Third, CMS has considerable latitude to amend or add new factual allegations; revise a Statement of Deficiencies; modify (including increase) remedies; etc. during the pendency of an appeal, so long as the agency provides sufficient notice prior to the hearing so that the facility can prepare and offer a defense.[6]  Accordingly, beware of raising only technical issues or defenses, such as 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. 

            Finally, note that 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.  Several dozen DAB and ALJ decisions, including at least nine during the past year, make clear that the practical effect of this regulation is that facilities may appeal only remedies, and not deficiencies themselves; the effect of the rule is that if CMS imposes no remedy, then there is no right to appeal even the most egregiously erroneous or inappropriate citation.[7]

            CMS has taken advantage of this reading of the regulation to engage in what most clients (and some ALJs) consider to be a grossly unfair litigation tactic.  In a number of recent cases, where it became clear during the course of the appeal that CMS could not sustain the cited deficiencies, CMS has simply rescinded the sanction -- without changing the underlying statement of deficiencies -- and then moved to dismiss the appeal on the ground that there no longer is an appealable action.  Several ALJ and DAB Decisions approve this procedure, even over protests by the facilities involved.[8]  So far as we are aware, no one has taken this issue to court.

            The DAB and its ALJs actually have very limited authority.  In essence, they may find that there is no 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).   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 SOM); 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.[12]

            Numerous cases hold that CMS may be entitled to summary adjudication where the facility has not appealed all deficiencies within the “range” if the CMP at issue (i.e., all “non-jeopardy” deficiencies).[13]  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.[14] 

            Likewise, if the facility raises only legal issues, ALJs usually rule that there is no right to an evidentiary hearing.  ALJs occasionally apply this rule where the facility has not clearly articulated the basis for its appeal, or where the remaining issues in dispute are not material to the remedy.[15]  For example, an ALJ has dismissed an appeal where a facility disputed a finding of “substandard quality of care” and the “scope” of certain deficiencies, but CMS argued that the CMP at issue would not be changed even if the facility prevailed on those issues.[16] 

            ALJs consistently hold that they do have the authority to determine the amount of a CMP de novo, and many cases illustrate reductions in CMPs.[17]  However, even though 42 C.F.R. §§  488.404 and 488.438(f) set forth a series of factors that CMS “must . . . take into account” in “determining the amount of the [civil monetary] penalty,” including the facility’s history of noncompliance; the facility’s financial condition; the seriousness of the deficiencies; and the facility’s “degree of culpability,” the DAB consistently has ruled that CMS has no obligation to offer evidence that it did so (even on cross-examination), and that the facility waives it right to raise the issue on appeal unless it offers evidence that CMS did not consider the criteria properly (even though CMS need not disclose how or even whether it considered the factors).[18] 

            In addition, ALJs do have the authority to decide that a facility resumed substantial compliance as of a date earlier than CMS found, thereby shortening the duration of a “per diem” CMP.[19]  If a facility makes such an argument, it bears the burden to demonstrate by appropriate evidence when and how it resumed compliance.

C.        Which Cases Are Winners (And Which Are Dead Duck Losers)?

            What is most striking about many reported DAB cases is that they involve fact patterns that should have been obvious were clear losers.  Given the harsh discussion of nursing facilities, their staffs, and clinical practices in some of these cases, it is hard to avoid the conclusion that pursuing an indefensible case does adversely affect the way that the ALJs and Board Judges view nursing facilities.

            On the other hand, keep in mind that most appeals settle.  Our experience, which we presume is typical, is that most settlements involve substantial reductions in the size of a CMP, or in “severity” of a citation, or both.  Thus, as is discussed below, particularly where CMS counsel has experience with these cases, it is likely that many of the fact patterns most favorable to facilities never make it to hearing (and that ALJs never know the disposition -- at least partially favorable to facilities – of the majority of appeals that are filed).  Again, this fact may influence the unduly negative tone of many Board and ALJ decisions that are adverse to facilities.

