Autumnwood of Livonia, DAB CR5332 (2019)

DECISION

The Centers for Medicare & Medicaid Services (CMS) moves for summary judgment on its allegations that Autumnwood of Livonia (Petitioner or facility) was not in substantial compliance with Medicare participation requirements at 42 C.F.R. §§ 483.12(a)(1), (b)(1)-(3); 483.95(c)(1)-(3) and that the civil money penalties (CMPs) CMS imposed as a consequence of Petitioner’s alleged noncompliance are reasonable in amount.  Petitioner contests these allegations and cross-moves for summary judgment in its favor.

I conclude that summary judgment is appropriate in this case because the undisputed facts, even when viewed in the light most favorable to Petitioner, establish that:  1) Petitioner did not substantially comply with the Medicare participation requirements found at 42 C.F.R. § 483.12(a)(1), (b)(1); and 2) the imposed CMPs are reasonable in amount.  I therefore grant CMS’s motion for summary judgment and deny Petitioner’s cross-motion for summary judgment.

I. Background and Procedural History

Petitioner is a skilled nursing facility (SNF) located in Livonia, Michigan.  Surveyors from the Michigan Department of Licensing and Regulatory Affairs (state agency) conducted a survey of Petitioner’s facility that ended on December 20, 2016.  CMS Exhibit (CMS Ex.) 1.  The state agency found that the facility was not in substantial

Page 2

compliance with the following Medicare participation requirements:  42 C.F.R. §§ 483.12(a)(1) (Tag F223); 483.12(b)(1)-(3), 483.95(c)(1)-(3) (Tag F226); 483.10(a)(1), (2) (Tag F240); and 483.10(a)(1) (Tag F241).1   CMS Ex. 1 at 1, 17, 26, 30.  In a letter dated January 27, 2017, CMS stated that it agreed with the state agency’s findings.  CMS Ex. 2.  In that letter, CMS imposed on Petitioner two per-instance CMPs for Petitioner’s alleged failure to substantially comply with 42 C.F.R. §§ 483.12(a)(1) (Tag F223); 483.12(b)(1)-(3), 483.95(c)(1)-(3) (Tag F226).  CMS Ex. 2 at 1-2.2

Petitioner timely requested a hearing and the case was assigned to me.  On April 4, 2017, I issued an acknowledgment and pre-hearing order establishing a briefing schedule.  In accordance with the schedule I set, CMS and Petitioner filed pre-hearing exchanges, including pre-hearing briefs (CMS Br. and P. Br., respectively), exhibit and witness lists, and proposed exhibits.  Within its pre-hearing brief, CMS moved for summary judgment, which Petitioner opposed in its own pre-hearing brief.  Petitioner also moved for summary judgment within its pre-hearing brief, prompting CMS to file a response in opposition (CMS Response).  CMS submitted ten exhibits (CMS Exs. 1-10), and

Page 3

Petitioner submitted six exhibits (P. Exs. 1-6).  As neither party has objected to any of the proposed exhibits, I admit all of them into the record.

II. Issues

The issues in this case are:

1. Whether summary judgment is appropriate;
2. Whether Petitioner failed to comply substantially with Medicare participation requirements;
3. Whether the remedies proposed are reasonable.

III. Jurisdiction

I have jurisdiction to hear and decide this case.  Social Security Act (Act) §§ 1128A(c)(2), 1819(h)(2)(B)(ii) (codified at 42 U.S.C. §§ 1320a-7a(c)(2), 1395i‑3(h)(2)(B)(ii)); 42 C.F.R. §§ 488.408(g), 488.434(a)(2)(viii), 498.3(b)(13).

IV. Discussion

A. Statutory and Regulatory Framework

The Act sets requirements for skilled nursing facility (SNF) participation in the Medicare program.  The Act authorizes the Secretary of the U.S. Department of Health & Human Services (Secretary) to promulgate regulations implementing those statutory provisions.  Act § 1819 (42 U.S.C. § 1395i-3).  The Secretary’s regulations are found at 42 C.F.R. part 483.

A facility must maintain substantial compliance with program requirements in order to participate in the program.  To be in substantial compliance, a facility’s deficiencies may pose no greater risk to resident health and safety than “the potential for causing minimal harm.”  42 C.F.R. § 488.301.

The Secretary contracts with state agencies to conduct periodic surveys to determine whether SNFs are in substantial compliance with the participation requirements.  Act § 1864(a) (42 U.S.C. § 1395aa(a)); 42 C.F.R. §§ 488.10, 488.20.  The Act and regulations require that facilities be surveyed on average every twelve months, and more often if necessary, to ensure that identified deficiencies are corrected.  Act § 1819(g)(2)(A) (42 U.S.C. § 1395i-3(g)(2)(A)); 42 C.F.R. §§ 488.20(a), 488.308.

Page 4

B. Findings of Fact, Conclusions of Law, and Analysis

1. Summary judgment is appropriate.3

Summary judgment is appropriate if there is “no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law.”  Mission Hosp. Reg’l Med. Ctr., DAB No. 2459 at 5 (2012) (citations omitted).  In order to prevail on a motion for summary judgment, the moving party must show that there is no genuine dispute of material fact requiring an evidentiary hearing and that it is entitled to judgment as a matter of law.  Id.  If the moving party meets this initial burden, the non-moving party must “come forward with ‘specific facts showing that there is a genuine issue for trial . . . .’”  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. Pro. 56(e)).  “To defeat an adequately supported summary judgment motion, the non-moving party may not rely on the denials in its pleadings or briefs, but must furnish evidence of a dispute concerning a material fact — a fact that, if proven, would affect the outcome of the case under governing law.”  Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010).

