Generations at Rock Island, DAB CR6612 (2025)

DECISION

Following a complaint investigation completed on November 10, 2021 and a revisit survey completed on December 8, 2021 by the Illinois Department of Public Health (state agency), the Centers for Medicare & Medicaid Services (CMS) determined that Petitioner, Generations at Rock Island (Petitioner or the facility), was not in substantial compliance with several Medicare participation requirements:  42 C.F.R. § 483.25(d)(1)-(2) (Free of Accident Hazards/Supervision/Devices); 42 C.F.R. § 483.12(a)(1) (Freedom From Abuse, Neglect, and Exploitation); (b)(1)-(3) (Develop/Implement Abuse/Neglect Policies) and (c)(1) (Reporting of Alleged Violations); and 42 C.F.R. § 483.10(f)(1)-(3), (8) (Right to Self-Determination).  As a result, CMS imposed an initial per-day Civil Monetary Penalty (CMP) amount of $1,835 before later reducing the amount to $1,192.75 per day for 42 days totaling $50,095.50.  CMS also imposed a discretionary denial of payment for new Medicare and Medicaid admissions (DPNA) from December 8 – 14, 2021 and, as a result, a two-year prohibition for conducting a Nurse Aid Training and/or Competency Evaluation Program (NATCEP).

With the exception of one of the two determinations pertaining to substantial noncompliance with 42 C.F.R. § 483.12(c)(1), CMS's determinations of noncompliance

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were not clearly erroneous, and I uphold the $1,192.75 per-day CMP amount as reasonable.  I reverse one of CMS's determinations of non-compliance with 42 C.F.R. § 483.12(c)(1) due to a failure to timely report a verbal incident between two residents that occurred on December 5, 2021, because the verbal incident was neither abuse, nor an allegation of abuse.  Therefore, I have reduced Petitioner's period of substantial noncompliance from 42 days to 35 days, and I have reversed CMS's imposition of a DPNA.

I.  Background and Procedural History

Petitioner is a skilled nursing facility (SNF) located in Rock Island, Illinois.  CMS Exhibit (Ex.) 1 at 1.  On November 10, 2021, the state agency completed a survey of Petitioner's facility and found that Petitioner was not in substantial compliance with the following Medicare requirements:

• 42 C.F.R. § 483.25(d)(1)-(2) (Tag F689)1 (Free of Accidents Hazards/Supervision/Devices), Scope and severity (S/S) G (an isolated deficiency that causes actual harm that does not amount to immediate jeopardy);2
• 42 C.F.R. § 483.12(a)(1) (Tag F600) (Freedom from Abuse, Neglect and Exploitation), Scope and severity (S/S) level G (an isolated deficiency that causes actual harm that does not amount to immediate jeopardy);

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• 42 C.F.R. § 483.10(f)(1)-(3) (Tag F561) (Self-Determination), S/S level D (an isolated deficiency that involves no actual harm with the potential for more than minimal harm that is not immediate jeopardy);
• 42 C.F.R. § 483.12(b)(1)-(3) (Tag F607) (Develop/Implement Abuse/Neglect Policies), S/S level D (an isolated deficiency that involves no actual harm with the potential for more than minimal harm that is not immediate jeopardy); and
• 42 C.F.R. § 483.12(c)(1) (Tag F609) (Reporting of Alleged Violations) S/S level D (an isolated deficiency that involves no actual harm with the potential for more than minimal harm that is not immediate jeopardy).

CMS Ex. 1.

On December 8, 2021, the state agency completed a revisit survey at Petitioner's facility in which it found that Petitioner was still not in substantial compliance with 42 C.F.R. § 483.12(c)(1) (Tag F609) (Reporting of Alleged Violations) S/S level D (an isolated deficiency that involves no actual harm with the potential for more than minimal harm that is not immediate jeopardy).  The surveyor's finding was due to Petitioner's failure to timely report a verbal altercation that occurred between two residents on December 5, 2021 that purportedly amounted to an allegation of abuse though no suspicion of abuse occurred or allegation was made.  CMS Ex. 2.  This was the sole basis identified by the state agency for why Petitioner had yet to return to substantial compliance at that time.  Id.

CMS found that Petitioner returned to substantial compliance on December 15, 2021.  CMS Ex. 39 at 1.

On May 23, 2022, CMS issued an initial determination in which it informed Petitioner that the complaint survey completed at Petitioner's facility on November 10, 2021, and the revisit survey on December 8, 2021, found that Petitioner was not in substantial compliance.  CMS Ex. 39.  CMS imposed a per-day Civil Monetary Penalty (CMP) of $1,835 per day for 47 days beginning October 29, 2021 and continuing through December 14, 2021, for a total of $86,245.  Id. at 2.  CMS also imposed a DPNA from December 8 – 14, 2021 and a two-year prohibition for conducting a NATCEP.  Id.

On June 2, 2022, Petitioner requested Independent Information Dispute Resolution (IIDR) with the state agency.  CMS Ex. 35 at 2.  As a result of the IIDR, the G-Level citation at F600 was reduced from S/S G to S/S D.  CMS Ex. 40.  Due to the reduction in scope and severity, CMS reduced the per-day CMP duration from 47 days to 42 days, beginning November 3, 2021 through December 14, 2021, for a total CMP of $77,070.  Id.

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On November 15, 2022, in response to Petitioner's request for a reduction in the CMP amount due to financial hardship, CMS reduced the CMP by 35% to $50,095.50 – $1,192.75 per day – and agreed to a 12-month payment plan with interest.  Joint Stipulations of Undisputed Facts; CMS Reply Ex. 1.

