instance or per day CMP against a long-term care facility when a State survey agency ascertains that the facility is not complying substantially with participation requirements. 42 C.F.R. �� 488.406, 488.408, 488.430. The regulations in 42 C.F.R. Part 488 also give CMS a number of other remedies that can be imposed if a facility is not in compliance with Medicare requirements.

The regulations specify that a CMP imposed against a facility can be either a per day CMP for each day the facility is not in substantial compliance or a per instance CMP for each instance that a facility is not in substantial compliance. 42 C.F.R. � 488.430(a). The regulations specify that a CMP that is imposed against a facility on a per day basis will fall into one of two broad ranges of penalties. 42 C.F.R. �� 488.408, 488.438. The upper range of CMP, of from $3,050 per day to $10,000 per day, is reserved for deficiencies that constitute immediate jeopardy to a facility's residents, and in some circumstances, for repeated deficiencies. 42 C.F.R. �� 488.438(a)(1)(i), (d)(2). The lower range of CMP, from $50 per day to $3,000 per day, is reserved for deficiencies that do not constitute immediate jeopardy, but either cause actual harm to residents, or cause no actual harm, but have the potential for causing more than minimal harm. 42 C.F.R. � 488.438(a)(1)(ii). There is only a single range of $1,000 to $10,000 for a per instance CMP, which applies whether or not immediate jeopardy is present. 42 C.F.R. �� 488.408(d)(1)(iv); 488.438(a)(2).

The regulations define the term "substantial compliance" to mean "a level of compliance with the requirements of participation 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. Substantial noncompliance that is 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." Id.

The Act and regulations make a hearing before an administrative law judge (ALJ) available to a long-term facility against whom CMS has determined to impose a CMP. Act, section 1128A(c)(2); 42 C.F.R. �� 488.408(g); 498.3(b)(13). The hearing before an ALJ is a de novo proceeding. Anesthesiologists Affiliated, et al, DAB CR65 (1990), aff'd, 941 F2d. 678 (8^th Cir. 1991).

A facility has a right to appeal a "certification of noncompliance leading to an enforcement remedy." 42 C.F.R. � 488.408(g)(1); see also 42 C.F.R. �� 488.330(e) and 498.3. However, the choice of remedies by CMS or the factors CMS considered when choosing remedies are not subject to review. 42 C.F.R. � 488.408(g)(2). A facility may only challenge the scope and severity level of noncompliance found by CMS if a successful challenge would affect the amount of the CMP that could be collected by CMS or impact upon the facility's nurse aide training program. 42 C.F.R. �� 498.3(b)(14) and (d)(10)(i). CMS's determination as to the level of noncompliance "must be upheld unless it is clearly erroneous." 42 C.F.R. � 498.60(c)(2). This includes CMS's finding of immediate jeopardy. Woodstock Care Center, DAB No. 1726, at 9, 38 (2000), aff'd, Woodstock Care Center v. U.S. Dept. of Health and Human Services, 363 F.3d 583 (6^th Cir. 2003). The Departmental Appeals Board (the Board or DAB) has long held that the net effect of the regulations is that a provider has no right to challenge the scope and severity level assigned to a noncompliance finding, except in the situation where that finding was the basis for an immediate jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB No. 1750 (2000). Review of a CMP by an ALJ is governed by 42 C.F.R. � 488.438(e).

In a CMP case, CMS must make a prima facie case that the facility has failed to comply substantially with participation requirements. To prevail, a long-term care facility must overcome CMS's showing by a preponderance of the evidence. Hillman Rehabilitation Center, DAB No. 1611 (1997); aff'd, Hillman Rehabilitation Center v. United States Department of Health & Human Services, No. 98-3789 (GEB) (D.N.J. May 13, 1999).

III. Issues

The issues before me are:

�Whether the facility was complying substantially with federal participation requirements;

�Whether CMS's determination of immediate jeopardy is clearly erroneous; and

�Whether the amount of the penalty imposed by CMS is reasonable.

