SUBJECT:

Rosewood Living Center,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to impose remedies against Petitioner, Rosewood Living Center, consisting of:

� four per-instance civil money penalties totaling $10,000;

� denial of payment for new admissions, effective August 31, 2003; and

� termination of Petitioner's participation in the Medicare program, effective September 4, 2003.

I. Background

Petitioner is a skilled nursing facility in Detroit, Michigan. Petitioner participated in the Medicare program. Its participation in that program was governed by sections 1819 and 1866 of the Social Security Act (Act) and by federal regulations at 42 C.F.R. Parts 483 and 488. ⁽¹⁾

Petitioner was surveyed for compliance with Medicare participation requirements in surveys that ended on July 22 (July 22 survey) and on July 31 (July 31 survey), 2003. The purpose of the July 22 survey was to determine whether Petitioner was operating in compliance with provisions of the Life Safety Code published by the National Fire Protection Association. ⁽²⁾ Compliance with the Life Safety Code is made a requirement of Medicare participation by a skilled nursing facility at 42 C.F.R. � 483.70. The purpose of the July 31 survey was to determine whether Petitioner was operating in compliance with the general conditions of participation stated in 42 C.F.R. Part 483. The surveyors determined that Petitioner failed to comply substantially with numerous participation requirements, both in the Life Safety Code and in the general Medicare participation requirements.

CMS determined to accept the surveyors' finding and to impose remedies against Petitioner. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I scheduled an in-person hearing. Prior to the hearing date the parties informed me that they agreed that the case should be heard and decided based on their written submissions. ⁽³⁾ Joint Motion dated January 7, 2005. As a result, the parties submitted written briefs and each party had an opportunity to submit a reply brief. CMS submitted exhibits consisting of CMS Ex. 1 - CMS Ex. 63. ⁽⁴⁾ Petitioner submitted exhibits consisting of P. Ex. 1 - P. Ex. 60. Additionally, the parties submitted joint exhibits consisting of J. Ex. 1 - J. Ex. 12. The joint exhibits comprise transcripts of a state license revocation hearing involving Petitioner. I am receiving into evidence all of the above-described exhibits.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner failed to comply substantially with Medicare participation requirements or with Life Safety Code requirements;

2. CMS's determination to impose per-instance civil money penalties against Petitioner is reasonable; and

3. CMS is authorized to impose additional remedies against Petitioner consisting of a denial of payment for new admissions and termination of Petitioner's participation in Medicare.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I discuss each Finding in detail, below

As I mention above, the surveyors who conducted the July 22 and July 31 surveys found numerous instances in which Petitioner allegedly failed to comply with Life Safety Code and Medicare participation requirements. Ultimately, CMS determined to impose four per-instance civil money penalties against Petitioner, based on four of these deficiency findings. I discuss these four deficiency findings at subparts a.-d. of Finding 1 in this decision. At Finding 2, I discuss the reasonableness of each of the per-instance penalties. At Finding 3, I discuss CMS's authority to impose the remedies of denial of payments for new admissions and termination of participation in Medicare.

I do not discuss in this decision the numerous deficiencies cited in the reports of the July 22 and July 31 surveys that were not the basis for per-instance civil money penalties. It is unnecessary that I make findings about these deficiencies because their presence and duration is not relevant to the findings that I make in this case. The four per-instance penalties that CMS imposed are justified entirely by the four deficiencies which they remedy. I find also that CMS's determinations to impose denial of payment for new admissions and to terminate Petitioner's participation in Medicare are authorized by the persistence of at least one of these four deficiencies through the termination date of September 4, 2003. Discussion of the other alleged deficiencies might have been necessary were I to find that none of the four deficiencies that I do discuss endured through the termination date. Only in that event would deciding the issue of whether other deficiencies persisted resolve whether CMS was authorized to terminate Petitioner's participation in Medicare effective September 4, 2003.

1. Petitioner failed to comply substantially with Life Safety Code and Medicare participation requirements.

a. Petitioner did not comply substantially with the requirements of section 2-1.2-1112 of the Life Safety Code (1967) because it failed to maintain and operate its facility so as to avoid undue danger to the lives and safety of its residents from fire, smoke, fumes or resulting panic during the period of time reasonably necessary for escape in case of fire or other emergency.

CMS offered abundant prima facie evidence to show that, as of the July 22 survey, Petitioner tolerated conditions at its facility that placed residents at a high risk of injury or death from fire. Much of CMS's proof relates to the way in which Petitioner used its third story - which had been designed as and used previously as a residential area - and its basement for storage of unused equipment and miscellaneous items.

The July 22 survey was performed by Aric D. Alexander, a fire safety inspector and a professional fire fighter and emergency medical technician. He averred that, in his experience, he had never seen a facility store so much combustible material on its premises. CMS Ex. 57, at 1, 5-6. Mr. Alexander found that the presence of a large quantity of combustible material coupled with the manner in which it was stored, the physical condition of the facility, Petitioner's failure to isolate or protect the stored items from fire hazard, and Petitioner's general unpreparedness to prevent or to limit fires, created a situation that was "not only unsafe, it was a disaster." Id. at 7. In his words:

The conditions on the third floor and in the basement of . . . [Petitioner] were the worst I had ever seen . . . .

Id.

Mr. Alexander found that Petitioner had piled helter-skelter in its third floor and basement huge quantities of combustible items in a way that created a high likelihood of an accidental and uncontrollable fire. CMS Ex. 57, at 5. These items included a stack of mattresses, cardboard boxes filled with unspecified materials, and tangled masses of furniture and equipment. CMS Ex. 19, at 1-6. The maze of stored items made it exceedingly difficult for fire fighters to have access to any fire that might have started in the storage areas. Id. The stored items blocked corridors and exits. CMS Ex. 57, at 6. Items stored on the third floor were deposited in a way that prevented room doors from closing. Several storage doors were missing in their entirety. Id. On the third floor, some items were stored in non-sprinklered areas. Id. Effectively, there were no fire barriers that enclosed the stored items. Mr. Alexander found multiple penetrations in smoke barriers consisting of holes in basement and third floor walls. Id.