            When evaluating a case, it is critical to consider the DAB’s unusual notion of “burden of proof.”  DAB appeals are at least in theory “de novo,” in the sense that an ALJ will base a compliance decision on the evidence before him or her, and will not take the Statement of Deficiencies as established fact (and some old DAB case law more or less directly so suggests).  Thus, CMS has at least some theoretical burden to establish a “prima facie case” of noncompliance with one or more regulatory provisions regarding any deficiency that the facility contests.[20]  At least in theory, this showing ought to include evidence that some act or omission by the facility violated some specific regulatory requirement or prohibition.  However, there is at least one recent Board decision that suggests that simply offering into evidence the Statement of Deficiencies (before cross-examination of CMS’ witnesses!) satisfies CMS’ burden to demonstrate noncompliance.[21]  To say the least, this notion turns the traditional notion of the government’s burden of proof on its head, but, suffice to say, detailed discussion of this policy is beyond the scope of this paper.[22] 

            Once CMS has presented a prima facie case, the burden then shifts to the facility to demonstrate by a preponderance of the evidence that it was in substantial compliance.[23]  This concept is very controversial, and has been the subject of considerable litigation, discussion of which is beyond the scope of this paper.  However, many cases illustrate that CMS’ “burden” is so low as to make the concept of a “prima facie case” virtually meaningless, and that the burden always is on the facility to demonstrate compliance, whether or not it can rebut the specific deficiencies at issue.[24]

            Accordingly, as is discussed below, it may make little sense to file an appeal where a facility cannot demonstrate that it did appropriately assess, plan for care, deliver care, etc., and address the specific deficiencies at issue.  It is true that there are instances where it may be appropriate to file an appeal even where a case may be less than rock-solid.  For example, it may be necessary to appeal a termination from the Medicare and Medicaid Programs if there is any hope of prevailing, especially if the termination is based solely on the running of six months of noncompliance, and the last deficiencies in the survey cycle are not particularly serious.[25]

            The vast majority of appeals involve CMPs.  Again, in some cases, the CMS is so large that an appeal is necessary, if only to try to reduce the scope or duration of the remedy.  It is possible to  concede liability, and to dispute only the duration of the noncompliance.[26] 

            In most cases, counsel must advise the client whether to take the 35% reduction of the CMP provided by regulation if the facility foregoes an appeal.[27]  Note that if the facility so chooses, it must so notify CMS in writing of the election within the same 60 day period for filing an appeal -- i.e., within 60 days after receiving the CMS Notice imposing a CMP. 

            There may be good reasons to forego the 35% discount and file an appeal even where the CMP is relatively small.  Some facilities really do fight on principle, and some believe that appealing inappropriate remedies is a tangible way to demonstrate to residents, families and staff that the facility will stand up for them.  (We believe that this psychological aspect often is the most important reason to file an appeal.)  More recently, DAB appeals have taken on a risk management aspect.  Where a civil suit is pending or likely, or a state may investigate an incident as potential Medicaid fraud, the facility may have to dispute or clarify certain facts if the Statement of Deficiencies is unusually lurid, or misstates facts in a way that could be material to a negligence case or a fraud investigation.  Because the appeal is an evidentiary proceeding, the ALJ may make findings of fact regarding the deficiency that could be helpful in another proceeding.  Conversely, facilities may be motivated to settle DAB appeals (or to take the 35% discount of a CMP) if there is a possibility damaging evidence might become public. 

            However, the reality is that certain fact patterns, no matter how upset the facility staff is at the citation, are just very hard to win.  Moreover, just as facilities sometimes are motivated to appeal “on principle,” so too do SSAs and CMS sometimes pursue certain cases for reasons beyond the facts of the particular case.  CMS and individual state agencies do pursue certain initiatives from time to time (for example, “abuse” cases), and some CMS and SSA officials seem to think each case they see is the absolutely worst horror of all time.  As a practical matter, the experience and personality of the CMS counsel handling the case may significantly affect how vigorously CMS contests an appeal; the chances of settlement; and the like.

            As is discussed in greater detail in the following section, a facility challenging any deficiency must be prepared to offer evidence, preferably supported by contemporaneous documentation, that its assessment, care planning, care delivery, etc. met applicable regulatory and professional standards – as well as evidence more specifically focused on the specific alleged noncompliance in the case.  Significant gaps in any of this evidence is problematic.  For example, say the allegation is that a resident’s condition deteriorated over a period of several hours, and the facility failed to call the attending physician.  The physician may be willing to dispute a surveyor’s conclusion regarding the seriousness of the change in the resident’s condition, but if the resident wound up in the hospital with an infection and an admitting diagnosis of dehydration, and the most recent nursing note was written two days earlier and showed the resident eating normally, visiting with family, etc., the ALJ understandably will be skeptical of the physician’s credibility, and the facility’s position.

            There are certain fact patterns that simply are very hard to win.  The following discussion is not intended to be exhaustive, and, as discussed below, there are examples of facility wins in each of these categories.  Counsel always should research the case law as best as is possible to determine how his or her ALJ has addressed similar cases – but, as discussed below, sometimes it is necessary to “read between the lines.”

