38-40 Freneau Avenue Operating Company LLC, d/b/a Atrium Post Acute Care of Matawan, DAB No. 3008 (2020)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioner 38-40 Freneau Avenue Operating Company LLC operates Atrium Post Acute Care of Matawan, a New Jersey skilled nursing facility (SNF) that participates in the Medicare program.  Based on a state health agency’s findings about how Petitioner handled a report of suspected verbal abuse of a resident by one of its employees, the Centers for Medicare & Medicaid Services (CMS) determined that Petitioner was not in “substantial compliance” with certain Medicare participation requirements as of November 29, 2016, and imposed a civil money penalty (CMP) as a remedy for the noncompliance it found.  Petitioner challenged CMS’s enforcement action before an Administrative Law Judge (ALJ), who concluded that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(b) as of November 29, 2016, and sustained the CMP.  38-40 Freneau Ave. Operating Co. LLC, DAB CR5059 (2018) (ALJ Decision).  Petitioner appeals the ALJ’s decision, but we conclude that the decision is supported by substantial evidence and not legally erroneous.  We therefore affirm that decision in its entirety.

Legal Background

To participate in Medicare, a SNF must be in “substantial compliance” with the program’s participation requirements in 42 C.F.R. Part 483, subpart B (sections 483.1- .95).1  42 C.F.R. §§ 483.1, 488.400.  A SNF is not in substantial compliance when it has a “deficiency” – that is, a failure to meet a participation requirement – that creates at least the potential for more than minimal harm to one or more residents.  42 C.F.R. § 488.301 (defining “substantial compliance”).  The term “noncompliance,” as used in the

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applicable regulations (and in this decision), is synonymous with lack of substantial compliance.  Id. (defining “noncompliance”).  Compliance with Medicare participation requirements is verified through onsite surveys performed by state health agencies, which report their findings in a Statement of Deficiencies (form CMS-2567).  Id. §§ 488.10(a), 488.11.

The participation requirements at issue here are found in 42 C.F.R. § 483.12(b), which requires a SNF to “develop and implement” policies that:  (1) prohibit and prevent abuse, neglect, and exploitation of residents; (2) provide for the investigation of allegations of such improper conduct; and (3) provide for training staff “as required at § 483.95.” 
A SNF’s obligation to “develop and implement” policies to prevent abuse and neglect extends to carrying out a substantively adequate policy “in a manner that would effectively prevent” undesired outcomes.  See, e.g., Life Care Ctr. of Gwinnett, DAB No. 2240, at 6 (2009) (noting that “[p]rocedures which are not carried out in practice are worthless”); Maysville Nursing & Rehab., DAB No. 2874, at 15 (2018) (holding that the sanctioned SNF failed to implement an anti-abuse policy by not carrying out steps specified by the policy for investigating an abuse allegation).   

CMS may impose one or more enforcement “remedies” on a SNF found to be not in substantial compliance with a Medicare participation requirement.  42 C.F.R.§§ 488.400, 488.402(b)-(c), 488.406.  Such remedies may include a CMP for each “instance of noncompliance.”  Id. §§ 488.408(d)(1)(iv), 488.408(e)(1)(iv).  When the CMP at issue in this case was imposed, the authorized penalty range for a per-instance CMP was $2,063 to $20,628.  45 C.F.R. § 102.3 (table).  Within that range, CMS sets the CMP in a given case based on, among other factors, the “seriousness” of the SNF’s noncompliance.  42 C.F.R. §§ 488.404(a)-(b), 488.438(f)(3).  Seriousness is a function of the noncompliance’s scope (whether it is “isolated,” constitutes a “pattern,” or is “widespread”) and severity (whether it has created a “potential for” harm, resulted in “[a]ctual harm,” or placed residents in “immediate jeopardy”).  Id. § 488.404(b).  The most serious noncompliance is that which puts one or more residents in “immediate jeopardy.”  Id. § 488.438(a) (authorizing the highest CMPs for immediate-jeopardy-level noncompliance); Woodland Oaks Healthcare Facility, DAB No. 2355, at 2 (2010) (citing authorities).  CMS’s regulations define immediate jeopardy to mean “a situation in which the provider’s noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.”  42 C.F.R. § 488.301. 

A SNF may challenge a determination of noncompliance that has resulted in the imposition of an enforcement remedy by requesting an ALJ hearing and appealing any unfavorable decision by the ALJ to the Board.  Id. §§ 488.408(g)(1), 498.3(b)(13), 498.5(b)-(c).  During the ALJ proceeding a SNF may also contest the reasonableness of the amount of any CMP imposed.  Lutheran Home at Trinity Oaks, DAB No. 2111, at 21 (2007).  A SNF may not contest CMS’s finding about the “level of noncompliance” (e.g.,

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a finding of immediate jeopardy) except in limited circumstances, such as when the finding affects the range of dollar amounts from which CMS may impose a CMP.  42 C.F.R. § 498.3(b)(14). 