The risk of accidental fire was increased, according to Mr. Alexander, by Petitioner's failure to deny access to the third floor and basement storage areas. He observed cigarette butts scattered throughout the third floor, which indicated not only that staff or residents had access to the floor, but that they were engaging in an intrinsically hazardous activity on that floor given the huge quantity of combustible material that was stored there. CMS Ex. 57, at 5.

Mr. Alexander made other observations which led him to conclude that Petitioner's facility was at a great risk for accidental fire. He observed a snow blower containing gasoline in Petitioner's basement. CMS Ex. 57, at 4. Petitioner had no storage cabinet designed to store flammable liquids. Id. Mr. Alexander saw an extension cord running through a puddle of water in the basement. Electrical fixtures containing exposed wires were present on the third floor. Id. at 5. Sprinklers in Petitioner's facility had been painted over, thereby interfering with their intended design, and decorations were hung from a smoke detector. CMS Ex. 3, at 10-11. One of Petitioner's stairwell doors failed to unlock when the fire alarm system was activated, despite the fact that it was designed to do so. Id. at 9. Many of Petitioner's exit signs were not illuminated. CMS Ex. 3, at 7-8; CMS Ex. 18, at 1, 4-8. Petitioner produced no records to show that it had tested its emergency generator. CMS Ex. 57, at 3. Nor did it produce records of tests or inspections of its fire alarm system, sprinklers, portable fire extinguishers, or the kitchen hood fire suppression system. Id. at 3-4. Petitioner had no records demonstrating that it had conducted quarterly fire drills. Id.

The evidence offered by CMS is persuasive and, in many respects, frightening. Absent a strong rebuttal by Petitioner it overwhelmingly supports the conclusion that a great threat of injury and death to residents from fire and smoke existed at Petitioner's facility.

I do not find that Petitioner offered a persuasive rebuttal because its fact contentions do not respond forcefully or completely to CMS's principal allegations. Petitioner focused on details of a few of Mr. Alexander's findings and attempted to raise questions about some of those details. See Petitioner's brief at 103-105. But, it failed to come to grips with CMS's central contention that Petitioner stored huge amounts of combustible material on its third floor and in its basement in a way that risked catastrophic consequences from a fire.

In many important respects, Petitioner simply failed to respond to CMS's allegations. These allegations, therefore, stand uncontradicted. Petitioner did not refute CMS's principal allegation that Petitioner piled massive amounts of combustible material on its third floor and in its basement in a haphazard way that raised the likelihood of a fire and diminished the possibility that a fire, if it started, could be extinguished. It offered no explanation for the presence of numerous cigarette butts on its third floor. It did not respond at all to the findings that it failed to produce records of tests or inspections of its fire alarm system, sprinklers, portable fire extinguishers, or the kitchen hood fire suppression system and that it had no records demonstrating that it had conducted quarterly fire drills. Nor did it deny findings that a stairwell door that was supposed to be activated by the fire alarm system was not activated or that its sprinklers were, in many instances, covered with paint.

Petitioner contends that, in fact, Mr. Alexander admitted that the third floor was safe for storage because it had a sprinkler system. Petitioner's brief at 105. I find that the record does not support this assertion. See J. Ex. 12, at 77-78. Mr. Alexander did not find a sprinkler system to be present on the third floor. His testimony was that he did not recall seeing a sprinkler system on the third floor. Id. That testimony certainly cannot be used to support a finding that a sprinkler system was present. Petitioner had the opportunity to put in evidence establishing the presence of a sprinkler system, if one existed, and failed to do so.

Mr. Alexander's testimony is in no event an endorsement of Petitioner's storage activities. It is clear from his testimony and findings that the manner in which Petitioner stored items on its third floor would have created a fire hazard even if the third floor was sprinklered. His testimony was only that Petitioner might use its third floor for storage if it had a sprinkler system on that floor. Mr. Alexander did not agree that a sprinkler system would, by itself, absolve Petitioner from the problems that resulted from the way in which it stored items on its third floor, including the volume of combustible material, the haphazard way in which Petitioner piled it in rooms and corridors, the lack of security, the use of the third floor as a smoking area, and exposed electrical wires.

Petitioner argued that Mr. Alexander failed to test the exposed electrical wires on the third floor of Petitioner's facility to determine if these wires were live. Petitioner's brief at 105. From this, it contends that it cannot be ascertained whether the exposed wires were an actual fire hazard because it is unknown whether they were live. Id. But, as with sprinklers, the presence or absence of live wires on the third floor is not an essential part of CMS's allegations of noncompliance. Had the wires been live that would have contributed to the risk of fire. But the risk existed in large measure because of the helter-skelter and unsafe storage of combustible materials on the third floor. Live electrical wires would simply add a possible way in which a fire could start.

Besides, the weight of the evidence supports the conclusion that these wires were, in fact, live, Petitioner's assertions to the contrary. As Mr. Alexander observed, there were functioning lights on the third floor, from which one could conclude reasonably that the wiring system on that floor had not been disconnected. Moreover, Petitioner's maintenance director admitted to another surveyor, Ms. Shawne Cripps, that the third floor wiring was, in fact, electrified. CMS Ex. 58, at 5.

Additionally, Petitioner asserts that it cannot be found to be deficient based on its failure to produce a record of having tested its emergency generator. Petitioner's brief at 103-104. According to Petitioner, Mr. Alexander was not qualified to test the generator and, therefore, no findings of noncompliance may be made based on his allegedly unqualified observation. Id. This assertion misses the point entirely. Mr. Alexander had no obligation to test Petitioner's generator. It was Petitioner's duty to ensure that the generator was in working order. Petitioner's failure to produce any test results is persuasive evidence showing that it had not complied with that duty.

b. Petitioner did not comply substantially with the requirements of 42 C.F.R. � 483.25(h)(1) because it failed to ensure that its resident environment remained as free of accident hazards as is possible.

