2008 SURVEY AND ENFORCEMENT CASE LAW UPDATE
A. Introduction
For the past several years, this paper and session have been structured principally as editorial commentary on the vagaries of the nursing facility enforcement process. This year, the authors set forth a more straightforward review of the year’s enforcement case law.
But that is not to say that the year’s developments have been even-handed. Consider the following statistic: In 2005, the Administrative Law Judges of the Department of Health and Human Services Departmental Appeals Board (“DAB” or “the Board”) rendered 36 reported decisions on the merits of appeals in which nursing facilities challenged survey and enforcement sanction (i.e., not including dismissals in cases where CMS had withdrawn remedies, untimely filings, and the like) – 24 sustained deficiencies and sanctions, and 12 were in favor of facilities, which was the rough ratio for previous years. Fast forward to 2007: As of the date this paper was prepared in early January, 2008, ALJs have rendered at least 48 decisions on the merits in nursing facility appeals during 2007 – 44 sustained sanctions, and only 4 favored facilities. That is a reduction in the facility success rate of about 75%. At the Board level, the contrast is even more striking – in 2007 the Board rendered 18 decisions sustaining all sanctions, and 0 in favor of facilities.[1]
Many of these rulings address fact patterns that are very difficult to overcome, e.g., elopements, skin breakdowns, medication errors, etc. But what is most striking about many decisions is the extent to which the Board has become almost entirely result oriented. As is discussed below, during 2007 some ALJs have been very direct in making clear that they will “presume” that CMS’ allegations and sanctions are proper – and thereby will give little if any weight to a petitioner/facility’s evidence. In some cases, ALJs will discover deficiencies and sustain sanctions on grounds CMS never asserted in any Statement of Deficiencies, notice or argument. In one case, an ALJ even denied a CMS Motion for Summary Judgment, but then suggested an alternative basis for liability and sustained the Motion on the ground that she suggested in the first instance, on the premise that an ALJ’s review of the record is “de novo.”[2]
In 2006 the Board expressly stated that it does not see its role as similar to “the oversight role of a federal appeals court reviewing agency decisions to determine if an adequate basis is articulated,” that it does not believe it is bound by the Administrative Procedure Act’s “adjudication” provisions, and it perceives itself simply as the final step in “formulating final agency action”[3] During 2007 the Board extrapolated from this premise to loosen, if not abandon entirely, the requirement that ALJs search the record for evidentiary support for sanctions (under either a “preponderance of the evidence” or “substantial evidence” standard, or otherwise). Instead, the Board has allowed, if not encouraged, ALJs to “infer” from CMS’ allegations the basis for the underlying deficiencies themselves, or even to “presume” the existence of noncompliance in some circumstances. Indeed, in 2007 the Board even rendered a decision in which it “inferred” CMS’ authority over activities not specifically set forth in the Long Term Care Requirements of Participation.[4] Thus, for example, during 2007 the Board has applied this theory to reinforce its past rulings that allow ALJs to “presume” the existence of “immediate jeopardy” where CMS so alleges (even if not cited by the state survey agency), or the continuation of noncompliance that supports a “per diem” civil monetary penalty long beyond the operative facts.
In the paper for this session last year, we noted that in just one year the Board had moved away from the notion that enforcement actions should be based on clearly stated legal standards; that precedential decisions are useful to provide notice of such standards to regulated entities; and that specific enforcement decisions may be challenged by appropriate evidence, arranged according to traditional concepts of reasonably articulable “elements.” Those principles are the traditional foundations of administrative law and due process. Today, the Board (like some other governmental agencies and officials) appears to believe that such traditional principles are quaint and outdated to the extent that they hinder its enforcement activities. In several court appeals this year, CMS has asserted that the importance of its enforcement activities requires suspension or replacement of such principles in the interest of assuring swift and certain punishment for perceived unlawful acts and omissions by caregivers. As discussed below, this notion is reflected in the result-oriented nature of enforcement procedures and decisions.
B. DAB Basics
It is important for counsel advising a client regarding DAB matters to recognize the peculiarities of the process. First, the Board has almost no useful procedural rules; instead, each ALJ has his or her own procedures and methods of reviewing evidence. For example, two ALJs require submission of written direct testimony far in advance of a hearing, thereby essentially freezing the petitioner/facility’s evidence and argument (even while the Board freely permits CMS to change its allegations, and even though the facility ostensibly has the burden of proof to demonstrate compliance in the face of CMS’ allegations). Thus, some ALJs in effect require petitioners to anticipate any argument or evidence CMS might advance in support of its position.[5] Counsel also must recognize that the Board does not consider its decisions to be “precedential,” and ALJs frequently render conflicting decisions on the most basic procedural issues – and also clinical issues.[6] Thus, we outline certain basics:
When CMS imposes a remedy, the threshold issue counsel faces is whether to recommend that the client file an appeal to the DAB.[7] There are several procedural issues that counsel and clients must consider.
First, there are significant substantive limits on appeals. According to 42 C.F.R. § 489.3, CMS must offer a facility the opportunity to appeal a finding of noncompliance that results in the imposition of any enforcement remedy. This substantive limit continues to bedevil providers, as the Board does not apply the regulation literally. Many Board and ALJ decisions make clear that the Board interprets this regulation to mean that facilities may appeal only remedies, and not the findings of noncompliance or deficiencies themselves. The effect of this narrowing of the regulation is that if CMS only proposes – or even imposes and then withdraws – a remedy, then there is no right to appeal even the most egregiously erroneous or inappropriate citation.[8]
Likewise, the Board consistently holds that its ALJs have very limited authority even within the cases they may accept. In essence, they may find that there is or is not factual or legal support for a deficiency and remedy (or, conversely, that a facility actually was in substantial compliance at the time of a survey), and that is it. They do not have the authority to enter stays or injunctions against the effectiveness of remedies[9]; to consider issues not specifically enumerated in 42 C.F.R. § 489.3; to review CMS’ choice of remedy (i.e., an ALJ cannot decide that a deficiency exists but warrants only a CMP and not termination)[10]; to review CMS’ interpretation of its regulations (even if obviously wrong); to review a SSA’s or CMS’ survey procedures (even egregious noncompliance with the procedures set forth in CMS’ “State Operations Manual”); or to review CMS’ failure to promulgate its survey and enforcement policies via the “notice and comment” provisions of the APA.[11] Several recent cases have held that an ALJ may not review loss of a facility’s nurse aide training and competency evaluation program (“NATCEP”) unless the facility actually was operating such a program at the time of the survey and appeal (even though the regulation specifically makes loss of NATCEP reviewable).[12] And a recent case holds that notwithstanding the explicit provision of the regulation that allows a challenge to a finding of “substandard quality of care,” an ALJ has no jurisdiction to review the “severity” of a citation, if the only pertinent remedy is a “per instance” CMP, the amount of which does not depend on the level of “severity.”[13]
Second, 42 C.F.R. § 498.40(a) provides that the facility must file its Request for Hearing within 60 days after receipt of the CMS (or SSA) Notice imposing a remedy – not within 60 days after the effective date of the remedy. ALJs routinely dismiss cases where the facility fails timely to request a hearing, and does not make a sufficient showing of “good cause” to extend the 60-day period. However, the Board recently conceded that it never has defined “good cause.”[14] So far as we can tell, there never has been a case where an ALJ has found that any circumstance constitutes “good cause” for extending the filing deadline.