            First, it is very difficult to win an “accident hazards” case where a resident actually suffered injury.  If one reads the reported cases, one will see both the Board and ALJs carefully reciting that the regulations do not impose “strict liability” for accidents.  However, the reality is that many, many decisions illustrate exactly that result.[28]  The theme repeated over and over again is that facilities must do “everything in their power” to prevent accidents, and so the occurrence of an accident almost always supports an “inference” that the facility must not have done so.  At the same time, ALJs consistently rule that an accident need not even have occurred to violate the regulation, and some cases even illustrate judges “inferring” the existence of some hazard, and then “inferring” the facility’s regulatory culpability, even where no resident actually suffered injury.[29]

            Within this general category of reported cases, certain fact patterns – elopements, falls, restraints and hazardous premises – seem to recur.  Thus, within the past year or so, the Board and ALJs have found liability in several “elopement cases[30];” about ten “falls” cases[31]; and a wide variety of cases involving hazards such as smoking; restraints; side rails; unlocked janitors closets; and the like.[32]

            Counsel and facilities are well advised to review some of these decisions before filing similar appeals.  In some of these cases, the facility staff seemed to be completely clueless (at least according to the case report, which sometimes must be taken with a grain of salt).  Thus, for example, some cases illustrate repeated elopements or falls, with no documentation (and, apparently, no reliable testimony) of reassessment or reconsideration of care planning approaches.  In one recent case, for example, the Board sustained a deficiency where a resident had been admitted with a history of assaultive behavior, and actually committed at least 28 assaults on other residents over a two year period without any effective intervention.[33]  In another case, the facility did not dispute that there had been numerous elopements and resident-to-resident altercations with injuries (the evidence showed that one resident was charted to be “aggressive” 134 times in a single month); and that several “followup” surveys continued to find inadequate supervision, “ineffective responses” to assaultive behavior; and the like.[34] 

            Certain clinical fact patterns also seem to recur.  Within the past year, for example, there have been at least half a dozen cases sustaining “skin breakdown” deficiencies.[35]  Again, the typical fact pattern is that a facility either cannot show that it took all necessary precautions to prevent breakdowns; or that, once a breakdown occurred, that it treated the wound appropriately and according to physician orders.[36]

            Similarly, facilities continue to litigate and lose medication error cases;[37] change in condition cases[38]; responses to emergencies[39]; and the like.

            As noted, however, within each of the foregoing categories, facilities do win some cases, almost always by showing that their assessments, care plans, care delivery, etc., were appropriate under the circumstances.  Specific sorts of evidence are discussed in the following section.  Moreover, as noted above, where the evidence is favorable to a facility, CMS typically will settle a case, or withdraw the remedy. 

            Thus, for example, in 2005 a facility did win an elopement case where it showed that its staff was diligent about monitoring a resident, immediately responding to alarms, etc.[40]  Another won where it showed that its response to a malfunctioning call light system was appropriate.[41]  Other facilities won “accident hazard” cases by showing that the incident in question was not reasonably foreseeable[42]; that the SSA’s evaluation of a hazard was exaggerated[43]; or that the SSA had not appropriately evaluated the hazard.[44]  In one peculiar case, an ALJ set aside a deficiency where a resident had fallen to her death from a window where he found that the facility had taken all reasonable precautions to secure the window; the DAB remanded the case with instructions to reconsider the decision; and the ALJ issued a subsequent decision reiterating his initial decision.[45]

            Several facilities won cases where they showed, for example, that an assessment for use of psychoactive medications was appropriate[46]; where a resident believed to have choked actually died from another ailment[47]; where a facility showed that its staff provided appropriate tracheostomy care[48]; and the like.  Sometimes, the facility wins on the central or most important clinical issue, but minor deficiencies (and corresponding remedies) are sustained.[49]     

            Perhaps the most emotional issue to appeal is alleged “abuse” or “neglect.”  CMS probably overuses these broad citations in two circumstances – as an additional deficiency where some underlying clinical deficiency also is charged, but also where something (arguably) bad happened, but no other citation clearly covers the circumstances.  Ironically, and perhaps because the citation is so overbroad and overused, it can be relatively easy to contest such a citation.  Many reported cases indicate either that a specific circumstance is not “abuse” at all, or that a facility’s response to an allegation of abuse was appropriate.[50]

D.        How To Identify Issues Really In Dispute (And Settle The Rest)

            Unless CMS has imposed a “per instance” CMP tied to a specific deficiency, which is appealable as such, it ordinarily is impossible to determine which deficiency or deficiencies support a remedy.  Thus, as discussed above, the Request for Hearing ordinarily must contest every cited deficiency, or else CMS will argue, and the ALJ summarily will agree, that the conceded deficiencies are enough to support the remedy.