In evaluating a motion for summary judgment, an administrative law judge does not address credibility or evaluate the weight of conflicting evidence.  Holy Cross Village at Notre Dame, Inc., DAB No. 2291 at 5 (2009).  Rather, in examining the evidence to determine the appropriateness of summary judgment, an administrative law judge must draw all reasonable inferences in the light most favorable to the non-moving party.  See Brightview Care Ctr., DAB No. 2132 at 9-10 (2007) (upholding summary judgment where inferences and views of non-moving party are not reasonable).  “[A]t the summary judgment stage the judge’s function is not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.”  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).  However, drawing factual inferences in the light most favorable to the non-moving party does not require that I accept the non-moving party’s legal conclusions.  Cedar Lake Nursing Home, DAB No. 2344 at 7 (2010).

Here, there is no genuine dispute of material fact.  The documents in the record establish the following undisputed facts:

Petitioner’s Anti-Abuse Policies:  At all times relevant in this case, Petitioner had a general policy prohibiting abuse of its residents.  Petitioner’s general policy was that “[e]ach resident shall be free from abuse . . . .”  P. Ex. 3 at 1.  In pertinent part, Petitioner’s policy defined abuse as “the willful infliction of injury, unreasonable confinement, intimidation or punishment with resulting physical harm, pain or mental anguish.”  P. Ex. 3 at 1.  Petitioner sought to advance that general policy by

Page 5

implementing a series of more specific anti-abuse policies.  Such policies included reporting of incidents and accidents; screening of potential employees; training of facility staff to detect and mitigate, or even prevent, potential instances of abuse; administrative identification and investigation (where necessary) of potential instances of abuse; and protection of residents during investigations of alleged abuse.  P. Ex. 3 at 3-8.  Of particular note, Petitioner’s reporting policy required its staff to “report any allegations or suspicions of . . . abuse . . . to the Administrator and DON [Director of Nursing] immediately.”  P. Ex. 3 at 7.

Resident 701:  At the time of the incidents at issue in this case, Resident 701 was an 87‑year‑old man who was admitted to the facility on May 9, 2015.  CMS Ex. 6 at 1.  Upon admission, Resident 701 was diagnosed with, inter alia, other cerebrovascular disease, general muscle weakness, anxiety disorder, dementia without behavioral disturbance, and dysphagia.  CMS Ex. 6 at 1; see also CMS Ex. 1 at 3.  Resident 701’s August 14, 2015 and November 12, 2015 quarterly Minimum Data Sets indicated, among other things, that his speech was unclear, he was sometimes understood, his short- and long-term memory was impaired, he had moderately impaired decision-making skills, and he required extensive assistance with bed mobility and transfers.  CMS Ex. 1 at 3-4.  Resident 701 spoke no English, only Arabic, which posed a barrier to communication between the resident and Petitioner’s staff.  CMS Ex. 1 at 8; CMS Ex. 7 at 10, 19.

On or about December 14, 2015, Resident 701’s family placed a hidden camera in his room.  CMS Ex. 1 at 7; CMS Ex. 5; CMS Ex. 7 at 10; CMS Ex. 9 at 4 (Kline Decl. ¶ 14).  The family placed the camera because Resident 701 had complained to them frequently about the care provided by facility staff, reporting that staff would throw him into bed and shove him.  CMS Ex. 1 at 7.  Over the next few days,4  the camera captured footage of several incidents involving one of Petitioner’s staff, certified nurse aide (CNA) C, treating Resident 701 “roughly.”  CMS Ex. 1 at 5-7.  The record does not contain any of this footage, but the surveyor reviewed it and summarized the incidents in the statement of deficiencies.  CMS Ex. 1 at 5-7; CMS Ex. 9 at 3 (Kline Decl. ¶ 9).  Petitioner does not dispute the surveyor’s description of the incidents.  P. Br. at 3-5 (asserting additional facts without alleging that the incidents did not occur).

The first incident involving CNA C and Resident 701, which occurred on December 15, 2015, began with Resident 701 sitting in his wheelchair and CNA C standing at the foot of Resident 701’s bed.  CMS Ex. 1 at 5; CMS Ex. 9 at 5 (Kline Decl. ¶ 14).  Resident 701

Page 6

appeared restless, attempting to remove a “lap buddy,” which the surveyor described as a “cushion that fits into the wheelchair frame.”  CMS Ex. 1 at 5.  Once Resident 701 removed the lap buddy, CNA C walked towards him, “grabbed [his] left arm and abruptly began walking towards the bed while pushing and lifting [Resident 701’s] knee to walk and kicking behind the knee area to propel the leg forward.”  CMS Ex. 1 at 5.  The surveyor explained in her testimony that when she “used the word ‘abruptly’ to describe the manner in which CNA C manipulated [Resident] 701’s body, [she] intended this word to be understood as being synonymous with ‘roughly.’”  CMS Ex. 9 at 2 (Kline Decl. ¶ 6).  Upon reaching the bed, CNA C “abruptly dropp[ed] the Resident onto the bed and then covered [him] with a blanket.”  CMS Ex. 1 at 5.

