SUBJECT:

Pacific Regency Arvin,

Petitioner,

Centers for Medicare & Medicaid Services

DECISION

I find that Petitioner, Pacific Regency Arvin, failed to comply substantially with federal participation requirements governing long-term care facilities during a period that began on March 10, 1999 and which ran through August 10, 1999. I sustain the imposition of civil money penalties against Petitioner in the following amounts and for the following periods:

• $3,050 per day for each day of a period that began on March 10, 1999 and which ran through March 12, 1999;

• $800 per day for each day of a period that began on March 13, 1999 and which ran through June 6, 1999; and

• $300 per day for each day of a period that began on June 7, 1999 and which ran through August 10, 1999.

Additionally, I sustain the Centers for Medicare & Medicaid Services' (CMS) authority to impose other remedies against Petitioner, including a denial of payment for new admissions during a period which began on June 5, 1999 and which ran through August 10, 1999. I do not sustain civil money penalties or other remedies against Petitioner for dates after August 10, 1999 inasmuch as there is no prima facie evidence that Petitioner failed to comply substantially with participation requirements after that date. The total amount of the civil money penalties that I sustain in this case is $97,450.

I. Background

Petitioner is a long-term care facility that is located in Arvin, California. It participates in the Medicare program and in California's Medicaid program. It is subject to the statutes and regulations which establish federal requirements for participation in these programs. Petitioner was surveyed for compliance with federal participation requirements on several occasions in 1999 by representatives of the California Department of Health Services (California State survey agency). Surveys were completed on the following dates: March 26, 1999 (March survey); June 7, 1999 (June resurvey); and August 11, 1999 (August resurvey).

At each of these surveys, Petitioner was found not to be complying substantially with participation requirements. CMS accepted the surveyors' findings and imposed civil money penalties against Petitioner. CMS also imposed an additional remedy consisting of a denial of payment for new admissions effective June 5, 1999 and continuing until August 20, 1999.

Petitioner requested a hearing. I held a hearing in Los Angeles, California, on December 11 - 13, 2000. At the hearing, I received into evidence from CMS exhibits consisting of CMS Ex. 1 - CMS Ex. 56, and I received into evidence exhibits from Petitioner consisting of P. Ex. 1 - P. Ex. 17. CMS offered an additional exhibit which I identified as CMS Ex. 57. Petitioner objected to admission of this exhibit into evidence. I rule as to the admission of the exhibit below at Part II of this decision. Additionally, I heard the testimony of several witnesses.

II. Ruling as to admission into evidence of CMS Ex. 57

I decline to receive into evidence CMS Ex. 57. I do so because admission of the exhibit would be prejudicial to Petitioner.

CMS Ex. 57 consists of the written declaration of Ms. Beverly Bennett, a former California State survey agency surveyor. Ms. Bennett conducted the August resurvey of Petitioner. The purpose of CMS Ex. 57 is to provide support for the findings and conclusions of the report of the August resurvey. CMS Ex. 36.

Much of Ms. Bennett's declaration addresses the findings that she made under Tag 332 in the report of the August resurvey. CMS Ex. 57 at 9 - 21. Ms. Bennett's declaration exceeds in scope or embellishes the allegations that were made in the report of the resurvey at Tag 332. I find it to be inadmissible inasmuch as CMS failed to give Petitioner reasonable notice of these additional allegations of noncompliance.

Tag 332 addresses alleged errors by Petitioner in its administration of medications to residents. CMS Ex. 36 at 2 - 3. The report of the resurvey asserts that Petitioner's staff committed three errors in the administration of medication to residents. It does not describe the alleged errors in any detail. Nor does the report explain how it was that the three asserted alleged errors add up to an alleged violation of the applicable regulation, which requires a facility to ensure that it be free of medication error rates of five percent or greater. See 42 C.F.R. � 483.25(m)(1).

