SUBJECT:

Valley Oaks Camden,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

Petitioner, Valley Oaks Camden (Petitioner or facility), is a long term care facility certified to participate in the Medicare and Medicaid programs as a provider of services.

The Centers for Medicare & Medicaid Services (CMS) determined that the facility was not in substantial compliance with program participation requirements because one of its employees brutalized several facility residents. Petitioner has not disputed the abuse citation, but argues that it should not be held accountable for one of the deficiencies cited by CMS - that a facility not employ individuals with particular criminal records - because a state criminal background check did not disqualify the employee from facility employment.

The parties have filed briefs and stipulations. CMS has moved for summary judgment.

For the reasons set forth below, I find that this case presents no genuine issue of material fact requiring an in-person hearing. First, Petitioner has not appealed the survey findings of abuse, so those determinations are final and binding. Moreover, while I agree that a facility might not be faulted for reliance on the results of a state criminal background check when it employs an abusive staff member, I nevertheless conclude that this facility is responsible for the abusive actions of its employee, and that it was not in substantial compliance with program participation requirements. I affirm imposition of the $7,500 civil money penalty (CMP).

I. Background

The Social Security Act (Act) sets forth requirements for nursing facility participation in the Medicare and Medicaid programs, and authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations implementing the statutory provisions. Act, sections 1819 and 1919. The Secretary's regulations governing nursing facility participation in the Medicare program are found at 42 C.F.R. Part 483. To participate in the Medicare and Medicaid programs, facilities periodically undergo surveys to determine whether they comply with applicable statutory and regulatory requirements for Medicare (SNFs) and/or Medicaid (NFs). They must maintain substantial compliance with program requirements, and, 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.

In this case, the facility employed an individual, Kalimah Shaheed, ⁽¹⁾ who abused several of its residents. On one occasion, she pulled a severely impaired resident (R1) out of his bed, on to the floor, and punched him in the head, chest and arm. On another occasion, she punched a demented resident (R2) in the temple. On a third occasion, she pinched a resident's (R7's) nose "in an inappropriate manner." On yet another occasion, she threatened a resident (R6). Other staff witnessed the abuse, but delayed or neglected reporting it. CMS Ex. 1.

On August 28, 2001, the Arkansas Department of Human Services (State Agency) completed its survey of the facility, found evidence of the above-described abuse, and concluded that the facility was not in compliance with federal requirements for nursing homes participating in the Medicare and Medicaid programs, specifically, 42 C.F.R. � 483.13(b) (abuse - F Tag 223), and 42 C.F.R. � 483.13(c)(1)(ii) (staff treatment of residents - F Tag 225). CMS Ex. 1. Under 42 C.F.R. � 483.13(b), a resident has the right to be free from verbal, sexual, physical, and mental abuse, corporal punishment, and involuntary seclusion. 42 C.F.R. � 483.13(c)(1)(ii) precludes the facility from employing individuals who have been found guilty by a court of law of "abusing, neglecting, or mistreating residents," or who have had entered into the state nurse aide registry a finding "concerning abuse, neglect, mistreatment of residents or misappropriation of their property." For each deficiency, the State Agency found a pattern of noncompliance that caused actual harm, but was not immediate jeopardy (scope and severity level H).

CMS agreed with the cited deficiencies, and added an additional citation, 42 C.F.R. � 483.13(c)(1)(iii). That subsection requires the facility to report to the state nurse aide registry or licensing authorities any knowledge it has of court actions against an employee that would indicate unfitness for service as a nurse aide or other facility staff. ⁽²⁾

In a letter dated September 14, 2001, CMS advised the facility that it was out of compliance with the federal requirements set forth in 42 C.F.R. � 483.13(b) and 42 C.F.R. � 483.13(c)(1)(ii) and (iii). CMS imposed a per instance CMP of $7,500, along with other remedies, denial of payment for new Medicare and Medicaid admissions and eventual termination of Petitioner's participation agreement, but those remedies were ultimately rescinded. ⁽³⁾ Only the $7,500 per instance CMP remains in effect.

Petitioner timely appealed CMS's determinations that it was out of compliance with 42 C.F.R. � 483.13(c)(1)(ii) and (iii). The case has been assigned to me. Petitioner submitted proposed stipulations of fact (Stip. 1 - 10), with which CMS ultimately concurred. Petitioner has also submitted an appeal brief (P. Br.), accompanied by attachments A - F, a reply brief (P. R. Br.), and a supplemental brief (P. Supp. Br.). CMS submitted a motion for summary judgment (CMS Br.), accompanied by exhibits 1 - 5. In the absence of objection, I admit Petitioner's attachments (P. Exs.) A - F, and CMS's exhibits (CMS Exs.) 1 - 5.