The surveyors who conducted the July 31 survey found numerous failures by Petitioner to take steps to eliminate accident hazards that were evident or foreseeable. Some of these - such as unrestricted access to Petitioner's unoccupied third floor, the presence of cigarette butts in that part of Petitioner's facility indicating smoking in an area where a fire hazard existed, and holes in the fire door leading to the third floor - were findings that duplicated those made by Mr. Alexander at the July 22 survey. But, there were other findings as well. These included the following:

� There was broken glass on the floors of Petitioner's third story. CMS Ex. 58, at 5-6. Although this part of Petitioner's facility was not being used to house residents, residents could gain access to it through an unlocked door and thereby could be exposed to the broken glass and other hazards that existed on the third floor. Id.

� On July 20, 2003, a surveyor observed a broken fluorescent light fixture in an unlocked resident shower room on the occupied first floor of Petitioner's facility. The fixture was hanging by exposed electrical wires. CMS Ex. 58, at 3. Water was dripping from the ceiling of the shower and from the fixture itself due to a leak on the second floor of the facility. Id. There was standing water on the floor of the shower, and a person standing in the water could easily touch the dangling fixture and its wires. Id. Petitioner's staff admitted that nursing assistants were using the shower room in question to give showers to residents, as of the date that this situation was observed by the surveyor. Id. Petitioner's maintenance director claimed that he had closed the shower room on either July 17 or July 18, 2003. But, he could not produce documentation of that action and on July 20, 2003 there was no sign or barrier on the shower room to warn of the hazard or to preclude its use. Id. at 4.

� On July 20, 2003, a surveyor observed a can labeled "gasoline," containing a liquid that smelled like gasoline, which was stored in Petitioner's kitchen area. CMS Ex. 60, at 4; J. Ex. 8, at 134. Petitioner's administrator subsequently acknowledged that the substance was gasoline and stated that Petitioner's staff was using it to fuel a power washer to clean the facility's floors. J. Ex. 6, at 195-196. Petitioner's maintenance director acknowledged that the gasoline should have been stored elsewhere. J. Ex. 11, at 37; 119; 135.

� On July 29, 2003, a surveyor observed a resident who is identified as Resident # 12 sitting in Petitioner's first floor smoking room unsupervised, with a package of cigarettes and a lighter. CMS Ex. 58, at 7. The resident's treatment records showed that the resident was mildly cognitively impaired, with her diagnoses including psychosis, mild mental retardation, and depression. However, the resident had not been assessed to determine whether she could safely smoke without supervision. Id. Moreover, the resident had not been provided with an ashtray and the resident asserted that she often stamped out cigarette butts on the floor. Id.

� On July 21 and 23, 2003, a surveyor observed unlocked and unattended housekeeping carts, on the second floor of Petitioner's facility, that were accessible to Petitioner's residents. CMS Ex. 58, at 7. The carts contained items that were potentially harmful to residents if ingested or sprayed in their eyes, including cleaning solutions, aerosol sprays, and window cleaner. Id. at 7-8.

These observations are powerful prima facie evidence of a failure by Petitioner to ensure that its facility was free from accident hazards. I have discussed above the potentially fatal dangers from fire and smoke that residents were subjected to by the way in which Petitioner stored combustible items on its third floor and in its basement. Other risks - risks from cuts and electrocution, for example - were present due to Petitioner's failure to bar residents access to its third floor. The risk of electrocution from a dangling fluorescent light fixture in a shower room that was not closed is obvious. Petitioner's storage of gasoline in its kitchen was also palpably unsafe as was its failure to secure maintenance carts containing potentially hazardous liquids. Finally, allowing a cognitively impaired resident to smoke unsupervised and without an assessment of whether it was safe to permit the resident to do so posed evident risks, not only to the resident, but to other residents as well.

CMS's prima facie case of noncompliance is not rebutted by the evidence offered by Petitioner. With respect to problems associated with Petitioner's use of its third floor for storage, Petitioner asserts that, in fact, the third floor of its facility was securely locked and that residents never had access to it. Consequently, according to Petitioner, the third floor simply was not a place where accident hazards - whatever they might be - were a relevant consideration because residents were not exposed to them.

This assertion, even if it is true, is not a complete response to CMS's allegations. The fact is that the manner in which Petitioner stored items on its third floor created an extreme risk of fire whether or not Petitioner's residents had access to the floor. Denying residents access to the floor would have protected them from exposure to hazards such as broken glass on the floor or exposed electrical wire, but it would not have saved them from the possibility of death or injury from a fire caused by improper storage and by staff, if not resident, use of the third floor as a smoking area.

Moreover, the credible evidence supports my finding that residents were able to obtain access to the third floor. Petitioner relies on the testimony of Ms. Leslie Skog, its administrator, to support its contention that residents could not obtain access to the third floor. J. Ex. 6, at 106. Ms. Skog testified in a State license revocation hearing that Petitioner's third floor is a "lock-down" unit which is accessible only with a key. Moreover, according to Mr. Dials, the maintenance director, stairways are accessible through mag-locks, which require a person simultaneously to turn a doorknob and to press a button in order to obtain access. J. Ex. 11, at 76-77. Petitioner contends - without citing to any evidence - that, in fact, surveyors participating in the July 22 and July 31 surveys were only able to obtain access to the third floor after doors to the third floor were opened for them by someone. Petitioner's brief at 67.