CMS offered Ms. Bennett's declaration to fill in the gaps and to explain the ambiguities in the report of the August resurvey. The declaration contains many assertions that are not stated in the report of the August resurvey. As a few examples of these many new assertions, Ms. Bennett avers in her declaration that:

• she personally observed a member of Petitioner's staff failing to flush a feeding tube with water prior to administering Carafate to a resident. CMS Ex. 57 at 9;

• this failure constituted a problem because she knew, from her experience as a nurse, that the clinical standard of practice dictates that a nurse administering medication via a gastrostomy tube must flush the tube before administering the medication. Id.;

• the failure by a member of Petitioner's staff to flush a resident's gastrostomy tube before and after administering Carafate to the resident created a likelihood that the resident would not receive the medication. Id. at 12;

• she identified two physician's orders for administering Tylenol to another resident, one for 500 mg. three times daily, and the other for 325 mg., two tablets every four hours, as needed for pain. Id. at 14;
  

• she observed a member of Petitioner's staff give the resident 650 mg. of Tylenol and knew that it was not administered in response to the resident's complaints of pain "because I was present during the entire episode . . . and . . . [the staff member] never, at any time asked the resident about whether or not she was experiencing pain . . . ." Id.;

• she became concerned that the staff member was administering 650 mg. of Tylenol routinely at every medication pass because there was no bottle of 500 mg. Tylenol tablets on the staff member's medication cart. Id. at 15;

• she calculated that Petitioner had a medication error rate of 6.25 percent, which she rounded down to six percent, using a formula to calculate the error rate which consisted of dividing the "errors observed" by the "opportunities for errors" that she identified. Id. at 20; and,

• the formula is contained in a document known as the State Operations Manual which contains guidelines for surveyors to use in making their findings. Id.

These additional allegations, and others contained in Ms. Bennett's declaration, are significant. As I discuss below, at Finding 2, the allegations contained in the August resurvey report at Tag 332 do not provide sufficient prima facie evidence to justify a conclusion that Petitioner failed to comply substantially with participation requirements. The additional information provided by Ms. Bennett in her declaration, if admitted into evidence, might fill in the gaps or resolve the ambiguities that are contained in the report of the August resurvey.

CMS provided Petitioner with a copy of CMS Ex. 57 on the Friday preceding the hearing in this case. Thus, Petitioner had only two working days' notice of CMS's greatly expanded allegations concerning Tag 332.

A survey report plays two significant roles in a case involving allegations by CMS of noncompliance with participation requirements. First, it gives a facility notice of CMS's allegations. Second, it constitutes a declaration by the surveyors who conducted the survey and it is evidence of their findings, there being no hearsay rule in these cases.

The notice function of a survey report is important given the way in which CMS tells facilities of its findings of noncompliance. CMS's notices to facilities of its remedy determinations usually are stated in the most general language. The notices seldom tell facilities the specific findings of noncompliance on which CMS bases its determinations to impose remedies. The survey reports, which are incorporated by reference in CMS's notices, fulfill that function. Usually, all that a facility will receive at the inception of a case involving CMS that informs it of the specifics of CMS's allegations is the survey report or reports that relate to that case.

In any case CMS has the opportunity, as the case evolves, to expand on the allegations that are made in the survey report. CMS may supplement those allegations by moving to amend them. I will normally grant such a motion if it is made sufficiently far in advance of a scheduled hearing so as not to prejudice a facility.

In this case, CMS followed its typical practice of giving notice. The only meaningful notice that Petitioner received describing its alleged deficiencies consisted of the reports of the three surveys that are at issue (additionally, in a letter from CMS's counsel to Petitioner's counsel dated November 22, 2000, which I discuss in more detail at Finding 2, CMS's counsel clarified that the findings that were made at Tag 332 incorporated findings made at another tag, Tag 333). See CMS Ex. 1; CMS Ex. 30; CMS Ex. 36. The notices that CMS sent to Petitioner do not describe the alleged errors or omissions that motivated CMS's remedy determinations. See, e.g., CMS Ex. 35.

CMS had more than a year to move to amend the survey reports. It did not do so. Instead, CMS waited until the eve of the hearing to attempt a de facto amendment of the report of the August resurvey in the form of Ms. Bennett's declaration. This is impermissible. CMS unfairly ambushed Petitioner by waiting as long as it did in this case to supplement its allegations.

III. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. A basis exists to impose remedies, including civil money penalties, against Petitioner;

2. The amounts of the civil money penalties that CMS determined to impose against Petitioner 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 of my Findings below as a separately numbered heading. I discuss each Finding in detail.

1. Petitioner failed to comply substantially with participation requirements from March 10, 1999 through August 10, 1999. CMS was authorized to impose remedies against Petitioner during this period which included a denial of payment for new admissions and civil money penalties.

