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                              Aloe Holdings, LLC d/b/a Auburn Oaks Care Center, DAB CR5319 (2019)
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Aloe Holdings, LLC d/b/a Auburn Oaks Care Center, DAB CR5319 (2019)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





Aloe Holdings, LLC d/b/a Auburn Oaks Care Center
	(CCN: 55-5219),
	Petitioner,
v.
Centers for Medicare & Medicaid Services,
	Respondent.
Docket No. C-16-231Decision No. CR5319May 10, 2019

        
              
    

      DECISION
As explained below, I find in favor of the Centers for Medicare & Medicaid Services (CMS) against Petitioner, Aloe Holdings, LLC d/b/a Auburn Oaks Care Center (Auburn Oaks), and sustain the imposition of a $4,150 per-instance civil money penalty.
I. Background
Auburn Oaks is a skilled nursing facility located in Auburn, California that participates in the Medicare and Medicaid programs. Following a survey completed on October 27, 2015, CMS determined that Auburn Oaks was not in substantial compliance with the following program requirement:
42 C.F.R. § 483.70(h) (Tag F465 – safe/functional/sanitary/comfortable environment) at scope and severity level ‘J' (isolated instance of substantial noncompliance that poses immediate jeopardy to resident health and safety).1**Page 2**
CMS Exhibit (Ex.) 1 at 13-18. CMS found that Auburn Oaks failed to secure wardrobes/closets (wardrobes) that were unstable and at risk of tipping over in resident rooms. *Id.* CMS imposed a $4,150 per-instance civil money penalty (CMP) for the deficiency.2
 CMS Ex. 17 at 2.
On January 8, 2016, Auburn Oaks timely requested a hearing to challenge the CMP. Administrative Law Judge Scott Anderson was originally designated to hear and decide this case. On January 15, 2016, he issued an Acknowledgment and Pre-hearing Order (APHO) that set forth deadlines by which the parties were required to file their pre-hearing exchanges, including briefs, exhibits, witness lists, and the direct testimony of any witnesses identified. APHO at 3.
CMS and Auburn Oaks each filed timely pre-hearing exchanges, including pre-hearing briefs (CMS Br. and P. Br.). CMS also objected to parts of Auburn Oaks' exchange (CMS Objections).
On August 19, 2017, this matter was transferred to me to hear and decide.
II. Exhibits and Witnesses
**A. Admission of exhibits**
As part of its pre-hearing exchange, CMS filed 20 exhibits, identified as CMS Exhibits 1 through 20. Petitioner did not object to these exhibits, which I therefore admit into the record.
Petitioner filed nine exhibits in its pre-hearing exchange, identified as Petitioner's Exhibits A through I.
CMS objected to Petitioner's Exhibits B-G, arguing they are not relevant to the issues in this case. CMS Objections at 3-5. The exhibits consist of the findings from each of the last Life Safety Code (LSC) surveys conducted at Auburn Oaks since 2011. Petitioner submits these exhibits to support its claims that its wardrobes were safe and posed no risk to the facility's residents. P. Br. at 5-6. Petitioner believes there is persuasive value
**Page 3**
in the fact that none of these annual LSC surveys identify the facility's wardrobes as potential risks to resident safety. *Id.*
CMS argues in response that the LSC surveys specifically assessed fire safety and therefore have no relevance to whether the stability of the facility's wardrobes posed a risk to resident safety. CMS Objections at 4-5. CMS also contends that, contrary to Petitioner's arguments, it is irrelevant whether the wardrobes were cited in past LSC surveys, because this case concerns whether unstable wardrobes were properly cited as a deficiency at the time of the October 2015 survey. *Id.*
I find CMS's arguments persuasive and sustain CMS's objection. The LSC embodies "a set of fire protection requirements designed to provide a reasonable degree of safety from fire." CMS, Life Safety Code & Health Care Facilities Code Requirements, *available at* https://www.cms.gov/Medicare/Provider-Enrollment-and-certification/CertificationandComplianc/LSC.html (last visited Apr. 30, 2019). LSC surveyors inspect certain types of furniture, such as upholstered furniture and mattresses, for fire safety concerns. CMS Ex. 19 at 22-23. The LSC nowhere provides guidance to surveyors concerning the assessment of the potential for furniture to tip over and harm residents. I also agree that past LSC surveys are irrelevant as the issue in this case is whether surveyors had a basis to cite wardrobe instability as evidence of noncompliance in the survey that was completed in October 2015.