However, whatever security precautions Petitioner may have had were defeated by the fact that a door which granted access to that part of the facility was broken. Petitioner omits to mention that fact from its argument. As Ms. Skog acknowledged in her testimony, a handle to a door providing access to the third floor was missing. J. Ex. 6, at 110.

Petitioner repeats its assertion that uncapped wires on the third floor were not electrified. Petitioner's brief at 68. But, as I discuss above, the weight of the evidence supports a finding that they were live. See n.3 at Finding 1.a.

Petitioner responds to the surveyors' findings concerning the first floor shower room by asserting, essentially, that the problems were identified prior to the surveys, and by contending that there was no danger to residents because the shower had been taken out of use and access to residents was denied. According to Petitioner, the shower room was, in reality, not being used to shower any residents. Petitioner contends that, prior to the beginning of the July 31 survey, presumably on the 17^th or 18^th of July, its maintenance director closed the shower room by placing "caution" tape across the shower to warn all staff and residents of the condition of the room. Petitioner's brief at 63; J. Ex. 11, at 74; CMS Ex. 4, at 77; CMS Ex. 39, at 6; P. Ex. 58, at par. 10. Petitioner asserts, moreover, that on the first day of the July 31 survey its maintenance director turned off power to the fluorescent light, cut the wires to the light and capped them, removed the light fixture, and contacted a contractor to repair the problem. Petitioner's brief at 63; J. Ex. 11, at 73; 75-76.

I do not find to be credible Petitioner's assertion that its staff identified the problem with the light fixture in the shower room prior to the 20^th of July, 2003 and took the shower room out of use. I find to be more credible the surveyors' observations and findings based on their interviews with Petitioner's staff that the room was not closed prior to the surveyors' identifying the problem with the light fixture. The surveyors' observations and findings are borne out by the fact that the room was not closed to public access when they first observed it, by the failure of Petitioner's maintenance logs to show that the problem was identified before it was brought to the staff's attention by the surveyors, and by the fact that neither Petitioner's administrator, nor its director of nursing, was aware of the problem with the light fixture. The assertions of Petitioner's maintenance director that he became aware of the problem on the 17^th or 18^th of July, 2003 and closed the room on those dates are self-serving when considered in light of this other evidence. J. Ex. 11, at 74-75.

Petitioner's principal response to the surveyors' observation of a container of gasoline in its kitchen area is to argue that it was placed there only temporarily in anticipation of it being used to fuel a power washer. Petitioner's brief at 64-65. Assuming that to be true, that does not detract from the surveyors' finding that storing gasoline - even temporarily - in a kitchen area is an unsafe and hazardous practice. I do not agree with Petitioner's contention that the risk posed by storing gasoline in the kitchen was "minuscule, at best." See Petitioner's brief at 65. I find to be more persuasive the surveyors' concerns that storing gasoline in an enclosed space where there are sources of heat and fire is inherently dangerous.

Petitioner asserts that its staff had determined that Resident # 12 was capable of smoking safely without supervision. Petitioner's brief at 70; see J. Ex. 4, at 84and 88; CMS Ex. 4, at 83-84; P. Ex. 28; P. Ex. 45, at par. 62; P. Ex. 46, at par. 45; P. Ex. 47, at par. 34. I do not find to be persuasive the evidence that Petitioner offered to support its contention. Petitioner offered no plan of care or other similar document that showed that the resident actually had been assessed to determine whether it was safe for her to smoke while unsupervised. Resident # 12's minimum data set assesses the resident to be moderately cognitively impaired and mentally retarded. P. Ex. 28, at 3 and 9. But, it contains no assessment of the extent to which the resident might need to be supervised while engaging in potentially hazardous activities like smoking. The other exhibits offered by Petitioner to support its contention that the resident had been found capable of smoking while unsupervised consist, essentially, of conclusions without support. None of them explain how Petitioner's staff arrived at a determination that it was safe for the resident to smoke while unsupervised. See P. Ex. 45, at par. 62; P. Ex. 46, at par. 45; P. Ex. 47, at par. 34.

Petitioner contends also that the smoking area in its facility was in view of its nurses' station. Therefore, according to Petitioner, the resident actually was supervised while she smoked. I am not persuaded by this assertion. It may have been possible for a nurse or nurses to observe a resident continuously from the nurses' station while the resident smoked. But what is possible is not necessarily the same thing as what occurred. Petitioner has offered no evidence to show that the resident actually was supervised while she smoked by nurses working at a nearby nurses' station.

Moreover, the surveyors' findings concerning Resident # 12's smoking were not limited to finding that the resident was observed smoking while unsupervised. The surveyors found also that the resident had not been supplied with an ashtray so as to allow her to smoke safely. Petitioner did not respond to this allegation.

Petitioner characterizes the surveyors' observations of unattended cleaning carts as identifying only a minimal problem, asserting that the surveyors: did not determine how long the carts were left unattended; did not ascertain whether a housekeeper was proximate to the carts; and failed to note that the carts were located in a non-residential area in Petitioner's facility. Petitioner's brief at 70. But, these assertions do not detract from CMS's allegation. At the center of the allegation was that the carts were left unattended and unlocked, thereby making it possible for a resident or residents to have access to them. Whether they were left in that state for a short period of time or a lengthy period of time certainly has a bearing on the degree of hazard created by the unattended carts. But, leaving carts containing potentially dangerous or poisonous substances unlocked and unattended for any length of time in a facility that housed cognitively impaired residents (as in, for example, Resident # 12) posed a risk. Moreover, the fact that the carts were in an area that was not residential did not mean that the area was foreclosed from resident access. Petitioner did not argue that residents had no access to the carts.

c. Petitioner failed to comply substantially with the requirements of 42 C.F.R. 483.25(c)(1) and (2) because it failed to follow its plan of care to protect a resident from the development of an avoidable pressure sore and because it failed to provide necessary treatment for a pressure sore.