On November 18, 2022, Petitioner requested a hearing to dispute the initial determination (RFH).  The Civil Remedies Division acknowledged receipt of the hearing request, assigned the case to me and issued my Standing Order (SO).

In accordance with the SO, on February 23, 2023, CMS filed a prehearing brief (CMS Br.), along with 41 exhibits (CMS Exs. 1-41).  Three of the exhibits (CMS Exs. 29-31) are the written direct testimony of CMS's witnesses.  On March 30, 2023, Petitioner filed a prehearing exchange consisting of a prehearing brief (P. Br.) and three exhibits (P. Exs. 1-3).  Petitioner did not propose any witnesses.  On April 12, 2023, CMS filed a Reply Brief (CMS Reply Br.) and two Reply Exhibits (CMS Reply Ex. 1-2).  On April 24, 2023, the parties filed joint statements of fact and issues presented, and on April 25, 2023, the parties filed a joint settlement status update in which the parties agreed to waive oral hearing and have a decision issued solely on the written record.

As neither party objected to the admission of the opposing party's exhibits, I admit CMS Ex. 1-41, P Ex. 1-3, and CMS Reply Ex. 1-2 into the record and issue this decision solely on the written record.

II.  Issues

The issues in this case are:

Whether Petitioner was in substantial compliance with the Medicare requirements at 42 C.F.R. § 483.25(d)(1)-(2), 42 C.F.R. § 483.12(a)(1), (b)(1)-(3) and (c)(1) and 42 C.F.R. § 483.10(f)(1)-(3), (8);

If Petitioner was not in substantial compliance, whether the CMP imposed on Petitioner was reasonable under the factors in 42 C.F.R. § 488.438(f);

and

Whether the DPNA from December 8 – 14, 2021 was reasonable.3

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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. Applicable Legal Authority

The Act sets requirements for SNFs to participate in the Medicare program and authorizes the Secretary of Health and 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. Parts 483 and 488.

To participate in the Medicare program, a SNF must maintain substantial compliance with program requirements.  To be in substantial compliance, a facility's deficiencies may "pose no greater risk to resident health or safety than the potential for causing minimal harm."  42 C.F.R. § 488.301.  "Noncompliance" means "any deficiency that causes a facility to not be in substantial compliance."  Id.

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 its implementing 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.  The state agency must also investigate all complaints.  Act § 1819(g)(4) (42 U.S.C. § 1395i-3(g)(4)).

The regulations specify the enforcement remedies that CMS may impose if a facility is not in substantial compliance with Medicare requirements.  42 C.F.R. § 488.406.  Among other remedies, CMS is authorized to impose a per-day CMP for the number of days a facility is not in substantial compliance or a per-instance CMP for each instance of the facility's noncompliance.  42 C.F.R. § 488.430(a).  In this case, CMS imposed a per-day CMP of $1,192.75.  The regulations specify that per-day CMPs have a single range between $113 and $6,774.  42 C.F.R. § 488.408(d)(1)(iv); 45 C.F.R. § 102.3 (Table).4

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If CMS imposes a remedy based on a noncompliance determination, such as a CMP, then the facility may request a hearing before an administrative law judge (ALJ) to determine whether there was a basis for the deficiency findings that led to the imposition of the remedy and whether the CMP imposed was reasonable.  Act §§ 1128A(c)(2), 1819(h)(2)(B)(ii) (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).  However, the facility may not appeal CMS's choice of remedies or the factors CMS considered in selecting remedies.  42 C.F.R. § 488.408(g)(2).

A facility may only challenge CMS's determination as to the scope and severity of noncompliance if a successful challenge would affect the range of the CMP that may be imposed, or if CMS has made a finding of substandard quality of care that results in the loss of approval of a facility's NATCEP.  42 C.F.R. § 498.3(b)(14), (d)(10)(i).  The CMS determination as to the level of noncompliance, including the finding of immediate jeopardy, "must be upheld unless it is clearly erroneous."  42 C.F.R. § 498.60(c)(2); Woodstock Care Ctr., DAB No. 1726 at 9, 39 (2000), aff'd, Woodstock Care Ctr. v. Thompson, 363 F.3d 583 (6th Cir. 2003).

B. Findings of Fact, Conclusions of Law and Analysis

1. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25(d)(1)-(2) (Tag F689) (Free of Accidents Hazards/Supervision/Devices), because the undisputed evidence demonstrates that Petitioner failed to follow resident R3's care plan, which resulted in actual injury.

42 C.F.R. § 483.25(d)(1)-(2) requires facilities to minimize the possibility of accidents by keeping residents' environments as free of hazards as possible, and by providing adequate supervision and assistive devices.  42 C.F.R. § 483.25 further states that "[b]ased on the comprehensive assessment of a resident, the facility must ensure that the residents receive treatment and care in accordance with professional standards of practice, the comprehensive person-centered care plan, and the resident's choices."  The Departmental Appeals Board (Board) has consistently held that a facility's failure to follow a resident's care plan is grounds for a violation of 42 C.F.R. § 483.25(d)(1)-(2).  Heritage Plaza Nursing Ctr., DAB No. 2829 at 6-7 (2017).

At issue here is the transfer of R3, a resident at Petitioner's facility, that resulted in the fracture of R3's ankle.  R3's diagnoses included "[m]orbid (severe) obesity" and muscle weakness for which R3 had received physical therapy as part of her treatment.  CMS Ex. 16 at 3.  R3's physical therapy discharge summary stated that R3 required transfers with a Hoyer lift with staff for safety, and she could perform scoot transfers with a slide board and a two-person assist.  Id. at 6.