The second incident, which also occurred on December 15, 2015, involved not only CNA C and Resident 701, but also Housekeeper F.  CMS Ex. 1 at 5; CMS Ex. 9 at 5 (Kline Decl. ¶ 14).  Resident 701 was lying on his bed, while Housekeeper F was standing facing his bed and CNA C was standing on the right side of the bed.  As Housekeeper F talked with CNA C, CNA C “roughly removed the Resident’s pants and roughly turned [him] onto the side (facing towards the door), removed the brief and without cleaning [him], put another brief on [him].”  CMS Ex. 1 at 5.  CNA C then “abruptly grab[bed] the Resident’s back of the head and pull[ed] the Resident up from the bed.”  CMS Ex. 1 at 6.  Finally, CNA C “abruptly turned the Resident and roughly (slammed) the Resident into the wheelchair . . . .”  Id.

The third incident, which occurred on December 15, 2015, as well, involved only CNA C and Resident 701.  CMS Ex. 1 at 6; CMS Ex. 9 at 5 (Kline Decl. ¶ 14).  CNA C pulled Resident 701 from his wheelchair to the right side of his bed while holding him under his arms.  CMS Ex. 1 at 6.  She ordered him to “walk, walk over there.”  Id.  Upon reaching his bed, CNA C “roughly pushed [him] onto the bed” and repositioned him on the bed while “roughly pulling on [his] right shoulder.”  Id.  During the repositioning, Resident 701 can be heard saying repeatedly, “Ah, Ah, Ah.’”  Id.  The surveyor explained in her testimony that the noises Resident 701 was making were “cries of distress . . . in response to being roughly treated and mishandled by CNA C.”  CMS Ex. 9 at 6 (Kline Decl. ¶ 17).

During the final incident, which occurred on December 17, 2015, CNA C and Resident 701 were in the room along with CNA D and licensed practical nurse (LPN) E.  CMS Ex. 1 at 6.  CNA C grabbed Resident 701 under the armpits “roughly and abruptly transferred [him] from the bed to the wheelchair . . . .”  CMS Ex. 1 at 6; CMS Ex. 9 at 5 (Kline Decl. ¶ 14).  At that time, LPN E was standing behind Resident 701, holding his wheelchair, and talking with CNA C.  CMS Ex. 1 at 6.  During their conversation, CNA C “stated, ‘Every mother f*****.’”5  Id.  She then “roughly and abruptly transfer[red] . . .

Page 7

Resident [701] from the wheelchair to the bed.”  Id.  During this rough treatment, Resident 701 again can be heard crying out in distress, saying repeatedly, “Ah, Ah, Ah.”  CMS Ex. 1 at 6; CMS Ex. 9 at 6 (Kline Decl. ¶ 17).  This time, CNA C told him, “Shut up!  Shut up!  Don’t make no noise!” while LPN E told him, “Lay down, lay down.”  CMS Ex. 1 at 6.  Neither CNA D nor LPN E “intervene[d] or acknowledge[d] the rough handling during care or the use of profanity . . . .”  CMS Ex. 1 at 6-7.

On December 18, 2015, Resident 701’s son and daughter came to the facility and directed Petitioner to send Resident 701 to the hospital.  CMS Ex. 5; P. Ex. 1 at 1 (Peruski Decl. ¶ 4).  According to Petitioner, the son and daughter wanted him sent to the hospital “because their family doctor wanted to see him to make sure he was ok to go to his sister’s funeral on Saturday . . . [and] because of the multiple falls he ha[d] had while in the facility.”  CMS Ex. 5.  After he was discharged to the hospital, Resident 701 did not return to the facility.  Id.

Petitioner’s Response to the December 2015 Incidents:  On December 21, 2015, Petitioner asked Resident 701’s son when Resident 701 would be returning to the facility.  CMS Ex. 5; P. Ex. 1 at 1 (Peruski Decl. ¶ 5).  Resident 701’s son informed Petitioner that Resident 701 would not be returning to the facility and instructed that Petitioner should not contact Resident 701.  CMS Ex. 5; P. Ex. 1 at 2 (Peruski Decl. ¶ 5).  On December 22, 2015, Petitioner was informed that Resident 701 would not be returning because of alleged abuse and lack of care.  CMS Ex. 5; P. Ex. 1 at 2 (Peruski Decl. ¶ 6).  On December 23, 2015, Petitioner contacted local police and the state to report the alleged abuse, but ultimately, after investigating, Petitioner was unable to substantiate the allegations.  CMS Ex. 5; P. Ex. 1 at 2 (Peruski Decl. ¶¶ 7-8).  The state also investigated the allegations but was similarly unable to substantiate them.  CMS Ex. 5; P. Ex. 1 at 2 (Peruski Decl. ¶ 9).