The prima facie evidence offered by CMS concerns a resident who is identified in the report of the July 31 survey as Resident # 603. The resident was a severely demented individual whose impairments included a broken hip. CMS Ex. 4, at 61. She was totally dependent on Petitioner's staff for all activities of daily living. Petitioner's staff assessed the resident as requiring repositioning every one to two hours due to her immobility. Additionally, the staff assessed the resident as being at a high risk for developing a pressure sore. Id. at 62.

However, there was no documentation in the resident's record to show that the resident actually was being repositioned at pre-planned intervals. CMS Ex. 4, at 63. To the contrary, the surveyors' observations of the resident support a conclusion that the resident was not being repositioned according to her care plan. On July 20, 2003, a surveyor observed the resident to be lying on her back at 9:30 a.m. At 11:30 a.m. on that same date the resident was observed still to be lying on her back. Id. at 60 - 61. The surveyor observed the resident again at 1:00 and 3:00 p.m. on July 20, 2003 and found her still to be lying on her back. Id. at 62. The resident was observed again on July 21, 2003 at 6:30 a.m., 9:30 a.m., 12:30 p.m., 1:15 p.m., and 3:00 p.m. On each occasion the resident was observed to be lying on her back. Id. On July 22, 2003, a surveyor observed the resident to be lying on her left side. On this occasion she was wearing a brief that was saturated with urine. The surveyor observed a stage II pressure ulcer on the resident's sacrum, measuring 2.3 centimeters by 1.3 centimeters.

The inescapable inference that emerges from this evidence is that Petitioner's staff ignored the pressure sore risk assessment of Resident # 603 and failed to execute the resident's care plan.

Petitioner's response to CMS's evidence is to argue, first, that any pressure sore that the resident might have developed while in Petitioner's facility was an unavoidable consequence of her medical condition. Second, Petitioner questions whether the sore identified by the surveyor actually was a pressure sore, contending that it "could have been a blemish or a self inflicted scratch and not a pressure sore at all." Petitioner's brief at 53-54. Third, Petitioner argues that it did develop an appropriate plan to address the resident's risk for developing pressure sores. Finally, it contends that the surveyors' conclusion that the resident was not repositioned according to the schedule in the resident's treatment plan is not credible because the surveyors did not observe the resident continuously.

I find these assertions to be unpersuasive. First, Petitioner is not absolved from its failure to provide care to Resident # 603 by the possibility that the resident's pressure sores were the inevitable consequence of her medical condition. 42 C.F.R. � 483.25(c) does not grant a facility a retrospective free pass to ignore the regulation's requirements of prevention and treatment. The regulation requires a facility to do all that it reasonably can do to prevent pressure sores whether or not it is ultimately determined that a resident's clinical condition made development of a sore or sores unavoidable.

What Petitioner is effectively saying now is that it should be excused for failing to comply with its own treatment regime for Resident # 603 because an after-the-fact review of the resident's case suggests that the treatment would have been futile. But, the regulation does not work that way. Hindsight may be a good teacher but it cannot be used to justify a facility's flaunting of a regulatory requirement. A reasonable reading of the regulation is that it requires a facility to assume that no resident should develop a pressure sore and to treat each resident as if the development of all pressure sores is avoidable. The regulation excuses a facility from liability if a resident then develops a sore that proves to be unavoidable despite the facility's best efforts to protect the resident. But, in no circumstances does the regulation excuse a facility from doing what sound medical and nursing practice dictates it should do to prevent the development of a pressure sore.

Nor is it determinative of a facility's compliance that a resident's wound may or may not be a pressure sore. A facility may be liable for failure to perform reasonable preventive measures even if a resident fails to develop a sore. And, a facility may be excused from liability if it does all that it should have done and the resident nevertheless develops an unavoidable sore. Thus, while it may be a relevant evidentiary factor in deciding the efficacy of a facility's treatment regime for a resident that a resident developed a pressure sore, the ultimate issue under the regulation is whether a facility did all that it reasonably should have done to prevent the development of a pressure sore whether or not a sore actually developed.

Second, and Petitioner's contentions notwithstanding, the weight of the evidence plainly supports CMS's assertion that Petitioner failed to discharge its obligations under the regulation. The fact that Petitioner may have developed a plan to protect the resident does not excuse Petitioner from liability if it failed to implement that plan. And here, the evidence is one-sided. Petitioner's plan for Resident # 603 included repositioning the resident at one- to two-hour intervals. That was clearly essential to the resident's well-being because the resident was immobile and Petitioner's staff had concluded that the resident was vulnerable to developing pressure sores from prolonged pressure. Petitioner not only failed to document any efforts that its staff may have made to reposition the resident, but credible observations established that the staff was not repositioning the resident according to the resident's treatment plan.

Over a two-day period extending from July 20 through July 21, 2003, surveyors consistently observed Resident # 603 to be in just one position, lying on her back. Although the resident was observed nine times during these two days, not once was the resident observed to be repositioned. ⁽⁵⁾ The inferences that I draw from these observations is that the resident was consistently positioned on her back during this period and that this position was the staff's preferred position for the resident. The fact that the surveyors did not observe the resident continuously does not undercut this inference. Common sense suggests that, had the resident been repositioned at all by the staff, she would have been observed in a position other than on her back at least once or twice during the two days she was observed.

Consequently, the evidence offered by CMS - and not rebutted by Petitioner - is that Petitioner's staff failed to reposition Resident # 603 in accordance with her treatment plan despite the staff's own assessment that the resident needed to be repositioned at intervals to protect the resident against developing pressure sores. That is an obvious violation of 42 C.F.R. � 483.25(c)(1).