Case Background

In mid-December 2016, the New Jersey Department of Health (NJDOH) performed a Medicare compliance survey of Petitioner’s facility.  CMS Ex. 1, at 1.  The survey focused on an incident in which a cognitively impaired female resident, known as Resident 1, was allegedly subjected to verbal abuse when a certified nurse aide, identified as “CNA #1,” told the resident to “shut up.”  Id. 

Relevant details of the incident involving Resident 1 and its aftermath are not in dispute.2  The incident occurred at approximately 4:45 p.m. on November 29, 2016 and was witnessed by an “activity aide,” who immediately reported her observation to the Activity Director (the activity aide’s immediate supervisor), to a registered nurse, and to the “CNA Supervisor.”  CMS Ex. 1, at 2-3.  Upon hearing the activity aide’s report, the CNA Supervisor relieved CNA #1 of responsibility for caring for Resident 1.  Id. at 4.  However, CNA #1 was allowed to finish her shift, which continued for another six and one-half hours (on November 29), and to care for other residents during that time.  Id. at 2, 5.  The next day, November 30, the CNA Supervisor reported the incident to the Director of Nursing.  Id.at 3, 5.  (There is no evidence that the Director of Nursing learned of the incident earlier than November 30.)  CNA #1 did not return to work after November 29, 2016, and Petitioner terminated her employment on December 1, 2016.  Id. at 7.   

When the incident in question occurred, Petitioner had in place an internal resident care policy titled “Abuse, Neglect and Mistreatment of Residents” (Abuse Policy) whose stated purpose was “[t]o ensure the safety and well being of all residents by protecting them from abuse, neglect and mistreatment.”  CMS Ex. 5,at 1.  The policy described  different types of abuse (“physical,” “sexual,” “mental,” and “verbal”), defining “verbal abuse” as “the use of oral, written or gestured language that willfully includes disparaging and derogatory terms to residents,” as well as “[l]anguage that can be interpreted as threatening, malicious, inappropriate name calling, angry or hostile tone.”  Id.  In addition, the Abuse Policy instructed employees as follows:

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Any staff member must report to his/her immediate supervisor, department head or the administrator if they suspect that there has been abuse, neglect or mistreatment.  Failure to report a suspected case of physical abuse, mistreatment or neglect shall be considered unprofessional conduct in the practice of his/her profession and may result in counseling which may lead to termination.

Any staff member who is suspected or allegedly abused a resident will be immediately relieved of his/her duties pending investigation.

Id. at 4-5 (italics added). 

In a survey interview (conducted on December 15, 2016), the CNA Supervisor stated that she believed that the incident involving Resident 1 involved “abuse.”  CMS Ex. 1, at 5; CMS Ex. 4, at 8.  When asked what she should have done when the activity aide told her about the incident, the CNA Supervisor responded that she should have reported it immediately to the Director of Nursing and relieved CNA #1 of her duties and sent her home.  CMS Ex. 1, at 5.  The CNA Supervisor further indicated that she knew what the Abuse Policy required but could not explain why she did not send CNA #1 home immediately after the incident was reported.  Id.; see also CMS Ex. 4, at 8. 

Based on its survey, NJDOH found that Petitioner’s staff “failed to follow” instructions in the Abuse Policy regarding the reporting of suspected abuse and relieving a suspected abuser from duty, and that these lapses constituted noncompliance with
42 C.F.R. §§ 483.12(b) and 483.95.  CMS Ex. 1, at 1-2, 4, 5-7.3  NJDOH also determined that Petitioner’s noncompliance had placed residents in immediate jeopardy on November 29, 2016, and that Petitioner had taken corrective measures sufficient to remove that condition as of November 30, 2016.  Id. at 2. 

CMS concurred with NJDOH’s deficiency and immediate jeopardy findings and imposed a $12,505 per instance CMP, which Petitioner then requested a hearing to contest.  CMS Ex. 3.  CMS responded to the hearing request by moving for summary judgment; Petitioner in turn asked the ALJ to grant it summary judgment.  Both parties filed briefs supporting their respective motions.     

Mirroring NJDOH’s survey findings, CMS argued in its brief to the ALJ that Petitioner had violated the directive in 42 C.F.R. § 483.12(b) to “develop and implement” anti-abuse policies and procedures because its staff failed on November 29, 2016 to follow

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instructions in the Abuse Policy regarding the reporting of suspected abuse and relieving a suspected abuser of work duties.  See CMS’s Jan. 30, 2018 Motion for Summary Judgment (MSJ) at 2, 7-8, 12 (asserting that Petitioner’s “failure to follow facility policies for abuse and neglect and investigative procedures constitutes a deficiency . . . .”).  CMS also argued that its immediate jeopardy finding is “not reviewable.”  Id. at 2, 5, 6-7. 