On May 26, 2016, Petitioner received from Resident 701’s family a settlement summary and flash drive containing video clips of several of the incidents described above, including the one involving CNA C, CNA D, and LPN E.  CMS Ex. 5; P. Ex. 1 at 3 (Peruski Decl. ¶ 10).  The next day, Petitioner reviewed the video clips and suspended CNA C, CNA D, and LPN E pending an investigation.  CMS Ex. 5; P. Ex. 1 at 3 (Peruski Decl. ¶ 10); CMS Ex. 4 at 2, 4-6.  On June 1, 2016, Petitioner concluded its investigation, which substantiated the allegations that CNA C abused Resident 701 and that CNA D and LPN E failed to report that abuse.  CMS Ex. 5; P. Ex. 1 at 3 (Peruski Decl. ¶ 10); CMS Ex. 4 at 1-3.  That same day, Petitioner terminated CNA C’s employment for “witnessed abuse of a resident,” and Petitioner terminated CNA D’s and LPN E’s employment for failing to report the abuse they witnessed.  CMS Ex. 5; P. Ex. 1 at 3 (Peruski Decl. ¶ 10); CMS Ex. 4 at 4-6.  On October 7, 2016, Petitioner received from Resident 701’s family an additional video clip depicting the incident involving CNA C and Housekeeper F.  CMS Ex. 1 at 4, 16; P. Ex. 1 at 4 (Peruski Decl. ¶ 16).  Petitioner immediately suspended Housekeeper F pending an investigation, which substantiated that Housekeeper F failed

Page 8

to report witnessed resident abuse, and terminated her employment at the conclusion of the investigation on October 11, 2016.  CMS Ex. 1 at 4, 16; P. Ex. 1 at 4 (Peruski Decl. ¶ 16).

The parties’ dispute centers not on the existence of the above-described facts, but rather on the legal significance of those facts.  Insofar as Petitioner attempts to raise factual disputes in its brief opposing summary judgment, my analysis in sections IV.B.2-IV.B.3, infra, shows that those disputes are not material to the issues I must decide.  Consequently, I conclude that summary judgment is appropriate in this case.

2. Petitioner was not in substantial compliance with Medicare participation requirements.

a. Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(a)(1) (F223) because one its staff members abused Resident 701 multiple times.

Residents of SNFs have the right to be free from abuse.  42 C.F.R. § 483.12.  A facility must not use verbal, mental, sexual, or physical abuse, corporal punishment, or involuntary seclusion.  42 C.F.R. § 483.12(a)(1).  In pertinent part, the regulations define “abuse” as “the willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish.”  42 C.F.R. § 483.5.  “Willful . . . means the individual must have acted deliberately, not that the individual must have intended to inflict injury or harm.”  Id.  When a facility’s staff member abuses a resident, “that wrongful act, committed while the [staff member] was providing care to facility residents, effectively ‘becomes the act of the facility’ . . . for purposes of establishing a violation of section 483.13(c)(1)(i) [now codified at 483.12(a)(1)].”  Kindred Transitional Care & Rehab - Greenfield, DAB No. 2792 at 17 (2017).

There is no real dispute that CNA C abused Resident 701.6   On four different occasions, CNA C treated Resident 701 “roughly,” variously grabbing, pulling, dropping, pushing, or slamming him.  CMS Ex. 1 at 5-7.  During two of those incidents, Resident 701 can be heard saying “Ah, Ah, Ah,” indicating he was experiencing discomfort or pain during the rough treatment.  CMS Ex. 1 at 6; CMS Ex. 9 at 6 (Kline Decl. ¶ 17).  On one of these

Page 9

occasions, CNA C told him to shut up and not make any noise.  CMS Ex. 1 at 6.  Clearly, CNA C’s actions were willful, inflicted injury or punishment, and resulted in physical harm, pain, and mental anguish, in violation of both the regulation and Petitioner’s anti-abuse policies.  Moreover, Petitioner’s own investigation, undertaken after it received video images of the incidents from the family, substantiated the allegations of abuse against CNA C, and Petitioner terminated CNA C’s employment due to her abuse of Resident 701.  CMS Ex. 4 at 1, 4.  These undisputed facts, even when viewed in the light most favorable to Petitioner, establish that CNA C abused Resident 701 multiple times in violation of 42 C.F.R. § 483.12(a)(1).

Petitioner does not attempt to defend CNA C’s actions.  Indeed, Petitioner labels them both “appalling” and “abhorrent” (P. Br. at 10, 14), characterizations with which I fully agree.  Rather, Petitioner attempts to deflect blame for CNA C’s behavior onto CNA C alone, arguing that it “cannot be held responsible for [CNA C’s] wrongful intentional acts . . . .”  P. Br. at 10.  Not so.  See, e.g., Kindred Transitional, DAB No. 2792 at 10 (“a facility may not disavow the wrongdoing of its staff and may properly be held responsible for its staff’s actions”).

Appellate panels of the DAB have repeatedly rejected attempts by facilities to disown conduct by their staff members that violated Medicare participation requirements.  To the contrary, the decisions make clear that, “for the purpose of evaluating a facility’s compliance with the Medicare and Medicaid participation requirements, the facility 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, e.g., Gateway Nursing Ctr., DAB No. 2283 at 8 (2009) (facility is responsible for its staff’s actions).  Employees are the agents of their employers, “empowered to make and carry out daily care decisions.”  Emerald Oaks, DAB No. 1800 at 7 n.3 (2001).  “Electing to meet its commitments to provide care and protect residents’ rights through these employees, [a facility] cannot . . . reasonably claim that their misconduct [i]s in effect irrelevant for the purpose of evaluating the facility’s compliance.”  Springhill, DAB No. 2513 at 14; see also Emerald Oaks, DAB No. 1800 at 7 n.3.  Appellate panels have further explained that this “rationale for holding a facility accountable for the actions of its staff applies equally to all staff members who, in the course of carrying out their assigned duties, fail to act in a manner consistent with the regulations and the facility’s policies pertaining to resident abuse.”  North Carolina State Veterans Nursing Home, Salisbury, DAB No. 2256 at 12 (2009).  Moreover, the decisions make clear that “because a facility is responsible for its staff’s actions, ‘considerations of foreseeability are inapposite when staff abuse has occurred.’”  Springhill, DAB No. 2513 at 15 (quoting Gateway, DAB No. 2283 at 8).