II. Discussion

A. Petitioner failed to appeal the survey findings of abuse, 42 C.F.R � 483.13(b), and those determinations are therefore final and binding. ⁽⁴⁾

CMS's determination of facility noncompliance that results in the imposition of a remedy is considered an initial determination. 42 C.F.R. � 498.3(b)(13). The statute and regulations dictate that CMS mail notice of an initial determination to the affected party, setting forth the basis for its initial determination, the effects of the determination, and the party's right to a hearing. The initial determination is final and binding unless reversed or modified by a hearing decision, or under some other circumstances not applicable here. Act, �� 1866(h), 205(b); 42 C.F.R. � 498.20(b).

A hearing request must be filed within 60 days after receipt of the notice of CMS's determination, and the request must identify the specific issues and findings of fact and conclusions of law with which the affected party disagrees, and it must specify the petitioner's basis for contending that those findings and conclusions are incorrect. 42 C.F.R. � 498.40(a) and (b).

Here, CMS sent Petitioner a notice that states, in clear and unequivocal language, its determination that the facility was out of compliance with � 483.13(b) and � 483.13(c)(1)(ii) and (iii). The notice also advises Petitioner of its right to request a hearing and instructs Petitioner to "identify the specific issues, and the findings of fact and conclusions of law with which you disagree," and to "specify the basis for contending that the findings and conclusions are incorrect." CMS Ex. 2.

Petitioner complied with these instructions and carefully limited its appeal to the deficiencies cited under 42 C.F.R. � 483.13(c)(1)(ii) and (iii): "Please consider this letter notice of Valley Oaks' appeal of the decision of September 14, 2001 (copy enclosed) that it was out of compliance with 42 C.F.R. � 483.13(c)(1)(ii) and (iii)." The hearing request does not mention the abuse tag, � 483.13(b).

Petitioner's subsequent filings confirm its intention to limit its appeal. Responding to my order of November 27, 2001, requiring the parties to identify legal and factual disputes, Petitioner filed a status report, received by my office on February 13, 2002. In that report, Petitioner set forth proposed stipulations, all relating to the subsection (c)(1)(ii) issue: facility reliance on a state procedure for running a criminal background check, and its purportedly justifiable ignorance of its abusive employee's criminal record. Petitioner reiterated that it followed appropriate hiring procedures, and therefore cannot be faulted for employing an individual with a criminal record. Like the hearing request, the status report does not challenge the abuse citation. Indeed, at this point Petitioner seems even to have eliminated its appeal of subsection (c)(1)(iii): "The finding for which this appeal is brought is that Valley Oaks failed to comply with 42 C.F.R. � 483.13(c)(1)(ii)." Status Report at 3.

In an order dated April 8, 2002, I directed the parties to brief the legal issues in the case. In its appeal brief, received by my office on May 20, 2002, Petitioner again limited its appeal to the deficiency cited under 42 C.F.R. � 483.13(c)(1)(ii), pointing out the parties' stipulations that Petitioner complied with state requirements for a criminal background check, and that the background check indicated that the abusive individual was eligible for employment. ⁽⁵⁾

Thereafter, however, CMS filed its summary judgment motion, arguing that, because Petitioner failed to dispute the facts and conclusions set forth in the abuse citation, 42 C.F.R. � 483.13(b) (Tag F 223), and failed to dispute CMS's findings with respect to 42 C.F.R. � 483.13(c)(1)(iii), CMS's findings with respect to those citations are final and binding. In reply, Petitioner did not claim any dispute over those citations, but pointed out that it filed a valid and detailed hearing request challenging CMS's conclusions with respect to 42 C.F.R. � 483.13(c)(1)(ii).

I agree that Petitioner filed a detailed and focused hearing request that complied with regulatory requirements for specificity. However, review of that document and Petitioner's subsequent submissions confirm that, at most, Petitioner deliberately limited its appeal to its alleged violations under 42 C.F.R. � 483.13(c)(1)(ii) and (iii). ⁽⁶⁾ At no point did Petitioner suggest that it disagreed with CMS's findings of fact and conclusions of law under � 483.13(b).

