SUBJECT:

Lake Shore Inn Nursing Home, Inc.,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

Petitioner, Lake Shore Inn Nursing Home, Inc., a long-term care facility located in Waseca, Minnesota, is certified to participate in the Medicare and Medicaid programs as a provider of services. Petitioner challenges the Centers for Medicare & Medicaid Services' (CMS) determination that it was not in substantial compliance with program participation requirements based on a survey completed on March 29, 2004. For the reasons discussed below, I find Petitioner to have been in substantial compliance with program participation requirements at all relevant times, and find further that there is no basis for CMS to impose the $4050 per instance civil money penalty (CMP) it assessed based on Petitioner's alleged noncompliance.

I. Background

The Minnesota Department of Health (State survey agency) conducted a survey at Petitioner's facility which was completed on March 29, 2004. The statement of deficiencies prepared by the State survey agency concluded that Petitioner was not in substantial compliance with four participation requirements (noted on the statement of deficiencies at F Tags 241, 441, 463, and 465, with the most serious deficiency, at F Tag 463, assessed as an immediate jeopardy). On April 21, 2004, CMS notified Petitioner of the imposition of a number of remedies relating to the March 29, 2004 survey including: a per instance CMP of $4050 for noncompliance related to the deficiency found at F Tag 463; denial of payment for new admissions, effective May 11, 2004; and mandatory termination of Petitioner's provider agreement, effective September 29, 2004, if all deficiencies were not remedied and Petitioner was not in substantial compliance with participation requirements by that date. On May 13, 2004, the State survey agency revisited Petitioner and found Petitioner in substantial compliance as of May 3, 2004. CMS notified Petitioner on June 15, 2004, that it was rescinding the denial of payment and that it would not terminate Petitioner's participation agreement. However, the CMP of $4050 remained. Petitioner requested a hearing by letter dated June 2, 2004, and the case was assigned to me for hearing and decision. Although Petitioner initially requested a hearing based on all deficiencies cited, by the time of the hearing the only deficiency remaining at issue was F Tag 463, which reflects noncompliance with 42 C.F.R. � 483.70(f).

I held a hearing in St. Paul, Minnesota, on December 27 and 28, 2004. Testifying for Petitioner were Karen Weckwirth, a certified nurse aide (CNA) at Petitioner's facility; Larry Rosenthal, Petitioner's maintenance director; R. Peter Madel, Jr., Petitioner's owner and CEO; and R. Peter Madel, III, Petitioner's administrator. Testifying for CMS were State survey agency surveyors Lou Anne Page, Deborah Neuberger, and John Rittman. ⁽¹⁾ At the hearing, I admitted CMS Exhibits (Exs.) 1-73 and Petitioner's Exhibits (P. Exs.) 1-37. The parties also submitted prehearing briefs (CMS or P. Prehearing Br.), posthearing briefs (CMS or P. Br.), and posthearing response briefs (CMS or P. R. Br.). I am including in the record the April 21, 2004 notice letter from CMS to Petitioner imposing remedies, and the June 15, 2004 letter from CMS to Petitioner discontinuing certain remedies, as ALJ Ex. 1. These two documents were not initially included in the record, and I asked for them to complete the record. CMS supplied the documents to me on August 31, 2005.

II. Issues

1. Whether Petitioner was out of substantial compliance with participation requirements.

2. Whether the CMP imposed by CMS against Petitioner is reasonable.

III. Statutory and Regulatory Background

The Social Security Act (Act) sets forth requirements for long-term care facilities (Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities (NFs)) participating in the Medicare and Medicaid programs, and authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations implementing the statutory provisions. Act, sections 1819 and 1919. The Secretary's regulations governing long-term care facilities participating in the Medicare program are found at 42 C.F.R. Parts 483, 488, 489, and 498.