Accordingly, I admit Petitioner's Exhibits A, H, and I into evidence. I reject Petitioner's Exhibits B-G and have not considered them in making my decision.
**B. Exclusion of witnesses**
CMS also objects to two of Petitioner's proposed witnesses, Administrator Ken Hadfield and Director of Nursing Anna Fast, on the grounds that the facility failed to submit written direct testimony for these witnesses, as required by the APHO. CMS Objections at 2-3. CMS points out I am well within my authority to exclude witnesses as a sanction against a party that fails to provide written direct testimony. *Id.*
CMS's objection is legally correct, as far as it goes, but Petitioner did not provide direct testimony for either witness, and I did not hold a hearing in this matter. Therefore, I have no testimony from either witness to consider whether I sustain or deny CMS's objection. I therefore overrule the objection as moot.
III. A decision on the record is appropriate.
The APHO required the parties to submit written direct testimony for each proposed witness and advised an in-person hearing would be held only if a party asked to cross-examine an opposing party's witness. APHO at 5-6; Civ. Remedies Div. P. 16(b), 19(d).
**Page 4**
CMS provided written direct testimony for each of its three proposed witnesses, none of whom Petitioner requested to cross-examine. CMS Exs. 7, 11, 13. Petitioner provided written direct testimony for only one witness, Patrick Zinda, for whom CMS expressly waived its right to cross-examine. CMS Objections at 3 n.1. Accordingly, a hearing is unnecessary and I will decide the matter based on the record. APHO at 6; Civ. Remedies Div. P. 19(d).
IV. Statement of issues
The issues presented are:
A. Whether Auburn Oaks was in substantial compliance with 42 C.F.R. § 483.70(h) (Tag F465) at the time of the survey completed on October 27, 2015; and
B. If Auburn Oaks was not in substantial compliance, whether the civil money penalty imposed by CMS is reasonable.
V.  Jurisdiction
I have jurisdiction to hear and decide this case. 42 U.S.C. § 1395i-3(h)(2)(B)(ii); 42 C.F.R. §§ 488.408(g), 488.434(a)(2)(viii), 498.3(b)(13).
VI. Scope of Review
Although the parties agree I must determine whether Auburn Oaks was in substantial compliance with program requirements at the time of the October 2015 survey, Auburn Oaks also disputes CMS's finding of immediate jeopardy, arguing that a deficiency finding at scope and severity level ‘J' was not warranted because the facts did not present a "crisis situation." P. Br. at 2-3, 9.
Petitioner's challenge is without merit because CMS's scope and severity determination, including its finding of immediate jeopardy, is not properly before me. The governing regulations expressly preclude me from reviewing the level of noncompliance found by CMS unless: (1) a successful challenge would affect the CMP range CMS selected for the deficiency at issue; or (2) there was a finding of substandard quality of care resulting in the loss of approval for a facility's nurse aide training program. 42 C.F.R. § 498.3(b)(14).
Neither condition is met here. CMS imposed a per-instance CMP between $1,000 and $10,000; that range would not change whether I found CMS's immediate jeopardy determination clearly erroneous or not. 42 C.F.R. § 488.438(a)(2); *Heritage Park Rehab. & Nursing Ctr.*, DAB No. 2231 at 15 (2009) ("[A]n immediate jeopardy finding does not affect the range of CMP amounts in a per instance CMP.").
**Page 5**
Furthermore, the deficiency at issue here does not include a finding of substandard quality of care, but instead relates to maintaining a "safe, functional, sanitary, and comfortable environment for the residents, staff, and the public." 42 C.F.R. § 483.70(h). "Substandard quality of care," by contrast, refers to deficiencies related to specific participation requirements enumerated at 42 C.F.R. § 488.301, which does not include the deficiencies of the type at issue before me here. Accordingly, Auburn Oaks cannot challenge the level of deficiency selected by CMS in this case.
Auburn Oaks also points to a perceived discrepancy in the scope and severity determinations in two notice letters that it received following the October survey. P. Br. at 5. After reviewing the two notices, I note that the "D" level deficiency they reference relates to a separate deficiency (42 C.F.R. § 483.25(h), Tag F323) from the one under review here, even if both are related to the facility's wardrobes. *Compare* CMS Ex. 1 at 13 *with* P. Ex. A at 3. It is not unusual to find different scope and severity determinations for separate deficiencies discovered during the same survey, and this could explain the apparent discrepancy cited by Petitioner.