After reviewing CMS's summary judgment motion and Petitioner's reply, I offered Petitioner a final opportunity to respond to the issues raised in CMS's summary judgment motion. I noted that my April 8, 2002 order and briefing schedule reflect Petitioner's statement of the issues, which limit the issue presented to whether the facility complied with subsection (c)(1)(ii). Although that subsection presents the sole issue Petitioner intended to appeal, CMS accurately points out in its motion for summary judgment that additional deficiencies were cited in the statement of deficiencies (which had not yet been submitted when I issued the April order). Most significantly, as CMS argues, the statement of deficiencies cites 42 C.F.R. � 483.13(b), and Petitioner failed to challenge that deficiency. I therefore advised the parties by letter dated October 16, 2003, that I would consider these cited, but apparently uncontested, deficiencies, and I afforded Petitioner a final opportunity to respond to CMS's arguments, particularly, its argument that Petitioner had waived appeal of the deficiencies sited under � 483.13(b).

In its supplemental reply, however, Petitioner does not address CMS's principal argument: that the facility has waived its right to appeal the abuse citation. Petitioner provides no explanation of its failure to include those provisions in its hearing request. It does not ask leave to file an amended appeal. Instead, it gratuitously denies having violated � 483.13(b), arguing that the facility should not be held responsible "because one rogue employee took actions well outside the parameters of her duties that resulted in a resident's rights being violated." P. Supp. Br. at 4. I find this insufficient to constitute a valid appeal of the survey finding. CMS's determination that the facility was not in substantial compliance with 42 C.F.R. � 483.13(b) (abuse) is therefore final and binding.

Moreover, as discussed below, even if I determined that Petitioner had timely appealed the abuse citation, I reject its argument that it should not be held responsible for the abusive actions of its employee.

B. Even if Petitioner had timely appealed the abuse citation, the uncontested evidence establishes that the facility was not in substantial compliance with 42 C.F.R. � 483.13(b) (abuse).

"[A] finding of noncompliance with section 483.13(b) on its face implies a failure (deliberate or negligent) by a facility to protect a resident from abuse, i.e. from a willfully inflicted injury resulting in harm . . . . " Beverly Health and Rehabilitation Center-Williamsburg, DAB No. 1748, at 6 (2000); 42 C.F.R. � 488.301.

The state surveyors set forth their findings in alarming detail:

�At about 9:45 p.m. on Sunday, June 24, 2001, an employee identified as "CNA #1" observed [Ms. Shaheed] pull [R1] from his bed onto the floor by his arm. She punched him in his head once, twice in his chest, and once in the arm." According to the facility's investigation report, CNA #1 waited almost 24 hours (23 hours and 15 minutes) before reporting the physical abuse. CMS Ex. 1, at 2.

�At about 6:00 p.m. on Monday, June 25, 2001, [Ms. Shaheed] punched R2 in the left temple because she thought that R2 resisted getting out of her chair. CNA #1, who observed the abuse, waited approximately two and a half hours before reporting it, at which time she reported it, along with the incidents she had witnessed the day before. CMS Ex. 1, at 2 - 3.

�Reports of these incidents apparently led to an investigation. The investigators learned that two weeks earlier CNA #3 witnessed [Ms. Shaheed] in R7's room. "She observed [Ms. Shaheed] take the resident's nose in her hand and pinch the nose in an inappropriate manner." Although CNA #3 claimed to have intervened, she did not report the incident until two weeks later, during the abuse investigation. CMS Ex. 1, at 3.

�CNA #4 reported to the abuse investigators that approximately three weeks prior to the abuse incidents involving R1 and R2, she heard [Ms. Shaheed] verbally abuse a resident in a shocking manner, but she did not report the incident at that time. CMS Ex. 1, at 4.

Based on these findings, the surveyors and CMS concluded that the facility failed to prohibit staff to resident abuse, and failed to ensure that staff reported immediately to the administration incidents of abuse, citing 42 C.F.R. � 483.13(b). ⁽⁷⁾ Petitioner does not deny these surveyor findings, nor dispute that its employee abused facility residents.

Petitioner nevertheless suggests that the regulation only requires that the facility "attempt to insure" that its residents are free from abuse, and argues that the facility "cannot absolutely guarantee that a rogue employee will not engage in behavior which violates the rights of residents." Petitioner argues that by following state law for obtaining a criminal background check of its employee, and by eventually removing the employee and assisting in her criminal prosecution, it satisfied its obligation to keep its residents free from abuse. P. Supp. Br., at 3-4. I disagree. A facility may not so easily evade its own responsibility by placing blame on the unquestionably abusive conduct of its "rogue employee."