In its brief to the ALJ, Petitioner argued that CMS had not made a “prima facie case” of noncompliance with 42 C.F.R. § 483.12(b) because any failure by its staff to follow the Abuse Policy on November 29, 2016 – which Petitioner characterized as an “isolated” or uncharacteristic occurrence – was not a failure to “develop and implement” that policy within the meaning of section 483.12(b).  Pet.’s March 12, 2018 Motion for Summary Judgment at 7-8, 10-11.  Petitioner also suggested that its staff had complied, or at least substantially complied, with the Abuse Policy’s requirements upon receiving the activity aide’s report of the incident involving Resident 1.  Id. at 9-10.  In addition, Petitioner contended that it was compliant with section 483.95(c)’s training requirements because it had provided training to its staff on abuse prevention before and after that incident.  Id. at 8.  Finally, Petitioner argued that CMS’s immediate jeopardy finding was “clearly erroneous” and that the amount of the CMP imposed by CMS was unreasonable.  Id. at 5-6, 11-17.  

The ALJ’s Decision

Preliminarily, the ALJ found it “unnecessary” to decide the case under a summary-judgment standard (by assessing whether genuine disputes of material fact necessitated an in-person evidentiary hearing) because the parties had not identified any “witnesses who would testify at a hearing.”  ALJ Decision at 2.4  He therefore decided the case, based on the existing written record, by making factual findings under a preponderance-of-the-evidence standard.  (Petitioner does not object to this aspect of the ALJ’s decision.)   

Addressing CMS’s allegation of noncompliance with 42 C.F.R. § 483.12(b), the ALJ found that, after the activity aide reported the November 29, 2016 incident involving Resident 1, Petitioner’s staff failed to carry out the Abuse Policy in two respects:  first, “[n]one of the members of Petitioner’s staff . . . reported the incident immediately to the director of nursing”; and second, when the CNA Supervisor learned of the incident, that employee failed to relieve CNA #1 of her duties and “send her away from the facility” but “merely reassigned [her] to perform other work at the facility in lieu of her regularly

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assigned duties.”  Id. at 4.  The ALJ concluded that these lapses demonstrated lack of substantial compliance with the requirement in 42 C.F.R. § 483.12(b)(l)-(2) that a SNF “implement written policies and procedures” that prohibit abuse and that provide for the investigation of allegations of abuse.  Id.  The ALJ emphasized that the Abuse Policy’s “adequacy” was not at issue.  Id. at 5.  Rather, said the ALJ, it was the “failure by Petitioner to implement that policy that [was] in question,” and [t]he most vigorous policy is of no benefit if it is not implemented.”  Id.

In addition to finding Petitioner noncompliant with section 483.12(b), the ALJ determined that the amount of the CMP was reasonable in light of “the seriousness of [the] noncompliance.”  Id.at 6.  In justifying that determination, the ALJ stated that the failure of Petitioner’s staff to follow its Abuse Policy after being alerted to the incident involving Resident 1 put other residents at risk of being subjected to verbal abuse by CNA #1 and suffering “serious psychological injury.”  Id. at 6.  The ALJ did not address Petitioner’s argument that it was compliant with the training requirement in 42 C.F.R. § 483.95(c), observing that CMS had “focuse[d] its case specifically on” section 483.12(b).5  Id. at 3. 

Standard of Review

In general, Board review of an ALJ’s decision is limited to determining whether or not:  (1) disputed factual findings are supported by “substantial evidence”6 in the record as a whole; (2) the decision’s necessary legal conclusions are correct (that is, are consistent with applicable statutes and regulations); and (3) a “prejudicial error of procedure . . . was committed.”  See Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s Participation in the Medicare and Medicaid Programs (“Board Guidelines”), “Completion of the Review Process,” ¶ (c).  The Board “will review only those parts of the record before the ALJ which are cited by the parties or which the Board considers necessary to decide the appeal.”  Board Guidelines, “Completion of the Review Process,” ¶ (a).  In addition, the Board “will not consider issues not raised in the request for review” or “issues which could have been presented to the ALJ but were not.”  Id.

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Analysis

Petitioner contends, on various grounds, that the ALJ improperly found it noncompliant with 42 C.F.R. § 483.12(b)(1)-(2).  Petitioner also contends (in the event that the noncompliance finding is sustained) that the ALJ erred in declaring the CMP amount to be reasonable.  Finally, Petitioner attempts to raise a due process issue.  We address these matters and reject Petitioner’s contentions in the order we have just identified them.        

1.     The ALJ’s conclusion that Petitioner was noncompliant with 42 C.F.R. § 483.12(b)(1)-(2) is supported by substantial evidence and not legally erroneous.