Third, 42 C.F.R. § 498.40(b) provides that a Request for Hearing must “identify the specific issues, and the findings of fact and conclusions of law with which the [facility] disagrees, [and must] specify the basis for contending that the findings and conclusions are incorrect.” CMS takes the very strong position that the Request for Hearing must set forth in considerable detail the precise basis for the facility’s case, i.e., its factual disagreement with each cited deficiency that supports the remedy. The most recent Board cases on point suggest that an ALJ should consider extenuating circumstances prior to dismissing an appeal, and whether “defects in the initial request for hearing were, in effect, subsequently remedied by submission of additional documents.”[15] In general, ALJs are ruling that the Request for Hearing must, at a minimum, describe the specific survey or surveys the facility is disputing; the specific deficiencies and remedies being appealed; and at least an outline of the factual and/or legal reasons why the facility thinks the remedy is inappropriate.[16] Thus, even though it may be many months before an appeal gets to a hearing, it usually is necessary to conduct an investigation and to prepare potential witnesses and documentary exhibits very early in a case -- perhaps even at the same time the facility continues to implement corrective action and to prepare for a follow-up survey -- in order to draft an effective Request for Hearing.
Fourth, CMS has considerable latitude to amend or add new factual allegations, revise a Statement of Deficiencies, and even modify (including increase) remedies during the pendency of an appeal, so long as (at least in theory) the agency provides sufficient notice prior to the hearing so that the facility can prepare and offer a defense.[17] Numerous cases disregard technical defenses relating to the purported inadequacy of notice of exactly what deficiency is being alleged. Once an appeal is filed, CMS sends the file to an HHS attorney in one of the ten HHS regional offices for review and case preparation, and some of these attorneys are fairly experienced in nursing facility cases, and can spot and repair flaws in an SSA’s preparation of the Statement of Deficiencies, or CMS’ imposition of a remedy.
Fifth, numerous cases hold that CMS may be entitled to summary adjudication where the facility has not appealed all deficiencies within the “range” of the CMP at issue (i.e., all “non-jeopardy” deficiencies).[18] CMS usually does not assign specific dollar amounts or portions of “per diem” CMPs to specific deficiencies, so unless the facility appeals each deficiency that could support the CMP, CMS will argue, and an ALJ will agree, that CMS is entitled to summary disposition of the appeal on the ground that any unappealed deficiency could support the entire CMP.[19]
Finally, Counsel should be aware that the Board never has clearly addressed the role that CMS’ “Interpretive Guidelines” to the Long Term Care Requirements of Participation play in enforcement proceedings. At least in theory, CMS’ “State Operations Manual” (“SOM”), which includes both CMS’ survey procedures, as well as its substantive Interpretive Guidelines, has no binding effect at all (at least as to facilities), since it has not been promulgated according to the notice and comment provisions of the APA. While some ALJs make clear that they will not use the Interpretive Guidelines for any purpose, the Board itself at least occasionally refers to its substantive provisions as authoritative interpretations of the regulations. At the same time, CMS frequently confuses matters by arguing that the SOM is not binding, or even pertinent, where, for example, a state survey agency fails to follow proper survey procedures, or a petitioner is arguing that a particular practice does not violate, or even is consistent with, an interpretive guideline.
Counsel should note that on December 28, 2007 CMS published a notice in the Federal Register proposing adoption of a regulation that would allow the Secretary to review (and presumably overturn) any ALJ or DAB Decision where he asserts as “error in the application of law or published guidance.” HHS asserted that current hearing procedures “do not provide sufficient safeguards to ensure that decisions accurately reflect the considered views of the secretary.”[20] It is not clear whether this proposal simply would clarify the Secretary’s ultimate authority over his Board, whether it is intended to enforce consistency (one would think his direct control over CMS could do that), whether the Secretary would use such review as a shortcut to imposing procedural regularity, whether the Secretary simply will reverse even those few decisions in favor of facilities, or even whether the Secretary is concerned with the result-oriented jurisprudence illustrated by the Board’s recent decisions.
C. The Board’s 2007 Cases
There now are well over 300 ALJ Decisions, and at least 60 Board Decisions, in nursing home appeals, but the rules that govern ALJ and Board decisionmaking are murkier than ever.
As noted above, the Board held in 2006 that it does not see its role as similar to “the oversight role of a federal appeals court reviewing agency decisions to determine if an adequate basis is articulated,” that it does not believe it is bound by the Administrative Procedure Act’s “adjudication” provisions, and it perceives itself simply as the final step in “formulating final agency action”[21] This position – which arguably is inconsistent with the adjudication provisions of the Administrative Procedure Act – has important consequences.[22]
In considering the Board’s decisions that address its own standards for decision, keep in mind, as noted above, that the Board’s regulations allow appeals only of “findings of noncompliance that result in the imposition of remedies.” In fact, the Board and its ALJs routinely hold that they are evaluating only whether support for an imposed sanction exists, and not necessarily the validity of the allegations of noncompliance themselves.