To participate in the Medicare program, a long-term care facility must maintain substantial compliance with program requirements. To be in substantial compliance, a facility's deficiencies may pose no greater risk to resident health and safety than "the potential for causing minimal harm." 42 C.F.R. � 488.301.

If a facility is not in substantial compliance with program requirements, CMS has the authority to impose one or more of the enforcement remedies listed in 42 C.F.R. � 488.406, which include imposing a CMP. See Act, section 1819(h). CMS may impose a CMP for the number of days that the facility is not in substantial compliance with one or more program requirements, or, for each instance that a facility is not in substantial compliance. 42 C.F.R. �� 488.430(a), 488.440.

In situations where deficiencies constitute immediate jeopardy, CMS may impose a CMP of between $3050 and $10,000 per day. 42 C.F.R. � 488.438(a)(1)(i). In situations where deficiencies do not constitute immediate jeopardy, but have caused actual harm or have the potential for causing more than minimal harm, CMS may impose a CMP of $50 to $3000 per day. 42 C.F.R. � 488.438(a)(1)(ii). An administrative law judge must uphold CMS's determination as to the level of noncompliance unless it is clearly erroneous. 42 C.F.R. � 498.60(c).

IV. Burden of Proof

As an evidentiary matter, CMS must set forth a prima facie case that a facility is not in substantial compliance. Petitioner then has the burden of coming forward with evidence sufficient to establish the elements of any affirmative argument or defense, and bears the ultimate burden of persuasion. To prevail, Petitioner must prove, by a preponderance of the evidence, that it was in substantial compliance with relevant statutory and regulatory provisions. Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing and Convalescent Center, DAB No. 1904 (2004); Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd Hillman Rehabilitation Center v. HHS, No. 98-3789 (GEB), (D.N.J. May 13, 1999).

V. Findings of Fact, Conclusions of Law, and Discussion

I make findings of fact and conclusions of law to support my decision in this case. I set forth each finding below, in italics, as a separate heading.

1. Petitioner was in substantial compliance with the participation requirement at 42 C.F.R. � 483.70(f) (F Tag 463) at all relevant times.

42 C.F.R. � 483.70(f) requires a facility to equip its nurse's station to receive resident calls through a communication system from resident rooms and from toilet and bathing facilities. The statement of deficiencies in this case asserted that based on observation, group, and resident interviews, Petitioner failed to provide a reliable, fully functioning communication system for 23 resident rooms (containing 36 residents) in the south wing of its facility. CMS Ex. 1, at 6.

The statement of deficiencies asserted that the resident call light system failed to function when more than four residents used their call lights to call for staff assistance. The statement of deficiencies further asserted that Petitioner had been aware of this since November 2003, but had failed to promptly put plans in place to assure that the system was fully functional and to safeguard the south wing residents. The statement of deficiencies reflected the surveyors' determination that the deficiency constituted immediate jeopardy. The statement of deficiencies specifically noted that: (1) during the resident group interview, two residents complained about the call light system not always working, one who just stated that if several lights go on at the same time the system didn't work, and another who said she was left on the commode for a long time when her call light didn't work; (2) the surveyors checked the call light system by activating call lights in several rooms. When an additional call light was turned on all call lights above resident doors and at the nursing station turned off, and the accompanying auditory system became silent and failed to function; (3) a resident's wife stated that sometimes her husband's call light didn't work and they would find out and fix it; (4) the licensed practical nurse (LPN) working on the unit was interviewed about the system "crashing" and she said it frequently happened when several residents had call lights on at the same time. When staff realized the system was down nursing assistants would go from room to room to de-activate the call light device at each bed. By a process of elimination the call light that brought down the system would be located and turned off and the system re-activated; (5) Petitioner's owner stated the facility would be getting a new call system but that the owner wanted it to be compatible with a new assisted living building. The owner said he would sign a purchase agreement for a new system the next day which could be installed within a week; (6) Petitioner's director of maintenance stated he knew the system had had problems for four or five months and that a local electrician had looked at the system in November 2003 and told him there was nothing to improve an "old and tired" system; (7) another nursing assistant told the surveyors that the system went down at least once a week and, when it did, staff went from room to room checking the call lights until they found the one that brought the system down. How long it took to re-activate the system depended on how many people were working and what they were doing when it went down; (8) a resident told the surveyors that he thought the system went down about twice a week, and he used his phone to call the nurses station when it was down; (9) a resident stated that there were times she put the light on and it didn't work, especially after lunch, and stated that if she was in her wheelchair she would try to get to her door to flag someone down. If she was in bed she had to shout for help; (10) a report of an incident in November 2003 (the resident was discharged and unavailable for interview) stated that the resident was not able to signal when he needed help to get off a commode when the call light system was down, and he had to wait an hour for help until found by a dietary aide passing snacks. CMS Ex. 1, at 6-10.