The above-cited cases are entirely consistent with the Act.  Section 1128A(l) of the Act, made applicable by Section 1819(h)(2)(B)(ii)(I) of the Act to cases, like this one, involving CMPs, provides, “A principal is liable for penalties . . . under this section for

Page 10

the actions of the principal’s agent acting within the scope of the agency.”  42 U.S.C. § 1320a-7a(l); see also 42 U.S.C. § 1395i-3(h)(2)(B)(ii)(I).  An appellate panel of the DAB has interpreted this section “to mean that facilities may indeed be held responsible for the actions of their employees in determining whether the facilities have complied with applicable regulations.”  Kindred Transitional, DAB No. 2792 at 12 (citing Ridge Terrace, DAB No. 1834 at 7-8 (2002)).7  By all appearances, then, CNA C’s violation of 42 C.F.R. § 483.12(a)(1) is also Petitioner’s violation.

Petitioner fails to cite, let alone come to grips with, any of the foregoing DAB decisions in its attempt to avoid responsibility for CNA C’s abuse of Resident 701.  Instead, Petitioner relies on two administrative law judge decisions, Oakwood Manor Nursing Ctr., DAB CR818 (2001) and Cedar View Good Samaritan, DAB CR997 (2003), and guidance from CMS’s State Operations Manual (SOM), CMS Pub. 100-07, App. Q, to argue that resident abuse, even by staff, must be foreseeable for a facility to be held responsible for the abuse.  P. Br. at 8-10.  Petitioner then lists facts that it believes demonstrate that CNA C’s abuse of Resident 701 was not foreseeable.  For example, it “never received any complaints of abuse or lack of care regarding any of the four terminated employees,” which included CNA C; those employees “had been on staff at [the facility] for years prior to their termination”; they “were subject to and passed criminal background checks prior to being hired by” Petitioner; and they, along with all

Page 11

other employees, were trained during orientation and annually about Petitioner’s “Policy & Procedure for Reporting Suspected Crimes Under the Federal Elder Justice Act and Abuse Prohibition Policy,” including a training session just a few months before CNA C abused Resident 701.  P. Br. at 9-10.  According to Petitioner, these facts establish that CNA C’s abuse of Resident 701 was both unforeseeable and not a consequence of Petitioner’s wrongdoing, which, according to the authorities it cites, absolves it of responsibility for CNA C’s wrongdoing.  P. Br. at 10.  To hold otherwise, Petitioner asserts, is to hold it strictly liable for CNA C’s wrongdoing.  P. Br. at 10-11.

For purposes of summary judgment, I accept as true all of the facts Petitioner lists, but they are irrelevant.  As the DAB has made clear, Petitioner is responsible for its employees’ misconduct, regardless of whether that misconduct was foreseeable.  Springhill, DAB No. 2513 at 14-15.  This is the standard set by the Act itself; Petitioner’s attempt to malign the standard as impermissibly imposing “strict liability” is thus unavailing.  See id. at 14 (holding facilities “to standards set forth in the Medicare and Medicaid participation regulations . . . is not tantamount to applying ‘strict liability’”).  Furthermore, Petitioner’s reliance on Oakwood, Cedar View, and guidance from the SOM is misplaced.  The employment relationship between Petitioner and CNA C sets her abuse of Resident 701 apart from the abuse found in Oakwood, which was perpetrated by a resident’s son, and the example of abuse from the SOM that Petitioner cites, which was perpetrated by an unknown outside intruder.  A facility does not have the same relationship with outsiders as it does with its employees, which warrants a different standard for liability for abuse perpetrated by employees in contrast to abuse perpetrated by outsiders, or even other residents.  See, e.g., Kindred Transitional, DAB No. 2792 at 10-11.  Cedar View is on point insofar as it involved abuse by a facility employee, but the reasoning of Cedar View has been undermined by more recent DAB decisions, particularly the ones cited above.  Thus, I decline to follow the reasoning of Cedar View because it runs counter to the much greater weight of the Act and DAB decisions.

Finally, even assuming, arguendo, that foreseeability is a proper consideration when assessing a facility’s responsibility for its employees’ misconduct, Petitioner would not entirely escape responsibility for CNA C’s abuse of Resident 701.  In a case where foreseeability did play a role in assessing facility compliance with the regulations prohibiting abuse and providing residents with the right to be free from abuse, an appellate panel held, “Protecting and promoting a resident’s right to be free from abuse necessarily obligates the facility to take reasonable steps to prevent abusive acts, regardless of their source.”  Pinehurst Healthcare & Rehab. Ctr., DAB No. 2246 at 6 (2009) (quoting Western Care Mgmt. Corp., DAB No. 1921 at 12 (2004)) (internal quotation marks omitted).  Moreover, another panel noted, “It is sufficient for CMS to show that . . . the facility failed to protect residents from reasonably foreseeable risks of abuse.”  Holy Cross Village at Notre Dame, DAB No. 2291 at 7(citing Western Care Mgmt., DAB No. 1921 at 15).  Even assuming that CNA C’s abusive behavior was not initially foreseeable, other staff witnessed her abuse Resident 701 during two separate

Page 12

incidents.  The December 15, 2015 incident that Housekeeper F witnessed clearly made foreseeable to Petitioner the risk that CNA C would again abuse Resident 701.  Yet even after Petitioner’s other staff became aware that CNA C posed a risk of abuse to Resident 701, they took no steps to protect him from the risk of abuse, much less reasonable steps.  And, as we know, CNA C went on to abuse Resident 701 again.