But the Board’s rationale in support of this result has been inconsistent in its 2007 decisions. The Board has held many times that CMS has at least some burden to establish a “prima facie case” of noncompliance in its proceedings.[23] This principle flows from the requirement in the APA that the “proponent of a rule or order” bears the burden to sustain that order.[24] The typical formulation of this rule, advanced in many administrative law contexts, is that the agency bears some burden to offer a “prima facie case” in support of its action; that once the agency does so, the burden of proceeding shifts to the party opposing the order to offer evidence; that the “standard of proof” is “preponderance of evidence on the record;” and that if the agency “fails to offer evidence on each element of a claim, then the preponderance of the evidence rule cannot be satisfied.”[25]
The Board’s guidance in its 2007 decisions regarding the content of such a “prima facie case,” and CMS’ obligation to offer any evidence at all in support of certain determinations, has been extremely unclear, and even contradictory:
• As noted above, the Board has held (and has argued in several recent court cases) that it is not bound by the APA standards for adjudications.[26]
• Thus, the Board holds – contrary to the express provisions of the APA – that CMS does not have the burden to sustain a sanction, but rather that the burden falls entirely on a facility challenging CMS action to demonstrate “compliance.”[27]
• In 2007, the Board has taken this result even further, holding that where CMS alleges that a deficiency constitutes “immediate jeopardy,” CMS not only has no burden whatsoever to support that determination, but that the enforcement regulations prohibit CMS even from offering evidence to support it; according to the Board, CMS’ regulations provide that an “immediate jeopardy” determination must be upheld unless “clearly erroneous,” which implies that there is a presumption in its favor, and that the facility bears the burden to overcome this presumption.[28]
• 2007 cases indicate that ALJs are applying this rule to find a “presumption” in favor of the merits of any “immediate jeopardy” citation as well.[29]
• And this result follows the Board’s 2006 decisions that “immediate jeopardy” no longer is limited to cases where (as the pertinent regulation recites by its terms) an actual resident is “likely” to suffer serious harm or death. Instead, the Board now will uphold such a finding (and the associated enhanced “remedy”) if the cited deficiency is of the “generic type” that could cause some hypothetical resident such harm, even if the evidence shows that no resident of the cited facility ever was exposed to such a “likelihood.”[30]
• Similarly, the Board suggested for the first time in 2007 that at least some of the “Requirements of Participation” do impose strict liability, even for circumstances beyond a facility’s control.[31]
• The Board also has reinforced, and its ALJs routinely hold, that the Statement of Deficiencies is “evidence” that, unless rebutted, is sufficient to sustain a sanction.[32] This position plainly is contrary to traditional administrative law principles.[33]
• Some ALJs have become so hostile to nursing facility evidence and arguments that they will sustain deficiencies based only on the allegations in a Statement of Deficiencies even where the facility does rebut such allegations (where the ALJ finds the rebuttal “unpersuasive”).[34]
• The Board has held that it may reverse, sua sponte, an ALJ decision that the evidence in a particular case does not constitute a deficiency, even where that decision was based on the ALJ’s finding that CMS offered no evidence to support such a conclusion.[35]
• The corollary to this result is that the Board has held that any single deficiency can support any civil monetary penalty CMS imposes (within an “immediate jeopardy” or “non-immediate jeopardy” range); thus, the Board may reverse an ALJ if he or she reduces a CMP, even where he or she finds that the evidence does not support all of the cited deficiencies.[36]
• Similarly, the Board routinely holds that it and its ALJs need not even address all of the cited (or appealed) deficiencies in order to sustain a sanction.[37] In other words, in a case where CMS based a sanction upon, say, six deficiencies, and the facility offers evidence that rebuts five, the Board allows ALJs to disregard such evidence and sustain the sanction in its entirely based on the sixth deficiency.
• During 2007, at least some ALJs have taken this result even further, and have sustained sanctions on completely different grounds than CMS cited or pressed during the appeal, on the notion that their reviews are “de novo,” not in the customary sense of a reviewing court taking a fresh look at the evidence or legal argument, but rather in the sense that an ALJ may sustain a deficiency on grounds he or she first identifies during a hearing.[38]
• In one 2007 case, an ALJ actually denied CMS’ Motion for Summary Judgment (based on CMS’ allegations); suggested sua sponte an alternative basis for the sanction CMS had imposed (i.e., different deficiencies based on her understanding of the facts); and then granted a renewed Motion for Summary Judgment based on the citations she herself had suggested.[39]
• In numerous other cases, ALJs have sustained sanctions based upon their own interpretation of the evidence, even though CMS or its witnesses did not offer that interpretation. The reach of this notion of “de novo” review is now on appeal to the Circuit Courts in several cases.
• In 2007, the Board also specifically held for the first time that CMS may impose “immediate jeopardy” sanctions even where the State Survey Agency did not cite any deficiencies at that level of “severity.”[40] At least in theory, this result is consistent with 42 C.F.R. §§ 488.402(e) and 488.452, which essentially provide that where CMS and the SSA differ in their application of the enforcement regulation, the agency that wants to impose the harsher penalty prevails.
• However, when combined with the lowered standard of proof for “immediate jeopardy” sanctions, the effect has been to allow any citation potentially to support enhanced sanctions.[41]
• Finally, during 2007 the Board has made clear that it will apply a “presumption” that any remedy is proper, specifically that any “per diem” CMP extends as long as CMS alleges, even in the absence of any evidence of continuing noncompliance.[42]
D. 2007 Court Developments
The foregoing developments at the Board have resulted in a resurgence of court actions relating to nursing facility appeals. In fact, as discussed in the next section, prudent counsel will structure DAB appeals with subsequent court action in mind (and accordingly will warn clients that the road to “appeal” may thus be longer).
Counsel should be aware of two recent developments: First, the return of requests for injunctions against terminations; and, second, a substantial increase in the number of DAB decisions being appealed to court.
Injunctions
Those with long memories will recall the flurry of injunction cases in the late 1990s, in which about twenty nursing facilities facing termination from the Medicare and Medicaid Programs sought – and many obtained – federal court temporary restraining orders and preliminary injunctions against such actions, notwithstanding the “exhaustion” requirements of the Medicare Act.[43] The basic fact pattern of the successful cases was similar – a nursing facility was facing “non-immediate jeopardy” termination (typically at the end of the six months statutory period); argued that the plain language of the nursing facility enforcement provisions of the Medicare Act reserved termination only to “immediate jeopardy” situations; showed that an administrative hearing could not be completed in time to prevent irreparable injury; and offered evidence of “transfer trauma” to residents as a public policy reason to avoid hasty termination and to preserve the status quo. (The fact that one of the first plaintiffs ultimately was successful in its DAB challenge to its termination greatly helped this argument.[44]) While a detailed review of the jurisprudence is beyond the scope of this paper, the late-90's successful TRO/PI litigants convinced a number of District Judges (none of the cases ever reached the Circuit Court) that their claims for relief were “collateral” to “claims for benefits” within the meaning of the then-controlling Supreme Court decisions. But this crack in the “exhaustion” door effectively slammed closed in 2000 with the Supreme Court’s Decision in Illinois Council on Long Term Care, Inc. v. Shalala, 529 U.S. 1 (2000), which held that the Medicare Act requires that virtually all claims of any sort must be “channeled” through the administrative review process.[45] Subsequent court cases confirmed the reach of this principle, and nursing facilities sought very few such injunctions in the next few years.[46]
During 2007, several cases seeking injunctions against terminations have been filed in federal court. At least two have been dismissed under the authority of Illinois Council.[47] However, in one case, a court did enjoin a termination, although the court’s decision does not even mention Illinois Council.[48] The authors have found news reports of at least one other temporary restraining order in a termination case, although subsequent news reports indicate that the facility in question, located in Kentucky, was terminated within a few weeks thereafter, which suggests that no preliminary injunction was issued.