IV. Findings and Discussion

The lettered findings of fact and conclusions of law noted below, in italics and bold, are followed by a discussion of each finding.

A. The facility was not in substantial compliance with the federal participation requirement at 42 C.F.R. � 483.25(h)(2) on January 9-10, 2003.

Under the "Quality of care" requirement, each resident of a facility must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, in accordance with the resident's comprehensive assessment and plan of care. 42 C.F.R. � 483.25. Specifically, with regard to the subsection of the requirement regarding "accidents," a facility must ensure that: 1) the resident environment remains as free of accident hazards as possible; and 2) each resident receives adequate supervision and assistance devices to prevent accidents. 42 C.F.R. � 483.25(h).

The State agency alleged that "the facility failed to ensure that Resident 3 (R3) received adequate supervision to prevent accidents." CMS Ex. 1, at 1. Specifically, based on interviews, observations, and record review, the State agency determined that the facility failed to provide supervision to maintain safety while smoking for 1 of 9 sampled residents.

R3 was admitted to the facility on May 16, 2002, ⁽¹⁾ with diagnoses of tobacco abuse, gastro-esophageal reflux, anemia, diabetes, left ventricular hypertrophy, diabetic retinopathy, dementia, hypertension, transient ischemic attacks, and cerebral vascular accident with paresis. CMS Ex. 1, at 1. The Minimum Data Set (MDS) coded him as having problems with long-term and short-term memory, as well as being moderately impaired in his ability for decision making. Id.

R3's care plan, dated May 29, 2002, contained a handwritten and undated update indicating that R3 had a "potential for harm to self; i.e., burning holes in clothes accidentally when smoking." CMS Ex. 1, at 1; CMS Ex. 2, at 7. A goal was established to encourage the resident to wear a smoker's apron and for staff to provide supervision during smoking. An entry recorded in the care plan on November 25, 2002 stated that the intervention directed at supervising R3 while smoking was discontinued. CMS Ex. 2, at 9.

Facility documentation revealed that R3, as well as his wife, resisted the use of a smoking apron, and both advocated for greater smoking freedom. CMS Ex. 1, at 2; CMS Ex. 2, at 16-17. At 1:25 p.m. on January 9, 2003, ⁽²⁾ three nurses were sitting in the day room across the hall from rooms 404 and 406. The day room opens to a patio used as one of the smoking areas for residents. As the surveyor walked down the 400 hall, she noted an odor of smoke. The surveyor went into the day room and alerted the three nurses to the smell of smoke, but they attributed the smell to the fact that R3 had been out smoking. The surveyor insisted that the odor was more like burning paper, at which point one of the nurses agreed that something was burning. The reaction by that nurse triggered a search for the source of the burning smell. Shortly thereafter, the surveyor entered R3's room and was informed by an occupational therapist that he had found the resident's shirt smoldering. CMS Ex. 1, at 3.

1. Petitioner's Assertions

Petitioner contends that R3 was being supervised by the three nurses sitting in the day room, as the day room opens to a patio used as one of the smoking areas for residents. Petitioner adds that, according to the layout of the facility (CMS Ex. 7, at 8), the three nurses were sitting across from rooms 404 and 406 in the day room that leads to the open patio. Petitioner further argues that R3 had an accident despite having been provided adequate supervision, and that CMS is attempting to hold the facility strictly liable. P. Br. at 4.

Petitioner maintains that, at the time of the incident giving rise to this action, the following interventions for the safety of R3 were in place:

�The resident was to be supervised by staff each time he went to the smoking area to smoke.

�The resident was encouraged to wear a smoking apron to prevent the potential for harm.

�The resident's cigarettes were kept by the nursing staff.

�The resident had to go to the nursing station to request a cigarette; thus staff was alerted when he was going to smoke and could closely supervise his smoking behavior.

