Wells LTC Nursing & Rehabilitation, DAB CR6870 (2026)

DECISION

The Centers for Medicare & Medicaid Services (CMS) moves for summary judgment on its allegations that Petitioner, Wells LTC Nursing & Rehabilitation (Petitioner or facility), was not in substantial compliance with Medicare program requirements at 42 C.F.R. §§ 483.12(a)(1) (Tag F600), and 483.12 (Tag F602); that Petitioner’s alleged noncompliance posed immediate jeopardy to resident health and safety; and that the per-instance civil money penalties (PICMPs) CMS imposed as a consequence of Petitioner’s alleged noncompliance are reasonable in amount.  Petitioner opposes CMS’s motion.

As explained in detail below, I make the following conclusions based on the undisputed facts.  First, there is a basis for CMS’s noncompliance findings and imposition of enforcement remedies because Petitioner is legally responsible for its staff’s actions, which violated Medicare program requirements and had at least the potential to cause more than minimal harm to Petitioner’s residents.  Next, I do not have the authority to address CMS’s finding that Petitioner’s noncompliance posed immediate jeopardy.  Finally, the PICMPs imposed by CMS are reasonable.  Therefore, I grant CMS’s motion for summary judgment and affirm CMS’s initial determination.

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I.  Background and Procedural History

The Social Security Act (Act) sets forth requirements for skilled nursing facilities (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 and safety than “the potential for causing minimal harm.”  42 C.F.R. § 488.301.  A deficiency is a violation of a participation requirement established at sections 1819(b), (c), and (d) of the Act, 42 U.S.C. § 1395i-3(b), (c), and (d), or the Secretary’s regulations at 42 C.F.R. pt. 483, subpt. B.  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  42 C.F.R. § 488.301.  A facility may violate a statutory or regulatory requirement, but it is not subject to enforcement remedies if the violation does not pose a risk for more than minimal harm.  42 C.F.R. §§ 488.402(b), 488.301.

The Secretary contracts with state survey agencies to survey SNFs to determine whether they are in substantial compliance.  Act § 1864(a), 42 U.S.C. § 1395aa(a); 42 C.F.R. § 488.20.  Each facility must be surveyed annually, with no more than 15 months elapsing between surveys, and must be surveyed 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 Act also authorizes the Secretary to impose enforcement remedies against SNFs that are not in substantial compliance with program participation requirements.  Act § 1819(h)(2), 42 U.S.C. § 1395i-3(h)(2).  The regulations specify the enforcement remedies that CMS may impose.  42 C.F.R. § 488.406.  Among other enforcement remedies, CMS may impose a PICMP for each instance of the SNF’s noncompliance.  42 C.F.R. § 488.430(a).  Relevant here, the authorized range for a PICMP was $2,586 to $25,847.  42 C.F.R. §§ 488.408(d), (e), 488.438; 45 C.F.R. § 102.3; 88 Fed. Reg. 69,531, 69,543 (Oct. 6, 2023).

If CMS imposes an enforcement remedy based on a noncompliance determination, then the facility may request a hearing before an ALJ to challenge the noncompliance finding and enforcement remedy.  Act § 1128A(c)(2), 42 U.S.C. § 1320a-7a(c)(2); Act § 1819(h)(2)(B)(ii), 42 U.S.C. § 1395i(h)(2)(B)(ii); Act § 1866(h)(1), 42 U.S.C. § 1395cc(h)(1); 42 C.F.R. §§ 488.408(g), 488.434(a)(2)(viii), 498.3(b)(13).  The hearing before an ALJ is a de novo proceeding.  CarePlex of Silver Spring, DAB No. 1683 (1999) (holding that ALJs hold de novo hearings based on issues permitted under the regulations and ALJ review is not a quasi-appellate review).  A facility has a right to appeal a “certification of noncompliance leading to an enforcement remedy.”  42 C.F.R.

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§ 488.408(g)(1); see also id. §§ 488.330(3), 498.3.  However, CMS’s choice of remedies and the factors CMS considered when choosing remedies are not subject to review.  Id. § 488.408(g)(2).

In regard to burden of proof, CMS must make a prima facie case that the SNF failed to comply substantially with federal participation requirements and, if this occurs, the SNF must prove substantial compliance by a preponderance of the evidence in order to prevail.  Hillman Rehab. Ctr., DAB No. 1611 at 8 (1997), aff’d sub nom. Hillman Rehab. Ctr. v. U.S. Dep’t of Health & Human Servs., No. Civ. A-98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d sub nom. Batavia Nursing & Convalescent Ctr. v. Thompson, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800 (2001).