As it did before the ALJ, Petitioner argues that no violation of section 483.12(b)(1)-(2) occurred on November 29, 2016, because any failure by its staff to follow the Abuse Policy on that date was not a failure to “implement” the policy, as that term is used in the regulation.  RR at 2, 5.  The ALJ clearly construed the term “implement” in section 483.12(b) as obligating Petitioner to follow, apply, or otherwise carry out its Abuse Policy when circumstances demand.  Petitioner submits, however, that the term should be read to require more than proof that an employee failed to follow a written resident care policy on a specific occasion.  RR at 4-5 (asserting that section 483.12(b) requires CMS to prove more than some isolated “mistake [by staff] in not carrying out their duties”).  According to Petitioner, a SNF violates its obligation to implement written policies and procedures only when it fails to “train” or educate its staff about them.  See RR at 4-5 (asserting that “not having been trained and educated about one’s obligations . . . is what would constitute a failure to implement”).  Petitioner alleges that its staff was “aware of its obligations” under, and had been “trained on,” the Abuse Policy prior to the incident involving Resident 1.  RR at 2.

The ALJ committed no legal error in concluding that Petitioner failed to implement the Abuse Policy in violation of section 483.12(b).  That conclusion is consistent with a common or ordinary definition of the verb “to implement” – which is to “carry out” or put into effect.  See Life Care Ctr. at Gwinnett at 6; United States v. McIntosh, 833 F.3d 1163, 1176 (9th Cir. 2016) (noting that the term is commonly defined, in part, to mean “carry out,” “complete,” “perform,” or “carry into effect”).  A policy that is not carried out or put into effect in a given circumstance is a policy that has not been implemented.  Petitioner’s suggestion that the term “implement,” as used in section 483.12(b), necessarily or exclusively means “train or educate about” is undercut by the fact that section 483.12(b) expressly, and separately (in paragraph (3)), requires a SNF to train staff about established abuse-prevention policies and procedures.  See 42 C.F.R. §§ 483.12(b)(3) (requiring a SNF to implement policies and procedures that “[i]nclude training as required” by section 483.95) and 483.95(c) (requiring a SNF to “provide training . . . that at a minimum educates staff on . . . [a]ctivities that constitute abuse, . . . [p]rocedures for reporting incidents of abuse, . . . [and] resident abuse prevention”).

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The ALJ’s conclusion is also consistent with how the Board applied section 483.12(b)’s predecessor provision.  Prior to November 28, 2016 (the effective date of a final rule which reformed Medicare’s participation requirements for long-term care facilities), the language in section 483.12(b) requiring a SNF to “develop and implement written policies and procedures” to “prohibit and prevent abuse, neglect, . . . and misappropriation of resident property” appeared – in substantially similar form – in section 483.13(c).7  See 81 Fed. Reg. at 68,726, 68,827.  In reviewing citations of noncompliance with section 483.13(c), the Board frequently held that a SNF’s failure to carry out or follow such policies and procedures when circumstances demanded constituted a failure to implement the policies or procedures.  See, e.g., N.C. State Veterans Nursing Home, Salisbury, DAB No. 2256, at 13 (2009) (stating that the administrative law judge “could reasonably conclude that [a certified nursing assistant’s] failure to immediately report the abuse she witnessed . . . constituted not only a violation of facility policy but also a failure by the facility to implement its policies on abuse”); Ill. Knights Templar Home, DAB No. 2369, at 9-10 (2011) (holding that the SNF violated its obligation to implement its policy on abuse because its staff failed to recognize certain conduct as “abuse within the meaning of its policy”); Pinehurst Healthcare & Rehab. Ctr., DAB No. 2246, at 17 (2009) (upholding an ALJ’s finding that the SNF’s failure to follow its own abuse policy constituted lack of substantial compliance with its obligation to implement written policies and procedures to prohibit abuse); Beverly Health Care Lumberton, DAB No. 2156, at 12-13 (2008) (upholding finding by an ALJ that the SNF was not in substantial compliance with its obligation to implement an anti-abuse policy because it allowed an employee suspected of abuse to continue working and because employees who witnessed the alleged abuse failed to comply with the policy’s reporting directive), aff’d, Beverly Healthcare Lumberton v. Leavitt, 338 F. App’x 307 (4th Cir. 2009); Columbus Nursing & Rehab. Ctr., DAB No. 2247, at 26 (2009) (rejecting the SNF’s argument that “CMS cannot make a prima facie case [of noncompliance with the requirement to implement policies and procedures to prevent abuse and neglect] by merely relying on a single, isolated instance where a facility has deviated from its internal abuse policy” (internal quotation marks omitted)). 