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On October 23, 2021, Petitioner's staff attempted to transfer R3 from her wheelchair to her bed, because she had been in her wheelchair "since early afternoon."  Id. at 12.  However, a registered nurse (RN) noted that the Hoyer lift was not charging and therefore could not be utilized to transfer R3 to her bed.  Id.  The RN called Emergency Medical Technicians (EMTs) to assist in transferring R3 to her bed along with five staff members using a gait belt and a walker.  Id.  During the transfer, R3's legs buckled prior to the EMTs grabbing her and R3 landed on her knees with both feet buckling "inward and back."  Id.  On October 24, 2021, R3 was transferred to the emergency department where she was diagnosed with right ankle, foot, and toe fractures and a left fibula fracture.  Id. at 7, 13.

Jeanette Heitzler, the state surveyor in this case who has been licensed as an RN for over 30 years, stated in her sworn declaration that Petitioner's staff were aware that R3 required a two-person assist with either a Hoyer lift or a scoot transfer.  CMS Ex. 30 at 1, 4.  Nurse Heitzler stated that, in her professional opinion, staff should not have attempted to transfer R3 without a Hoyer lift, even with the assistance of five staff and two EMTs.  Id. at 5.  Instead, Petitioner should have attempted to utilize one of the other two Hoyer lifts that were present in the facility (but located on different floors), utilized a backup battery for the Hoyer lift on R3's floor, or attempted a slide board transfer – all of which were outlined in R3's physical therapy discharge orders.  Id.; CMS Ex. 16 at 6.

Petitioner argues that its staff acted appropriately when the Hoyer lift on R3's floor was inoperable by utilizing two EMTs and five staff members to transfer R3.  P. Br. at 11.

While Petitioner's staff may have attempted what they thought was an appropriate transfer given that the Hoyer lift on R3's floor was not working, Petitioner's staff failed to follow R3's transfer orders, which directly resulted in severe injury to R3, when there were other options available to Petitioner that complied with R3's transfer orders.  Petitioner offers no testimony or other evidence demonstrating that its staff were unable to follow R3's care plan in utilizing a Hoyer lift from another floor, a backup battery, or a slide board.  Petitioner asserts in its Brief that the staff's actions were reasonable, but Petitioner presented no evidence – such as expert testimony – that its staff's actions were appropriate given the circumstances.  Accordingly, I find that Petitioner violated 42 C.F.R. § 483.25(d)(1)-(2) when it failed to follow R3's documented care plan, resulting in serious injury to R3.

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2. Petitioner was not in substantial compliance with 42 C.F.R. § 483.25(d)(1)-(2) (Tag F689) (Free of Accidents Hazards/Supervision/Devices), because the undisputed evidence demonstrates that Petitioner failed to provide adequate supervision to prevent R5 from eloping.

As set forth above, 42 C.F.R. § 483.25(d)(1)-(2) requires facilities to minimize the possibility of accidents by providing adequate supervision to residents.  The Board has held that facilities may determine how best to supervise their residents.  Owensboro Place & Rehab. Ctr., DAB No. 2397 at 2-3 (2011).  However, a facility's failure to implement proper policies and procedures or to follow its policies or procedures may result in a violation of 42 C.F.R. § 483.25(d)(1)-(2).  Id. at 8; Pinecrest Nursing & Rehab, DAB No. 2446 at 12-13 (2012).

At all times relevant, Petitioner had an elopement policy that stated, "[a]ll exits are alarmed or in visual control 24 hours a day" and that "[a]ll [doors other than the front door] are alarmed or monitored continuously."  CMS Ex. 27 at 1.

In the present case, R5 while a resident of Petitioner's facility, had a care plan that indicated she was a wheelchair-bound supervised smoker who liked "to go outside and smoke often."  CMS Ex. 17 at 8, 12.  R5 was also a documented wanderer who was provided a Wanderguard.5  Id. at 5-6.  Petitioner's staff were to escort smokers, like R5, outside three times per day for supervised smoking.  CMS Ex. 11 at 2.

On October 31, 2021, Petitioner's staff informed R5 that she would not be taken outside to smoke because they were too busy.  CMS Ex. 21 at 2.  R5 later observed that the service elevator door was open and unmonitored.  Id.  R5 then wheeled herself to the elevator and went down to the first floor.  Id.  R5 then wheeled herself down the first-floor hallway to the laundry room where she knew there was an exit door that would not sound an alarm if she exited.  Id.  R5 was able to kick the door open and wheel herself out to the sidewalk where she hoped to find a cigarette.  Id.  R5 remained outside until a doctor from a neighboring facility saw her and brought her back to Petitioner.  Id.  Upon her return, Petitioner's Administrator and staff investigated the incident and confirmed that the exit door in the laundry room was "partially propped open" and therefore would not alarm if a resident with a Wanderguard passed through the threshold.  Id.  It was also discovered that the service elevator buttons were not functioning properly, thus the elevator door remained open on the fourth floor, allowing R5 access to it.  Id.

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Petitioner neither addressed this incident in its Brief, nor offered any evidence disputing the relevant facts as presented by CMS.  Accordingly, I accept CMS's assertions of fact as true.  Therefore, I find that Petitioner violated 42 C.F.R. § 483.25(d)(1)-(2) in failing to follow its elopement policy by having an exit door unalarmed and unmonitored, allowing a resident with a noted history of wandering to elope from the facility.