The weight of the evidence also supports a finding that Petitioner failed to comply with the second subpart of 42 C.F.R. � 483.25, which requires a facility to take all reasonable measures to treat a pressure sore that has developed. Petitioner concedes that Resident # 603 had pressure sores even if it disputes that the sore identified by the surveyors was a pressure sore. It was obliged by the regulation to develop a plan of care which promoted healing. Repositioning the resident at one- to two-hour intervals was an essential element of that plan and Petitioner failed to perform that element.

d. Petitioner did not comply substantially with the requirements of 42 C.F.R. � 438.25(e)(2) because it failed to provide appropriate treatment and services to a resident with a limited range of motion in order to increase the resident's range of motion and/or prevent further decrease in her range of motion.

CMS's prima facie evidence concerning Petitioner's alleged failure to provide appropriate treatment and services to a resident with a limited range of motion relates again to Resident # 603. The resident was assessed by Petitioner's staff on June 8, 2003 to display limited range of motion in both of her arms and hands and partial loss of movement to her leg and foot. CMS Ex. 4, at 66-67. This loss of range of motion was a consequence, most likely, of a stroke that the resident suffered prior to the date of the assessment. Petitioner's staff's objectives for the resident included maintaining the level of her joint mobility. Id. at 67. The treatment plan that the staff developed for the resident included passive range of motion (PROM) exercises administered to both the resident's upper and lower extremities three to five times per week. Id. at 67-68.

Despite that Petitioner's staff had planned PROM exercises for Resident # 603, none were documented after June 13, 2003. CMS Ex. 4, at 68. By the July 31 survey, nearly six weeks had elapsed without any documentation in the resident's record of PROM exercises.

The surveyors interviewed Petitioner's restorative aide in order to determine whether Resident # 603 had received PROM exercises. Id. at 67. The aide asserted that she lacked the time to document what she had been doing for the resident. Her response to the question of whether she'd provided PROM exercises to the resident was "not really." Id.

This evidence supports a conclusion that Petitioner staff failed to provide Resident # 603 with PROM exercises despite determining that these exercises were necessary to address the resident's range of motion limitations. It is ample support for a finding that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.25(e)(2). Petitioner's staff recognized that Resident # 603 had a limited range of motion as a consequence of a stroke. It was obliged to address this problem with appropriate treatment and services. It determined that such treatment and services would consist of PROM exercises. Yet, it failed to follow through on that determination.

Petitioner's response to this evidence is to argue that it was excused from providing the resident with PROM exercises or other range of motion treatments because such care would have been futile. It does not deny that its staff planned to provide the resident with PROM exercises, nor does it deny that the staff failed to follow through on its commitment. Its position is, simply, that such exercises would have been a waste of time because the resident was doomed by her stroke to develop the limitations she displayed when observed by the surveyors.

This argument mirrors the argument that Petitioner made concerning its failure to provide pressure sore prevention care to Resident # 603 and it fails for the same reason. The regulation does not excuse a facility from providing range of motion care to a resident on the ground that the resident's condition makes providing the care an exercise in futility. The regulation obligates a facility to assume that a resident with range of motion limitations has a potential for improvement, or at least, not to deteriorate further. That in turn requires a facility to make a good faith effort to help the resident. A facility is not liable if, despite its good faith and appropriate efforts, the resident's condition fails to improve or worsens. But, a facility must at least try to help a resident and it is not excused by concluding that help would be a waste of time.

Moreover, in this case, Petitioner staff determined that Resident # 603 might be helped by PROM exercises. At no point prior to the July 31 survey did the staff conclude that providing such care to the resident was futile. Petitioner's current argument that providing care to the resident was a waste of time loses force given the fact that its own staff determined that such care would not be futile.

2. The per-instance civil money penalties that CMS determined to impose are reasonable.

CMS determined to impose four separate per-instance civil money penalties to remedy the four deficiencies that I discuss above at Finding 1. The penalties are: $3,000 for Petitioner's failure to comply with section 2-1.2-2112 of the Life Safety Code (Finding 1.a.); $4,000 for its failure to comply with 42 C.F.R. � 483.25(h)(1) (Finding 1.b.); $1,500 for its failure to comply with 42 C.F.R. �483.25(c)(1) and (2) (Finding 1.c.); and $1,500 for Petitioner's failure to comply with 42 C.F.R. � 483.25(e)(2) (Finding 1.d.). ⁽⁶⁾

Per-instance civil money penalties to remedy deficiencies that are substantial are authorized by 42 C.F.R. � 488.408. A per-instance civil money penalty may fall within a range of between $1,000 and $10,000. 42 C.F.R. � 488.438(a)(2). Regulations establish the criteria for deciding the amount of a civil money penalty. 42 C.F.R. �� 488.438(f)(1) -(4); 488.404 (incorporated by reference into 42 C.F.R. � 488.438(f)(3)). These factors include: the seriousness of a deficiency or deficiencies; the relationship of deficiencies to each other; a facility's compliance history; its culpability for its deficiencies; and its financial condition.

I have evaluated each of the four proposed per-instance penalties separately, considering the regulatory factors that I have mentioned. I have also considered Petitioner's arguments that the aggregate penalties impose too heavy a financial burden on Petitioner. I conclude that each of the four penalties is reasonable and that Petitioner has not shown that its financial condition precludes it from paying all of them.

First, I note that each of the four penalties is relatively modest when measured against either the range of penalties that might be imposed per-instance or against the specific deficiencies. The highest of the four penalties is $4,000, less than one-half the maximum permissible per-instance amount. Yet each of the four deficiencies had potentially extremely serious consequences for Petitioner's residents.

CMS determined that two of the deficiencies - Petitioner's failure to comply with the requirements of the Life Safety Code and its failure to prevent accident hazards - were so serious as to comprise immediate jeopardy for Petitioner's residents. Regulations define an immediate jeopardy deficiency to involve a situation in which a facility's noncompliance has caused or is likely to cause serious injury, harm, impairment, or death to a resident. 42 C.F.R. � 488.301. Strictly speaking, a determination of immediate jeopardy is irrelevant to the issue of what is reasonable as a per-instance civil money penalties. A determination of immediate jeopardy is a necessary prerequisite to imposing a per-diem civil money penalty in excess of $3,000, but is not a prerequisite to imposing a per-instance penalty in any amount up to $10,000. See 42 C.F.R. � 488.438(a)(1)(i), (ii), (a)(2). Therefore, it is unnecessary that I find that the evidence supports CMS's immediate jeopardy determinations.