In addition to suggesting that the ALJ misconstrued the governing regulation, Petitioner questions the ALJ’s finding that the registered nurse, Activity Director, and CNA Supervisor – the employees to whom the incident involving Resident 1 was first reported – failed to carry out the duties specified in the Abuse Policy.  The ALJ found that these employees should have reported the incident to the Director of Nursing “immediately” (that is, during the late afternoon or early evening on November 29) but failed to do.  ALJ

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Decision at 4.  Petitioner does not dispute that these employees should have reported the incident to the Director of Nursing but emphasizes that the Abuse Policy does not explicitly require “immediate” reporting, and that the CNA Supervisor reported the incident to the Director of Nursing the next day, November 30, 2016.  RR at 3.  However, the Statement of Deficiencies and a surveyor’s notes reflect that the CNA Supervisor understood the Abuse Policy as requiring immediate reporting to the Director of Nursing.  CMS Ex. 1, at 5; CMS Ex. 4, at 8.  Petitioner did not offer evidence that its staff, particularly its supervisory staff, understood the requirement differently or had any basis to do so.8  Furthermore, Petitioner does not claim that it was reasonable under the circumstances for the CNA Supervisor to delay reporting the incident to the Director of Nursing until the next day.   And Petitioner’s own disciplinary records reflect that Petitioner considered the delayed reporting to be unreasonable because it terminated the Activity Director’s employment for not reporting the incident involving Resident 1 to the Assistant Director of Nursing, Director of Nursing, or Administrator until the day after the incident.  See CMS Ex. 7, at 5 (disciplinary report citing the Activity Director for failing to report in a “timely manner”).

Even if the CNA Supervisor could be said to have fulfilled her reporting obligations under the Abuse Policy (which we do not agree she did), the record shows that the registered nurse plainly did not.  According to the Statement of Deficiencies, after learning of the incident from the activity aide, the registered nurse did not at any point relay the information she received to her immediate supervisor (presumably, the Director of Nursing or Assistant Director of Nursing) or to the facility’s Administrator, as the Abuse Policy required.  CMS Ex. 1, at 4; CMS Ex. 4, at 11; CMS Ex. 5, at 4 (requiring “[a]ny staff member” to report a case of suspected abuse “to his/her immediate supervisor/department head or [to] the administrator”).

Petitioner concedes that its staff violated the Abuse Policy by not relieving CNA #1 of all duties immediately after the activity aide reported the suspected abuse of Resident 1.  But Petitioner calls that lapse a “technical deviation.”  RR at 9.  By this terminology, Petitioner apparently means that the failure to relieve CNA #1 of all duties on November 29, 2016 did not harm or have a potential to harm other residents.  Id. The ALJ rejected that proposition, stating that Petitioner’s failure to relieve CNA #1 immediately was not “minor” or trivial because “[w]hen the incident was reported it was not possible for

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anyone to conclude reasonably that the CNA’s potential for uttering abusive language was limited just to Resident # 1” and because “[a]ll of the residents of Petitioner’s facility deserved immediate protection from the possibility that the CNA might abuse them as well.”  ALJ Decision at 5.

Responding to that finding, Petitioner contends that, after the incident involving Resident 1 was first reported, its staff “did take immediate action to correct [CNA #1’s] behavior and prevent harm” to other residents by immediately “counsel[ing]” and “reprimand[ing]” CNA #1 and by supervising her for the remainder of her shift on November 29, 2016.  RR at 9.  This contention is largely unfounded.  While there is some evidence that CNA #1 was counseled or reprimanded on November 29, 2016 for her conduct toward Resident 1,9 there is no basis in the record to suppose that verbal admonishment alone was an effective deterrent in these circumstances.  Close supervision of CNA #1 might have mitigated the risk of harm, but there is no evidence that her interactions with residents were closely supervised at any point on November 29, 2016.  The ALJ therefore reasonably found that Petitioner’s failure to send CNA #1 home before her shift ended on November 29, 2016 created at least the “potential” or “possibility” that residents other than Resident 1 would be subjected to verbal abuse and suffer “psychological harm” as a result.      

Petitioner complains that CMS failed to offer evidence “to suggest that [the] incident [involving Resident 1] resulted in or was even remotely likely to result in ‘physical harm, pain or mental anguish’ [to Resident 1] as is required under the federal definition of ‘abuse’ at 42 C.F.R. 488.301.”  RR at 4.  However, CMS had no obligation to present such evidence because failing to protect Resident 1 from abuse was not the basis for the noncompliance determination at issue here.  The issues presented by that determination were whether Petitioner failed to implement its Abuse Policy in violation of section 483.12(b), and whether any such violation had at least the “potential” for “more than minimal” harm to one or more residents.  Petitioner does not claim that the ALJ failed to resolve those issues.  Moreover, the relevant definition of “abuse” in this case was not the definition of that term in 42 C.F.R. § 488.301 but the definition of “verbal abuse” in Petitioner’s Abuse Policy.