3. Petitioner was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F600) (Free From Abuse and Neglect), because the undisputed evidence demonstrates that Petitioner failed to protect a resident (R1) from abuse by a fellow resident (R2), that had documented schizoaffective disorder, a history of aggressive and violent behaviors, and should not have been housed on the dementia unit.

CMS next argues that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F600) (Free from Abuse and Neglect).  A facility commits neglect when it fails to "provide goods and services to a resident that are necessary to avoid physical harm, pain, mental anguish or emotional distress."  42 C.F.R. § 483.5 (definition of "neglect").  The stated intent of 42 C.F.R. § 483.12 is to ensure that "[e]ach resident has the right to be free from abuse, neglect and corporal punishment of any type by anyone."

R2 was admitted to Petitioner's facility on October 29, 2021 after being transferred from a sister facility.  CMS Ex. 15 at 1.  It was noted that R2 had a history of schizoaffective disorder and noncompliance.  Id.  During admission, R2 was aggressive, "combative and kicking," yelled profanities at staff and attempted to physically hit staff.  CMS Ex. 1 at 6‑7 ("(R2) was verbally and physically abusive from the time (R2) got here."); CMS Ex. 15 at 4-5; CMS Ex. 20 at 3; CMS Ex. 30 at 7.  R2, despite having no dementia diagnosis, was admitted to Petitioner's locked dementia ward, which violated Petitioner's policy regarding housing on the dementia unit.  CMS Ex. 1 at 7-8 ("Usually a resident has to have a diagnosis of Dementia to be admitted to [the dementia] unit."); CMS Ex. 1 at 8 ("Admission to our locked Dementia unit is dependent on a diagnosis of dementia."); CMS Ex. 15 at 20-21; CMS Ex. 30 at 6-7.

R2's first roommate at Petitioner's facility had to be transferred to a different room on R2's first day due to his fear of R2, referring to R2 as "psycho."  CMS Ex. 1 at 7-8; CMS Ex. 20 at 2.  R2 also attempted to "grab or swing out at" a member of Petitioner's staff.  CMS Ex. 20 at 3.  Petitioner's Administrator was informed of R2's violent behavior.  CMS Ex. 20 at 3; CMS Ex. 30 at 7.  All of the aforementioned observed and documented abusive behaviors of R2 occurred within one day of his admission.

R1 had a diagnosis of dementia and lived in the dementia ward of Petitioner's facility.  R1 had a documented tendency to wander into other residents' rooms on the ward.  CMS Ex. 14 at 1, 10; CMS Ex. 20 at 1, 2; CMS Ex. 30 at 7.

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On October 29, 2021 at around 7:30pm, R1 wandered into R2's room.  CMS Ex. 14 at 9.  R2 wanted R1 to leave, grabbed R1 by the arm and pushed R1 to the floor.  Id.; CMS Ex. 20 at 2.  R2 was observed to be standing over R1, yelling and cursing at her.  CMS Ex. 20 at 2.  R1 was observed to have no injuries, but R1 was visibly shaking and crying.  CMS Ex. 14 at 9.

Petitioner does not dispute that the October 29, 2021 incident constituted abuse of R1 by R2.  Instead, Petitioner argues that it was only on notice that R2 was verbally and physically abusive toward staff, and not fellow residents.  P. Br. at 9-10.  Accordingly, Petitioner argues that it was not foreseeable that R2 would be abusive toward fellow residents.

While this distinction may be material in certain instances, here, there was evidence that R2's aggression was haphazard, erratic, and unpredictable, and not simply because a person was a member of the staff interacting with him.  See, e.g., CMS Ex. 15 at 4 (R2 attempted to hit a nurse while the nurse's back was turned; "Resident friendly but quickly becomes angry with [nurse] for what appears no reason and then again friendly.").  I find that Petitioner was on notice that R2 was verbally and physically abusive toward other people and that a specific incident directed toward a resident was not necessary for it to be foreseeable that R2's aggression would be directed towards another resident based on the specific facts of this case.  I further find that Petitioner's failure to follow its own policy in this instance – by placing R2 on the dementia unit with residents who were known to wander into other residents' rooms – compounded the foreseeability and likelihood that R2 would act verbally and physically abusive toward another resident on the dementia unit, such as R1.  Accordingly, I find that Petitioner neglected to protect R1 from abuse in violation of 42 C.F.R. § 483.12.

4. Petitioner was not in substantial compliance with 42 C.F.R. § 483.10(f)(1)-(3) (Tag F561) (Self-Determination) as the undisputed evidence demonstrates that Petitioner failed to follow its own policy with regard to resident cigarette breaks.

CMS alleges that Petitioner was in violation of 42 C.F.R. § 483.10(f)(1)-(3) for its failure to take R4 out for a cigarette break.  CMS Ex. 21 at 3; CMS Ex. 29 at 5-6; CMS Br. at 15 n.2.  42 C.F.R. § 483.10(f) states that residents have a right to self-determination and that they have the right to make choices for themselves "about aspects of his or her life in the facility that are significant to the resident."

As set forth above, R5 was a resident at Petitioner's facility whose care plan noted that she was a wheelchair-bound supervised smoker who liked "to go outside and smoke often."  CMS Ex. 17 at 8, 12.  Pursuant to Petitioner's Smoking Times Policy, staff were to escort smokers, like R5, outside three times per day for supervised smoking.  CMS Ex. 11 at 2.