The reports of the March survey and the June and August resurveys, which were accepted by CMS as a basis for its remedy determinations, each found Petitioner not to have been complying substantially with participation requirements. These reports cover a continuous period of time which begins on March 10, 1999. CMS Ex. 1; CMS Ex. 30; CMS Ex. 36. CMS did not find that Petitioner attained compliance with participation requirements until August 20, 1999, nine days after completion of the August resurvey.

Petitioner contests some of the findings of noncompliance that were made at the March survey and at the June resurvey and it contests the single finding of noncompliance that survives from the August resurvey after completion of the informal dispute resolution (IDR). However, Petitioner does not deny that as of the March survey and June resurvey it was failing to comply substantially with at least some participation requirements. Consequently, Petitioner concedes that it was not complying substantially with participation requirements from March 10, 1999 through August 10, 1999.

CMS is authorized to impose remedies where a long-term care facility fails to comply substantially with a participation requirement or requirements. These remedies may include civil money penalties and denial of payments for new admissions. CMS was authorized to impose remedies against Petitioner during the March 10 - August 10, 1999 period based on Petitioner's failure to comply substantially with participation requirements during that period.

2. CMS did not establish a prima facie case that Petitioner failed to comply substantially with any participation requirement as of August 10, 1999 or thereafter.

The only allegation of failure to comply substantially with participation requirements extant from the August resurvey is the allegation that is made at Tag 332 of the resurvey report. CMS Ex. 36 at 2 - 3. The other allegations of noncompliance in the resurvey report that were made at Tags 281 and 333 were withdrawn (although CMS explained in its counsel's November 22, 2000 letter to Petitioner's counsel that the allegations under Tag 332 also incorporated the fact allegations made at Tag 333 of the report of the August resurvey). See id. at 1 - 4. And, an allegation of noncompliance that was made at Tag 426 was not found by the California State survey agency or CMS to be of a scope and severity so as to establish failure by Petitioner to comply substantially with participation requirements. Id. at 4 - 5.

The allegation of noncompliance that is made at Tag 332 is that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.25(m)(1). This regulation requires that a facility must ensure that it "is free of medication error rates of five percent or greater . . . ."

The report of the August resurvey fails to state a prima facie case of noncompliance with this requirement. The report does not, on its face, establish an error rate by Petitioner in the administration of medications of five percent or greater. The report fails to contain any explanation of why Petitioner's alleged errors demonstrate medication error rates of five percent or greater. There is nothing in the resurvey report which establishes the surveyors' methodology in determining how alleged errors asserted in the report comprise five percent or more of the total number of medications administered by Petitioner at the medication pass that is referred to in the report. Nor is there any explanation in the report as to how anyone could legitimately extrapolate from the alleged errors to conclude that they establish an overall error rate by Petitioner's staff in the administration of medications that totals five percent or more.

At Part II of this decision I explain why I decline to admit into evidence Ms. Bennett's declaration. See CMS Ex. 57. I point out that the declaration contains numerous assertions which explain Ms. Bennett's findings at Tag 332 of the report of the August resurvey. I might have accepted this declaration had CMS timely moved to amend the findings in the resurvey report. But, I make no findings based on this exhibit inasmuch as I have excluded it from evidence.

I note that, on November 22, 2000, counsel for CMS sent a letter to counsel for Petitioner which explains that the alleged errors that are referred to at Tag 332 of the report of the August resurvey include the findings made at Tag 333. This clarifies the allegations made at Tag 332. However, it does not address the defect in those allegations which I discuss here, namely, the failure of the report to explain how the three alleged errors demonstrate an overall error rate of five percent or more in the administration of medications by Petitioner's staff.

3. Petitioner manifested an immediate jeopardy level deficiency from March 10 - March 12, 1999. Therefore, a basis exists to impose immediate jeopardy level civil money penalties against Petitioner for each day of this period.

The report of the March 1999 survey alleges at Tag 324 that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.25(h)(2). CMS Ex. 1 at 26 - 30. The regulation requires a long-term care facility to ensure that each of its residents receives adequate supervision and assistive devices to prevent accidents. The report concludes that Petitioner's alleged failure to comply with the regulation was so egregious as to put Petitioner's residents at immediate jeopardy.