Petitioner is a skilled nursing facility located in Wells, Texas.  Surveyors from the Texas Health and Human Services Commission (state agency) conducted a survey of Petitioner’s facility that ended on March 12, 2024.  CMS Ex. 1 at 1.  Based on the state agency’s findings, CMS determined that the facility was not in substantial compliance with 42 C.F.R. § 483.12(a)(1) (Tag F600 – freedom from abuse, neglect, and exploitation, cited at scope and severity (S/S) level J (isolated instance of actual harm that posed immediate jeopardy to resident health and safety) and 42 C.F.R. § 483.12 (Tag F602 – freedom from misappropriation/exploitation, cited at S/S level D (isolated instance of no actual harm with the potential for more than minimal harm).  CMS Ex. 2 at 1.  Based on the deficiencies, CMS imposed a PICMP of $25,847 for the deficiency described at Tag F600 (S/S: J), and a PICMP of $15,460 for the deficiency described at Tag F602 (S/S: D).  Id.

Petitioner appealed, and the case was assigned to Administrative Law Judge (ALJ) Leslie C. Rogall, and reassigned to the undersigned upon ALJ Rogall’s retirement.  Consistent with ALJ Rogall’s Standing Pre-Hearing Order, CMS filed a Motion for Summary Judgment and Pre-Hearing Brief (CMS Br.) with 19 exhibits (CMS Exs. 1-19), which included the written declarations of two proposed witnesses.  Petitioner filed its Pre-Hearing Brief (P. Br.), Response to CMS’s Motion for Summary Judgment (P. Response) along with 23 exhibits, which included the written declaration of four proposed witnesses.  Petitioner also filed objections to CMS’s proposed exhibits and requested to cross-examine CMS’s proposed witnesses.1  CMS filed a Reply to Petitioner’s response

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(CMS Reply), its responses to Petitioner’s evidentiary objections, and requested to cross-examine Petitioner’s proposed witnesses.

In deciding whether summary judgment is appropriate, I must rely only on materials facts that are undisputed.  I do so here; therefore, it is unnecessary to receive the parties’ exhibits into evidence to decide the motion.  Lilia Gorovits, M.D., P.C., DAB No. 2985 at 3 n.4 (2020), aff’d sub nom. Gorovits v. Becerra, No. 20-1850, 2021 WL 1962903 (E.D. Pa. May 17, 2021); Ill. Knights Templar Home, DAB No. 2274 at 6-7 (2009) (holding that an ALJ must review all proposed exhibits submitted in support of or in opposition to a motion for summary judgment; the ALJ is not required to admit those exhibits into the record).

It is also unnecessary that I rule on Petitioner’s objections because I rely only on facts that the parties do not dispute.  Nevertheless, I note that I do not rely on any of the documents, or portions thereof, to which Petitioner objects in deciding this case.  Finally, I do not rely on any testimony from a CMS witness, so an in-person hearing to cross-examine one of those witnesses would serve no purpose.  Because CMS prevails based on the undisputed facts, including factual claims from Petitioner’s witnesses, CMS would have no reason to cross-examine them.  There are thus no issues here that “would benefit from being resolved in an evidentiary hearing.”  Fal-Meridian, Inc. v. U.S. Dep’t of Health and Human Servs., 604 F.3d 445, 449 (5th Cir. 2010).

II.  Issues

I consider first whether summary judgment is appropriate.

On the merits the issues are:

1. Whether Petitioner substantially complied with Medicare participation requirements at 42 C.F.R. § 483.12(a)(1) (Tag F600), and 42 C.F.R. § 483.12 (Tag F602);
2. If Petitioner was not in substantial compliance, whether CMS’s finding that Petitioner’s noncompliance posed immediate jeopardy is reviewable in this forum; and
3. If Petitioner was not in substantial compliance, whether the PICMPs amounts are reasonable?

III.  Discussion

Summary judgment is appropriate if a case presents no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.  Bartley Healthcare Nursing and Rehab., DAB No. 2539 at 3 (2013), citing Celotex Corp. v. Catrett, 477 U.S. 317,

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322-25 (1986); Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009), and cases cited therein.

The moving party may show the absence of a genuine factual dispute by presenting evidence so one-sided that it must prevail as a matter of law or by showing that the non-moving party has presented no evidence “sufficient to establish the existence of an element essential to [that party’s] case, and on which [that party] will bear the burden of proof at trial.”  Livingston Care Ctr. v. Dep’t of Health & Human Servs., 388 F.3d 168, 173 (6th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)).  To avoid summary judgment, the non-moving party must then act affirmatively by tendering evidence of specific facts showing that a dispute exists.  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehabilitation Ctr., DAB No. 1918 (2004).  The non-moving party may not simply rely on denials, but must furnish admissible evidence of a dispute concerning a material fact.  Ill. Knights Templar, DAB No. 2274 at 4; Livingston Care Ctr., DAB No. 1871 at 5 (2003).  In doing so, the non-moving party must show more than “some metaphysical doubt as to the material facts.”  West Texas LTC Partners, Inc., DAB No. 2652 at 6 (2015), aff’d., West Texas LTC Partners, Inc. v. U.S. Dep’t. of Health & Human Services, No. 15-60763 (5th Cir., 2016); 1866ICPayday.com L.L.C., DAB No. 2289 at 3 (2009), quoting Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. at 587.  