The statement of deficiencies relates that the facility was notified of the surveyors' determination of immediate jeopardy on March 24, 2004. The facility put into place a plan to assure the safety of residents by: (1) giving hand bells to residents who were able to use them; (2) instructing staff to be on alert for any sign the electrical system was down and, between 6:00 a.m. and 9:00 p.m., instructing staff to test the system when no lights were on; (3) evening and night shifts were told to make frequent rounds; (4) placing a notice on the Resident Council Bulletin Board at the south wing nurses' station to inform family and visitors of possible call system failure; and (5) arranging for a new communication system to be installed the week of March 29, 2004. Immediate jeopardy was removed on March 29, 2004. CMS Ex. 1, at 10-11.

CMS adopted the State survey agency findings and determinations. In defending its action against Petitioner before me, CMS now asserts that Petitioner's call light system was known to malfunction whenever five or more call lights were activated at the same time and that Petitioner knew of the problem from at least late October of 2003. Moreover, the system was estimated to go down approximately once a week, for at least five to ten minutes at a time. Despite this, CMS asserts that Petitioner failed to fix or replace the system or implement a formal back-up system and inform staff and residents about its existence. CMS states that the purpose of a call light system is to provide a means for residents to alert staff that they need assistance, particularly for those residents who cannot physically find help on their own. CMS argues that given the extremely vulnerable condition of the residents on the south wing and the length of time that the call light problem existed, Petitioner's failure to fix the problem created a situation of immediate jeopardy. CMS R. Br. at 6.

I addressed what section 483.70(f) requires in the case of Heritage Park Nursing Center, DAB CR1051 (2003). I held there that section 483.70(f) requires that a communication system, whatever system that is, ⁽²⁾ be effective and reliable. To be effective and reliable the system must work, otherwise it is not effective and reliable because it has no health and safety purpose. I also stated that whether the communication system is an alternate method or a substitute method from the primary method used by a facility is irrelevant. The communication system works or it does not. It works when, and only when, residents and staff can rely on it dependably to convey messages that may range at random from the trivial to the critical, from the casual to the urgent. If residents cannot be confident that their efforts to communicate with staff are being transmitted with a very high degree of regularity, the system does not work. And, unless the staff can be certain that residents' communications are reaching them with a very high degree of regularity, the system does not work. Thus, it is CMS's proper role to determine not just whether a system exists, but whether it is effective and reliable. To hold that the regulation only allows CMS to verify whether a communication system exists, but not to evaluate its effectiveness, is contrary to the broader purpose of the regulation: to have facilities designed, constructed, and equipped to protect the health and safety of residents. 42 C.F.R. � 483.70. A communication system that does not work cannot protect the health and safety of residents. Heritage Park Nursing Center, DAB CR1051, at 29.