The term "immediate jeopardy" is defined in regulations to mean:

a situation in which the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.

42 C.F.R. � 488.301. It is not necessary that a resident be harmed or die in order for there to be immediate jeopardy. A situation which poses a likelihood for causing serious injury, harm, impairment, or death to a resident is sufficient to constitute immediate jeopardy even if actual harm has not yet occurred. Id.

The regulations require that deference be paid to CMS in determining when immediate jeopardy exists. If there is a failure by a facility to comply substantially with a participation requirement, and CMS determines that the level of noncompliance is immediate jeopardy, then that determination as to the level of noncompliance must be sustained unless it is established to be clearly erroneous. 42 C.F.R. � 498.60(c)(2).

The allegations of immediate jeopardy level noncompliance that are made in the report of the March 1999 survey under Tag 324 focus on the care that Petitioner provided to residents who are identified in the survey report as Residents #4, #13, and #11. Resident #4 is an individual who suffers from severe cognitive deficits and severely impaired decision-making skills secondary to Alzheimer's disease and depression. P. Ex. 16 at 1, 5. His level of cognitive impairment is so severe that he is unable to utilize Petitioner's call light system to summon staff for care or in emergencies. Id. at 5. Resident #4 has a history of episodes of agitated behavior. Id. at 55, 58, 60. The resident has on occasion assaulted Petitioner's staff and other residents of Petitioner's facility. Id. at 2, 50, 59. The resident has a tendency to wander and to attempt elopements. Id. at 2, 57, 58, 60, 62. His propensity to wander and to elope is so severe that his physician ordered that he be restrained in a reclining chair with a safety belt. Id. at 15, 59. Petitioner's staff was advised to monitor the resident closely in light of the resident's deficits and problems. Id. at 2, 50.

The survey report alleges that the resident was either left unsupervised or was not supervised adequately. As a consequence, according to the report, the resident engaged in behavior that was dangerous to himself or to others. The report alleges that, on March 9, 1999, the resident was found in his room. There was broken glass in the room from a window that had been broken by the resident when he put his shoe through it. CMS Ex. 1 at 26. The window was subsequently taped. However, according to the survey report, on March 10, 1999, the resident was observed going from the bathroom directly to the previously broken window, where he proceeded to pound on the window. Id. at 27. A nurse was summoned and the resident was restrained in a gerichair and placed in a hallway. However, the resident was left unsupervised and, approximately 20 minutes after being placed in the hallway, the resident pulled a fire alarm. The survey report alleges that, at about 5:15 p.m. on the afternoon of March 10, 1999, the resident attempted to elope Petitioner's facility by attempting to scale a chain link fence. The survey report alleges that, despite these behaviors by Resident #4, no written plan had been established for the resident's supervision as of 1:50 p.m. on March 11, 1999, more than 24 hours after the resident had broken the window in his room. CMS Ex. 1 at 28.

The allegations that the survey report makes concerning Resident #13 are that this resident made repeated and occasionally successful efforts to elope Petitioner's facility. The resident was unaccounted for on February 26, 1999 overnight for a period of more than 10 hours. Previously, he had eloped the facility in December 1998. On that occasion he was found two blocks from the facility by members of his family. CMS Ex. 1 at 28 - 29. During the course of the March 1999 survey the resident was observed ambulating throughout Petitioner's facility without supervision. Id. at 29.

The allegations that the survey report makes concerning Resident #11 are that this resident was allowed to walk to the store a block from the facility and that facility staff informed the surveyors that allowing the resident to go out by herself was in Resident #11's care plan. However, when the surveyors reviewed the care plan, there was no documentation in the care plan that this resident was allowed to go to the store unsupervised. CMS Ex. 1 at 29. The survey report also states that Resident #11 was at risk for falls and needed to be monitored during ambulation and other facility activities, and also needed to be monitored for inappropriate mental changes or behaviors, as the resident had voiced suicidal ideations. Id. at 29 - 30.