In examining the evidence for purposes of determining the appropriateness of summary judgment, I must draw all reasonable inferences in the light most favorable to the non-moving party.  Brightview Care Ctr., DAB No. 2132 at 2, 9 (2007); Livingston Care Ctr., 388 F.3d at 172; Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); but see Brightview, DAB No. 2132 at 10 (entry of summary judgment upheld where inferences and views of non-moving party are not reasonable).  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.  West Texas LTC Partners, Inc., DAB No. 2652 at 6-7, 14-15 (2015); Cf. Guardian Health Care Ctr., DAB No. 1943 at 11 (“A dispute over the conclusion to be drawn from applying relevant legal criteria to undisputed facts does not preclude summary judgment if the record is sufficiently developed and there is only one reasonable conclusion that can be drawn from those facts.”).

Here, CMS has come forward with evidence – primarily the facility’s own documents and Petitioner’s statements of fact – establishing facts showing that the facility was not in substantial compliance with 42 C.F.R. §§ 483.12 and 483.12(a)(1).  For its part, Petitioner does not dispute the material facts.  Its argument is, instead, a legal one:  that the facility cannot be held responsible for its employees’ actions and misconduct.  Petitioner proffers that the employees at issue were properly trained, their actions were not foreseeable, and its Quality Assurance and Performance Improvement (QAPI) Committee took immediate corrective actions and made good faith efforts to prevent

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future potential abuse and misappropriation issues before the survey began.  P. Response at 4-5.  I accept all these facts as true.  Even so, as a matter of law, the facility is responsible for the actions of its employees.

1. Summary judgment is appropriate because there are no disputed issues of material fact.  As a matter of law, the facility is responsible for the actions of its staff.

Section 1128A(l) of the Act, made applicable by § 1819(h)(2)(B)(ii)(I) of the Act to cases like this one provides, “[a] principal is liable for penalties . . . under this section for 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).  Consistent with this statutory framework, the Departmental Appeals Board (Board) 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 Care and Rehab, DAB No. 2792 at 12 (2017) (citing Ridge Terrace, DAB No. 1834 at 7-8 (2002)).

The Board has repeatedly rejected attempts by facilities to disown staff misconduct.  The Board has made 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).  Having chosen to meet its obligations to provide care and protect residents’ rights through its 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.

The Board’s decision in Kindred is particularly instructive.  The Board rejected the argument that the CNA acted outside the scope of employment simply because his conduct was personally motivated, finding instead that the employment relationship provided the “means and opportunity” for the abuse.  The Board held the facility liable for the nursing assistant’s sexual and attempted sexual abuse of residents, noting that he “was in the facility and had access to the residents because the facility placed him in the position to provide personal care to the residents, in the course of which he committed these acts.”  Kindred, DAB No. 2792 at 14.

The Board has further explained that this rationale applies broadly to all staff members who, while performing their assigned duties, fail to act in accordance with regulatory requirements and facility policies concerning resident protection.  North Carolina State Veterans Nursing Home, Salisbury, DAB No. 2256 at 12 (2009).  Moreover, because a

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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).

I acknowledge Petitioner’s argument that, under Texas state law, employers are not responsible for the criminal acts of its employees unless certain conditions are met.  P. Pre-Hearing Br. at 13 (citing Tex. Civ. Prac. & Rem. Code § 41.005(c)).  However, the state law on which Petitioner relies applies to civil proceedings and limits recovery of exemplary damages based on another person’s criminal conduct.  It does not apply to administrative enforcement actions imposing civil money penalties for noncompliance with federal Medicare participation requirements.  Accordingly, there is no conflict between state law and the applicable federal framework.  Even if such a conflict existed, federal law would control in these administrative proceedings.  Cedar View Good Samaritan, DAB No. 1897 at 12-13 (2003).

For these reasons, I conclude that, as a matter of law, Petitioner is responsible for the actions of its staff in determining whether it was in substantial compliance with Medicare program participation requirements.

2. Petitioner, through Certified Nursing Assistant (CNA) A, was not in substantial compliance with 42 C.F.R. § 483.12(a)(1).