Finally, Petitioner complains that it is being sanctioned for a “lapse in judgment” by a single employee – namely, the CNA Supervisor.  RR at 2, 4.  However, Petitioner’s own actions show that more than one employee experienced at minimum a lapse in judgment:  the record reflects that Petitioner disciplined three employees (the registered nurse, Activity Director, and CNA Supervisor) for not following the Abuse Policy.  CMS Ex. 1,

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at 5, 7.  Regardless of the number of employees involved, we reject the implication that the act or omission of a specific employee cannot be the basis for a noncompliance finding.  The Board has repeatedly held that a SNF “acts through its staff and cannot dissociate itself from the consequences of its employees’ actions.”  Springhill Senior Residence, DAB No. 2513, at 14 (2013); see also Madison Cnty. Nursing Home, DAB No. 2895, at 8 (2018). 

In short, Petitioner has not identified any unsupported finding of material fact or prejudicial legal error supporting the ALJ’s regulatory compliance analysis.  We therefore affirm his conclusion that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(b)(1)-(2) as of November 29, 2016. 

2.     CMS’s immediate jeopardy finding is not subject to review.

Petitioner asserts that the ALJ “d[id] not address the arguments relating to the determination of immediate jeopardy yet then analyze[d] the merits of the immediate jeopardy determination.”  RR at 6.  Petitioner asserts that the Board should address the immediate jeopardy issue because the ALJ “misapplie[d] the immediate jeopardy standard and fails to identify any express facts upon which to substantiate CMS’ determination.”  Id.

Petitioner is mistaken: the ALJ expressly declined to “analyze[ ] the merits of” CMS’s immediate jeopardy finding, stating that “I do not address [the parties’] arguments” about “whether any noncompliance manifested by Petitioner comprised immediate jeopardy for Petitioner’s residents.”  ALJ Decision at 2.  The ALJ did find, in addressing Petitioner’s objection to the CMP amount, that Petitioner’s deficiency had the “potential” to cause “seriousharm.”  See ALJ Decision at 6.  However, the finding did not resolve Petitioner’s disagreement with the immediate jeopardy finding because the ALJ did not consider whether the noncompliance was “likely to cause” or had actually caused serious harm.  At least one of those conditions – likelihood of serious harm, or actual serious harm – must be present to warrant an immediate jeopardy finding.  See Daughters of Miriam Ctr., DAB No. 2067, at 8-10 (2006) (discussing the regulatory prerequisites for an immediate jeopardy finding). 

The ALJ committed no legal error in declining to review the immediate jeopardy finding.  A SNF is in a state of “noncompliance” (lack of substantial compliance) if it has a deficiency that creates at least the “potential” for “more than minimal” harm to one or more residents.  42 C.F.R. § 488.301 (definitions of “substantial compliance” and “noncompliance”); NHC Healthcare Athens, DAB No. 2258, at 2 (2009).  Under the administrative appeal regulations in 42 C.F.R. Part 498, CMS’s finding about the “level of noncompliance” – that is, a finding that a SNF’s deficiency exceeded the potential-for-more-than-minimal-harm threshold by causing actual harm or placing residents in immediate jeopardy – is appealable only if a successful challenge to the finding would

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affect:  “(i) [t]he range of civil money penalty amounts that CMS could collect”; or “(ii) [a] finding of substandard quality of care [as defined in 42 C.F.R. § 488.301] that results in the loss of approval for a SNF . . . of its nurse aide training program.”  42 C.F.R. § 498.3(b)(14); NHC Healthcare Athens at 15-16; North Las Vegas Care Ctr., DAB No. 2946, at 10-11 (2019).

Neither of these conditions for appealability is satisfied in this case.  Reversal of the immediate jeopardy finding would not affect the range of CMP amounts that CMS could collect because CMS imposed a per-instance CMP, for which only one penalty range applies to immediate-jeopardy-level and non-immediate-jeopardy-level noncompliance alike.  42 C.F.R. §§ 488.408(d)(1)(iv), (e)(1)(iv), 488.438(a)(2); compare id. §§ 488.408(d)(1)(iii) and 488.408(e)(1)(iii) (specifying upper and lower penalty ranges for per-day CMPs, depending on the level of noncompliance).  In addition, there is no evidence that the immediate jeopardy finding undergirds a “substandard quality of care” finding that resulted in the loss of Petitioner’s nurse aide training program.  For these reasons, CMS’s immediate jeopardy finding is not reviewable in this administrative proceeding.  Madison Cnty. Nursing Home at 16; Del Rosa Villa, DAB No. 2458, at 19 n.9 (2012) (holding that because CMS’s immediate jeopardy finding “did not and could not affect” the penalty range for the per-instance CMP levied in that case, “the Board lack[ed] the authority to review” that finding), aff’d, Del Rosa Villa v. Sebelius, 546 F. App’x 666 (9th Cir. 2013).

