SUBJECT:

Liberty Commons Nursing & Rehab - Johnston,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I sustain the imposition by the Centers for Medicare & Medicaid Services (CMS) of remedies against Petitioner, Liberty Commons Nursing Center, consisting of the following civil money penalties:

� $3,050 per day for the two-day period of October 22 and 23, 2003; and

� $50 per day for the period which began on October 23, 2003 and which ended on November 25, 2003.

I. Background

Petitioner is a skilled nursing facility in Benson, North Carolina. It participates in the Medicare program. Its participation in that program is governed by sections 1866 and 1819 of the Social Security Act. It is also governed by regulations at 42 C.F.R. Parts 483 and 488.

Petitioner was surveyed for compliance with Medicare participation requirements in a survey that ended on October 23, 2003 (October survey). The surveyors found that Petitioner had failed to comply substantially, in two respects, with participation requirements. One of these findings of noncompliance involved the requirements of 42 C.F.R. � 483.13(c). The surveyors concluded that Petitioner had neglected to provide care to residents such that Petitioner's noncompliance immediately jeopardized the health and safety of residents. ⁽¹⁾ The other finding of noncompliance involved the requirements of 42 C.F.R. � 483.10(e). The surveyors concluded that Petitioner had failed to respect the personal privacy of its residents, although the scope and severity of this alleged noncompliance was at less than the immediate jeopardy level. ⁽²⁾

CMS concurred with the surveyors' findings. It determined to impose remedies consisting of civil money penalties in amounts of:$5,000 per day for October 22 and 23, 2003, the period during which immediate jeopardy allegedly existed at Petitioner's facility; and $200 per day for the period beginning on October 23, 2003 and ending on November 25, 2003, the period during which Petitioner allegedly failed to comply with privacy requirements.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I held a hearing on January 12, 2005 in Raleigh, North Carolina. At the hearing I received exhibits into evidence consisting of CMS Exhibits (CMS Exs.) 1 - 32, and Petitioner's Exhibits (P. Exs.) 1 - 27. I heard the cross-examination and redirect testimony of several witnesses whose written direct testimony was offered and received into evidence as affidavits or declarations made under oath.

II. Issues, findings of fact and conclusions of law

A. Issues

This case involves the following issues:

1. Did Petitioner fail to comply substantially with the requirements of 42 C.F.R. � 483.13(c)?

2. If Petitioner failed to comply substantially with the requirements of 42 C.F.R. � 483.13(c), was CMS's determination that the degree of noncompliance was at the immediate jeopardy level of scope and severity clearly erroneous?

3. Did Petitioner fail to comply substantially with the requirements of 42 C.F.R. � 483.10(e)?

4. What, if any, civil money penalty amounts are reasonable?

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 set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. Petitioner failed to comply substantially with the requirements of 42 C.F.R. � 483.13(c).

The regulation that is at issue requires a facility to develop and implement written policies and procedures that prevent mistreatment, neglect, and abuse of residents. CMS alleges that Petitioner contravened this requirement by neglecting to provide care to its residents that met professionally recognized standards of quality. It asserts that this alleged deficiency is established by evidence showing that Petitioner's staff failed to provide appropriate care to a resident who asserted that he was allergic to latex.

Many of the facts that are the basis for CMS's allegations of noncompliance are not in dispute. Petitioner's post-hearing brief at 1 - 2. CMS's allegations center around the care Petitioner's staff gave a resident who is identified as Resident # 2 in the report of the October survey. The resident's family informed Petitioner's staff that the resident was allergic to latex, a substance that is common in nursing facilities due to its use in resident care (as with, for example, latex gloves). For an individual who is allergic to latex, exposure to that substance can cause a reaction varying from mild to fatal, depending on the nature of the exposure and the individual's sensitivity. Petitioner's staff had no confirmation of the extent of Resident # 2's sensitivity to latex - if he was sensitive at all - but, it determined to deal with the resident as if he were highly sensitive. ⁽³⁾ It planned a number of precautions to be implemented to protect the resident from latex exposure. These precautions included informing Petitioner's staff and pharmacy of the resident's presumed allergy, providing non-latex gloves and equipment to the staff, and posting signs warning the staff of the resident's presumed allergy. Id.