Program requirement:  42 C.F.R. § 483.12(a)(1) (Tag F600).  The Act mandates that residents be free from “physical or mental abuse, corporal punishment, involuntary seclusion, and any physical or chemical restraints imposed for purposes of discipline or convenience and not required to treat the resident’s medical symptoms.”  Act § 1819(c)(1)(A)(ii), 42 U.S.C. § 1395i-3(c)(1)(A)(ii).  Consistent with the statute, the regulation governing abuse provides that each resident has the right to be free from abuse, neglect, misappropriation of resident property, and exploitation.  42 C.F.R. § 483.12.  Abuse is defined as “the willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish.”  42 C.F.R. § 488.301.  Abuse includes verbal, sexual, physical, and mental abuse.  Id.  Willful “means the individual must have acted deliberately, not that the individual must have intended to inflict injury or harm.”  Id.  “Instances of abuse of all residents, irrespective of any mental or physical condition, cause physical harm, pain, or mental anguish.”  Id.

Petitioner’s Anti-Abuse Policies.  Consistent with statutory and regulatory requirements, Petitioner had policies for preventing, investigating, and reporting resident abuse.  P. Exs. 15 and 16; see also CMS Ex. 8.  “‘Abuse’ is defined as the willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish.”  P. Ex. 16 at 19.  Petitioner’s policy required it to “[e]stablish and maintain a culture of compassion and caring for all residents and

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particularly those with behavioral, cognitive or emotional problems.”  P. Ex. 15 at 1.  Staff were provided orientation and training on topics including “abuse prevention, identification and reporting of abuse, stress management, and handling verbally or physically aggressive resident behavior.”  Id. at 2.

Resident 1 (R1).  The following facts are undisputed.

R1, whose diagnoses included unspecified dementia, psychotic disturbances with delusions and Alzheimer’s disease, was admitted to the facility on September 22, 2023.  CMS Ex. 4 at 1; see also P. Br. at 2.  On admission, R1 was referred to “pysch therapy and requested urgent eval for behaviors” and also had a documented history of falls.  P. Ex. 2 at 1.

CNA A was hired on August 28, 2023.  P. Ex. 12 at 1.  As part of her onboarding, CNA A successfully completed the facility’s abuse and resident’s rights training course, acknowledged that she was required to follow all facility policies and guidelines, including those that prohibit any type of abuse or neglect, and her written tests demonstrated proficiency in resident care areas, including dementia care.  P. Ex. 12 at 6-7; 18-19; 22 (among others).  Registry checks confirmed CNA A was employable as a nurse aide in the State of Texas.  Id. at 38-41.

On October 4, 2023, a CNA notified L.M., a charge nurse, that R1 had fallen on the floor in the dining room, but did not hit his head.  P. Ex. 4 at 1, 3.  L.M. assessed R1 for injuries, noting none.  Id. at 1.  R1 denied pain but was unable to provide a description of the circumstances that led to the fall.  Id.  L.M.’s report states R1 would only permit her to take his blood pressure before becoming combative again.  Id.  R1’s physician and family member as well as the Administrator and Director of Nursing (DON) were notified of the fall.  Id. at 3.

The next morning, on October 5, 2023, DON K.G. reviewed the surveillance camera to determine how R1’s fall occurred.  Id. at 4.  The incident report states:

it was seen that resident and CNA [A]2 were standing by the water cooler in the dining room on A hall.  CNA [A] and resident are seen conversing with each other and resident becomes agitated and tosses a cup of water at the CNA, splashing her in the face and front of her shirt.  CNA [A] then reaches out and shoves resident on the shoulder, and hits him (with what appears to be an open hand) across the left side of his head.  Resident stumbles backwards, tripping, and falls on the floor, hitting his back on the chair behind him and his head on the floor.  [] CNA [A] then walks away

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and gets a towel for her shirt and the other CNA is seen coming on the camera and goes to get the nurse to come to the unit.

Id.  Upon review of the video, the incident was immediately reported to the police and the resident’s family member and physician were also notified.  Id. at 4, 6.  The DON reassessed R1 for injuries, noting an abrasion to R1’s left ear.  P. Ex. 9 at 4.  R1 was then sent to the hospital for evaluation and treatment, but no further injuries were noted.  Id.  The social worker followed up with R1 to ensure there were no adverse emotional effects from the incident, and it is noted that R1 was unable to recall the accident.  P. Ex. 6.  Both CNA A and the reporting CNA were suspended pending investigation and were eventually terminated.  Id. at 4; P. Ex. 9 at 4.

The undisputed facts show that CNA A physically abused R1.  By definition, any instance of abuse has the potential to cause more than minimal harm, 42 C.F.R. § 488.301 (definition of abuse), and the Board has held that one episode of abuse is sufficient to support a finding of substantial noncompliance.  Kindred, DAB No. 2792 at 15, 18-19 (“Nothing in section 438.13’s [now 483.12] language contemplated that finding a violation turns on the number of incidents or perpetrators, or pervasiveness of abuse.”).  Therefore, the abuse that occurred is sufficient to support a finding that the facility was not in substantial compliance with section 483.12(a)(1), and CMS is entitled to summary judgment.