Petitioner argues that the determination that there existed an immediate jeopardy level deficiency at Petitioner's facility between March 10 and 12, 1999 reduces only to the allegations that Resident #4 stood before a window with a slipper in his hand on March 10, 1999 and that, later on the same day, he pulled a fire alarm. Petitioner's posthearing brief at 12. According to Petitioner, this conduct is too trivial to pose immediate jeopardy to anyone. Petitioner argues that the allegations that Resident #4 was observed to "pound on" the previously broken window on March 10, 1999 were undercut by testimony offered at the hearing. Petitioner's posthearing brief at 9; Tr. at 370. At the hearing, the surveyor did not assert that the resident had pounded on the window. Rather, she testified that she observed the resident raising his hand towards the window while holding a shoe or slipper. Tr. at 370. Petitioner argues also that one surveyor conceded that the observations made concerning Residents #13 and #11 were not part of the California State survey agency's conclusion that an immediate jeopardy level deficiency existed. Petitioner's posthearing brief at 6 - 8; Tr. at 741 - 743.

I disagree with Petitioner's arguments. This is not simply a case of a resident standing before a window with a slipper in his hand or of a resident pulling a fire alarm. The evidence offered by CMS concerning the care that Petitioner gave to Resident #4 establishes a prima facie case, which Petitioner did not rebut, that Petitioner was not adequately supervising its residents. The lack of supervision created a meaningful risk that residents would sustain accidents. CMS's determination that this risk placed residents at immediate jeopardy is not clearly erroneous. It is unnecessary for me to examine closely the care that Petitioner gave to Residents #13 or #11 or to decide whether the allegations made concerning these residents are part of the basis for CMS's determination of an immediate jeopardy level deficiency because the evidence relating to the care given to Resident #4 is sufficient to establish an immediate jeopardy level deficiency.

CMS established a prima facie case, which Petitioner did not rebut, that Resident #4's dementia and dementia-related behavior made him dangerous to himself and to others. Resident #4 needed close supervision. That necessity was recognized, not only by the resident's physician, but by Petitioner's staff. However, Petitioner's staff failed to provide the requisite level of supervision for the resident even after the resident engaged in unsupervised conduct which clearly demonstrated the risks that were attendant to leaving the resident unsupervised.

Even prior to March 9, 1999, Petitioner's staff had been advised to monitor the resident closely and the resident's physician prescribed restraints. If that advice was not enough, it should have been apparent to Petitioner's staff, based on Resident #4's conduct on March 9, 1999, that the resident posed a danger to himself and to others. The fact that the resident broke a window on that date was sufficient to put Petitioner's staff on notice to take precautions to assure that the resident would not repeat such conduct. Such precautions could have consisted of close observation of the resident or more effective use of restraints. But the resident was not supervised closely nor was he restrained effectively. As a consequence, on March 10, 1999 the resident was observed to be unsupervised and, at the very least, approaching the same window he had shattered on March 9. And, the resident was observed engaging in other dangerous conduct on March 10, including attempting to elope Petitioner's facility. Yet, even this conduct did not prompt Petitioner's staff to write a care plan for more effectively dealing with the dangers posed by Resident #4.

It is not necessary for me to conclude that Resident #4 pounded on a window with his shoe on March 10, 1999 to find that the resident was inadequately supervised. Petitioner has not explained why the resident - after having broken a window with his shoe the previous day - was left in circumstances where the potential existed for him to repeat his conduct on the following day. Nor has Petitioner explained why Petitioner did not develop a plan to assure that the resident did receive adequate supervision.

Petitioner argues that CMS's analysis of the care that Petitioner gave to Resident #4 reduces to a blanket demand that the resident be placed on "one on one monitoring" during his stay at Petitioner's facility. Petitioner's reply brief at 3. Petitioner argues that such a high level of monitoring is unreasonable, both in the context of the facts of this case, and as a matter of law. I agree with Petitioner that there is no requirement in either the Act or in the regulations that a facility subject its residents to one on one monitoring as part of the normal care that the facility provides to residents. Nor am I convinced that Petitioner was obligated to subject Resident #4 or any of its other residents to a steady regime of one on one monitoring. However, it is apparent from the evidence in this case that there was at least a brief period during which Petitioner needed to monitor Resident #4 closely - if not one on one - in order to assure that the resident not engage in hazardous conduct. That consisted of the period which began on March 9, 1999 and which ran through March 12, 1999, when the resident, on two occasions, was observed to have engaged in dangerous conduct. And, the evidence shows that Petitioner failed to provide the requisite monitoring to the resident during this period.

4. Civil money penalties in the amounts of $3,050 per day for each day of the period which began on March 10, 1999 and which ran through March 12, 1999 are reasonable.