But as I have already noted, resolving an alleged variance in scope and severity findings or evaluating the propriety of the finding of immediate jeopardy is not appropriate in this case, as CMS opted to impose one per-instance penalty for the deficiency finding stemming from 42 C.F.R. § 483.70(h), Tag F465. Accordingly, my decision will be limited to determining whether Auburn Oaks was in substantial compliance with that regulatory provision during the October 2015 survey and, if not, whether the penalty amount imposed is reasonable.
VII. Burden of Proof
CMS must first make a *prima facie* showing that Auburn Oaks failed to comply substantially with federal participation requirements. If this occurs, Auburn Oaks must prove substantial compliance by a preponderance of the evidence in order to rebut CMS's showing and prevail. *Hillman Rehab. Ctr.*, DAB No. 1611 at 8 (1997); *Batavia Nursing & Convalescent Ctr.*, DAB No. 1904 (2004); *Emerald Oaks*, DAB No. 1800 (2001); *Cross Creek Health Care Ctr.*, DAB No. 1665 (1998).
VIII. Discussion
There is no significant dispute between the parties as to the relevant facts. On September 12, 2015, Auburn Oaks staff found a resident on the floor in her room with a wardrobe on top of her lower extremities. CMS Ex. 16 at 1. That resident reported that she was standing up from her wheelchair to reach for her briefs when she lost her balance and held onto the wardrobe, which then fell over. CMS Ex. 10 at 1; CMS Ex. 16 at 5-6. As a result, the resident suffered a scraped finger, a scrape on her foot, and reported dull pain to the top of her head. CMS Ex. 10 at 1-2; CMS Ex. 16 at 1-2.
**Page 6**
A few days later, on September 15, Health Facility Evaluator Nurse (HFEN) Leticia Marker, a state surveyor, visited the facility for an unrelated complaint investigation, and spoke to the resident involved in the wardrobe accident. CMS Ex. 10 at 1. HFEN Marker then investigated other wardrobes in the facility and noted that several were not safe. *Id.* at 2-3. She did not cite any deficiencies related to the wardrobes at that time, however, nor did she do so in a follow-up visit a week later on September 22, 2015, when she toured the facility with Maintenance Manager Patrick Zinda to survey the wardrobes in residents' rooms. CMS Ex. 10 at 5-6; CMS Ex. 11 at 3-4. Mr. Zinda reassured HFEN Marker that he would secure the wardrobes.3
 CMS Ex. 10 at 5-6; CMS Ex. 11 at 3-4.
HFEN Marker returned to the facility several weeks later with other surveyors to conduct an annual survey which was completed on October 27, 2015. CMS Ex. 11 at 5-6. During that survey, they found the facility still had unsecured, unstable wardrobes – specifically, two wardrobes in the rooms of Residents 36 and 37. CMS Ex. 5 at 6-7. The surveyors then cited Auburn Oaks for the unsecured wardrobes, determining they posed an immediate jeopardy to resident health and safety. CMS Ex. 1 at 13-14. Upon determination of immediate jeopardy, Auburn Oaks secured its unstable wardrobes within approximately six hours, thus abating the immediate jeopardy to its residents. CMS Ex. 1 at 13-14; CMS Ex. 17 at 1.
**A. CMS has established by a preponderance of the evidence that Petitioner failed to substantially comply with 42 C.F.R. § 483.70(h), Tag F465.**
CMS regulations direct a skilled nursing facility to provide a safe, functional, sanitary, and comfortable environment for the residents, staff and the public. 42 C.F.R. § 483.70(h). CMS contends that Petitioner violated this requirement by not securing certain wardrobes from tipping, which put its residents at risk for harm. Specifically, CMS points to the wardrobes in the rooms of Residents 36 and 37, which were unstable and at risk of tipping over. According to one surveyor, one wardrobe was "wobbly" and "move[d] easily" when shaken and the other "tipped forward" when its door was opened. CMS Ex. 5 at 2, 4; CMS Ex. 7 at 3-4. The surveyors also noted that when they discussed the issue with facility staff, one individual, a certified nursing aide, had acknowledged that the wardrobes were not safe and "could be dangerous." CMS Ex. 5 at 4. In fact, other surveyors found additional unstable wardrobes throughout the facility.4
 CMS Ex.
**Page 7**
13 at 4; CMS Ex. 15 at 12. As a result, CMS contends Auburn Oaks failed to provide a safe environment for its residents.