Again, Petitioner does not dispute the material facts but argues that it cannot be held responsible because, in sum, it did everything right and the CNA’s actions were unforeseeable.  P. Br. at 6-15.  Petitioner emphasizes its comprehensive anti‑abuse policies, its staff training program, and CNA A’s successful completion of multiple competency tests, as well as her clearance through all required registry checks.  Id. at 3-4.  I accept as true that the facility maintained robust anti‑abuse policies, provided CNA A with appropriate training, and confirmed her eligibility for employment.  However, as already explained, these measures do not relieve Petitioner of responsibility for the physical abuse committed by its employee.  A facility remains accountable for a CNA’s abuse even when the conduct contradicts the facility’s expectations and despite the facility’s efforts to prevent such incidents.  Springhill, DAB No. 2513 at 13–14.

Petitioner also argues that “citing a deficiency, as was done in this case, based on a potential ‘problem’ that has already been addressed by the QAPI Committee is not legally authorized.”  P. Br. at 9.  According to Peittioner, pursuant to the Texas Administrative Code and 42 C.F.R. § 483.75, “surveyors are prohibited from citing deficiencies based upon items/issues that a [Quality Assurance and Performance Improvement (QAPI)] team has already addressed.”  Id.  Petitioner continues that the State Operations Manual (SOM) Appendix PP (Appx. PP) similarly provides that good faith efforts by the committee to identify and correct potential problems with the facility may not be used as the basis for a deficiency.  Id. at 9-10.  To demonstrate that these rules

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apply to the issue at hand, Petitioner proffers, and I accept as true, that the facility investigated the incident, took immediate remedial action, which included termination of CNA A as well as the CNA that failed to properly report the incident, and took other corrective action including assessments of all residents with whom CNA A interacted, performed safety checks, and provided in‑service trainings after the incident, prior to the survey.  Id. at 6-9.

Petitioner’s reliance on 42 C.F.R. § 483.75 is misplaced.  Section 483.75 requires a facility to develop, implement and maintain an effective QAPI program.  In regard to whether the deficiency should be cited, the regulation further instructs that “[g]ood faith attempts by the committee to identify and correct quality deficiencies will not be used as a basis for sanctions.”  42 C.F.R. § 483.75(i).  The SOM provides more explanation stating that if the facility, through its Quality Assurance and Assessment (QAA) committee, “has identified and made a good faith attempt to correct the same issue identified by the survey team during the survey, the facility will not be cited for QAA (it may however, still be cited with deficiencies related to actual or potential issues at other tags).  SOM, Appx. PP, F865, Sanctions and Good Faith Attempts (Emphasis added).  In other words, section 483.75(i) protects a facility from being cited under section 483.75 when it has made good-faith efforts to identify and correct the underlying deficiencies; however, it does not protect the facility from citations for those underlying deficiencies themselves, which is the situation here.  Petitioner was not cited for a QAPI deficiency under section 483.75; rather, it was cited for failing to meet its obligation under section 483.12(a)(1) to protect its resident from physical abuse.

Finally, Petitioner contends that, at most, the deficiency should have been treated as “substantiated but not cited.”  P. Br. at 10-15.  In making this argument, Petitioner relies on a Texas news report describing a facility that was not cited following a serious incident of substantiated sexual abuse.  P. Ex. 13.  The article provides that the state agency defines “‘substantiated but not cited’ cases as times when the investigation determined the allegation did occur, but by the time a surveyor had arrived, the facility had ‘taken the actions necessary to correct and prevent the deficient practice’ – meaning it had come into compliance with state regulations.”  Id. at 3.  However, neither the article nor Petitioner identifies any specific legal authority supporting this definition or, more importantly, showing that such a theory applies here.3

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In sum, Petitioner chose to provide care to R1 through CNA A and is responsible for her actions.  The undisputed facts establish that CNA A physically abused R1, in violation of 42 C.F.R. § 483.12(a)(1) and the physical abuse, by definition, had the potential to cause more than minimal harm.  CMS is therefore entitled to summary judgment, and I find Petitioner was not in substantial compliance with federal requirements.

3. Petitioner, through Nursing Assistant (NA) AH, was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F602).

Program requirement:  42 C.F.R. § 483.12 (Tag F602).  Residents of SNFs have the right to be free from misappropriation of resident property and exploitation.  42 C.F.R. § 483.12.  “Misappropriation of resident property” is defined as “the deliberate misplacement, exploitation, or wrongful, temporary, or permanent use of a resident’s belongings or money without the resident’s consent.”  42 C.F.R. § 483.5.  “Exploitation” means “taking advantage of a resident for personal gain through the use of manipulation, intimidation, threats, or coercion.”  Id. 

Petitioner’s Policies.  The facility’s policy, “Identifying Exploitation, Theft and Misappropriation of Resident Property,” is in accord with the regulations.  P. Ex. 16 at 25.  Petitioner’s policy also provides examples of misappropriation, including the “unauthorized or coerced purchases on the resident’s credit card,” “coercion to provide gifts in exchange for ongoing care” and “manipulating the resident into providing monetary support or assistance.”  Id.