3.     Petitioner has identified no valid basis for reducing the CMP.

We next consider Petitioner’s objection to the $12,505 per-instance CMP.  In reviewing the reasonableness of a CMP amount, ALJs and the Board may consider only the factors specified or cross-referenced in 42 C.F.R. § 488.438(f), factors which include the seriousness – that is, the severity and scope – of a cited deficiency.10  42 C.F.R.
§ 488.438(e)(3); North Las Vegas Care Ctr. at 15-16.  “The daily or per-instance penalty amount selected by CMS is presumptively reasonable based on those regulatory factors, and the burden is on the SNF to demonstrate, through argument and the submission of evidence addressing the regulatory factors, that a reduction is necessary to make

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the CMP amount reasonable.”  North Las Vegas Care Ctr. at 16 (internal quotation marks omitted). 

Observing that $12,505 “falls slightly higher than the mid-point of the range of possible per-instance [CMPs] that may be imposed,” the ALJ found that the “seriousness of Petitioner’s noncompliance justifies this penalty amount.”  ALJ Decision at 6.  Petitioner submits that the penalty amount is unreasonable because there was “no basis for” CMS’s finding that its noncompliance with section 483.12(b) had placed residents in immediate jeopardy.   RR at 11.  However, as discussed earlier, the immediate jeopardy finding – a finding about the noncompliance’s severity – is unreviewable and “final.”  The finding therefore may be weighed in assessing the CMP’s reasonableness.  Pearsall Nursing & Rehab. Ctr. – North, DAB No. 2692, at 10 (2016) (holding that the ALJ lawfully considered an unreviewable immediate jeopardy finding in deciding whether a per-instance CMP amount was reasonable).  Absent factors warranting a reduction, a mid-range per-instance CMP for immediate-jeopardy-level noncompliance, such as the one imposed in this case, is manifestly reasonable.  Cf. Southpark Meadows Nursing & Rehab. Ctr., DAB No. 2703, at 12-15 (2016) (holding that a per-instance CMP that was “slightly less than the mid-point of the applicable penalty range” was “manifestly reasonable given the level of severity and scope” of the deficiency).

As it happened, the ALJ did not mention, or explicitly rely upon, CMS’s immediate jeopardy finding in reviewing the reasonableness of the CMP amount.  Instead, the ALJ found that the noncompliance created the “potential” (if not the likelihood required for an immediate jeopardy finding) that cognitively impaired residents other than Resident 1 would be subjected to verbal abuse by CNA #1 and thereby suffer “serious psychological injury.”  ALJ Decision at 6.  Petitioner does not disagree that verbal abuse could result in “serious psychological injury” to a cognitively impaired resident, and we have rejected its contention that allowing CNA #1 to finish her shift on November 29, 2016 did not put residents at risk of being subjected to verbal abuse.  Petitioner otherwise fails to articulate a clear reason why a deficiency that poses a risk of “serious psychological injury” does not warrant a mid-range CMP.  See RR at 10-11.  It also fails to identify any other factor (besides the severity of the deficiency) justifying a reduction in the CMP.  Accordingly, we affirm the ALJ’s finding that $12,505 was a reasonable CMP for Petitioner’s noncompliance. 

Page 14

4.     The Board cannot entertain Petitioner’s argument that 42 C.F.R. § 498.3(b)(14) is unconstitutional.

Asserting that an immediate jeopardy finding has a “multitude of negative implications” apart from affecting CMS’s selection of the CMP amount,11 Petitioner contends that the regulations which operate to preclude administrative review of CMS’s immediate jeopardy finding in this case – most notably, 42 C.F.R. § 498.3(b)(14) – have deprived it of “property” or caused other “serious loss” without due process of law in violation of the Fifth Amendment to the Constitution.12  RR at 11-13.  We decline to address this issue for two reasons.  First, Petitioner did not raise, or attempt to raise, the issue before the ALJ.  As noted, the Board generally does not consider “issues which could have been presented to the ALJ but were not.”  Board Guidelines, “Completion of the Review Process,” ¶ (a).  Petitioner does not claim that it could not have presented the issue to the ALJ in its pre-hearing brief, which it filed 45 days after CMS argued (in its prehearing brief) that the immediate jeopardy finding could not be appealed.  Second, to the extent Petitioner is challenging the constitutionality of a duly promulgated and applicable regulation (section 498.3(b)(14)), the Board has no authority to entertain that challenge.  Carrington Place at Muscatine, DAB No. 2321, at 24 (2010); Buena Vista Care Ctr., DAB No. 2498, at 20-21 (2013) (refusing to entertain on the merits the SNF’s contention that it had a constitutional due process right to challenge CMS’s immediate jeopardy determination).  The Board has no authority to declare a duly promulgated regulation unconstitutional or refuse to apply it on that ground.  Buena Vista at 21.