Parenthetically, I find curious Petitioner's purported reliance on the state background check in hiring Ms. Shaheed. Stips. 6 and 7. By Petitioner's own admission, it was advised on August 3, 2001, that Ms. Shaheed "was eligible for employment." Stip. 6; P. Ex. C. But the abuse occurred in June 2001, two months earlier. Indeed, the FBI check occurred on June 25, 2001, the day after Ms. Shaheed pulled R1 from his bed and punched him. Ms. Shaheed was apparently providing care (and abuse) to facility residents well before the facility received any information, erroneous or not, as to the results of her FBI background check. I recognize that the parties have stipulated that the facility hired Ms. Shaheed "in reliance upon the findings, conclusions, and report of the Office of Long Term Care," (Stip. 7), and I am apparently required to accept this stipulation. But the documents establish that Ms. Shaheed was providing care and abusing residents before the FBI even ran a background check. As Petitioner argues, this system for checking applicant backgrounds may be seriously flawed - all the more reason for facility vigilance in monitoring the performance of its new staff members.

Moreover, even if I do not fault the facility for hiring an employee with a criminal record, I fault the facility for allowing an employee to abuse repeatedly its residents. Petitioner's argument suggests that its obligations ended when it complied with state law on checking the backgrounds of potential employees. But just because a new employee purportedly has no criminal background does not mean that the facility can assume that she will provide adequate care. The facility's obligation to protect its residents includes properly supervising its employees (whether or not they have criminal records), and immediately reporting and investigating all instances of abuse.

In Emerald Oaks, where the employee conduct was far less sinister, the facility similarly argued that resident neglect stemmed from the actions of one nurse acting "far outside her duties." Emerald Oaks, DAB No. 1800, at 7, n. 3 (2001). The Board rejected this notion, finding

Her employer cannot disown the consequences of the inadequacy of the care provided by the simple expedient of pointing the finger at her fault, since she was the agent of her employer empowered to make and carry out daily care decisions.

Id. I recognize that the employee conduct in Emerald Oaks was negligent rather than abusive, and no evidence there suggested a deliberate attempt to inflict pain. But it would be anomalous to hold the facility accountable only for staff incompetence and neglect, but let it off the hook when, in the course of her duties, a staff member commits a deliberate assault. And the evidence here does not suggest that the employee abused her victims independent of her job. Rather, it appears that she committed her abusive actions in the course of her duties. She abused R1 "[w]hen . . . doing our last rounds." CMS Ex. 1, at 2. She abused R2 "because she thought R2 was resisting getting out of her chair." Id. She apparently abused R6 while providing care. Id. at 4.

Finally, the abuse here was not an isolated incident. Abuse occurred over a period of at least three weeks. At least three other employees observed Ms. Shaheed's abusive behavior, but neglected to report it, suggesting a deeper systemic problem in the facility. Staff were improperly supervised, and were either unaware or simply unwilling to fulfill their own obligations to report. Petitioner thus failed in its obligation to afford its residents freedom from staff abuse, and was thus not in substantial compliance with 42 C.F.R. � 483.13(b).

C. Petitioner has not challenged the reasonableness of a $7,500 CMP, and, based on the scope and severity of the deficiency, a $7,500 CMP is reasonable.

Aside from its claim that CMS had no basis for imposing a CMP, Petitioner does not argue that a $7,500 per instance CMP is unreasonable. Not one of its submissions even mentions the criteria for setting the amount of a CMP. The issue is therefore not before me.

Moreover, in reviewing the reasonableness of the CMP, I consider whether the record evidence supports the finding that a $7,500 penalty is at a level "reasonably related to an effort to produce corrective action by a provider with the kind of deficiencies found and in light of the other factors involved . . . ." Barn Hill Care Center, DAB No. 1848, at 21 (2002); Community Nursing Home, DAB No. 1807, at 22 (2002); Emerald Oaks. DAB No. 1800, at 13; CarePlex of Silver Spring, DAB No. 1683, at 8 (1999). The "other factors involved" include: 1) the facility's history of noncompliance; 2) the facility's financial condition; 3) 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. 42 C.F.R. � 488.438(f). The factors in section 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.