The facility also had a “Gifts, Gratuities, and Payments” policy that states “[o]ur facility prohibits employees from receiving or giving any gift, gratuity, or payment for services rendered; . . . or engaging in any activity, practice, or act which conflicts with the interest of the facility or its residents.”  Id. at 61.  It states, “[t]he accepting of anything of value by our employees . . . from any of our suppliers, residents, family members, visitors, or other employees in any form whatsoever is prohibited.  Such conduct may be criminal under certain laws.”  Id.

Finally, in-service training materials dated March 3, 2024, provides “Staff is unable to receive ANY kind of payment from residents for ANY type of services.  Allowing a resident to give you money, pay bills, give you a tip or request any other kind of service for payment is strictly prohibited” and that “[t]aking money from residents, even if it is given freely, is considered a FELONY[,] . . . [e]xploitation of their finances is a serious offense, even if they offer it to you.”  Id. at 66.

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Resident 2 (R2).  The following facts are undisputed.

NA AH was hired by the facility as a housekeeper in January 2024 but later transitioned to the position of hospitality aide in late February, early March 2024.  P. Ex. 17 at 1; P. Br. at 16.  R2 was a long-term resident of the facility.  CMS Ex. 10 at 1.  On March 3, 2024, NA AH reported to a charge nurse that she did not feel comfortable in R2’s room because he was making sexually inappropriate comments.  CMS Ex. 12 at 1.  The charge nurse, along with another staff member, further investigated and R2 reported that, “he let the staff member borrow $300 to pay her light bill and she would pay him back the following day on pay day.”  Id.  R2 “also stated she played with his penis and he touched her boobs.”  Id.; see also P. Ex. 17 at 10 (R2 stating he and NA AH are friends and she would touch him sexually in exchange for this help financially).

After further investigation, Petitioner concluded there was evidence to support that R2 gave his debit card to NA AH to pay her utility bill and to purchase gas.  P. Ex. 17 at 10 (Associate Separation Report describing bank receipts, evidence of a $309 utility payment, and video surveillance showing an ATM transaction, in the amount of $200, occurred); see also CMS Ex. 12 at 3 (“proof has been sent of the financial exploitation that did occur”).  The facility terminated NA AH on March 4, 2024.  P. Ex. 17 at 10.  The reasons for separation included, as relevant here:

455.8.  Thefts of any kind from fellow associates, the Company, or persons served by the Company or unauthorized possession, removal, use, or loan of Company, customer or fellow associate property including Company or customer owned, leased or controlled vehicles of any type

455.17.  Intimidating or coercing fellow associates, customers, or persons served by the Company in any manner

455.16.  Harassment, discrimination, retaliation, personal advances and/or physical contact with other associates, or persons served, of a nature not in keeping with your job duties and/or outside the bounds of acceptable behavior in a business setting

427.  Gifts and Gratuities
Acceptance of money or gifts from . . . residents . . . is not permitted. . . .  Solicitation of gifts or donations by associates is strictly forbidden.

Id. at 11.

In addition to its argument that the facility should not be held responsible for NA AH’s actions, which I have already explained is incorrect as a matter of law, Petitioner argues that NA AH’s conduct did not constitute misappropriation because R2 voluntarily gave

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her money, asserting that consent negates a regulatory finding under F602.  P. Pre‑Hearing Br. at 18–19.  Petitioner proffers that, “[a]ccording to the State Operations Manual Surveyor F602 Interpretive Guidelines and 42 CFR § 483.5, ‘misappropriation of property is the deliberate misplacement or use of a resident’s personal belongings or money without consent.”  P. Br. at 18.  Petitioner contends, and I accept as true, that R2 consensually gave NA AH money.

However, the definition of misappropriation of property is not so narrow.  The regulation defines misappropriation of resident property as the “deliberate misplacement, exploitation, or wrongful, temporary, or permanent use of a resident’s belongings or money without the resident’s consent.”  42 C.F.R. § 483.5 (Emphasis added).  The SOM, on which Petitioner relies, goes on to explain that staff may not accept money or personal items from residents under any circumstances because their position of authority may enable manipulation or undue influence.  SOM, Appx. PP, F602, Guidance § 483.12.  In fact, Petitioner’s own policies mirror this standard, expressly prohibiting staff from accepting gifts or money and warning that “taking money from residents, even if given freely,” constitutes exploitation and may be a felony. P. Ex. 16 at 25, 61, 66.  The Board has long held the facility’s failure to follow its own policies supports a finding of noncompliance.  See, e.g., Lake Worth Nursing Home, DAB No. 3194 at 14-15 (2025) (citing 38-40 Freneau Ave. Operating Co. LLC, DAB No. 3008 at 2, 8 (2020); Beverly Health Care Lumberton, DAB No. 2156 at 13 (2008).  Thus, even if R2 voluntarily gave NA AH money or access to his debit card, her acceptance was inherently exploitative because of her role as a staff member.  Moreover, Petitioner does not dispute R2’s report of sexual contact with NA AH, which only heightened her ability to influence his decisions.

