# Appendix — Fairfax Nursing Home, Inc. v. Department of Health & Human Services

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0746%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2003
- **Citation:** 537 U.S. 1111

## Text

No.02 76 TNO 13 2002

in 4

IN THE

Supreme Court of the United States

OCTOBER TERM, 2002

FAIRFAX NURSING HOME, INC.,
Petitioner

V.

UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES

On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Seventh Circuit

APPENDIX TO
PETITION FOR WRIT OF CERTIORARI

CHARLES P. SHEETS
BRIAN E. NEUFFER

Counsel of Record
WINSTON & STRAWN
35 West Wacker
Chicago, Illinois 60601
(312) 558-5600

Counsel for Petitioner
FAIRFAX NURSING HOME, INC.

App. i

APPENDIX CONTENTS
App.
Page
Fairfax Nursing Home, Inc. v. United States,
HHS, 300 F.3d 835 (7th Cir. 2002) ........c.c.scccsescorecscceoee 1-13

Fairfax Nursing Home, Inc. v. Health Care Financing
Administration, DAB No. 1794 (2001)..........::sssseceeeees 14-43

Fairfax Nursing Home, Inc. v. Health Care Financing
Administration, DAB CR 1 (2001) .........ccceeceeeeeeeeee 44-80

Hillman Rehabilitation Center v. United States,
DAB No. 1611 (1997)

App. 1

UNITED STATES COURT OF APPEALS FOR THE
SEVENTH CIRCUIT

300 F.3d 835; 2002 U.S. App. LEXIS 16505

FAIRFAX NURSING HOME, INCORPORATED,
Petitioner,

V.

UNITED STATES DEPARTMENT OF HEALTH &
HUMAN SERVICES, Respondent.

No. 01-4088
May 29, 2002, Argued
August 15, 2002, Decided
PRIOR HISTORY: Petition for Review of a Final
Decision of the Department of Health and Human Services

Department Appeals Board, Appellate Division. DAB No.
1794.

DISPOSITION: AFFIRMED.
COUNSEL:

For FAIRFAX NURSING HOME, INCORPORATED,
Petitioner: Brian E. Neuffer, WINSTON & STRAWN,
Chicago, IL USA.

For UNITED STATES DEPARTMENT OF HEALTH
& HUMAN SERVICES, Respondent: Ted K.
Yasuda, DEPARTMENT OF HEALTH AND HUMAN
SERVICES, Office of the General Counsel, Region V,
Chicago, IL.

JUDGES: Before RIPPLE, DIANE P. WOOD and
EVANS, Circuit Judges.

App. 2

OPINION BY: RIPPLE, Circuit Judge.

Fairfax Nursing Home is a skilled nursing facility
participating in Medicare and Medicaid. Fairfax was
assessed a civil monetary penalty ("CMP") by the Center
for Medicare and Medicaid Services ("CMS") because of
its failure to comply substantially with Medicare
regulations governing the care of respirator-dependent
nursing home residents. Fairfax appealed to the Department
Appeals Board of the Department of Health and Human
Services ("HHS"); after a hearing before an Administrative
Law Judge, both the ALJ and the Appellate Division
affirmed the CMP. Pursuant to 42 U.S.C. §§ 1320a-7a(e)
and 1395i-3(h)(2)(B)(2), Fairfax appeals that decision to
this court. Fairfax argues that the Department Appeals
Board ("DAB") erroneously placed the burden of proof on
Fairfax and that the ALJ applied the incorrect legal
standard in determining that Fairfax had violated HHS
regulations. For the reasons set forth[**2] in the following
opinion, we affirm the decision of the Appeals Board.

I. BACKGROUND
A. Facts

Fairfax is a skilled nursing facility ("SNF"), see 42
U.S.C. § 1395i-3(a); 42 C.F.R. § 488.301, participating in
Medicare and Medicaid (collectively "Medicare") as a
provider. Regulation of SNFs is committed to the Center
for Medicare and Medicare Services, formerly known as
the Health Care Financing Administration ("HCFA"),' and
to state agencies with whom the Secretary of Health and

' We shall refer to this agency by its present name, CMS, because it
has been more than one year since the name change was implemented.
See 66 Fed. Reg. 35,437 (July 5, 2001). However, in some places,
when quoting from the record or the decisions of the ALJ and the
Appellate Division, the agency is referred to as HCFA.

App. 3

Human Services has contracted. See 42 U.S.C. § 1395aa(a).
The primary method of regulation is by unannounced
surveys of SNFs, conducted in this case by surveyors of the
Illinois Department of Public Health ("IDPH"). See 42
U.S.C. § 1395i-3(g). These surveys are conducted at least
once every 15 months. See Jd. § 1395i-3(g)(2)(A)(3). If the
State survey finds violations of Medicare regulations, the
State may recommend penalties to CMS. The civil
monetary penalty imposed here was based on an IDPH
recommendation.

CMS imposed the penalty because of series of
failures in Fairfax's care of ventilator-dependent residents.
On December 20, 1996, R10, a ventilator-dependent
resident at Fairfax, suffered respiratory distress and
required emergency care.” Respiratory therapists
administered oxygen directly to R10, and one therapist
turned off R10's ventilator because the alarm was sounding.
Once R10 was stabilized, the therapists left, but neglected
to turn the ventilator back on. As a result, R10 died.
Prompted by this incident, Fairfax began to develop a
policy for the care of ventilator-dependent residents. That
policy was completed in February 1997 and was
implemented in early March of that year. The policy
provided that once the resident was stabilized following an
episode of respiratory distress: the nurse will check the
resident & chart Q 15 minutes X 4 (for a total of 1 hr.)
encompassing the following: vital signs/respiratory status
oxygen stats [saturation] /lung sounds/vent settings /level
of consciousness/ odor color and consistency of secretions
& comfort level of the resident. Admin. R., App. A at 517.

On March 2, 1997, R126 was observed to have a
low oxygen saturation level, an elevated pulse and
temperature, and to be breathing rapidly. These signs

7 All residents are denoted by number to respect their privacy.

App. 4

indicated that the resident was having respiratory
difficulties. R126's physician was called; he ordered a
chest x-ray and gave several other instructions. However,
contrary to Fairfax's policy, R126's medical chart did not
reflect whether these orders were carried out. R126 died
shortly thereafter.

On March 5, 1997, R127 was found with low
oxygen saturation and mottled extremities. Fairfax staff
failed to make a complete assessment, took no vital signs,
made no follow-up assessments and did not notify a
physician. On March 7, R127 was found cyanotic and
required five minutes of ambu-bagging. Nurses charted
four follow-up notes, but only observed R127's color and
oxygen saturation and took no other vital signs. Also on
March 7, during the 7 a.m. to 3 p.m. shift, three episodes of
respiratory distress were noted, each of which required
ambu-bagging. No physician was called. On March 10,
R127's skin was observed turning blue, but there was no
record of treatment for respiratory distress and no vital
signs or assessments were charted. On March 21, R127
had another episode, this time with mottled legs, shaking
and a dangerously low oxygen saturation. The physician
was present; R127 was ambu-bagged and administered
Valium. There was no complete assessment and no follow-
up. On March 25, R127 was found to have a severe
infection and died on March 27.

On March 23, 1997, R83 was found non-responsive
with low oxygen saturation, low blood pressure, an
elevated pulse rate and a low respiratory rate. R83 was
ambu-bagged, and the treating physician was called. The
first noted follow-up was an hour later and 2-1/2 hours
passed before R83 was monitored again.

On April 2,._1997, a state surveyor observed a
Fairfax employee fail to use sterile procedures while

App. 5

performing tracheostomy care on R6 and R11. The same
employee also neglected to hyper-oxygenate the residents
before or after suctioning the tracheostomy.’

On April 3, 1997, R68 became cyanotic, with low
oxygen saturation, which required ambu-bagging and an
increase in the amount of oxygen given through the
ventilator. The records for R68 failed to note R68's vital
signs, and the record did not reflect whether R68 oxygen
saturation level ever returned to a normal level. On April
4, R68 was not sufficiently stable to permit a routine
tracheostomy change.

After a survey on April 8, 1997, IDPH surveyors
determined that Fairfax's actions and omissions posed
"immediate jeopardy" to the health and safety of its
residents. Specifically, Fairfax had violated 42 C.F.R. §
483.25(k), which pertains in part to the special care of
ventilator-dependent residents. CMS concurred and notified
Fairfax by a letter dated May 7, 1997, that CMS was
imposing a CMP of $3,050 per day for a 105-day period,
from December 20, 1996, through April 3, 1997, during
which Fairfax was not in substantial compliance with HHS
regulations governing the care of ventilator-dependent
residents. CMS also assessed a penalty for a period of
noncompliance running from April 4, 1997, through May
14, 1997. The total penalty for this latter period was
$2,050, and Fairfax did not challenge it.

* Hyper-oxygenation refers to "giving the patient or resident more air
prior to suctioning, because when you introduce the suction catheter
that's attached to the suction machine and you're actually drawing out
both secretions and air, and when you hyper-oxygenate a patient or
resident you're giving them air to . . . help them through the process."
Admin. R., App. A at 294. This procedure should be followed both
before and after suctioning. See /d. at 295.

App. 6

B. Administrative Law Judge's Decision

Fairfax appealed the CMP to the HHS Department
Appeals Board ("DAB"), which reviews the imposition of
CMPs pursuant to a provider's right of review under 42
C.F.R. § 498.5. The DAB assigned the case to an
administrative law judge who held a hearing in late May
and early June 2000. Applying an earlier DAB Appellate
Division decision, Hillman Rehabilitation Center v. United
States, DAB No. 1611 (1997), the ALJ required that CMS
make out a prima facie case for the imposition of the CMP,
but assigned the ultimate burden of proof to Fairfax. Thus,
Fairfax had to prove, by a preponderance of the evidence,
that it was substantially compliant with the applicable
regulations. The ALJ affirmed CMS' initial determination
to impose a CMP of approximately $320,000 on Fairfax.
In doing so, the ALJ found that a state of immediate
jeopardy prevailed at Fairfax from December 20, 1996,
until April 3, 1997, due to Fairfax's violations of 42 C.F.R.
§ 483.25(k).

The ALJ discussed each of the violations found by
the state surveyors, beginning with the death of R10. R10
died, in part, the ALJ concluded, because Fairfax did not
have in place a policy for the monitoring of ventilator-
dependent residents following an episode of respiratory
distress. This lack of a policy and later failures to comply
with the new policy posed severe risk to the health and
well-being of the patients. The ALJ found that all but one
of the surveyors' reported violations constituted a risk to
patients at the immediate jeopardy level. The ALJ
emphasized the repeated monitoring failures and the threat
those failures posed to the residents. The ALJ found that
"there is not only a prima facie case of noncompliance here,
but the preponderance of the evidence is that Petitioner was
not complying substantially" with the regulations
governing the proper care of vent-dependent residents.

App. 7

Admin. R. at 24. Finally, the ALJ found that the amount of
the CMP was reasonable.

C. Department Appeals Board, Appellate Division
Decision

Fairfax appealed the ALJ's decision to the DAB
Appellate Division. Fairfax argued that the ALJ erred
following the Appellate Division's earlier ruling in Hillman
and assigning the ultimate burden of proof to Fairfax. It
further contended that the ALJ. applied the wrong legal
standard, linked together unrelated incidents and that the
amount of the CMP was punitive, rather than remedial.

With respect to the burden of proof, CMS submitted
that Fairfax had waived the issue by not raising it before
the ALJ. The Appellate Division took note of this
objection, but decided the issue on the merits. The
Appellate Division first concluded that the burden of proof
was irrelevant because the evidence was not in equipoise.
The Appellate Division nevertheless reaffirmed Hillman
and rejected Fairfax's argument. The Appellate Division
also rejected Fairfax's other arguments, determining that
the ALJ applied the proper legal standard, that the ALJ's
decision was supported by substantial evidence and that the
amount of the CMP was reasonable. Fairfax appeals. We
have jurisdiction under 42 U.S.C. § 1395i-3(h)(2)(B)(2)
and 42 U.S.C. § 1320a-7a(e).

Ii DISCUSSION

We must now determine whether substantial
evidence supports CMS' conclusion that a state of
immediate jeopardy prevailed at Fairfax from December
20, 1996, until April 4, 1997.4

* In Hillman Rehabilitation Center v. United States, DAB No. 1611
(1997), available at 1997 WL 123708, the Appellate Division of the
HHS Department Appeals Board held that in termination hearings

before an ALJ, the sanctioned facility bears the burden of persuasion
once HHS has made a prima facie showing to justify the CMP. See
Hillman, at 1; Appellant's App. 1. This rule was extended to civil
monetary penalty cases by Cross Creek Health Care Center v. HCFA,
DAB No. 1665 (1998), available at 1998 WL 479291. Fairfax argues
that the Hillman rule violates the Administrative Procedure Act in two

ways.

HHS argues that Fairfax waived its objection to HHS' assignment of
the burden of proof to Fairfax by failing to raise the issue before the
ALJ. Fairfax did raise the issue on appeal to the DAB Appellate
Division. Under the statute governing our review, a party must raise an
issue before "the Secretary" in order to preserve the issue. See 42
U.S.C. § 1320a-7a(e). Nevertheless, we think raising the issue on
appeal within the DAB is sufficient to preserve it for our review.
Further, the Appellate Division itself did not rely on waiver and
resolved the merits of Fairfax's appeal.