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On October 31, 2021, Petitioner's staff informed R5 that she would not be taken outside in the morning to smoke because they were too busy.  CMS Ex. 21 at 2.  Accordingly, CMS has demonstrated that Petitioner was not in compliance with its Smoking Times Policy or R5's right to self-determination with regard to smoking.  Petitioner does not address this alleged noncompliance in its Brief.  Therefore, in the absence of any evidence or argument to the contrary, I find that Petitioner violated 42 C.F.R. § 483.10(f)(1)-(3).

5. Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1) (Tag F609) (Reporting of Alleged Violations of Abuse), because the undisputed evidence demonstrates that Petitioner's staff failed to report an allegation of verbal abuse to the State Agency.

42 C.F.R. § 483.12(c)(1) states that in response to allegations of abuse, the facility must "[e]nsure that all alleged violations involving abuse . . . are reported immediately, but not later than 2 hours after the allegation is made . . . ," to the administrator of the facility and to other officials in accordance with State law, e.g., the state agency.

1. Petitioner's staff failed to report the November 2, 2021 incident of verbal abuse from a visitor to a resident.

On November 2, 2021, R5's new roommate, R6, was moving in with the assistance of R6's daughter (V23).  CMS Ex. 19 at 2; CMS Ex. 21 at 2.  During the move-in process, V23 started moving R5's possessions to make room for R6's possessions.  CMS Ex. 21 at 2.  R5 asked V23 to not touch her belongings and, subsequently, V23 called R5 a "bitch."  Id.  R5 stated it was "the worst day of [her] life" and that she "was crying when this all happened."  Id.  As a result of her behavior, V23 was escorted from the building.  Id. at 2-3.  The state surveyor interviewed all staff that heard, witnessed, or responded to the incident.  CMS Ex. 1 at 9 – 11; CMS Ex. 30 at 7-8.  A nurse was quoted as stating, "[V23] was verbally abusive to [R5]."  CMS Ex. 1 at 10.  It was further noted that another nurse "confirmed that the incident was verbal abuse, however she did not report it to [the Administrator]."  CMS Ex. 21 at 2-3.

Petitioner does not contest in its Brief that it was in substantial compliance with 42 C.F.R. § 483.12(c)(1) with respect to this incident, and two nurses characterized the incident as verbally abusive.  Furthermore, there is no dispute that this allegation of abuse was not timely reported to the Administrator or state agency.  Therefore, I find that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1).6

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2. The verbal altercation on December 5, 2021 between two residents did not constitute abuse or allegations of abuse, and therefore Petitioner did not have an obligation under 42 C.F.R. § 483.12(c)(1) to report the exchange.

On December 5, 2021, a registered nurse on Petitioner's staff, V6, witnessed two residents, R2 and R16, in a brief verbal altercation at the elevator that arose from one of the resident's accidental near-bumping into the other while exiting/entering the elevator.  CMS Ex. 24; CMS Ex. 25.  That same day, V6 noted in the residents' progress notes that "[b]oth men [were] yelling at each other 'you almost hit me w/your w/c', 'no I didn't,'" and that both residents were "yelling and cussing at each other with fists raised."  CMS Ex. 24; CMS Ex. 25.  V6 further indicated that she "stepped between the two of them to split them and keep them from making contact."  Id.

After V1, Petitioner's administrator, read the progress note on December 6, 2021, she reported the incident to the state agency "in an overabundance of caution" (P. Br. at 13) and followed-up with both V6 and each of the residents.  CMS Ex. 2 at 2.  V1 then concluded investigating the incident and sent a final report to the state agency.  P. Ex. 2.  V1 concluded in the final report that "no abuse occurred and no residents were harmed," and she noted the following from her interviews:

• V1 interview of V6:  "[V6] states that the R[2] was inside the elevator in his wheelchair sitting with his back to the doors.  When the doors open, R[2] began to push himself out backwards, not seeing that he was going to run into R[16].  R[16] began muttering under his breath at R[2] to watch where he was going and to stop so he didn't run into him. [V6] states that the residents were muttering things under their breath not loud enough for either to hear but both knew that the other was frustrated. [V6] states that she just stepped between the two residents to diffuse the situation and prevent an altercation of any kind.  [V6] states it was more of a bicker between two residents than any kind of altercation but says had she not stepped between them, things may have been different.  [V6] states that neither

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resident seemed upset and everything went back to normal once they were sent on their way."

• V1 interview of R2:  "When asked if R[2] remembered the incident he replied no.  When reminded of the incident with R[16] at the elevator he said 'Oh, that? It was nothing. I went to roll off the elevator and he started complaining that I was gonna run him over.  So I said I'm just trying to get off the fucking elevator.'  When asked if he called R[16] any names or said anything hurtful to him R[2] replied 'No, is that what he told you? I didn't say shit to him. I was just wanting off the elevator.' When asked if he raised his fists at R[16] to threaten him he stated 'I just threw my hands up in the air because I was frustrated but I wasn't trying to hit anyone.'  When asked if there was anything else said or done during this incident he replied no.  When asked if there were any further issues with him and R[16] he said no.  When asked if R[2] felt safe in the facility he replied yes.
• V1 interview of R16:  "When asked if R[16] remembered this situation he could not recall the incident.  When reminded of the incident at the elevator he said 'Is he making a big deal out of that?' I assured R[16] that I have to investigate all incidents in the facility to make sure everyone is safe and that R[2] was not complaining he said 'Oh, well it was nothing.'  When asked if R[2] threatened him, he said 'No, but he almost ran into me.'  When asked if he yelled at R[2] or if R[2] yelled at him, R[16] said 'No, is he saying I yelled?'  When asked if R[2] called him any names or said anything hurtful he said 'Not that I remember.' When asked if R[16] felt safe in the facility he said yes.  When asked if there were any other issues with R[2] or any other residents, he replied no.