The minimum civil money penalty amount that may be imposed against a facility for each day that the facility manifests an immediate jeopardy level deficiency is $3,050. 42 C.F.R. � 488.438(a)(1)(i). That is the amount that CMS determined to impose against Petitioner for each day of the March 10 - March 12, 1999 period. I find these penalties to be reasonable inasmuch as Petitioner manifested an immediate jeopardy level deficiency on each day of the period.

5. Civil money penalties of $2,000 per day for each day of the period which began on March 13, 1999 and which ran through June 6, 1999 are not reasonable. Civil money penalties of $800 per day for each day of that period are reasonable.

CMS based its determination to impose civil money penalties of $2,000 per day for each day of the March 13 - June 6, 1999 period on the non-immediate jeopardy level deficiency findings that were made at the March survey. I do not find CMS's determination to be reasonable because it is based on an incorrect assessment of the number of deficiencies and the scope and severity of those deficiencies that were established. I am imposing civil money penalties against Petitioner of $800 per day for each day of the March 13 - June 6, 1999 period. My decision to impose penalties in these amounts takes into account my conclusions that there were numerous serious deficiencies present at Petitioner's facility as of the March 1999 survey, but that these deficiencies were fewer in number and less egregious than those that were alleged originally by the surveyors who conducted the March 1999 survey.

Among the things that CMS's penalty determination fails to take into account is that the surveyors' initial findings - which are the basis for CMS's penalty determination - were substantially modified after IDR. Tr. at 639. The IDR process rescinded several of the surveyors' initial findings - including one finding of a deficiency that allegedly caused residents to experience actual harm - and reduced the scope and severity of many of those that remained. However, CMS did not reconsider its penalty determination in light of the reduction in number and severity of deficiencies.

CMS's witness, Ms. Paula Perse, acknowledged in her testimony that it is CMS's practice to look at IDR results once IDR is completed and to make modifications or changes to its determination if they appear to be prudent. Id. But, it failed to do so in this case or to explain why a reduction in the civil money penalty amounts would not be in order given the results of IDR. Indeed, CMS has not provided any explanation as to why civil money penalties in the amounts of $2,000 per day are reasonable for the non-immediate jeopardy level deficiencies that Petitioner manifested as of March 13, 1999. CMS asserts only that the penalty amounts are based on the fact that, after March 13,

1999, there were still "numerous serious violations" present at Petitioner's facility, several of which involved actual harm to residents of Petitioner. CMS's posthearing brief at 57.

In fact, the deficiencies that remained after IDR were less egregious than those that were found originally by the surveyors. The remaining deficiencies were numerous, but few of them involved findings of actual harm to residents of Petitioner. There were three deficiencies involving findings of actual harm. CMS Ex. 1. All of the other deficiencies that were identified at the March 1999 survey were low level deficiencies.

CMS's assessment of $2,000 per day civil money penalties also fails to take into account my conclusion that some of the deficiencies alleged by the surveyors either were not supported by prima facie evidence or were rebutted by evidence introduced by Petitioner. My decision that penalties of $800 per day are more reasonable penalty amounts takes into account that some of the deficiencies alleged by the surveyors were not established.

Petitioner specifically challenged five of the findings of deficiencies that remained after completion of IDR. These are at Tags 157, 241, 246, 314, and 428 in the report of the March 1999 survey. Petitioner's reply brief at 9 - 20. One of these challenged tags, Tag 314, is a "G" level deficiency, meaning that it involved a finding by the surveyors that residents of Petitioner experienced actual harm from Petitioner's alleged noncompliance with participation requirements. CMS Ex. 1 at 21 - 24.

I find that CMS either failed to establish a prima facie case of noncompliance, or Petitioner rebutted with evidence that it offered, concerning three of these tags. These are Tags 241, 246 and 428. I find that CMS offered prima facie evidence, which Petitioner did not rebut, concerning Tags 157 and 314.

I sustain the deficiency findings that were made at Tag 157 for the reason that Petitioner rebutted evidence that was presented concerning only one of the examples cited under the Tag. That is evidence which relates to the care that Petitioner provided to Resident #1. CMS offered prima facie evidence of noncompliance concerning another resident, Resident #6, whose care is cited under the tag, and Petitioner did not rebut this evidence. I find the evidence presented by CMS with respect to Resident 6 to be sufficient to sustain the deficiency allegations that were made under the tag.