            There is a single, but important, exception to this rule.  By regulation, a per diem CMP in excess of $3000 per day may be imposed only for “immediate jeopardy” citations.[51]  Since a finding of “immediate jeopardy” in most clinical areas, by definition, is equivalent to a finding of “substandard quality of care,” the DAB appeal regulations appear to provide a separate regulatory basis for appeals of “jeopardy” and “non-jeopardy” findings and remedies.[52]  Thus, we routinely do elect the 35% regulatory discount as to small “non-jeopardy” CMPs where we are appealing a larger, “immediate jeopardy” deficiency and CMP, on the ground that “jeopardy” and “non-jeopardy” per diem CMPs are, by regulation, mutually exclusive, and therefore are separate appealable remedies under the regulation.  Most CMS attorneys appear to accept this reasoning, but we are aware of no DAB decision on point.[53]

            As noted above, once an appeal is filed, the case is sent to an HHS Assistant Regional Counsel for preparation.  CMS does have the authority, by regulation, to settle CMP appeals, and the customary reading of the broad regulatory language is that CMS may settle all or part of a pending case.[54]  Some ALJs encourage the parties to settle any parts of an appeal that are not really in dispute, and to focus the hearing only on significant disputed issues.  As a practical matter, we have found no advantage to trying all parts of a case, good and bad, on the theory that the ALJ might give each side something. 

            Most DAB cases, like most cases of all sorts, settle.  What is a “good” settlement obviously depends on the client’s perspective, but our experience, which no doubt is typical, is that many HHS attorneys, particularly the more experienced ones, can separate the wheat from the chaff.  In recent years, the DAB has focused more closely on expert clinical testimony, and we have found that many HHS attorneys are sensitive to this development.  Some (but not all) consult their own experts during the course of developing the government’s case.  Thus, we have found that where we have offered our expert evidence during the course of settlement negotiations, we have been successful in obtaining substantial reductions in CMPs, reductions in severity and/or scope, reinstatement of nurse aide training, and even reversals of terminations in settlements.  Since all evidence must be exchanged before the hearing anyway, there is no benefit to reserving evidence or arguments during settlement negotiations. 

            CMS usually drafts the Settlement Agreement. The form Settlement Agreement is straightforward and CMS ordinarily permits the facility to recite that it is not admitting liability or the accuracy of the deficiencies.  In the case of a very large settlement amount, CMS ordinarily will  accept payments over time.

E.         What Sort Of Evidence Wins Appeals?

            When the DAB dockets the appeal, it sends the parties’ counsel a Procedural Order that sets forth in detail the time line and procedures for stipulating to issues and facts, identifying documents and witnesses, prehearing motions, and the like.  However, the (very few) standard procedural rules do not directly address the logistics of trial preparation, and counsel who do not regularly practice before the DAB must be aware that each ALJ uses somewhat different procedures. 

            For example, some ALJs require submission of a “case readiness report” early in the case in which each party outlines the legal and factual issues it believes to be in dispute.  Others require a detailed prehearing brief.  Some ALJs require simultaneous exchanges of evidence, but others require one party or the other to go first.  (One ALJ requires the facility to exchange first only if she does not think the Request for Hearing is sufficiently detailed.)  One ALJ requires CMS to submit its evidence within a month or so of the docketing of the case, and the facility a month or so later; but others do not send exchange orders until months after docketing.  Two ALJs now require both parties to submit written prefiled direct testimony with their exchanges, and limit the hearing to cross-examination of the written record. 

            Note that ALJs do not employ a uniform policy regarding redacting resident names from exhibits.  Our view -- which CMS shares -- is that redaction causes confusion, since many resident records are on similar forms, and that exhibits should never be altered by anyone, even in the interest of resident confidentiality.  CMS also notes that the DAB has other means, including sealing records or requiring redaction only in cases that proceed to judicial appeals, to protect resident privacy.

            There is no discovery as such.  CMS ordinarily exchanges surveyor notes as part of its proposed exhibits.  However, if the ALJ require the parties to redact resident names from their exhibits, this makes surveyor notes virtually impossible to use, so in such cases, specifically request CMS to provide unredacted copies of exhibits, especially surveyor notes.

            For those ALJs who require extensive prefiled submissions, expect to have to submit final exhibits, written direct testimony in affidavit form, and a detailed prehearing brief within three or four months after filing the case.  Thus, experts must be retained and prepared early in the case, sometimes before seeing CMS’ evidence.  Our experience is that this procedure front-loads the preparation that otherwise would be done closer to the hearing date, but sometimes can highlight weaknesses in a case. 

