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While CMS has the burden of production to establish a prima facie case of noncompliance with a regulation, once CMS has met this burden, the provider has the ultimate burden of persuasion that it was in substantial compliance with the regulation at issue.
In response to a complaint regarding a Sunshine Haven Nursing Operations, LLC (“Sunshine”) resident, Centers for Medicare and Medicaid Services' ("CMS") contacted the New Mexico Department of Health, the SA, in 2008 to conduct surveys of Sunshine. The SA conducted surveys on November 5 and 19, 2008, as well as on January 21, 2009, February 3 and 5, 2009, and April 2 and April 20, 2009. During each survey, the SA found that Sunshine was not in substantial compliance with Medicare conditions of participation. After conducting the November 5, 2008, survey, the SA sent Sunshine a letter dated November 19, 2008, to give a formal notice of imposition of statutory Denial of Payment for New Admissions (DPNA). The letter also stated that the SA would recommend the termination of Sunshine’s provider agreement to the CMS Regional Office. After several letters containing the same notice, the provider agreement was terminated on May 6, 2009, based on a finding that Sunshine was out of substantial compliance for six continuous months. An Administrative Law Judge (“ALJ”) held a hearing on Sunshine's initial appeal of the CMS decision, and determined that Sunshine was not in substantial compliance with Medicare program participation requirements from November 5, 2008, to May 6, 2009, and upheld remedies. The Departmental Appeals Board ("DAB") affirmed the ALJ's decision. Sunshine appealed.
Did the evidence support the finding that Sunshine fail to substantially comply with the Medicare program participation requirements?
Sunshine has not persuaded the Court by a preponderance of the evidence that it was in continuous substantial compliance from November 5, 2008, to May 6, 2009. The Court found that CMS established a prima facie case that Sunshine violated Section 483.25(a)(3) by failing to follow bath policy and care plans, thus shifting the burden of persuasion to Sunshine to show that it was in substantial compliance with Section 483.25(a)(3). Sunshine has failed to carry that burden of persuasion. Moreover, the Court held that Sunshine failed to prove by a preponderance of the evidence that it substantially complied with Section 483.25(h). The Court further noted under the existing jurisprudence, the facility has the burden to prove that it resumed substantial compliance prior to the date of revisit by the SA. In this case, the Court found that Sunshine has failed to provide documentation to prove that it achieved substantial compliance. Accordingly, the Court denied Sunshine's Petition as it related to the DPNA and termination of the provider agreement, affirmed the DAB's decision with respect to the conclusions on the DPNA and termination of the provider agreement, and will dismiss the case with prejudice.