Petition for Review of a Final Decision of the Department of Health and Human Services Department Appeals Board, Appellate Division. DAB No. 1794
Before Ripple, Diane P. Wood and Evans, Circuit Judges.
The opinion of the court was delivered by: Ripple, Circuit Judge.
Fairfax Nursing Home is a skilled nursing facility participating in Medicare and Medicaid. Fairfax was assessed a civil monetary penalty ("CMP") by the Center for Medicare and Medicaid Services ("CMS") because of its failure to comply substantially with Medicare regulations governing the care of respirator-dependent nursing home residents. Fairfax appealed to the Department Appeals Board of the Department of Health and Human Services ("HHS"); after a hearing before an Administrative Law Judge, both the ALJ and the Appellate Division affirmed the CMP. Pursuant to 42 U.S.C. §§ 1320a-7a(e) and 13951-3(h)(2)(B)(ii), Fairfax appeals that decision to this court. Fairfax argues that the Department Appeals Board ("DAB") erroneously placed the burden of proof on Fairfax and that the ALJ applied the incorrect legal standard in determining that Fairfax had violated HHS regulations. For the reasons set forth in the following opinion, we affirm the decision of the Appeals Board.
Fairfax is a skilled nursing facility ("SNF"), see 42 U.S.C. § 1395i-3(a); 42 C.F.R. § 488.301, participating in Medicare and Medicaid (collectively "Medicare") as a provider. Regulation of SNFs is committed to the Center for Medicare and Medicare Services, formerly known as the Health Care Financing Administration ("HCFA"), *fn1 and to state agencies with whom the Secretary of Health and Human Services has contracted. See 42 U.S.C. § 1395aa(a). The primary method of regulation is by unannounced surveys of SNFs, conducted in this case by surveyors of the Illinois Department of Public Health ("IDPH"). See 42 U.S.C. § 1395i-3(g). These surveys are conducted at least once every 15 months. See id. § 1395i-3(g)(2)(A)(iii). If the state survey finds violations of Medicare regulations, the state may recommend penalties to CMS. The civil monetary penalty imposed here was based on an IDPH recommendation.
CMS imposed the penalty because of series of failures in Fairfax's care of ventilator-dependent residents. On December 20, 1996, R10, a ventilator-dependent resident at Fairfax, suffered respiratory distress and required emergency care. *fn2 Respiratory therapists administered oxygen directly to R10, and one therapist turned off R10's ventilator because the alarm was sounding. Once R10 was stabilized, the therapists left, but neglected to turn the ventilator back on. As a result, R10 died. Prompted by this incident, Fairfax began to develop a policy for the care of ventilator-dependent residents. That policy was completed in February 1997 and was implemented in early March of that year. The policy provided that once the resident was stabilized following an episode of respiratory distress:
the nurse will check the resident & chart Q 15 minutes X 4 (for a total of 1 hr.) encompassing the following: vital signs/respiratory status oxygen stats [saturation] /lung sounds/vent settings/level of consciousness/ odor color and consistency of secretions & comfort level of the resident. Admin. R., App. A at 517.
On March 2, 1997, R126 was observed to have a low oxygen saturation level, an elevated pulse and temperature, and to be breathing rapidly. These signs indicated that the resident was having respiratory difficulties. R126's physician was called; he ordered a chest x-ray and gave several other instructions. However, contrary to Fairfax's policy, R126's medical chart did not reflect whether these orders were carried out. R126 died shortly thereafter.
On March 5, 1997, R127 was found with low oxygen saturation and mottled extremities. Fairfax staff failed to make a complete assessment, took no vital signs, made no follow-up assessments and did not notify a physician. On March 7, R127 was found cyanotic and required five minutes of ambu-bagging. Nurses charted four follow-up notes, but only observed R127's color and oxygen saturation and took no other vital signs. Also on March 7, during the 7 a.m. to 3 p.m. shift, three episodes of respiratory distress were noted, each of which required ambu-bagging. No physician was called. On March 10, R127's skin was observed turning blue, but there was no record of treatment for respiratory distress and no vital signs or assessments were charted. On March 21, R127 had another episode, this time with mottled legs, shaking and a dangerously low oxygen saturation. The physician was present; R127 was ambu-bagged and administered Valium. There was no complete assessment and no follow-up. On March 25, R127 was found to have a severe infection and died on March 27.
On March 23, 1997, R83 was found non-responsive with low oxygen saturation, low blood pressure, an elevated pulse rate and a low respiratory rate. R83 was ambubagged, and the treating physician was called. The first noted follow-up was an hour later and 2-1/2 hours passed before R83 was monitored again.
On April 2, 1997, a state surveyor observed a Fairfax employee fail to use sterile procedures while performing tracheostomy care on R6 and R11. The same employee also neglected to hyper-oxygenate the residents before or after suctioning the tracheostomy. *fn3
On April 3, 1997, R68 became cyanotic, with low oxygen saturation, which required ambu-bagging and an increase in the amount of oxygen given through the ventilator. The records for R68 failed to note R68's vital signs, and the record did not reflect whether R68 oxygen saturation level ever returned to a normal level. On ...