Fairfax submits that the Secretary was required to promulgate this
rule by notice-and-comment rulemaking and that such a rule could not
be adopted by adjudication. Second, Fairfax argues that Hillman
violates APA § 7(c), which places the burden of proof on the
"proponent of a rule or order." 5 U.S.C. § 556 (d).

We believe that several reasons militate against our addressing this
issue at this time. First, the issue does not affect the outcome in this
case. By its own terms, the rule in Hillman is operative only when the
evidence is in equipoise, and, as our discussion in the text indicates, the
evidence in this case certainly cannot be characterized as in equipoise.
Secondly, we believe that this issue ought to be addressed with great
prudence and caution. The Appellate Division has not addressed the
application of this rule to civil monetary penalties in any
comprehensive manner. Premature adjudication on our part will not be
helpful in achieving accuracy or clarity in this important area of
administrative practice. Definitive adjudication on our part is best
reached after that administrative body has had the opportunity to set
forth in more plenary fashion than it has in this case the justification
for this rule.

App. 9

A. We first address Fairfax's argument that the ALJ
employed the incorrect legal standard. The regulations set
up two basic categories of conduct for which CMPs may be
imposed. See 42 C.F.R. §§ 488.408, 488.438. The upper
range, permitting CMPs of $3,050 per day to $10,000 per
day, is reserved for deficiencies that constitute immediate
jeopardy to a resident or, under some circumstances,
repeated deficiencies. See Id. § 488.438(a)(1)(i). By
contrast, the lower range of CMPs, which begin at $50 per
day and run to $3,000 per day, is reserved for "deficiencies
that do not constitute immediate jeopardy, but either caused
actual harm or have the potential for causing more than
minimal harm." See Id. § 488.438(a)(2)(ii). "Immediate
jeopardy" is defined as "a situation in which the provider's
noncompliance with one or more requirements of
participation has caused, or is likely to cause, serious
injury, harm, impairment, or death to a resident." /d. §
488.301.

Fairfax emphasizes the ALJ's use of the term
"potential" to describe the probability of harm in several of
the ALJ's findings. It submits that the ALJ's use of this
terminology establishes that the deficiencies in question
were deserving of "lower range" penalties. We take each in
turn.

Finding 1(b): Petitioner failed to carry out the
treating physician's orders and failed to properly document
R126's medical charts. This had the potential for serious
injury, harm, impairment, or death to the resident and
constitutes immediate jeopardy. Admin. R. at 8. Fairfax
contends that potential for serious harm is insufficient to
constitute immediate jeopardy, which requires that the
provider's omission be likely to cause serious harm or
death. However, in the discussion below this finding, the
ALJ found that "Petitioner was woefully inadequate in the
treatment and care of R126. . . . Such conduct caused or

App. 10

was likely to cause serious injury, harm, impairment or
death to the resident." Jd. at 9. The ALJ found that "the
record presents a picture of a lackadaisical staff, rather than
a staff aggressively treating a pneumonia that was further
aggravating the resident's already compromised health." Jd.
at 10. The ALJ clearly was aware of the proper standard
for immediate jeopardy and applied it correctly.

Finding 1(c) addressed Fairfax's failure to monitor
R127 after R127's episodes of respiratory distress. The
ALJ found that this monitoring failure "had the potential
for serious injury, harm, impairment, or death to the
resident and constitutes immediate jeopardy." Admin. R. at
11. Fairfax argues that this is an indication of the ALJ's
application of a lower standard than immediate jeopardy as
defined in the regulations. Again, the ALJ's discussion of
this finding demonstrates that he was well aware of the
proper standard and applied it correctly. The ALJ devoted
four pages of his opinion to discussing the treatment of
R127, and addressed the specific risks posed to the resident
by Fairfax's failure to monitor R127 after several
respiratory episodes in close succession. He closes his
analysis with a finding that the failures of the staff to assess
properly and monitor the patient, as well as the failure to
call the treating physician, “exposed the resident to risk of
serious injury, harm, impairment, or death." Jd. at 16.

The other findings of the ALJ that are questioned by
Fairfax, when read in context, likewise make clear that the
lapses were of a severe nature.

Finding 1(d) discussed Fairfax's failure to monitor
R83 and R68, which “had the potential for serious injury,
harm, impairment, or death to the resident and constitutes
immediate jeopardy." Admin. R. at 16.

App. 11

In Finding 1(e), which addressed Fairfax's failure to
ensure that R6 and R11 received proper tracheostomy care,
the ALJ concluded that "this had the potential for serious
injury, harm, impairment, or death to the residents and
constitutes immediate jeopardy." Jd. at 18. Fairfax again
cites the ALJ's failure to use the precise terminology of 42
C.F.R. § 488.301 as evidence that he applied the wrong
standard. Close attention to the body of the opinion, once
again, reveals that the ALJ both understood the term's
meaning and applied it correctly. In finding l(c), the ALJ
had already discussed the risks posed by Fairfax's failure to
monitor residents following an episode of respiratory
distress, so there was no need to repeat that discussion in
finding 1(d), which dealt with the same issue. The ALJ's
conclusion with respect to R83 makes manifestly clear that
there was no misunderstanding of the applicable standard:
"That R83 survived Petitioner's incompetent care and
treatment does not excuse the fact that he was placed at risk
of serious injury, harm, impairment, or death." Admin. R.
at 17.

With respect to R68, the ALJ remarked in a similar
vein: "Ms. Daniels testified that it was ‘pretty lucky’ that
nothing serious happened to R68, because, in a matter of
minutes, brain damage could be sustained from lack of
oxygen. Petitioner's duty to provide appropriate respiratory
care to its ventilator-dependent residents cannot be a matter
of chance." Jd. at 17-18 (citation omitted). Under finding
1(d), the ALJ did point out Fairfax's violation of its
guidelines and its monitoring errors. The conclusion is
inescapable that the monitoring failures described in
finding 1(d) could lead to the same dire consequences the
ALJ chronicled in finding 1(c). The same is true with
respect to finding 1(e). In similar language, the ALJ
concluded that patients R6 and R11 were "placed at serious

App. 12

risk of injury, harm, impairment or death" from the
"deficient tracheostomy" care that they received. Jd. at 20.

As the members of the Appellate Division noted, a
fair reading of the ALJ's opinion also makes clear that he
focused not simply on the situation of each individual
patient, but also on the entire state of readiness in the
facility during the time in question. Fairly read, his
"bottom line" is that a respiratory patient in Fairfax during
the time in question was in continuous jeopardy of serious
injury or death because of the systemic incapacity of the
facility to render the necessary care to sustain life and avoid
serious injury. The record is replete with references to the
danger of infection to vent-dependent residents living in
nursing homes. The death of R10 was the beginning of a
series of events that document all too graphically the
finding of the ALJ.

Finally, we note that the ALJ carefully and correctly
delineated the entire regulatory scheme before he embarked
on his analysis of the individual situations of the patients.
This manifestation of his understanding of the distinctions
that he is now accused of misunderstanding and
misapplying supports further the Appellate Division's
estimation - and ours - that he both understood the law and
properly applied it.

B. We also believe that the HHS' decision is
supported by substantial evidence. The state surveyors
documented numerous instances of Fairfax's failure to care
adequately for its respirator-dependent residents. The
common thread running through most of these omissions is
Fairfax's repeated lack of follow-up and monitoring after a
resident experienced respiratory distress. Beginning with
the death of R10, and continuing throughout the period in
question, Fairfax did not ensure that, once a resident had an
episode, that resident was examined at regular intervals in

App. 13

the time immediately following the incident. The record
firmly supports HHS' determination that a state of
immediate jeopardy to resident health existed at Fairfax
from December 20, 1996, until April 3, 1997.

Conclusion

The Board's decision was supported by substantial
evidence and, therefore, it is affirmed.

AFFIRMED

App. 14

DEPARTMENT OF HEALTH AND HUMAN SERVICES
DEPARTMENTAL APPEALS BOARD
APPELLATE DIVISION

No. A-2001-75

FAIRFAX NURSING HOME INC., PETITIONER
v. :
HEALTH CARE FINANCING ADMINISTRATION, RESPONDENT

DAB No. 1794
2001 HHSDAB LEXIS 112

October 30, 2001

PANEL: Donald F. Garrett, Marc R. Hillson, Judith A.
Ballard, Presiding Board Member

OPINION:

DECISION ON REVIEW OF ADMINISTRATIVE
LAW JUDGE DECISION

Fairfax Nursing Home, Inc. (Fairfax) appealed a
March 22, 2001 decision by Administrative Law Judge
(ALJ) Jose A. Anglada affirming a determination by the
Health Care Financing Administration (HCFA)° to impose
a civil money penalty against Fairfax. Fairfax Nursing
Home, Inc., DAB CR753 (2001) (ALJ Decision). For the
reasons stated below, we uphold the ALJ Decision. We
affirm and adopt his findings of fact and conclusions of
law.

' Although HCFA has been renamed the Centers for Medicare &
Medicaid Services (CMS), we continue to use "HCFA" below since
that acronym was used to refer to the agency at the time that the actions
at issue here were taken and that the testimony discussed was given.
See 66 Fed. Reg. 35,437 (July 5, 2001).

App. 15

Legal Background

Requirements for long-term care facilities that seek
to participate in the Medicare program as a skilled nursing
facility under section 1819 of the Social Security Act (Act),
or in the Medicaid program as a nursing facility under
section 1919 of the Act, are set out at 42 C.F.R. Part 483.
The general "quality of care" requirement at section 483.25
provides that— Each resident must receive and the facility
must provide the necessary care and services to attain or
maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the
comprehensive assessment and plan of care. More
specifically, subsection 483.25(k) provides that the facility
“must ensure" that residents receive proper treatment and
care for "special services," including ‘tracheostomy care,
tracheal suctioning, and respiratory care.

Compliance with these requirements is determined
through the survey and certification process, set out at 42
C.F.R. Part 488, Subpart E. Surveys are generally
conducted by a state survey agency under an agreement
with HCFA (although HCFA may itself conduct surveys
and revisits). Subpart F of Part 488 specifies the remedies
that may be imposed by HCFA (or a state where
appropriate) based on a finding that a facility is not in
substantial compliance with the requirements. Factors that
must be considered in selecting what remedy to impose
include the seriousness of the deficiencies, including
whether the deficiencies constitute immediate jeopardy,
and whether the deficiencies are isolated, constitute a
pattern, or are widespread. 42 C.F.R. 488.404. Other
factors that may be considered include the relationship of
one deficiency to other deficiencies. One of the available
remedies is a civil money penalty (CMP). Section 488.430
provides that- HCFA... may impose a civil money
penalty for the number of days of past noncompliance since

App. 16

the last standard survey, including the number of days of
immediate jeopardy. "Immediate jeopardy" is defined 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.

An upper range CMP, $3,050 to $10,000 per day,
must be imposed for deficiencies constituting immediate
jeopardy to the facility's residents. 42 C.F.R. §§ 488.408;
488.438(a)(1)(i). A per day penalty "may start accruing as
early as the date that the facility was first out of
compliance" and be computed for the "number of days of
noncompliance until the facility achieves substantial
compliance" or is terminated from the program. 42 C.F.R.
§§ 488.440; 488.454.

A facility may appeal a_ certification of
noncompliance leading to an enforcement remedy, but may
not appeal the choice of remedy or the finding that
deficiencies pose immediate jeopardy. 42 C.F.R.
488.408(g); 498.3(b)(12); 498.3(d)(10). A determination
with respect to the level of noncompliance may be appealed
only if a successful challenge on this issue would affect the
range of CMP amounts that HCFA could collect. 42 C.F.R.
§§ 498.3(b)(13); 498.3(d)(10); 488.438(e). | HCFA's
determination as to the level of noncompliance "must be
upheld unless it is clearly erroneous." 42 C:F.R. 498.60(c).
This includes HCFA's finding of immediate jeopardy.
Woodstock Care Center, DAB No. 1726, at 9, 38 (2000).

Under 42 C.F.R. Part 498 procedures, there is a
right to request a hearing by an ALJ assigned to the
Departmental Appeals Board and a right to request review
of an ALJ decision by the Board itself. A request for
review of an ALJ decision must specify the issues, the
findings of fact or conclusions of law with the party

App. 17

disagrees, and the basis for contending that the findings and
conclusions are incorrect. 42 C.F.R. 498.82(b).

HCFA's findings in this case were based on a
survey performed by the Illinois Department of Public
Health (IDPH), from April 1 through 8, 1997. HCFA
determined to impose a penalty of $3050 per day for the
105-day period from December 20, 1996 through April 3,
1997, and a penalty of $50 per day for the period April 1
through May 14, 1997. Fairfax appealed the $3050 per day
penalty (totaling $320,250), including the level of
noncompliance, but did not appeal the remaining penalty
(totaling $2,050). ALJ Decision at 2. HCFA's findings for
the higher level penalty were based on alleged deficiencies
in meeting the requirements of 42 C.F.R. 483.25(k) at the
immediate jeopardy level, based on findings with respect to
facility residents identified as R10, R126, R127, R83, R68,
R6, R11, and R130.