On the other hand, CMS's determination of immediate jeopardy is an indication of seriousness. I have examined the two "immediate jeopardy" level deficiencies without regard to whether they meet the regulatory definition of immediate jeopardy. These were very serious deficiencies, whether or not they were immediate jeopardy level deficiencies. In both cases, Petitioner's noncompliance placed at risk the lives and safety of Petitioner's residents.

Individuals who resided at Petitioner's facility were, by definition, extremely dependent on others to care for their needs. As an example, Resident # 603 was virtually immobile. She was totally dependent on Petitioner's staff to provide care. Had a fire begun in the facility, she would have been incapable of exiting the premises on her own. Consequently, the fire hazard that was extant at the facility placed this resident's life - and those of others who were similarly dependent - at peril. Moreover, the fire hazard that existed as a consequence of Petitioner's actions was not minor or negligible. The credible judgment of Mr. Alexander, an experienced fire and public safety inspector, was that the conditions that prevailed at the facility were the worst he had ever seen. CMS Ex. 57, at 7.

I reach a similar conclusion about the accident hazards that prevailed at Petitioner's facility. Those hazards emanated in part from the fire hazards caused by Petitioner's improper storage activities. But, there were several other problems as well, discussed at Finding 1.b. of this decision. Most prominently, there was a real risk that a resident could be electrocuted by exposed wires in a shower stall that had not been decommissioned by Petitioner's staff.

I find that the seriousness of the fire and accident hazard deficiencies justifies the penalties of $3,000 and $4,000 that CMS determined to impose for these deficiencies. There is really no need to look beyond the factor of the deficiencies' seriousness to sustain the civil money penalties. However, evidence relating to other regulatory factors supports the penalties. Although the two deficiencies do not encompass precisely identical facts, they evidence a similar problem when viewed as a whole. There is a relationship between the deficiencies. The common factor with these two deficiencies is an incredible laxness on the part of Petitioner's staff in addressing hazards that put residents' lives at risk. The overall pattern of laxness that emerges from the deficiencies supports a conclusion that Petitioner's staff manifested a high degree of culpability for them. This supports the penalty amounts of $3,000 and $4,000.

I find that the two $1,500 deficiencies are also supported by evidence pertaining to their seriousness. Each of these deficiencies related to the care that Petitioner gave to a resident, Resident # 603, who was totally dependent on Petitioner's staff for care. Petitioner's failure to attend to this resident's needs was inexcusable under any circumstance, but was especially so in light of her condition. Her helplessness made it critical that the staff be attentive to her needs. For example, the resident was unable to reposition herself. Failure by the staff to reposition the resident condemned that resident to lie in one position. Failure by the staff to keep the resident clean and free from contact with her urine meant that the resident was condemned to lie in urine. Failure to provide this resident with PROM exercises meant that the resident would have no hope of maintaining joint mobility.

Petitioner argues that its financial condition makes imposition of penalties totaling $10,000 unreasonable. Its sole basis for this argument appears to be that it has ceased operating. Petitioner's brief at 110. But, cessation of operation does not mean necessarily that Petitioner is without cash reserves or assets from which Petitioner may pay the penalties. Petitioner offered no financial evidence to show that it lacks the necessary funds. I find that its argument is not persuasive absent such evidence.

3. CMS is authorized to impose additional remedies consisting of denial of payment for new admissions and termination of Petitioner's participation in Medicare.

Under applicable regulations at 42 C.F.R. Part 498, remedies that are available to CMS in the event of a facility's failure to comply substantially with participation requirements include both denial of payment for new admissions and termination of the facility's certification to participate in the Medicare program. In this case, CMS imposed the remedies of denial of payment for new admissions, effective August 21, 2003, and termination of Petitioner's participation in Medicare, effective September 4, 2003. The sole question that I may decide concerning these determinations is whether Petitioner failed to comply substantially with one or more participation requirements on the dates that the remedies were imposed. If I answer that question affirmatively, that decides the issue of CMS's authority to impose the remedies.

A finding that a facility is not complying substantially with one or more participation requirements creates a presumption of ongoing noncompliance. CMS is under no obligation to assume that a facility has regained compliance on any given date. The burden is entirely on the facility to prove that it attained compliance with all participation requirements on the date or dates when it asserts to have done so.

I conclude that Petitioner did not prove that it attained compliance with all of the participation requirements that I discuss at Finding 1 of this decision, either by August 21 or by September 4, 2003. Consequently, CMS is authorized to impose the remedies of denial of payment for new admissions and termination of Petitioner's participation in Medicare. ⁽⁷⁾

Petitioner has not even averred that it corrected all of its deficiencies by either August 21 or September 4, 2003. The sole evidence that Petitioner offered about its post-survey compliance efforts is the plan of correction that it submitted to the Michigan State survey agency addressing the deficiencies that were identified at the July 31 survey. CMS Ex. 14. ⁽⁸⁾ Petitioner did not even submit its plan until after August 21, 2003. The plan is dated August 28, 2003, but it was not received by the Michigan State survey agency until September 2, 2003. CMS Ex. 14, at 1. In the cover letter to the plan, Petitioner asserted that:

All resident-specific deficiencies have a correction date of 8/14/03, at which time the residents were evacuated from the facility during a multi-state power outage as directed by the Michigan Public Health Institute. The remaining citations will have a correction date of October 25, 2003.