Here, the record is silent as to most of these factors. However, I consider the abuse a very, very serious deficiency. It involved actual harm to several residents over a period of weeks (scope and severity of H). I also find that, in failing to monitor adequately the actions of its staff, Petitioner is culpable. See 42 C.F.R. � 488.438(f). And, relative to the facility's potential liability, the penalty is low. CMS could have imposed a higher per instance CMP (up to $10,000), or a per diem penalty of up to $3,000 per day for the number of days that the facility was not in substantial compliance, which, in this case, could easily have exceeded three weeks. 42 C.F.R. � 488.438(a). Given the seriousness of the deficiency and the actual harm to residents, I am not able to find unreasonable a $7,500 CMP.

III. Conclusion

For the reasons discussed above, I find that the facility was not in substantial compliance with program participation requirements, specifically 42 C.F.R. � 483.13(b) (abuse), and I affirm the $7,500 per instance CMP.

Carolyn Cozad Hughes

Administrative Law Judge

1. Unknown to the facility when it hired her, Ms. Shaheed apparently had several aliases: Clara Jean Poole, Clara Sean Poole, Clara J. Wilson, and Kaliman Shaheed. P. Exs. C, D.

2. CMS's reference to � 483.13(c)(1)(iii) may have been in error. The survey report form quotes the text of 42 C.F.R. � 483.13(c)(2), (3) and (4), which require immediate reporting and investigation of all instances of alleged neglect, mistreatment, and abuse, and the facts set forth in the survey report form would certainly support a deficiency under these subsections. On the other hand, as Petitioner points out, CMS offers no facts that support a deficiency finding under � 483.13(c)(1)(iii), or, for that matter, � 483.13(c)(1)(ii). Nevertheless, because I find that the properly cited abuse deficiencies - 42 C.F.R. � 483.13(b) - justify the remedy imposed, I need not address this issue. But see, Cedar View Good Samaritan, DAB No. 1897 (2003) (quoting the text of the regulation held sufficient notice of violations, without actual citation to the regulation).

3. Remarkably, given the seriousness of the deficiencies, it seems that CMS allowed the facility to continue nurse aide training and competency evaluation programs. See Act, �� 1819(f)(2)(B)(iii)(I)(c); 1919(f)(2)(B)(iii)(I)(c).

4. I make findings of fact and conclusions of law to support my decision. I set forth each finding, in italics and bold, as a separate heading.

5. According to Petitioner - and CMS does not dispute this - the facility learned

of the employee's criminal history (Arkansas convictions on food stamp fraud and drug charges, and California convictions for spousal abuse, possession of narcotics, disorderly conduct, and prostitution) only after the allegations of abuse arose. Petitioner also argues that none of these convictions fall within the regulatory prohibition that it not employ individuals found guilty of abusing residents. P. Ex. D.

6. I found confusing the parties' positions with respect to � 483.13(c)(1)(iii). Petitioner's hearing request plainly includes that provision. ("Please consider this letter notice of Valley Oaks' appeal of the decision of September 14, 2001 . . . that it was out of compliance with 42 C.F.R. � 483.13(c)(1)(ii) and (iii)." Emphasis added.) On the other hand, its status report limits the issue to subsection (c)(1)(ii), and, in its reply brief, Petitioner seems to concede that it violated subsection (c)(1)(iii), and is only interested in challenging CMS's conclusion that it violated subsection (c)(1)(ii). ("The fact that a violation of subsection (c)(1)(iii) may have occurred does not mean that a violation of (c)(1)(ii) also occurred.") P. R. Br. at 3. But I cannot tell from this record exactly what findings CMS relies on to support a violation of (c)(1)(iii). The state surveyors did not cite that subsection, and CMS has not explained the bases for its conclusion that the facility was not in compliance with subsection (c)(1)(iii). Because I find that the F Tag 223 deficiencies more than justify the $7,500 remedy, I find it unnecessary to sort out the subsection (c)(1)(iii) issue.

7. As noted, CMS could also have cited deficiencies under � 483.13(c)(2), (3), and (4). The statement of deficiencies quoted that subsection, asserted that it had been violated, and thus provided adequate notice to the facility "even without the actual citation to those subsections." Petitioner would not be prejudiced if CMS proceeded on those alleged violations. Cedar View Good Samaritan, DAB No. 1897, at 9. Here, however, CMS has apparently not proceeded on those alleged violations.