But, these precautions notwithstanding, on October 21, 2003, a nurse's assistant on Petitioner's staff provided care to Resident # 2 while wearing latex gloves. CMS Ex. 14, at 9; CMS Ex. 22, at 2. The resident complained of shortness of breath. Petitioner's staff consulted with a physician, administered oxygen to the resident, and transported him to a hospital.

CMS asserts that a series of staff errors culminated in the assistant's use of latex gloves to treat Resident # 2. The assistant who was involved in the incident did not usually work in the resident's corridor and, consequently, was unfamiliar with the resident and his presumed allergy. CMS Ex. 14, at 1. The precautions that Petitioner had put in place failed to forewarn the assistant about exposing the resident to latex. Warning signs that had been placed in the resident's room had been removed - possibly by the resident - so that there was no explicit visual warning in the room on October 21, 2003 to alert the staff of the dangers of using latex gloves to treat the resident. See CMS Ex. 14, at 1. The nurse's assistant should have received a verbal warning at the beginning of her shift about the resident's condition. Tr. at 89, 97. However, on October 21, 2003 the licensed practical nurse who was on duty failed to inform the assistant of the resident's presumed allergy. CMS Ex. 5, at 1. Finally, the nurse's assistant would have been apprized of the resident's presumed allergy had she consulted the resident's records prior to commencing her shift, because the record contained an appropriate notation. But, the nurse's assistant failed to do so, examining the resident's flow sheet only at the end of her shift. CMS Ex. 18, at 8.

The prima facie evidence offered by CMS is sufficient to establish a failure by Petitioner to provide Resident # 2 with the care that he should have received. Petitioner's plan to protect the resident from exposure to latex was well-intentioned and might have been successful had it been implemented. But, the reasonable inference that I draw from the evidence is that Petitioner was simply lax in implementing its plan. It had no effective mechanism in place to assure that an employee who was unfamiliar with Resident # 2 and his presumed problem would learn about that problem and act appropriately. The nurse's assistant should have been briefed about the resident before starting the shift but was not. She should have reviewed the resident's record before providing him with care but she failed to do so. Its staff did not ensure that warning signs remain posted in the resident's room.

Petitioner characterizes the events surrounding the care of Resident # 2 as a single nursing error. It asserts that the failures in this case were an isolated mistake, one from which it is unreasonable to draw a conclusion that its measures designed to protect the resident were inadequately implemented. Petitioner's post-hearing brief at 8. Petitioner asserts that the error in this case occurred despite its efforts to protect Resident # 2 and it argues that it should not be found deficient for so isolated an instance. Petitioner's post-hearing brief at 8 - 12.

I do not agree with Petitioner's analysis. The inference that I draw from the cascade of failures to protect Resident # 2 is that Petitioner had not drilled its staff sufficiently in the need to assure that precautions for residents who were at risk were known and carried out. In this case the failure of execution was not an isolated error by one employee (a nurse) to inform another employee (the nurse's assistant) of a resident's circumstances. Nor was it an isolated failure by the assistant to read the resident's record. That there was a failure to brief the nurse's assistant by Resident # 2 before the assistant began to provide care and a failure by the assistant to read the resident's record before providing care and a failure by Petitioner's staff to maintain warning signs in the resident's room is persuasive proof that Petitioner's problem was systemic.

This case is distinguishable from others in which administrative law judges have found that it was not reasonable to infer a deficient practice from a single isolated error in staff judgment. What makes this case different from the cases in which isolated errors have not been found to establish deficiencies is that here, the error was not isolated to one employee's mistaken judgment. Rather, there was an overall failure of implementation of a plan as is evidenced by the several mistakes that were documented by CMS. For example, in Life Care Center of Hendersonville, DAB CR542 (1998), I held that a facility employee's failure to provide care appropriately to a resident was not a basis from which to infer a deficiency because the employee had received explicit instructions as to how to provide care which the employee disregarded. Thus, in Hendersonville, there was a truly isolated error in judgment by a single employee notwithstanding the facility's best efforts to provide appropriate care.