            Facilities must be careful to follow the Procedural Order and Prehearing Order to the letter.[55]  The original and two copies of each submission (including exhibits) must be filed, although no one seems to know what happens to the two copies (really!), and some ALJs require parties to bring additional copies of exhibits to the hearing (one ALJ has the parties bring the three copies of the exhibits to the hearing, but not exchange them in advance).  Each exhibit must be numbered and marked with the case number, exhibit number and “page __ of __,” and some ALJs will not accept unmarked exhibits.  Prior written statements by witnesses, including surveyor notes, statements in lieu of testimony, expert qualifications and summaries of testimony, all must be exchanged.  ALJs ordinarily will prohibit either party from introducing into evidence, at least in the direct case, documents or testimony not previously identified and exchanged.  The hearing is held in a mutually agreeable location convenient to the facility, typically in a local courthouse or a quasi-formal setting like a Social Security Office hearing room.  Some ALJs prefer to hold hearings in federal courthouses or in large cities with major airports.

            CMS frequently files a Motion for Summary Disposition, even in cases where factual disputes appear to be obvious.  Two ALJs formerly were notorious for granting such motions, but the DAB has become much more cautious during the past two years in this regard, following a court decision that remanded a DAB case for hearing where the facility had raised arguable factual issues that the ALJ had disregarded.[56]  Thus, during the past two years, the DAB has reversed at least a dozen ALJ decisions granting summary disposition on the merits, and remanded them for trial.[57]

            As suggested in the preceding section, the facility must offer detailed evidence which, if accepted by the ALJ, will demonstrate compliance.  Regardless of the specific allegation at issue, the burden is on the facility to show that it was in compliance with all applicable regulatory requirements, and so counsel should use the Long Term Care Requirements of Participation as a guide, and offer documentary evidence to illustrate that the facility appropriately admitted, assessed, care planned, delivered care, reviewed and changed the care plan, notified the physician, etc., as applicable with respect to the specific deficiency.  As a practical matter, such evidence ordinarily is necessary to put any specific allegations of noncompliance into appropriate context.  Thus, if counsel is not familiar with the details of the regulations and the sorts of evidence necessary to demonstrate compliance, or the details of clinical decisionmaking, documentation, and the like, it is necessary to obtain the assistance of someone who is. 

            The case reports discussed above illustrate that ALJs will expect to be able to determine, primarily from contemporaneous facility records, whether the facility was in compliance with the regulatory requirements.  Thus, it ordinarily is necessary to offer at least several months of admission face sheets, history and physical data, physician orders, medication administration records, progress notes, policies and procedures, and the like, to paint a picture of each resident at issue.  While most of the ALJs are reasonably sophisticated about nursing facility operations and clinical issues, they are not experts and receive no specific medical training, and there should be a live witness who can explain each pertinent piece of evidence.[58]  None of the ALJs will allow witnesses or counsel simply to read documents into the record; they will, however, allow – indeed, they expect – witnesses to explain the meaning and importance of entries in the documents.  It actually is not unusual for an ALJ to make a factual error in a decision regarding a clinical matter (even as minor as the meaning of an abbreviation in a record) that was not explained.

            In addition to this background or contextual evidence, the facility also must tailor its evidence to the specific issues in dispute.  Thus, for example, if the deficiency alleges that facility’s investigation of alleged abuse was inadequate, the facility should include all of its pertinent policies and procedures, investigation notes, incident reports, reports to other agencies, and the like.

            CMS and surveyors frequently cite deficiencies based on a facility’s failure to follow its own clinical or other policies.  DAB case law is, at best, unclear whether the failure to follow a policy may, in itself, constitute a deficiency.  In 2005, the DAB affirmed a deficiency based on a facility’s failure to follow its policies for neurochecks following a resident fall with the observation that it was reasonable for the ALJ to infer that the facility had adopted the policy because it decided that such was necessary to meet the regulatory standard “attain and maintain highest practicable well being.”  However, in the same case, the Board also noted that its holding should not be read to preclude a facility from showing that a policy is not coextensive with the regulatory requirement.  According to the Board, “the nature of the policy, the applicable professional standard, and the circumstances in which the deviation [from the policy] occurred would all be relevant in evaluating compliance.”[59]  Thus, evidence regarding compliance (or not) with facility policies can be a two-edged sword, since CMS also can argue that a policy is not coextensive with the regulatory requirement.

            Similarly, CMS can and will draw upon all sorts of evidence to demonstrate that some facility practice or omission failed to meet some governing standard.  Thus, for example, the Board has sustained deficiencies based on use of a medical device contrary to the manufacturer’s instruction;[60] where a hazard has been publicized in FDA or other professional notices or publications;[61] and, in many cases, based on expert testimony that some act or omission failed to meet some clinical standard of care.