There is no dispute in this case that Petitioner did have a call light system in place. Further, there is also no dispute that when the surveyors were in the facility they tested the system and found that if more than four call lights were on at one time the system shut down and had to be reset. The question remaining, however, which I address below, is whether, given the virtually-uncontested and entirely-persuasive evidence that five or more simultaneous calls on the call light system would cause the system to shut down, did that fact, understood in the context of the facility's manner of dealing with the situation, amount to substantial noncompliance with 42 C.F.R. � 483.70(f)? I find that it did not. Specifically, while I find that the evidence and argument adduced by CMS establish a prima facie case of noncompliance in the absence of rebuttal, I find that Petitioner's evidence, which includes the facility's showing that even when the system failed, which was rarely, staff were aware of the situation, took immediate and effective measures to correct it by visiting all residents and resetting the system, and making every reasonable effort to explore solutions to the problem, adequately rebut CMS's prima facie case. ⁽³⁾

First, the evidence adduced by Petitioner convinces me that Petitioner's staff was aware that the call light system needed to be reset after five lights were activated and that they re-activated the system expeditiously. Ten members of Petitioner's staff have declared that "[w]hen the call-light system had to be reset, it normally took approximately 5-10 minutes to reset the system. Staff immediately knew when the system needed to be reset . . . [the] call-light system did not need to be reset frequently . . . [in] addition to the call-light system, residents on south wing [were] also equipped with a personal alarm. The personal alarms worked even when the call-light system had to be reset . . . [t]herefore, if a resident needed assistance, the resident could use his [or] her personal alarm to alert staff." P. Ex. 36.

CNA Weckwirth testified at the hearing that Petitioner's nursing staff knew when the system needed to be reset. She testified that there were four aides on the south wing. At times they were told by word-of-mouth that the system was down. Two aides started on either end of the wing and met in the middle. Within five or 10 minutes they knew where the problem was. Tr. 172, 177. She testified further that there was never a time when Petitioner's nursing staff had no idea how to reset the system. Tr. 173. Until the system was back in operation, the nurses physically went into each resident's room to check that the light was depressed. Tr. 174. She also testified that the system needed to be reset about once a week to once every three weeks. Tr. 174, 179. In her testimony at hearing, CNA Weckwirth noted that only about six residents had a personal alarm. However, those alarms went to residents who were impaired and the facility was concerned that they would get out of bed and fall. She testified also that the alarm made a "very loud noise" [Tr. 179] and that gave the nurses a fairly clear idea of whose personal alarm they were hearing as not every resident was a possible "suspect." Tr. 179-181.

Petitioner did understand that its call light system needed improvement. Although the system may have been operating to its manufacturer's standards, Petitioner did call in an electrician to determine whether the system could be improved. Tr. 185-186; P. Ex. 32, at 1. The system could not be improved and Petitioner began looking for a new call light system. Tr. 186-188, 239. Petitioner determined to install a new system at the same time it installed a new system in its assisted living facility. Id. However, before deciding to wait until the assisted living facility was completed, Petitioner's administration consulted its nursing staff to determine whether there was a safety concern with waiting. Staff did not raise a concern about waiting. Tr. 239.

The testimony and declarations submitted by Petitioner's witnesses convince me that the facility was adequately addressing any problems inherent with its call light system. ⁽⁴⁾ Petitioner's call light system had, apparently, been in place since 1968 without causing any resident any harm. Petitioner was in the process of looking for a more modern system, at least in part to address the problem cited by CMS. In the interim, it asked its nursing personnel if they believed there were safety problems with the current system and was reassured that there were none. It appears that, contrary to CMS's assertions, Petitioner's nursing staff did know what to do when the system went down, checking on all residents in an immediate two-element "sweep" of the south wing to find the call light that brought down the system. CMS has not convinced me that a more formal education process was necessary in the face of the staff's declarations and testimony. Moreover, other than giving hand bells to residents able to use them, I do not find that any of the interventions that Petitioner instituted following CMS's citation of the deficiency were materially different than what Petitioner had been doing prior to citation. I agree with CMS that the purpose of the system is to provide a means to alert staff that a resident needs assistance, especially for those residents who cannot physically find help on their own. However, I do not believe in this instance that either a deficiency (and certainly not a situation of immediate jeopardy) existed. See CMS R. Br. at 6.