P. Br. at 5, 6.

Petitioner alleges that it adopted proper measures to protect R3 from smoking-related accidents, but the resident had a history of being resistant to care. He did not like wearing the smoking apron and refused to wear it consistently. Moreover, adds Petitioner, the resident's wife objected to the smoking apron and constant monitoring, and wanted the resident to be able to smoke when he pleased without restriction. P. Br. at 5.

2. CMS's Assertions

CMS acknowledges that Petitioner had implemented interventions to protect R3, encouraging him to wear a smoking apron and supervising his smoking. However, CMS asserts that in November 2002, Petitioner modified R3's care plan by discontinuing its plans to supervise the resident's smoking. CMS Br. at 4. Petitioner implemented this change, alleges CMS, in spite of the indication in the care plan that R3 continued to experience risks of harm associated with his accidentally burning holes in his clothes while smoking. Id.

3. Discussion

Pursuant to 42 C.F.R. � 483.25(h)(2), a facility must ensure that each resident receives adequate supervision and assistance devices to prevent accidents. A facility's duty of care is not absolute. However, the measures undertaken by a facility for the protection of its residents must be adequate. Here, Petitioner did not provide R3 with adequate supervision to prevent accidents.

R3 was admitted to the facility on May 16, 2002, after he was discharged from the hospital, subsequent to experiencing a second cerebral vascular accident. CMS Ex. 2, at 6. His Comprehensive Care Plan, dated June 3, 2002, noted him to be afflicted with confusion, forgetfulness, and dementia. Id. at 7. He was confined to a wheelchair.

An entry in the Comprehensive Care Plan, dated August 8, 2002, indicated that R3 had the potential for harm to self due to burning holes in his clothing accidentally while smoking. As a result, the facility adopted intervention measures aimed at encouraging the resident to wear a smoking apron and supervising his smoking. CMS Ex. 2, at 8. On November 25, 2002, however, a handwritten entry in the Comprehensive Care Plan revealed that R3's smoking supervision was to be discontinued. Following that notation, it was noted that the resident was noncompliant, in that he refused to wear a smoking apron, and that his wife was aware of the situation. Id. at 9. Surprisingly, instead of instilling a heightened awareness in the facility regarding the protection of R3, his noncompliance moved the facility to relax protection measures.

The facility's lackadaisical approach to caring for the safety and well-being of R3 culminated in the event giving rise to this case. On January 9, 2003, while walking through one of the facility corridors, the surveyor perceived a strong odor of something burning. She brought the matter to the attention of three employees who were in the day room area, but none of them appeared particularly alarmed by her remarks. They attributed the odor to cigarette smoke coming from R3, who had just returned from smoking in the courtyard. At the surveyor's insistence, one of the employees followed the surveyor into the corridor, and agreed that the odor was something more than the odor given off by someone who had been smoking. This prompted a search by the three employees. CMS Ex. 7.

A few minutes into the search, Therapist Binh Netter summoned the search party to R3's room (Room 403). He reported that when he entered the resident's room, he observed that R3's shirt was smoldering, and that he and Nurse Linda Edwards put water on the shirt to keep it from burning. The surveyor described the damage to R3's shirt as a three-inch-in-circumference hole in the lower front. Therapist Netter, the first staff member to discover that R3's shirt was smoldering, indicated in a statement given on January 10, 2003, that the burn on the resident's shirt was the size of the end of a cigarette. CMS Ex. 3, at 9. In a statement given on February 13, 2003, however, he said that the burn was the size of a dime which, obviously, is larger than the end of a cigarette. CMS Ex. 3, at 10. Nurse Linda Edwards also gave a resident incident statement indicating that R3's shirt was burnt in the front as well as on the sleeve, and that she noted no injuries. CMS Ex. 3, at 8. From the accounts of the incident described in the aforementioned statements, it is reasonable to conclude that R3's shirt burned for several minutes. ⁽³⁾

The fundamental issue here is whether the facility failed to ensure that R3 received adequate supervision to prevent accidents. In that regard, the evidence before me establishes that the facility failed to provide the supervision that would have been adequate to prevent R3 from experiencing accidents.