Petitioner also suggests that Resident # 2's exposure to latex may simply be an unavoidable consequence of his residing in a nursing facility where there is a pervasive presence of latex. I do not find this argument to be persuasive. Petitioner was made aware of the resident's presumed allergy and agreed to assume the risk of providing care to him. Once it assumed that risk it also accepted the obligation to do all that was reasonably possible to protect the resident against accidental exposure to latex. Here, the exposure - being put in close proximity with latex gloves - was both foreseeable and avoidable.

2. Petitioner did not prove to be clearly erroneous CMS's determination that Petitioner's failure to comply with the requirements of 42 C.F.R. � 483.13(e) was an immediate jeopardy level deficiency.

Assuming a deficiency to be present CMS's determination of an immediate jeopardy level of scope and severity may not be set aside unless it is found to be clearly erroneous. 42 C.F.R. � 498.60(c)(2). I do not find to be clearly erroneous CMS's determination that Petitioner's noncompliance with the requirements of 42 C.F.R. � 483.13(e) was at the immediate jeopardy level of noncompliance.

A deficiency creates immediate jeopardy if there is a likelihood of serious injury, harm, impairment, or death to a resident. 42 C.F.R. � 488.301. In arguing that CMS's determination is clearly erroneous, Petitioner focuses on the likelihood of harm to Resident # 2 caused by his exposure to latex. According to Petitioner, there is no credible evidence that the resident was likely to suffer harm from his exposure, much less is there evidence that he suffered actual harm. Indeed, according to Petitioner, it is not even clear from the record that the resident was allergic to latex. Petitioner points out that the resident's diagnosis of a latex allergy was based solely on his assertion that he was allergic to the substance. As Petitioner notes, there is no documentation that the resident ever was tested for sensitivity to latex, nor is there clinical evidence proving that he actually reacted to latex. The resident's principal claim of sensitivity was that exposure to latex made him short of breath. In fact, the resident's other medical conditions caused him to suffer from respiratory problems and, according to Petitioner, it is not possible to segregate a latex reaction from any of the other respiratory problems that the resident experienced.

I agree with Petitioner that the evidence that the resident had a latex allergy is tenuous at best. In the absence of a clinical test establishing the degree of the resident's sensitivity, if any, there is no way to say confidently whether he was allergic to latex or how sensitive he was. ⁽⁴⁾ However, I do not find the question of the resident's allergy to be necessary to deciding the issue of whether there was immediate jeopardy. The immediate jeopardy in this case does not lie in the exposure of Resident # 2 to latex. Rather, it lies in the weakness of Petitioner's system for protecting its residents demonstrated by the series of errors that occurred in providing care to Resident # 2.

It is not unreasonable to infer from the failure of Petitioner's staff to implement the protective measures that had been developed for Resident # 2 that other residents would be jeopardized when placed in similar circumstances and that there would be a likelihood of serious injury, harm, or death as a consequence. The systemic failure to implement protective measures that was present at Petitioner's facility, as is evidenced by errors committed in providing care to Resident # 2, would jeopardize any resident who is dependent on a staff to treat him or her subject to safety precautions.

3. Petitioner failed to comply substantially with the requirements of 42 C.F.R. � 483.10(e).

The regulation at issue provides that a facility resident has the right to personal privacy and confidentiality of his or her personal and clinical records. CMS bases its allegations that Petitioner failed to comply with this requirement on the following facts. At the October survey a surveyor observed that Petitioner's survey notebook - a publicly displayed document which contained findings from previous surveys along with documentation of corrective actions Petitioner had taken to correct deficiencies identified at those surveys - also contained personal and medical information for residents. CMS Ex. 18, at 4. Specifically, the publicly displayed documents, which included treatment records and diagnoses, identified residents by their names. Id.