I believe that Petitioner had a system in effect where residents were dependably able to convey messages and that the amount of time that the system was down was adequately addressed by staff.

2. There is no basis for CMS to impose the $4050 CMP it assessed.

As I have found Petitioner to be in substantial compliance, CMS had no basis upon which to impose the $4050 per instance CMP it assessed.

Richard J. Smith

Administrative Law Judge

1. I note here that in an otherwise well-tried and well-briefed case, the parties have gratuitously indulged themselves in a series of immoderate and regrettable exchanges over the testimony of Surveyor Rittman. Petitioner has charged that some of his testimony was fabricated and deliberately untruthful and has unwisely added to its final brief a footnote that is, from any perspective, indefensible. CMS has responded in perfervid terms without simply stating the obvious: that the points at which the Rittman testimony is in conflict with some of the surveyors' notes, or is unsupported by others, or is obliquely corroborated by yet others, are all the obvious results of the methodology employed in the survey process. Nor have the parties appreciated the responsibility of the fact-finder in evaluating such evidence, which can be fairly characterized as based in part on notes of a process of interview and observation during which different surveyors were involved with different matters and different personnel at different times. Much of the testimony, and many of the notes, both constitute and contain obvious hearsay, some of it quite imperfectly recorded, and the fact-finder must discount a great deal of it accordingly. Having done so, and in acknowledgment that the following observation is not material to the resolution of this case, I here note that I can discover no support whatsoever in this record for the assertion that any part of Surveyor Rittman's testimony was deliberately untruthful or fabricated. Were it necessary to the outcome of this case, I would find that no such support exists in this record.

2. I specifically make no finding that the regulation requires an electronic call light system, but take administrative notice that hospitals and nursing homes use button operated call systems. I also noted that the overarching regulatory scheme is to protect residents. Thus, the call light system should be configured so that it is practical and useful for that purpose.

3. Petitioner made several arguments which I note here but find unconvincing. First, Petitioner states that its call light system was in compliance with Underwriter's Laboratory standards. Whether Petitioner's system was in compliance with these standards is irrelevant, because such compliance does not prove that Petitioner was in compliance with these federal regulations. Thus, even if the system was working as intended by the manufacturer, that does not mean that it comported with the regulations. Petitioner also asserts that because the State initially approved the call light system the government is estopped from "claim[ing] a violation here." P. Br. at 34. Whatever the ultimate merit of this argument might be, it is beyond my jurisdiction to find that the government is so estopped.

4. I note here CMS Ex. 8, an incident report from November 2003. The report states that a resident [Resident A] told the nurse completing the report that "[h]e came back from supper and had to use the commode. Na had put him on commode and told him she would be a little while. [Resident A] turned on his call light and waited for about an hour. Call light system was down during this time. Kitchen staff passing snacks then told a nurse's aide that he was still on the commode. That nursing aide then helped him off the commode." The nurse completing the report then checked off that the "Patient was oriented," the "Call light was within reach," and the "Call light was on." As a follow-up, the nurse noted that "[a] CNA meeting was held shortly after this incident and CNA's were made aware of the need to report to each other when they go to break. Call light system was checked by maintenance." It is not clear from the incident report whether the call light system actually malfunctioned. The statement that the call light system was down comes from the resident. However, in contrast, the nurse checked and observed that the call light was on. The follow-up noted that the call light system was checked by maintenance, but it does not indicate that the system was down at the time. It does appear that a resident may have been left on a commode, and it also may be that a CNA went on break and did not make the other CNAs aware of the fact that Resident A was on the commode. However, it is not clear whether this situation portrays a failure of the call light system or, perhaps, points toward a quality of care deficiency. I do not find it constitutes a deficiency based on the regulation under consideration here.