Appeals On The Merits
During 2007, at least half a dozen DAB decisions have been appealed to the courts on the merits. The Medicare Act sets up a bifurcated appeal system, where appeals of civil monetary penalties are to the Courts of Appeals under 42 U.S.C. § 1395i-3 (h)(2)(B)(ii), which incorporates certain procedural provisions of 42 U.S.C. § 1320a; and appeals of all other remedies, including terminations, are to the District Court under 42 U.S.C. § 405(g).
So far as we can tell, no court has set aside a DAB Decision in the merits, although there have been some decisions in favor of facilities on procedural issues.[49] For example, a 2004 Sixth Circuit decision held that the DAB may not use summary proceedings in cases in which material facts are at issue,[50] and a 2007 District Court decision indicates that CMS’ notice requirements will be enforced strictly.[51]
Counsel should note that in some – but not all – judicial appeals of CMPs, CMS takes the position that it may recoup a CMP from a facility’s Medicare reimbursement during the pendency of a judicial appeal. 42 U.S.C. § 1395i-3(h)(2)(B) specifically withholds such authority from CMS “during the pendency of any hearing,” and 42 C.F.R. § 488.442 provides that CMS may not collect a nursing facility CMP pending an administrative hearing. However, CMS has argued in at least two cases this year in which appellants sought stays of collection from the Fourth Circuit Court of Appeals that the legislative history of Section 1320a (which governs fraud and abuse penalties) provides that CMPs may be collected during judicial appeals. In both cases, the Court denied the petitioner’s motions without addressing either party’s substantive arguments (although it noted in one order that CMS could substitute a bond for recoupment if appropriate).[52]
E. Guidance To Counsel
The DAB process never has been an efficient means for a nursing facility to defend itself against inaccurate, exaggerated or inappropriate allegations or sanctions. In 2007, it plainly has proven to be completely ineffective for those purposes. In the absence of reform of the process – an obvious “fix” would be a clear judicial statement that ordinary APA standards of burden of proof, substantial evidence, etc., apply – counsel must consider not only the efficacy of the process, but also potential alternatives.
First, as noted above, counsel should presume that exhaustion of the DAB process is a prerequisite to any federal court appeal, so the reality is that even though the DAB process may be lengthy and expensive, it may not be possible to avoid.
Second, while the “informal dispute resolution” (“IDR”) process remains problematic in many states, some states are reforming the process and moving toward independent or quasi-independent decisionmakers. While such systems are not perfect (in some states the survey agency routinely overturns or ignores such “independent” recommendations to set aside deficiencies), many such independent fact-finders do not accept surveyor assertions or opinions at face value, and do insist upon clinical evidence to support a surveyor’s judgment, and some demonstration of a cause and effect relationship between some alleged act or omission and some specific adverse outcome. In some states, the independent decisionmakers are reasonably sophisticated, and will consider expert evidence and opinion, and even some debate with surveyors regarding clinical issues. Third, in setting up DAB cases for potential judicial appeals, it is more important than ever to select cases carefully, offer detailed clinical evidence, and preserve all procedural and legal issues. The DAB website is easily accessible, and even cursory research will illustrate that certain fact patterns or types of cases are “dead duck losers.” While there are older cases that illustrate facility successes defeating most types of citations, the reality, as discussed above, is that ALJs impose near-strict liability in certain cases. For example, even though the Board has held many times that the “supervision” and “accidents” regulation incorporates a “rule of reason” and does not impose strict liability for “unforeseeable” events, the reality is that ALJs routinely sustain deficiencies where residents elope, are injured, etc., pretty much irrespective of the facility’s fault.[53]
To date, many of the DAB judges, and the Board itself, generally are immune to detailed clinical evidence of the sort that is common in civil cases. The typical DAB hearing is very short – most ALJs schedule only a day or two – and some ALJs feel free to substitute their opinions on clinical issues for those of witnesses. Moreover, the Federal Rules of Evidence do not directly apply in DAB proceedings, and every ALJ allows surveyors to opine on the matters they cite, whether or not they have any pertinent training or experience. In addition, CMS tends to use “all purpose” academic experts at hearings who are paid simply to opine that the facility is wrong, the deficiency represents the worst thing he or she ever has seen, etc.[54] Thus, the general standard of “fact-finding” before the DAB is far looser than would be acceptable in a court of law, and there are many, many reported ALJ and Board decisions where one would be hard pressed to tell from the report that the petitioner even had offered any clinical evidence at all.
Nevertheless, some petitioners are getting better about articulating the “standard of care” in terms of the “expected outcome” in a particular situation, and then defending the nursing staff’s professional judgments in that context. A very few recent ALJ decisions do respect such evidence, and, if a court so requires, one would hope that these cases become more common.[55]
Finally, most counsel are extremely reluctant to request the intervention of elected officials in enforcement matters, and elected officials understandably are reluctant to do so. However, CMS imposes sanctions largely by rote, and generally gives no weight to the adverse impact of a facility termination or closure on a local community.[56] Thus, there have been a handful of occasions during 2007 where elected officials have intervened to request, with varying degrees of firmness, that CMS settle or resolve cases on reasonable terms where there is a legitimate fear of closure, and/or the facility is well-known in the community as a quality provider.
Conclusion
The DAB process illustrates all of the flaws of the current survey and enforcement process – it is subjective, inconsistent, inaccurate, and ultimately not even successful on its own terms. Indeed, the sheer number of appeals that continue to be filed even in the face of the decisions discussed above – several hundred per year – testify to the frustration of the regulated entities. In short, the system begs for reform, and the pertinent question is whether such reform ultimately will be imposed by a judge who is offended by some excess, or by the agency deciding that its administrative processes ought to be directed by the Administrative Procedure Act, even if that result means that some petitioners might “win” a few appeals.
[1] Most, but not all, DAB and ALJ Decisions are available on the DAB’s website, www.hhs.gov/dab. The CCH Medicare and Medicaid Guide publishes some, but not all, decisions, usually a few weeks after release. In addition, some commercial services such as WestLaw publish DAB decisions.