CMS acknowledges that another subsection of 42 C.F.R. � 483.10, 42 C.F.R. � 483.10(g), requires a facility to display the most recently issued statement of deficiencies and its plan of correction in a place that is readily accessible to residents. It asserts, however, that this second subsection cannot be read as countermanding the requirement of 42 C.F.R. � 483.10(e) that residents' privacy be protected. It argues that Petitioner should have known that it should have edited any posting of survey results to eliminate residents' names.

Petitioner takes issue with this contention. It contends that CMS's analysis of the regulations would be correct only if one read 42 C.F.R. � 483.10(e) broadly and 42 C.F.R. � 483.10(g) narrowly. Petitioner asserts that there is nothing in the plain language of the regulations to suggest that they should be read together in this way. Petitioner argues that it had no notice from CMS that the regulations would be applied in the manner that CMS now would have them be applied. Consequently, according to Petitioner, it is now being held unfairly to a regulatory application of which it had no notice.

Moreover, according to Petitioner, there was not even the potential of harm to its residents from Petitioner's posting of confidential resident information. According to Petitioner, no resident ever complained about the posting and, indeed, it is unclear whether any resident even was aware that confidential information had been posted. P. Ex. 32 at 4; Tr. at 74.

I do not find Petitioner's arguments to be persuasive in light of the facts of this case. First, the interrelationship between 42 C.F.R. �� 483.10(e) and (g) is not opaque or difficult to understand. On its face, 42 C.F.R. � 483.10(e) is a very broadly worded regulation. The duty that the regulation imposes on a facility is absolute. The regulation does not suggest any exceptions to the facility's obligation to protect its residents' privacy. The subsection clearly imposes on a facility the duty to shield confidential resident information as a primary responsibility. A facility's other obligations, including its obligation to make survey results available, must give way in the face of 42 C.F.R. � 483.10(e).

Here, the facility's duty was obvious. Petitioner should have known that it could not lawfully post survey results or corrective action items that identified residents by their names. Petitioner's failure to at least exclude residents' names from the posted material was a plain violation of its duty to protect residents' privacy. ⁽⁵⁾

Second, I find that the evidence is persuasive that there was a potential for more than minimal harm to residents resulting from Petitioner's action. Whether residents actually were embarrassed by the information posted by Petitioner is beside the point. The potential for humiliation existed so long as the privacy-protected information was exposed by Petitioner to public view.

4. Civil money penalties of $3,050 and $50 per day are reasonable.

The remedies that CMS imposed in this case consist of civil money penalties of $5,000 per day for Petitioner's failure to comply with the requirements of 42 C.F.R. � 483.13(c) and $100 per day for Petitioner's failure to comply with the requirements of 42 C.F.R. � 483.10(e). I find these penalty amounts to be excessive. I sustain civil money penalties of $3,050 and $50 per day for the two deficiencies.

Regulations establish the criteria for determining the amounts of civil money penalties. Daily civil money penalties for deficiencies that are at the immediate jeopardy level of scope and severity must fall within a range of from $3,050 to $10,000. 42 C.F.R. � 488.438(a)(1)(i). Daily civil money penalties for deficiencies that are substantial but not at the immediate jeopardy level of scope and severity must fall within a range of from $50 to $3,000. 42 C.F.R. � 488.438(a)(1)(ii). The factors to be used to decide where a civil money penalty amount should be fixed within a permissible range are set forth at 42 C.F.R. �� 488.438(f)(1) - (4) and 488.404 (incorporated by reference into 42 C.F.R. � 488.438(f)(3)). Generally, these factors include:the seriousness of deficiencies; the facility's culpability for its deficiencies; its compliance history; and a facility's financial condition.

CMS has not alleged that Petitioner manifests a history of past noncompliance that would support significant penalty amounts. Nor has Petitioner offered evidence to show that its financial condition is such that it would be unable to pay the civil money penalties that are at issue here. That leaves only the issues of seriousness and culpability as measures of penalty amounts.