The ALJ Decision

In his decision, the ALJ made the following
numbered findings of fact and conclusions of law:

1. Petitioner was not in substantial compliance
with federal participation requirements from December 20,
1996 through April 3, 1997.

a. Petitioner failed to implement a_ policy
concerning ventilator dependent residents, and,
through its carelessness, brought about the
premature demise of R10. This constitutes
immediate jeopardy.

b. Petitioner failed to carry out the treating
physician's orders and failed to properly
document R126's medical charts. This had the
potential for serious injury, harm, impairment or

App. 18

death to the resident and constitutes immediate
jeopardy.

c. Petitioner failed to adhere to the guidelines it
had developed in February 1997, and
implemented at the beginning of March 1997
for ventilator dependent residents in respiratory
distress by not monitoring or providing proper
follow-up -assessments to R127. This had the
potential for serious injury, harm, impairment,
or death to the resident and _ constitutes
immediate jeopardy.

d. Petitioner failed to adhere to the guidelines it
had adopted in March 1997 for ventilator
dependent residents in respiratory distress by
not monitoring or providing proper follow-up
assessments to R83 & R68. This had the
potential for serious injury, harm, impairment,
or death to the resident and constitutes
immediate jeopardy.

e._ Petitioner failed to ensure that R6 and Ril
received proper tracheostomy care. This had the
potential for serious injury, harm, impairment,
or- death to the residents and constitutes
immediate jeopardy.

f. The conduct of Petitioner with respect to R130
does not constitute a deficiency.

2. Beginning December 20, 1996 ard continuing
through April 3, 1997, Petitioner failed i» comply with
requirements of 42 C.F.R. 483.25 at tie immediate
jeopardy level.

3. The amount of the penalty imyyesed by HCFA is

reasonable. Under each of his major findings and
conclusions, the ALJ set out the survey findings, and then

ee

App. 19

discussed his findings based on the evidence presented,
stating which witnesses he found credible and why he
rejected Fairfax's arguments. We do not here repeat the
detailed findings from the ALJ Decision, except to the
extent necessary to address Fairfax's arguments on appeal.

tandard for Review

Under the guidelines for Board review under 42
C.F.R. Part 498, the standard of review on a disputed
factual issue is whether the ALJ decision is supported by
substantial evidence in the record as a whole. The standard
of review on a disputed issue of law is whether the ALJ
decision is erroneous. See e.g., Woodstock Care Center,
DAB No. 1726, at 8-9 (2000).

Issues on Appeal

On appeal, Fairfax raised a threshold issue .
regarding whether the ALJ applied the appropriate burden
of proof. Fairfax also alleged generally that the ALJ erred
by - using the wrong legal standard for deciding
whether a deficiency existed at all, substituting the facility's
new respiratory care protocol (adopted after the death of
R10) for the applicable standard of care; 1 concluding
that the mere "potential" or "risk" of harm is sufficient to
warrant a finding of immediate jeopardy; 1 linking
unrelated incidents (alleged deficiencies occurring during
the last 30 days of the 105-day period) to the deficiency
that resulted in R10's accidental death on December 20,
1996, and assuming an unbroken period of immediate
jeopardy during the intervening time; and 1 affirming a
total penalty that is improperly punitive, rather than
remedial.

While not alleging that any of the ALJ's specific
findings of fact were not supported by substantial evidence
in the record, Fairfax set out its version of the facts with

App. 20

respect to each of the residents for which findings were
made. Fairfax asserted, based on its version of the facts,
that the "alleged deficiencies re R126, R127, R83, R68, R6,
& Ril do not rise to the level of immediate jeopardy."
Fairfax Appeal Brief (App. Br.) at 19-24.°

Below, we first discuss the threshold issue
regarding burden of proof. We then address each of the
general allegations of error, discussing as necessary the
more detailed arguments made related to each of the
allegations. Finally, we state why we conclude that the
ALJ's factual findings are supported by substantial
evidence in the record and reject Fairfax's characterization
of the incidents in question.

1. The ALJ applied the appropriate burden of
proof.

In Hillman Rehabilitation Center, DAB No. 1611
(1997), this Board reversed an ALJ decision that had placed
the ultimate burden of persuasion on HCFA to establish
that a rehabilitation agency that had previously entered into
a Medicare provider agreement no longer met the
conditions for participation, and therefore could be
terminated from the program. Based on the relevant

? Fairfax also objected to the change of administrative law judges that
occurred prior to the hearing in this case. Fairfax provided an affidavit
attesting that the first judge had told counsel that if IDPH “had
conducted an investigation on January 2, 1997 to investigate the
incident of December 20, 1996, he would rule that Immediate Jeopardy
could not be imposed on Fairfax from December 20, 1996 through
April 3, 1997." Exhibit (Ex.) C. Fairfax asserted that the “unilateral
reassignment of judges by HCFA" was a violation of due process. Id.
at 28. We agree with HCFA that Fairfax did not timely raise this
procedural issue. We note, however, that HCFA has no control over
assignment of Departmental Appeals Board (DAB) judges. The DAB
is independent of HCFA and assigns or reassigns cases to judges based
on their availability to hear and decide cases.

App. 21

statutory and regulatory language, prior administrative and
court decisions, and the underlying purpose of protecting
Medicare beneficiaries, this Board rejected the ALJ's
rationale for placing the burden on HCFA. The Board
concluded that the procedural concerns expressed by the
ALJ could be addressed in a manner more consistent with
the relevant provisions and underlying purpose. The Board
held the following:

FFCL 1A. HCFA must set forth the basis for its
determination terminating a provider with sufficient
specificity for the provider to respond, including
the basis for any finding that a condition-level
deficiency exists. The provider must then identify
which of the findings material to the determination
the provider disputes, and must also identify any
additional facts the provider is asserting.

FFCL 1B. At the hearing, HCFA has the burden of
coming forward with evidence related to disputed
findings that is sufficient (together with any
undisputed findings and relevant legal authority) to
establish a prima facie case that HCFA had a legally
sufficient basis for termination.

FFCL 1C. At the hearing, the provider has the
burden of coming forward with evidence sufficient
to establish the elements of any affirmative
argument or defense which it offers.

FFCL 1D. The provider bears the ultimate burden
of persuasion. To prevail, the provider must prove
by a preponderance of the evidence on the record
asa whole that it is in substantial compliance with
the relevant statutory and regulatory provisions.
Hillman at 8; see also Hillman at 9-10.

———————————————————————eooeee

App. 22

The Board decision was upheld in Hillman
Rehabilitation Center v. United States, No. 98-3789 (GEB)
(D.N.J. May 13, 1999). Subsequently, this Board
determined in Cross Creek Health Care Center, DAB No.
1665, at 13, n.10 (1998),that the rationale in Hillman
applies in the context of CMPs imposed on long-term care
facilities.

Fairfax did not raise the issue of burden of proof
before the ALJ. On appeal, however, Fairfax argued that
placing the burden of proof on Fairfax was unconstitutional
because it denied Fairfax due process. Fairfax also argued
that the decision in Hillman constituted a substantive
change in policy that the federal Administrative Procedure
Act (APA) required to be promulgated through notice and
comment rulemaking. In response to HCFA's argument
that Fairfax had waived this issue by not raising it before
the ALJ, Fairfax argued that its failure to raise the issue
below should not be considered a waiver since an ALJ does
not have the authority to invalidate a statute or regulation
on constitutional grounds.

We first note that Fairfax misconstrues the nature of
the Hillman decision. The applicable procedural
regulations in 42.C.F.R. Part 498 are silent on burden of
proof. The Board's decision in Hillman is thus in the nature
of an order which, while establishing precedent for the
ALJs hearing these cases, is not a “rule” under the APA.
Moreover, the Board's decision in Hillman was consistent
with prior decisions on burden of proof issued by the Social
Security Administration Appeals Council, the Board's
predecessor for reviewing ALJ decisions in these cases.
Thus, it did not represent any change in policy. If the
Board were persuaded that our determination on the burden
of proof was unconstitutional, nothing in the applicable
statutes or regulations would preclude us from reaching a _
different conclusion in this case. In any event, however,

there is no merit to Fairfax's challenge to the ALJ Decision
here based on its assertions about the burden of proof, for
the following reasons:

As we explained in Hillman, which party has the
ultimate burden of persuasion becomes significant only if
the weight of the evidence is in equipoise. That is not the
Situation here. Fairfax's constitutional argument lacks
merit. Fairfax presented no citations to relevant case law to
support the proposition that a Medicare provider has a due
process right to have the ultimate burden of persuasion
placed on HCFA. For the reasons explained in Hillman, at
pages 20-22, and affirmed on appeal, we conclude that
there is no such right.

2. The did not improperly substitute Fairfax's

protocol for the applicable standard of care.

After the death of R10, Fairfax developed a new
protocol for care of ventilator dependent residents in
respiratory distress. Fairfax alleged that the ALJ erred by
applying this protocol as a substitute for the applicable
standard of care. According to Fairfax, use of the new
protocol against Fairfax is contrary to public policy, as
evidenced in Federal Rule of Evidence No. 407. That rule
provides:

When, after an event, measures are taken which, if
taken previously, would have made the event less
likely to occur, evidence of the subsequent measure
is not admissible to prove negligence or culpable
conduct in connection with the event. This rule
does not require the exclusion of evidence of
subsequent measures when offered for another
purpose, such as proving ownership, control, or
feasibility of precautionary measures, if
controverted, or impeachment.

App. 24

Underlying this rule is the notion that use of corrective
actions as evidence of negligence or culpable conduct could
act as a disincentive to such measures and therefore
jeopardize public health and safety. Fairfax also pointed to
this Board's decision in Lake City Extended Care Center,
DAB No. 1658 (1998) for the proposition that failure to
follow an internal protocol is not necessarily evidence of a
failure to adhere to the standard of care. Fairfax App. Br. at
18-19.

We first note that this is not a question about the
admissibility of evidence. Fairfax did not timely object to
the ALJ admitting its protocol into the record. Indeed,
Fairfax submitted the protocol as its Exhibit 10. Moreover,
evidence that is inadmissible under the Federal Rules of
Evidence may be received in a Part 498 proceeding. 42
C.F.R. 498.61. The public policy underlying Rule 407 is
inapplicable as well. The survey and certification
regulations require corrective action for all deficiencies
except isolated deficiencies with a potential for only
minimal harm and no actual harm. 42 C.F.R. 488.408(f).
Thus, admitting evidence of what corrective actions
facilities took would not have the unintended consequence
of discouraging them from taking such actions. HCFA
pointed out, and Fairfax did not deny, that an exception to
Rule 407 is recognized where remedial action is mandated
by superior governmental authority. HCFA App. Br. at 56,
citing 2 Weinstein's Federal Evidence 407.05[3], p. 407-27
(2nd Ed. 2001).

-Fairfax's substantive argument that the ALJ
erroneously substituted Fairfax's policy for the applicable
standard of care also lacks merit. Fairfax's assertions about
the policy ignore not only statements in the ALJ Decision,
but also testimony from Fairfax's own witnesses with
nursing credentials confirming the testimony of HCFA's
witnesses with like credentials. The ALJ Decision noted

App. 25

that the purpose of the protocol, called "Nursing Guidelines
for Ventilator Dependent Residents in Respiratory
Distress," was to ensure not only proper care and treatment
of such residents, but also to provide monitoring of such
patients. He further noted that Fairfax's own Director of
Nursing (DON) had testified that the protocol "embodied
good nursing practices," that R10 should have been
monitored after apparently having been stabilized, and that
such monitoring is good nursing practice that "should be
done on every resident that goes into any type of distress."
ALJ Decision at 7, quoting Tr. at 502. The DON also
testified about the development of the policy and the
accompanying charting form, based on textbooks and
respiratory certification for nurses; she indicated that it was
good nursing practice before being put into writing and that
the form "was developed to make everyone more in tune
with what needed to be embodied in the charting." Tr. at
505-507. The surveyor, who was an experienced nurse,
also testified that the monitoring required by the protocol is
standard-nursing practice in the area. Tr. at 141 (Daniels);
see also Tr. at 152-154 (Daniels); 394 (Lawrence); 420-21
(Casares).

Fairfax presented no convincing evidence that its
policy did not represent the applicable standard of care.
Fairfax presented some testimony to the effect that the
requirement in the protocol to monitor the patient by
charting the vital signs and other observations might not
always apply if the nurse did "little things" that stabilized
the resident or if the initial intervention worked because the
problem was a mechanical one such as a kink in the
ventilator tubing. See, e.g., Tr. at 349 (Lawrence); Tr. at
492, 509 (Benda). The ALJ could, however, properly
discount this testimony in light of the facts that no
qualification appears on the face of the written policy
(which Fairfax's witnesses in effect admitted represented

App. 26

the standard of care) and that the policy applied to "any
resident in distress." P. Ex. 10; Tr. at 502 (Benda).
Moreover, even if the ALJ had credited this testimony, it
would not be sufficient by itself to undercut the ALJ's
findings with respect to the particular residents at issue
here. Substantial evidence in the medical records of the
residents to whom the ALJ applied this protocol as the
standard of care, as well as in the testimony as a whole,
supports his findings that the residents were in respiratory
distress that required monitoring to ensure that they had in
fact been stabilized.

In light of the testimony establishing the protocol as
the standard of nursing care, the ALJ did not err by
disregarding the opinion of a physician witness (Dr. Saltiel)
that suggested, contrary to the protocol, that physician
contact was not necessarily required in circumstances of
repeated episodes of respiratory distress. Moreover, the
ALJ found Dr. Saltiel's testimony not credible regarding the
protocol because he was confused about it and his
testimony was contradicted. ALJ Decision at 13-14.