[2] See Jennifer Matthew Nursing and Rehab Center v. CMS, ALJ Dec. No. CR1717 (2007). See also Brightview Care Center v. CMS, DAB Dec. No. 2132 (2007), reported at CCH Medicare and Medicaid Guide ¶ 121,252, finding that the ALJ improperly had applied the standard for summary disposition, but nevertheless sustaining the cited deficiencies and remedies based on “de novo” review.
[3] Cal Turner Extended Care Pavilion v. CMS, DAB Dec. No. 2030 (2006), CCH Medicare and Medicaid Guide ¶ 120,975. In Batavia Nursing and Convalescent Center v. CMS, DAB Dec. No. 1911 (2004), CCH Medicare and Medicaid Guide ¶ 120,589, the Board first held that it is not bound by the APA’s requirements, and could create a “standard of review” that assigns the “burden of proof” to a petitioner challenging a CMS enforcement action. The Sixth Circuit Court of Appeals held in Batavia (and has held in many subsequent cases) that it could affirm the result in that particular case under any notion of burden of proof, but that “eventually” it would have to address the issue. See Batavia Nursing and Convalescent Center v. Thompson, 129 Fed. Appx. 181, 184 (6th Cir. 2005); Sanctuary at Whispering Meadows v. Thompson, No. 04-3989 (6th Cir. 2005).
[4] See Liberty Nursing and Rehabilitation - Mecklenburg County v. CMS, DAB Dec. No. 2095 (2007); SunBridge Care and Rehabilitation for Pembroke, ALJ Dec. No. CR1636 (2007), CCH Medicare and Medicaid Guide ¶ 121,215 (both cases “inferred” CMS authority to regulate operation of facility vans; the former is on appeal to the Fourth Circuit Court of Appeals).
[5] This extraordinary doctrine plainly violates the Administrative Procedure Act and is being challenged directly in a pending court appeal, Liberty Commons Nursing and Rehab Center - Alamance v. Leavitt, No. 07-1329 (4th Cir.). In that case, which will be argued in the Spring of 2008, the ALJ twice denied the petitioner’s motions to supplement its evidence to address new arguments CMS first raised after the petitioner filed its written testimony, and the Board disregarded the issue in its review.
[6] Several recent cases illustrate the point. In Liberty Commons Nursing and Rehabilitation Center - Mecklenburg County v. CMS, DAB Dec. No. 2095 (2007), the Board sustained an large CMP where an ALJ held that the “accident hazards” regulation prohibited use of supplemental wheelchair restraints in vans; only a few months later, a different ALJ sustained a large CMP where a different survey team from the same state required exactly the same practice. See SunBridge Care and Rehabilitation for Pembroke v. CMS, ALJ Dec. No. CR1636 (2007), CCH Medicare and Medicaid Guide ¶ 121,215. The former case is on appeal to the Fourth Circuit, No. 07-1667, and the latter case is on appeal to the Board. There are many similar examples. For example, in Atlantic Rehab and Nursing Center v. CMS, ALJ Dec. No. CR1230 (2004), an ALJ held that the standard of care for performing the Heimlich maneuver was confirmed “complete tracheal obstruction.” In Jennifer Matthew Nursing and Rehab Center v. CMS, ALJ Dec. No. CR1717 (2007), CMS asked a different ALJ to find that the applicable standard of care is suspected partial obstruction in order to sustain the sanction in that case, and the ALJ sustained an immediate jeopardy deficiency on the ground that the facility staff did not administer the Heimlich maneuver upon suspicion that a resident may have been choking. To date, the Board has been completely indifferent to the confusion such conflicting result-oriented decisions cause.
[7] Under 42 C.F.R. § 498.3, a nursing facility may appeal a finding of noncompliance that results in imposition of a federal remedy. CMS itself imposes the vast majority of such remedies, typically in a Notice that specifically sets forth this appeal right. A state survey agency’s (“SSA”) recommendation that CMS impose a remedy does not trigger DAB appeal rights. However, CMS has delegated to SSAs the right to impose the federal denial of payment for new admissions (“DPNA”) remedy, and so if the SSA does so, that remedy may be appealed to the DAB (and it is receipt of the SSA Notice in such a case that triggers the 60 day period to file the Request for Hearing, at least as to that remedy). A SSA Notice imposing a federal DPNA will include a description of federal appeal rights.
[8] There are several dozen reported cases illustrating this point, including six more in 2007. See Sunset Villa v. CMS, ALJ Dec. No. CR1683 (2007); Gulf Pointe Specialty Hospital v. CMS, ALJ Dec. No. CR1651 (2007), CCH Medicare and Medicaid Guide ¶ 121,229; Grace Care Center v. CMS, ALJ Dec. No. CR1647 (2007), CCH Medicare and Medicaid Guide ¶ 121,227; Colonial Oaks Guest Care Center v. CMS, ALJ Dec. No. CR1618 (2007); Corpus Christi Nursing and Rehab Center v. CMS, ALJ Dec. No. CR1616 (2007); Twin Pines Nursing and Rehab v. CMS, ALJ Dec. No. CR1601 (2007), CCH Medicare and Medicaid Guide ¶ 121,157. Typical fact patterns are illustrated cases such as Fountain Lake Health and Rehabilitation Center v, CMS, DAB Dec. No. 1985 (2005), CCH Medicare and Medicare Guide, ¶120,826 (no right to hearing where CMS withdraws CMP; there are many similar cases, even where CMS withdraws the remedy during the course of the appeal); Heritage Manor of Franklinton v. HCFA, ALJ Dec. No. CR666 (2000), CCH Medicare and Medicaid Guide ¶ 120,132; (no right to hearing where CMS withdraws termination action); Arcadia Acres, Inc. v. HCFA, DAB Dec. No. 1607 (1997), CCH Medicare and Medicaid Guide ¶ 45,140 (same; denial of payment for new admissions).
[9] See, e.g., Palm Grove Convalescent Center v. HCFA, ALJ Docket No. C-99-12 (1999) (unreported).
[10] See, e.g., Beverly Health and Rehabilitation Center v. HCFA, DAB Dec. No. 1696 (1999), CCH Medicare and Medicaid Guide ¶ 120,065 (ALJ has no authority to decide whether termination of participation is an appropriate remedy); Aase Haugen Homes, Inc. v. CMS, ALJ Dec. No. CR1273 (2005), CCH Medicare and Medicaid Guide ¶ 120,746 (no authority to review choice of per instance CMP as remedy).