I also sustain the deficiency findings that were made at Tag 314. Here too, Petitioner challenged some, but not all of the findings of noncompliance that were made under the tag. These are findings that the surveyors made concerning Petitioner's care of a pressure sore that was sustained by Resident #3. However, even if I accept Petitioner's assertions about these findings, there remain findings that Petitioner did not challenge concerning its care of another resident, Resident #1. The evidence that CMS offered concerning Petitioner's care of Resident #1 comprises prima facie evidence of noncompliance with the requirements stated at Tag 314, which Petitioner did not rebut.

CMS failed to establish a prima facie case of noncompliance under Tag 241. The surveyors alleged that, on two occasions, kitchen staff were observed to yell out residents' names while serving food. On another occasion, the staff was observed to have served pureed food on divided plastic plates. CMS Ex. 1 at 6 - 7. I can understand how calling a resident by his or her last name might offend the resident. But, CMS has not shown how the two instances of such conduct posed a potential for more than minimal harm. I do not understand how serving food on divided plates posed any conceivable harm to residents.

I find the deficiency findings that were made at Tag 246 not to be substantiated. The surveyors who conducted the March 1999 survey alleged at this tag that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.15(e)(1). This regulation provides, among other things, that a resident of a facility has a right to receive services that reasonably accommodate the resident's needs. The allegations under this tag are that one resident, Resident #5, complained that her wheelchair did not fit her properly and that it was too difficult for her to maneuver the chair that had been supplied to her. The resident is reported also to have complained that she had not communicated with Petitioner's staff concerning her wheelchair needs since February 9, 1999, when the resident had been measured for a new chair. CMS Ex. 1 at 7 - 8.

I find this evidence not to be persuasive evidence that Petitioner's staff failed to accommodate Resident #5's needs. First, it is unverified hearsay and not reliable evidence of what Petitioner's staff may have done or failed to do for the resident. It does not, in my judgment, establish a prima facie case of noncompliance by Petitioner. Moreover, the evidence was rebutted by the testimony that, in fact, Petitioner's staff had made multiple efforts to find a wheelchair that fit the resident properly. In fact, Petitioner had supplied the resident with three different wheelchairs during the resident's stay at Petitioner's facility, including an electric wheelchair. Tr. at 763, 792.

I also find that the deficiency findings that were made at Tag 428 are not substantiated. The surveyors who conducted the March 1999 survey alleged at Tag 428 that Petitioner failed to comply with the requirements of 42 C.F.R. � 483.60(c)(1). This regulation provides that each of a facility's resident's drug regimen must be reviewed by a licensed pharmacist at least once a month. The surveyors alleged that Petitioner failed to comply with the requirements of the regulation because its staff could not produce evidence of monthly drug reviews being done in the months of January, June, August, and September 1998.

I am not persuaded by this evidence because it is too remote in point of time. I do not find it reasonable to infer that Petitioner was failing to review residents' drug regimens in March 1999 from evidence that is six months old or older. Indeed, the fact that Petitioner evidently was able to produce evidence showing that it had reviewed residents' drug regimens as recently as February 1999 leads me to conclude that the opposite inference - that Petitioner was reviewing residents' drug regimens as of the March 1999 survey - is the more reasonable inference.

6. Civil money penalties of $500 per day for each day of the period which began on June 7, 1999 and which ran through August 10, 1999 are not reasonable. Civil money penalties of $300 per day for each day of that period are reasonable.

CMS based its determination to impose civil money penalties against Petitioner of $500 per day beginning with June 7, 1999 on the findings that the surveyors made at the June 1999 resurvey of Petitioner. The surveyors made six findings of noncompliance at that resurvey. CMS Ex. 30. However, I find that one of the allegations of noncompliance is unsubstantiated. Thus, Petitioner manifested five - and not six - deficiencies as of the June 1999 resurvey. Moreover, four of the five deficiencies that Petitioner manifested were at the lowest level of scope and severity that may constitute a failure to comply substantially with participation requirements. None of the five deficiencies that were established as of the June 1999 resurvey caused residents of Petitioner to experience harm. I am imposing civil money penalties of $300 for each day of the June 7 - August 10, 1999 period to reflect the fact that Petitioner manifested fewer deficiencies than were found originally and also in light of the fact that none of the deficiencies caused any of Petitioner's residents to experience harm.