P. Ex. 2.

On December 7, 2021, the state surveyor interviewed V6 about the incident, and the surveyor recorded the following summary of the interview:

They were mad at each other because one was getting front of the other and they were like "you about ran into me", "no I didn't" "yes you did" back and forth. [R2] called [R16] a name under his breath [ ] but [R16] didn't hear him, they were mumbling and possible cursing about the incident under their breath. I separated them before it escalated any father (sic).  It was just yelling "You almost hit me, etc."  It could've been a big deal had I not been right there.  I am aware of the abuse policy and they were not threatening each other or derogatory with words.  I diverted it before it came to any abuse issues.  Had I thought it was abuse I would've called the DON and Admin and completed an incident report.  They were

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mumbling and cursing about the incident.  I separated them before it escalated any farther.  It was just yelling, I didn't feel like it was abuse.

CMS Ex. 26 at 2.

With respect to the residents' views themselves, the state surveyor also noted on December 7, 2021 that "both residents state they didn't get into a fight and no ones feelings were hurt or derogatory names exchanged.  Bother (sic) residents deny being in fear of the other or that there was any argument that needed attention."  Id. at 3.  The state surveyor summarized V1's recounting of her conversation with V6: "States the nurse felt the altercation was cussing, mumbling but she didn't feel that it was abuse because they were more just disagreeing and not in danger or hurting each other."  Id.

The state surveyor noted in support of her finding of substantial noncompliance that "V1 confirmed if the nurse (V6) had any concern or enough of an incident to chart then she shouldv'e [sic] reported it to me and didn't."  Id. at 3.

Petitioner argues that no allegation or suspicion of abuse was formed in relation to the December 5, 2021 incident.  P. Br. at 12.  Petitioner further argues that neither resident reported feeling abused or disparaged, and the incident did not amount to abuse.  Id.  CMS does not specifically articulate in its briefs why this incident, which no one internal or external to Petitioner's facility concluded was abusive at any point, constitutes "allegations of abuse."  See CMS Br. at 19; CMS Reply at 5-6.  Rather, CMS appears to argue that because the nurse who witnessed R2's and R16's interaction noted it in the resident's charts, then the interaction must constitute allegations of abuse.  See CMS Br. at 19.  I disagree, whether an incident is recorded in a patient's medical file is not dispositive of whether the incident constitutes an "allegation" of abuse.

V1's final report is consistent with the state surveyor's interviews of V6, R2, and R16, and substantiates that no abuse occurred.  The crux of the substantial noncompliance determination then is whether V6's witnessing of this altercation constitutes allegations of abuse such that there was a legal obligation to report the incident immediately and not later than two hours following its occurrence.  42 C.F.R. § 483.12(c)(1).  For the reasons below, I find that the verbal incident between R2 and R16 does not constitute "allegations" of abuse.

"Abuse" is defined in the regulations, in relevant part, as "the willful infliction of injury, . . . [or] intimidation . . . with resulting physical harm, pain or mental anguish. . . . It includes verbal abuse . . .."  42 C.F.R. § 483.5.  Importantly, of relevance here, the definition requires injury or intimidation and that some resulting physical harm, pain, or mental anguish result.  The altercation that RN V6 witnessed did not include any injury

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and neither resident appeared intimidated.  Furthermore, after the brief encounter, both residents calmed down quickly and went about their days, which supports V6's interpretation of the event as a brief frustrated exchange between residents and not "allegations" of abuse.  V6's interpretation of the altercation was further confirmed by subsequent interviews of each resident by both V1 and the surveyor.  Notably, neither resident heard the cussing the other mumbled under each other's breath, and the raised fists was an indication of frustration and not a threat of force.  And neither resident reported any physical harm, pain, or mental anguish.  To the contrary, both residents appeared more concerned that the other resident interpreted the altercation as something worthy of reporting and investigation.

While highly fact-dependent, not every heated exchange between residents that includes mumbled cussing under one's breath and frustrated gestures is tantamount to abuse or allegations of abuse under the law.  Here, the altercation is akin to two drivers at an intersection frustrated at the other's interpretation as to who has the right of way.  While each resident's expression of that frustration was sub-optimal, it was not concomitant with allegations of abuse where there was no injury, neither of the residents involved – both of whom were conscious and cognitively intact – actually alleged abuse, and it was witnessed first-hand by a nurse who reasonably characterized the altercation as a disagreement that quickly dissipated.7

That V6 charted the altercation is no more evidence that the encounter between the residents rose to the level of allegations of abuse than would not charting an altercation be evidence that a particular altercation was not abusive.  It is valuable to chart any host of resident interactions that are not abuse or allegations of abuse.  Furthermore, that V1 reported the encounter to the state agency the next day is also not dispositive of whether

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the encounter constituted allegations of abuse.  A facility may choose to over-report an event even if the event did not mandate reporting to err on the side of caution in case someone reviewing the event (such as a surveyor) happens to take a different view after the fact – as is the case here.  Conversely, a facility's failure to report an altercation – as with Petitioner's failure to report the incident between R5 and V23 covered above – is not evidence that the incident did not rise to the level of allegations of verbal abuse.  Each incident must be assessed based on the particular facts and circumstances of the individual instance itself.