Fairfax's reliance on Lake City is misplaced. - In that
case, the ALJ had concluded that the fact that Lake City's
protocol directed staff to call a physician if a resident's
temperature exceeded 101 degrees gave rise to a
presumption that this was the standard of care, but that the
facility had rebutted the presumption - by presenting
persuasive evidence that this was not required. In this
context, the Board adopted the ALJ's conclusion that
"failure by a facility to comply with a protocol is not a
failure to comply with a participation requirement where
the protocol does not comport with a professionally
recognized standard of care and where the participation
requirement does not direct a facility to follow each of its
internal protocols." Lake City at 18. Fairfax, however,
presented no evidence here to rebut the presumption that

App. 27

the protocol it adopted reflected the professionally
recognized standard of care. Moreover, as discussed
below, the deficiency found by HCFA (and the ALJ) here
was Fairfax's failure to have a guideline/procedure/protocol
on respiratory care (whether written or otherwise) that was
effectively communicated to staff and applied by them in
the care of the residents. Fairfax did not deny that it
needed to do this in order to ensure that residents receive
the special services they need, as required by 42 C.F.R.
483.25(k).’ Thus, we conclude that the ALJ did not err as
alleged by Fairfax. The ALJ found that the policy merely
articulated the applicable standard of care, and ample
evidence in the record supports this finding.

3. The ALJ applied the correct legal standard and
did_not misapply the definition of "immediate
jeopardy”.

As mentioned above, "immediate jeopardy" means -

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. Fairfax argued that the
ALJ departed from this definition, by concluding that mere

* We do not here adopt HCFA's position that the State Operations
Manual (SOM) interprets section 483.25(k) as incorporating a facility's
internal policies by reference into the regulation. HCFA relied on a
SOM section that merely directs surveyors to determine whether
facility staff is following the facility's own protocol and/or written
procedures for ventilators. HCFA Br. at 52, quoting SOM Appendix P
at PP-112. HCFA cannot reasonably rely on this as a basis for applying
an internal policy as though it had been incorporated by reference into
the regulation, especially in light of the outcome-oriented approach in
the long-term care requirements and Federal Register requirements for
incorporation by reference. We also note that the decisions on which
HCFA relied for the proposition that we must uphold any HCFA
interpretation are inapposite to Part 498 cases, in which the Board
renders the final decision on behalf of the Department.

App. 28

"potential" or "risk" of harm was sufficient for immediate
jeopardy, and therefore employed the wrong legal standard.
Fairfax pointed to language in the ALJ's numbered
findings, stating that deficiencies had the "potential" for
harm (FFCLs 1.b., 1.c., 1.d., and 1.e.), and to statements in
his discussion referring to "risk" of harm. In response,
HCFA pointed to language in the ALJ Decision which
HCFA said showed that the ALJ clearly understood the
definition of "immediate jeopardy" and was applying it.
HCFA cited certain court cases to support its position that
the substance of the decision, rather than the wording,
should control. Fairfax replied that "the ALJ failed to
specifically find that the deficiencies related to FFCLs 1(b)-
(e) were ‘likely to cause’ serious injury, harm, impairment
or death" and that "the immediate jeopardy ruling for those
findings, therefore, should be overturned." Fairfax Reply
Br. at 2. Fairfax sought to distinguish the cases relied on
by HCFA, arguing that, in this case, the problem is not
merely a passing remark of the ALJ's or the sketchiness of
the written opinion. Instead, Fairfax asserted, “Almost all
of the ALJ's actual findings misstate the governing legal
standard. The opinion is unambiguous on this point." Jd. at
3 (emphasis in original).

' We first note that the initial situation leading to
HCFA's finding that Fairfax failed to comply with the
requirement at 42 C.F.R. 483.25(k) to ensure that residents
receive special services such as respiratory care was with
respect to R10. With respect to this resident, the ALJ
found the following in FFCL l.a.: Petitioner failed to
implement a policy concerning ventilator dependent
residents, and, through its carelessness, brought about the
premature demise of R10. This constitutes immediate
jeopardy. ALJ Decision at 6. As Fairfax's argument seems
to recognize, this finding is consistent with the definition of
immediate jeopardy. In discussing this resident, the ALJ

App. 29

first stated that, in essence, the state surveyors had found
that the staff caring for R10 "did not follow
_ guidelines/procedures/protocols in the provision of
respiratory care, and that lack of adherence directly caused
the death of R10." Id. He then went on to discuss the
evidence, concluding: It is unequivocal, from the facts of
this case, that Petitioner's carelessness was the direct cause
of R10's death. Tr. at 489. The lack of due care is first
evident from the act of turning the resident's ventilator off,
and then from not monitoring the resident after she
apparently had been stabilized. ... Furthermore, Petitioner
did not have a written policy for the protection of ventilator
dependent residents in respiratory distress. It is evident that
whatever non-written guidelines existed were either
improperly communicated to the attending staff or were not
diligently applied. ALJ Decision at 8.

Second, the ALJ's FFCLs 1.b. to 1.e., to which
Fairfax objected, not only refer to "potential" for harm, but
also specifically state that each deficiency "constitutes
immediate jeopardy." This at the very least undercuts
Fairfax's contention that the specific findings are
"unambiguous" and makes reference to the decision as a
whole perfectly appropriate, as HCFA contended. An
examination of the ALJ Decision as a whole indicates that
the ALJ was aware of the definition of "immediate
jeopardy" and intended to find that these situations were
deficiencies with a likelihood of causing serious harm.
Moreover, while Fairfax is correct that mere potential or
risk is insufficient to meet the definition of immediate
jeopardy, the terms "potential" and "risk" are not inherently
inconsistent with the concept of "likelihood" in that
definition. See Woodstock Care Center, DAB No. 1726, at
38 (2000). The issue is whether the "potential" or "risk"
are sufficiently great to constitute:a "likelihood." The
ALJ's statements that the deficiencies constituted

App. 30

immediate jeopardy imply that he thought the potential/risk
did rise to a likelihood.

Moreover, a finding of immediate jeopardy is not
contingent on a finding that each individual incident placed
a resident at such a degree of potential or risk of serious
harm that there was a likelihood of harm to that specific
resident at that particular time. The more incidents with a
potential for serious harm, the more likelihood there is that
such harm will occur to some similarly situated resident,
particularly when, as in this case, the incidents evidence a
failure to have and consistently follow protocols to avoid
the potential harm. Findings about incidents related to
individual residents are not themselves the deficiencies that
must be corrected - the deficiency is the underlying failure
to meet a participation requirement evidenced by the
incident. 42 C.F.R. 488.301.

Fairfax's other general arguments related to the
immediate jeopardy determination similarly lack merit, for
the following reasons: [1] Contrary to what Fairfax
implied in describing the incidents here, the mere fact that
actual harm did not occur to each of the residents is
irrelevant. Immediate jeopardy encompasses situations
where there is a likelihood of serious harm. [2]Fairfax's
reliance on a decision by a state ALJ reaching a somewhat
different result is misplaced. The state ALJ did not have
the same evidence before her, nor was she applying the
same standards. See Fairfax Ex. B. Fairfax's arguments,
however, raise the issue of what is the "legal standard" that
a federal ALJ must apply in order to uphold a CMP at the
immediate jeopardy level. As noted above, the regulations
specifically state that HCFA's finding that a deficiency is at
the immediate jeopardy level must be upheld unless
"clearly erroneous." 42 C.F.R. 498.60(c).° The ALJ

* This standard was explained in the preamble to this regulation as
follows: "Survey team members and their supervisors ought to have

App. 31

recognized this as the standard, concluding that --
Petitioner failed to show that HCFA's determination of
immediate jeopardy was clearly erroneous. In fact, the
preponderance of the evidence establishes the Petitioner's
deficiency was at the immediate jeopardy level. . . .
Petitioner did not prove by the preponderance of the
evidence that it had eliminated the immediate jeopardy to
its residents on any date prior to April 4, 1997. ALJ
Decision at 24. He based this on 1) the evidence discussed
under his second major conclusion, including testimony by
the surveyor that "after R10's demise, the lack of the
facility's immediacy in initiating a protocol to prevent any
further problems placed residents at severe risk for harm, if
not death," 2) the evidence supporting his findings related
to other residents, and 3) his finding that "it was not until
April 4, 1997, that Petitioner initiated a comprehensive plan
to address and abate the immediate jeopardy." ALJ
Decision at 23-24.

4. The ALJ did not err in determining the duration
of the penalty.

Fairfax argued: "Even if the record could sustain an
immediate jeopardy finding for one or more deficiencies, it
does not support a finding of 105 days of continuous
immediate jeopardy." Fairfax App. Br. at 22. Fairfax
referred to the incident with R10 as "an isolated tragedy"
and likened it to the situation in Hermina Traeye Memorial
Nursing Home, CR756 (2001). In that case, the ALJ
concluded that "a single isolated episode of staff error in
the remote past" was not "persuasive evidence of an
ongoing failure to comply . . . at a survey that takes place
six months after the occurrence of the episode." Fairfax

some degree of flexibility and deference in applying their expertise in

working with these less than perfectly precise concepts." 59 Fed. Reg.
56,116; 56,179 (Nov. 10, 1994).

App. 32

App. Br. at 23, quoting Hermina Traeye, CR756, at 18-19.
According to Fairfax, the evidence regarding the event of
December 20, 1996 related to R10 "does not support an
inference that a general state of immediate jeopardy existed
over the next 70 days," and, instead, the IDPH surveyor
who visited Fairfax on January 2, 1997 "found no
deficiencies." Fairfax App. Br. at 23. If immediate
jeopardy had existed at that time, Fairfax asserted, the
surveyor was required under HCFA policy to take
immediate steps to protect the residents. Fairfax App. Br. at
23-24, citing State Operations Manual, §§ 7307, 7308, and
7309. According to Fairfax, HCFA failed to make a prima
facie case that Fairfax's residents were in a continuous state
of immediate jeopardy for 105 days." Jd. at 22.

These arguments have no merit. First, Fairfax's
attempt to characterize the events regarding R10 as an
"isolated event" simply is not supported by the record
before us. HCFA's finding of a deficiency constituting
immediate jeopardy was based on Fairfax's failure to have
policies/guidelines/protocols that were communicated
effectively to staff. Fairfax did assert that it had a protocol
that prohibited unplugging a ventilator during an episode of
respiratory distress such as that experienced by R10, but
did not assert that it had any written or oral
policy/guideline/protocol at the time of the incident
regarding monitoring a ventilator dependent resident
following respiratory distress. HCFA's further finding that
the immediate jeopardy was not abated until April 4 was
based on Fairfax's admitted failure to put such a protocol in
place prior to March 1997, and its failure thereafter to
_ effectively communicate to staff the need to follow
protocols on special services such as respiratory care,
tracheostomy, and tracheal suctioning. This failure was
evidenced by numerous incidents (up to and including the
time of the survey) for which records showed a failure to

App. 33

follow protocols, particularly the protocol for residents
suffering respiratory distress. The incidents were related in
this respect. Contrary to what Fairfax asserted, the survey
did not start on April 8, 1997. Rather, the record shows it
started on April 1 and was completed on April 8. HCFA
Exs. 1-6. The comprehensive steps that Fairfax took were
after the surveyors had informed Fairfax that the state of
immediate jeopardy might be found. HCFA Ex. 1, at 24.
Thus, this case is distinguishable from the facts found by
the ALJ in Hermina Traeye, where he found that HCFA
was basing its finding that the immediate jeopardy
continued solely on an inference from one episode.

Second, Fairfax also misrepresents what the record
shows about the IDPH surveyor who visited the facility
after R10's death. There is no evidence in the record that
this surveyor ever found or informed Fairfax that it had "no
deficiencies." Fairfax's DON testified that the surveyor
said she made "no findings," but this is not the same as a
finding of "no deficiencies." Tr. at 490 (Benda). Moreover
Fairfax's administrator, whose testimony was more
internally consistent, testified that, while the surveyor made
a remark that turning off the ventilater for R10 appeared to
be a "terrible mistake," she further indicated that her
investigation of the incident was not yet completed. Tr. at
621-623 (Considine); compare Tr. at 503-504 (Benda).
Indeed, there is evidence that the surveyor was still seeking
information from the facility as late as March 24, 1997. Tr.
at 680; P. Ex. 6. Moreover, it appears that her visit was
merely an investigation, rather than a survey. There is no
evidence in the record about when or whether this surveyor
actually completed her investigation. Since it is not clear
that she would have ever been obliged under the regulation
to take the steps required when immediate jeopardy is
found during a survey, it is not reasonable to infer from her
failure to take those steps that she found no immediate

App. 34

jeopardy. Moreover, even if her investigation had been a
survey resulting in a surveyor's finding that Fairfax was in
substantial compliance, Fairfax could not rely on that
finding. Under the regulations, surveyors make only
recommendations with respect to compliance of Medicare
facilities -- HCFA is not bound by those recommendations.
42 C.F.R. §§ 488.12, 488.330.