[11] See, e.g., Orchard Grove Extended Care Center v. HCFA, ALJ Dec. No. CR541 (1998), CCH Medicare and Medicaid Guide ¶120,006; Green Oaks Hospital v. CMS, ALJ Dec. No. CR861 (2002).
[12] See, e.g., Evergreen Common v. CMS, ALJ Dec. No. CR1684 (2007); The Oaks v. CMS, ALJ Dec. No. CR1274 (2005), CCH Medicare and Medicaid Guide ¶ 120,744; Briarcliff Manor Nursing and Rehabilitation Center v. CMS, ALJ Dec. No. CR1228 (2004), CCH Medicare and Medicaid Guide ¶ 120,711.
[13] See Evergreen Common v. CMS, ALJ Dec. No. CR1684 (2007).
[14] See Brookside Rehabilitation and Care Center v, CMS, DAB Dec. No. 1094 (2007), now on appeal to the Fourth Circuit. See also, e.g., Maitland Health Care Center v. CMS, ALJ Dec. No. CR1642 (2007), CCH Medicare and Medicaid Guide ¶ 121,224; Knox County Nursing Home, ALJ Dec. No. CR1588 (2007); Casa del Sol Senior Care Center v. CMS, ALJ Dec. No. 1418 (2006); Cary Health and Rehabilitation Center v. HCFA, ALJ Dec. No. CR685 (2000), CCH Medicare and Medicaid Guide ¶ 120,155; aff’d, DAB Dec. No. 1771 (2001), CCH Medicare and Medicaid Guide ¶ 120,222. So far as the authors can tell, the only cases in which the Board ever has extended a filing deadline involve purely procedural matters, such as where an ALJ was considering a Motion to Reopen his decision, and CMS did not oppose extending the appeal deadline until after the ALJ decided the motion.
[15] See Care Inn of Gladewater v. HCFA, DAB Dec. No. 1680 (1999), CCH Medicare and Medicaid Guide ¶ 120,041; see also Fairview Nursing Plaza, Inc. v. HCFA, DAB Dec. No. 1715 (2000) CCH Medicare and Medicaid Guide ¶ 120,121; Birchwood Manor Nursing Center v. HCFA, DAB Dec. No. 1669 (1998), CCH Medicare and Medicaid Guide ¶ 120,023. Beware of reliance on older ALJ and Board decisions predating Fairview Plaza.
[16] See, e.g., Signet Health and Rehab. Center v. CMS, ALJ Dec. No. CR 1096 (2003), CCH Medicare and Medicaid Guide ¶ 120,568 (summary disposition appropriate where facility did not dispute any of CMS’ fact allegations).
[17] See, e.g., Britthaven of Goldsboro v. CMS, DAB Dec. No. 1960 (2005), CCH Medicare and Medicaid Guide ¶ 120,749; Liberty Commons Nursing and Rehab – Alamance v, CMS, ALJ Dec. No. CR1427 (2006), CCH Medicare and Medicaid Guide ¶ 120,914, aff’d, DAB Dec. No. 2070 (2007).
[18] See, e.g., Tyson Health and Rehabilitation Center v. CMS, ALJ Dec. No. CR1193 (2004), CCH Medicare and Medicaid Guide ¶ 120,672.
[19] CMS sometimes, but not always, assigns “per instance” CMPs to specific deficiencies; thus, at least in theory, if CMS breaks the per instance CMP into specific parts assigned to specific deficiencies, the facility should be able to appeal some, but not all of the CMPs.
[20] 72 Fed. Reg. 73708 (Dec. 28, 2007). The Secretary noted that he would accept comments through January 28, 2008, so the rule may have been adopted by the time of this conference.
[21] Cal Turner Extended Care Pavilion v. CMS, DAB Dec. No. 2030 (2006), CCH Medicare and Medicaid Guide ¶ 120,975. In Batavia Nursing and Convalescent Center v. CMS, DAB Dec. No. 1911 (2004), CCH Medicare and Medicaid Guide ¶ 120,589, the Board held that it is not bound by the APA’s requirements, and could create a “standard of review” that assigns the “burden of proof” to a petitioner challenging a CMS enforcement action.
[22] Several courts have noted, at least in passing, that the adjudication provisions of the APA do govern Board appeals, at least to the extent that the Medicare Act does not set forth contrary rules. See, e.g., Omni Manor Nursing Home v. Thompson, 151 Fed. Appx. 427 (6th Cir. 2005); Crestview Parke Care Center v. Thompson, 373 F.3d 743 (6th Cir. 2004); Beechwood Restorative Care Center v. Thompson, 494 F.Supp.2d 181 (N.D.N.Y. 2007). See generally Maryland General Hospital, Inc. v. Thompson, 308 F. 3d 340 (4th Cir. 2002). To date, the only court decision that arguably turns on this point is Crestview Parke, where the Court held that APA adjudication standards limited the Board’s ability to render “summary” decisions where material facts at least arguably were at issue.
[23] See Hillman Rehabilitation Center v. HCFA, DAB Dec. No. 1611 (1999), aff’d, Hillman Rehabilitation Center v. HCFA, No. 98-3789 (D.N.J. May 13, 1999) (unpublished opinion); and Cross Creek Health Care Center v HCFA, DAB Dec. No. 1665 (1998). At least one old DAB decision indicates that CMS has the burden to offer evidence regarding each deficiency it presses at the hearing. See Western Care Management v. CMS, DAB Dec. No. 1921 (2004), CCH Medicare and Medicaid Guide ¶ 120,662.
[24] 5 U.S.C. § 556(d); Steadman v. Securities and Exchange Commission, 450 U.S. 91 (1981); Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951).
[25] 42 U.S.C. § 405(g) incorporates the “preponderance of evidence standard” to Medicare appeals. See generally American Grain Trimmers, Inc. v. Office of Workers’ Compensation Programs, 181 F.3d 810, 813-19 (7th Cir. 1999) for a lengthy discussion of the application of the concepts of “shifting” burdens of proceeding and proof in federal administrative proceedings.
[26] See, e.g., Batavia Nursing and Convalescent Center v. CMS, DAB Dec. No. 1911 (2004), CCH Medicare and Medicaid Guide ¶ 120,589.