            The Prehearing Order requires both parties to exchange prior statements by witnesses.  This rule does not require that the facility exchange every single nursing note ever created by a nurse-witness, but the rule should be respected.  The survey team probably copied many facility records – facility staff often are unaware of exactly what the surveyors copied – and CMS ordinarily will include in its exhibits everything the surveyors copied (sometimes including documents not pertinent to the deficiencies at issue).  It is not unusual for CMS’ version of a document to differ from the facility’s version, and if the difference is material, this can lead to fireworks.  Sometimes there is a legitimate explanation, but there had better be a good one, or the ALJ can and will infer that the facility staff altered the record.[62]        

            While there is no hard and fast rule about the number of witnesses or exhibits, none of the ALJs permit repetitive or redundant testimony, and some specifically indicate that they will read only those documents the parties specifically point to at the hearing or in their briefs.  (The days of naming seventy prospective witnesses and hundreds of proposed exhibits definitely are over!)  The ALJ ordinarily will schedule a specific number of days for the hearing, and some carefully will divide the time between the parties (sometimes down to the minute).  CMS presents its case first, and in cases involving live testimony, it is not unusual for a plodding HHS attorney to take the better part of a day to present a single surveyor’s testimony, which obviously compresses the time available for cross-examination, and for the facility’s witnesses.  One ALJ ordinarily limits hearings to a single day of cross-examination; as a practical matter, facility counsel wants to cross-examine the surveyor(s), so that does not leave much time for facility witnesses.  Unless a case is extraordinarily complex, we rarely offer more than five or six witnesses, which obviously puts a premium on selecting the most articulate caregivers and experts.

            In general terms, ALJs will give appropriate weight to witnesses’ training and experience.  A knowledgeable physician’s detailed and articulate medical testimony ordinarily will “trump” judgments made by a nurse-surveyor, although ALJs will discount self-serving, incomplete, or speculative testimony.  However, some ALJs will allow fairly far-ranging speculation by surveyors “for what it is worth,” and of course, you never find out what weight the ALJ will accord it until you read the decision.  While the rules of evidence do not directly apply, some ALJs are more strict than others about allowing leading questions, hearsay, etc.

            As noted above, recent DAB decisions highlight the necessity for facilities to offer focused expert testimony on disputed clinical issues.  In one recent case, for example, CMS imposed a very large CMP based on a facility’s alleged failure to assess the appropriateness of administration of psychoactive medications.  The ALJ set aside the deficiency on the basis of detailed testimony from two attending physicians (one of whom was an expert on the medications at issue) about their own assessments of the need for the medications; why they selected the medications they did rather than others; and the like.[63]

            In another case, a termination action was set aside after two physicians testified in considerable detail that certain alleged medication errors actually had no actual or potential adverse impact on residents under the circumstances of the case.[64]

            In another case, the ALJ set aside an immediate jeopardy deficiency regarding supervision and choking danger where the facility offered detailed evidence regarding the resident’s condition, the family’s choices, the close monitoring, etc.[65]  In a similar case, an ALJ set aside a finding that a resident had choked where the facility offered detailed expert testimony from a physician that the resident’s condition involved impaired swallowing reflexes that required the resident to cough to swallow food.[66]

            In one interesting case, the DAB reversed an ALJ who had sustained a deficiency for inadequate response to a resident’s change in condition, holding that the ALJ had accorded inadequate weight to expert nurse testimony regarding the applicable nursing standard of care.[67]

            Following the hearing, the ALJ will require a detailed posthearing brief (some ALJs impose page limits), and some request proposed findings of fact and conclusions of law.  A decision by the ALJ may  take as long as a year, or even more, although some of the ALJs are prompt. 

            Either party may appeal an adverse factual or legal finding to the DAB Appellate Division (a panel of ALJs who do not hear the evidentiary appeals), where additional briefing and decision (the DAB itself rarely entertains even oral argument) will take several months.  The DAB standard of review of ALJ fact findings is “substantial evidence,” and for legal issues is whether the ALJ’s decision is “erroneous.”[68]  Questions regarding legal issues are subject to “de novo review.”  There is no provision in the DAB rules for cross-appeals, so if a winning party wishes to preserve an issue that it did not prevail upon, it must file an appeal on that issue. 

            The losing party can appeal to court; however, where to file the appeal is somewhat complicated.  42 U.S.C. § 1395i-3(h)(2)(B)(ii) provides that nursing facility CMP cases are governed by Section 1128A of the Social Security Act, 42 U.S.C. § 1320a-7a(d) (which governs other CMPs), which in turn provides that appeals of CMP decisions should be made to the U.S. Circuit Court.  However, 42 U.S.C. § 405(g) provides that all other adverse HHS determinations (i.e., including terminations) must be appealed to the U.S. District Court.  There are only a handful of reported court decisions in DAB cases, nearly all of which sustain deficiencies and remedies on the merits. 