Petitioner posits that its facility had interventions in place to ensure appropriate supervision. Allegedly, the resident's cigarettes were maintained by the nursing staff. Thus, the resident had to go to the nursing station to request a cigarette. In that way, the staff was alerted when the resident was going to smoke, and could closely supervise his smoking behavior. However, argues Petitioner, the resident's wife defeated the facility's efforts by providing R3 a separate supply of cigarettes. P. Ex. 9, at 1.

Petitioner maintains that, because of the wife's objections to the smoking apron and close supervision, the facility modified those interventions as of November 25, 2001 [sic] ⁽⁴⁾. As stated earlier, the modification consisted of discontinuing the supervision of R3's smoking. P. Br. at 5. In spite of acknowledging the discontinuance of the monitoring of R3's smoking, Petitioner asserts that facility staff did continue to monitor and supervise the resident's smoking activities in order to ensure his safety. In other words, Petitioner affirms on one hand what it denies on the other.

In an attempt to advance proof that the facility continued to monitor R3's smoking in spite of having modified the care plan as stated above, Petitioner refers to the affidavit of the facility administrator at the time, Paul Stockett. P. Br. at 5, 6; P. Ex. 9, at 1 � 5. At paragraph five of his affidavit, the facility administrator recites the interventions that the facility had adopted prior to the modification of November 25, 2002. Petitioner, however, appears to have overlooked the succeeding paragraph, where the administrator states that:

It is believed that the resident was provided a separate supply of cigarettes from his visiting wife, thus defeating the facility's efforts to monitor the resident's behavior. The resident went to the patio area to smoke unbeknownst to staff, and the nurses and staff were not provided with the opportunity to supervise as closely as was expected.

P. Ex. 9, at 1 � 6.

This statement by the administrator is a recognition that no supervision was taking place when the resident was smoking in the outer court. The administrator makes the vague suggestion that it was "believed that the resident was provided a separate supply of cigarettes from his visiting wife." However, it matters not the source of the cigarettes; the facility still had the duty to supervise the resident to prevent accidents. While there may be times when a facility would wish to accommodate the preferences of a resident or his/her family members, the facility has an obligation under the regulations to take any necessary precautions to ensure the safety of its residents. Certainly, the facility cannot shift the blame for its lack of supervision to the resident's spouse because she may have provided R3 with a separate supply of cigarettes. If the facility "believed" that the resident's wife was providing him with cigarettes on her own, it had the obligation to devise measures to protect the resident from smoking accidents. Petitioner's assertion, that the facility first became aware of the alternate supply of cigarettes after the January 9, 2003 incident, lacks relevance inasmuch as the record reflects that at least three staff nurses were aware that R3 was in the courtyard, and none went outside to supervise his smoking activities. P. Reply at 3; P. Ex. 11, at 1.

Thus, contrary to its own evidence in the form of affidavits, Petitioner argues that the staff was aware that R3 had been smoking and provided supervision accordingly, but was unable to detect the minuscule ash on the resident's shirt. P. Br. at 6; P. Ex. 9, at 1; P. Ex. 11, at 1. The alleged supervision was being carried out by the three staff members encountered by the surveyor on the occasion of the incident here under consideration. In light of Petitioner's contention, that staff monitored R3's smoking activities when he requested cigarettes from staff, it would not seem inappropriate to infer that on the day in question (January 9, 2003), the resident had obtained the cigarette from the staff, in view of the allegation that the three nurses encountered by the surveyor were monitoring the resident's smoking. I find, however, that the three nurses that were in the day room while R3 was smoking in the outer court did not adequately supervise the resident. They were visiting with each other, and not attentive to the smoking behavior of the resident. Had they been closely monitoring R3, they would have noticed that he had dropped ashes on his shirt and the frantic search for the source of the burning smell that ensued after he was through smoking would not have been necessary. More importantly, R3 would not have been exposed to the danger of burning himself. It is very unlikely that the nurses, who were allegedly monitoring the resident's smoking, could detect a hazardous situation concerning R3's smoking from where they were visiting in the facility day room.

