Health Law Daily $722K penalty upheld for immediate jeopardy-level non-compliance
Tuesday, March 17, 2020

$722K penalty upheld for immediate jeopardy-level non-compliance

By Jeffrey H. Brochin, J.D.

Findings of numerous failures by home health care agency to abide by patient care protocols justified huge per-diem fine imposed by CMS.

The Department of Health and Human Services Departmental Appeals Board (DAB) Civil Remedies Division has upheld CMS’s total sum of $722,500 in per-day civil money penalties (CMPs) imposed on an Indiana home health care agency after finding that the agency did not carry its heavy burden to show that the finding of immediate jeopardy was clearly erroneous. The DAB upheld CMS’s findings that the agency violated its duties under 42 C.F.R. § 484.10 and that its violation of those duties adversely affected patient health (Associated Homecare, Inc. v. CMS, Docket No. C-17-362, Decision No. CR5372, July 24, 2019).

Indiana health survey findings. Associated Homecare, Inc. is a home health agency (HHA) located in Valparaiso, Indiana that participated in the Medicare program. From July 7 through 22, 2016, a surveyor for the Indiana State Department of Health conducted a survey of the HHA in response to a complaint, and found that the HHA was not in compliance with Medicare conditions of participation and that the noncompliance with one of those conditions constituted immediate jeopardy. On August 19, 2016, the state agency conducted a revisit survey of the HHA and found that they had removed the immediate jeopardy conditions as of August 19, 2016, but had not corrected the other condition-level noncompliance identified during the July survey and that they therefore remained out of compliance with Medicare conditions of participation.

On October 28, 2016, the state agency conducted yet another revisit survey and again determined that the HHA was out of compliance with Medicare conditions of participation. On January 27, 2017, the state agency conducted a final revisit survey and found that as of December 20, 2016 the HHA had resumed substantial compliance with all Medicare conditions of participation.

CMS determinations and fines. Based on the state agency surveys, CMS made the following determinations: From July 22 through October 27, 2016, the HHA failed to comply with the conditions of participation at 42 C.F.R. §§ 484.10 and 484.18; from July 22 through August 18, 2016, the HHA’s noncompliance with 42 C.F.R. § 484.10 posed immediate jeopardy to the health and safety of its patients; from July 22 through December 19, 2016, the HHA failed to comply with the conditions of participation at 42 C.F.R. §§ 484.30, 484.36, 484.48, and 484.55; and that effective December 20, 2016, they returned to substantial compliance with all conditions of participation.

CMS imposed per-day CMPs of $8,500 per day effective July 22 through August 18, 2016, for a total of $238,000; $2,000 per day effective August 19 through October 27, 2016, for a total of $140,000; and $6,500 per day effective October 28 through December 19, 2016, for a total of $344,500. After the HHA was notified of the total CMP sum of $722,500, they requested a hearing to challenge the findings.

Issues and DAB findings. The issues before the DAB were whether the HHA failed to comply with Medicare conditions of participation, and, if they failed to so comply, was CMS’s determination that non-compliance with 42 C.F.R. § 484.10 posed immediate jeopardy to patient health and safety clearly erroneous, and, whether the CMPs imposed were reasonable.

The DAB reviewed 16 instances of patient care cited by the state agency and subsequently adopted by CMS. Among the violations uncovered during the surveys were instances where proper wound care was instructed by the patient protocol, yet the HHA reported "no wound records found." Where patient blood pressure or other vitals fell outside of the parameters determined in the protocols, the physician was to be notified, but that was not done. A patient who developed a red and sore area suffered with that condition for two weeks despite having notified the HHA of the condition, yet the records noted it as "a change in patient’s status."

DAB conclusions. The DAB concluded that CMS’s undisputed findings from the July and October surveys demonstrated multiple violations of 42 C.F.R. §§ 484.30 and 484.55, as well as the HHA’s own policies, and that their nurses, RNs and LPNs alike, did not follow the care plans for seven of its patients across the July and October surveys, either by failing to provide necessary care or by providing care not called for in the care plan. The initial assessments of four patients were inadequate or conducted in an untimely fashion.At least three patients affected by assessment deficiencies were in poor health and faced a high risk of serious complications and death. The deficiencies substantially limited the HHA’s capacity to furnish adequate care to its patients and adversely affected patient health and safety. The HHA therefore did not comply with 42 C.F.R. §§ 484.30 and 484.55.

Based on the foregoing, the DAB ruled that the HHA did not meet its burden of establishing that CMS’s immediate jeopardy determinations were clearly erroneous, and they upheld the $722,500 in CMPs.

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