CMS Ex. 14, at 1 (emphasis added). Two of the four deficiencies that I discuss at Finding 1, consisting of Petitioner's noncompliance with the Life Safety Code (Finding 1.a.) and its noncompliance with its obligation to prevent foreseeable accident hazards, were not "resident-specific" deficiencies. The part of the plan of correction that addresses the accident hazards deficiency recites two proposed correction dates: October 25, 2003 (crossed over, without explanation), and September 15, 2003. Id. at 74. Both of those dates are subsequent to the remedy dates of August 21 and September 4, 2003.

The plan of correction is not, in and of itself, credible evidence that Petitioner actually attained compliance by the specified dates. It is easy for a facility to represent that it has done something by a specified date in order to assert that it has attained compliance with a participation requirement. That, obviously, can be a self-serving allegation. Here, Petitioner has not averred that it has documentation of repairs to its facility, of staff training, or of other corrective measures that would corroborate its assertions of compliance on dates prior to the dates when the remedies were imposed by CMS.

Petitioner also argues that it attained compliance with some requirements by August 14, 2003, simply by virtue of its having evacuated its facility on or prior to that date. Petitioner contends, essentially, that it can no longer be held accountable for deficient practices if it is no longer serving a resident population.

That argument has no merit. What underlies the deficiencies that are at issue in this case is slipshod or incorrect practices by Petitioner's staff. The propensity to engage in such practices does not disappear automatically with the cessation of resident care. In order to attain compliance, therefore, Petitioner must do more than assert that its noncompliance was eliminated by transferring residents out of its facility. It must show how it would comply with participation requirements when it reopened its doors to residents. That, Petitioner failed to do.

Petitioner makes additional arguments that I find without merit. First, Petitioner contends that CMS improperly failed to accept Petitioner's plan of correction and order a re-survey of Petitioner's facility prior to terminating Petitioner's participation in Medicare. Petitioner's theory is that if it submits a plan of correction, CMS is obligated by law to accept it and act on it. Alternatively, Petitioner argues that it should have been given a chance to satisfy CMS that it was complying with participation requirements before CMS imposed the remedy of termination of participation. Petitioner's brief at 8.

I disagree with Petitioner's analysis of CMS's obligations. There is nothing in the regulations governing long-term care facilities that obligates CMS to accept a facility's plan of correction. To the contrary, the regulations plainly give CMS discretionary authority to accept or not accept a plan of correction. The regulation at 42 C.F.R. � 488.456(b)(1) provides that CMS may terminate a facility's participation in Medicare where: (i) the facility is not in substantial compliance with a participation requirement regardless of whether immediate jeopardy is present; or (ii) where the facility fails to submit an "acceptable plan of correction." The use of "acceptable" is a clear statement that CMS has discretion to accept or not to accept a plan of correction. I have no authority to review CMS's exercise of discretion not to accept Petitioner's plan of correction.

Second, Petitioner contends that CMS acted arbitrarily when it determined to terminate Petitioner's participation in Medicare. However, CMS's authority to terminate is non-reviewable discretionary authority. CMS may act so long as the predicate requirement of noncompliance with a participation requirement is met, as it was in this case. 42 C.F.R. � 488.456(b)(1)(i). I am without authority to review CMS's exercise of discretion to terminate Petitioner's participation, even as I am without authority to review CMS's determination not to accept Petitioner's plan of correction.

Finally, Petitioner asserts that CMS has no right to terminate Petitioner's participation in Medicare because Petitioner had ceased operation and transferred its residents prior to the termination date. However, CMS's authority to terminate participation is not contingent on a facility's actively housing and providing care to residents. There is nothing in either the regulations or the Act itself that suggests that ongoing resident care is a necessary prerequisite to imposing termination of participation as a remedy. See 42 C.F.R. � 488.456(b)(1)(i) and (ii).

Steven T. Kessel

Administrative Law Judge

1. Other regulations of general applicability to participating providers are at 42 C.F.R. Part 489. Hearings involving appeals concerning an entity's participation status in Medicare are at 42 C.F.R. Part 498.

2. CMS submitted both the 1985 Life Safety Code and its predecessor, the 1967 Life Safety Code, as an appendix (Life Safety Code Appendix) to its brief.

3. CMS submitted with its brief a motion for leave to substitute a corrected CMS Ex. 58. It is correcting a formatting error in the initial CMS Ex. 58 which had missing two lines of text from � 3. Petitioner filed no objection. Therefore, I am receiving this substituted exhibit into evidence.

4. CMS moved to amend its prehearing exchange to include a new exhibit, CMS Ex. 64. I denied CMS's motion.

5. It was not until July 22, 2003, that a surveyor observed the resident to be positioned on her side. CMS Ex. 4, at 62.

6. Petitioner characterizes these penalties as "a $10,000 per instance civil money penalty." Petitioner's brief at 109. The characterization is inaccurate because there are four separate penalties at issue and I must adjudicate the reasonableness of each of them separately. The total penalty amount of $10,000 is only an issue if Petitioner proves that it lacks the financial wherewithal to pay penalties totaling that amount.

7. The reports of the July 22 and July 31 surveys recite numerous alleged instances of noncompliance in addition to those which I discuss at Finding 1. I find it unnecessary to discuss these additional alleged instances because Petitioner's failure to attain full compliance with all of the participation requirements that I discuss at Finding 1 before or by the dates when CMS imposed the remedies of denial of payment and termination of participation is sufficient to authorize CMS to impose these remedies. However, and obviously, had Petitioner established that it attained compliance with all four of these requirements by or before the remedy dates, that would not have sufficed to establish that CMS was without authority to impose the remedies. It merely would have been sufficient to open the door to consideration of the numerous other alleged deficiencies.

8. Neither party alluded to a plan of correction addressing the Life Safety Code deficiencies that were identified at the July 22 survey, nor has Petitioner recited any specific documentation in which it averred that it corrected those deficiencies.