CMS cited the deficiency at scope and severity level “D,” finding an isolated incident that caused no actual harm but had the potential for more than minimal harm and did not constitute immediate jeopardy.  CMS Ex. 1 at 14.  The undisputed evidence establishes that R2 lent NA AH approximately $500, and that NA AH did not repay the loan by the agreed-upon date.  P. Ex. 17 at 10; CMS Ex. 11 at 2–3.  The record does not indicate when (or whether) NA AH ever repaid the money.  In addition, R2 told the facility’s investigating nurse that “he thought AH was his friend and he now fears that he will be kicked out of the facility.”  CMS Ex. 11 at 3.  Considering these undisputed facts – the amount of money involved, the failure to timely repay it, and R2’s expressed fear – I question CMS’s conclusion that NA AH’s actions resulted in no actual harm.  Nevertheless, the undisputed evidence confirms CMS’s determination that the deficiency had the potential for more than minimal harm.  Accordingly, I find Petitioner was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F602).

4. CMS’s finding that Petitioner’s noncompliance posed immediate jeopardy to resident health and safety is not reviewable in this forum.

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An ALJ may review CMS’s scope and severity findings (which includes a finding of immediate jeopardy) only if a successful challenge would affect:  (1) the range of the CMP amounts that CMS could collect; or (2) 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)-(ii).  Petitioner acknowledges that “because this case involves a per instance CMP (as opposed to a per day fine), scope/severity cannot be directly attacked” but nevertheless asks that I “overturn the [immediate jeopardy] designation because it is clearly erroneous.”  Id. at 21.

As Petitioner acknowledges, I do not have authority to review CMS’s finding of immediate jeopardy.  In this case, CMS imposed a per-instance CMP.  Unlike for per-day CMPs, under the regulations, there is only a single range for a PICMP, which is $2,586 to $25,847, and this range applies to both immediate jeopardy and non-immediate jeopardy level noncompliance.  Compare 42 C.F.R. § 488.438(a)(1) with 42 C.F.R. § 488.438(a)(2); 88 Fed. Reg. at 69,543.  Although the severity of noncompliance affects review of the amount of a CMP, it does not, in the case of a PICMP, affect the range of the CMP.  42 C.F.R. §§ 488.438(e) and (f); 488.404.  Because CMS imposed a PICMP against Petitioner, a successful challenge to the immediate jeopardy finding would not affect the range of the CMP amount that CMS could collect.  NMS Healthcare of Hagerstown, DAB No. 2603 at 6-7 (2014).  Nor was there a finding of substandard quality of care that resulted in the loss of approval for its nurse aide training program.  For these reasons, I conclude that I have no authority to review CMS’s finding of immediate jeopardy.  However, consistent with my duty to review the seriousness of the deficiency in determining whether the PICMPs imposed are reasonable, I consider Petitioner’s discussion of the seriousness of the deficiency in the following section.

5. The proposed PICMPs are reasonable.

To determine whether a CMP is reasonable, I apply the factors listed in 42 C.F.R. § 488.438(f):  1) the facility’s history of noncompliance, including repeat deficiencies; 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. The factors 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.

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.  Barn Hill Care Ctr., DAB No. 1848 at 21 (2002);

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Cmty. Nursing Home, DAB No. 1807 at 22 et seq. (2002); Emerald Oaks, DAB No. 1800 at 9 (2001); CarePlex of Silver Spring, DAB No. 1638 at 8 (1999).

The Board has consistently held that there is a presumption “that CMS considered the regulatory factors [in 42 C.F.R. § 488.438(f)] in choosing a CMP amount and that those factors support the penalty imposed.”  Crawford Healthcare & Rehab., DAB No. 2738 at 19 (2016).  CMS has no responsibility to produce evidence concerning a particular factor unless the facility contends the factor does not support the CMP amount.  Liberty Commons Nursing & Rehab - Alamance, DAB No. 2070, at 18 n.16 (2007), aff’d, 285 F. App’x 37 (4th Cir. 2008) (per curiam).  Therefore, “the burden is on Petitioner to demonstrate, through argument and the submission of evidence addressing the regulatory factors, that a reduction is necessary to make the CMP amount reasonable.”  Copperas Cove LTC Partners, Inc., DAB No. 3049 at 43 (2021) (citing Good Shepard Home for the Aged, Inc., DAB No. 2858 at 23 (2018).