[27] See, e.g., Evergreene Nursing Care Center v. CMS, DAB Dec. No. 2069 (2007), CCH Medicare and Medicaid Guide ¶ 121,137, reversing ALJ Dec. No. CR1337 (2005) where an ALJ commented in passing that “the preponderance of the evidence did not show noncompliance”. The Board’s rationale for this result has shifted over the years. At one point, the Board held that it really was the facility challenging CMS action that was the proponent of an “order” that the CMS action was wrong. In more recent years, the Board simply assigns the burden to demonstrate compliance to the facility, apparently by analogy to the burden on an applicant for new Medicare certification to demonstrate compliance.
[28] See Daughters of Miriam Center v. CMS, DAB Dec. No. 2067 (2007), CCH Medicare and Medicaid Guide ¶ 121,132, reversing ALJ Dec. No. CR1337 (2005); Liberty Commons Nursing and Rehab - Johnston v. CMS, DAB Dec. No. 2031 (2006), CCH Medicare and Medicaid Guide ¶ 120,976.
[29] See, e.g., Century Care of the Crystal Coast v. CMS, DAB Dec. No. 2076 (2007), CCH Medicare and Medicaid Guide ¶ 121,150, affirming ALJ Dec. No. CR1488 (2006), CCH Medicare and Medicaid Guide ¶ 120,991. This case currently is on appeal to the Fourth Circuit Court of Appeals.
[30] Liberty Commons Nursing and Rehab Center - Johnston v. CMS, DAB Dec. No. 2031 (2006), CCH Medicare and Medicaid Guide ¶ 120,976.
[31] See Emerald Shores Health and Rehab Center v. CMS, DAB Dec. No. 2072 (2007), reversing ALJ Dec. No. CR1385 (2005) (ALJ held that facility pest control policy met professional standards; Board reversed and held that “success” of policy for regulatory purposes is measured only by whether any ants remain on premises, and suggests that regulation allows strict liability); see also Jennifer Matthew Nursing and Rehab Center v. CMS, ALJ Dec. No. CR1717 (2007) (granting summary judgment on deficiency alleging indoor temperature in facility during heat wave exceeded regulatory guidelines notwithstanding facility success in keeping residents safe).
[32] See, e.g., Barbourville Nursing Home v. CMS, DAB Dec. No. 1962 (2005), CCH Medicare and Medicaid Guide ¶ 120,750. On the other hand, one ALJ did recently hold that CMS has at least some burden to establish, by appropriate evidence, the content of a “professional standard” where the language of the regulation does not make clear, in lay terms, what that content is. See Davis East v, CMS, ALJ Dec. No. CR1319 (2005), CCH Medicare and Medicaid Guide ¶ 120,818.
[33] See United States v. Menendez, 48 F.3d 1401, 1004 (5th Cir. 1995) (“charging document” in an administrative enforcement action is not sufficient for the agency to meet its burden of supporting a decision, since the charging document is not “evidence.”)
[34] See, e.g., Oxford Manor v. CMS, ALJ Dec. No. CR1686 (2007).
[35] Alden Town Manor v. CMS, DAB Dec. No. 2054 (2006), CCH Medicare and Medicaid Guide ¶ 121,049, reversing ALJ Decision CR1398 (2006) CCH Medicare and Medicaid Guide ¶ 120,899.
[36] Burton Health Care Center v. CMS, DAB Dec. No. 2051 (2006), CCH Medicare and Medicaid Guide ¶ 121,050, reversing ALJ Dec. No. CR1330 (2005), CCH Medicare and Medicaid Guide ¶ 120,828. But see The Residence at Salem Woods v. CMS, DAB Dec. No. 2052 (2006), CCH Medicare and Medicaid Guide ¶ 120,051, sustaining the same ALJ’s reduction of a CMP where he set aside some, but not all, cited deficiencies.
[37] See, e.g., Claiborne and Hughes Health Care Center v. CMS, ALJ Dec. No. CR1687 (2007); Grace Healthcare of Benton v. CMS, ALJ Dec. No. CR1676 (2007).
[38] See, e.g., Laurels at Forest Glenn, ALJ Dec. No. CR1681 (2007); SunBridge Care and Rehabilitation for Pembroke, ALJ Dec. No. CR1636 (2007), CCH Medicare and Medicaid Guide ¶ 121,215 (deficiency cited for failure to use supplemental restraints in van; ALJ agreed no basis for CMS position, but sustained sanction based on his subjective determination that facility staff used van seat belts improperly); Liberty Commons Nursing and Rehab Center – Alamance v. CMS, ALJ Dec. No. CR1427 (2006), CCH Medicare and Medicaid Guide ¶ 120,914, aff’d, DAB Dec. No. 2070 (2007), CCH Medicare and Medicaid Guide ¶ 121,136 (elopement case, ALJ sustained sanction based on opinion facility should have used different locking and alarm system); Life Care Center of Gwinnett v. CMS, ALJ Dec. No. CR1377 (2005), CCH Medicare and Medicaid Guide ¶ 120,889 (CMS cited staff failure to respond promptly to falling resident; ALJ held response appropriate but sustained deficiency because facility had discontinued wheelchair alarm several months before fall, and he decided it should have been retained.)
[39] Jennifer Matthew Nursing and Rehab Center, Docket No. C-06-671, Order issued Feb. 15, 2007; see ALJ Dec. No. 1717 (2007).
[40] See Lake Mary Center v. CMS, DAB Dec. No. 2081 (2007); Brookshire Healthcare Center v. CMS, ALJ Dec. No. CR1693 (2007).
[41] Liberty Commons Nursing and Rehabilitation Center - Johnston v. Leavitt, No. 06-1868 (4th Cir. July 20, 2007), affirming DAB Dec. No. 2031 (2006), CCH Medicare and Medicaid Guide ¶ 120,976.
[42] See, e.g., Liberty Nursing and Rehabilitation - Mecklenburg County v. CMS, DAB Dec. No. 2095 (2007) (facility evidence that it corrected deficiency “unpersuasive” in light of presumption of continuing noncompliance; case is on appeal to court); see also Rolling Hills Rehab Center v. CMS, DAB Dec. No. 2119 (2007), CCH Medicare and Medicaid Guide ¶ 121,233; Century Care of the Crystal Coast v. CMS, DAB Dec. No. 2076 (2007), CCH Medicare and Medicaid Guide ¶ 121,150 (case is on appeal to court); Emerald Shores Health and Rehab Center v. CMS, DAB Dec. No. 2070 (2007), reversing ALJ Dec. No. CR1385 (2005).
[43] See, e.g., Mediplex of Massachusetts, Inc. v. Shalala, 39 F. Supp.2d 88 (D. Mass 1999), Libbie Convalescent Center, Inc. v. Shalala, 26 F. Supp.2d 128 (D.D.C. 1998).