In view of the foregoing, I find that CMS has established a prima facie case that Petitioner failed to provide R3 with adequate supervision, and that such conduct had the likelihood of causing serious injury, harm, impairment, or death to the resident. Petitioner has not come forward with persuasive evidence to overcome CMS's showing by a preponderance of the evidence.

B. CMS's finding of immediate jeopardy was not clearly erroneous.

The deficiency cited against Petitioner by CMS was at the immediate jeopardy level. However, CMS assesses a per instance CMP of $3,000. Appeal rights attach to certain initial determinations made by CMS as prescribed in the regulations. The level of noncompliance, in the instant case, immediate jeopardy, can be appealed only if: 1) the range of the CMP that can be collected could change; or 2) a finding of substandard quality of care leads to the loss by the facility of the approval of its nurse's aide training program. 42 C.F.R. �� 498.3(b)(14)(i), (ii) and 498.3(d)(10)(i), (ii).

A per instance CMP can be in the range from $1,000 to $10,000. There is no specifically defined range of per instance penalty for findings of immediate jeopardy. 42 C.F.R. � 488.438(a)(2). Therefore, a finding of immediate jeopardy has no bearing on the range of penalties. If CMS has assessed a per instance CMP, the only way CMS's assessment of immediate jeopardy can be an appealable issue is if the finding of substandard quality of care will affect the facility's nurse's aide training program. In the case before me, neither party has presented evidence that Petitioner has a nurse's aide training program.

In the alternative, should Petitioner in fact have an approved nurse's aide training program, I find that CMS's assignment of immediate jeopardy is not clearly erroneous. "Immediate jeopardy" is defined in the regulations 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. Admittedly, R3 did not suffer serious harm or injury as a consequence of his smoking activities. However, without adequate supervision, R3 was likely to suffer serious injury, harm, impairment or even death. Petitioner knew that the resident had a history of being a danger to himself due to his smoking behavior, but did not act on that knowledge. Petitioner had interventions in place to protect R3 from harm while smoking. Those interventions were ultimately removed from the resident's care plan, according to Petitioner, at the insistence of the resident's wife. Petitioner should have foreseen that, if left unsupervised, R3 was likely to suffer serious injury, harm, impairment, or death. It is only by mere good fortune that the smoldering cigarette ash found on R3's shirt did not cause more damage than just burning a hole in his shirt.

C. The amount of the penalty imposed by CMS is reasonable.

CMS imposed a $3,000 per instance CMP. In the notice of remedies sent by CMS on May 16, 2003, Petitioner was advised that, in imposing a per instance CMP, the factors identified at 42 C.F.R. � 488.438(f) were considered. CMS Ex. 5, at 2.

The resident's exposure to the likelihood of serious injury, harm, impairment, or death, and the facility's apparent lack of concern for the safety of this resident, and, by inference, all of its residents, is clear evidence of the seriousness of the deficiency in this case. In addition, Petitioner has not shown that the CMP would be a significant detriment to Petitioner's financial condition.

V. Conclusion

I conclude that CMS correctly determined that Petitioner was not in substantial compliance with federal participation requirements in the Medicare and Medicaid programs and the imposition of a per instance CMP of $3,000 is reasonable.

José A. Anglada

Administrative Law Judge

1. The Statement of Deficiencies refers to the resident's admission date as May 16, 2003, which was noted in error.

2. The Statement of Deficiencies refers to this date as January 9, 2002, in apparent error.

3. It would be an understatement to say that R3's shirt had only a burn the size of a dime. However, the size of the burn to R3's shirt is not relevant to my analysis .

4. The modification was in fact made as of November 25, 2002. The 2001 date appears to have been mentioned by Petitioner inadvertently.