In response, Petitioner contends it was under no obligation to secure residents' wardrobes, citing to requirements found in the National Fire Protection Association's Annual Life Safety Code surveys as well as CMS guidance concerning the installation of sprinkler systems. P. Br. at 2-3. Petitioner also cites the lack of guidance or installation hardware from wardrobe manufacturers as to tip-over risk to support its assertion that it had no reason to "suspect any inherent risk." P. Br. at 3, 7. Petitioner also cites its successful completion of years of Annual Life Safety Code surveys to prove it had no reason to believe it was necessary to secure residents' wardrobes to ensure their safety. P. Br. at 6-7.
Petitioner concedes a resident was actually injured by a falling wardrobe, but describes this as an isolated incident which would not have triggered any duty to assess wardrobe stability because the facility had never had any other issues with wardrobes with the same design. P. Br. at 2-3. In sum, Petitioner did not believe it had any reason to think its wardrobes posed a risk to its residents, because guidance from either regulators or manufacturers failed to alert them, and because the facility's own experience suggested the wardrobes were safe when in "normal use." P. Br. at 7.
I do not find Petitioner's arguments persuasive. Petitioner apparently believes explicit guidance from an external authority was the only way it could have been put on notice that its facility's wardrobes were potentially unsafe if unsecured. But a facility's obligation to keep its residents free from hazards is not satisfied by adherence to a manufacturer's instructions. Instead, 42 C.F.R. § 483.70(h) plainly requires a skilled nursing facility to provide a safe environment for its residents. This necessarily requires such a facility to contemplate potential risks its environment could present to its residents, who by definition are more vulnerable than the general populace.5
 But I need not consider whether it was reasonable to require Auburn Oaks to consider the foreseeability of harm by unsecured wardrobes under Tag F465, because the facility was put on notice that its wardrobes were potentially unsafe by *actual harm* to one of its residents on September 12, 2015, who attempted to balance while rising from a wheelchair by holding the door of her wardrobe, causing it to tip and injure her. CMS Ex. 10 at 1; CMS Ex. 16 at 5-6. Despite its own self-professed policy of identifying hazards and "develop[ing] strategies to mitigate and remove" them, *see* CMS Ex. 1 at 16,
**Page 8**
Auburn Oaks simply dismissed this injury as an isolated occurrence. Certainly, it is not at all difficult to imagine future instances where a typical resident of a skilled nursing facility might pull or hang on a wardrobe's doors for balance, which is precisely what happened here.
In that regard, it is notable that at the time of the October 2015 survey at issue, surveyors found that wardrobes in some resident rooms were already secured, while wardrobes in other rooms had brackets attached that could be used to secure them to the wall. CMS Ex. 10 at 4-6; CMS Ex. 11 at 4; CMS Ex. 15 at 11. Clearly then, at some point someone at Auburn Oaks had contemplated the possibility that free-standing wardrobes could perhaps pose a danger to residents.
Even worse, Petitioner was put on actual notice by CMS surveyors as to the potential risk, but still did nothing. HFEN Marker raised her concerns about the wardrobes to Auburn Oaks on September 15, 2015, three days after the accident. She discussed the resident injured by an unsecured wardrobe with Anna Fast, the facility's Director of Nursing. CMS Ex. 11 at 3. She returned a week later to investigate the facility's wardrobes, and toured resident rooms with the facility's maintenance manager, Patrick Zinda. *Id.* at 4. Mr. Zinda acknowledged that the wardrobes would be unsafe if a resident pulled on the door, and agreed to secure all the wardrobes in residents' rooms. P. Ex. I at 2; CMS Ex. 10 at 5-6; CMS Ex. 11 at 3-4. Yet when the surveyors returned over a month later, many wardrobes remained unsecured,6
 including those in two residents' rooms cited here, which were described as "wobbly" and "dangerous." CMS Ex. 5 at 2, 4.
Auburn Oaks relies on the surveyors' delay in citing the facility to justify its failure to act. P. Br. at 2, 4. This claim is without merit. HFEN Marker gave the facility every opportunity to correct this deficiency. Any delay benefited Auburn Oaks, though they did not take advantage of it. In any case, arguing the facility should have been cited earlier is irrelevant to whether there was a basis for the deficiency cited in the October 2015 survey.
These facts show Auburn Oaks was clearly put on notice as to the risk unstable wardrobes in residents' room posed to those residents. Despite actual harm to a resident, followed by repeated informal notices from CMS surveyors, the facility refused to acknowledge the rather obvious possibility of harm, and did nothing to mitigate the risk of harm until it was cited. I have no difficulty in concluding that Auburn Oaks failed to substantially comply with 42 C.F.R. § 483.70(h) by allowing wardrobes in residents' rooms to remain unsecured.