In sum, Petitioner, having elected to provide care to Resident 701 through CNA C, cannot now disclaim responsibility for CNA C’s abuse of Resident 701 while providing him care.  Consequently, the undisputed facts show that Petitioner, through CNA C, violated Resident 701’s right to be free from abuse and the regulatory prohibition against using verbal or physical abuse against its residents.  42 C.F.R. § 483.12(a)(1).  The undisputed facts also show that, due to Petitioner’s deficiencies, Resident 701 suffered actual harm.  Accordingly, I conclude that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(a)(1).

b. Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(b)(1) (F226) because it failed to implement its written policies intended to prohibit and prevent abuse.

A facility must develop and implement written policies and procedures prohibiting and preventing abuse of residents.  42 C.F.R. § 483.12(b)(1).  A facility may fail to comply substantially with section 483.12(b)(1) if it fails to develop policies or procedures adequate to prevent abuse, or if it fails to implement such policies.  See, e.g., Southpark Meadows Nursing & Rehab. Ctr., DAB No. 2703 at 6 (2016) (quoting Glenoaks Nursing Ctr., DAB No. 2522 at 14 (2013)).

Petitioner’s general policy prohibiting abuse of residents was that “[e]ach resident shall be free from abuse . . . .”  P. Ex. 3 at 1.  To protect the resident’s right to be free from abuse, Petitioner required its staff to “report any allegations or suspicions of . . . abuse . . . to the Administrator and DON immediately.”  P. Ex. 3 at 7.  Petitioner manifestly failed to implement these policies.  CNA C abused Resident 701 on at least four occasions.  CMS Ex. 1 at 20-22.  This represents four separate failures to implement Petitioner’s anti-abuse policies.  Further, three separate staff members, CNA D, LPN E, and Housekeeper F, witnessed two separate incidents where CNA C abused Resident 701, yet none of them reported that abuse to the administrator, the DON, or anyone else.  It took over five months for Petitioner’s administrator to discover that abuse occurred at all (and over nine months to discover the incident that Housekeeper F witnessed).  Furthermore, the administrator might never have discovered the abuse if Resident 701’s family had not provided video footage documenting the abuse.  P. Ex. 1 at 3, 4 (Peruski Decl. ¶¶ 10, 16).  CNA D’s, LPN E’s, and Housekeeper F’s failures to report abuse represent three additional separate failures to implement Petitioner’s anti-abuse policies.  CNA C’s abuse caused actual harm to Resident 701, and CNA D’s, LPN E’s, and Housekeeper F’s failures to report the abuse contributed to that actual harm because they allowed the abuse

Page 13

to continue.  For the same reasons explored in detail in the previous section, all of these failures by Petitioner’s staff to implement Petitioner’s anti-abuse policies are directly attributable to Petitioner.

Petitioner points to a variety of things it claims it did right in response to CNA C’s abuse of Resident 701 and CNA D’s, LPN E’s, and Housekeeper F’s failures to report that abuse, arguing that these actions were sufficient to satisfy its obligation to implement its anti-abuse policies and procedures.  In particular, Petitioner focuses on the integrity of its anti-abuse policies and procedures, its investigation of CNA C’s abuse, and the training it gave to its employees regarding their obligations under its anti-abuse policies and procedures.  P. Br. at 13.  Petitioner asserts that “the conclusion that a facility has failed to comply with § 483.13(c) [sic] does not automatically flow from the mere fact that an isolated instance of nonreporting of alleged abuse has occurred.”  P. Br. at 13-14 (emphasis in original).

Even accepting, for purposes of summary judgment, the truth of all of Petitioner’s allegations about what it did right, those actions do not undermine the conclusion that Petitioner failed to implement its anti-abuse policies.  Petitioner’s staff was responsible for implementing each of Petitioner’s anti-abuse policies.  Therefore, each failure of Petitioner’s staff to report abuse as required by those policies represented a separate violation of 42 C.F.R. § 483.12(b)(1)’s injunction to implement policies that prohibit and prevent abuse.  Further, even assuming that an isolated instance of a single staff member failing to implement a single anti-abuse policy is insufficient to violate 42 C.F.R. § 483.12(b)(1),8 the undisputed facts of this case reveal not one but seven separate instances involving four staff members failing to implement two different policies intended to prohibit and prevent abuse.

In an attempt to also avoid responsibility for CNA C’s, CNA D’s, LPN E’s, and Housekeeper F’s violations of 42 C.F.R. § 483.12(b)(1), Petitioner raises the same arguments that it raised against its noncompliance with 42 C.F.R. § 483.12(a)(1).  Petitioner again asserts that it “cannot be held responsible for the wrongful intentional actions of this individual or the individuals who failed to report the alleged abuse.”  P. Br. at 14.  I will not belabor the point.  Petitioner is simply wrong in this assertion, and I reject its arguments on this point for the same reasons I rejected them in Section IV.B.2.a, above.