Fairfax is also mistaken in implying that it was
entitled to prospective notice of a finding of noncompliance
before a CMP may be imposed. The regulation at 42 C.F.R.
488.454 makes clear that HCFA may impose a CMP based
on a finding of a noncompliance occurring between surveys
and that the duration of such a CMP is until the facility
“achieves substantial compliance." Generally, this point is
determined by a revisit or by submission by the facility of
written, credible evidence that HCFA finds acceptable to
verify that corrections have been made. HCFA here
reduced the amount of the CMP at the point where it
determined Fairfax had abated the immediate jeopardy,
while the surveyors were on site performing the survey.

The fact that HCFA did not make findings about the
care provided to specific residents during the first 70 days
after R10's death is irrelevant. Fairfax witnesses admitted
that in that period Fairfax had not taken even the minimal
corrective step of putting in place its new protocol. Fairfax,
moreover, did not present any credible evidence that it had
taken other corrective action sufficient to ensure that it was
meeting the applicable standard of care during this 70-day
period. See ALJ Decision at 22-23. While Fairfax
presented evidence that it did do some in-service training,
other evidence indicates that the training focused on
matters other than monitoring residents following an
episode of respiratory distress and was not effective. See,
e.g., P. Exs. 8, 10; Tr. at 488, 544-545. Thus, HCFA could
reasonably conclude that the immediate jeopardy situation

Tce imaaai alii

App. 35

persisted throughout this period, particularly in light of
what later records showed about Fairfax's failure to in fact
provide the appropriate care to residents suffering from
respiratory distress, despite adoption in March of a protocol
based on the standard of care. In sum, HCFA was not
clearly erroneous in concluding that steps taken prior to
April 4 were insufficient to abate the immediate jeopardy.

5. The ALJ did not impose a CMP that is punitive.

Fairfax argued that the CMPs recommended by
HCFA and adopted by the ALJ are fatally flawed because
they are punitive in nature, rather than remedial. Fairfax
asserted that this rendered the CMPs contrary to the
Constitution, the Medicare Act, and this Board's prior
decisions. In support, Fairfax cited this Board's decision in
CarePlex of Silver Spring, DAB No. 1627 (1997) and the
ALJ decision on remand in CarePlex of Silver Spring,
CR536 (1998). Fairfax App. Br. at 25. According to
Fairfax, HCFA "admitted that the immediate jeopardy had
ceased to exist a few days before the April 8 survey" and
both parties “agreed that the alleged immediate jeopardy
was abated because Fairfax had drafted and implemented
its protocol for respiratory care prior to the date of the
survey" prior to “any finding or hint from HCFA that a
deficiency existed or that CMPs were accruing." Fairfax
App. Br. at 27. Therefore, Fairfax asserted, "HCFA may
not feasiblely argue that its recommended CMP served the
necessary remedial purpose of ‘induc{ing] the deficient
facility to correct outstanding deficiencies promptly and
effectively’," as required by the Board's decision in
CarePlex.

Again, Fairfax's argument is predicated upon a
misstatement of the facts. HCFA did not in fact admit that
the immediate jeopardy was abated prior to the survey, nor
agree that Fairfax had implemented its new protocol

App. 36

satisfactorily prior to the survey. The record shows that the
survey in fact started on April 1 and that it was only after
the surveyors had informed Fairfax that they considered
immediate jeopardy to exist that Fairfax developed the
comprehensive plan (outlined in the ALJ Decision) that
HCFA found satisfactory to abate the immediate jeopardy.
HCFA Ex 1. HCFA and the ALJ specifically found that the
steps taken previously were inadequate. Substantial
evidence in the record supports this finding, including the
medical records for residents R126, R127, R83, R68, R6,
and Rll. The medical records show that the facility staff
was not consistently following protocols Fairfax had
developed, based on applicable standards of care, for
providing special services such as respiratory care to
residents.

As noted above, the regulations specifically permit
imposition of CMPs for periods of past noncompliance
since the last standard survey. This does not render the
CMP punitive in nature. The threat of imposing the CMP
led Fairfax to comply in this instance and the CMP will be
an incentive in the future for Fairfax to maintain
compliance. While some remedies may provide an
incentive to correct existing deficiencies, the purpose is not
so limited. As explained in the preamble to the 1994
regulations implementing sections 1819 and 1919 of the
Act, Congress wanted to "discourage facility
noncompliance that the Congress believed to be widely
evident between surveys and thereby, to encourage lasting
compliance." 59 Fed. Reg. 56,116; 56,175 (Nov. 10,
1994). The preamble further explained that Congress
authorized imposing a CMP for past noncompliance, even
if subsequently corrected, to create a “financial incentive
for facilities to maintain compliance." 59 Fed. Reg. at
56,206, quoting H.R. Rep. No. 391, 100th Cong., Ist Sess.
473-6 (1987).

The suggestion by Fairfax that only if it knows in
advance that a penalty will be imposed does it have
sufficient notice that it should take steps to correct a
deficiency is disingenuous. Even if HCFA had not yet
made a noncompliance finding, the record shows that
Fairfax clearly knew after the death of R10 that at the very
least it needed to improve its care of residents experiencing
respiratory distress by developing and implementing a
protocol. Fairfax should have known, moreover, that
adopting the protocol, but not taking sufficient steps to
ensure it would be followed, would be inadequate to meet
the regulatory requirement that it ensure that residents
attain and maintain the highest practicable physical well-
being, including by ensuring that residents receive special
services, in accordance with their plans of care. In
proposing this requirement, HCFA explained that it
deliberately chose the word "ensure" with respect to
treatment and care that the facility is responsible for
providing "since this is the reason for the residents stay in
the facility, as well as for program payment." 56 Fed. Reg.
48,826; 48,850 (Sept. 26, 1991). We also note that the
amount of the penalty imposed is the lowest amount under
the regulations that could be imposed on a per day basis for
an immediate jeopardy level of noncompliance. Thus,
having concluded that HCFA was not clearly erroneous in
determining that immediate jeopardy existed during the
period from December 20, 1996 through April 3, 1997, we
do not have the authority to reduce the amount of the

penalty. ‘

As noted above, Fairfax did uot take specific
exception to the ALJ's factual findings made in his
discussion of individual residents (as opposed to his general

App. 38

numbered conclusions). Instead, Fairfax argued generally
that the incidents related to individual residents did not
show immediate jeopardy and presented its version of the
incidents, which differs in some respects from the ALJ's
findings or which emphasizes different facts. We have
addressed Fairfax's general arguments about immediate
jeopardy above. We have reviewed the entire record and
also conclude generally that the ALJ's findings are
supported by substantial evidence. Below, we address the
more specific arguments based on or implicit in Fairfax's
version of the facts.

a. Substantial evidence in the record supports the
ALJ's findings with respect to R10, and the
facts emphasized by Fairfax are irrelevant.

Throughout its briefing, Fairfax characterized the
death of R10 as an "accident" or an "isolated event” due to
the failure of a respiratory therapist to follow Fairfax policy
that a ventilator never be unplugged. Fairfax ignored the
findings regarding its failure to have and to communicate to
staff a protocol for monitoring ventilator dependent
residents after an episode of respiratory distress to ensure
that the resident is in fact stabilized and to evaluate the
underlying cause of the distress. The ALJ found that this
failure was a cause of R10's death since monitoring every
15 minutes for the first hour after the episode, per the
protocol later adopted, would have revealed that R10's
ventilator had been unplugged. Instead of directly
challenging this finding, Fairfax presented a version of the
events emphasizing that one of the respiratory therapists
was with R10 until approximately 15 minutes before a
nurse entered the room and found R10 dead at 1:15. The
flaw in this approach is that the protocol (based on the
standard of care) required nursing care to monitor the
resident, so the presence of the respiratory therapist in the
room is irrelevant. Indeed, the protocol is titled "Nursing

App. 39

Guidelines . . . ." P. Ex. 10. The record shows that the last
nurse who was present left the room at approximately
12:50, about 25 minutes before any nurse returned. HCFA
Ex. 12, at 8.2 The record also shows that, when the nurse
did return at about 1:15, the purpose was to change R10's
gastric feeding tube, rather than to monitor R10 to ensure
that she had stabilized. Jd. By then it was too late to revive
R10. The fact that the police who investigated R10's death
determined it was an “accident" is also irrelevant. As
HCFA pointed out, a conclusion that there was no criminal
intent in the unplugging of R10's ventilator is not
tantamount to a finding that Fairfax was not deficient in its
care of R10. Similarly, while the fact that the respiratory
therapist who unplugged the ventilator had 20 years’
experience may be relevant to show that Fairfax could have
expected that he would know to never unplug a ventilator,
it does not excuse Fairfax's deficiency in providing nursing
care to R10.

b. Substantial evidence in the record supports
the ALJ's findings about R126.

The ALJ thoroughly discussed the evidence and
arguments regarding R126, finding that Fairfax failed to
carry out the treating physician's orders, given after an
episode of respiratory distress, and that R126's medical
records fail to show that Fairfax took steps to increase his
oxygen level, which was dangerously low. ALJ Decision
at 8-11. The ALJ concluded that Fairfax was "woefully
inadequate in its treatment and care of R126, in violation of
42 C.F.R. 483.25(k)" and that such conduct "caused or was

* During the approximately 45 minutes between the onset of the
respiratory distress at 12:30 and the time the nurse returned, no vital
signs were charted. HCFA Ex. 1, at 20; P. Ex. 7. The surveyor
testified that such monitoring was even more critical for R10 because
she had been given Ativan, which would make her appear calm, even if
she had not been stabilized. Tr. at 146.

App. 40

likely to cause serious [*41] injury, harm, impairment or
death to the resident." Id. at 9.

On appeal, Fairfax argued as it had before the ALJ
that the record shows that R126 died within hours after the
orders were given and that in fact the doctor's orders were
being carried out. Fairfax App. Br. at 6.

The testimony relied on by Fairfax to show that the
orders were being carried out was found by the ALJ to be
vague, replete with generalities, and not credible in light of
the complete failure of Fairfax to produce the results of the
tests and x-ray the physician ordered, or a record entry
showing the dispensing of the antibiotic he ordered. We
agree and see no reason to disturb that credibility finding
here. Moreover, as the ALJ recognized, the deficiency was
not only in failing to carry out the orders, but in failing to
chart what was done, "inasmuch as responsible and
meaningful follow-up treatment would have been at peril,
absent such vital information." ALJ Decision at 11; see Tr.
at 157.

Fairfax's citations to R126's medical record to show
that he was in extremely poor condition, died shortly after
the orders were given, and was in a "do not resuscitate"
status are also unavailing, even if true. Fairfax provided
nothing to indicate that any of these factors affected the
duty of care that Fairfax owed to R126, nor that anything
that the ALJ found was expected of Fairfax under the
circumstances was inconsistent with the plan -of care for
this resident. Thus, we agree with the ALJ that it is
irrelevant that R126 would have expired in spite of
treatment.

c. Substantial evidence in the record supports
the ALJ's findings about R127, R83, and
R68.

App. 41

The ALJ found that Fairfax "failed to adhere to the
guidelines it had adopted in March 1997 for ventilator
dependent residents in respiratory distress by not
monitoring or providing proper follow-up assessments to"
R127, R83, and R68. ALJ Decision at 11-18.

Fairfax cited the record to show that R127 was also
extremely ill and that the family's instructions were to
provide only "comfort care." Fairfax App. Br. at 7-8.
According to Fairfax, it was cited for deficiencies "where
treatment and care were given with good results, but where
documentation regarding subsequent monitoring was
allegedly deficient according to Fairfax's new guidelines."
Id. at 8. Similarly, with respect to R83, Fairfax asserted
that "it is undisputed that Fairfax successfully treated this
resident, but Fairfax was cited because it should have
charted more frequently." Jd. at 9.

As noted above, however, failure to document
monitoring is a failure to meet the standard of care
embodied in Fairfax's protocol and can have negative
outcomes for the resident. The mere fact that the residents
did not have negative outcomes in these particular instances
is irrelevant. The records related to R127, R83, and R68
support the ALJ's conclusion that HCFA was not clearly
erroneous in determining that the immediate jeopardy
caused by Fairfax's failures had not been abated. The
evidence shows (and indeed Fairfax does not dispute) that
Fairfax was not consistently following its new protocol
(based on the standard of care) for ventilator dependent
residents suffering from respiratory distress.

Moreover, while emphasizing that only comfort
care was to be provided for R127, Fairfax pointed to no
evidence that comfort care would not include providing the
care described in the protocol. The protocol on its face
applies to any respiratory distress and indicates that one of

App. 42

the purposes of monitoring is to determine whether the
resident is comfortable. P. Ex. 10.

d. Substantial evidence in the record supports the
ALJ's findings about R6 and R11.

The ALJ found that Fairfax failed to ensure that R6
and R11 received proper tracheostomy care. ALJ Decision
at 19-20. Fairfax made the point with respect to these
residents that there is no evidence that they were ventilator
dependent. This fact is relevant in determining whether the
new protocol for ventilator dependent residents in
respiratory distress applied to these residents. It does not,
however, undercut the finding that, by failing to follow its
own protocols (based on the standard of care) for residents
needing special services, Fairfax was deficient in meeting
the requirement at 42 C.F.R. 488.425(k). The particular
special services at issue for these residents were
tracheostomy care and tracheal suctioning. Part of one of
Fairfax's protocols for such care may have been more
important for ventilator dependent residents, specifically,
oxygenating a patient before removing and cleaning a trach
tube. However, the deficiencies found in Fairfax's care to
these residents also related to other parts of its protocols,
such as the need to use sterile technique.