F.         How To Cross-Examine A Surveyor

            CMS almost always offers its evidence through one or more surveyors, typically (but not always) the surveyor who actually cited the deficiency in question.  Our experience is that even though there are many DAB appeals, most surveyors have never been cross-examined about their findings and conclusions, and that it can be relatively easy to pick apart specific deficiencies via cross-examination.

            But – and this is a very large “but” – counsel must very carefully consider exactly what he or she wishes to accomplish via such cross-examination.  Every ALJ will warn counsel in his or her introductory statements that “the surveyor is not on trial,” and at least one ALJ typically cuts off most surveyor cross-examination with the curt observation that she is not much interested in how the surveyor conducted the survey, what she saw, or what she has to say on the stand.  In theory, this position is (at least sort of) consistent with the notion that the ALJ’s review of the facts is “de novo,” and thus the surveyor’s observations, and especially her conclusions, have little if any weight.  On the other hand, CMS obviously offers surveyors as witnesses for a reason, and it is hard to see how CMS could make out a prima facie case of a violation without at least some corroboration by a live witness that she actually saw, read, smelled, heard, etc., what she wrote in the Statement of Deficiencies.[69]  Indeed, even cursory examination of ALJ decisions shows that many are based on little more than surveyor “findings.”

            Thus, we believe that it is important to inquire in great detail (frequently straining the ALJ’s patience) into the factual basis of the surveyor’s decisionmaking.  We agree that the surveyor’s decisionmaking process itself ordinarily is not material to the ALJ’s ultimate evaluation of a case (the exception might be to illustrate that the surveyor’s consideration of the evidence was based on a material factual error), and none of the ALJs will permit much inquiry in that area.  However, it is useful to put into appropriate context many purely factual matters that may bear upon the ALJ’s consideration of the evidence.  For example, sometimes a surveyor really did misread a record, or misquote or misunderstand a staff member.  Sometimes, a surveyor makes a material mistake about a resident’s medical condition (perhaps helped along by a misleading or incomplete facility records).[70]

            In addition, cross examination can be helpful to the ALJ’s determination of the credibility and weight to give to certain evidence.  For example, if the surveyor testifies that Nurse Jones admitted X, it may be useful for the surveyor to concede that she interviewed Nurse Jones over the phone and never met her, and did not know whether she had any facility charts available at the time, etc.; or that Nurse Jones was so upset by the surveyor’s presence that she was in tears, was apologizing for her inability to remember a resident’s chart, etc. (both recent scenarios that persuaded ALJs to minimize the weight accorded to nurses’ supposed “admissions”).

            Likewise, it is a tried and true tactic to make a defense through a surveyor.  For example, a surveyor ordinarily will agree that “assessments” and “care planning” decisions may be reflected in various places in a resident’s chart, and not only in documents critiqued by the surveyor.  Nurse surveyors obviously cite lots of nursing deficiencies, but when asked to focus on specific professional judgments by their peers, some surveyors will become equivocal, and most will admit that every circumstance or policy leaves at least some room for professional judgment.  (Of course, then the facility’s nurse must defend her judgment.)  Most surveyors will concede that X, Y and Z were done properly, and that she was concerned only about A, B, or C.

            It certainly is fair game to demonstrate the limits of a surveyor’s expertise, particularly if the surveyor is not a nurse, but has surveyed a clinical area (non-nurses can survey nursing issues if they pass that “module” of the surveyor qualifying test).  Likewise, some nurse-surveyors have never worked in a nursing facility, or have not done so recently, and may not be familiar with the operations or pertinent policies at a particular facility.  Many surveyors are flummoxed when asked to articulate the governing professional standard for some clinical area, or the source of the standard.  Many are not aware of recent clinical research, or of the increasingly sophisticated research being done in geriatrics.[71]  It makes little sense just to take potshots at surveyors, but nearly all of the ALJs have enough trial experience to understand that such examination, if tailored to the material issues, can help them evaluate the evidence.  Again, however, note the limits of such examination; one ALJ routinely will cut it off as not helpful to her, and all will require it to be narrowly focused on the material factual issues.

            More and more surveyors appear to be coached to say virtually nothing on the stand.  Like Sergeant Schultz, they saw nothing, made no decisions, etc., beyond what they wrote in the Statement of Deficiencies.  And some surveyors, even at this late date, still give speeches about nursing facilities putting “profits over people” and the like.  Such testimony obviously has little weight, and we usually leave it alone.