Petitioner, having elected to provide care to Resident 701 through CNA C, CNA D, LPN E, and Housekeeper F, cannot now disclaim responsibility for CNA C’s abuse of Resident 701 while providing him care and CNA D’s, LPN E’s, and Housekeeper F’s

Page 14

failures to report that abuse.  Consequently, the undisputed facts show that Petitioner, through CNA C, CNA D, LPN E, and Housekeeper F, failed to implement its policies meant to prohibit and prevent abuse.  42 C.F.R. § 483.12(b)(1).  The undisputed facts also show that, due to Petitioner’s deficiencies, Resident 701 suffered actual harm.  Accordingly, I conclude that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(b)(1).

3. The remedy proposed is reasonable in amount.

Regarding the amount of the CMPs, I examine whether a CMP is reasonable by applying the factors listed in 42 C.F.R. § 488.438(f):  1) the facility’s history of noncompliance; 2) the facility’s financial condition; 3) the factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort, or safety.  The absence of culpability is not a mitigating factor.  The factors listed in § 488.404 include:  1) the scope and severity of the deficiency; 2) the relationship of the deficiency to other deficiencies resulting in noncompliance; and 3) the facility’s prior history of noncompliance in general and specifically with reference to the cited deficiencies.  Unless a facility contends that a particular regulatory factor does not support the CMP amount that CMS proposed, the administrative law judge must sustain it.  Coquina Ctr., DAB No. 1860 at 32 (2002).  The regulations specify that a CMP that is imposed against a facility on a per-instance basis will fall into a single range of penalties.  42 C.F.R. §§ 488.408; 488.438.  The range is from $1,000 per instance to $10,000 per instance, adjusted for inflation under 45 C.F.R. pt. 102.  42 C.F.R. § 488.438(a)(2).  The adjusted amounts applicable in this case are $2,063 per instance to $20,628 per instance.  45 C.F.R. §§ 102.2, 102.3.  The regulations leave the decision regarding the choice of remedy to CMS and the amount of the remedy to CMS and the ALJ, requiring only that the regulatory factors at §§ 488.438(f) and 488.404 be considered when determining the amount of a CMP within a particular range.  42 C.F.R. §§ 488.408, 488.408(g)(2), 498.3(d)(11); see also 42 C.F.R. § 488.438(e)(2), (3); Alexandria Place, DAB No. 2245 at 27 (2009); Kenton Healthcare, LLC, DAB No. 2186 at 28-29 (2008).

CMS decided to impose two per-instance CMPs in this case.  Each per-instance CMP that CMS imposed was $3,263, which is near the bottom of the range permitted for per-instance CMPs.

CMS argues primarily that the per-instance CMPs imposed are reasonable because they are near the bottom of the permitted penalty range and because of the severity of Petitioner’s noncompliance.  CMS Br. at 12; CMS Response at 4-5.  Petitioner contends that the CMP should be reduced to the lowest possible amount because of its “positive facility history.”  P. Br. at 15.  Petitioner relies on testimony from its administrator, who states, “The date of the last standard survey for [Petitioner] was 8/21/2015.  The average number of citations in Michigan is 10 and Petitioner had 8.  None of the citations in the 2015 survey were at the ‘harm’ level.”  P. Ex. 1 at 5 (Peruski Decl. ¶ 21).  Evidence from

Page 15

CMS confirms that none of the citations from that survey caused actual harm to residents.  CMS Ex. 10 at 2.  CMS disputes the significance of Petitioner’s enforcement history, noting that the two most recent surveys prior to the one at issue in this case revealed noncompliance that caused actual harm to residents.  CMS Response at 4; CMS Ex. 10 at 1.

For purposes of summary judgment, I accept Petitioner’s characterization of its compliance history, but I still conclude that the minimal CMPs imposed in this case are reasonable.  Each of the two instances of noncompliance underpinning the separate per-instance CMPs was serious and caused or resulted in actual harm to a resident.  Resident 701 was an extremely vulnerable resident.  His documented diagnoses limited his independence; he therefore relied on Petitioner’s staff for bed mobility and transfers.  CMS Ex. 1 at 3-4, 8; CMS Ex. 6 at 1; CMS Ex. 7 at 19.  Yet CNA C physically abused Resident 701 on four different occasions, all of which involved transfers or bed mobility, and also verbally abused him during one of those incidents.  CMS Ex. 1 at 5-7.  Three other members of Petitioner’s staff witnessed two of those incidents of abuse, including the incident involving verbal abuse, but none of them intervened to prevent the abuse while it was ongoing or reported the abuse after witnessing it.  Id.  Had Housekeeper F reported CNA C’s abuse of Resident 701 on December 15, 2015, as she was obligated to do, then in all likelihood, CNA C’s further abuse of Resident 701 on December 17, 2015, would have been prevented.  These incidents demonstrate a serious breakdown in the implementation of Petitioner’s anti-abuse policies.  Petitioner did not discover the abuse until Resident 701’s family gave management video footage documenting CNA C’s conduct, which was over five months after the incidents occurred.  Throughout all that time, CNA C was providing care to Petitioner’s other residents.  Given these facts, CMS could easily have elected to impose a per-day CMP lasting months.  Had CMS imposed even the lowest amount permitted by the regulations, the CMP would have totaled more than twice the total amount of CMPs CMS actually imposed.9

Petitioner’s noncompliance was severe, and Petitioner was highly culpable for that noncompliance.  Each of these factors, whether viewed separately or in tandem, supports the imposition of a CMP well in excess of the minimum amount permitted by the regulations.  Consequently, I conclude that the two $3,263 per-instance CMPs imposed by CMS are reasonable.