Here, CMS imposed a PICMP of $25,847 for the abuse deficiency described at 42 C.F.R. § 483.12(a)(1) that posed immediate jeopardy, which was the maximum amount permitted, and a per-instance CMP of $15,460 for the misappropriation deficiency described at 42 C.F.R. § 483.12 that did not pose immediate jeopardy, which is slightly higher than the midpoint of the penalty range.  42 C.F.R. §§ 488.408(d), (e), 488.438; 45 C.F.R. § 102.3; 88 Fed. Reg. at 69,543.

Considering the relevant factors, in light of the arguments and evidence proffered by Petitioner, I find the amounts imposed by CMS are reasonable.

Petitioner proffers that the seriousness of the alleged violation is one of factors that must be considered when assessing the reasonableness of a CMP.  Petitioner proffers that “even under F600 (which was cited at the IJ level), there was no injury to the resident, and the nurse aide in question had been provided all appropriate training required by law.”  P. Br. at 21.  To further support its contentions the seriousness of the violation does not support the PICMP, Petitioner explains that “[R1] was not injured, and a precautionary visit to the hospital confirmed that.  [R1] did not suffer any emotional trauma, and even after repeated follow ups, he never even recalled the incident.”  Id. at 20.  Finally, Petitioner explains that the facility’s staff were properly trained and demonstrated their knowledge of the facility’s abuse prevention and prohibition protocol, which supports that there was no need for immediate action to prevent a serious adverse outcome from occurring or recurring.  Id. at 20-21.  The Petitioner therefore asks me to “consider the lack of seriousness . . . to reduce the total CMP imposed . . . .”  Id. at 21.

Similarly, Petitioner proffers that, in regard to the deficiency identified “under F602, it is undisputed that the resident in question consented to the nurse aide’s use of this debit card, so there was likewise no resident harm.”  Id. at 21.  Petitioner previously explained that after learning of the incident involving NA AH, the QAPI teams interviewed all

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residents who were cognitively intact to determine whether they had any potential issues with misappropriation or exploitation and no issues were reported.  Id. at 17. 

Contrary to Petitioner’s assertions, the facility’s noncompliance was very serious.  I accept (and the proffered evidence supports) that R1 did not suffer any physical injuries nor recall the incident CNA A’s physical assault.  Nevertheless, as a matter of law, abuse is inherently harmful.  The regulations make clear that “[i]nstances of abuse of all residents, irrespective of any mental or physical condition, cause physical harm, pain or mental anguish.”  42 C.F.R. § 483.5 (Definition of abuse).  Further, the CNA that witnessed the abuse did not intervene or properly report the abuse, but instead falsely reported R1 had merely fallen.  This reflects a breakdown in the implementation of Petitioner’s abuse prevention policies.

The situation involving R2 is also serious.  Even if R2 initially consented to lending NA AH money, it is undisputed that the debt was not timely repaid.  Petitioner’s own investigation confirmed that the incident left R2 fearful of being evicted from the facility.  Therefore, I find these undisputed facts do not support Petitioner’s contention that the violations were not serious.

Petitioner also contends that it has shown that the facility has aggressive abuse and misappropriation prevention programs, and that all proper training was conducted.  P. Br. at 22.  Considering these facts, Petitioner opines that the proposed CMPs, which were just a few thousand dollars short of the maximum allowed, are unjustified and should be significantly reduced.  Id.  I accept as true Petitioner’s contentions.  However, these arguments are essentially that Petitioner is not culpable for the deficiencies at issue here, which are irrelevant because “[t]he absence of culpability is not a mitigating circumstance in reducing the amount of the penalty.”  42 C.F.R. § 488.438(f)(4).

Turning to the remaining factors I am required to consider, CMS presented evidence of Petitioner’s prior history of noncompliance before the survey at issue, including deficiencies cited under F600.  CMS Ex. 17.  Petitioner does not dispute this history or offer any argument to the contrary.  Nor does Petitioner contend that its financial condition limits its ability to pay the proposed CMPs.

As discussed above, the deficiencies in this case are serious.  Petitioner failed to ensure that its residents were free from abuse and misappropriation of property, as required by regulation.  These failures exposed residents to the risk of serious harm, impairment, or even death.

Given Petitioner’s compliance history and the seriousness of the deficiencies, I conclude that the PICMPs imposed are reasonable.

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IV.  Conclusion

For the reasons explained above, CMS’s motion for summary judgment is granted.  I conclude that Petitioner was not in substantial compliance with the participation requirements at 42 C.F.R. §§ 483.12(a)(1) and 483.12 (Tags F600 and F602).  Finally, I conclude that the proposed CMPs, a PICMP of $25,847 for the instance on October 4, 2023, described at deficiency F600 (S/S: J) and a PICMP of $15,460 for the instance on February 27, 2024, described at deficiency F602 (S/S: D), are reasonable.