Petitioner challenged two of the six deficiencies that were identified at the June 1999 resurvey. These challenged deficiencies are described at Tags 332 and 426 of the resurvey report. I agree with Petitioner that, in the case of the alleged deficiency that is described at Tag 332, CMS failed to establish a prima facie case of noncompliance. I find the allegations of deficiency that were made at Tag 426 to be substantiated.

At Tag 332 of the report of the June 1999 resurvey, the surveyors alleged that Petitioner had a medication error rate of five percent or greater. CMS Ex. 30 at 4 - 5. The regulation which is the basis for the tag, 42 C.F.R. � 483.25(m)(1), is the same regulation that I discuss above, at Finding 2. The report recites that the surveyors observed 43 instances in which a single member of Petitioner's staff administered medications to residents. All of these instances occurred during a medication "pass" which transpired during one work shift on June 4, 1999. The surveyors concluded that three of these instances of medication administration were done erroneously. According to the surveyors, the error rate for the pass was 6.9 percent. From this, they concluded that the overall medication error rate at Petitioner's facility was five percent or greater.

I find this evidence to be unpersuasive. The surveyors and CMS have relied on a form of sampling as a basis for making generalizations about the overall quality of care provided by Petitioner. But, CMS has not introduced any evidence to show that the surveyors' sampling methodology is valid. While I do not dispute the legitimacy of sampling as a tool to determine the efficacy of a facility's practices, I conclude that no meaningful conclusions may be drawn from the sample that is at issue here.

CMS has offered nothing to show that the sample observed by the surveyors was representative of Petitioner's medication administration. It has not made a prima facie showing that three errors out of a total of 43 medication administrations is a statistically valid sample of Petitioner's overall care from which legitimate generalizations may be made. By contrast, there are reasons to doubt the accuracy of the sample that CMS relied on. For example, it is unclear that the same staff member administered medications to residents on all shifts. Other staff members might be more or less conscientious and accurate than the one whom the surveyors observed.

Petitioner argues that some of the errors in administering medication are trivial and that conclusions about Petitioner's accuracy in administering medications cannot be drawn from such trivial errors. I agree with Petitioner that at least one of the errors cited by the surveyors is trivial (administration of a teaspoon of Metamucil, an over-the-counter laxative, to a resident, instead of a tablespoon as was directed). On the other hand, what is at issue here is not the significance of the errors that were committed but the propensity of Petitioner's staff to commit errors. The finding that Petitioner had an error rate of five percent or more in its staff's administration of medications to residents is not impeached by the fact that some of the identified errors were trivial. But, the finding is not valid because CMS failed to show that the surveyors' methodology supported their conclusions.

At Tag 426 of the report of the June 1999 resurvey, the surveyors concluded that Petitioner failed to comply substantially with the requirements of 42 C.F.R. � 483.60(a). CMS Ex. 30 at 6 - 8. This regulation requires that a long term care facility provide pharmaceutical services (including procedures that assure the accurate acquiring, receiving, dispensing, and administering of all drugs and biologicals) to meet the needs of each of its residents. The report of the June 1999 resurvey alleges that Petitioner failed in three respects to comply with the requirements of the regulation. First, it allegedly failed to comply with its own policy that controlled drugs be stored in a double locked location. Id. at 7 - 8. Second, Petitioner allegedly permitted expired medications to be stored in its medication storage room and on its medication storage cart. Id. at 8. Third, Petitioner allegedly failed to comply with its own policy for dating multi-dose vials of insulin. Id.

Petitioner established that, although its medications were not double locked, they were in fact stored in a single locked room. Petitioner acknowledges that this practice may not have complied with its own policies. It asserts, however, that CMS offered no persuasive proof that single locking the medications was an ineffective safeguard.

I agree with Petitioner that CMS failed to offer persuasive prima facie evidence to show that Petitioner was storing its medications in an unsafe manner. There is no evidence to show that either unauthorized employees of Petitioner or residents had access to the stored medications. Nor, as Petitioner notes, is there even a requirement in the regulations that a facility double lock its medications.

Steven T. Kessel

Administrative Law Judge