Fairfax disputed the surveyor's testimony that its
policy required use of hydrogen peroxide, rather than
distilled water, as part of the sterile technique required.
Fairfax App. Br. at 10, citing Tr. at 295. In support, Fairfax
cited to HCFA Exhibit 21, which refers to sterile water, not
hydrogen peroxide. The surveyor's finding, however, was
based on a different Fairfax protocol, identified in the
survey findings as "Procedure for Trach Care with Inner
Cannula" and described as instructing the staff person to
"clean outside of trach tube and surrounding skin area with
hydrogen peroxide and normal saline using cotton tipped

App. 43

applicators." HCFA Ex. 1, at 27; see also Ex. 1 to HCFA
App. Br. HCFA Exhibit 21 is titled "Sterile Suctioning of a
Tracheostomy Tube." Fairfax did not dispute that it also
had the policy on tracheostomy care described in the survey
findings. Nor did Fairfax present any evidence to
contradict the surveyor's testimony that the standard of care
for cleaning the tracheostomy site is to use hydrogen
peroxide. Tr. at 292-302. Also, contrary to what Fairfax
implied, it is irrelevant that the surveyor admitted that she
never determined whether R6 and R11 contracted any
disease or infection as a result of the care given. As the
definition of "immediate jeopardy" indicates, a showing of
actual harm is not required.

We also note that the findings regarding these
residents, while supportive, are not needed in order to
uphold the conclusion in the ALJ Decision that Fairfax did
not take adequate steps to abate the immediate jeopardy
until April 3. As late as April 3, 1997, Fairfax was failing
to meet the standard of care for monitoring R68, a
ventilator dependent resident, after an episode of
respiratory distress. See ALJ Decision at 17-18, and
evidence discussed therein.

Conclusion

For the reasons explained above, we uphold the
ALJ Decision. We affirm and adopt the ALJ's FFCLs.

Donald F. Garrett

Marc R. Hillson

Judith A. Ballard
Presiding Board Member

App. 44

DEPARTMENT OF HEALTH AND HUMAN SERVICES
DEPARTMENTAL APPEALS BOARD
CIVIL REMEDIES DIVISION

No. C-97-406

FAIRFAX NURSING HOME, PETITIONER
Y.
HEALTH CARE FINANCING ADMINISTRATION

Decision No. CR753
HHSDAB LEXIS 42

March 22, 2001

PANEL: Jose A. Anglada, Administrative Law Judge
OPINION:

DECISION

Fairfax Nursing Home (Petitioner) requested a
hearing in this case on May 8, 1997, pursuant to section
1128A(c)(2) of the Social Security Act (Act) and 42 C.F.R.
§§ 488.408(g), 498.3(b)(12),(13)."° Petitioner is a skilled
' This matter was originally assigned to Administrative Law Judge
Stephen H. Ahigren. At the parties' request, the case was stayed for an
indefinite period so that they could pursue settlement negotiations. On
August 11, 1999, after months of inactivity, Judge Ahlgren ordered
Petitioner to show cause why this case should not be dismissed for
abandonment. In its response, Petitioner stated that it had not
abandoned its request for hearing and that it had made several attempts
to arrange settlement negotiations. On September 8, 1999, the case was
reassigned to me. In the absence of objection, I allowed the case to go
forward to hearing.

App. 45

nursing facility participating in Medicare and Medicaid.
On April 8, 1997, the Illinois Department of Public Health
(IDPH) completed standard, extended, and Life Safety
Code surveys at Petitioner to determine if it was in
compliance with the federal requirements for nursing
homes participating in Medicare and Medicaid. That visit
resulted in a finding that Petitioner was not in substantial
compliance with participation requirements, and that the
conditions in Petitioner's facility constituted immediate
jeopardy to resident health and safety. As a result, IDPH
notified Petitioner that it would recommend to the Health
Care Financing Administration (HCFA) that it impose
specific remedies. HCFA concurred with the
recommendation and, on May 7, 1997, it imposed the
following remedies:

A civil money penalty (CMP) of $3,050 per day for
each day of immediate jeopardy, effective
December 20, 1996 and continuing through April 3,
1997; and a CMP of $50 per day, effective April 4,
1997 and continuing until attainment of substantial
compliance or termination of the provider

agreement.

Directed Inservice Training, effective May 22, 1997
for all licensed nursing and certified respiratory
therapy staff caring for the ventilator and
tracheostomy residents.

Denial of Payment for New Admissions, effective
May 22, 1997.

HCFA subsequently determined that Petitioner was
back in substantial compliance on May 15, 1997. HCFA
imposed a CMP totaling $322,300, calculated as follows: a
daily fine of $3,050 from December 20, 1996 through April
3, 1997 (a total of $320,250); and a daily fine of $50 from
April 4, 1997 through May 14, 1997 (a total of $2,050).

App. 46

Petitioner does not contest any of the deficiencies which
were the basis of the $2,050 CMP from April 4, 1997
through May 14, 1997. Petitioner's Readiness Report at 1.
At issue is HCFA's finding of immediate jeopardy, which is
the basis of the CMP imposed from December 20, 1996
through April 3, 1997.

A hearing was held before me in Chicago, Illinois,
from May 31 through June 2, 2000. At the hearing HCFA
offered 21 exhibits identified as HCFA Ex. 1-21. Petitioner
did not object to HCFA Ex. 1-20, and I admitted them into
evidence. Petitioner objected to HCFA Ex. 21. I overruled
Petitioner's objection, and admitted HCFA Ex. 21 into
evidence. Petitioner offered 20 exhibits identified as P. Ex.
1-20. HCFA did not object to P. Ex. 1-20, and I admitted
them into evidence. HCFA subsequently submitted a post-
hearing brief (HCFA Brief). Petitioner submitted a
response brief (P. Response). Attached to Petitioner's
response brief is a May 26, 1998 final order and decision
~ issued by IDPH. I identify this document as P. Attachment
1. Petitioner argues that the IDPH decision is instructive
because it shows that the facts of this case "did not rise to
the state equivalent of an immediate jeopardy." P.
Response at 20. HCFA submitted a reply brief (HCFA
Reply). Attached to HCFA's reply brief is a November 7,
2000 ruling issued by an Administrative Law Judge of this
office. I identify this document as HCFA Attachment 1.

HCFA argues that reliance on the IDPH decision
would be misplaced, and it cites the attached ruling as
support for the proposition that I should refuse to defer to
State administrative findings made in State proceedings
where HCFA was not a party. The IDPH decision is not
binding on me, and I accord it little weight. As HCFA
points out, HCFA was never a party to the State
proceedings and the State decision is the product of a
different evidentiary record as well as different legal

App. 47

standards.

Based on the testimony offered at the hearing, the
documentary evidence, the arguments of the parties, and
the applicable law and regulations, I find that from
December 20, 1996 through April 3, 1997, Petitioner was
not in substantial compliance at the immediate jeopardy
level. Thereafter, and continuing through May 14, 1997,
Petitioner admits that it was not in substantial compliance
at less than the immediate jeopardy level of severity. I find
further that HCFA is authorized to impose CMPs against
Petitioner at the rate of $3,050 per day from December 20,
1996 through April 3, 1997, and at $50 per day from April
4, 1997 through May 14, 1997.

le Law atio

Petitioner is considered to be a long-term care
facility under the Act and regulations promulgated by the
Secretary of the United States Department of Health and
Human Services (Secretary). The statutory requirements
for participation by a long-term care facility are found at
sections 1819 and 1919 of the Act. The regulatory
requirements are found at 42 C.F.R. Part 483. Sections
1819 and 1919 of the Act invest the Secretary with the
authority to impose CMPs against a long-term care facility
for failure by the facility to comply substantially with
participation requirements. Pursuant to the Act, the
Secretary has delegated to HCFA and the States the
authority to impose remedies against a long-term care
facility that is not complying substantially with federal
participation requirements. 42 C.F.R. Part 488 provides
that facilities which participate in Medicare may be
surveyed on behalf of HCFA by State survey agencies in
order to ascertain whether the facilities are complying with
participation requirements. 42 C.F.R. §§ 488.10 - 488.28.
The regulations contain special survey provisions for long-

App. 48

term care facilities. 42 C.F.R. §§ 488.300 - 488.325.
Under Part 488, a State or HCFA may impose a CMP
against a long-term care facility where a State survey
agency ascertains that the facility is not complying
substantially with participation requirements. 42 C.F.R. §§
488.406, 488.408, 488.430. The penalty may start accruing
as early as the date that the facility was first out of
compliance and continue until the date substantial
compliance is achieved or the provider agreement is
terminated.

The regulations specify that a CMP that is imposed
against a facility will fall into one of two broad ranges of
penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range
of CMPs, of from $3,050 per day to $10,000 per day, is
reserved for deficiencies that constitute immediate jeopardy
to a facility's residents, and, in some circumstances, for
repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1), (d)(2).
The lower range of CMPs, of from $50 per day to $3,000
per day, is reserved for deficiencies that do not constitute
immediate jeopardy, but either cause actual harm to
residents, or cause no actual harm, but have the potential
for causing more than minimal harm. 42 C.F.R.
488.438(a)(2). The terms “substantial compliance" and
"immediate jeopardy” are defined terms in the regulations
which govern participation of long-term care facilities in
Medicare. "Substantial compliance" is defined to mean: "a
level of compliance with the requirements of participation
such that any identified deficiencies pose no greater risk to
resident health or safety than the potential for causing
minimal harm." 42 C.F.R. 488.301. "Immediate
jeopardy" is defined to mean: "a situation in which the
provider's non-compliance with one or more requirements
of participation has caused, or is likely to cause, serious
injury, harm, impairment, or death to a resident." Id.

App. 49

There are additional factors which the State and
HCFA consider in determining where within a range of
penalties, once the range is established, the amount of a
CMP should be. These include the facility's: 1. history of
noncompliance, including repeated deficiencies; 2.
financial condition; and 3. culpability for the deficiencies.
42 C.F.R. 488.438(f). Additionally, the State and HCFA
may consider factors specified in 42 C.F.R. 488.404.
These include the relationship that a deficiency may have
to other deficiencies and a facility's prior history of
deficiencies. The applicable burden of proof in a CMP
case requires HCFA to prove a prima facie case that the
facility has failed to comply substantially with one or more
participation requirements. To prevail, a facility must
overcome HCFA's showing by a preponderance of the
evidence. Hillman Rehabilitation Center, DAB No. 1611
(1997); affd Hillman Rehabilitation Center v. United
States, No. 98-3789 (GEB) (D.N.J. May 13, 1999).
HCFA's determination that a deficiency constituted
immediate jeopardy must be upheld unless the facility
proves that the determination was clearly erroneous. 42
C.F.R. 498.60(c)(2); Woodstock Care Center, DAB No.
1726, at 9 (2000).

The Act and regulations make a hearing before an
Administrative Law Judge available to a long-term care
facility against whom HCFA has determined to impose a
CMP. Act, section 1128A(c); 42 C.F.R. §§ 488.408(g),
498.3(b)(12), (13). The hearing before an Administrative
Law Judge is a de novo proceeding. Anesthesiologists
Affiliated, et al., 941 F.2d 678 (8th Cir. 1991).

Issues

1. Whether Petitioner was complying substantially
with federal participation requirements on the
dates HCFA determined to impose a CMP.

2. If it is established that Petitioner was not
complying substantially with federal
participation requirements, what was the level
of non-compliance.

3. If non-compliance is established, whether the
amount of the penalty imposed by HCFA is
reasonable.

Findings and Discussion

Findings of fact and conclusions of law are stated
below in italics. They are followed by a discussion of each
finding.

1. Petitioner was not in substantial compliance
with federal participation requirements from
December 20, 1996 through April 3, 1997.

The applicable regulation at 42 C.F.R. 483.25,
entitled "Quality of care," provides: "Each resident must
receive and the facility must provide the necessary care and
services to attain or maintain the highest practicable
physical, mental, and psychosocial well-being, in
accordance with the comprehensive assessment and plan or
care." As a corollary to this overarching requirement, 42
C.F.R. 483.25(k) provides that the facility "must ensure"
that residents receive proper treatment and_care for "special
services," including: (1) tracheostomy care; (2) tracheal
suctioning; and (3) respiratory care. Below, I will discuss
examples of failures by Petitioner to comply with the
pertinent regulatory requirements mentioned above.

Resident number 10 (R10

a. Petitioner failed to implement a_ policy
concerning ventilator dependent residents, and, through its
carelessness, brought about the premature demise of R10.

App. 51

This constitutes immediate jeopardy.

State surveyor findings

The findings of the State surveyors are set forth in a
HCFA Form 2567. HCFA Ex. 1. In essence, the State
surveyors found that the staff caring for R10 "did not
follow guidelines/procedures/protocols in the provision of
respiratory care, and that lack of adherence directly caused
the death of R10." HCFA Ex. 1 at 21.

Discussion

The record shows that on December 20, 1996, R10
experienced an episode of respiratory distress and required
care. Transcript (Tr.) at 135. She was completely
dependent on a ventilator for breathing, as she could not do
so on her own. Tr. at 138. Respiratory therapists
administered oxygen to the resident using a device known
as an ambu-bag. This device allows an operator to
manually force air into the lungs in order to promptly raise
the oxygen saturation level of a resident to normal. During
the process of "ambu-bagging," a respiratory technician
disconnected the resident from the ventilator, and turned
the machine off.''! After manually elevating the resident's
oxygen saturation level, the therapist reconnected R10 to
the ventilator, but did not turn the machine back on. This
left the resident without any oxygen supply. She died as a
direct result. Tr. at 135 - 138; HCFA Ex. 12.