Page 16

V. Conclusion

For the reasons set forth above, I sustain CMS’s determinations.  I conclude that Petitioner was not in substantial compliance with the participation requirements at 42 C.F.R. § 483.12(a)(1), (b)(1).  I also conclude that the imposed CMPs, two $3,263 per-instance CMPs, a total CMP of $6,526, are reasonable.  I therefore grant CMS’s motion for summary judgment and deny Petitioner’s cross-motion for summary judgment.

1. The regulations governing Medicare participation requirements for SNFs have been revised, effective November 28, 2016. 81 Fed. Reg. 68,688 (Oct. 4, 2016); 82 Fed. Reg. 32,256 (July 13, 2017). I apply the regulations in effect at the time of the survey. See Carmel Convalescent Hosp., DAB No. 1584 at 2 n.2 (1996). Based on the November 2016 effective date, the revised regulations do not appear in the 2016 codification of Title 42 of the C.F.R. (dated October 1, 2016). These recent revisions may explain Petitioner’s apparent confusion as to the correct regulations to cite. See, e.g., P. Br. at 2 n.1. When the regulations were updated, former 42 C.F.R. § 483.13(c)(1)(i) was redesignated without revision as 42 C.F.R. § 483.12(a)(1). Departmental Appeals Board (DAB) cases discussing noncompliance with former 42 C.F.R. § 483.13(c)(1)(i) thus remain instructive in cases, like this one, involving alleged noncompliance with 42 C.F.R. § 483.12(a)(1). Similarly, former 42 C.F.R. § 483.13(c) was redesignated 42 C.F.R. § 483.12(b), albeit with substantial revisions. DAB cases discussing noncompliance with former 42 C.F.R. § 483.13(c) thus remain instructive in cases involving alleged noncompliance with 42 C.F.R. § 483.12(b) to the extent the redesignation and revision of former 42 C.F.R. § 483.13(c) did not alter the substance of the obligations that provision imposed on SNFs.
• back to note 1
2. CMS alleged that Petitioner failed to comply substantially with Tag F226, which encompasses the regulatory requirements codified at 42 C.F.R. §§ 483.12(b)(1)-(3), 483.95(c)(1)-(3). CMS Br. at 10-11; see also CMS Ex. 1 at 17. However, CMS’s argument in this proceeding focuses solely on Petitioner’s alleged failure to implement its policies and procedures prohibiting abuse, which implicates only 42 C.F.R. § 483.12(b)(1). I therefore do not address the provisions at 42 C.F.R. §§ 483.12(b)(2)-(3), 483.95(c)(1)-(3) in this decision.
• back to note 2
3. My conclusions of law appear as headings in bold italic type.
• back to note 3
4. According to the surveyor’s description of the footage, the date and time stamps within the footage do not correspond to the actual dates and times on which the various incidents involving CNA C and Resident 701 actually occurred. CMS Ex. 1 at 5. Petitioner does not dispute the timeline of the incidents provided by the surveyor and relied upon by CMS. P. Br. at 3.
• back to note 4
5. The surveyor used asterisks in her description of the statement and later describes the actual words used as “profanity and verbal abuse.” CMS Ex. 1 at 7.
• back to note 5
6. In its brief, Petitioner generally is careful to label the incidents involving CNA C and Resident 701 as “alleged” abuse or some variation that leaves open the question of whether abuse occurred. It is puzzling that Petitioner would label the incidents this way when its own investigation substantiated the allegations of abuse and it terminated the abuser for “witnessed abuse of a resident.” CMS Ex. 4 at 1, 4. In any event, Petitioner does not dispute the basic facts surrounding the incidents involving CNA C and Resident 701, which, as my analysis will show, constituted abuse.
• back to note 6
7. Although the DAB has disclaimed reliance on common-law doctrines in assessing SNF compliance (Kindred Transitional, DAB No. 2792 at 12), the Restatement (Third) of Agency (Restatement) provides helpful background concerning the scope of agency, particularly in the context, relevant here, of an employee-employer relationship. The Restatement provides, in pertinent part, “A principal is subject to vicarious liability to a third party harmed by an agent’s conduct when . . . as stated in § 7.07, the agent is an employee who commits a tort while acting within the scope of employment . . . .” Restatement (Third) of Agency § 7.03(2)(a) (2006). Section 7.07, in turn, describes the scope of employment as follows:


An employee acts within the scope of employment when performing work assigned by the employer or engaging in a course of conduct subject to the employer’s control. An employee’s act is not within the scope of employment when it occurs within an independent course of conduct not intended by the employee to serve any purpose of the employer.

Id. § 7.07(2). By this definition, providing care to Petitioner’s residents was well within the scope of CNA C’s employment. CNA C abused Resident 701 while providing him care. CNA C’s care of Resident 701 served Petitioner’s purpose, even if she performed it in an impermissible, abusive manner.
• back to note 7
8. Such an assumption is plainly at odds with 42 C.F.R. § 483.12(b)(1)’s categorical language.
• back to note 8
9. The math is simple. At the time CMS imposed CMPs, the minimum amount of a per-day CMP authorized by the regulations for non-immediate jeopardy level noncompliance was $103. 42 C.F.R. § 488.438(a)(1)(ii); 45 C.F.R. § 102.3. Had CMS elected to impose a per-day CMP in this amount from when the noncompliance began, roughly December 17, 2015, until CNA C was suspended on May 27, 2016 – a period of about 162 days – the total CMP would have been $16,686.
• back to note 9