Neither of the two deficiencies was so serious as to merit remedies that exceeded the minimum within each penalty range. In the case of the immediate jeopardy level deficiency, a minimum penalty of $3,050 per day is merited by the absence of proof of actual harm to any resident and the absence of proof of elevated culpability. The likely consequences of Petitioner's failure to implement effectively its precautions for residents who were at risk obviously were very serious. That is why CMS determined - and why I sustain - an immediate jeopardy level deficiency. But, Petitioner is correct in asserting that there was no persuasive evidence that Resident # 2 was harmed or even put at serious risk by Petitioner's noncompliance. It is impossible to assess the degree of risk to Resident # 2 absent clinical proof that he was actually allergic to latex. The danger to residents caused by Petitioner's deficiency thus lay entirely in the probability that, sooner or later, a resident would be harmed if Petitioner did not remedy the flaws in its system.

The absence of proof that a resident actually was harmed by the deficiency is reason for me to find that the deficiency fell at the low end of the immediate jeopardy range. Furthermore, CMS has not shown that Petitioner manifests any culpability for its deficiency that would take it out of the low end. Clearly, Petitioner implemented its protections for Resident # 2 in good faith. It meant well for the resident but it failed to execute on its plans.

Similarly, in the case of the non immediate jeopardy deficiency, I find that a minimum penalty of $50 per day is merited by the facts of this case. There is no evidence that any resident was harmed by Petitioner's public display of private information. As Petitioner contends, there is not persuasive evidence that any resident of Petitioner was actually aware that private information had been posted. Moreover, there is no evidence that Petitioner manifested elevated culpability here that would justify increasing the penalty amount beyond the minimum of $50 per day. The weight of the evidence is that Petitioner posted the private information in good faith, not realizing that it was violating regulatory requirements.

In any case involving daily civil money penalties there is potentially an issue of penalty duration. Here, however, Petitioner has not challenged CMS's determinations that the immediate jeopardy level deficiency persisted for a period of two days and that the other deficiency persisted from October 23 until November 25, 2003. It is unnecessary that I make findings about duration given that Petitioner has not challenged CMS's determination.

Steven T. Kessel

Administrative Law Judge

1. The expression "immediate jeopardy" is defined at 42 C.F.R. � 488.301 to mean a situation in which a facility's noncompliance with a Medicare participation requirement or requirements has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.

2. The report of the October survey erroneously cites to 42 C.F.R.

�� 483.13(c)(1)(i) and 483.10(d)(3) as the regulations with which Petitioner allegedly failed to comply. CMS subsequently made it clear that it is alleging noncompliance by Petitioner with the requirements of 42 C.F.R. �� 483.13(c) and 483.10(e). I find no prejudice to Petitioner resulting from the original mis-citation of regulatory authority.

3. Evidently, the resident was never tested to determine whether he was allergic to latex or the extent of his sensitivity.

4. CMS offers as Appendix A to its post-hearing brief a copy of the resident's death certificate that lists a latex allergy as a possible condition contributing to his death. The exhibit is offered untimely and I exclude it for that reason. Moreover, there is nothing in the exhibit to show how the diagnosis of a latex allergy was arrived at. For that reason I find it to be less than credible evidence of the resident's clinical condition.

5. A closer question - one that I do not address in this decision - might arise if Petitioner had followed the surveyors' example and identified residents with numbers. That would have made it more difficult, but not necessarily impossible, to identify which residents were being discussed in the report or the plan of correction. I take notice of the fact that often, a survey report which discusses the care that a facility gives to a resident is so resident-specific that a person with knowledge of the goings on at a facility can identify the resident from the information in the report even if a number is substituted for a resident's name. It would difficult in that circumstance for the facility to comply with its posting obligation under 42 C.F.R. � 483.10(g) and not contravene its obligation under 42 C.F.R. � 483.10(e). I do not address this problem here because, in this case, Petitioner failed to comply with even the most basic duty of deleting the residents' names.