To interpret 42 C.F.R. § 483.12(c)(1) as casting this encounter as an allegation of abuse is not only inconsistent with the text of the regulation, but it also comes at a cost, e.g., it diminishes the autonomy of the residents involved, dilutes the words "abuse" and "allegation of abuse" which detracts from the gravity of situations where those terms are aptly applied, chills residents' willingness to communicate about relationships or exchanges with other residents for fear of a disproportionate reaction, and incentivizes nurses to record less information pertaining to residents interactions with one another.  I find that this exchange did not constitute allegations of abuse, so Petitioner was not in violation of 42 C.F.R. § 483.12(c)(1), (4) when Petitioner did not report the December 5, 2021 encounter between R2 and R16 at the elevator to the state agency within two hours.

6. Petitioner returned to substantial compliance on December 8, 2021 rather than on December 15, 2021.

The Board "has held that 'CMS's determination of whether the evidence demonstrates that a facility returned to substantial compliance' prior to the date determined by CMS 'is subject to de novo review by an ALJ and on appeal to the Board.'"  Foxwood Spring Living Center, DAB No. 2294 at 12 (2009) (citing Taos Living Center, DAB No. 2293 at 20 (2009)); see also 59 Fed. Reg. 56,116, 56,208 (Nov. 10, 1994) ("When a facility disagrees with the decision [of continued noncompliance] made at the time of the revisit, this disagreement could be resolved through the administrative hearing process.").

As addressed above, I find that Petitioner's failure to immediately report the verbal incident between R2 and R16 that took place by the elevator on December 5, 2021 did not violate 42 C.F.R. § 483.12(c)(1), (4).  This alleged substantial noncompliance was the only incident noted on the December 8, 2021 revisit survey, and therefore I find that Petitioner achieved substantial compliance as of the date of the revisit survey – December 8, 2021.8  I find that Petitioner was substantially noncompliant from November 3, 2021

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through December 7, 2021, and therefore the CMP per-day accrual is for 35 days rather than 42 days (had Petitioner been substantially noncompliant through December 14, 2021).  See CMS Ex. 40. See also Foxwood Spring Living Center at 6-10.

7. Because Petitioner returned to substantial compliance by December 8, 2021, the imposition of a DPNA from December 8 – 14, 2021 was unreasonable and must be overturned.

After its November 10, 2021 survey of Petitioner's facility, the state agency informed Petitioner that it recommended to CMS's regional office (RO) – and the RO concurred – the imposition of a discretionary DPNA effective December 8, 2021 if substantial compliance was not achieved by that date.  CMS Ex. 32 at 2.  As addressed above, Petitioner returned to substantial compliance on December 8, 2021, so the discretionary DPNA should not have gone into effect, and it is therefore unreasonable to the extent it was implemented.  Foxwood Spring Living Center, at 14-15.

8. The per-day CMP amount of $1,192.75 imposed by CMS for Petitioner's violations is reasonable.

As I have concluded that Petitioner violated 42 C.F.R. §§ 483.25(d)(1)-(2), 42 C.F.R. § 483.12(a)(1), 42 C.F.R. § 483.10(f)(1)-(3), 42 C.F.R. § 483.12(b)(1)-(3) and 42 C.F.R. § 483.12(c)(1), I must now determine whether the per-day CMP imposed against Petitioner was reasonable.  In so determining, I apply 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 42 C.F.R. § 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.

The Board has explained that "[i]t is settled law that ALJ review of the reasonableness of CMP amounts imposed by CMS is de novo."  Fireside Lodge Retirement Ctr., Inc., DAB No. 2794 at 19 (2017).  I consider whether the evidence supports a finding that the amount of the CMP 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 above factors. I am neither bound to defer to CMS's factual assertions, nor free to make a wholly independent choice of remedies without regard for CMS's discretion.  See, e.g., Barn Hill Care Ctr., DAB No. 1848 at 21 (2002).  The Board has explained that "[t]he determination of whether a CMP amount is reasonable is a conclusion of law, not a

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finding of fact."  Cedar Lake Nursing Home, DAB No. 2344 at 12 (2010), aff'd, Cedar Lake Nursing Home v. U.S. Dep't of Health & Human Servs., 619 F.3d 453, 457 (5th Cir. 2010).  However, unless a facility contends that a particular regulatory factor does not support the CMP amount, I must sustain it.  Coquina Ctr., DAB No. 1860 at 32 (2002).  Pursuant to 42 C.F.R. § 488.408(g)(2), a facility cannot appeal CMS's choice of a remedy, and an appeal of a CMP is limited to review based on the regulatory factors set forth at 42 C.F.R. §§ 488.438(f) and 488.404(b)-(c).  See, e.g., Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 19-20 (2010).  Moreover, when an ALJ has found a basis for imposing a CMP, as I have done here, I "may not set a penalty of zero or reduce the penalty to zero," nor can I deviate from the penalty ranges set forth in 42 C.F.R. §§ 488.438.  42 C.F.R. §§ 488.438(e); 59 Fed. Reg. at 56,116, 56,206 (Nov. 10, 1994).  The lower per-day CMP range of $113 to $6,774, as adjusted annually, is applicable to this case, because this range applies to deficiencies that do not constitute immediate jeopardy, but either cause actual harm to residents, or have the potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii); 45 C.F.R. § 102.3 (Table) (2020); 83 Fed. Reg. 51369, 51380 (Oct. 11, 2018).