[44] The petitioner in the Mediplex of Massachusetts judicial appeal successfully contested its termination on the merits. See Randolph Crossings Nursing Center v. HCFA, ALJ Dec. No. CR584 (1999).
[45] Counsel should note, however, that one recent case held that an administrative appeal, at least of a termination action, is moot if the facility has closed. See Beechwood Restorative Care Center v. Thompson, 494 F.Supp. 2d 181 (N.D.N.Y. 2007). Another court recently entered a preliminary injunction against a termination following completion of the administrative appeal process in order to preserve the status quo where the facility persuaded the Court that it would close during the judicial appeal process if the termination were to be effectuated. See Evergreene Nursing Care Center v. Leavitt, No. 3:07cv00024 (W.D. Va. 6/4/07).
[46] See, e.g., Cathedral Rock of North College Hill, Inc. v. Shalala, 223 F.3d 354 (6th Cir. 2000). Cathedral Rock was decided shortly after Illinois Council, and the Court noted therein that there might possibly be some exception for some kinds of “collateral” claims following Illinois Council, but subsequent Sixth Circuit cases make clear that any exception, if there really is one, is very narrow. See BP Care, Inc. v. Thompson, 398 F.3d 503 (6th Cir. 2005).
[47] See, e.g., FMSC Colliersville Operating Co., LLC v. Leavitt, No. 2:07-cv-2788-BBD-sta (W.D. Tenn., Order denying TRO, 12/19/07); Pinewood Healthcare, LLC v. Leavitt, No. CV07-0059-N-EJL (D. Idaho, Order denying preliminary injunction, 3/16/07).
[48] Ridgeview Manor of the Midlands, L.P. v. Leavitt, No. 3:07-cv-861-JFA (D.S.C., Order granting preliminary injunction, 4/9/07). The facility subsequently lost its administrative appeal. See Ridgeview Manor v. CMS, ALJ Dec. No. CR1593 (2007).
[49] Recent court decisions affirming deficiencies on the merits include Liberty Nursing and Rehab - Johnston v. Leavitt, No. 06-1868 (4th Cir., 5/28/07) (unpublished); Lakeridge Villa Health Care Center v. Leavitt, No. 05-4194 (6th Cir. 11/3/06) (unpublished); Harmony Court v. Leavitt, No. 05-3644 (6th Cir. 8/1/06); Barbourville Nursing Home, Inc. v. DHHS, No. 05-3421 (6th Cir. 4/6/06); and Beechwood Restorative Care Center v. Thompson, 494 F.Supp.2d 181 (N.D.N.Y. 2007).
[50] Crestview Parke Care Center v. Thompson, 373 F.3d 743 (6th Cir. 2004). Following Crestview Parke, the Board reversed about a dozen summary decisions against facilities, and ALJs ordinarily now do not issue such decisions unless the parties waive hearing or the petitioner fails to offer evidence on one or more alleged deficiencies. On the other hand, the Board does “summarily” affirm ALJ decisions, and in at least two recent cases, summarily reversed ALJ decisions favorable to facilities. See Evergreene Nursing Care Center v. CMS, DAB Dec. No. 2069 (2007), CCH Medicare and Medicaid Guide ¶ 121,137; Alden Town Manor, DAB Dec. No. 2054 (2006), CCH Medicare and Medicaid Guide ¶ 121,049.
[51] Beechwood Restorative Care Center v. Thompson, 494 F.Supp.2d 181 (N.D.N.Y. 2007), holding that CMS must provide at least 15 days notice of a denial of payment for new admissions (at least in non-immediate jeopardy situations).
[52] However, in Evergreene Nursing Care Center v. Leavitt, No. 3:07cv00024 (W.D. Va. 6/4/07), a court both enjoined a termination and collection of a CMP pending judicial appeal where the facility persuaded the court that collection of the CMP would close the facility and moot the appeal.
[53] An extreme example is illustrated by Lutheran Home at Trinity Oaks v. CMS, DAB Dec. No. 2111 (2007), CCH Medicare and Medicaid Guide ¶ 121,221, sustaining an “immediate jeopardy” sanction where a resident who had worn a simple “hand roll” for many years somehow managed to twist it around her finger while she slept, causing injury, and the Board sustained an ALJ finding that the event and injury were “foreseeable,” and thus the facility’s fault. Similar recent decisions include Briarwood Nursing Center v. CMS, DAB Dec. No. 2115 (2007) (long time resident eloped via window; held “foreseeable” because resident was confused); Oxford Manor v. CMS, ALJ Dec. No. CR1686 (2007) (thirteen year resident who never wandered eloped; held “foreseeable” even though unprecedented, because resident was confused).
[54] See, e.g., Mountain View Manor v. CMS, Dec. No. CR1076 (2003) (ALJ decision heavily based on academic expert’s critique of facility management of resident-to-resident altercations; however, based on the reported facts, it seems likely facility would have lost even in absence of adverse expert testimony.) On the other hand, the Board once reversed an ALJ decision to the effect that a facility failed to notify a physician of a resident’s change of condition where the Board found that the ALJ had not given appropriate weight to an expert’s views regarding the applicable nursing standard of practice. See Park Manor Nursing Home v. CMS, DAB Dec. 1926 (2004), CCH Medicare and Medicaid Guide ¶ 120,676.
[55] See, e.g., Wesley Care and Rehabilitation v. CMS, ALJ Dec. No. CR1530 (2006), CCH Medicare and Medicaid Guide ¶ 121,048 (most of period of noncompliance and CMP set aside where ALJ accepted care planners’ testimony re: their consideration of appropriate interventions for agitated resident); Grace Living Center - Jenks v. CMS, DAB Dec. No. CR1197 (2004), CCH Medicare and Medicaid Guide ¶ 120,678 (ALJ accepted specific testimony by two physicians regarding their judgment process for ordering specific psychoactive medications).
[56] CMS’ enforcement regulation requires CMS to consider, among other things, when imposing CMPs, the facility’s financial condition. See 42 C.F.R. § 488.438(f)(2). In practice, CMS does not do so, even where a facility can demonstrate hardship or even insolvency. The Board uniformly holds that the burden is on a petitioner to come forward with evidence that it cannot pay a CMP, but even when facilities offer such evidence, ALJs typically either ignore the topic altogether or simply find such evidence “unpersuasive.” See, e.g., Kenton Healthcare, LLC v. CMS, ALJ Dec. No. CR1666 (2007), CCH Medicare and Medicaid Guide ¶ 121,242; Ridge Terrace v. CMS, ALJ Dec. No. CR938 (2002).