Ms. Patricia Benda, the Director of Nursing (DON),
was notified at home that R10 had died under questionable
circumstances. Tr. at 479 - 480. She went to the facility

. Disconnecting the resident from the ventilator is necessary for the
manual administration of oxygen, but as will be discussed later, it is not
necessary or desirable to turn the ventilator off.

App. 52

and inquired as to the facts surrounding the death of R10,
and learned that the ventilator had been turned off when
R10 was being administered respiratory therapy. Ms.
Benda was unable to obtain information as to who turned
the ventilator off from the two attending respiratory
therapists, Brenda Harris and Michael Anderson. The
latter, who was the last person in the room with the
resident, initially denied turning off the ventilator. Tr. at
480 - 482. The police were alerted and they came and took
Mr. Anderson into custody. Under police interrogation, he
stated that he "unconsciously" turned the ventilator off to
silence its alarm while Ms. Harris was in the process of
giving the resident manual respiratory therapy with an
ambu-bag. The resident was returned to stable condition
and everyone left the room. He was the last one out, and
forgot to turn the ventilator back on. HCFA Ex. 12 at 7.’

Ms. Benda testified that Petitioner had a policy to :
the effect that the ventilator was never to be turned off
unless the resident had been pronounced dead by a
physician, or two registered nurses, or transferred to a
hospital. Tr. at 484. If such a policy did exist, it appears to
be an unwritten policy because no document containing
that policy was produced at the hearing. It was not until
February 1997 that Petitioner developed a written policy
for the care and treatment of ventilator dependent residents
in respiratory distress; and it was not until the beginning of
March 1997 that, after much deliberation, the policy was
implemented. That policy, entitled "Nursing Guidelines for

> Mr. Anderson submitted his resignation shortly after this unfortunate
incident, and before Petitioner took any action against him. Ms. Harris
was terminated when it was discovered, several weeks later, that she
had falsified her respiratory therapist certificate and credentials. Tr. at
607, 302 - 304. -

App. 53

Ventilator Dependent Residents in Respiratory Distress,"
was developed in the aftermath of the tragic events of
December 20, 1996, involving R10. P. Ex. 10; Tr. at 491 -
492. The main purpose of those new guidelines was not
only to ensure proper care and treatment for ventilator
dependent residents who experienced respiratory distress,
but also to provide monitoring for those whose respiratory
distress symptoms had been relieved. Tr. at 5 10; P. Ex. 10.

Siabilized ventilator dependent residents were to be
observed by a nurse and charted every fifteen minutes for
up to an hour. The documentation would include vital
Signs, respiratory status, oxygen saturation levels, lung
sounds, ventilator settings, level of consciousness, odor,
color, and consistency of secretions, and comfort level of
the resident. Any further respiratory distress noted during
the monitoring period would warrant an immediate call to
the attending physician, and continued observation and
documentation throughout the shift, or until the resident
stabilized or was transferred to a hospital. P. Ex. 10. Ms.
Benda, the DON, agreed that the policy adopted by the
facility after the incident of December 20, 1996 embodied
good nursing practices, and that R10 should have been
monitored after apparently having been stabilized. Tr. at
502.

It is unequivocal, from the facts of this case, that
Petitioner's carelessness was the direct cause of R10's
death. Tr. at 489. The lack of due care is first evident from
the act of turning the resident's ventilator off, and then from
not monitoring the resident after she apparently had been
stabilized. As stated by Ms. Benda in her testimony, such
monitoring is good nursing practice. She testified that it
"should be done on every resident that goes into any type of
distress." Tr. at 502. Furthermore, Petitioner did not have a
written policy for the protection of ventilator dependent
residents in respiratory distress. It is evident that whatever

App. 54

non-written guidelines existed were either improperly
communicated to the attending staff or were not diligently
applied.

Resident number 126 (R126)

b. Petitioner failed to carry out the treating
physician's orders and failed to properly document R126's
medical charts. This had the potential for serious injury,
harm, impairment, or death to the resident and constitutes
immediate jeopardy.

State surveyor findings

On March 2, 1997, R126 was noted with an oxygen
saturation level (SAQ2)"? of 80%, a temperature of 100.9, a
pulse of 100, and respirations of 40. The treating physician
was called, and treatment was prescribed for immediate
administration. HCFA Ex. 1 at 22. The doctor ordered a
chest x-ray,'* start IV and antibiotics, instill blue dye into
the tube feeding,’ and elevate the head of the bed 45
degrees. There is no indication in the medical chart that
these orders were carried out, nor is there a complete
assessment of R126 as per facility guidelines. HCFA Ex. 1
at 22 - 23.

* According to the treating physician, an SAO2 ranging from 92% -
100% is considered normal, and an SAO2 of 80% is dangerously low.
Tr. at 40.

* The x-ray was aimed at determining if there were findings consistent
with pneumonia, congestive heart failure, pneumothorax, or other
abnormal lung conditions. Tr. at 32 - 33.

© A dye called methylene blue is placed into tube feedings to determine
whether food is entering the lungs. Tr. at 35.

App. 55

Discussion

Petitioner argues that R126 was admitted to the
facility in a vegetative state, and that it is reasonable to
conclude that his death was attributable to his very
precarious condition. Tr. at 760. Specifically, it asserts
that when the charge nurse noticed changes in the resident's
condition she proceeded to take proper action. She began
to monitor the resident and called the treating physician,
who prescribed a course of treatment over the phone.
Petitioner alleges that all of the doctor's orders were
complied with, even though they were not citarted. Finally,
Petitioner contends that the issue of whether the antibiotic,
Timentin,'° was administered is specious, inasmuch as Dr.
John Hardek, the treating physician, testified that it takes
24 hours for that medication to take effect. Tr. at 761 -
762.

Contrary to Petitioner's assertions, Dr. Hardek
testified that in his opinion the resident died of pneumonia
(Tr. at 47) and that, with treatment, the resident may have
recovered from the pulmonary condition. Tr. at 35. It is
Dr. Hardek's testimony that it would take time for the
antibiotic to start working. Tr. at 47. However, this fact,
rather than justifying a failure to administer it, serves to
underscore the need for its prompt administration so that its
therapeutic effects could be felt as soon as possible.

For the reasons set forth below, I find that Petitioner
was woefully inadequate in the treatment and care of R126,
in violation of 42 C.F.R. 483.25(k). Such conduct caused
or was likely to cause serious injury, harm, impairment or
death to the resident.

” Timentin is a broad spectrum antibiotic. Tr. at 33.

App. 56

The treatment and care charts for R126 do not
reflect that any of Dr. Hardek's orders, telephonically
relayed on March 2, 1997, were carried out. P. Ex. 9. It is
unknown how much time transpired from when Dr. Hardek
gave his instructions over the phone to when the resident
passed away. From the totality of the record, it is
reasonable to conclude that several hours passed. There is
an indication in the record that the treating physician gave
his orders during the morning portion of the nurse's 7:00
a.m. to 3:00 p.m. shift. Tr. at 335, 337. The progress notes
have a "12 noon" insertion as to when the resident was
found dead, but that entry is unreliable. P. Ex. 9 at 5. That
insertion appears to have been made after the fact at some
unknown date and time by the charge nurse, Ms. Tamilyn
Lawrence, whose testimony, as will be seen below, was
vague and replete with generalities.

As charge nurse, it was Ms. Lawrence's duty to
follow through with Dr. Hardek's orders. She testified that
she carried these out in the following way: "I believe we
would have gotten the Timentin started. Otherwise, I
would have called the doctor." Tr. at 342. She allegedly
asked her Assistant Director of Nursing (ADON) to help
her with the IV antibiotic, because: "I was busy doing
other things. I had asked my ADON to at least -- to help
me, and I guess we had discussed what would be better.
She went to the emergency kit or she went to get the
Timentin, and I was trying possibly to do other things,
either go and call for the chest x-ray, and I think I sent an
aide down to the kitchen to get blue dye for the tube
feeding." Tr. at 342 - 343. Additionally, she "probably"
asked the respiratory therapist to take samples for a sputum
culture. Tr. at 364."7

* While the HCFA Form 2567 does not specifically mention the
sputum culture, the medical chart shows that Dr. Hardek ordered a
sputum culture and stain. P. Ex. 9 at 7. The stain allows for immediate

App. 57

Of all the orders given by Dr. Hardek, the only one
Ms. Lawrence claimed that she did herself was the insertion
of the blue dye in the feeding tube. Surprisingly, she could
not say what the results were, nor did she make a record of
it. Tr. at 343 - 344. She claimed that she was too busy to
be able to provide for the needs of R126, but she made no
specific mention of any particular task that took precedence
over the care and treatment he required at that critical
moment. Although Ms. Lawrence allegedly asked others
for help, she could not say for certain whether the sputum
samples were taken or whether the antibiotic was given.

If Ms. Lawrence had carried out all of the treating
physician's orders herself, and had stayed by the resident's
bedside monitoring him throughout his crisis, I might be
more persuaded that there was an excuse for not
documenting the medical charts. However, the only entry
required of her was that of the administration of the blue
dye test. The ADON, who allegedly administered the
antibiotic, also failed to make an entry to that effect.
Likewise, the respiratory therapist, who supposedly took
the sputum sample, also failed to record the event. It would
have been very easy for Petitioner to produce the results of
the sputum tests and x-rays, the findings of the blue dye
test, or an entry showing the dispensing of the antibiotic.
Because it did not do any of these things, too many factors
converge to detract from Petitioner's credibility regarding
compliance with Dr. Hardek's orders.

Petitioner's argument that, even if it had fully
complied with the treating physician's orders immediately
the resident would still have died, is unavailing. A finding

detection of bacteria, and the culture is grown in a microbiology
laboratory. Tr. at 33.

App. 58

of immediate jeopardy does not hinge on a showing of a
direct causal relationship between the facility's failure to
carry out the treating physician's orders and the death of the
resident. Petitioner cannot argue that it did not immediately
carry out the treatment and care prescribed for R126
because it knew that he would soon die. It is true that
Petitioner was aware that R126 was extremely fragile and
vulnerable, but that knowledge should have served as a
catalyst for prompt and urgent action. The record presents
a picture of a lackadaisical staff, rather than a staff
aggressively treating a pneumonia that was further
aggravating the resident's already compromised health.
Even if the physician's orders had been carried out and not
charted, that alone would have placed the resident at great
risk, inasmuch as responsible and meaningful follow-up
treatment would have been at peril, absent such vital
information.

Matters are much worse here, however, in that there
is not a shred of credible evidence that R126 was
administered the treatment prescribed by his physician.
That treatment was intended to treat a pneumonia, and as
stated earlier, his treating physician identified that
condition as the cause of death. It is irrelevant, as
Petitioner argues, that R126 would have expired in spite of
treatment. Petitioner had a duty with respect to R126 to
administer the necessary care and treatment that would
further R126's well being. Far from satisfying this
requirement, Petitioner's actions, or lack thereof, had the
potential to cause serious injury, harm, impairment, or
death to the resident.

I also note that although R126 had a dangerously
low SAOQ2 level at 80%, there is no documentation that he
was suctioned or received respiratory therapy to increase
his oxygen level. Ms. Lawrence testified that she recalled
that R126 was suctioned, but had no recollection that

App. 59

ambu-bagging occurred or whether the oxygen levels on
the ventilator were increased. Treatment or monitoring
would be reflected in the progress notes or respiratory flow
sheets, she said. Yet, she admits that the records fail to
show that efforts were directed at increasing R126's SA®*
level. Tr. at 382 - 386.

Resident number 127 (R127)

c. Petitioner failed to adhere to the guidelines it
had developed in February 1997, and implemented at the
beginning of March 1997 for ventilator dependent residents
in respiratory distress by not monitoring or providing
proper follow-up assessments to R127. This had the
potential for serious injury, harm, impairment, or death to
the resident and constitutes immediate Jeopardy.

State surveyor findings

The State surveyors determined that on March 5,
1997, at 10:00 p.m., R127 was found pale, with mottled
extremities, and an SAO2 of only 75%. There was no
complete assessment of the resident, no vital signs were
taken, no follow-up assessments every 15 minutes were
done, and no physician was notified. HCFA Ex. 1 at 23.

On March 7, 1997, at an unknown time during the
7:00 a.m. to 3:00 p.m. shift, R127 was found cyanotic,
requiring emergency ambu-bagging for five minutes.
Nursing charted four follow-up notes, but only assessed
R127's color and SAQ2 levels. No vital signs or complete
assessment were noted in the resident's record, as required
by the guidelines. HCFA Ex. | at 23.

Respiratory Care made a note on March 7, 1997,
during the 7:00 a.m. to 3:00 p.m. shift, that R127 had a
total of three episodes in which the resident required
emergency bagging for 10-15 minutes and experienced
twitching and turning of her head back and forth. Her

App. 60

SAO2 dropped to 82%. There is no indication that the
treating physician was notified of the multiple episodes of
respiratory distress. HCFA Ex. 1 at 23 - 24.