            The best surveyor testimony is short, direct and to the point.  She will succinctly explain her expertise and how it caused her to look at what she did, and to draw the conclusions she did.  She will agree that the facility is not a horrible place, but that her role is to evaluate compliance with the regulations that someone else drafted, not to award gold stars of approval.  As every experienced litigator knows (and some ALJs pointedly remind us), such testimony is hard to cross-examine.  Lucky for facilities, not all surveyor testimony meets this standard.

G.        Do Experts Help, Or Just Get In The Way?

            The short answer to both questions is yes, and there are legal and practical reasons for this equivocal response. 

            The DAB has never directly said what role expert witnesses ought to play in these cases, and, as with many of the issues addressed above, its decisions are ambivalent.  Thus, for example, in one recent case the Board 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.[72]  Other decisions seem to give great weight to expert witnesses’ views of how to comply with various regulatory requirements.[73]  On the other hand, the reality is that ALJs routinely disregard expert testimony, and one could read many decisions without realizing that experts had testified for one side or the other.

            CMS sometimes, but not always, does use experts to support its cases.  However, CMS’ practice seems to depend in large degree upon the practices of individual CMS attorneys, and there are many cases where we are surprised to find that CMS is supporting some technical point only with the testimony of a surveyor.  CMS’ experts are largely from academic backgrounds -- some have no practical experience whatsoever in long term care -- and their testimony often can be minimized -- even on voir dire -- by showing its purely academic basis.  Academic experts almost universally want to lecture the ALJ how to decide the case or apply the regulations, which obviously invades the ALJ’s province, and so an objection to such testimony on that basis will be sustained.  Likewise, academic experts seem to love to offer opinions on hypotheticals, and sometimes can be led down the garden path.[74]

            As discussed above, the facility ultimately bears the mixed legal and factual burden to demonstrate that it was in compliance with all applicable regulatory requirements.  “The facts” will dictate the outcome of most cases, but an expert can highlight which facts are most material or compelling, or can help the ALJ understand or put material facts into perspective.  From the facility’s perspective, the best expert is one who is close to the facts; thus, ALJs routinely accept as experts for the purpose of rendering opinions on nursing standards, etc., nurse consultants or managers who have supervisory or oversight responsibility for the facility, but who were not involved first hand in the events at issue.  A Director of Nursing might be able to play this role in some cases, but where nursing issues have been cited, probably is too close to the events to testify solely as an expert.

            Occasionally -- and such cases actually are relatively unusual -- there is a technical point, or a recent clinical development that can be highlighted by expert testimony.  (As noted above, some CMS attorneys will consider such evidence in settlement discussions.)  For example, there is some recent research to the effect that “dehydration” is overdiagnosed in nursing facilities (and especially as a hospital admitting diagnosis), and more physicians are becoming familiar with the literature, and can articulate, the differences and clinical indications among dehydration and conditions such as hypovolemia that are secondary to infections.  Similarly, we settled a recent case by offering detailed expert testimony that reviewed recent literature and studies to the effect that much of the conventional wisdom about the use of thickened liquids to avoid aspiration pneumonia has no clinical basis, and that there actually is no correlation between aspiration of unthickened liquids and development of pneumonia.  Reported cases also illustrate the need for technical experts regarding the operation of alarm systems; life safety issues; and the like.[75]

            However, experts can get in the way of telling a compelling story.  Except as noted above with respect to specific technical or clinical issues, we are very leery of using witnesses who have no relationship with the facility other than as a paid expert.  Our experience is that such experts cannot resist the urge to lecture the ALJ, which both wastes everyone’s time, and distracts from the necessary story line that the facility did appropriately assess, plan for care, deliver care, etc.  For example, we have had clients insist that we offer a former surveyor or state official to opine about proper application of the regulations, and we uniformly decline to do so.

            Likewise, in some cases, expert testimony that seems compelling back in the office is much less so at the hearing.  We once offered an expert on wound care who had spectacular credentials, including as a consultant to a wound products company, and who actually had evaluated the residents at issue, and who seemed like a strong witness.  The ALJ was less than impressed with those assessments (unfairly, we think), and referred to the witness as a mere “wound products salesman” in completely dismissing his testimony in her decision.

Conclusion

            This is real litigation, and a DAB appeal requires the same detailed analysis, preparation and trial skills as does any serious litigation -- as well as understanding and accommodating the quirks and vagaries of the DAB process.  Proper case

 selection, preparation and presentation can produce good results for facilities -- if you know the nuts and bolts.