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Conclusion

Based on the foregoing analysis, we affirm the ALJ’s decision to sustain the $12,505 CMP imposed by CMS on Petitioner. 

• 1. In October 2016, CMS issued a final rule that revised the Medicare participation requirements in 42 C.F.R. Part 483, subpart B.  With irrelevant exceptions, the revisions in the final rule took effect on November 28, 2016.  See Medicare and Medicaid Programs; Reform of Requirements for Long-Term Care Facilities, 81 Fed. Reg. 68,688 (Oct. 4, 2016).  CMS applied the revised regulations in taking the challenged enforcement action, and Petitioner does not dispute their applicability in this appeal.
• 2. These details are recounted in the post-survey Statement of Deficiencies (CMS Ex. 1), notes written by NJDOH surveyors during the survey (CMS Ex. 4), and Petitioner’s own records (CMS Ex. 7-10; P. Ex. 2).  See also Pet.’s March 12, 2018 Motion for Summary Judgment at 1, 7 (asserting that there is “no genuine dispute on any issue of material fact in this case”).
• 3. The Statement of Deficiencies included a non-immediate-jeopardy-level deficiency citation that is not at issue in this case.
• 4. CMS proffered the written direct testimony of one person, NJDOH employee A.Y.  Petitioner moved to exclude her testimony, and the ALJ granted the motion.  ALJ Decision at 1-2.
• 5. Although its brief to the ALJ cites section 483.95(c) – which specifies training requirements regarding resident abuse reporting and prevention – CMS presented no argument that Petitioner had failed to train its staff concerning resident abuse or other topics.  MSJ at 7.
• 6. “Substantial evidence means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).  “Under the substantial-evidence standard, the Board does not re-weigh the evidence or overturn an ALJ’s choice between two fairly conflicting views of the evidence; instead, the Board determines whether the contested finding could have been made by a reasonable fact-finder tak[ing] into account whatever in the record fairly detracts from [the] weight of the evidence that the ALJ relied upon.”  Douglas Bradley, M.D., DAB No. 2663, at 4 (2016) (internal quotation marks omitted).
• 7. Title 42 C.F.R. § 483.13(c) (Oct. 1, 2015) required the SNF to “develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse of residents and misappropriation of resident property.”
• 8. Petitioner suggests that the CNA Supervisor’s reporting was timely under 42 C.F.R. § 483.12(c)(2), which defines the term “immediately” to mean “not later than 24 hours if the events that cause the allegation do not involve abuse and do not result in serious bodily injury” (italics added).  This contention fails because Petitioner does not argue that the first criterion for the provision’s applicability – namely, that the reportable events did not involve “abuse” or, more specifically, “verbal abuse” as defined in the Abuse Policy – is satisfied.  Nor does Petitioner question the ALJ’s finding that it should have been apparent to its staff, based on the activity aide’s report, that the incident had at least the “potential” to involve verbal abuse.  See ALJ Decision at 5.
• 9. According to the Statement of Deficiencies, the “CNA Supervisor spoke with [CNA #1 on November 29, 2016] and instructed her that no staff member should speak to a resident in [the] manner” that CNA #1 had just spoken to Resident 1.  CMS Ex. 1, at 4.
• 10. The ALJ stated that “the presence or absence of immediate jeopardy is not a necessary element in deciding the penalty amount.”  ALJ Decision at 2.  We are not certain what the ALJ meant by this statement.  If the ALJ meant that immediate jeopardy is not a factor that may be considered by CMS in setting the CMP amount (or by an ALJ or the Board in reviewing the penalty amount’s reasonableness), he was mistaken.  Title 42 C.F.R. § 488.438(f)(3) provides that, in setting a civil money penalty – be it a per-instance or a per-day penalty – CMS may consider, among other factors, the “factors specified in §488.404.”  The factors specified in § 488.404 include the deficiency’s severity – that is, whether the deficiency subjected residents to immediate jeopardy or some lesser degree of actual or threatened harm.  See 42 C.F.R. § 488.404(b)(1).  If the ALJ merely meant that the per-instance CMP amount is not selected from different dollar ranges based on whether immediate jeopardy exists, we have already made this point clear.
• 11. According to Petitioner, these “negative implications” include CMS’s consideration of unadjudicated immediate jeopardy findings in deciding what remedies to impose in future enforcement actions and the use of such findings to develop public ratings of nursing home quality.  RR at 12-13.
• 12. Petitioner suggests that the regulatory limitation on review of CMS’s level-of-noncompliance determination also violates the Administrative Procedure Act (APA), RR at 11-12, but Petitioner failed to make that point below.  Furthermore, Petitioner offered no substantial supporting legal argument in this appeal:  its request for review contains only a brief three-sentence paragraph concerning the APA’s (alleged) applicability and neither quotes nor analyzes statutory or regulatory text or relevant case law.