**Page 9**
**B. The $4,150 per-instance civil money penalty imposed by CMS was reasonable.**
In determining the reasonableness of the penalty amount imposed, I look to the factors set forth at 42 C.F.R. §§ 488.438(f) and 488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)). These factors include the seriousness of the deficiency, the facility's compliance history, its financial condition, and its degree of culpability. *Id.*
Auburn Oaks does not raise any specific arguments about the reasonableness of the penalty amount. CMS, however, argues that Auburn Oaks' noncompliance was serious, as one resident was actually injured from a falling wardrobe falling over. CMS Br. at 9-10. I agree the facility's noncompliance here was serious for that reason. Auburn Oaks is indeed fortunate that an unsecured wardrobe did not cause more serious injuries to the resident who was hurt, or to any other residents with unstable wardrobes in their rooms.
CMS also argues that Auburn Oaks was culpable because it had been aware of the unsecured wardrobes but failed to secure them. CMS Br. at 9. I agree with CMS. I do not believe Petitioner intended neglect, indifference, or disregard for its residents. I also acknowledge that, once it was cited for the immediate jeopardy level deficiency, Auburn Oaks addressed the deficiency promptly, securing the wardrobes within about six hours. CMS Ex. 1 at 13-14; CMS Ex. 17 at 1. Nevertheless, as I outlined above, Auburn Oaks was made aware of the risk its unsecured wardrobes posed to its residents and did nothing, despite actual harm to a resident. Both its Director of Nursing and its Maintenance Manager were put on notice to address the risk by a CMS surveyor, but did nothing, despite reassuring the surveyor – multiple times – that they would secure the wardrobes. CMS Ex. 10 at 5-6; CMS Ex. 11 at 3-5. The facility's failure to act despite being put on notice of the possibility of harm demonstrates a higher level of culpability.
Turning to the other factors, I note that Auburn Oaks has not proffered evidence of financial inability to pay this CMP. And, the facility has a history of noncompliance, having been found deficient with respect to a variety of Medicare participation requirements in November 2012, 2013, and 2014, though I note that the 2015 survey before me is the first to reflect an immediate jeopardy level of severity. CMS Ex. 20 at 1-3. For these reasons, I find the $4,150 per-instance CMP to be reasonable.


          /s/
        Bill Thomas

                      Administrative Law Judge
      1. CMS subsequently rehoused this regulation at 42 C.F.R. § 483.90(i). 81 Fed. Reg. 68,688, 68,870 (Nov. 28, 2016). And, CMS now associates environment safety with Tag F921. State Operations Manual Appendix PP at 691, available at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/GuidanceforLawsAndRegulations/Downloads/Appendix-PP-State-Operations-Manual.pdf (last rev. Nov. 22, 2017). There is no substantive change in either the regulation or the tag. Therefore, for simplicity’s sake, I will continue to refer to Tag F465 and the regulation in effect at the time of the survey and the request for hearing. back to note 1
                      2. Auburn Oaks was in fact cited for several deficiencies, but only one resulted in the imposition of a remedy. I therefore limit my decision to consideration of that deficiency. CMS Ex. 17 at 2. back to note 2
                      3. Zinda disputes conceding the wardrobes were unsafe in his conversation with HFEN Marker, as she relayed in her declaration, but admitted in his own statement that he agreed to personally secure every wardrobe in the facility following his conversation with her after their tour on September 22, 2015. Compare CMS Ex. 11 at 4 with P. Ex. I at 2. back to note 3
                      4. The survey team in fact found over 30 wardrobes at Auburn Oaks that were unstable and needed to be secured. CMS Ex. 15 at 12. Nevertheless, because the Form CMS-2567 specifically cites to the unstable wardrobes in the rooms of Residents 36 and 37, CMS Ex. 1 at 13, I rely on only these two instances to evaluate CMS’s deficiency finding. back to note 4
                      5. The facility's own policy concerning resident safety, reviewed by the surveyors, indicated that Auburn Oaks "strives to make the environment free from accident hazards as possible" and that "[s]afety risks and environmental hazards are identified on an ongoing basis." CMS Ex. 1 at 16. back to note 5
                      6. Zinda asserted in his declaration that he personally secured every wardrobe in the facility, a task which took him a "period of time" to complete. P. Ex. I at 2. Auburn Oaks does not attempt to justify the month-long delay in completing this task, suggesting a lack of urgency to address the problem even after a resident’s injury and feedback from a CMS surveyor suggested it as a necessary course of action. back to note 6 Back to top
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