Here, CMS initially imposed a per-day CMP of $1,835 for 47 days, for a total of $86,245.  After IIDR, CMS upheld the per-day CMP of $1,835, but reduced the number of days to 42, for a total CMP of $77,070.  Subsequently, at Petitioner's request due to financial hardship, CMS reduced the total CMP amount by 35% to $50,095.50, which is equal to $1,192.75 per day, and agreed to the amount being repaid over a 12-month period with interest.  CMS Reply Ex. 1; Joint Stipulations of Fact.  I have further found that Petitioner remained out of substantial compliance for 35 days rather than the 42 days that CMS had determined.

CMS argues that the CMP is reasonable based on the seriousness of the noncompliance, Petitioner's culpability and the facility's history of noncompliance, which includes 11 citations for noncompliance in the two years preceding the subject survey cycle.  CMS Br. at 20-21; CMS Ex. 3 at 1-6.  Moreover, the reduced amount of the per-day CMP of $1,192.75 is in the bottom 20% of the penalty range.

In response, Petitioner argues that the CMP must be reduced due to its financial condition.  P. Br. at 17-19.  In support, Petitioner submitted 122 pages of financial documents demonstrating its financial condition as of the end of 2021.  P. Ex. 3.  The documents submitted are duplicates of those sent to CMS on June 7 and October 4, 2022, in response to which, on November 15, 2022, three days before Petitioner filed the present appeal, CMS reduced the CMP by 35% and permitted 12-month payment plan with interest.  Compare P. Ex. 3 with CMS Reply Ex. 2; see also CMS Reply Br. at 7; Joint Stipulations of Fact.  Petitioner does not explain why the 35% reduction failed to adequately address its concerns regarding its financial condition or provide an amount that would not "compromise resident health and safety."  See P. Br. at 17-19.

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As set forth above, when determining whether a CMP imposed is reasonable, I may not reduce the penalty to zero, nor may I deviate from the penalty ranges set forth in 42 C.F.R. §§ 488.438(a).  Moreover, to justify a reduction of a CMP based on financial hardship, Petitioner acknowledges that "the correct inquiry . . . is 'whether the facility has adequate assets to pay the CMP without having to go out of business or compromise resident health and safety.'"  P. Br. at 18 (quoting Gilman Care Ctr. DAB No 2357 at 7 (2010) (citing Sanctuary at Whispering Meadows, DAB No. 1925 at 19 (2004))).  Petitioner bears the burden of demonstrating, by a preponderance of the evidence, that it cannot pay the CMP.  Oaks of Mid City Nursing and Rehabilitation Center, DAB No. 2375 at 26 (2011).

I find that the per-day CMP of $1,192.75, which is in the bottom 20% of the penalty range, is reasonable.  Petitioner's prior history includes 11 citations for noncompliance in the two years preceding the subject survey cycle, and Petitioner's staff failed to follow R3's care plan, which resulted in a "right ankle fracture and closed fracture of the proximal end of the left fibula."  I have also found Petitioner substantially noncompliant with five other regulations in the present case.  While I reversed CMS's determination that Petitioner's failure to immediately report the verbal incident between R2 and R16 that took place by the elevator on December 5, 2021 violated 42 C.F.R. § 483.12(c)(1), (4), the reduction in the number of days of substantial noncompliance from 42 to 35 appropriately accounts for my finding since Petitioner had violated 42 C.F.R. § 483.12(c)(1) due to another incident this same survey cycle.  Due to the reduction in days of substantial noncompliance, the total CMP is now $41,746.25.

While the financial documents submitted by Petitioner do show operating losses, Petitioner has not demonstrated that the $41,746.25 CMP would result in Petitioner "having to go out of business or compromise resident health and safety."  Petitioner has not included any testimony, affidavit, etc. stating that Petitioner cannot pay the CMP or that paying it would cause Petitioner "to go out of business or compromise resident health and safety."  To the contrary, Petitioner's financial statements demonstrate that it had $1,205,913 in cash and cash equivalents for the year ended December 31, 2020.  P. Ex. 3 at 12.  The documents also demonstrate that, between October 1 and December 31, 2021, Petitioner was able to absorb an average monthly net loss of $474,957.  P. Ex. 3 at 34.

Accordingly, I find that Petitioner has not shown that its financial condition, which was already used to reduce the CMP in this case by 35%, mandates additional reduction here.  See Gilman Care Ctr., DAB No. 2357 at 7 (2010) (observing that "[t]he facility has been able to sustain operating losses of up to ten times the CMP amount without closing, making it less credible that paying the CMP would put it out of business").

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9. The impact on Petitioner's Quality Rating is not appealable.

Petitioner argues that if its current appeal is successful in overturning CMS's noncompliance findings, the publication of those findings and the related impact to its quality rating should be removed.  The Board has found that "claimed collateral consequences" of "survey noncompliance findings" such as the citations have on a facility Five-Star Rating "do not rise to the level of a constitutionally protected interest" and therefore "does not trigger appeal rights under the Act or regulation."  Generations at Regency Center, DAB No. 2950 at 7 (2019); see also San Fernando Post Acute Hosp., DAB No. 2942 at 15 (2012).  Accordingly, any adverse impact to Petitioner's Quality Rating based on CMS's findings of noncompliance is not presently appealable before this tribunal even if it is within the jurisdiction of other courts.

V.  Conclusion

For the reasons discussed above, I find that Petitioner was not in substantial compliance with 42 C.F.R. §§ 483.25(d)(1)-(2), 483.12(a)(1), 483.10(f)(1)-(3), 483.12(b)(1)-(3) and 483.12(c)(1).  I further find that the CMP imposed by CMS in the amount of $1,192.75 per day for 35 days totaling $41,746.25 is reasonable.