Again on March 10, 1997, there is a note by
Respiratory Care, during the 7:00 a.m. to 3:00 p.m. shift,
that R127 had another episode of turning blue, yet there is
no nursing entry addressing respiratory distress and no vital
signs or assessments were charted. HCFA Ex. 1 at 24.

On March 21, 1997, at an unknown time during the
7:00 a.m. - 3:00 p.m. shift, R127 was found with mottled
legs, shaking, and SAO2 of 74%. The physician was there
and she was ambu-bagged and given Valium. No complete
assessments were done and follow-up [*25] was not
carried out as per the guidelines. HCFA Ex. | at 24.

On March 25, 1997, R127 was found to have
MRSA (methicillin-resistant staph aureus) in the sputum.
R127 was found dead at approximately 7:45 p.m. on March
27, 1997. HCFA Ex. 1 at 24.

Discussion

Dr. Alberto Saltiel, R127's treating physician and
Petitioner's medical director at the relevant time (Tr. at 62,
79), diagnosed R127 with pneumonia, and noted that she
had been experiencing episodes of respiratory distress and
convulsions. During the period preceding her death, he
gave orders aimed at making the resident comfortable.
This, he said, entailed raising the oxygen saturation level
and stopping the seizures. Specifically, Dr. Saltiel stated
that he directed that she be given respiratory therapy,
Valium, and Dilantin. Nothing was prescribed for her
pneumonia in view of her do not resuscitate (DNR) status.'*

® Dr. Saltiel lay great emphasis on R127's DNR status. I would hope
that such status is not at the root of the improper care and treatment
given to this resident.

App. 61

Tr. at 65 - 73.

Doctor Saltiel testified that R127 was admitted to
Petitioner after surgical removal of an esophageal
diverticulum. Allegedly, she was also suffering from
chronic obstructive pulmonary disease (COPD) which, in
the treating physician's opinion, was terminal.'? Doctor
Saltiel further stated that the resident's family placed her in
the nursing home for the purpose of receiving comfort care,
and that nothing was to be done to prolong her life. In spite
of that, it was Doctor Saltiel's opinion that R127 had lived
beyond expectation.”” Tr. at 64, 66.

Petitioner has presented no evidence to rebut
HCFA's assertions that it failed to follow its own policy
regarding the care and treatment of ventilator dependent
residents in respiratory distress. In this respect, Dr. Saltiel's
testimony not only confirmed the wisdom of the policy,”"
but also highlighted its ineffectual application. For
example, on March 5, 1997, R127 was noted to have a pale
color, mottled extremities, and an SAO2 of 75%.” The

'° I note, however, that COPD is not an admitting diagnosis for R127.
P. Ex. 11 at 1.

= Regarding R127's clinical picture, I rely mostly on Dr. Saltiel's
testimony inasmuch as the medical charts contain minimal charting by
Dr. Saltiel. P. Ex. 11 at 9; Tr. at 63.

'? Dr. Saltiel perceived that the policy for handling respiratory distress
residents was good. To a certain extent, however, he deferred to the
expertise of Dr. Sabbagh, whose knowledge as a specialist in
pulmonary diseases he respected. Dr. Sabbagh was Petitioner's
pulmonary specialist and he was instrumental in developing the policy
for the care and treatment of respiratory distress residents. Tr. at 121,
491.

'? It should be remembered that Dr. Hardek testified that an SAO2 of
80% was dangerously low. Tr. at 40.

App. 62

progress notes show that she was ambu-bagged for five
minutes and her SAQ2 increased to 97%. The attending
nurse noted that monitoring would continue. The record
does not indicate how the monitoring would be done, nor is
there documentation evidencing that monitoring was
performed. P. Ex. 11 at 2.

Dr. Saltiel conceded that a resident who has
experienced respiratory distress should be stabilized and
monitored to ensure that return to normal functioning has in
fact occurred. He also agreed that the guidelines for care
and treatment of respiratory distress residents adopted by
Petitioner called for monitoring every 15 minutes for a total
of one hour. Tr. at 114-115. Such monitoring, as per the
policy, encompasses vital signs, respiratory status, oxygen
saturation level, lung sounds, ventilator settings, level of
consciousness, odor, color, and consistency of secretions,
and comfort level of the resident. P. Ex. 10. Such charting
is absent from the progress notes of R127 during the
various respiratory distress events mentioned by the
surveyors in the findings noted above.

Although Dr. Saltiel appeared to recognize the
virtues of the respiratory distress guidelines, he seemed
confused regarding its application. Pertinent to this is his
distorted understanding of the requirement to monitor a
resident at 15-minute intervals for up to an hour after a —
respiratory distress event. When asked by counsel for
HCFA whether or not the facility should have monitored
R127 every 15 minutes on March 5, 1997, Dr. Saltiel
responded that the resident was monitored more often than
every 15 minutes. He added that just because the guidelines
say that monitoring should be done every 15 minutes, it
does not mean that it can't be done more often. In support
of this statement, he referred to the entry at page 2 of P. Ex.
11, where it says that the resident was ambu-bagged for
five minutes when she was found with an SAQ2 of 75%.

App. 63

Tr. at 115-116. Clearly, the intent of the guidelines is that,
after being properly stabilized, a resident should then be
monitored every 15 minutes for up to an hour. The number
of minutes during which the resident is initially oxygenated
bears no connection to the 15-minute interval monitoring
after stabilization. The logic behind the conclusion that
ambu-bagging for five minutes constitutes monitoring at
less than the 15 minute interval called for in the policy

escapes me.

Elsewhere, Dr. Saltiel testified that multiple crises
of respiratory distress do not warrant notification of the
treating physician as per the guidelines. On a personal
level, he thought it would be a matter that he would like to
be informed about. Tr. at 119. In saying this, he
overlooked the language of the Nursing Guidelines for
Ventilator Dependent Residents in Respiratory Distress.
The last paragraph of page 1 of that document states as
follows: "Any further respiratory distress will warrant an
immediate call to the attending physician and continued
observation and documentation throughout the shift, or
until the resident stabilizes or is transferred to a hospital."
P. Ex. 10 at 1.

Dr. Saltiel, as well as Ms. Carolyn Nealy, the
respiratory therapist, acknowledged that R127 experienced
multiple episodes of respiratory distress on March 7, 1997.
Tr. at 117, 455-456. Notwithstanding the unequivocal
requirement of the guidelines, Dr. Saltiel seemed unfazed
by the fact that R127, his patient, had experienced a series
of respiratory distress events on March 7, 1997, and he was
not notified. P. Ex. 11 at 3. It is not clear whether R127
experienced respiratory distress on March 10, but she did
have such an event on March 21, 1997. P. Ex. 11 at 3-4.
As with respect to the earlier dates of March 5 and 7, no
proper charting or monitoring, as required by the guidelines
for respiratory distress residents, was performed. It is

App. 64

noteworthy that the progress notes show that on March 21,
when R127 went into respiratory distress with an SAQ2 of
74%, she was ambu-bagged by the therapist. P. Ex. 11 at 4.
However, the therapist, Ms. Carolyn Nealy, testified that
when she began to ambu-bag R127, Dr. Saltiel ordered her
to stop because the resident was twitching and Dr. Saltiel
said that the ambu-bagging would not relieve the twitching.
Tr. at 462. That reasoning leaves me aghast since the
therapist was not providing relief for the twitching, but for
the respiratory distress. The incident is particularly
disturbing in light of Dr. Saltiel's testimony that the
respiratory distress caused oxygen decrease in the brain,
and that, in turn, produced the convulsive reaction. Tr. at
68. It would appear logical, then, that the convulsions or
twitching could be relieved by restoring oxygen to the brain
through ambu-bagging.

At one point in his testimony, Dr. Saltiel stated that
on March 21, 1997, R127 was treated according to the
guidelines by improving her oxygen level. That, he said,
would provide comfort for the resident. Tr. at 73. Ms.
Nealy's testimony, which I believe to be true, establishes
that what Dr. Saltiel did was make R127 suffer from lack of
oxygen. I find Dr. Saltiel's testimony at pages 68 and 69 of
the transcript, to the effect that his orders were directed at
stopping the seizures with Valium and Dilantin, consistent
with Ms. Nealy's testimony that the physician did not allow
her to provide emergency oxygen to the resident. If the
medical director had a flawed understanding of the
application of the guidelines for handling respiratory
distress residents, I am not surprised that the nurses and
respiratory therapists displayed the kind of ignorance as to
those same matters that permeate the record of this case.

I find the testimony of Ms. Joella Daniel, a

surveyor, persuasive that Petitioner failed to monitor R127
during and after episodes of respiratory distress. This is

App. 65

particularly true on March 5, 7, and 21, 1997. From Ms.
Daniels' testimony, I conclude that monitoring after ambu-
bagging at successive intervals is crucial because an
elevated SAO2 level immediately after oxygenation does
not tell the true story of oxygen levels in the blood. The
pulse, respiration, blood pressure, and temperature readings
are some of the indicators of true stabilization. A resident's
elevated SAOQ2 level immediately after ambu-bagging
could be misleading. Thus, there is a need to continue
close observation and scrutiny at successive intervals.
Accurate recording in the progress notes of indicators such
as those mentioned above will provide medical personnel
vital information for the proper care and treatment of a
respiratory distressed resident. On the other hand, the
absence of such monitoring and charting of critical data
regarding a respiratory distressed resident places that
individual at risk for serious harm or death. Tr. at 171 -
175.

Also damaging to a resident could be the failure to
notify the treating physician of such abnormalities as
repeated episodes of respiratory distress. That is precisely
what occurred on March 7, 1997. Petitioner's own policy
states that more than one episode of respiratory distress
warrants an "immediate call" to the treating physician. P.
Ex. 10. In view of this, I do not give credence to Dr.
Saltiel's testimony that repeated episodes of respiratory
distress are not unusual, and therefore, impliedly of no
serious concern. Tr. at 118-119. Ms. Daniels, on the
contrary, considered that three episodes in one shift was
Significant and should have triggered notification of the
treating physician. Tr. at 182-183. Likewise, Ms. Tamilyn
Lawrence, one of Petitioner's nurses who had worked at
Petitioner's facility since 1989, was of the opinion that
three episodes in one shift requiring emergency respiratory
care is not a common occurrence. She went on to agree

App. 66

that such a serious situation mandated adherence to the
facility's respiratory distress protocol. Tr. at 392.

On cross-examination of Ms. Daniels, counsel for
Petitioner tried to highlight that the record reflected that on
those occasions in March 1997 when R127 went into
respiratory distress, the treatment given brought about
improvement in her condition. Tr. at 244-247. However,
those references in the record indicating a positive response
to treatment are not evidence that Petitioner carried out the
assessments and monitoring at 15-minute intervals required
by the guidelines. By failing to address the issue squarely,
and pointing to irrelevant matters, Petitioner implicitly
concedes that it ignored the application of its own policy.
As stated earlier, its witnesses extolled the virtues of the
policy, but few, if any, would live by it. Lip service falls
far too short of the requirements. I find that Petitioner's
failure to properly assess and monitor R127 during and
after episodes of respiratory distress, as well as the failure
to notify the treating physician regarding repeated episodes
of respiratory distress, exposed the resident to risk of
serious injury, harm, impairment, or death.

Residents 83 and 68 (R83 & R68)

d. Petitioner failed to adhere to the guidelines it
had adopted in March 1997 for ventilator dependent
residents in respiratory distress by not monitoring or
providing proper follow-up assessments to R83 & R68.
This had the potential for serious injury, harm, impairment,
or death to the resident and constitutes immediate
jeopardy.

State surveyor findin 83

On March 23, 1997, at 8:30 a.m., R83 was found
non-responsive. SAO2 was only 75% and vital signs were
as follows: blood pressure 60/- (systolic only shown); pulse

App. 67

100; respirations 12; and temperature 98.6. R83 was ambu-
bagged and suctioned, with a large amount of thick, green-
yellow sputum received, and the treating physician was
called. The next entry was at 9:30 a.m., an hour later,
noting that R83 was responding. This entry noted blood
pressure, pulse, SAOQ2 level, and that an IV was started.
The next and final follow-up entry was not made until
12:00 p.m., and it only noted blood pressure, pulse, and
SAOZ2 level. HCFA Ex. 1 at 25-26.

Discussion

Ms. Daniels testified that on March 23, 1997, at
8:30 a.m., R83 was non-responsive to any verbal stimuli.
The blood pressure reading only registered a systolic of 60,
and the diastolic was so low that it was unobtainable. That
would be indicative, she said, of a semi-shock state, where
oxygen may not profuse throughout the body. She added
that the pulse rate was 100 and the respirations were 12.
The increased heart rate was the body's response to the lack
of oxygen. She explained that, by pumping harder and
faster, the heart tries to bring oxygen to the tissues. Tr. at
193 - 196.

The progress notes show that R83 had an SAOQ2 of
75%. From earlier references, it is known that this level of
oxygen placed the resident at great risk. He was ambu-
bagged and suctioned. The suctioning was productive of a
large amount of green-yellow sputum. HCFA Ex. 16 at 2.
The treating physician was called and orders were received.
However, the charge nurse failed to specify what those
orders were. The clinical picture presented by R83 is
obviously that of a resident in respiratory distress. The
situation should have triggered the application of the
guidelines for respiratory distressed residents. Those
guidelines had been adopted in early March 1997, and it is
evident that, on March 23, the charge n

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0746%3A2. Public record. Not legal advice.